Is Europe still the powerhouse of gaming?

Dee Maher, CEO of La Royale Gaming Investments, says Europe is still considered a benchmark for regulated online gambling and that despite tightening requirements there are plenty of opportunities for operators to explore

The European gaming market, on the whole, has become increasingly competitive as more operators and suppliers look to expand their footprint across the region. What specific challenges or opportunities do you believe the European iGaming market faces in maintaining its position as a powerhouse amidst growing competition from other regions?

Europe contains some of the most established online gambling markets in the world with countries like the UK, Sweden and Denmark seen as the benchmark for regulation and licensing. These jurisdictions have proved that you can put frameworks in place to protect players, mitigate the risk of fraud and AML, impose sensible taxation and still have a successful, sustainable industry where operators, suppliers and other stakeholders can thrive. This is why companies with a regulated markets approach often look to establish themselves in Europe before venturing further afield to the likes of North and South America, Africa and even Asia. The challenge these established markets now face is over-regulation – as they continue to tighten requirements, there is an increasing risk that players will encounter too much friction and switch to unlicensed sites where the KYC process is smoother (almost non-existent) and there are no limits on bonuses, promotions and VIP schemes. It’s also important for those markets that haven’t embraced regulation, or whose frameworks do not cover both casino and sports betting, to do so.

How have recent regulatory changes within Europe impacted the region’s attractiveness as a base for iGaming companies compared to other emerging markets?

The tightening of regulations has led to a slowdown in operators entering markets such as the UK and Sweden. In the former, there have been several high-profile exits over the past three years or so, although this is likely due to uncertainty around the government gambling white paper, published in April 2023, and expected changes to requirements around affordability, stake limits and potential bonusing. The publication of the white paper does seem to have eased concerns, with its contents generally well-received by operators, many of whom had already implemented some of the requirements around affordability checks. Since its publication, we have seen new brands enter the market, a trend we believe will continue. In terms of it being a base for companies, localisation is mission critical, and operators (and suppliers) absolutely must have a base within the regions they target so I think we will continue to see businesses have a presence in European markets. That said, for the bigger, listed companies, we may see more adopt Flutter’s approach of listing on the New York Stock Exchange, especially if North America is ultimately their primary market.

In your view, are there still opportunities for iGaming companies to make their mark within this region, or should they be turning their attention elsewhere?

Absolutely. Europe is a mix of established and newly regulated markets, and there are opportunities to explore in both. Competition breeds innovation, and the companies that can come to market with something new, or even something that does what is currently being done a whole lot better, can find success. It must also be remembered that the grass is not always greener. We have seen plenty of companies look for success in the US market, only to find the going to be much tougher than expected. A great product, a superior experience, something the industry has never seen before – these are the factors that lead to success regardless of the market they are deployed into. Sure, new markets opening up present huge opportunities to address a vast audience for the first time – Brazil in Latin America, for example – but that audience will not engage with a business or a brand if it does not meet their expectations, just as it wouldn’t in an established market such as Spain.

What lessons can emerging iGaming markets learn from Europe’s experience with regulation, technology, and consumer protection?

They can learn a lot when it comes to responsible gambling. Markets such as the UK really do set the standard for others to follow, especially when it comes to the tools operators are mandated to have in place such as deposit, loss and session limits. The option to self-exclude is also a must – this is not required in all regulated markets. Europe has pioneered the ban on gambling with credit, and this is something I’d like to see regulators in other markets such as the US also consider. The UK is pushing ahead with pretty strict affordability checks, but the regulator has said these will not impact the player experience as they can be done via modern technologies that run in the background. Technology can also be used to monitor individual player behaviour in real-time, so there’s no reason why more jurisdictions should not impose requirements around player monitoring and intervention in the case potential problem play is identified.

And are there perhaps any lessons that Europe can take from emerging regions?

There needs to be a balance struck between protecting players and ensuring a viable market for operators and suppliers. If regulations are too stringent, operators will simply withdraw or not launch into a market, which will have a knock-on effect on suppliers in those markets. I think some emerging markets have possibly struck that balance more effectively than some established jurisdictions, but it’s still early days for these markets and as they mature, they may find the need to tighten requirements. This is the case in Buenos Aires, with no more operator licences being awarded while concerns over underage gambling are addressed. Of course, the most effective approach is for all jurisdictions to collaborate and knowledge share so that the best frameworks can emerge.