Are Europe’s ever-tightening internet casino laws destroying iGaming?
The online gambling industry is so far removed from what is was twenty years ago. What began as an unregulated free-for-all, where more rogues than reputable operators existed, has turned into something with so many government regulations and mandates, that many companies are struggling to compete.
Internet gambling was, at one time, the world’s second most competitive industry (behind adult websites, of course). Now, more companies are going belly up because there’s only so much room for competition to exist. The largest operations remain, buying up and absorbing all of the smaller operations that didn’t already abandon bankrupt offerings.
Some would say we’ve gone from one extreme end of the scale to the exact opposite, taking a burgeoning industry and stifling it with so many laws that only the biggest, most lucrative companies can afford to pay licensing fees and still invest in the technology necessary to stay in compliance with regulatory laws. The question is…
Are Europe’s Internet Casino Laws Destroying iGaming?
There’s no question that the strictest internet gambling laws are coming out of Europe. The UK started it in 2014 when it updated its laws. Regulations became far more strict, and every operator that wanted to access the UK market would have to apply for a UK license to do so. They would pay the license application fee, the license fee, a 15% consumption tax, and have to stay in line with the legal stipulations of maintaining that license.
Suffice it to say, it became very expensive to accept UK players. However, any company that could afford to compete in that market did so, because the UK was by far the largest and most lucrative white-hat market on the planet.
Every year since, the UK has further tightened the belt around its licensees. Player protections get stronger, anti-money laundering legislation gets stricter, and the cost operators pay to stay within compliance remains on an uphill grade. Compounding the issue for operators is other European jurisdictions who see the benefits of the UK’s strangle-hold, and continually make moves to follow in their footsteps.
As for whether that every-tightening rope is a boon or bane for the iGaming industry – that really depends on who you ask. Any company that was put out of business, or at least pushed out of the European market, will tell you it’s destroying iGaming. Any company that’s followed the rules and still manages to stay afloat tends to agree it’s creating a safer and more lucrative market that’s just as beneficial to regulators as it is operators and their players.
The Negative Side Effects
If you think about the negatives, they all revolve around money, and they only impact operators. They must spend more to secure their software. They must pay for regular audits to prove their worthiness for a license. They must bear taxation. They must cut back on the bonus promotions that once drew new players to their virtual doors, and kept them coming back for more.
Furthermore, operators must perform financial checks on high rollers to ensure they can afford what they’re wagering, and that the funds are coming from a legitimate place. This scares away a lot of valuable gamblers – not just the ones who may be attempting to launder money, but those who find the probe too invasive, too personal, too insulting; whatever word best fits the description on a case by case basis.
Essentially, these stricter laws are costing businesses money and VIP players, forcing the industry to consolidate into a select number of high-profile businesses.
The Positives Outweigh the Negatives
Operators may be feeling the tight belt, but for players, there’s no question that internet casino laws are working to their benefit. Responsibility is not just suggested, it’s mandatory, and non-compliance comes with enormous fines. Players are being protected better than ever, and it’s creating a market they feel they can trust like never before.
Any online casino that appreciates its customers as much as its revenue will agree that protecting their players is protecting their assets. These companies are the ones that are learning to become more flexible; to evolve, adapt and secure an advantage in an industry that is constantly changing for the greater good.