Faced with severe fiscal restraints, governments are increasingly turning their attention to the potential of legalising and licensing online gambling as a valuable source of tax revenues.
"There is also a strong argument that since consumers will engage in illegal online gaming if countries don't regulate, it is better to license and tax it than to allow the revenues to go to unlicensed operators - and player protection will be greater too in this scenario," said David Trunkfield, lead gaming partner at PricewaterhouseCoopers.
Historically, online gaming was made up of fragmented pockets of legal and illegal spending, served by operators licensed in a range of jurisdictions, with the size of the market almost impossible to measure accurately. Nowadays, however, there are moves around the world by policy makers to bring online gaming into a locally licensed, regulated and taxed framework.
New analysis by PwC recently found that the online gaming industry has continued to evolve during the past year with a growing number of countries within the European Union setting up regulatory regimes for online gaming, particularly poker and sports betting.
This year alone has seen Spain, Denmark, Greece, Bulgaria, Germany and Hungary all taking steps towards developing a locally regulated, legal online gaming market. However, this is more complex and taking longer than expected as any national regimes in the EU need to be consistent with EU law. The UK too is looking at changing regulation to capture tax revenues which are currently being lost to offshore jurisdictions such as Gibraltar and Malta.
According to the report, the majority of the legal online gaming in the world occurs in Europe, the Middle East and Africa, with the UK being the largest legal online gaming market. The regulatory complexities still vary widely between countries and even between various forms of online and mobile gaming.
Trunkfield added: "With online gaming being complementary to bricks and mortar revenues, there will be more than enough room in the market for both online and physical gaming services, provided each offers a compelling experience for the consumer. Whether you look at the physical casino market or online gaming opportunities, the overriding challenge is the same.
"In this ever-increasing digital world where consumers can access vast quantities of information and experiences from wherever they are, the gaming industry is competing for the increasingly limited share of the money consumers have for discretionary spend."
