Regulating online casino gambling is a hot-button issue for European governments. Different countries have different approaches based on the political realities and the social fabric of each country.
Online gaming is growing throughout the European Union. The industry forecasts a 2020 gross revenue of €24.7 billion and by 2022 the market is expected to grow to almost €30 billion. Revenue is highest in the UK with Germany, France and Sweden coming in second, third and fourth respectively. Most of the online gambling revenue is generated by sports betting, online casino gambling and online lottery play. In Europe, poker accounts for only 6% of the online gambling market.
In the 28 EU member states, Internet casino gaming accounts for 23.2% of total gambling revenue and its market share is expanding rapidly. The European Gaming and Betting Association (EGBA) reports that sports betting takes in over 40% of online gaming revenue. Slots is in #2 place. PCs are still the preferred device for placing bets but the EGBA expects that by 2021, mobile gaming will overtake desktop betting.
Based on these numbers, the EGBA has called repeatedly for the European Commission to adopt a standardized regulatory framework that will unify online gambling laws and regulations across the continent. In addition to providing a more unified framework, it’s estimated that such a move could save EU businesses and consumers almost €6 billion annually.
Lack of EU Unity
Currently, there is no specific EU-wide legislation that regulates online gaming. From 2012 to 2018 the EU Commission pursued a formal policy to regulate online gambling but the policy never included any type of legislative proposal that would have established EU-wide practices for player protection and industry access. Its principal achievement was to establish a framework for information exchange and administrative co-operation between the gambling regulators of member states. Even a non-binding recommendation on consumer protection for gamblers and minors was not widely adopted.
At present, EU regulation of online gambling across member states is a mix of competing interests. It meets neither the needs of the gambling industry nor of consumers. The marketplace has been further tested by the pandemic but the EU’s framework for consumer protection isn’t responding to the sudden change. Currently, most EU consumer laws aren’t applicable to online gambling transactions so, in areas where the government hasn’t been proactive in regulating online casino activity, consumers lack needed protection mechanisms.
The absence of a EU strategy for regulating online gambling has left the situation in upheavel. The numbers of players who have visited online gambling sites during the pandemic has increased substantially. Some EU countries are introducing measures to control the situation. Measures have included outright bans, limitations on deposits and bonuses and advertising restrictions.
The gambling industry also suffers from the fragmentation. Gambling operators face market barriers and added operating costs due to the absence of EU regulations. A black market for illegal gambling websites flourishes as does a "grey" EU market of gambling operators who are licensed in their country of origin but whose status is not recognized in many of the areas in which they are operating.
This fragmented patchwork has consequences for consumers. The levels of player protections differ from one country to the next so customers are at risk of under-regulation and exploitation in many areas. If the EU wants to create a high-level of consumer protection for the digital marketplace, it needs to step in.
Some examples of the varying laws include:
The Gambling Act 2005 regulates all gambling in the UK. Since 2005 no new regulations that specifically relate to online gaming have been introduced. The Gambling Act 2005 forbids anyone lacking a Gambling Commission license from advertising services to UK customers. There is, however, a whitelist of sites from countries that have proven that their licenses meet standards set forth by the Gambling Act 2005. They include sites based in EEA (European Economic Area) Countries and sites based in Tasmania, the Isle of Man, Gibralter, Alderney and Antigua and Barbuda.
Germany is one of the EU countries that is in the process of updating its gambling laws to reflect the growth of the online gambling industry. Currently, it is illegal for a website to be hosted in Germany but German citizens can wager and play at offshore casino sites.
Additional new laws, to come into effect in 2021, will be enforced under a new regulatory authority, the Gluecksspielneuregulierungstaatsvertrag. The Gluecksspielneuregulierungstaatsvertrag will be tasked with regulating online gaming activities including those which must be approved by the individual states in Germany such as measures for dealing with gambling addictions and player protection guidelines.
Online casino operators will be able to offer sports betting, slots and poker though limits will be in place for online table games like blackjack and roulette and spin-stakes. Live sports betting will be limited to wagers taken on the final result or the next scorer and a stake-limit of 1 EUR per-spin will be imposed on slot games. Each individual German state will decide for itself whether or not to allow table games.
Online casino operators will not be allowed to advertise during the daytime.
Italy, home of the first casino, has allowed online gambling since they were introduced in the ‘90s. The country’s regulator, the Amministrazione Autonoma dei Monopoli di Stato – Autonomous Administration of State Monopolies (AAMS), issues licenses to online gambling operators – including offshore operators -- who can then offer their services to Italians.
Online games which can be offered in Italy include horse pools, bingo, casino games, fixed-odds, sports/horse betting, cash poker games, skill games and tournament and solitaire poker games.
The 2018 Gambling Act and Gambling Ordinance were enacted to regulate online gambling in Sweden. Online casinos can offer games for real money betting including roulette, baccarat, poker, punto banco, blackjack and dice games. Offshore casinos wishing to operate an online casino in Sweden must apply for a Swedish Online Gaming License and must meet the Swedish Gambling Authorities regulations.
The Netherlands is set to begin a regulated online gambling market on January 1 2021. The market will run under the Kansspelautoriteit gambling regulator and will allow online operators to provide and promote online casino games in the country. There are licenses for casino games (slots, table games, online lotteries, non-sporting events and spread-betting) and for sports betting. Remote operators will be provided with a central database of excluded players and they must abide by this list. If a player is excluded by one operator, all other operators must deny access to that individual for the indicated period of time.
Online gambling remains a highly politicized issue in the EU and the EU is unlikely to introduce regulations without support. Yet many customers and operators hope that the EU will take a leadership position in assuring operator market access, unified national government strategy and player protection to EU players and operators.