How European regulators are squeezing the online gambling industry

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The European gambling industry is facing changes in 2020 as regulators crack down on gaming operators.

UK MPs are calling for gambling laws set out in 2005 and 2014 to be updated, claiming they are now ‘too liberal’ in the digital age. Meanwhile, Germany is outlining strict limits on its new regulated online gambling market, and Sweden is putting limits on deposits, stakes and ‘freeplay’ money given away in promotional activities.

Here is everything we might see change across the three countries in 2020 and beyond.

The UK online gambling market is currently regulated under the Gambling Acts of 2005 and 2014. The laws are now being criticised for being ‘too liberal’ and fueling the UK’s growing gambling addiction crisis.

While the industry pulls in £11 billion annually, a recent GambleAware survey estimated that 2.7% of the adult population has a gambling addiction. Experts in the industry have argued against the figure, but MPs say the study is enough to warrant change.

Calls are now being made for a new Gambling Act, tailored to the digital age and centered around preventing gambling addiction.

Over 50 MPs and peers published proposals in mid-June as to how the industry could be restructured, completely overhauling the laws set out under Tony Blair’s Labour government. The changes include:

  • A ban on gambling ads, both TV and online
  • £2 stake limit on all online slot machines (limit is currently £100)
  • A ban on VIP schemes and inducements
  • Independent financial checks

MPs have also called for independent financial checks on bettors to make sure they don’t gamble more than they can afford. The changes, if introduced, could massively affect the UK gambling industry. Experts say the reduction in money staked at the plethora of sites with online slots will have a considerable impact on operators alone.

Members of parliament, however, are sticking to the recommendations.  Speaking to The Guardian, Labour MP and leader of the parliamentary group on gambling-related harm Carolyn Harris, backed the changes. She said: “They [gambling firms] have shown time and again that they will not effectively self-regulate. Urgent change is needed to stop this industry riding roughshod over people’s lives.”

The cross-party group has successfully campaigned to ban credit-card betting and limit fixed-odds betting terminals in recent years.

The UK Gambling Commission has gotten behind the changes, recommending a curb on loyalty schemes which significantly contribute to some operators’ income. It added that it was committed to ‘drastically reducing gambling harm’ in a recent public statement.

German lawmakers have recently approved regulations to legalise online casinos and poker from July 2021, though the shift isn’t set to be easy on operators. The market will reportedly be overseen by a new regulatory board in line with the legalisation, which has been described as a surprising move by industry experts.

While online sports betting, poker, and gaming will now be permitted, all three will come with significant restrictions. Rules on how much players will be able to bet will reportedly be put in place in the first instance, limiting just how much operators will be able to make online.

Online slots will start from €1 per spin, with an individual monthly deposit limit of €1000. Gambling advertising will only be allowed within the hours of 9 pm and 6 am. Fixed Jackpots will be banned from online slots, as will autoplay functions, and gamblers will not be able to play slots as side games to table games like Blackjack.

Enforcement action is also set to continue on companies operating illegally. Around 100 companies have been warned in recent months, with 10 deciding to withdraw completely from the German online gambling market.

Sweden is big on its online gambling – the country is home to big gaming software businesses such as NetEnt, and brought in a huge £496.7 million in revenue in the first quarter of 2020. The government, however, is now seeking to toughen-up it’s laws.

New temporary measures have been put in place to protect residents from gambling addiction during the COVID-19 outbreak and are set to stay in place for the remainder of the year. These include a weekly deposit limit of 5,000 SEK (£400), and a maximum bonus amount of 100 SEK (£8). Players will also have to set a limit on their playing time by law.

All three countries expect to see pushback from online operators, who argue the changes will only move the biggest gamblers towards unregulated sites which do not pay tax or offer gambling support. However, it may be that their complaints fall on deaf ears. It seems that, at a time when online gambling is just taking off in the US, the EU is inevitably set to shackle the industry with tighter regulation.

How European regulators are squeezing the online gambling industry

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