The Effects of Growing Regulations in European Online Gaming

The current outlook on online betting regulations

Online gaming in Europe, and all the various online betting regulations that come with it, is a complicated matter. This is mainly because there are so many different rules in place across multiple countries: each European country is able to create their own online gambling rules and laws, as long they sit within the broad structure of the Treaty of the Functioning of the European Union. As with most laws, there are many competing interpretations and this has led to varying levels of regulation from country to country.

In recent years, many of the larger countries within the EU have tightened up their gambling laws, ultimately leading to a descaling of online betting companies in operation. The new rules and regulations put in place basically make it even harder to apply and acquire a gambling license. This has turned what was an already difficult process into something nigh on impossible for new companies to break into. More importantly, however, the smaller companies already in operation are struggling to keep afloat.

Why are online betting regulations getting an overhaul?

For many years, the online betting industry has moved so quickly that the existing laws simply could not keep up. The advancing technology and constantly-deployed new betting features brought surprising ways to bet, and so many online companies were operating quite freely, without adherence to particularly strict rules. Unfortunately, this type of environment quickly attracted untrustworthy betting sites that had little respect  for the safety and protection of customers.

The importance of data protection was the core underlying issue that came to light, eventually being inspected and rehauled in 2018. The outcome from all these changes was a new and more stringent regulatory system that all companies needed to comply with. Purely keeping up with all the recent changes has been a strain on many companies, with serious reshaping of company infrastructure required for most.

One area in which companies have had to make serious changes is around customer data. Once upon a time, companies were free to use customer data as they wanted. But now, there are strict rules in place as to how data should be stored and how it can be used. All these changes have inevitably led to smaller companies struggling to keep up. The big-name betting brands have been able to swallow the costs of restructuring, but it has led to serious issues for newcomers and smaller brands.

What does the future hold?

European governments are hot on the tails of all their licensed online gaming sites nowadays. The ever-present threat of site audits has meant gaming companies now need to react quicker than ever in order to comply with regulations and keep their gambling licenses valid. Short-notice audits have recently caught out many larger companies and this goes to show that no one who fails to play by the rules  is safe. Many experts in this field are wondering whether smaller gaming sites will have enough resources to survive in this increasingly competitive industry.

What it may eventually come down to is whether companies decide to scale down their operations and offer a unique service dedicated to a handful of markets and games, or simply shut up shop and move on. We have seen multiple takeovers in the last 10 years alone and these were often the right decision for some of the smaller owners being bought out.

However, with these new stricter regulations in place, we may see a rise in the number of smaller sites being bullied into takeovers, purely because they can’t meet the increasing regulatory demands. It seems to be that these strict regulations are a necessary evil for the industry, but at what cost to the smaller bookmakers?

Customer control & smaller betting companies

At the end of the day, our privacy rights and the protection of data in an ever-increasing online world need to come first. If that means a reduction in the number of betting sites made available to the public then so be it, but as we have seen since the dawn of the online gaming era, not everyone plays by the rules.

The freedom at which companies could freely store and move customer data around was at the very heart of the recent data protection regulation changes. Customers demanded more privacy and to keep control of their personal data. And on the whole, that is what they have been given.

However, the clampdown on rules and the inability to meet the new regulatory guidelines has led to smaller betting and iGaming sites looking to offer their services elsewhere. This leads us to the issue of grey and black gaming markets. The issue of black markets is quite clear and we see online sites operating without licenses and any acknowledgment of the local governing rules. They are quickly stamped out, but new ones continue to take their place.

Grey markets, on the other hand, are the shady areas where many smaller companies will look to operate. A classic example of this is a crypto betting site: in a world where many countries are still sitting on the fence about the legality of crypto as a currency, a lot of companies are still jumping in and operating as if the rules have all been approved and set in stone.

The need for common EU regulations

There are a lot of mismatched rules and regulations across Europe. This not only leads to confusion amongst companies, but also betting customers as well. More and more people are betting online within the EU, and access to the various gaming sites within different countries is as easy as it has ever been. As such, to put it directly, the internet does not operate with national borders. The problem is therefore that, due to a vast contrast in the quality of regulations being followed, some countries protect their customers better than others..

The one clear problem that we have seen is the issue regarding self-excluded players, where some players exclude themselves from one site but are able to easily sign up and access other sites within another country. In the internet age, this type of issue needs to be resolved by countries sharing data and using a central list of players – but that in itself is a huge issue and monumental stumbling block.

Would all EU countries agree to this sharing of data, with the best of intentions, and would that further violate the privacy of customer data? It’s a huge problem to solve but the need for positive change is clear. With millions of betting customers across the EU, something needs to be decided and acted upon soon. First and foremost, all EU countries would need to update to electronic identification, a huge step towards meeting that collective information list. The electronic ID process would also stamp out a lot of the fraudulent and under-age gambling that takes place in many EU countries.

What everyone needs, in an ideal world, is a set of guidelines that all countries are required to follow. This would make for a clear and concise betting environment for all involved. Clear rules on under-age gambling, data protection, and gambling addiction are some of the highest priority issues. But as is ever the problem, countries are not likely to agree on the specifics. It looks like the issue of online gaming regulations will continue for some time, but a collective regulatory guideline looks to be the only intelligent answer – getting all countries to agree to this change will continue to be the biggest challenge in this industry.