The global economy has been depleted by the pandemic, damaging millions of businesses that have never recovered. In an effort to rebuild the economy, governments are desperately seeking new funding sources, and many are considering revising the regulatory framework to increase tax collection and replenish the budget. The gambling industry may benefit from some of these shifts and see the changes much awaited by both operators and players.
The online gambling industry is now on the rise, and operators are monitoring the development of many legislative changes in the countries of Europe and North America.
This article examines the expected changes in legal regulation in Ukraine, Germany, the Netherlands, and the United States.
The explosive growth of the Dutch gambling industry
A recent article published by Online Casino Ground claims that the Netherlands can become one of Europe's largest online betting industries, a rather ambitious allegation that should be taken into account by the competitors.
In 2019, gamblers in the Netherlands spent more than 182 million euros on gambling, and in the five years prior to 2015, the number of players rose from 500,000 to 1.2 million, thereby increasing the revenue from 296 million euros to 3.1 billion euros.
It is estimated that about 50% of the country's gamblers resort to unlicensed operators, but this figure is likely to significantly decrease as licensed operators will attract more interest and provide more bonuses.
A German regulation in preparation
As of July 2021, new rules are expected to come into force that will eliminate the ban on online casinos and poker games. This will pave the way for a significant number of betting shops, and allow a number of online casinos to request official licenses. The state will retain its monopoly on the lottery, but an ever more laid-back approach to other gambling sectors will enable other operators to occupy their place in alternative markets.
In Germany, the gambling regulation is expected to implement some very tough measures, including a €1 stake limit on virtual slots, limited live betting markets, a total ban on live-streaming on sportsbook websites, and a 5-minute delay for punters switching from one platform to the other. Also, will be prohibited online poker games, casino playing, and radio casinos from 6 a.m. to 9 p.m.
The gambling market in Germany, as in many other countries, has in the last few months turned into a political battleground to some extent. Nevertheless, it is obvious that the state would gain from a regulated market, as it would be entitled to receive revenues from gambling taxation and license fees.
Ukraine - a promising gambling hub in Eastern Europe
To some extent, the gambling business has been "invisible" to the Ukrainian government, but it now seems that they are eager to follow the example of West-European countries.
The government intends to sell gambling licenses and divert the revenue to social support, development of healthcare, sports, culture, and others. Also, several casinos are planned to be opened in major cities such as Kyiv, Dnipro, Lviv, and Odesa, which is hoped to boost the number of tourists to these cities and assist in the struggle for the tourist industry.
According to forecasts by Ukrainian regulatory authorities, about 225 million euros is expected from the sale of licenses (including B2B) in 2021. Judging by the number of licenses, the government may expect investments from foreign companies, but in order to make it profitable for external players, changes will have to be made in tax legislation.
In particular, tax rates in the Ukrainian gambling market are among the highest in Europe. Currently, the government is pushing to introduce an 18% tax on personal winnings, GGR, and operators' profits. Such regulations may hinder the growth of the market and may not allow it to become as much competitive as possible. But a draft of the law has been presented to Parliament, intended to amend the tax rates, especially the tax on GGR and the tax on winnings. For sure, this will stimulate the development of the market once it is enacted.
Growth of offline and online gambling in the U.S.
Research and Markets predict that the U.S. online gaming market will see average annual growth of 15.41%. Currently, legal online betting can only be accessed by bookmakers in Delaware, New Jersey, Nevada, and Pennsylvania. But Pennsylvania's success in this market, however, may encourage other states to do the same.
The state earned gross gambling revenue of $3,226.92 million in 2017, ranking it as the second most profitable state following Nevada, according to the American Gaming Association. It collected about $2.5 billion in gambling taxes, which helped support local governments and communities, creating 33,171 jobs, $1.8 billion in wages, and a $6.3 billion of economic benefit, according to May 2019 data.
In addition, there are no signs of a decline in profit growth, and it looks like other states will be eager to follow PA's example.
The bottom lane
As we can see from these examples, governments are now beginning to recognize that gambling bans simply do not work. They merely push gamblers to black market providers, creating an insecure situation from which the government does not benefit.
Moreover, it is obvious that online gambling can contribute to the economy and provide the infusion of cash resources so desperately needed by states.
Similar to any other major law reform, there seems to be an internal power struggle that can slow down the progress of reforms and delay their implementation.