M&A IN SPAIN
M&A OPPORTUNITIES As we have seen, Spain is based on a closed licenses system so unless a licensing window is opened, the only way to enter the market is through an acquisition process. In order to structure an M&A transaction in the Spanish online gambling market it is important to understand the following framework: i. the direct transfer of gambling licenses is prohibited under Spanish law; ii. a merger, spin-off or transfer of a branch of activity is possible with the prior authorization of the Regulator. iii. the shares in a company holding a license can be acquired without prior authorization from the Regulator (although we recommend informing the Regulator); MERGER, SPIN-OFFS OR CONTRIBUTION OF A BRANCH These types of corporate transactions require the prior approval from the DGOJ. In the absence of clarity under Spanish Gambling Law on which aspects should be taken into account when considering whether or not to authorize these transactions, the DGOJ considers that the following elements to be considered, in line with the protective purpose that informs the state gambling regulations: • Whether the operation is robust; the implications that may arise from the use of the transferred licenses by the entity or entities resulting from the corporate transaction; • Whether the operation may have a negative impact on the development of the gambling activity or on the protection of the players, including the control and supervision of such activity by the DGOJ; • The possible consequences for the players who have a gaming account with funds in the companies involved in the corporate transaction. • Full compliance by the resulting companies with all gambling requirements and regulations as set out in the regulations for the latest licensing window.
GENERAL LICENSES
BETS
OTHER GAMES CONTESTS
Fixed odds sports betting Fixed odds horse betting Other fixed odds betting Pool sports betting
Roulette
Contests
Poker
Baccarat
Blackjack
SINGULAR LICENSES
Pool horse betting Pool other betting
Bingo
Complimentary games
Exchange sports betting Other exchange betting
Slots
Table 1. General vs Singular Licenses
TYPE OF GAME
TAXATION
Fixed odds sports betting
20% on win*
Fixed odds horse betting
20% on win
Fixed odds other betting
20% on win
Pool sports betting
20% on win
Pool horse betting
20% on win
Pool other betting
20% on win
Exchange sports betting
20% on win
Exchange other betting
20% on win
Contests
20% on win
Other games (roulette, poker, baccarat, blackjack, bingo, complimentary games, slots)
20% on win
Draws and promotional games
10% of the prize value
Table 2. Applicable taxes by game type * Spanish term equivalent to GGR
The special tax regime applicable to the companies located in the tiny Spanish enclaves of Ceuta and Melilla should be highlighted. These operators benefit from reduced taxation on all games set at10% on win, representing a 50% percent reduction compared to other operators in Spain. They also have reduced corporate and other taxes.
The DGOJ will require that the authorized corporate operation
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IMGL MAGAZINE | JULY 2023
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