The Take Home Regulation Message for 2016: Adapt or Get Left Behind

Published December 30, 2016 by Lee R

The Take Home Regulation Message for 2016: Adapt or Get Left Behind

As online commerce takes hold with gradual global implementation, 2016 got iGaming’s adaptation into full swing.

While a shocking election result sprung new hope for halted US legislation, innovation and progressive regulation swept across Europe.

Welcome Portugal, Quick 

Newcomers to regulation included Portugal, whose gambling regulations adopted in April 2015 were actually implemented in May of this year 2016, as soon as grey market operators completed their wind-down of operations before applying through the newly defined channels in Portuguese legislation.    

Charter New Licensees

The first operators to receive licenses from the regulator include Betclic, which received 2; along with one each to Bet, Estoril Sol Digital; and PokerStars.

Coming on Strong

The new competition in Portugal had an immediate impact: the 1600 cash game players per 7-day period catapulted Portugal’s regulated market to the 3 ranking in PokerScout’s Online Poker Traffic Report.

Roaring Romania

As for innovation in regulation models, Romania made the biggest splash, with SRIJ deftly granting out the licenses in spring to some of iGaming’s biggest companies, infusing instant credibility into the fledgling European market. 

Affiliate Licensing

Romania adopted the first affiliate licensing system as well, with Online Casino Reports among the first affiliates issued one of these Class-II licenses.

Netherlands Making Way

Another huge regulation breakthrough in 2017 came about in July when the Netherlands’ Lower House passed an iGaming bill approving national license issue to international operators with full passage pending an additional Senate vote expected in 2017. 

Reaching Out

The Dutch government showed an authentic commitment this year to international iGaming companies eager to enter that lucrative market by channelling the country’s many avid online players to regulated operations while restricting illegal operators.

Thorough, Comprehensive, Sustainable 

Regulation in the Netherlands will cap a comprehensive process dating back to 2014, with meticulous Dutch legislation adjusted step-by-step in Senate votes addressing the respective issues of online gambling licensure, regulation, taxation, and advertising.

Germany Regroups, Again

Not all was bright in the European regulation model progress, as the government leading the EU’s largest economy in Germany remains scattered. 

The German Environment

Germany’s problems date back to the current gambling law introduced in the early 2010s, which the EU deemed non-compliant as soon as the first states began adopting it in 2012. The problematic German provision was a cap of 20 placed on the amount of operators allowed to enter the local market.

States Sit Down

However, real hope for 2017 lies with Germany’s 16 individual states formally committed to cooperating on effective amendment that will identify a set of criteria for interested gambling companies to meet in order to be awarded a German iGaming license.

Europe’s Biggest Development

With individual nations putting up some impressive breakthroughs as they strive towards regulation, let’s not forget the biggest development in European iGaming this year: the removal of ring fencing.

The Ringed Fence

Some of Europe’s biggest markets, including France, Spain, Italy, Portugal, and the UK agreed in 2016 to remove the practice of ring fencing, which had been limiting poker play as well as pool and jackpot contribution to players within national borders. 

Walls Tumbling Down

Now, mid 2017 is the realistic ETA for players in each of these countries to play together at virtual tables and pay in to international or European player pools whose larger scale will lead to larger volume of individual wins and bonuses. 

France Relented

The main fence fell in 2016 when the French government shifted policy in iGaming law. The new amendment authorized national online gambling regulator ARJEL to dialogue with other European governing bodies regarding systems for shared liquidity. Differing taxation systems constitute the primary barrier to shared liquidity deals entering 2017.

Back in the USA

As for the coveted US, nothing really happened, just a wild wave of speculation around the election results. While no actual legislation under the Trump Administration will take place until he is inaugurated in January, American Gambling Association President and CEO Geoff Freeman called the election of the former casino owner the ideal opportunity for the iGaming industry to “achieve our objectives.”

Freeman’s Repeal Appeal

AGA statistics indicate gambling to represent a $240 billion industry providing 1.7 million jobs in 40 states to generate $38 billion in annual tax revenue. The key legislation request Freeman submitted to the Trump Administration in 2016 was a repeal or replacement of the 1992 Professional and Amateur Sports Protection Act banning sports betting in all states in the US save for Nevada, Delaware, Montana and Oregon.

Will Reality Bite?

A Realpolitik challenge arises in Freeman’s assertion that “President-elect Trump has expressed his view on sports betting and agreed that current laws have failed.” The remaining question is whether Trump’s sentiment can be translated into practical benefits such as updated or new legislation containing an effective regulation model that benefits operators, government, and society alike.   

Turning Japan

Japan actually passed regulation just before year’s end for its $40 billion dollar casino industry. Alas, the example ultimately provided a salient illustration of the difference between passing regulation and actually implementing a regulation model in which licensed operators compete and serve the national public. 

Innovative Model, Fine

Japan’s innovative Japan’s Casino Bill maps the integration of so-called large-scale integrated resorts (IRs) combining casinos with hotel, shopping and conference facilities. However, casinos themselves in the world’s third largest economy will not open until well after the Tokyo 2020 games, pending further legislation adapting new regulation, tax rates and safe gambling procedures and requirements.

Departure Down Under

In other regions, Australia’s clunky regulation model actually drove operators out of the market. This was confirmed when popular online gambling provider Vera and John closed shop in Australia in the first of what is expected to become a wave of operators leaving the Australian market due to new constrictive online gambling legislation.

PokerStars Starts Packing

The prohibition and stiff penalty against offshore casinos servicing Australian punters has already prompted another departure, with global online poker leader PokerStars announcing in 2016 its plans to leave Australia as well.

Final Thoughts

Regulation remained a gradual and often painful process in 2016. Nonetheless, many new paths emerged for even the most defiant legislation models and jurisdictions to emulate the many markets in 2016 whose government, operators, and customers began to see substantial revenue and social benefits in an historic year for iGaming regulation.

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