30-second summary
- Growing popularity of online gambling calls for more regulation in Europe
- Several countries plan to update gambling laws
- Sweden liberalized market on January 1
- UK considering ban on betting with credit cards
- The Netherlands to introduce major regulatory changes in 2020
Global shift to online casinos
Since the US Supreme Court overturned the federal ban on sports betting in May 2018, various states have passed laws to legalize it in their jurisdictions. Many have also opened up the online space for bettors. In Europe, the online gambling landscape is changing fast.
Statistics show that globally, more consumers now gamble online than in physical locations. This has created a huge market for gambling operators to occupy that space. In 2019, several European countries will update their gambling regulations.
The scandal of rising numbers of problem gamblers and addicts has put pressure on governments to regulate better and limit the damage.
Sweden opens market to foreign operators
Sweeping legislation to liberalize the online casino space in Sweden took effect on January 1. The new rules aim to break up the state monopoly. Foreign operators can now apply for licenses; this move stops their illegal access to the market, which impacted domestic gambling companies.
Opening up the market also keeps gambling revenues within Sweden. Swedish players were opening accounts in other jurisdictions in droves. More than 70 operators have applied for Swedish licenses and just over 30 have been awarded. They will be taxed at 18% on their revenues.
The new regulations will also make gambling safer for players who are at risk of addiction. And the legislation makes it easier for the Lotteriinspektionen (Swedish Gambling Authority) to enforce measures to stop money-laundering and fraud.
Online players will need to be at least 18 years old, compared with a minimum age of 21 at land-based casinos.
Sweden is a major producer of iGaming platforms and games in Europe. It is hoped that liberalizing the gambling space will boost companies such as Evolution, Play’n GO, and NetEnt.
Neighboring Finland, which also has a state monopoly on gambling, is reportedly eyeing the changes in Sweden with a view to following suit.
UK cracks down on problem gambling
Britain was beset by bad publicity over the gambling sector in 2018. The government was called to task over its delay to slash the maximum stake on fixed odds betting terminals from £100 ($129) to £2 ($2.57). Gambling companies have been heavily fined for regulatory breaches. And there is pressure on various sports to end sponsorship deals with betting operators.
This year the government has announced it will fund more gambling addition clinics to help problem gamblers.
The UK Gambling Commission, the regulator, is now pushing for further restrictions to gambling to limit social harms. Last week, the UKGC called for a ban on credit card betting to stop problem gamblers spending money they don’t have. Research suggests an estimated 20% of all online bets are made with credit cards.
The regulator has put out a call for evidence and is mooting an outright ban on the practice. A decision is expected in February. Culture Secretary Matt Wright, who has oversight of the gambling industry, said he would introduce legislation if operators don’t comply voluntarily.
In April, the government will increase the tax rate for online gambling operators from 15% to 21%. The massive hike is to compensate for loss of revenue – estimated at £1.1bn ($1.4bn) over five years – when FOBT stakes are cut to £2 that month.
Gambling operators say the tax increase will hit their margins hard, especially since the government may also introduce an obligatory levy this year on all gambling companies registered in the UK.
British gambling companies were already moving stateside in 2018. Evidence suggests that operators like William Hill and Ladbrokes, which already have operations in some US states, will make a bigger push into the space in 2019. The overturning of the federal ban on sports betting in May 2018 has made the US very attractive.
Lagging behind in the Netherlands
The Dutch gambling sector has seen little modernization in recent years. The state-owned Holland Casino enjoys a monopoly both on and offline. Foreign online casinos are not yet permitted to operate in the country, and Dutch gamblers can access online gaming only on the Holland Casino platform.
Draft legislation – the Remote Gaming Bill – has been passing slowly through the legislature since 2015. The law is now expected to be passed in February, with regulatory changes coming into force in 2020.
Taxes on gambling revenues will be eye-wateringly high at 29% once the law is passed. Operators will have to pay another 0.5% to support programs to help gambling addicts, and a further 1.5% to fund the regulator, the Kansspelautoriteit (the KSA).
The KSA will finally be allowed to issue its own licenses to gambling operators. This is likely to open up the country to EU-based companies at last and bring the Netherlands into line with the rest of the EU in not restricting trade between member states.