While gambling is prevalent in many European countries, certain aspects make the UK stand out. This analysis will explore these unique elements and also draw attention to some similarities.
The significance of gambling and its resultant income: The UK leads the gambling industry
Gambling is a pastime deeply rooted in the cultural and historical fabric of Europe and the UK. Billions of adults engage in gambling activities across the continent daily. According to the European Gaming and Betting Association, out of 29 European nations, 25 have competitive markets, while four maintain a monopoly system. While we strive to steer clear of a statistics-heavy discussion, they provide a valuable foundation for comprehending the situation.
When it comes to financial matters and market size, Gross Gaming Revenue (GGR) is a dependable indicator. In 2022, Europe's GGR reached €108.5bn. On the other hand, the UK reported a gross gambling yield of £14.08bn during the same period, making it the largest gambling market in Europe, with Italy trailing behind.
Online gambling is on an upward trajectory in both the UK and Europe. However, in the EU, more revenue is generated from land-based gambling than online. This trend is reversed in the UK, where nearly half of the total GGR (£6.4bn of £14.8bn) comes from the online sector. This suggests that European gamblers might currently prefer the social interaction offered by physical gambling venues.
Therefore, even though other countries have larger populations and territories, the UK stands as the most lucrative gambling market in Europe in terms of revenue. Following the UK in 2020, the next biggest markets were Italy, Germany, France, Spain, and the Netherlands.
Who engages in gambling?
The typical profile of a gambler, predominantly men aged 30-44, is fairly uniform across Europe. However, there has been a discernible rise in female gamblers since 2020. Furthermore, men usually start gambling at an average age of 20, while for women, it's typically at age 34.
In both the UK and Europe, men generally deposit larger amounts than women. A 2020 article by Natasha Medvedeva of RedLab states, "On average, women in Europe deposit around €38.76, while men deposit approximately €54.14". Despite women making fewer deposits, they do so more frequently, with an average of 32 deposits, compared to 19 deposits by men. In the UK, men lose around £3,709.44 per year, while women lose about £2,659.92.
In terms of gambling activities by country, a 2016 report from The Economist revealed that Irish gamblers were the fourth highest losers in Europe on a per adult resident basis, followed by the UK, Malta, and Sweden.
What are the gambling products and where are they played?
There is no uniform regulation across the EU concerning what gambling products are allowed in each country or how gambling is regulated. This results in a wide disparity in what gamblers can do throughout Europe.
In the UK, slot machines generate the most revenue. Despite the differences in rules and products, "casino" products are also the most lucrative in Europe when evaluated by revenue share. Moreover, across Europe, mobile betting has surpassed desktop betting in popularity.
One significant divergence in product trends is that lottery products constitute approximately one-third of the Gross Gaming Revenue (GGR) in the UK, while in Europe, it represents only one-fifth.
Market structure and perceptions
Owing to the lack of standardized gambling laws across the EU, each European country has a distinct gambling market, despite similarities in who participates in gambling and their chosen forms of gambling. This distinction includes the point in time when each country legalized gambling and how the government views and regulates the activity.
Compared to other European countries like Norway or Cyprus, which have the most rigid gambling laws in Europe, the UK has always adopted a more lenient approach towards gambling. With only a few exceptions, the UK is the sole European jurisdiction that has allowed high-street betting shops. It also has less stringent advertising rules (in contrast, Spain and Italy nearly fully ban it). The UK led the way by legalizing online gambling as early as 2005. Following EU countries took another three years to legalize online gambling: Italy in 2008, France in 2010, Spain in 2011, and Denmark in 2012. The Netherlands (2021) and Germany (2021-22) are the most recent countries to permit online gambling.
Similarly to the variation in-laws, the tax structure on gambling profits across Europe also varies considerably. Greece enforces one of the steepest taxes at 35%, while the UK applies one of the least burdensome at 21%. Simultaneously, The Netherlands imposes a 29% tax (+1.5% contribution to the gaming authority), Italy levies a rate of 22%, and Sweden applies an 18% tax.
Is this the threshold of excessive regulation?
Vixio's 2023 Global Gambling Outlook report indicates that European gambling markets are nearing maturity. However, this does not imply that the situation is becoming any easier. Each market operates independently and tends to become more divergent over time. Markets such as Germany, Spain, Sweden, and the UK are consistently experiencing regulatory changes, and their progress seldom aligns.
As mature markets, many European nations have gone through various phases of regulatory modifications. They have gathered data on the effectiveness of these regulations, insights on gambling participation, problem gambling, revenue, and so forth. However, methods and standards for data collection vary, with some countries conducting nationwide surveys while others do not.
European regulations, which often adopt a research-based approach, are gradually becoming stricter. This strictness is also evident in the UK, where rules on advertising, slot spin speed, and stake limits have already been put in place.
Lately, regulators have shifted their attention towards bonuses and their provisions due to concerns about certain terms and conditions being unjust and pressuring players to continue betting to access their winnings. In the UK, this has led to the emergence of no-wagering casinos, which offer free spins and other bonuses without restrictions.
The UK's recently released whitepaper on gambling reform frequently mentions 'unaffordable spending' and 'stricter restrictions on bonuses.' It suggests that affordability checks (already in place in Norway and the Czech Republic) and new bonus regulations, including reducing wagering requirements (as seen in Denmark), are likely on the horizon.