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An industry as large and varied as the online casino sector can be difficult to understand from a policy perspective, mainly because by being online, it raises questions of jurisdiction. Players are located all over the world, as are casinos, and it can be a challenge to pinpoint exactly who is responsible for regulating the industry.
In the European Union, the situation gets a little more complex. While the EU has plenty of regulatory roles in different industries, for iGaming specifically, regulation falls to each individual member state. How does this work?
Each EU member state is responsible for coming up with a regulatory framework for online gambling. This is why while players in the UK have had access to online casinos for years, policy changes in places like Spain, France and Belgium are still being discussed and implemented. However, because of how porous the Union (not to mention the web) is, countries have turned their attention to the sector with increasing interest – it does not pay to sit on the side lines when a sector as amorphous as iGaming is continually increasing in size.
The European Commission has not been idle on this topic, however. While an overarching policy for remote gaming is unworkable in practical terms, the EC has laid out guidelines for countries deploying a regulatory framework of their own. In 2012, the EC adopted the ‘Towards a comprehensive European framework on online gambling’ paper. In simple terms, this outlines what EU member states should aim to achieve when regulating remote gaming activity. Regulations must comply with EU law; steps must be taken to prevent fraud and money laundering; consumers, minors and vulnerable groups must be protected; efficient enforcement and administrative cooperation must be prioritized, and they must strive to protect the integrity of sports and prevention of match-fixing
Two countries in particular have taken a proactive approach to the problem. Malta and the United Kingdom have both developed a highly respected licensing authority – the Malta Gaming Authority and the UK Gambling Commission, respectively – which license eligible operators to offer their products online. The small Mediterranean island was the first member state to regulate the iGaming sector, back in 2004.
Both of these licensing authorities have strict rules, which operators must follow before they are granted their license and in order to retain such a license. Agents for these authorities regularly check up on online casinos to make sure they are following the rules set out.
Operators holding a license from the MGA or UKGC are held to very strict standards when it comes to crime prevention. Because players can shop around for their choice of online casino, within and without the EU, this creates a situation favourable to those who would seek to play the system, in particular through fraud and money laundering.
At the moment, there are 28 member states in the European Union. Their membership in the Union comes with a number of perks, one of which includes access to the single market. This is defined as an internal market that allows the free movement of goods, capital, services and people between member states.
Along with countries in the European Economic Area (which includes Iceland, Lichtenstein and Norway, which are not EU member states), European countries can participate in trade with one another as if there were no borders. The iGaming industry in particular benefits from the free movement of workers, who can easily relocate from their home countries to other EU states to meet the needs of growing gaming companies.
In 2012, the European Commission appointed a group of experts on gambling services to advise on the preparation of policy initiatives. These experts also trade knowledge and experience on matters of regulation as well as good practice, to improve the sector across the EU.