Online gambling is a highly regulated sector. To operate and provide their services in EU countries, EU established gambling operators need to possess many licenses.
In Europe online gambling activity is controlled by national license regimes
While in the past, either there was no regulation specifically for online gambling or it was only allowed for state monopolies to provide online gambling services, today the overwhelming majority of EU member states have adopted multi-license regimes which allow several private operators to obtain a license and provide their services in that country. Only 5 EU member states had competitive multi-license regimes in 2009, whereas the rest had monopolies and prohibitions. In 2019, the situation has dramatically shifted and multi-license regimes have now been adopted in 25 member states (see our map for more details). The shift towards multi-licensing regimes is positive, as it is a vital element of any competitive and regulated market.
The lack of innovation and variety of product offerings in countries which have a non-competitive model is one of the reasons why, for instance, monopolies are failing. The online gambling market is, like most online markets, highly sensitive to consumer demand and if a player cannot find the product or service that they want with licensed operators, they will look outside in the online world, which is borderless and only a few clicks away. This could lead the player to play on websites that are licensed elsewhere in other European countries, otherwise known as the “grey market” or with websites that are not regulated at all in the EU and do not offer any of the consumer protections that are required in the vast majority of EU member states.
But there are many, many licenses…
In some member states one license is all a company requires to offer online gambling services but, in many countries, companies are required to obtain licenses specifically for offering different product groups, such as poker or sports betting. This can of course be a challenge for gambling operators who offer multiple online gambling products. EGBA member companies hold licenses in 19 EU Member States and, as a result, collectively possess more than 134 online gambling licenses, averaging 7 licenses per country.
The existence of very different licensing regimes is both administratively challenging and costly for both companies and regulators and has effectively created 28 mini online gambling markets in Europe which require different compliance rules. In Europe, to offer the same game or product (e.g. poker) a company will require multiple licenses to supply it to customers across EU member states, despite the product or game on offer not changing in character or terms.
Objective must be to increase the number of players who play inside the regulated marker
Successful regulation requires achieving the highest possible share of players in a given country playing within the online gambling websites which are licensed, regulated and supervised in that country. This ensures that all consumers are protected by the national consumer protection regulations, the country authorities regulate gambling activity and receive gambling tax revenue, while operators ensure compliance and their legitimate operation within markets. To facilitate this, national policies should ensure that the consumer has choice by enabling competition on the supply side of the market through multi-licensing.
- Multi-license regimes have become the dominant regulatory model in the EU, having been introduced in 23 EU member states so far.
- EGBA member companies offer their services across 19 EU Member States and, as a result, collectively possess more than 134 online gambling licenses to do so, averaging 7 licenses per country.