When the United States Senate passed the Unlawful Internet Gambling Enforcement Act (UIGEA) in October 2006, the gambling industry experienced the equivalent of a major earthquake.
Companies that were previously reliant on the United States market for its main customer bases were suddenly left in the lurch. Those companies who had foreseen the new Act had already started seeking alternative markets, going as far as South America, the Far East and Europe.
In one single swoop, online casino operators, poker rooms and other companies affiliated to the gambling industry were suddenly focusing on these regions and trying to get their slice of an already tight and competitive market.
Europe has now become the main target market for many of these online casino companies. However, if they thought that it would be easy to slide into the market, they were very wrong. For starters, as mentioned, competition is tough as it is. European operators, who already have a strong customer base as it is, understand the culture and mentality needed to promote business to local gamblers and they certainly have a head start.
Nevertheless, the European Commission is generally more lenient and accepting toward online gambling than the United States authorities ever were and regularly investigates complaints against national operators who control state monopolies and thus – in their eyes – defy European law. As it stands, seven countries have until the end of 2007 to justify their sports betting monopolies.
Regulation in European countries
Whether it is simply timing coincidence or due to the effects of the UIGEA, things seem to be picking up for the online gambling industry in Europe. From January 2007, Belgian companies are allowed to offer electronic gaming if they are licensed by another European operator.
Italy issued a new law for controlling internet gambling and created the AAMS, a regulation board which acronym means ” Independent Administration of State Monopolies”, that has created guidelines for gambling, poker and sportsbetting companies to operate under a new legislation
Another country that opted for regulation is Spain, which introduced with the Gambling Act a number of rules applicable to all the gambling activities developed via internet and other electronic media.
In Northern Europe, internet gambling is also slowly by surely picking up. German authorities have recently clamped down on online gambling operators, although this simply shows that there is indeed a flourishing industry in the country. Scandinavian countries are looking towards regulation and many expect an announcement regarding licensing very soon.
Eastern Europe is possibly one of the greatest opportunities for online casino companies looking to break into regional markets. Many of these countries are “playing it by ear” to see where the market is heading and how they should deal with legislation.
The main hurdles facing the gambling industry in Europe, therefore, include breaking through state monopolies and the issue of taxation.
All in all, the picture looks positive, with the European Commission showing a genuine effort to regulate the industry and meet the corporate sector half way. However, this was also the situation in the United States for a while and in an industry as volatile as the gambling one, it is difficult to say what the future really holds for European wagering, post UIGEA.