Islj 2009 3-4 - TMC Asser Instituut

saw sports betting as an easy way to gain a large amount of income for
state coffers.
Success always has a lot of parents whilst failure is an orphan and
so, soon, lots of parties wanted part of the loot. The first was the Town
Council of the city of Santander, which in 1932 managed to gain 3%
of the revenue, thereby reducing the prize money to 82%. Soon afterwards,
it was agreed to give another 2% to charity. This led, almost by
surprise, to the creation of an efficient and highly advanced private
gambling organisation, which was a pioneer in Spain and Europe but
that, like so many other things, was interrupted by the outbreak of the
Spanish Civil War on 17th July 1936.
Following the war 6 , in the league’s 1939-1940 season the management
of La Quiniela (which was renamed “Bolsa del Fútbol”) was
handed over to the religious order San Juan de Dios and it was decided
that 50% of the revenue would be used for prize money, 5% for
administration and the remaining 45% would go to the religious order
in order for it to carry out its own purposes. Finally, and after certain
scandals that took place during these years, the State decided to take
over its management (thereby appropriating the invention), for which
it promulgated the Decree-Law dated 12th April 1946, creating the
Patronato de Apuestas Deportivas Benéficas (hereinafter, the
“Patronato”). It was at this time that what was initially a strictly private
business became property of the State, which monopolised its management
and exploitation and forbade private organisations from carrying
out this type of activity, under penalty of being accused of committing
a smuggling offence. It is curious that what was initially designed as a
private business ended up becoming a state monopoly that, notwithstanding
certain changes, has survived right up to the present day.
As explained in the preamble of the aforementioned Decree-Law,
“The extraordinary level of interest that currently exists in sport (and football
in particular), along with the enormous popularity of this game with
regard to football, has given rise to the appearance of numerous bets in
which the State is not involved at all in terms of regulation or financial
exploitation, as all of these bets are made and exploited by private citizens
or entities.” It can therefore be seen that the aim of this rule was not
so much to regulate but rather to give the State a monopoly over
sports betting, even though the money was given to charity.
This is the intention of the legislator, for whom “State intervention
would provide an appropriate guarantee to betters and would give the
considerable financial product of these bets to public charity. These are the
circumstances that advise the creation of an independent state Body to
centralise the placing of these bets, which shall be established exclusively
in order to provide considerable new revenue to charity.”
And this is how the state monopoly of sports betting in Spain
began which, as can be seen, was initially limited to the world of football.
In this sense, the first Article of the aforementioned Decree-Law
stated that “With the guarantee and intervention of the State, the
Patronato de Apuestas Mutuas Deportivas Benéficas shall be established
in Spain, which initially shall only cover football, without prejudice to
the fact that in the future, if it is considered appropriate, it may also be
applied to other sports.”
This regulation of paramount importance later on, as it defined the
legal framework for betting during the years of the dictatorial regime
of General Franco (a state monopoly), and which, as explained below,
was inherited by democratic Spain through the creation of the
Organización Nacional de Loterías y Apuestas del Estado (National State
Lottery and Betting Organisation).
As a consequence of this monopolistic purpose, the Decree-Law
prohibits other sports betting in its article 7, stating that “As the entire
net product of these bets is meant for charity, any bets related to football
that are established or may be established in the future are forbidden
whenever, when making the bets, it is necessary to risk any amount of
money.” And this is accompanied by a warning 7 that “Anyone that
6 With regard to any intellectual property
rights that the creator of La Quiniela
might have had, it is sufficient to say
that Manuel González Lavín ended his
days at a concentration camp in Sant
Cyprien (France).
7 As discussed later, this is maintained in
current regulations.
8 Based on the powers that, respectively,
the Spanish Constitution granted to
each of them.
breaches this provision shall be punished in accordance with the current
Smuggling and Fraud Law.”
This regulation established the distribution of the income from sports
betting as follows:
a) 45% would be used for prize money payable to betters.
b) Another 45% would be used for charity and social projects.
c) The remaining 10% would be reserved to cover the expenses of the
service provided by the Patronato.
Regarding the form in which the activity should be carried out, the
regulation stated that “The issuance of tickets and the payment of the
corresponding prizes shall be carried out by Lottery Offices, Subordinate
Offices of Tabacalera S.L. and Tobacconists, which shall receive a commission
or “issue premium” for these services.”
The importance of this regulation is based on the fact that, as we
shall study further below, it established the following premises in the
Spanish legal and political system, which the legislation regulating
gambling and betting has respected (with the corresponding variations)
up to the present day:
1. Gambling and betting is a state monopoly (which is now
shared with the Autonomous Communities). There is no doubt in
this regard. So much so that the subsequent Decree dated 23rd March
1956, approving the Lottery Directive, declared in article 1 that “The
National Lottery is an ordinary resource of the income budget and a State
monopoly, which guarantees the payment of prizes.” Therefore, there can
be no doubt as to whether or not gambling and betting in Spain has
been a state monopoly.
2. Anyone that carries out these activities without the authorisation of
the public authorities is considered to have committed a smuggling
offence.
3. Part of the income from games of chance and sports betting must
be used for public interest purposes (for charity in 1949 and today
for the promotion of sport and other social purposes).
4. The distribution of tickets and the payment of prizes are carried
out exclusively through Lottery Offices and Tobacconists. Because
of this, Spaniards have historically made their bets at Lottery
Offices and Tobacconists.
The Patronato continued to operate as an independent body
reporting to the Tax Department until the restoration of democracy
in Spain, and its activity has always focussed on sports betting. In this
sense, for example, its most recent regulations (in particular, the
Resolution of the Patronato’s Board of Directors, approving the regulations
governing betting competitions from 1st September 1979
onwards), state that the purpose of this body is not only to organise
betting competitions (defined as competitions that “are organised
based on the results of a game or various games of football that appear in
competitions authorised by the Royal Spanish Football Federation or that
have an international nature”), but rather to subject these to an
administrative Law regime in order to better guarantee “the important
public interests affected by these competitions.” That is to say, in 1979
betting continued to be based on football and it continued to be an
authentic state monopoly.
As stated previously, within the entry into force of the Spanish
Constitution on 29th December 1978, the rigid state monopoly on
gambling gave way to a new (but not necessarily any less rigid) legal
regime in which the monopoly was shared between the State (when
the bets or games are on a state-wide level) and the different
Autonomous Communities recognised in the Constitution 8 . This
was when the government, in order to unify the state bodies that
managed gambling and sports betting, in 1984 and by means of the
1985 General State Budget Law (Law 50/1984, dated 30th December),
created the Organización Nacional de Loterías y Apuestas del Estado -
National State Lottery and Betting Organisation - (hereinafter
ONLAE), which included and unified the institutions that had managed
state-wide gambling up until this time, i.e. the Patronato de
Apuestas Mutuas Deportivas Benéficas and the Servicio Nacional de
Lotería 9 (National Lottery Service) created after the Patronato.
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