If Fred done has his way, the British betting shop could become as common a sight on the Spanish high street as outdoor cafés and tapas bars.

The multimillionaire owner of Betfred, the fourth-largest betting chain in Britain, is planning to set up the first betting shops in Spain, starting in Bilbao. Other British betting firms, including William Hill and Stanleybet, are also drawing up plans to raid the Spanish market, where gambling laws are being liberalised.

British bookmakers, who have four decades of experience working in a legal, regulated market, see Spain as the first step in a big international expansion.

“I think Spain is the first of many,” Mr Done told The Times. “I think within five years, the whole of the market in the European Union will open up to bookmakers.”

Spaniards are inveterate gamblers – by some estimates, the biggest in Europe. The lottery is a national obsession and many Spaniards can be seen diligently feeding slot machines in the corners of dingy bars for hours on end.

Internet gambling is illegal in theory, but Spaniards are heavy users of their services. Many Spaniards living near Gibraltar regularly visit the British colony’s betting shops.

Spaniards are also mad about sports. At the office, Spaniards are continually making bets on, for example, whether Fernando Alonso will beat Michael Schumacher in the next grand prix or whether Rafael Nadal will defeat Roger Federer in the tennis. Yet until now Spaniards have been unable to have a legal flutter on such events.

Betfred has signed an agreement with Ekasa, a Basque company, to build and operate the new betting shops, to be called Reta – Spanish for “dare”. Initially, most of the betting is expected to be on football matches, especially the premier La Liga. Horse racing exists, but it is far less popular.

The Basque Country, of which Bilbao is the largest city, is the first Spanish region to reform its laws to allow high-street gambling. The regional government is due to grant concessions to three companies, which Ekasa and Betfred are applying for. If they succeed, they will be opening their first shop in fertile territory. Basques are so mad about gambling that they place bets on poetry contests.

Madrid’s regional government is expected to be the next to pass new laws liberalising the sector, probably before the end of the year. Catalonia, of which Barcelona is the capital, and Andalusia, where many expatriate Britons live, are likely to follow suit.

It is understood that other companies, such as Stanleybet, which sold its UK betting shops to William Hill last year, are waiting for Madrid’s regional government to change its legislation before committing to Spain. The company already has a presence in other European countries including Italy and Romania. William Hill has also signed a deal recently with Codere, a Spanish gaming company that operates more than 30,000 slot machines and bingo halls accross Spain.

“There are quite a few [British] bookmakers looking at opening in Spain,” Mr Done said. “A lot of people are watching this experiment with the Basque Country and Madrid very closely. If it works there, I think competition will be fierce.”