The Spanish Government passes a new Royal Decree that imposes strict limitations on the advertising of gambling activities

Written on 23 Nov 2020

Royal Decree 958/2020 develops the provisions of the Spanish Gambling Act of 2011 relating to the advertising of gambling activities, which would also consolidate the restrictions on those advertising practices that were already put in place during the state of alarm in order to protect consumers.

Act 13/2011, of 27 May, regulating gambling (Spanish Gambling Act) lays down a set of specific requirements for the sending of marketing communications in relation to gambling and envisages the future development of additional conditions for these advertising activities. Since then, sending marketing communications about gambling has been merely limited to a prior authorisation regime for the development of gambling activities (i.e. obtaining a license), through which the gambling operator may be entitled to conduct such advertising. On the other hand, the Code of Conduct of the Spanish self-regulatory organisation in advertising matters –Autocontrol– in this regard, which was approved in 2012 and is binding on those enterprises that have adhered to that Code of Conduct, already included provisions on social responsibility, the responsible gambling principles, and the protection of minors (values that the new Royal Decree intends to preserve).

The Spanish Government enacted its first measures against the advertising of gambling in the context of the COVID-19 pandemic, where it was considered that the most vulnerable subjects would need additional protection due to their remaining in their homes for longer and due to being more easily influenced. Now, without the legal cover of the state of alarm that was declared in March, the Spanish Government has approved Royal Decree 958/2020, of 3 November, on marketing communications of gambling activities (Royal Decree) in order to protect consumers, as well as to fight against the ever-growing trend of compulsive gambling among young Spaniards.

The Royal Decree imposes severe restrictions on the advertising of gambling, including advertising carried out through information society services. In this sense, the Royal Decree generally prohibits marketing communications about this kind of activity save for certain exceptions, as well as imposing additional conditions depending on the means used for the dissemination of such advertising.

One of the most noted measures of the Royal Decree is that it prohibits customer acquisition promotions, so that marketing communications may only target previously registered customers in the systems of gambling operators (i.e. with an opened account with the relevant gambling operator during, at least, 30 days) that have been verified in a documented manner. However, the Royal Decree does not provide any guidance on how customers should be verified in order to address communications to them. Thus, we entertain some doubts around whether the fact that a customer knows a credential to log in to his/her account shall be sufficient or else a strong customer authentication (SCA) would be required/recommended for such verification.

The Royal Decree limits online advertising of gambling activities to a closed list of cases: ads that (i) are placed on the gambling operators web pages or applications, (ii) are placed on web pages or applications whose main activity is the offering of gambling products or information about gambling, provided that mechanisms to prevent the access of minors and for delivering responsible gambling messages from time to time are put in place (please note that no criterion on the number of responsible gambling messages is provided), (iii) are the result provided by search engines, provided that where a commercial agreement between the gambling operator and the search engines is in place, the search should be based on words or sentences directly connected to gambling activities, (iv) are sent by email in accordance with the Royal Decree, and (v) are disseminated in video-sharing platforms or in social media services, subject to the specific conditions laid down in the Royal Decree.

Also, any ad about gambling activities that is placed on information society services should include an electronic ID code to identify them as pertaining to gambling. It should also be taken into account that the Royal Decree also sets forth that such marketing communications should not entail any hindrances to the main content of the page or application, except for those marketing communications included on the specific websites of gambling operators. In any event, the Royal Decree requires that the ads do not impede users’ navigation and that users are easily able to close them or stop their execution.

As far as the sending of marketing communications by email is concerned, the Royal Decree requires the express consent from the addressee, as provided for in the Spanish Gambling Act and in the Spanish e-Commerce Act. However, the Royal Decree does not clarify if the exception established in the Spanish e-Commerce Act would be applicable in cases where there is a previous contractual relationship with the addressee and the marketing communications are related to similar products or services to the ones that were initially provided by the contract (i.e. soft opt-in). In this sense, the most likely interpretation to make will be that a soft opt-in is not viable, as the Spanish Gambling Act already envisaged a provision worded almost in identical terms that did not include any mention to the potential exception.

For the dissemination of marketing communications through video-sharing platforms, it shall be necessary to implement instruments to prevent minors from being targeted with gambling ads, as well as to allow users to use block or hide mechanisms for this type of ad. In addition, advertisers disseminating audiovisual advertisements about gambling in video-sharing platforms should enable tools and features that allow the setting up of control schemes for the time slots envisaged in the Royal Decree. As a general rule, ads about gambling may only be emitted during 1 and 5 a.m.

Regarding advertising on social media services, the Royal Decree imposes similar obligations to those imposed on vide-sharing platforms re. parental control and ad blocking features, while adding other specific obligations for the dissemination of marketing communications by these means. Among other things, gambling ads on social media services should only be served to the following audience: (i) persons following a gambling operator's official account or channel on such social media services, (ii) persons having shown an active interest in gambling activities, provided that they may delete such preference using the mechanisms implemented by the social media service, and (iii) persons having a registered account with (and therefore being considered a client of) a gambling operator.

The potential infringements of the provisions included in the Royal Decree are subject to the sanctioning regime of the Spanish Gambling Act. In this sense, gambling operators will be responsible for their compliance with the Royal Decree and for ensuring that those entities that disseminate marketing communications about their activities (or those participating in intermediary stages for such dissemination, such as online intermediation services) abide by the provisions. In any event, advertisers or entities participating in intermediary stages shall comply with the obligation of ensuring that gambling operators intending to promotion their activities are entitled to carry out advertising about gambling activities in accordance with their license. Also, it should be taken into account that the Royal Decree expressly sets forth that the liability of information society service providers will be subject to the provisions of the Spanish e-Commerce Act (especially those on the hosting defence of these service providers).

To wrap up, the Royal Decree imposes strict limitations on the advertising of gambling to protect public order and social interest, as the nearly unrestricted offering of this kind of activity may have contributed to the increase in people addicted to gambling (including particularly vulnerable groups and people with risk behaviours). However, the implementation of these measures will imply many changes in the business models of various operators (whether in the gambling sector or not).