The gambling industry has evolved over centuries alongside the humans who participate in it. Changes to social norms, technology, and the economy mean that gambling looks different from one decade to the next. The 2020s have witnessed a significant rise in iGaming, with implications for geopolitics.
iGaming is simply gambling that is facilitated on the internet, and because more of us spend more time online, it is fast becoming the preferred way to gamble. The European Union (EU) and North America have been some of the biggest hubs for iGaming, and their development has inevitably led to regulatory changes. This, in turn, will impact EU-US relations.
The Growth of iGaming
Because iGaming is tied to the internet, it offers several benefits for players. First, there is the matter of convenience. Playing at a land-based casino requires customers to visit the physical location and deal with various logistical challenges. But playing online requires just an internet connection and a computer device. Many iGaming platforms are also flexible with payment options, accepting a range of fiat and cryptocurrency choices. Additionally, you have benefits such as bonuses, community access, and more. All these have contributed to iGaming achieving massive adoption around the world.
In 2024, for example, iGaming made up 39% of the EU’s €123.4 billion in Gross Gaming Revenue (GGR). In the US, the online gambling market is pegged at $12.68 billion for the same period and shows no signs of stopping. While the EU and the US are distinct markets, the trends in both mirror each other.
Consumers are eagerly turning to various platforms designed and licensed to serve their specific markets. American players can tap into trusted US options that offer a wide range of games, from classic casino titles to modern ones. EU customers similarly have a myriad of online platforms licensed in their country, even those that are technically offshore. However, with all of these, governments have the responsibility of creating regulations that serve their markets while pleasing various stakeholders.
Meeting Consumer Needs
When it comes to iGaming regulations, governments have to strike a balance between protecting stakeholders and benefiting from the industry’s growth. The iGaming space is already worth billions of dollars, which means a significant amount of tax revenue. And while the industry needs guidance, governments don’t want to lose out on this revenue.
Gambling has always been a challenging area in terms of regulation, and some countries have outright banned it. What steps do the EU and the US need to take in terms of regulating iGaming? First, there is the establishment of appropriate frameworks.
While individual countries in the EU have their own betting laws, operators approved by bodies such as the European Gaming and Betting Association (EGBA) can obtain licenses that cover multiple countries. The US is much more fragmented, as individual states have their own requirements for operation. As such, companies based in the EU looking to penetrate the US market might face a harder time. The same applies to data sharing, as the EU is governed by its GDPR laws, whereas the US lacks a national law as robust. Setting up businesses across the EU and the US can thus prove to be tricky for operators trying to stay on the right side of the law.
However, despite these challenges, many EU-based operators still wish to leap into the US to tap into its market. Companies like Bet365 and Entain are doing this, and over the next few years, we can expect to see the impact on US-based regulation.
The Need For Synergy
EU-based operators are expanding from an environment with more centralized and consistent gambling regulation to one that is less predictable. This will highlight the need for more synergy within the US. First, we’ll likely see certain states attract this sort of business more than others. EU-based companies already have their work cut out for them when it comes to navigating the US, so they’ll be drawn to states that have the most favorable laws to work with.
As they establish themselves, there will be increased lobbying within both the US and the EU. Companies in the US space will be even more incentivized to lobby for pro-iGaming laws, whether it’s foreign companies trying to have a smoother ride in the US or US-based companies trying to protect their interest. Taxation will also further come into conversation. US states vary in terms of their gambling taxation rates, and there will likely be a push for the rates to be lowered in certain states. It will be to avoid double taxation for companies that operate both in the EU and the US. If this doesn’t work, we will see even more migration of gambling companies to certain states to take advantage of lower taxation rates.
Conclusion
Relations between the EU and the US have always been complicated, but they’re about to take on a new dimension with the rise of iGaming. Consumers’ shifting loyalties mean that various places within both the US and the EU must develop regulations properly. Companies trying to expand to the US will also have to grapple with the complexity of the laws there. With this in mind, we can expect to see an increase in lobbying and, hopefully, a change in these regulations that benefits everyone within the ecosystem.
