Betting regulations - a new gaming world order

Online betting regulations is fairly new to most markets. Online betting has in most countries been a grey area activity legally speaking. Not all countries have sought to regulate the fast growing online gaming market like the UK, Ireland and Austria to name a few of the early regulation birds. Italy has been at it a while, France and Denmark have recently jumped on the bandwagon. The trend is clear; regulation is coming on pretty fast. In this article we will look at the new legal landscape of online betting regulations in Europe.

What does this new regulation mean for operators?

Obviously these new betting regulations will require a lot of costly compliance. The bill consisting of various professional fees and direct application costs will run very high. Law firms around Europe must be celebrating this new regulation trend. The compliance bill alone will create a barrier of entry that will ensure that only the biggest operations of today can get in.

Taxes go up. Where one before could rely on say Malta and their 0.5% turnover tax on betting one now have to live with as much as 30% gross win tax like in Greece. Even worse is the 5% turnover tax proposed in Germany and the 8.5% turnover tax in France. These taxes may be brought more in sync with the reality of betting as we know it, but nothing is certain when state monopolies and politicans call the shots.

Increased competition among the larger operations are bound to happen even if they are going to gain market share on the expense of those players not capable of competing in the licensed market. Expect a marketing bonanza in all media where licenses are given. As the main operators battle out for market share M&A activity should go up. It does make sense creating larger entities and cut costs that way.

What does betting regulations mean for customers?

For consumers of online betting services these betting regulations will most certainly mean that boys are separated from men. The boys will be left out in the dark, while the men bask in the glorious light of licenses. One can argue that this will provide a safety net for the consumer and his deposit. A company passing strict due diligence by a regional gaming board would be more likely to hold the deposit of his customers more safe than an unregulated business.

The sad thing with these betting regulations is that the price to play will go up dramatically. The sports books will have to increase their margins to meet the hefty tax hikes. Expect to see lines at 95% today closer to the 80% mark. If you are serious about your sports betting any hope of making decent money is gone with such a move.

How will these new betting regulations be enforced?

Expect the "new monopolies" and the gaming boards to lobby hard for protecting their market position and income. They will use every opportunity to block the way for unregulated operators. Years have been spent lobbying what is going on exactly now. Millions of euros have been spent on this very scenario playing out in front of our eyes. Be sure they will not want anyone to mess with this. You will see more of shutting down payment options for unregulated business like Poland, Norway and the US has done. You might see DNS blocking and new creative ways of making sure the money stays with the giant operators who in turn pay a hefty tax to the government.

What is the serious bettor to do?

First; be patient. We need to see how it all plays out. Maybe it won't be that bad when the smoke clears. For some time you will still be able to access huge unregulated operators if you wish. Many sites will guide you on your way, and of course; these operators are prepared to fight too. They know they can offer a much better product to the end user (you) than the regulated bookies can. They want to use their edge to compete. Will they be successful? Time will tell.

Final note

Back in the late nineties and early 2000's bookmakers went to Gibraltar and Malta to compete versus government monopolies. The survivors of that era are now the big fat cats with pockets full of cash. In effect they have become the monopolies of today and they are aligning  their interests with the old monopolies. For the creative, fast moving, dynamic bad boy of an operator this opens up a whole new set of possibilities. Stay tuned for the ride, it's going to be a wild one.