2012 Marks New Era For Regulated European E-gaming
2012 marks the beginning of a new era in the European Internet gambling sector. For the first time revenues generated from domestically regulated markets will account for the clear majority of total e-gaming revenues in Europe.
Research undertaken by Global Betting and Gaming Consultants (GBGC) for its Interactive Gambling Report reveals that in 2011 51.3% of revenues were from domestically regulated markets. This figure will jump to 60.1% in 2012 as several key markets launch new e-gaming licensing regimes.
GBGC Europe E-Gaming Local Licence
“The founding pillars of the “golden age” of Internet gambling in Europe are crumbling and 2012 will be a defining year in that process. Low gaming taxes are being replaced by high taxes; single licences are being replaced by the need for multiple licences. As a result, the high customer payouts that made e-gaming so attractive are being reduced too,” explained Lorien Pilling, Director at Global Betting and Gaming Consultants.
Spain is due to launch its new licences in the middle of 2012, whilst Denmark has already begun issuing e-gaming licences with a 20% tax on gross gaming revenues. Germany’s states are also planning some restrictive licensing of e-gaming under the new Interstate Gambling Treaty and Greece has plans for a 30% gross profits tax for its domestic e-gaming licences, plus a withholding tax on players’ winnings.
Major operators like PokerStars, Bwin.Party Digital Entertainment, Unibet, and 888 Holdings have accepted the new regulatory landscape in Europe even though the higher taxes and increased costs make once profitable markets a lot less so.
Domestic, local, licences do have benefits for operators because they make advertising and payments easier to undertake. But the success of the new licensing model is dependent upon governments being able to prevent non-domestically licensed operators from continuing to attract players.
A number of the newly regulated markets, for example, restrict Internet casino games. GBGC’s research predicts that only 39.8% of online casino revenues in Europe will be derived from domestic licences in 2012.
“Casino games and slots are popular with players. If governments continue to restrict the availability of these games, players will find means of using websites that will accommodate them,” Pilling stated.
Domestically Regulated = operating under a local licence issued or specifically recognised by the government of the country from which revenues are derived. This usually means a licence issued by that government but in the case of UK it currently also encompasses licences held in White List jurisdictions. The figure does not include revenues from state lottery games.