Islj 2009 3-4 - TMC Asser Instituut

mulated by football clubs, it was agreed that these debts (part of
which were due to the expenses resulting from the renovation of stadiums
for the World Cup held in Spain in 1982) would be made the
responsibility of the LFP. Furthermore, in order to guarantee the
sport’s economic success and recapitalise the football clubs, all of the
football clubs were forced to become limited sporting companies
(sociedades anónimas deportivas, SAD 17 ).
Whilst on one hand the LFP took responsibility for the payment of
this debt, on the other hand it centralised the charging of television
transmission rights and the percentage received from La Quiniela 18 ,
which would be used for the payment of the debts that it had taken
over from its affiliated clubs. Furthermore, during the business years
1991 and 1992, 7 % of ONLAE’s total annual revenue was used to
fund the “Barcelona 92” Olympic Games 19 .
And this is how things worked in Spain until finally, in 1997 the
LFP early cancelled the Corrective Plan that was still in force by funding
the debt remaining as a result of this Plan with its own financing
resources (specifically, by means of a loan of 20,000 million pesetas
granted by a Savings Bank), gaining in return a better assignation of
the distribution of money from La Quiniela (which was increased to
10% 20 , which is maintained today) whilst guaranteeing the fulfilment
of the objectives of the previous Corrective Plan.
And this is the current legal regime regarding the distribution of
the profits from sports betting, which is regulated by Royal Decree
419/1991, dated 27th March, regulating the distribution of the revenue
and prize money from sports betting controlled by the State and other
games managed by the ONLAE (in the version resulting from the
modification made by the subsequent Royal Decree 258/1998, dated
20th February). According to article 1 of this Royal Decree:
“The total weekly revenue obtained by the National State Lottery and
Betting Organisation from Charitable Sports Betting shall be distributed
as follows:
a) 55 percent for prizes.
b) 10.98 percent for Provincial Councils, through the respective
Autonomous Communities or for these, if they only contain one
province.
c) 10 percent for the National Professional Football League.
d) 1 percent for the National Sports Council, to be used for nonprofessional
football.
e) Whatever is left over after each business year, having deducted the
Administration expenses and the Commissions payable to Receivers,
shall be given to the Public Treasury.”
Therefore, as can be seen above, the revenue from sports betting is still
used today to finance the promotion and stability of sport in Spain.
IV.- Present Situation: Appearance of New Forms of Exploitation
Nobody today doubts about the importance of the game (in all of its
forms) to the Spanish economy. Together with traditional games such
as La Quiniela and the Lottery, new times have brought with them
several variants that have enabled those that exploit this business (up
to this day and officially, the State through the LAE and the ONCE,
along with various private companies, that have been granted administrative
authorisation by the Autonomous Communities, in the different
leisure locations concerned such as casinos, bingo halls, gambling
rooms, etc), to exponentially increase their profits and results.
In this sense, a look at the latest data published by the Interior
Ministry shows the financial importance of the sector. In its last
Annual Report on Gambling in Spain 21 (2007), the Ministry states that
the total amount played in 2007 amounts to 30,989.59 million Euro,
which indicates the importance of the gambling sector to the Spanish
economy. Furthermore, the report states that the average amount
played per inhabitant amounted to 685.61 Euro, which is no small figure.
However, despite the success of games of chance, the fact is that
Spanish legislation has left out certain formats or types of games (particularly
with regard to online sports betting), causing a situation of
legal uncertainty which leaves the various operators and users in a sort
of legal limbo that they can only get out of in two ways: either by giving
up the exploitation of these formats (because, it could be said that
these are actually illegal types of games because they do not have the
corresponding administrative authorisation) or by waiting for the
State and the Autonomous Communities to define a new legal framework
in which these new activities can be carried out. Of course, there
is also the option of operating illegally from another location.
By way of example, in its Report, the Ministry divides the existing
(and, of course, legal) games into three main groups, depending on
the way they are organised:
1. Games organised by private companies that have administrative
authorisation, which are carried out at establishments that are
appropriate for this purpose such as casinos, bingo halls, gambling
rooms (slot machines), etc.
2. Games managed by the State, entrusted to the public owned company
Loterías y Apuestas del Estado (LAE) including Lotteries,
Primitivas (Primary Lotteries) and La Quiniela (in its various current
versions).
3. Games managed under special administrative authorisation by
ONCE, including the various games involving the popular
“cupón” (coupon).
As can be seen, apart from certain online versions of the games
exploited by the LAE (which shall be referred to later), the Report
does not contemplate the games and sports betting that have been
developed over the last few years through web platforms, i.e. what is
now known worldwide as Online Gambling or Online Betting,
depending on the type of game.
Put simply, this is because the current legislation (notwithstanding
what it will be explained later) does not contemplate the exploitation of
games of chance or sports betting that is carried out online, and therefore
these cannot be authorised. And it, is because it is not possible “to grant
authorisation for a type of gambling or betting in the absence of the technical
regulations necessary for its conduction and practice 22 ,” an essential
requirement that, with the current regulations, prevents the granting
of this type of authorisations.
At the same time, gambling activities that do not have the corresponding
administrative authorisation are considered illicit and are
punished according to Spanish Law as a smuggling offence. This
results in private operators that want to carry out this type of activities
in Spain having to choose between doing it by clandestine means
from tax paradises such as Antigua and Barbuda, Turks & Caicos,
Gibraltar, or from nearby countries in which this activity is legal, such
as the United Kingdom, Malta, etc; or give up the idea of carrying out
this activity in Spain (which obviously does not happen very often).
As shall be analysed in the corresponding chapter, before beginning
their activities some of the sports betting establishments that currently
operate in Spain requested administrative authorisation to carry out
17 With the only exception of the 4 football
clubs that had a positive net balance at the
time of approval of the Sport Law (Real
Madrid FC, FC Barcelona, Athletic Club
de Bilbao and Club Atlético Osasuna).
18 In accordance with the Transitory
Provision 3 of the Sport Law, “During the
period of validity of the agreement and
until the total extinction of the debt, the
professional League shall receive and manage
the following financial rights:
a. Those that, for any purpose, are generated
by the television broadcasting of
the competitions organised by the
League (by itself or in conjunction with
other club associations).
b. Those corresponding to the general
sponsorship of these competitions.
c. The 1% of the total income from sports
betting controlled by the State recognised
by current legislation as being
assigned to the professional League.”
19 In accordance with the Transitory
Provision of Royal Decree 419/1991,
dated 27th March.
20 This being ruled afterwards by virtue of
Royal Decree 258/1998, dated 23rd
February, partially modifying Royal
Decree 419/1991, dated 27th March, regulating
the distribution of the revenue and
prize money from sports betting controlled
by the State and other games
managed by the ONLAE and adding
additional regulations.
21 Accessible at http://www.mir.es/
SGACAVT/juego/memorias_de_juego/
informeAnualJuego2007.pdf
22 Decision number 1368/2000, dated 2nd
November, of the Galician High Court of
Justice (Administrative Disputes
Chamber, Section 2), regarding the
appeal made by Eurobets International
Sports Betting S.A.
102 2009/3-4
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