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Gambling Regulations in Europe/The Changing Face of Online Gambling Regulation in Europe

Things are changing for the online casino industry in Europe, where many countries are changing their attitude to regulation. Online gambling is legal in countries such as Spain, Italy, Belgium, France, and Denmark, to name but a few, which is causing neighboring countries like to take notice and are move towards changing their own regulation. The Netherlands, where gambling is legal offline,  is currently moving towards the legalization and regulation of online casinos for 2021. Another notable country looking to legalize and regulate their online casino industry is Germany. 

Germany to Move Ahead with Online Casino Regulation in 2021

Germans are no strangers to popular games such as  slots, blackjack, and roulette, as land-based casinos have been legal since the 16th century, resulting in a more tolerant approach to their gambling.

In fact, there are dozens of casinos all over Germany, either in or close to all the major cities. In addition, some are famous tourist destinations, including the Casino Bad Ems, which is located outside Frankfurt and dates back to 1720, and the world-renowned Baden-Baden casino, which is a mere, few hours away from Munich and Zurich.

At present, online gambling is illegal. It wasn’t always illegal, however, and, for a long time, it was unregulated because it was new. However, online casinos and other gambling sites were gradually made illegal between 2008 and 2012.

The exception to this is Schleswig-Holstein, Germany’s most northern state, which is located north of a major city, Hamburg and south of neighboring Denmark (where online gambling happens to also be legal. For this reason, many of the gambling sites in Germany, including some on this list of German online casinos, obtained their license from Schleswig-Holstein.

Fortunately, however, this is all set to change now that the Prime Ministers of each of Germany’s Federal States have agreed to change gambling regulations in order to allow online casino and sports betting. The German government have realized that existing gambling regulations haven’t stopped its citizens from visiting online casinos. Instead, they’ve just created an unregulated market in which a disproportionate amount of revenue goes into a single state, with the rest flowing out of the economy and into the coffers of other countries such as Malta, Gibraltar, which welcome German players with open arms.

At present, each of Germany’s states each issues their own betting licenses, but along with the new laws, there will be a new state treaty and regulatory body, the Glücksspiel Neuregulierung Staatsvertrag (GlüNeuRStV) – that will be responsible for regulating online casinos and other betting activity. As long as the laws are ratified by 13 of 16 of the states, the new online gambling regulations are due to go into effect in July 2021.

New Online Casinos Regulations to Increase Gambling Revenues in Germany

The good news for online casinos is that gambling is already a lucrative industry in Germany, with total revenues of €16.3bn in 2019. This can be roughly broken down by type, with sports betting generating 38% of this amount, casinos a close second with 34%, and poker responsible for 24%.

More importantly, revenue is already being generating by online gambling but with it being unregulated, accurate data is hard to come by. Some experts have estimated it as €2.2bn with the potential to grow to €3.3bn by 2024. Others have estimated revenue from online gambling being somewhere between €4 – €22bn. Though exact figures may differ, one thing that experts agree on is that with an economy as robust as Germany’s, and a population that’s familiar with casino-style games, the sky is truly the limit.

Online Casinos in Spain Offer a Success Blueprint

One of the countries Germany is looking at with optimism is Spain, who has seen revenues from online casinos and other gambling activity soar, since passing the Spanish Gambling Act in 2011.

Gambling had been legal in Spain since in 1976 but casinos located in autonomous communities such as The Basque Country, Canary Island, and Andalusia took it upon themselves to operate without a license – making the industry difficult to regulate. When the Spanish Gambling Act, which is also known as Law 13/2011, was introduced, it created a new regulatory body, Dirección General de Ordenación del Juego (DGOJ), that’s responsible for regulating online casinos. As a result of the regulation, there are now lots of thriving licensed online casinos in Spain, and the number of licensed sports betting shops has grown by an incredible 300% since 2011.

Most importantly, as expected, the legalization has led to increased (taxable) revenue. In 2019, Spain generated revenues of €748.5m from online gambling, which is an increase of 7% on the previous year.  The largest proportion of this revenue comes from sports betting activities, which generated €378.6m - mainly from their incredibly popular football league, La Liga. This must also give Germany cause to be hopeful about increasing revenue after regulation, as their league, the Bundesliga is also very popular. 

Revenue from online casinos came in second at €273.9m. Better still, this figure is up 15.2% on the previous year, second in growth to real money contests (cash giveaway games), which saw an increase of a staggering 170%. The rest of the total is made up of €81.3m from poker, €12.1m from bingo, and €2.7m from real-money contests.  

The upcoming legislation will be an interesting, and important, test for the online gambling industry. If changing gambling regulations in Germany and the Netherlands are a success, maybe it will encourage other countries, like Norway, and maybe even Russia to look at their own laws surrounding online casinos, allowing the industry to flourish like it has in Spain.