EU online gaming and its legalities

Gambling is not a novel idea by any stretch of the imagination; throughout history, people have indulged or fought the

Gambling is not a novel idea by any stretch of the imagination; throughout history, people have indulged or fought the urge to wager bets, and the thrill of winning at the ponies, on a Las Vegas slot machine, or on a smartphone between bites of a sandwich – never ever gets old.

Online gambling is a major player in today’s e-commerce sector. If we consider Europe, online gambling is increasing rapidly, with annual growth rates of nearly 15% and expected EU revenues of 13 billion Euros in 2015.

There is an EU legal framework for gambling which is applicable to all member states and regulated by the European Commission. This regulatory body works with fraud prevention, protection consumers and minors, compliance of EU law and preservation of sport integrity. But, aside from the overarching opportunities and limitations for online gambling in the EU, each member state has its own laws, licenses and regulatory frameworks, which make the business of online gambling tricky and difficult to navigate.

Some European nations are more lenient and the acquisition of licenses is not too difficult, or the state of the legislation is rather unclear, for example Germany, Greece and Cyprus, while other nations have greater stringencies for e-merchants. In addition, there are varying laws in each country regarding cross boarder business and sometimes merchants licensed in one or more Member State will provide gambling services in other EU countries without the required permission.

In Switzerland there has been a call for online gaming to be “liberalized”. As a result of online gambling throughout the EU, physical casinos have become less visited and because Swiss law prohibits online poker but does not prohibit the Swiss from accessing gambling sites from other nations (according to 1998 gaming law), the need to spend money in Swiss casinos has been greatly minimized.  In preparation for new legislation, taxation is already in place and drafted legal changes are being made within the industry.

In France, the rules are different: in 2010, the French Gambling Authority (ARJEL) was established and silences became available for e-merchants in the gambling sphere including horse racing, sports betting and skilled gaming (which includes poker) but lottery, casino and arcade games are still not allowed. Gaming operators licensed outside of France however, are not allowed to advertise to a French audience, nor offer gambling services to French based consumers.

Italian law also prohibits outside advertisement and gambling services however, licenses for lottery, arcade and casino gaming are given to merchants. In recent events, the Lega Nord Party passed a motion to ban online gambling for a year in various gambling spheres like lottery, stop the issuing of more licenses and to put a hold on the business of around 200 already licensed online gambling merchants.

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Even though the motivation for the bid is said to be a fight against gambling addiction, a response of disbelief has prevailed: A gambling ban in Italy would further strip the already depleted economy of desperately needed tax revenue with an estimated 2% economic decline in 2013. Furthermore, as Peter Amsel puts it in his Gambling News, “These operators would be well within their rights to sue Italy for compensation, which they would most assuredly be awarded.”

The flux and flurry of e-gaming in the EU is an un-avoided reality. And from a payment point of view, there are several other challenges to be face by merchants but, there are payment processing providers that specialize in this industry. Also note that we at Payment Magnates are busy creating an exhaustive list of industry categorized payment services provider with company information and contact details for your assistance.  



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