Collaboration Amongst Online Gaming Regulators in Europe

Consumers who play online games will continue to play whether or not governments sanction and regulate the sport. The very nature of online gaming means people will play and gamble irrespectiveonline gaming of geography.

Europe has witnessed a similar rise in the popularity of online gaming as America in recent years. In 2010, only 7 EU countries were regulated. Whereas now, the majority of members states have regulation, and those that don’t are planning or reviewing legislation. Only a handful, mainly in the Balkans, former Soviet countries, and Switzerland entirely prohibit online gaming and gambling.

Current State Of EU Regulation

At present, regulation has been on a state-by-state basis. America is making similar progress at the local level. In 2012, the European Commission produced a report on this subject, noting that “administrative cooperation between regulatory authorities in the EU countries as an area warranting attention.”

Right now, online gaming companies seeking to move into new markets, either from outside the EU or from one member state to another need to meet separate regulatory burdens for each country. This makes the EU an expensive region for games operators, in terms of time and resources required.

The commission has come to realise that this is a burden that may hinder the sector’s development. A report in 2014 encouraged regulators to work together, to evolve beyond cooperation on an “ad-hoc basis and in an informal manner.”

Informal cooperation

Gaming regulators do have a long history of working together, informally at least. The Gaming Regulators European Forum (GREF) has existed since 1989, with annual meetings and subcommittees working to address everything from technical issues to responsible gambling and addiction.

The next steps would be to formalise these informal working groups at the EU level. The question is the best way to go about that, to ensure member states have the protections they need without creating additional burdens for online gaming companies.

PwC, a global management consultancy firm, conducted a study on EU online gaming, which resulted in the following findings:

  1. Regulating online gaming does not appear to have a material impact on land-based offerings. (In fact, land-based offerings, e.g. casinos benefited from online gambling, even when partnerships weren’t active or formal).
  2. Successful regulation combines a wide product offering with a commercially viable tax regime
  3. Discussions on online gaming regulation need to be informed by objective market and economic analyses if the debate is to move beyond myth and legend.

How to formalise cooperation?

PwC, the European Commission, industry analysts and the GREF working groups all suggest implementing a range of measures that could lead to more harmonised regulation:

  • Greater sharing of technical standards. Each member state has different compliance standards, all of which include technical specifications from gambling companies. Sharing these requirements would reduce some of the burdens, making it easier to be compliant across Europe. This could include details on security testing and other practices used to verify the platforms deployed by operators.
  • Sharing information when companies are investigated, audited, whitelisted or blacklisted. A high volume of complaints against operators should trigger alerts in other countries.
  • Share similar information on players, with some data protection safeguards, to protect other players and online games companies against fraud.
  • Certificates of good standing to be issued once an operator has been licensed, to reduce the time required to gain a license in another country, since it would show a regulatory standard has been met. This would save everyone time since efforts would not need to be duplicated.

Secure Trading work with a number of online gaming companies and take a keen interest in the growth of this sector and regulatory issues.