International edition
August 22, 2019

Jaime Estalella, COO of Codere Europe

“Codere proposes an approach to online gaming from an integral perspective”

(Spain, exclusive Yogonet.com).- Codere has maintained a critical position regarding the new Spanish legislation and the recent opening of the online market. In this interview, Jaime Estalella, COO of Codere Europe, talked about the lawsuit that the firm sued against Bwin and Miapuesta.com (Sportingbet). The company, that already counts with a license for Madrid Council, presented an application for the country.

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odere has shown its criticism with regards to the new Spanish gaming law due to the online gaming treatment...
Codere has shown its criticism with regards to the new Spanish gaming law on how it has treated online gaming. Codere Group has had, for many years, a great interest in an adequate online gaming regulation in Spain, and that’s why, from the first steps on the processing of becoming a law, we have manifested our opposition to this hasty and flawed online gaming regulation process in Spain and the hurried regulatory development that has been carried out. In this sense, Codere Group has approached the Spanish authorities, in the Parliament and outside it, to evidence that there are regulations in the Law that do not respond neither to the general interests nor to a correct regulation for this important economic sector.

For us, this conviction is founded on the treatment that the Gaming Law grants to online gaming operators that have been developing the activity in an illegal way, without submitting to the Spanish legislation, not having a license, not paying taxes in our country for the profits obtained and not guaranteeing the proper protection to underaged and vulnerable groups. If the current situation is not corrected, those operators would be benefited under the new law, because the advantages aquired would be consolidated (brand, customer base, etc), in an illegal way, some of them thanks to the important savings coming from their lack of taxation in Spain. On the other side, we are Spanish businessmen that have been respectful towards the Spanish legislation, who have paid our taxes on time and have created employment and wealth in Spain.

So we think this is not the accurate way to face this norm, and what Codere proposes is the  approach to online gaming from an “integral” perspective, not only considering online gaming as a new channel, but also discerning the adequate harmonization and convergence between traditional and online gaming, the different channels and different gaming modalities. The online gaming sector in Spain requires, as the new authorities are facing a global approach, to face the activity as a whole. 

The company has reported that traditional operators suffer from the unfair competition. In which stage are the legal actions started against several online gaming operators? Which have been the results?
For years, Spain has been developing a strong legal traditional gaming industry, strongly regulated and audited by the Administration. Besides, this legal industry had achieved to displace illegality to marginal rates.

In this context, the gaming sector has considered the beginning and growth of Internet gaming, offered to residents in Spain from Gibraltar and other tax havens, by operators that justify their actions on inexistent rights derived from the European Treaties, that do not tax in Spain and are not subject to regulation, even inexistent on this subject, in our country.

Considering this situation of helplessness, Codere decided to start legal actions on the court, presenting a lawsuit for unfair competition and illegal advertising against one of the operators responsible for this online activity in Spain: Bwin, official sponsor of Real Madrid. 

This demand has been part of a series of legal actions that Codere is boosting in order to exercise its rights and those of the Spanish companies, and also the rights of other countries belonging to the UE, which have been trusting in the Law, in the performance of Public Administrations to take care of their compliance and in the jurisprudence of the Courts of Justice, including the Court of the European Union, to which the companies are eligible in a non accurate way. Neither the Spanish legislation nor the right of the European Union habilitate Bwin and other similar operators to develop their activity in Spain.

Besides, the company has started simultaneously different lawsuits against illegal gaming operators, achieving the precautionary cessation of the activity in Spain of the web page Miapuesta.com, belonging to Sportingbet in the country. This is a relevant action because the court that is dealing with the issue dictated an Edict in which considers illegal any games of chance and betting activity, including online gaming, which does not count with previous administrative authorization.

The Edict is very important for the sector because it considers illegal the activities of offer and operation of games of chance and remote betting, specially in Internet, both those that are previous to the coming into force of the new Gaming Law 13/2011, last May 29, 2011, as well as those performed later, to be developed without licenses issued in Spain and against current prohibitions.

How is Spain positioned with regards to other countries that have regulated online gaming? What way should the country take in order to establish a proper frame for online gaming?
The still incipient online gaming market in Spain, expecting to see the light in the coming months, sees Europe as its closest reference in business development. The UK is a pioneer model in Europe, supported by a system of licenses in which the operators, in order to perform their activity, have to comply with a series of requirements established by a public regulator. All the operators are liable to a 15% tax rate on their gross profits (net income).

On the other hand, Italy has been one of the main European countries in legalizing online gaming and has become an important developing market. In this case, the system is more liberal and available to all the operators with venue and license in any place within the EU, but must follow the requirements establised by the Italian norm, which demands to have a license in order to operate in the country.

Before the gestation of the Online Gaming Bill in Spain, the company has bet strongly, and continues doing that, on the development of an adequate, transparent and competitive regulation of the sector, which guarantees the rights of the users and enables the continuity of the sector.

One of the important challenges that the firm faces will be the need to harmonize national online gaming operating licenses with the licenses granted by autonomous  communities. Such harmonization must solve the conflict that may be produced with regards to taxation, the gaming modalities and even their own conditions to have access to the licenses. This matter pending will just be solved, in our opinion, through an integral approach of the problem, which we have previously commented about. 

If the appropriate regulation is established, Does Codere aim to penetrate into online gaming? Which are your future plans and goals connected to this segment of the industry?
Yes. We think online gaming is an important channel to offer a gaming experience to our customers, so we consider this activity within Codere Group for the near future.

In fact, the company already has a previous experience developed through online gaming in Italy since 2010, where it has licenses for the online bingo development and is already arranging the preparation of casino games to develop them online, too.

Codere started operating online bingo through the web www.codere.it in Noviember 20, 2010. This first online gaming experience of the company in Europe opens its way for the development in other countries in which it operates, once the market continues liberalizing and the pertinent licenses are obtained. 

In Spain, we already count with an online gaming license from Madrid Council and we have presented our application to obtain a national license. In this sense, we are focused in Codere evolution, from its condition of traditional prívate gaming operator to “global gaming operator”. 

This new global approach positions the company as a multi-channel operator, managing multiple channels in order to comprise the different players profiles: as a multi-offer operator (traditional gaming, bets, social games, skill games, contests and lotteries), and as an innovative operator (boosting a new gaming community, opinion and creation of new contents). All this working in the markets that continue regularizing this activity, transforming Codere in a multi-national operator. 

Codere collaborates and performs a close follow-up of the development of the legislation in those countries that are moving towards the regulation of the online gaming market, both in the countries in which Codere has a physical presence and in those that are potential new markets for the group.

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