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Emily D. Swoboda

Player Protection in Times of Piecemeal Regulation

19 January 2009

Until the Spanish government regulates Internet gambling and adopts uniform security measures, some Spanish I-gamers, one legal expert said, risk flying without a net.

Under some circumstances, there is legal recourse for victims of fraud at online gambling sites in Spain; by and large, however, Spain's legal system is not set up to protect online gamblers in an unregulated environment.

"If an online gambler in Spain wins 200 euros, for instance, and doesn't get paid, they cannot, say, go to the police," Xavier Muñoz, a partner with Barcelona-based Legal Link, told IGamingNews Monday. "But if he has his [identity] taken online at a gambling site, he can file a formal report with the police, or, if he knows the person who did it, he can file for criminal action."

IGamingNews learned last week that Spain's Partido Popular, the Parliament's second largest and most conservative party, introduced a resolution pressuring the federal government to issue nationwide regulations for Internet gambling, which would include rules for fraud protection.

In the meantime, Mr. Muñoz said, there are only two areas of Spain that have established regulations for secure betting and which adhere to the country's personal data-protection laws.

On the federal level, Loterias y Apuestas Del Estado, Spain's lottery monopoly, accepts bets only from bank accounts authorized in Spain, or a credit card issued in Spain, and the user must demonstrate Spanish residency. Loterias y Apuestas also does not allow bets from minors or foreign users, and requires proper identification if winnings are above 600 euros, Mr. Muñoz said.

A federal law enacted in 2006 allowing sports betting in shops, terrestrial and online, gave regional governments the freedom to impose regulatory conditions as they saw fit.

Madrid's regional government in November 2006 approved the Madrid Community Betting Regulation, authorizing the licensure of three types of activities: betting (both online and off), online bingo and online casinos.

And while none of the sports betting operators in Madrid has gone online, each is required to follow a set of standards for fraud security, Mr. Muñoz said.

The rules include being required to receive prior authorization on equipment, guarantee customers' residence and bank account in Madrid and blocking access to minors.

Mr. Muñoz said the only issue not addressed specifically for online gambling is money laundering because Madrid's and Loteria Y Apuestas' regulations both refer only to the money-laundering standards for land-based casinos, which, while very stringent, only apply to the land-based gaming industry.

But with the new rules under consideration at the federal level will likely come new rules curtailing money laundering in online gambling, he said.

Conference Spotlight: Combating Cybercrime in Betting & Gaming

Xavier Muñoz will be presenting more on the topic of Spain as an emerging market on January 27 at the CCBG conference in London.

Click here for more information on this event.

Player Protection in Times of Piecemeal Regulation is republished from
Emily D. Swoboda
Emily D. Swoboda