View from the City: Is the US' approach impacting European igaming?

Since the repeal of PASPA, the US has experienced the fastest gaming expansion in its history, with 36 US states plus Washington DC legalising sports betting. During this time, only four states legalised igaming, but such slow adoption comes as no surprise, after all ‘sports betting is about sports, igaming is about gambling’. Although expansion has been rapid, US states are taking a methodical and rigorous approach to digital gaming expansion.

On the other side of the pond, the digital gaming industry is more established from a revenue standpoint. However, regulators are rethinking current policies or adopting new, more stringent policies.

Specifically, the UK Gambling Commission, a bellwether for the rest of Europe, is undergoing a complete review of its gambling policies. This could include maximum stakes of between £2-£5 per wager and a ban on free bets or bonuses.

Other countries are also making changes. The Swedish market issued deposit limits during the pandemic while also implementing advertising and marketing restrictions. This is also happening in Germany (marketing restrictions) and Finland, while the Netherlands has recently migrated from grey to regulated.

Why is this happening? I think the regulatory expansion of digital gaming in the US is influencing European countries to reconsider their positioning. For operators, a tougher regulatory environment will have a meaningful impact on their financials.

Those larger operators, with greater scale and geographic diversification, are likely to be able to withstand a more stringent regulatory environment while smaller operators are likely to be constrained. The recent MGM/LeoVegas deal suggests convergence between Europe and US and land-based and digital could become a more prominent theme and lead to the next wave of M&A across the gaming space.