A Hawk-Eyed View of the European iGaming Industry

Sorin Despot

by Sorin Despot

Interactive Gaming ( iGaming) describes gambling and betting services provided through the use of communications technologies. If you’re paying online to remotely assist a bet or a wager, chances are that you are an iGamer.

The iGaming sector has been steadily growing in Europe and is still developing, even though it’s growth is made somewhat unpredictable by regulatory pressure exerted in disparate states across Europe. Seconded by London and Gibraltar, La Valletta (Malta) has established itself as the iGaming capital of Europe and, at least for now, the iGaming capital of the world.

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Europe Dominates the Global iGaming Market

The European market is by far the largest market for iGaming. Of the €34.6bn of online GGR created worldwide in 2015, north of 47.6% went to European operators. The European online gambling market is estimated to produce a Gross Gaming Revenue ( GGR= stakes minus winnings) of about €16.5 billion and is expected to grow steadily to a whopping €24.9 billion by 2020. An H2 Gambling Capital report released in May 2016 illustrates Europe’s substantial market share lead:

Global iGaming Market 2015

This success is mainly tributary to the high level of internet penetration across Europe and the relentless entrepreneurial creativity of European operators, pushing the industry forward through constant innovation. Nonetheless, iGaming is facing difficulties in Europe due to market fragmentation and different degrees of economic protectionism across European states.

Not All of Europe Feels the Same Way about iGaming

2017 has been an action-packed year, with changes in iGaming regulations implemented or placed into motion in Europe. Several countries are moving forward with passing legislation on online gambling or issuing licenses. For example, the Czech Republic mended its gambling laws and is finally on its way to issuing online gambling licenses.

Likewise, Italy has put forward a new tender for online gambling licenses in the first quarter, while Sweden and the Netherlands are moving ahead with legislative proposals intended to open their online gambling markets. For the first time, Poland has passed legislation that allows the operation of online casino games via a state monopoly, and online promotional lotteries via private companies, coupled with stronger enforcement measures for unlicensed operators.

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At the opposite end of the spectrum, some European states have opted for significantly restrictive measures: Switzerland is determined to pass legislation that will allow only established brick and mortar casinos to offer online games under extended licenses, while considering blocking plans for currently operating websites. Slovakia and Norway insist they would allow only state monopolies to operate online casinos, while gearing up for stricter enforcement measures to limit unlicensed offers and a focus on restrictive website and/or payment blocking measures.

The examples can keep rolling, but, all in all, last year’s developments in the European jurisdictions illustrate an ever-greater fragmentation of regulatory approaches, with several different models being adopted across the continent. Therefore, globally focused companies continue to face challenges of complying with a wide range of different requirements along European national borders.

Most European Gamblers Opt for Sports Betting, even Online

European iGaming Market 2015

iGaming has diversified and is continuously diversifying its products, in an attempt to capture a greater slice of the European gambling market. The aforementioned H2 Gambling Capital report shows that the European iGaming sector accounted for 17.5% of the total European gambling market. The European Gaming and Betting Association mentions independent forecasts that “expect online gambling’s market share to steadily rise to 22% by 2020. However, the revenue of the offline market is also predicted to increase from €77.7 billion in 2015 to €84.3 billion in 2020, meaning that the growth of the online market is not to the detriment of the offline market and its traditional providers.”

Key Takeaways

The iGaming industry is growing, steadily establishing itself as an important sector of the digital economy. In an otherwise US-dominated spectrum of digital fields, Europe has managed to get ahead in iGaming, through the constant development of products and thanks to the ever-more fitting ways of transferring and spending money online.

FinTechcompanies like Twispay are constantly searching for ways to empower and improve the online financial experience of iGamers and non-gamers alike. Consequently, the constant pursuit of innovative technologies, while navigating Europe's gambling regulatory bureaucracy, will eventually result in breakthroughs that will touch and improve each of our lives.

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