Europe’s online gambling market has been changing dramatically in recent years, as nations look to regulate the practice in their own jurisdictions while still being mindful of European Union laws at the same time.
In 2014, the most dramatic changes came in the United Kingdom, where a new taxation and regulation scheme had a ripple effect through the worldwide industry.
UK Changes to Point of Consumption Tax Model
The UK Gambling (Licensing and Avertising) Act of 2014 marked a major change in the way the nation would oversee online gambling.
The UK had long been friendly to online gambling, but few companies actually based their operations there.
That was due in large part to taxation rates: it was simply cheaper for companies to set up shop in Gibraltar, the Isle of Man, or other locations where local governments were happy to collect very little in taxes in order to attract Internet gambling companies.
The new laws required companies that wanted to offer online gambling to UK customers to apply for a UK license.
That came with a bitter pill to swallow for many operators, as the UK would also collect a 15 percent point of consumption tax from licensed online gambling companies for all revenues they collected in the UK.
The Gibraltar Betting and Gaming Association tried to sue to stop the UK Gambling Commission from enforcing the new rules, but that lawsuit was shot down by the UK High Court.
That wasn’t the only area of concern for operators. The licensing process required companies to provide a legal rationale for the “grey market” jurisdictions (those countries where online gambling is not expressly regulated, but is not clearly banned either) where they had significant operations.
That left some firms in a position where they had to choose between the lucrative UK market or successful operations in less regulatory-certain grey markets.
Some groups simply chose to back out of the UK, including Mansion Poker and several other Asian-focused sites.
Other companies, like Ladbrokes and PokerStars, made a point of leaving many grey market areas, though in the case of PokerStars, this was likely as much about improving their regulatory footprint ahead of battles for licenses in New Jersey and other places as it was about the UK licensing rules.
With the new tax regime just going into place in December, it may be some time into 2015 before we truly know the new law’s impact on the industry.
Spain Adds Licenses, Sweden Considers Reform
While the UK licensing program was the biggest story in Europe this year, several other nations made important moves in 2014:
Spain announced that they would allow more online casino licenses in the hopes of growing the Internet gaming market inside the country, saying that poker alone wouldn’t bring in the revenue they wanted.
Sweden has been considering an end to their state-controlled monopoly on Internet gambling, but plans for reform have been slowed down because of uncertainty after Prime Minister Stefan Lofven’s minority government wasn’t able to pass a budget, leading Lofven to call for new elections early next year.
Maltese officials arrested two directors of Everleaf, accusing the two men of misappropriating player funds.
The Maltese Lotteries and Gaming Authority had been accused by players of not taking a hard enough stance against Everleaf while the site was still in operation.
Andorra may be one of Europe’s smallest countries, but the tiny principality is hoping to pass legislation that would allow for a single casino license and online gambling.
Lawmakers hope to pass the bill next year, and believe that a casino will work well thanks to the heavy tourism in the nation, which has a population of only about 80,000.