BtoBet: Over-regulation and opportunities in the European sports betting sector

Regulatory developments in the European sports betting gaming sector have created both hurdles and opportunities for the continent’s operators, as the UK and Germany implement restrictions while the Netherlands opens its doors.

Publishing its latest report, ‘European Sportsbook Opportunities in an Increasingly Complex Scenario’, BtoBet highlighted the potentially lucrative market of the Netherlands – where football and other sports have a wide following – while also maintaining a positive outlook on the future of the German sector. 

Identifying the Netherlands as a market with ‘significant growth potential’ since going live on 1 October under the terms of the KOA Act, BtoBet pointed to data from H2 Gambling Capital and Regulus Partners predicting Dutch gross gaming revenues of €827 million and €1.084 billion respectively.

Sports betting in particular could be the winning product for operators targeting Dutch consumers, with the gap between sports wagering and casino offerings narrowing significantly when online verticals are considered – H2 expects sports betting to stand at €428 million by 2024 and €585 million for casino.

Lastly, data suggests that the major sports operators should focus on when developing their online sports betting offering for the Netherlands are football – widely considered the ‘national sport’ of the country – and tennis, which accounts for a greater annual GGR than all other sports except football.

In the Netherlands’ neighbour Germany, BtoBet cited business reports by gaming operators which suggest the maintenance of a ‘positive outlook for the intermediate-term’, despite the introduction of strict measures such as a limited in-play sports betting market, a live streaming ban on betting sites and a mandatory five-minute delay when switching between different sites.

The report referenced by BtoBet forecasts that the German market will grow to €18.2 billion by 2024 when factoring in the ‘positive impact and new momentum’ of the new regulatory framework of the GlüNeuRStv fourth interstate gambling treaty.

However, concerns do remain that the unlicensed market will be more appealing to German bettors due to the requirements of the new regulatory regime.

Meanwhile, on the other side of the North Sea, BtoBet has highlighted some developments in the UK betting and gaming space which it believes could be cause for concern.

As the review of the 2005 Gambling Act continues, the British retail betting industry faces increasing difficulties, with the gross gaming yield from non-remote operations declining by 26.4% and 639 high-street betting shops closing between 2019 and 2020.

On the other hand, the UK’s betting and gaming market remains substantial, recording a total of £4.732 billion from April 2018 until March 2019 alone, of which £2.402 billion came from land-based operations and £2.33 billion from online verticals.

Overall, although maintaining a positive outlook on Germany and the Netherlands, the main concern of BtoBet’s report centred on the possibility of bettors moving away from licensed operators and towards illicit black market offerings as a result of over-regulation.

The referred to a PwC report which concluded that “the excessive regulation of sports betting, especially of the online segment, poses great risks of pushing the players towards the unregulated ‘black’ market”.

View the full report HERE.

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