The Business of Gaming Regulation: The Ups and Downs of Legal Changes
The European online casino and gaming market has grown markedly over the last two decades. From humble beginnings, the continent now generates billions of pounds in revenue every year.
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In fact, since the implementation of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), Europe has overtaken the US as the world's online gaming hub.
As with many industries, regulation has followed growth. In the early noughties, when the sector was starting up, national governments took little interest in its nuances. However, as more people have embraced the real money casino gaming revolution, things have changed. Today, many of Europe's largest countries have implemented their own online gambling laws. Often complements to any offline gaming laws, the new regulations have altered the industry's dynamics.
UK Sets the Standard for Online Gaming Laws
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Indeed, the first country to implement a comprehensive regulatory framework in 2014 was the UK. Authorised by the government and overseen by the UK Gambling Commission (UKGC), Britain has become the gold standard for online gaming regulations. As well as insisting that each operator holds a valid licence, the UKGC oversees issues such as game integrity, security, finances, advertising and responsible gambling.
Although operators have had to remodel large parts of their business in order to remain active, the net result has been a positive. According to UKGC reports, gross gaming yield for the remote sector (i.e. online) was up 2.9% between 2017 and 2018 to £5.6 billion. That increase meant online operators were the biggest revenue generators within the gaming industry at 39% market share. Over in France, It's a similar story. Despite a rough start to regulated online gaming, a liquidity sharing pact with Spain and Portugal has seen revenue improve.
In 2017, online casino revenue increased by 10% while sports betting and poker saw 23% and 10% gains, respectively. Like France, Italy's online gaming economy has also enjoyed an upswing following the introduction of a regulatory framework in 2018. However, it's not all be positive. Even though total turnover was up 5% to €106.8 billion/£95.9 billion in 2018, certain laws are threatening to stifle local operators.
Regulation Works if It's Not Restrictive
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With Google cracking down on gambling adverts and Italy banning similar content on TV in 2019, certain operators aren't happy. According to the team behind regulated casino online Bet Nero, too much red tape is bad for business. Although responsible gambling is an important focus for regulators and operators, extreme measures are threatening to damage the industry. Indeed, what's interesting about the current wave of regulation sweeping Europe is how far things have evolved.
From a state of zero regulation, some countries are now careering towards too much of it. Even the UK, which many regard as the best online gaming country in the world, has to walk a fine line. Quite what the balance between responsible gaming regulations and freedom in business are isn't clear at this point. Even though it's worth billions, online gaming is still a relatively fresh industry. One thing that's clear though is that legislation will continue to present new opportunities and potential problems for operators. Therefore, only the companies that are able and willing to adapt will survive.