Gaming Law 2024

What Next for Gambling Regulation?

Harris Hagan is again pleased to introduce the Chambers Global Practice Guide to Gaming Law. Gaming Law 2024, while not an exhaustive text on gambling law, is a guide to the licensing and regulatory regimes in many of the major global markets. The author hopes that its geographical coverage and information on the regulatory frameworks globally will be a helpful guide to lawyers, gambling businesses and others.

As the global gambling industry continues to grow and evolve, the regulatory landscape is rapidly changing to address new challenges, opportunities and technologies. The next phase of gambling regulation is being shaped by several key trends and developments, all of which are likely to have a significant impact on how gambling is conducted and regulated worldwide.

Technology

Technology continues to grow rapidly and to touch almost every aspect of our lives in some shape or form. It is changing the way we behave, communicate, live, work, play, learn and gamble, as well as changing the world and our society.

Without a doubt, online gambling has metamorphosed since its infancy, alongside technological change. With people spending a third of their waking time on their mobile phones, the global mobile gambling industry is booming with growing demand. Businesses continue to innovate, seen most recently with several Las Vegas casinos diversifying into live casino. Legislators and regulators continue to see the benefits of the regulated market both in terms of ensuring they do not miss out on tax revenues and improving consumer protections.

The use of AI has continued to grow exponentially over the last 12 months, and its infiltration into the industry is starting to be seen. AI is a powerful tool which is now being used to support safer gambling through tracking customer behaviours and assisting operators in intervening if there are signs of problem gambling, as well as in relation to banking and payments and associated security measures. 

AI has also expanded into compliance. The UK’s Advertising Authority, which regulates UK advertising, has been using AI to monitor gambling promotions to confirm they comply with their requirements. There is also the possibility to use AI to detect suspicious betting activity. AI will undoubtedly continue to be a big theme for the year ahead and perhaps we will start to see AI being used in more areas of compliance. For example, could the use of AI result in a decrease of problem gambling rates?

Last year saw the gambling industry being targeted by cybercriminals. Most notably, in September 2023, the cyber-attack on MGM Resorts cost the company USD100 million. Over the last 12 months, cybersecurity has become a global issue of much prominence. This was most recently seen in the much anticipated, and exciting, new gambling market – Brazil. Brazil introduced legislation on 2 May 2024, setting out technical and cybersecurity criteria that online gaming and sports betting operators must comply with within six months of receiving their licence. 

Changing Times

2024 has witnessed significant regulatory change for a number of key jurisdictions, and there are still more changes that lie ahead.

Brazil, which was a prohibited gambling market and historically a lucrative grey market, has had legislative change on the horizon for several years, and draft bills that were being negotiated in Brazil’s Senate were delayed due to political changes (presidential and governmental). However, on 30 December 2023, Brazil’s gambling legislation authorising a new licensing regime for online gaming and sports betting received approval; a pivotal moment for both Brazil and those wishing to target the market. Revenue is projected to reach USD4 billion by 2029. Perhaps we will see a shift towards companies looking to expand in Brazil, but only if they can stomach the high tax rates and unattractive licence fees. At the time of writing, Brazil awaits a vote on its land-based gaming bill.

In Ireland, the gambling regulatory framework was overhauled in October 2024 when its Gambling Regulation Bill was passed. The new legislation introduces a regulatory framework for both land-based and online gaming in Ireland. It also introduces the establishment of a regulatory body, the Gambling Regulatory Authority of Ireland, advertising restrictions and a national self-exclusion register.

Meanwhile, the UK remains in the critical consultation phase to implement the proposals published in the highly anticipated government’s gambling white paper in April 2023. The government and the Gambling Commission’s ambitious and optimistic timeline for implementing most measures by summer 2024 has not been met, and progress has – at least at the time of writing – come to a standstill following the general election in July 2024. 

Other changes include the introduction of supplier licensing in Denmark from 1 January 2025 with licence applications being accepted from October 2024, and the continued legalisation of sports betting in the USA, with the activity now permitted in 39 states.

Illegal Gambling

Illegal gambling remains a significant concern for the gambling ecosystem and its stakeholders, including legislators, regulators and gambling businesses, posing a risk to consumer protection, gambling businesses, regulatory integrity and tax revenues generated from gambling. 2024 has seen increased collaboration in the global response and approach to tackling the illegal market, particularly in the USA and the UK. Increased action and enforcement in this area is likely – the author hopes – to be a continued focus in the next 12 months, particularly given the significant risk to consumers. Gambling businesses are seeing increased pressure from the unlicensed market, and its prevalence is increasing, with estimated USD51 billion spent each year with illegal operators in the USA. International collaboration and a more integrated global approach are emerging, most notably through the International Association of Gaming Regulators’ introduction of a working group on illegal gambling in 2024 and the memorandum of understanding entered between the America Gaming Association, the Betting & Gaming Council and European Casino Association at G2E in October 2024.

We are beginning to see signs of certain US state regulators and state agencies rising to the challenge of curtailing illegal operators, for example, by issuing cease and desist letters. However, it is pervasive in every state, often analogised as “whac-a-mole”, and requires effective action from federal agencies, which we are yet to see.

On the other side of the Atlantic, the British Gambling Commission raided, with police, an illegal gambling den and, more notably, in September 2024 the regulator commenced its own, rare, criminal prosecution against football-themed website Sorare, promoted by the Premier League, for providing unlicensed gambling. Further, the Dutch regulator also took enforcement action by fining three Curacao-based operators, and a Greek industry trade group wrote an open letter to the regulator, claiming that 40% of the market takes place offshore and appealed for greater protection for licensees against those operating illegally.

Continued Enforcement and Regulatory Challenge

Anti-money laundering, responsible/safer gambling and consumer protection, as ever, continue to be areas of key focus across international gambling sectors, however, there has been less high-profile enforcement action over the past 12 months. There has been a continued focus on the accountability of individuals within gambling companies (including CEOs).

Licence reviews can often take many months (even years), leaving gambling businesses in a prolonged state of uncertainty. The continued escalation in compliance assessments and licence reviews has resulted in significant financial penalty packages. In the UK, whilst there has been less enforcement action over the past 12 months, during the 2023-2024 financial year, the British Gambling Commission still issued almost GBP47 million by way of penalty packages.

M&A Activity

A rapidly evolving gambling industry presents significant opportunities and challenges. M&A has significantly accelerated in the last ten years, driven by the increasing cost of regulation and diminishing profits, along with the liberalisation of gambling laws in some jurisdictions, particularly the USA.

Last year saw a quieter period for M&As, however transactions bounced back again in 2024, more quickly than expected and despite the remaining regulatory uncertainty in several key jurisdictions. A number of key M&A trends have emerged globally over the past 12 months, including a continued expansion in the USA following legalisation of sports betting, M&A being seen in the previously unexploited B2B sector, and an increase in private equity companies taking large publicly listed brands private. The steady rise in M&A activity is anticipated to continue, particularly given a continued decrease in interest rates and the new global opportunities following regulatory change.