Rules of engagement – online sports betting rules, laws, and regulations in 2022
Sportsbook operation is one of the most lucrative avenues in the online gambling industry. The global betting market was worth $85 billion in 2019, and despite taking a hit due to the crisis, it still presents numerous opportunities for investment and growth. The legal issues involved are very complex, especially when it comes to operating internationally. Different countries have different definitions of “gambling” and “betting,” different levels of tolerance for operators offering services unspecified in the law, and different policies on taxation and licensing. Before choosing to invest in a certain market, it’s critical to gain an understanding of local regulations and policies, so we at Slotegrator have prepared a brief guide to help you navigate these waters.
HOW LEGAL IS ONLINE SPORTS BETTING?
Every online sportsbook operator knows that the international legal landscape is very complex and prone to changes. One always has to be on the lookout for news and developments in the industry. However, there are few havens of stability across the globe.
Online sportsbooks are legal and regulated in many countries, like the UK, Australia, Denmark, France, the Philippines, Ghana, and Colombia. The nature and extent of allowed activities varies, with some countries permitting only specific types of bets to be made or only allowing betting on particular sports or events. In some countries, online offerings are tied to a land-based license, and in others they are regulated separately or not at all.
THE WORLD’S BIGGEST MARKETS: THE UK, AUSTRALIA, AND THE USA
In the United Kingdom, sports betting is regulated and operators are required to have a local license. Most bets are made on football, horse racing, and dog racing. The market is extremely active, with surveys showing that more than 50% of bettors place bets on a weekly basis. According to the United Kingdom Gambling Commission (UKGC), total GGY for remote betting reached £2.1 billion in 2019, an increase of 4.3% compared to the previous year.
Notably, policy in the UK seems to gravitate towards increasing regulations. Already a heavily regulated market, there are talks of further restricting marketing for iGaming operators and possibly even implementing a complete ban on advertising.
In Australia, online casino games are banned, but both land-based and online sports betting are allowed and regulated at the state level. Each state has its own licensing authority, and in general, the industry is heavily regulated. Australia is among the world’s most lucrative markets, as the country has one of the highest rates of gambling participation in the world. Sports betting expenditure in the country reached $1.235 billion in 2019 (an increase of 16% over the previous year), and it has grown even more since the start of the crisis.
How to start an online casino business for Australians in 2022
Australians have a well-documented love of gambling. The country is among the world’s leaders in gambling participation — and revenues — with Australian adults spending more per year on...Learn more
In the USA, gambling is restricted and is subject to numerous laws and regulations at the state and federal levels. Legally speaking, the regulatory landscape is a patchwork of areas with different degrees of regulation. Only in two states (Utah and Hawaii) are all forms of gambling completely banned. The others permit various forms of gambling to a different extent, with a growing number allowing sports betting.
In May 2018, the Professional and Amateur Sports Protection Act (PASPA), a federal ban on sports betting, was ruled unconstitutional and struck down by the US Supreme Court. The decision to legalize sports betting is now up to individual states. Most of them still prohibit the practice, but the current trend is towards liberalization, with Virginia and Colorado being the latest states to legalize sports betting.
But while more and more states are choosing to regulate, operators should be on the lookout for details – certain states legalize betting in a very limited form. For example, Mississippi and North Carolina won’t allow mobile betting, while Tennessee will only permit bets made online.
Experts are carefully watching the US market because the partisan nature of American politics means that things may change drastically after the 2020 elections. Two years ago, a bill calling for federal regulation of sports betting didn’t pass, but a similar situation may unfold differently if the balance of power in the US Congress shifts.
LAW AND ORDER – SPORTS BETTING IN EUROPE
Another example of a complicated legal landscape is Germany. The country’s gambling laws are complex, with numerous federal- and state-level regulations, and German authorities are constantly revising their legislation. Online sports betting is legal across the country, which presents an immense opportunity for operators. However, at times even this area presents challenges.
Germany’s new regulations will finally allow online casino licensing in 2021
German regulators have struggled for years to craft appropriate laws governing online gambling. Finally, in March of 2020, the new Interstate Treaty on Gambling was approved, which will go into effect in...Learn more
In April 2020 the procedure for granting sports betting licenses was challenged in the Administrative Court of Darmstadt, freezing the licensing process. The situation was brought about by a transparency complaint issue by an Austrian operator that was planning to enter the German market. A similar, almost identical situation occurred in 2016, which at the time led to legal ambiguity and de facto toleration of certain sports betting offers.
Many anticipated the situation would remain unresolved until July 2021, when the new German Interstate Treaty on Gambling comes into force. However, on October 12, 2020, the Hessian Administrative Court overturned the lower court's ruling, and as of this writing licenses now can be issued again. This case illustrates well how unpredictable German legislation can be, but nonetheless, the trend seems to be that the legal framework is becoming better and easier to comply with. However, operators should note that the new Interstate Treaty on Gambling will include new limitations on in-play betting, as well as advertising restrictions.
Some European countries like Sweden and Hungary still restrict gambling activities to a single government monopoly, but the question that often arises is if these practices can coexist with the freedom to provide services or to open a business that is guaranteed by the EU. While the Union doesn’t explicitly condemn these systems, mostly the decisions of the EU Court of Justice tend more towards liberalisation of the betting market.
The Netherlands is the latest example of a shift towards open betting markets. According to Kansspelautoriteit, a regulated online gambling market in the country will begin in 2021. Officials say that more than 100 candidates have already shown interest in obtaining a license. It remains to be seen if other European countries will follow.
TURMOIL AND OPPORTUNITY – AFRICAN COUNTRIES
Africa, home to 1.3 billion people, is a region of enormous interest for sportsbook operators.
Of the continent’s 54 countries, only seven completely forbid all gambling activities (Mauritania, Guinea-Bissau, Libya, Sudan, Somalia, Burundi, and Eritrea). Some countries, like Tunisia and Egypt, prohibit gambling but make exceptions for tourists and foreigners. Others make an exception specifically for sports betting — for example, in Nigeria, sports betting is considered a game of skill, not chance, making it legal.
Bet on the future: Africa’s online gambling industry
Many leading iGaming operators now see Africa as a lucrative region to expand in. Thanks to their economic dynamism and enthusiasm for online sports betting, countries such as South Africa, Nigeria, and ...Learn more
In many countries, the online side of sports betting is not regulated at all, which can make them an unstable place to conduct business. Even in regulated markets where platforms operate relatively unfettered, it’s not unknown for local governments to suddenly crack down on gambling enterprises. For example, in Uganda in May 2019, Matia Kasaij, the Minister of Finance, urged authorities to halt the issuance of new gambling and betting licenses. However, for now, there is no official indication that the country won’t license new companies.
The Kenyan government has a similarly rocky relationship with the gambling industry. In July 2019, the government suspended sports betting licenses, but a group of Kenyan legislators has called on the president’s office to restore them. In July 2020, the Kenyan government removed a 20% excise duty tax on betting stakes, but then pledged to overturn this decision just days later.
South Africa is the biggest market on the continent, despite numerous legal restrictions. Online gambling, in general, is prohibited, but bookmakers licensed at a provincial level can accept bets online. Numerous provinces have their own rules and regulations, so it is by no means an easy market to enter.
Nigeria, Africa’s second biggest market, faces similar issues. Regulations at both the federal and provincial level often clash and overlap, creating a regulatory landscape that’s difficult to navigate and introducing a risk of being exposed to double taxation. In both countries, there are talks of introducing a unified gambling law, which would finally eliminate all of these complications.
While they are the most popular, South Africa, Nigeria, and Kenya are not the only countries that attract international sportsbook operators. Emerging markets like Tanzania and Mozambique offer a lot of potential, with considerably lighter regulations. Tanzanian legislators have amended several laws, and a new gaming regulatory system has been introduced that attracted a lot of new investors.
ASIA – A TIGHT SHIP
It’s no surprise that Asia, with 60% of the world’s population, is its largest gambling market.
Despite this, there are only a few countries where betting on sports is legal. Macau has numerous restrictions for betting. Instant lottery and sports betting company Macau Slot has an exclusive concession to operate football and basketball betting, including bets placed over the phone and on the internet. Singapore and South Korea are similar cases — heavily restricted and, with a few exceptions, state-run.
Starting a sports betting platform in 2022: elements of success
Sports bettors have been making wagers for almost as long as there have been events to bet on. But the practice has changed with the times — now, instead of having to go to racing tracks or betting...Learn more
The most open and popular sports betting market in Asia is the Philippines. Licensing is available only to offshore operators, which means there is no competition from domestic operators and events – a factor that has attracted a huge number of companies to the market.
In Myanmar, sports betting is illegal, like most forms of gambling, but an exception is made for tourists and foreigners. Talks of legalizing casinos were circulating on a high level back in 2018-2019, so it’s reasonable to assume that further lifting of restrictions is possible.
ENDLESS POTENTIAL – LATIN AMERICA
After Colombia was the first to regulate online gambling in 2016 and the market started booming, it seems other countries are following suit. The degree of legalization, though, varies on a country-by-country basis. In Argentina, for example, online betting is legal in several provinces, but overall, legislation is fragmented.
Brazil, long on the watchlist of potential emerging markets, recently made steps towards legalization. The president of Brazil has signed a decree to privatize sports betting, however, the measure is yet to be implemented. With its population of 210 million and known love of sports, Brazil promises to be a very attractive market for sportsbook operators.
Mexico is among the biggest and most active markets in the region. Online sportsbooks are poised to be even more prominent than before, as retail operations took a hit because of the crisis. Regulations in the country are relatively clear and straightforward.
Among the more uncertain regions is Costa Rica, which is neither moving towards tightening regulations nor towards explicitly supporting the gambling industry. The online sector is still unregulated, while there are a number restrictions and rules for the land-based portion of the market. Time will tell if online sports betting will draw more attention from the government.
It should be noted that legislation doesn’t always change for the worse – the government of Ukraine has recently lifted a blanket ban on gambling, and is now one of the most promising emerging markets for sportsbook operators. The only sports betting products that remain prohibited are virtual events or events with an RNG-determined outcome.
When markets open up like this, many operators seize the opportunity to expand. But to do that, the sportsbook should satisfy legal requirements and obtain a license. In certain rare instances, countries recognize valid licenses issued by a foreign authority (for example, it used to be the case that the UK accepted licenses issued by Gibraltar), but this is extremely risky, as legislation may change.
The lack of a local license doesn’t necessarily mean operators can’t accept players from a different region, but at the very least, it would prohibit them from advertising there. So operators could end up in a situation where, for example, they aren’t breaking the law if they accept some players from the United Kingdom while being licensed in Curacao, but would be if they target this audience specifically and deliberately. Some sportsbooks, however, manage to attract audiences from other countries with little to no direct marketing.
While it’s true that obtaining licenses and entering new markets is both tricky and risky, operators all over the world pursue these opportunities to enlarge their player base. Many sportsbooks based in Australia started targeting the USA as soon as the process of legalization started in 2018. This is far from being an isolated case; every time the sports betting ban is lifted in a country, all the companies that were previously working in the legal gray area hurry to seize their share of the market.
By following due process and making sure to review and understand relevant requirements, sportsbook operators can transcend borders and enjoy a level of growth that is impossible when focusing on a single region. But the decision if one market or the other is worth the risk of a long-term investment is not easy to make without investigating the smallest details and understanding the intricacies of local policies.
We closely follow world news and trends and keep our ear to the ground to anticipate the latest developments in legislation all over the world. If you are opening an online sports betting platform or considering new areas of operation for your existing sportsbook, we are more than happy to share what we know — for free.