Will the EU Help to Regulate the Gambling Market?

Posted by Harry Kane on Tuesday, April 9, 2019

If you were to analyse the individual gambling markets throughout Europe, you’d see that each has its own national regulatory body. In the UK, for example, the regulatory burden falls on the shoulders of the UK Gambling Commission (UKGC), who work with various government agencies and independent bodies to create safeguards for players nationwide.

In many ways, the UKGC is blazing a trail for European regulatory bodies to follow, with its core strategic objectives through 2021 making provisions for the protection of vulnerable gamblers and the reputation of the industry as a whole. However, the fact remains that significant regulatory differences exist between different countries, and this can put some players at a higher risk than others in some jurisdictions.

Martin Haijer, the Director General of the European Gaming & Betting Association (EGBA), has proposed a solution to this by urging EU policymakers to push for the development of a common rulebook for the iGaming market. We’ll explore this further below while asking how such a rulebook would impact on the virtual gambling sector.

Are European Gamblers Being Underserved Online?

According to Haijer, this so-called common rulebook would provide uniform protections, standards and safeguards in the European market, creating a universal set of regulations that create transparency for both operators and individual players alike.

The need for such uniform safeguards has become increasingly pressing in the European market, thanks largely to the exponential growth experienced by several nations during the last decade.

Italy remains the largest iGaming in Europe, with this sector generating gross gambling revenue (GGR) of 18 billion Euros in 2015. The progressive and well-regulated UK market trails narrowly behind in second place, with a healthy GGR of 17.9 billion Euros recorded three years’ ago.

Spain’s GGR also topped eight million Euros as part of the same statistics, while this market recently recorded an impressive year-on-year growth of 29.9% during the third quarter of last year.

Spain is also looking to evolve further and profit directly from the UK’s decision to withdraw from the European Union, by offering operators increasingly competitive tax rates and encouraging British-based firms to relocate overseas.

While the iGaming market in Europe may be continuing to grow at an exponential rate, however, Haijer’s assertion is that regulatory standards in the region have failed to keep pace. As a result, there remains a concern that Europe’s growing throng of online gamblers are being underserved by a raft of inadequate and frustratingly inconsistent policies.

This issue is being exacerbated by the borderless nature of the Internet, and the fact that there are no rules prohibiting intercountry gaming within Europe. As a result, Europeans can easily play on gambling websites based in different jurisdictions to where they live, which in turn places them at the mercy of changeable regulations and poorly defined laws.

Overall, the EGBA points to several major gaps in customer safeguards in the iGaming market, including those pertaining to problem gambling and an underlying lack of self-exclusion.

In fact, half of all EU member states have yet to implement comprehensive self-exclusion services for players, with the vast majority failing to follow the example set by markets such as the UK.

Making the Argument for Uniform Regulations and Safeguards

Perhaps most alarmingly, Haijer’s EGBA group have also detailed significant state failings in underage gambling protections.

This, along with concerns over customer verification procedures, remains one of the most pressing concerns facing online gambling regulators in 2019. It’s certainly something that the UKGC has sought to address, particularly as the number of children aged between 11 and 16 classed as having a gambling problem in the UK has quadrupled to more than 50,000 since 2016.

Despite this, Haijer has cited research undertaken by the University of London from 2014, which revealed that only Denmark has so far implemented European Commission policies and safeguards relating to online consumer protections.

This underlines the extent of the challenge facing the European market as a whole, with each EU member state adopting a differing regulatory approach and failing to recognise the impact of significant change within the industry. Not only this, but very few states boast the comprehensive regulatory approach of the UK, with some countries failing to provide even the most basic player safeguards.

These concerns undoubtedly support the growing calls for a common EU rulebook, which would revolutionise the fast-growing iGaming market in Europe and provide players with the protection that they deserve.

Ultimately, this would ensure that more than 12 million gamblers are protected when gambling online, regardless of which member state they reside in or the jurisdiction of the virtual casinos that they frequent. Most importantly, it would provide much-needed protection to vulnerable and underage gamblers across an entire continent, creating safeguards that were transparent and effective within every single European jurisdiction.

Will the EU Provide Universal Protection for European Gamblers?

Those backing reform and a common EU rulebook will be disheartened by recent events, with the European Court of Justice (ECJ) detailing that it would no longer enforce EU laws on gambling sector regulations back in 2017.

Instead, it opined that national policies and standards that have been defined by member states should be used to provide iGaming legislation, creating greater autonomy for its members while simultaneously creating regulatory inconsistencies across Europe.

This ruling is undoubtedly at odds with the EU’s commitment to creating a workable digital single market for its consumers, with this goal seemingly central to the underlying premise of the European Union.

Even on a fundamental level, this approach forces online gamblers in Europe to have their level of protection determined by the member state in which they live, which also incompatible with the EU’s modus operandi and the values on which the union was built.

Given this, and with the iGaming market in Europe facing the considerable challenges posed by exponential growth, intercountry gambling and a rise in the number of vulnerable players, now is surely the time for the EU Commission to act and establish a legally binding common rulebook.

If not, players in jurisdictions will fewer protections will be placed at far greater risk of becoming problem gamblers, while inefficient and inconsistent regulatory measures could undermine the long-term growth of Europe’s iGaming market.