The online gambling and iGaming industry is thriving. With a worldwide user base, you have the freedom to operate in any country. However, it is crucial to consider the legality of online gambling in your chosen country. What are the legal obligations and regulations that you need to adhere to? This article explores the top 5 countries & markets where online gambling is legal, along with the necessary regulations for compliance.
Online Gambling Market: Current Size & Future Trends
The online gambling market has witnessed significant growth in recent years. According to industry experts, the market is expected to continue its upward trajectory and reach US$ 133.9 Billion by 2028, exhibiting a Compound Annual Growth Rate (CAGR) of 8.5% during the period of 2023-2028.
This growth can be attributed to several factors, including the increasing penetration of the Internet of Things (IoT), the growing cultural acceptance and legalization of online betting, and the rising adoption of mobile phones among users for playing online games.
The top two markets in the online gambling industry are the United States and the United Kingdom, which generate over a third of the total revenue.
The US online gambling industry is anticipated to generate a revenue of US$19.14bn by 2023, with an estimated annual growth rate (CAGR 2023-2027) of 12.89%.
The UK online gambling market, which is the second-largest globally, has a projected revenue that is estimated to reach €12.05bn in 2023. The forecasted annual growth rate (CAGR 2023-2027) is 5.50%, leading to a projected market volume of €14.93bn by 2027.
Australia, Japan, and Germany follow, with $9.1bn, $5.5bn, and $5.1bn in revenue, respectively, in 2023.
Many offshore jurisdictions are preferred by online gambling merchants because they offer gambling license options and allow gaming businesses to operate.
5 Online Gambling Business Types
1. Online Casinos
The Online Casinos market is anticipated to witness a significant surge in revenue, with a projected value of US$34.80bn by 2023. Furthermore, the market is expected to exhibit an annual growth rate of 7.42% (CAGR 2023-2027), resulting in a market volume of US$46.34bn by 2027.
The United States is projected to generate the highest revenue in the global comparison, with a value of US$6,292.00m in 2023. Additionally, Canada is expected to have the highest user penetration rate in the Online Casinos market, with a projected rate of 34.1%.
2. Online Lottery Market
The anticipated growth rate for the global Online Lottery Market is projected to be 7% from 2023 to 2032. During this period, the market size is expected to increase significantly, reaching a valuation of USD 14.9 Billion in 2023 and further escalating to USD 20.7 Billion by 2032.
3. Online Sports Betting
The projected market volume of the Online Sports Betting industry in 2023 is estimated to reach US$7.62 billion. In terms of global comparison, the United States is expected to generate the highest revenue, amounting to US$19,140.00 million in 2023.
4. Online Poker Market
The estimated size of the Global Online Poker Market in 2023 was USD 96.2 Billion, with a projected increase to approximately USD 170 Billion by 2030. This growth is anticipated to occur at a compound annual growth rate (CAGR) of 12% from 2023 to 2030.
5. Online Bingo Games Market
The projected market size for online bingo games is expected to reach USD 1161.37 Million by 2023, with a further increase to USD 1904.55 Million by 2032. The compound annual growth rate (CAGR) for this market is estimated to be 7.5%.
Online Gambling Trends in 2023
The online gambling industry is experiencing significant changes due to technological advancements, regulatory changes, and evolving player preferences. These trends are shaping the landscape of online gambling and are expected to continue to do so in the future.
- Mobile gambling – An important trend in the online gambling market is the increase in mobile gambling, with the global market estimated to reach $113.2 billion. It is expected that in 2023, more people will gamble on their smartphones and tablets. This is due to factors such as the growing accessibility of high-speed mobile internet and the rising acceptance of smartphones and tablets.
- Live Dealer games – Another trend to look out for in 2023 is the growth of live dealer games. This type of online gambling allows players to interact with actual dealers in real time, providing a more interactive and social gambling experience.
- eSports – Additionally, the popularity of eSports, or competitive video gaming, is rising, leading to an increase in eSports betting. It is expected that more online casinos and sportsbooks will offer eSports betting options in 2023.
Now that you have an overview of the online gambling market, let’s take a closer look at top 5 countries & markets where online gambling is legal. We will also delve into the gross gaming revenue (GGR), market size, regulations, and gambling legislations in each of these countries.
5 Biggest Markets Where Online Gambling is Legal
When starting an online gambling business, it is crucial to take into account the countries that permit online gambling, as well as the regulations and laws that are applicable in the area.
This is because different regions have varying laws and regulations regarding online gambling, and it is important to comply with them to avoid legal issues.
Therefore, it is essential to conduct thorough research on the countries where online gambling is legal and the regulations that govern the industry in those regions. This will help ensure that the online gambling business operates within the legal framework and avoids any potential legal complications.
How do you get an online gambling license? What are the rules and requirements? In this Guide to Getting an Online Gambling License, find out everything you need to know about the laws and regulations, factors to consider, and the cost of getting a gambling license.
Let’s look at the regulations and gambling laws by country.
1. USA
The US Online Gambling Market is expected to grow to around USD 9 billion by 2032, with a CAGR of roughly 17% between 2023 and 2032, according to a CMI research report.
The United States online gambling market is being driven by the increasing use of IoT-based devices and the popularity of cashless transactions, accessibility through electronic devices, and customizable budgets.
The market has been segmented into sports betting, casino, and others, with sports betting currently dominating the market.
Sports Betting
Sports betting is the most popular form of online gambling in the United States, followed closely by lottery draw, online slot machine gaming, and casino table/card games.
While the federal government authorized sports betting in 2018, each state has its own legislation, making it challenging to assess internet gambling for the entire nation.
The US sports betting market’s total GGR sum of $497.7m was recorded by the AGA, surpassing the iGaming market’s $481.5m.
iGaming market
The iGaming market also saw a 23% increase in revenue, totaling $481.5m.
- Nevada remains the largest state, with commercial gaming revenue of $1.4bn in July 2023, a 4% increase from the previous year.
- New Jersey recorded $506.2m in revenue, an 11% annual increase, and Pennsylvania recorded $470.4m, also up 11% year-on-year.
- Massachusetts generated $128.8m in commercial gaming revenue, while Ohio made $240.7m.
- Slots had a total GGR of $3.13bn, a 3% increase from last year, making it the largest gambling market in the US.
- Table game GGR reached $976.3m, a 2% increase from July 2022, making it the second-largest market.
- Sports betting GGR increased by 28% year-on-year, with new markets like Massachusetts and Ohio contributing to this growth.
US territories and states that allow online gambling
Online casino games and poker have been legalized, regulated, and taxed in several states. These states include Connecticut, Delaware, Michigan, Nevada, New Jersey, Pennsylvania, and West Virginia.
They have legalized online casino games and online poker, as long as the organizations organizing such games are properly licensed and approved.
Lawmakers in 36 states have proposed bills to legalize and regulate sports betting. They have introduced legislation to legalize and regulate sports betting, with some already having sportsbooks in operation or planning to open soon.
It is expected that within the next year, online gambling will be authorized in at least one of the following states: California, Illinois, Indiana, Massachusetts, Nevada, or New York.
Online lotteries are available in Michigan, Illinois, Georgia, Kentucky, North Dakota, Pennsylvania, New Hampshire, and North Carolina, with varying residency requirements for participation.
As of 2023, around half of the states had authorized or regulated internet gambling in some capacity, and more states are expected to open up their online gambling markets.
2. UK
In 2023, the online gambling market in the UK had a total online Gross Gambling Yield (GGY) reaching £1.3 billion with a 5 percent growth. This increase can be primarily attributed to the significant rise of 12 percent in online real event betting.
In terms of online real event betting, the GGY witnessed a year-on-year increase of 12 percent during Q1, amounting to £538 million. It is worth noting that the conclusion of the football season may have played a role in the reduction of the number of bets.
Furthermore, online slots experienced a 3 percent growth in GGY, reaching £583 million for the current reporting period. The number of average monthly active accounts surged by 12 percent, reaching 4 million.
Gambling regulations in the UK
The United Kingdom has its own strict regulations for both online and land-based gambling. The United Kingdom Gambling Commission (UKGC), known for its stringent standards, issues licenses to providers under the Gambling Act of 2005. This commission covers various games such as poker, bingo, sports betting, and popular casino games.
Regulations have been implemented to control advertising, spin speed, and stake limits on slots.
Regulators have also focused on bonuses and how they are offered, as concerns have been raised about unfair terms and conditions that force players to continue betting to release their winnings. This has led to the rise of no wagering casinos in the UK, which offer free spins and bonuses without restrictions.
- Gambling and sports are highly valued in the country, and there is a strong gambling culture. Many brands are licensed by the UKGC, even if they are not based in the UK.
- The popularity of internet casinos continues to grow among gambling enthusiasts. However, new companies face challenges entering the UK online gambling market due to tighter regulations by the UKGC.
While these regulations aim to protect players and ensure fair gaming practices, they make it difficult for newcomers to meet the standards and operate legally.
As a result, the market has become more competitive and challenging for new entrants.
In 2022, the UK government has also started actively reviewing and reforming its gambling laws to promote responsible gambling and reduce the number of problem gamblers in the country.
3. EUROPE
The gambling market revenue in Europe reached €108.5bn gross gaming revenue in 2022.
The reopening of land-based gambling venues was the main driver of this growth, with land-based gross gaming revenue increasing by 34% to €70.3bn in 2022, accounting for 65% of total gambling revenue.
Online gambling revenue also increased by 8% to €38.2bn gross gaming revenue, or 35% of Europe’s total gambling revenue.
Casino was the most popular online gambling product by revenue, generating €14.9bn gross gaming revenue and accounting for 39% of
Europe’s online gambling revenue.
Sports and other types of betting were close behind, generating €13.6bn in gross gaming revenue and accounting for 35% of Europe’s total online gambling revenue.
European countries where online gambling is legal
Online gambling in Europe is generally legal, but it varies from country to country due to different legal frameworks. Each of the 44 countries in Europe has its own regulations regarding online gambling, so it cannot be simply classified as legal or illegal without considering the specific legislation.
While most EU countries permit some form of online gambling, the types of games allowed vary. Some countries allow all games, while others only permit certain types such as betting, poker, or casino games.
For instance, the UK allows all forms of online gambling, while Germany has strict laws that regulate online sports betting and casino games, with the exception of horse racing betting.
In certain European jurisdictions, monopolistic regimes have been established for online gambling services, either operated by a state-controlled public operator or by a private operator with an exclusive right.
Additionally, each country has its own regulatory body, such as the UK Gambling Commission in the UK, the Swedish Gaming Authority in Sweden, and the Gemeinsame Glücksspielbehörde der Länder in Germany.
The Court of Justice of the European Union oversees these regulatory bodies and works to protect consumers from fraud and vulnerable groups, like minors, from exposure to gambling.
Online gambling is legal in several European countries, such as Germany, France, Spain, Switzerland, Belgium, Hungary, Italy, Poland, Russia, Malta, Gibraltar, Luxembourg, the Netherlands, Portugal, Norway, and Denmark.
Let’s look at the regulations and gambling laws by country:
Malta
Malta, the largest remote gaming jurisdiction globally, was the pioneer among EU Member States in offering services to gambling companies. This has led to the availability of a wide range of online services and facilities in the gaming industry.
The Malta Gaming Authority (MGA), established in 2001, is responsible for regulating various forms of gambling in the country, including land-based activities like casinos and their online counterparts, which encompass both B2C and B2B services.
Spain
In Spain, gambling regulations have undergone multiple modifications, with the latest amendments allowing for online casinos to operate in the country under certain conditions.
Gaming operators must obtain a general license and a single license for a specific regulated gambling modality, which requires meeting legal, technical, and economical requirements and fulfilling obligations.
Spanish residents can sign up and play at licensed websites within the country.
The Netherlands
The Netherlands has recently passed its first law regarding online gambling, which now allows for two types of gambling licenses to be awarded to operators: sports betting and casino gaming.
These two categories include various types of gambling that may be permitted or prohibited, such as casino games, poker, slot machines, and more.
However, online lotteries, non-sports betting, and spread betting remain prohibited. Virtual sports may be permitted if they meet certain conditions.
Italy
Compared to many other European countries, Italy has more lenient gambling laws. It allows companies to offer sports betting services both in retail locations and online.
In 2011, amendments to the legislation also permitted licensees to provide poker and casino games to customers.
The Agenzia Dogane e Monopolio di Stato is responsible for ensuring that online operators follow gambling rules and prevent fraud, corruption, and money laundering in the Italian gambling industry.
The licenses granted cover various types of games, including skill games, poker, casino games, sports betting, lotteries, bingo, and horse pools.
Italian players do not have to pay taxes on their winnings; instead, the burden falls on the operators through taxes on their revenues and licensing fees.
Sweden
Sweden recently implemented new laws to break the monopoly held by the state-run online gambling company. These laws aim to open up the market to private operators and expand the gambling industry in the country.
Previously, only Svenska Spel, the state-owned company, was allowed to offer online gambling in Sweden, including casino games, sports betting, and other forms of entertainment.
However, the Swedish Gambling Authority now oversees the licensing for online gambling, while Svenska Spel still maintains ownership of land-based casinos.
4. Australia & New Zealand
Online gambling is legal in both Australia and New Zealand, with the exception that in New Zealand, only online gambling websites that are based and regulated within the country are considered legal. Any online gambling websites that are based overseas are deemed illegal and prohibited in New Zealand.
Australia
The Australian online gambling market is expected to reach US$ 7.2 Billion by 2028, exhibiting a growth rate (CAGR) of 7.09% during 2023-2028.
The market is being propelled by various factors such as the easy availability of high-speed internet, and emerging technological advancements like virtual reality (VR), cloud gaming, and artificial intelligence (AI).
The market has been segregated based on game type into sports betting, casino, and others, with sports betting currently holding the largest market share.
Similarly, based on the device, the market can be bifurcated into desktop, mobile, and others, with desktop exhibiting a clear dominance in the market.
Online gambling provides a wide range of advantages such as convenience, free games, bonuses, loyalty points, global access, and a wide range of payment options.
The introduction of new forms of online gambling like lottery terminals, keno, and instant scratch tickets have gained popularity across the country, attracting the younger generation and reaching people who do not have access to casinos or bars.
Gambling regulations in Australia
Gambling in Australia, including online wagering, sports betting, and lotteries, is strictly regulated and subject to licensing. Those planning to enter the Australian gambling market must carefully examine the regulations of the specific states where they intend to operate.
Online gambling is regulated at the federal level by the Interactive Gambling Act 2001 (Cth), while each state and territory independently regulates land-based gambling. Compliance requirements may vary depending on the nature of the gambling activity and the jurisdiction in which it takes place.
In Australia, various entities involved in gambling activities are required to comply with specific regulations and licensing requirements.
Offline casinos, gaming machine operators, bookmakers, online betting and gambling operators, lotteries and keno operators, and gaming machine manufacturers must adhere to regulations set by state and territory authorities, as well as the Australian Communications and Media Authority (ACMA).
Online gambling is generally prohibited by the Interactive Gambling Act 2001 (IGA).
However, there are exceptions to this rule. Regulated interactive gambling services, such as lottery, gaming, wagering, and betting, are allowed if they have obtained a license.
Additionally, games that are not considered banned or regulated interactive gambling services can be offered without a license.
Operators can obtain a license for a regulated interactive gambling service from a relevant state or territory in Australia, and once licensed, they can offer their services in all states and territories.
New Zealand
The projected revenue for the Online Gambling market in New Zealand is anticipated to reach US$1.12bn in 2023. Furthermore, it is expected that there will be an annual growth rate (CAGR 2023-2027) of 7.76%, leading to a projected market volume of US$1.51bn by 2027.
The market encompasses various forms of betting and gaming, with all values measured in terms of gross gaming win (GGR).
- The gaming revenue for FY23 in New Zealand saw a significant increase of 51% year-on-year, reaching NZ$759.4 million (US$452 million/€417.8 million).
- Electronic gaming machines (pokies) contributed to 50% of the gaming floor revenues, representing a 27% increase from pre-pandemic levels.
- Table games revenue also grew by 50% year-on-year to NZ$231 million (US$137 million/€126.6 million) compared to the previous reporting period.
Gambling Regulations in New Zealand
While online gambling is illegal in New Zealand, except for authorized providers such as Lotto NZ and the TAB, New Zealanders can still gamble on offshore websites.
The country’s primary gambling law, the Gambling Act 2003, imposes strict regulations on the industry, with no new casino venue licenses or betting site licenses being granted.
Any gambling activities that go against the Gambling Act 2003 are still illegal, and some New Zealand players are banned from using domestic online betting providers except for TAB and the lottery.
The increasing popularity of online betting has contributed to a shift away from totalisator betting, with punters showing a preference for fixed odds betting. This shift is largely driven by the availability of betting apps, which cater to the changing consumer preferences.
While internal competition within the industry is non-existent due to the regulated monopolies of TAB NZ and Lotto New Zealand, external competition is high. TAB NZ faces competition from New Zealanders who choose to gamble with overseas bookmakers.
5. Japan
The online gambling market in Japan is estimated to reach USD 14.48 billion by 2033, with a projected compound annual growth rate (CAGR) of 6.56%. Despite strict regulations, online gambling has gained popularity in recent years due to its convenience and accessibility for players.
Various gambling enterprises, including bookies and betting shops, facilitate wagering on games. Online gambling encompasses a range of casino-style games such as sports betting, blackjack, poker, roulette, and slot machines.
The Japan sports betting market is expected to experience a growth rate (CAGR) of 8.89% from 2023 to 2028. The recent legalization of sports betting in Japan has played a significant role in driving this growth.
Regulatory changes have allowed licensed operators to offer sports betting services, attracting both local and international players to enter the market. Furthermore, the strong passion for sports, particularly baseball, soccer, and sumo wrestling, has created a favorable environment for sports betting in Japan.
Online gambling regulations in Japan
While most forms of online gambling are prohibited in Japan, offshore gambling is not prohibited. Online casinos or sports betting websites can operate under licenses issued in other countries.
Japanese online gambling laws focus on Japanese companies rather than individual players. Local corporations are not permitted to operate online casinos or betting sites in Japan, with the exception of the state-sponsored Japanese Racing Association and Japanese Lottery.
Additionally, the Japanese Diet has passed an act that legalizes gambling to be operated by licensed private entities in certain designated locations within Japan.
The term of a casino license is three years from the grant date and may be renewed for successive three-year periods.
At present, there are only three designated areas for integrated resorts, with Osaka and Nagasaki Prefectures being the two locations that have officially submitted proposals to the government for their pursuit to establish an IR (integrated resort).
Key Takeaways
The global online gambling market is experiencing a steady growth, driven by advancements in technology, favorable legislation, and increased global connectivity.
It is anticipated that the market will continue to expand in the upcoming years, as individuals not only show interest in playing online casino games but also in investing in online casinos or gambling.
The younger generation is expected to engage in paid live streams for game design, affiliate marketing for gambling websites, betting sessions, and funding for the development of new technologies required by online gambling platforms.
Additionally, the online gambling market has witnessed growth due to enhanced marketing strategies and online promotions, alongside the rising demand from developed markets.
Gambling is widely accepted as a significant commercial activity in numerous countries, with online gambling activities being accessible through desktops, tablets, smartphones, and smart TVs. Developed economies such as the U.S., the U.K., and other European countries exhibit a high popularity for gambling activities.
However, in a highly competitive industry, online gambling merchants must prioritize seamless user interface, robust data security measures, and secure payment processing to establish and maintain the trust of its users.
In a highly competitive industry, it is essential to prioritize elements such as a smooth and intuitive interface, fast loading times, engaging graphics, and a variety of gaming options to attract and retain players.
To ensure secure and efficient payment-handling alternatives for online gambling, it is crucial for merchants to choose high-risk payment providers that specialize in handling transactions for high risk industries and provide customized gambling merchant accounts.
These payment processors should ideally offer fraud prevention methods, robust security measures, and comprehensive payment solutions. By partnering with a reliable high-risk payment provider, online gambling operators and iGaming platforms can provide a secure and comfortable payment experience.
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