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Can More Help Ease The Pain?

Added: Nov. 3, 2014

Maybe, maybe not. In case you missed the most recent news in the online gambling world, at least one country is taking procative steps to increase gambling revenue. This country is Spain and in a recent announcement they revealed their plans.

Here is what you need to know. The numbers just in show that the metric that Spain refers to as the Gross Gaming Revenue has declined by a fairly high 6 percent on a year to year comparison. Note that this decline in revenue is only for the online gambling sites. These sites are oftentimes referred to as “…” sites. Anyway, apparently whatever is going on in Spain as far as online gambling is concerned doesn’t look so good.

So the next most obvious question is what is Spain doing to boost the revenue? Would you believe that the Spanish gambling regulators have put forth a plan to issue more licenses? These proposed new online gambling licenses will be issued to existing online casino operators. According to the regulators, these new licenses can be used to expand into new areas of online gambling. More interesting perhaps is a bit of language buried deep in this announcement that indicates that these new online casino licenses will also be issued to other companies that are looking to get into the online casino market in Spain.

Is this a wise move on the part of Spanish regulators? Of course we cannot know the answer to this question for about another year or so till new online gambling revenues are released again. Yet take a look at this for yourself and see if this makes any sense.

Let’s review what’s going on here. So the online gambling regulators announce that the online casino revenue has dropped precipitously. As a solution to the problem, these very same regulators are issuing more licenses. Will this help?

Look at it another way. Think back to your high school or college economics classes. If the number of online gambling dollars drops, does that not suggest that the number of people using online gambling sites is dropping or that the amount they spend at these online casinos is decreasing? Recall that in economics terms, that would suggest that the “demand” for online casinos in Spain is decreasing. All right, so suppose the demand is dropping for online gambling in Spain. What effect will the move by the Spanish regulators have?

Perhaps instead of expanding the pie as the regulators hope that the new licenses will accomplish, something else will happen instead. Perhaps new licenses will only cut the size of the pie available to the existing online casino license holders. Food for thought. Let’s see how this one plays out.