Enormous Demand for Gambling and Impressive Returns: Western Europe’s Industry

Despite the stringent regulations and high tax rates, this region continues to captivate iGaming operators with the alluring promise of immense wealth. As it stands, nearly half of the global online gambling sphere is attributed to this market.

Discover the Western countries of the Old Continent with 2WinPower. Delve into an encompassing overview of each nation’s distinct industry dynamics and regulatory frameworks.

The Characteristics of the Region

Over the past few decades, Western Europe has metamorphosed into the epicentre of the entertainment universe.

Most governments have effectively regulated online gambling by establishing indigenous licensing mechanisms.

This pivotal transition has ushered private operators into some of the wealthiest markets globally. It supplanted the erstwhile era of public monopolies on gambling, vestiges of which endure in the form of national lotteries.

Let us traverse the spectrum of this region’s diverse markets — from the allure of iconic destinations like the UK and Italy to the diminutive enclaves that pack a disproportionate punch, like Malta.

The United Kingdom

The British amusement sector looms as a behemoth, engaging almost 100,000 individuals while amassing a gross gambling yield (GGY) that comfortably breaches the £14 billion threshold annually.

The online gaming domain alone constitutes nearly 40% of the overall market. Notably, the 2019-2020 tax year witnessed a splendid achievement, with the Internet amusement sector’s GGY soaring to £5.7 billion, signifying an impressive 8.1% augmentation over the preceding year.

Ingrained within British culture, gambling entwines itself with daily life, drawing nearly half of the adult populace to engage in betting activities each month.

Legislative Nuances

Shaped by the 2005 Gambling Act, the entertainment realm offers a hospitable ecosystem for land-based and online establishments.

Such specifics characterise the acquisition of licences sanctioned by the local regulatory authority:

1. Annual fees for online casinos scale in correspondence with the operator’s GGY.
2. The charges encompass a spectrum from modest sums to surpassing half a million pounds for yields that exceed the £1 billion rate.
3. Permit holders are bound to relinquish 21% of their revenues as taxes.

As technology’s evolution ushers in new horizons since the inception of the Gambling Act, the British government has initiated a comprehensive review of extant regulations as of late 2020.

The objective is to modernise these frameworks and secure the well-being of vulnerable groups. Consequently, operators will likely embrace augmented player verification and affordability checks.

Ireland

Like its neighbour, Ireland harbours an affinity for sports betting and horse racing, grounding these activities in rich historical contexts that resonate with a broad spectrum of gamblers.

Commercial physical halls have been proscribed here. Nevertheless, a legal loophole has facilitated the establishment of private members’ clubs, effectively microscale casinos that beckon patrons to enrol as consumers at no charge.

Persisting legislative amendments have failed to furnish a coherent legislative scaffold, driving the Irish administration to embark on an ambitious overhaul of gambling regulations in 2021.

The existing legal bedrock consists of the antiquated Gaming and Lotteries Act of 1956, intermingled with the Betting Act of 1931.

Conversely, the online amusement realm lures myriad operators to procure licences from jurisdictions boasting unambiguous regulatory frameworks.

These entrepreneurs subsequently seek authorisation to extend their services to the island residents. Such dynamics stand to evolve drastically, with the promise of revised rules and the enticement of Ireland’s attractive corporate tax rates poised for transformation.

The Netherlands

Strict regulations govern the amusement segment. Paradoxically, the online gambling landscape is prohibited, punctuated by scant exceptions tailored to specific sectors.

Prospective entrepreneurs must navigate the labyrinthine corridors of licensure, being compelled to apply for permits while meeting stringent prerequisites. An operator’s domicile must align with the EU, the European Economic Area, or an alternate third country’s legislative framework that harmonises with the foundational principles of the Online Gambling Act (2019).

Entering the industry necessitates a fee (from €40,000 to €50,000). The tax rate is set at 29% of the Gross Gaming Revenue. Additionally, a 1.75% contribution from the GGR is allocated to address problem gambling concerns and facilitate the sustenance of the Kansspelautoriteit regulator.

Belgium

The gambling sphere operates under the sway of the 1999 Gaming Act. It underwent augmentation in 2011 to accommodate the surging tide of online entertainment.

Consider the licensing specifics of this market:

Luxembourg

Blessed with a compact yet affluent population and the European Union’s third-highest GGR per capita, this country beckons as a potentially enticing destination for iGaming operators.

According to the Gaming Law (1977), land-based establishments should adhere to rigorous oversight. However, the online segment has more freedom. Licences for brick-and-mortar casinos are nominally uncapped. Nevertheless, the Casino 2000 establishment is a de facto monopoly.

The 2009 Gaming Law designates the Loterie National, governed by a government-supervised nonprofit institution, as the solitary entity authorised to provide online amusement services.

Framed within the perspective of local projects, these monopolies channel the propensity to gamble into controlled realms. This consistency finds synergy with stringent player safeguards and advertising stipulations that coalesce to safeguard the structure of this environment.

Despite the unattainability of an iGaming licence, the governing authorities seem amenable to EU-based operators extending their services to the Grand Duchy’s residents.

France

This country emerges as a colossal gambling arena within Europe, boasting a combined GGR of €7.6 billion. This expanse of the decentralised amusement field is a testament to the nation’s unique historical trajectory across the preceding century.

The decriminalisation of gaming was a milestone realised as late as 1977 during the crucible of democratic transition. According to the constitutional underpinnings of 1978, the prerogative of gambling regulation rests not exclusively with the central authority but switches to the 17 regional governments. Each of them superimposes its distinctive licensing schema.

How to Obtain a Permit in France

Federal-level operations require licences from the central regulatory body, the Dirección General de Ordenación del Juego (DGOJ). Conversely, land-based and some online activities, limited to specific autonomous communities, unfold under the aegis of permits issued by competent local authorities.

Consider the specifics of licensing in France:

1. According to Law 13/2011, operators should acquire discrete permits for each gaming category and specific variant within these groups. Licensing fees begin at around €45,000 and an additional €10,000 for each type of activity offered.
2. Online sports betting necessitates businessmen to contribute an astonishing 54.9% of their GGR as taxes. In contrast, horse racing is embraced by more lenient rates — to 13.8% of the wagers.

With nearly half of the population engaging in gambling and an escalating GGR already surpassing €11.1 billion in online gaming alone, France attracts operators.

Monaco

The country’s bankruptcy during the mid-1800s coalesced with Princess Caroline’s ingenious stratagem — the inception of a casino. This single stroke of genius catapulted Monaco into the echelons of elite seaside havens.

Nevertheless, a curious irony unfolds here. As native citizens, a mere fifth of the principality’s population is systematically barred from partaking in gambling activities. The virtual gaming area remains devoid of regulatory embrace, bereft of any licensing protocol. This vacuum presents an unfettered arena for foreign operators to flourish.

Andorra

Nestled amid the Pyrenees, the tiny principality of Andorra is a ski paradise, an allure drawing hordes of tourists. Unsurprisingly, the organisation of land-based gambling activities has long been atop the national agenda.

In 2018, the Andorran administration announced the possibility of licence applications for brick-and-mortar casinos. Meanwhile, online gambling remains mainly untouched by regulatory efforts or public discourse. It offers residents unbridled access to services offered by offshore operators.

Spain

This country, with the formidable €7.6 billion GGR, emerges as one of Europe’s premier gaming landscapes.

Two main stages formed the amusement field in this state:

1. The decriminalisation of gambling in 1977 imbued the nation with a distinctive regulatory blueprint.
2. The constitutional canvas of 1978 bifurcated gambling regulation, vesting authority within the exclusive purview of regional governments.

Online gaming at the federal level requires documents granted by the central body, the Dirección General de Ordenación del Juego (DGOJ). In contrast, land-based operations are shepherded by permits issued by respective local authorities.

Working in the amusement field mandates acquiring separate licences corresponding to different entertainment types and specific game variants. The fees start from approximately €45,000, augmented by €10,000 for each category.

The tax rate for online casinos is 20% on the GGR. In contrast, horse racing betting implies a fiscal burden of 13.8% of the wagers.

Portugal

Fully regulated land-based and online gambling sectors thrive here. Nevertheless, the industry is struggling with the vestiges of the Great Recession. This is a side effect of exceptional tax rates that have perturbed local operators since the inception of a licensing scheme in 2016.

This landscape begets an anomalous dynamic. The Serviço de Regulação e Inspeção de Jogos (SRIJ) presides over the regulatory canvas, underscored by a legislative architecture that spans decades. It has been evolving through several decrees, most notably Decree-Law No. 66/2015.

The state-owned Santa Casa da Misericórdia de Lisboa (SCML) monopolises lotteries and sports betting. In contrast, licenced operators are empowered to provide gaming services.

The fees start from €12,000 and €18,000 for the maintenance of technical systems. Taxation unfurls in two types:

• 25% of the revenue for online casinos;
• 8% of the turnover for betting projects.

As the online segment gains newfound momentum, precipitated by a 45.1% upsurge in online GGR during 2020, Portugal is an enticing environment for online operators.

Italy

In this country, local licences manifest as limited entities with predefined durations. They are accessible exclusively through a tendering process activated at the government’s discretion. The cost of such permits is about €2.5 million.

While lotteries are under the tutelage of a private monopoly, licenced operators are empowered to provide an array of gambling and betting options. Taxation implies its nuances depending on specific game variants. The amount of charges is from 20% to 25% of GGR.

Italy’s online amusement field has undergone a transformational metamorphosis affected by the Covid-19 pandemic. These changes caused a staggering 45.1% surge in GGR during 2020, bolstering the state’s appeal for online operators.

San Marino

Land-based gambling in this miniature country adheres to the vigilant stewardship of the Ente di Stato dei Giochi. The organisation is endowed with a monopoly encompassing all entertainment activities.

However, the virtual niche remains untouched by the control of regulatory architecture, bereft of any licensing mechanism. Such conditions offer an unfettered platform for foreign operators to grow.

Vatican City

In alignment with the tenets of the Catholic Church, the Holy See formally introduced a prohibition on the activity of gaming establishments.

This interdict extends across land-based and online projects. Even casino ships sailing beneath the banner of the Vatican are prohibited. These restrictions were codified in 2013 with Law XVIII, adorning the Vatican with a halo of sanctity in amusement matters.

Malta

This country is a paragon of gambling jurisdictions. The Remote Gaming Regulations (2004) position it as the premier European Union member state to institutionalise a framework for online gaming.

Malta is the mecca for operators seeking reputable licences within the EU. These foundational tenets underwent revision and consolidation through the 2018 Gaming Act. Further, they were enriched by the Malta Gaming Authority’s new regulations and directives.

Licensing fees start at an annual fixed sum — €25,000. The charges are augmented by a variable monthly contribution calculated depending on the revenue (up to €600,000 annually). The tax rate is 5% of the income.

The Main Things about Western Europe’s Gambling Landscape

The amusement industry in the considered region remains resilient despite stringent regulations and high tax burdens. The allure of immense wealth continues to captivate iGaming operators.

The main strengths of Europe’s entertainment field are as follows:

• The region constitutes a significant portion of the global online gambling market.
• The promise of substantial profits entices entrepreneurs to navigate the regulatory landscape.
• Ongoing technological advancements and legislative adaptations ensure the industry’s dynamic nature.
• The gambling sphere continues to transform, reflecting changing player preferences.

We offer a wide range of gaming content, constant operator support, reliable payment and security software, and many other relevant products and services.