iGaming Insights — Growth Opportunities in EU
The iGaming industry is expanding steadily. According to the Technavio’s report, the global online gaming industry is expected to grow at a CAGR (Compound Annual Growth Rate) of 10.73% from 2016 to 2020. The technological advancements are opening up new possibilities to create real-life experiences in the digital world.
Below you will find an overview of European market and state of regulations.
UK
Current State: Legal and regulated
The United Kingdom is the freest market in Europe when it comes to the permissions to operate. Online poker, sports betting, slots and lottery games are all allowed for the operators to provide as long as they obtain the proper licensing. Online gaming accounts for over one third of the total gaming industry in the UK. Sports betting only has reached betting wagers of 4.5 billion GBP in a year.
Italy
Current State: Regulated with the local licensing
Italy comes as the second largest market after the UK. 5 years ago, online poker was the most profitable product for the operators, but it suffered a significant decline. Sports betting, however, continues to be on the rise, along with the casino games. 23% of igaming was done through the mobile channel in the year of 2016. The mobile devices are the most popular among people who prefer sports betting — 56% of wagers were completed via that channel.
France
Current State: Online poker and sports betting are legal (with licensing), chance games like roulette are not .
While “chance” games are not allow currently, due to high demand from the players, the laws are expected to be changed in the future. Similar to Italy, online poker is the least popular type of iGaming. The taxes are high and operators find it difficult to make a significant profit. Online betting, however, generates impressive revenue. In 2016, the total GGR was €813m. Sports betting achieved a 29% growth compared to the previous year and accounted for €349m of GGR. This can be explained by the high popularity of football in the country.
Spain
Current State: Regulated with the local licensing
Spanish authorities allow all types of online gaming, as long as the operator obtains the proper licensing. Most of the licences are issued for 5 years. The imposed tax is high — 25% on GGR for all gambling operators.
The year of 2016 was very successful for Spanish operators and the industry continuous to grow. According to the report issued by the Directorate General for the regulation of Gambling, the expected GGR for 2016 is over €500 million. The leading vertical is Sports betting, generating 44% of total industry revenue. However, slots and other casino games are skyrocketing to popularity.
The biggest product growth was recorded by the online and mobile casino games, which were 41% of the total turnover in 2016. The increase was generated primarily by slots and live roulette. The betting GGR represents around 50% market share proportion, followed by the casino games segment with around 27%.” — Eduardo Morales Hermo, senior advisor at Ficom Leisure.
According to GamblingComplience’s report, the other markets where it’s regulated to operate with the local licensing are the following:
- Belgium;
- Czech Republic;
- Greece;
- Malta;
- Poland (only sports betting and poker).
Markets that are expected to pass new laws to regulate online gaming:
- Austria;
- Ireland;
- Netherlands;
- Slovakia;
- Switzerland.
There are two major reasons why European countries are updating the laws: Firstly, there is a pressure from European Commission to oversee the regulations and secondly — the vastly growing popularity of the online gaming.
While we are waiting to see how these changes in regulation will reflect on the business, the wisest investment for the operators would be to offer their product to players on the mobile devices. With the mobile penetration on the rise, the biggest growth opportunity lies in the multi-channel online gaming.
