A new era for regulated European i-gaming

2012 marks the beginning of a new era in the European online gambling sector.

For the first time, revenues generated from domestically regulated markets will account for the clear majority of total i-gaming revenues in Europe.

Research undertaken by Global Betting and Gaming Consultants for its Interactive Gambling Report found that in 2011, 51.3 per cent of revenues were from domestically regulated markets. This figure will jump to 60.1 per cent in 2012 as several key markets launch new i-gaming licensing regimes.

GBGC director Lorien Pilling cites 2012 as a defining year for i-gaming in Europe. "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 i-gaming so attractive are being reduced too."

Spain is due to launch its new licences this year while Denmark has already begun issuing licences with a 20 per cent tax on gross gaming revenues. Germany's states are also planning some restrictive licensing of i-gaming under the new Interstate Gambling Treaty and Greece has plans for a 30 per cent gross profits tax for its domestic i-gaming licences, plus a withholding tax on players' winnings.

Major operators 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 restrict internet casino games and GBGC research predicts that only 39.8 per cent 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," added Pilling.