The regulation of gambling in the European Union aims to reduce addiction and its negative societal impacts. But will these measures really achieve the desired goals?
In many EU countries, online gambling advertising is regulated in a specific way. Ads must include warnings that gambling can cause addiction, clearly communicate the risks and chances of winning, and minors are prohibited from participating. While some EU countries take drastic measures by completely banning gambling advertising.
Regulation itself is a positive thing, and the EU is known globally as a regulatory force. However, the market situation is quite complex, as the industry involves not only the media and legal gambling companies, but also illegal operators and BigTech companies like Google and Meta, which laws struggle to regulate.
The introduction of advertising bans targeting domestic media and operators, while neglecting the problem of illegal gambling operators who account for a significant portion of the market, does more harm than good.
Italy, for example, which has completely banned gambling advertising, shows that its citizens spend a billion euros annually on the black market. Despite blocking illegal domains, Italy has seen a significant increase in illegal operators who do not adhere to any rules protecting vulnerable groups like addicts and minors in promoting their services. The large size of Italy’s online black market is concerning but not surprising, given that Italy has one of the strictest advertising regimes in Europe.
The European Gambling and Betting Association (EGBA) has called for a review of Italy’s general ban on gambling advertising after a new report revealed that players in the country spend €25 billion on black market gambling websites each year. Almost €1 billion in gross gambling revenue is lost on black market sites, equal to the combined regulated online gambling revenue in eight other EU countries: Croatia, Cyprus, Estonia, Latvia, Lithuania, Luxembourg, Malta, and Slovenia.
For this reason, in most European countries, advertising is allowed, except for ads aimed at minors. For example, in Scandinavian countries, as well as in Switzerland and France, advertisers must adhere to “responsible advertising.” In Spain, ad airtime is simply restricted, not banned. In Portugal, restrictions apply to the underage population, with all ads requiring a +18 label, as is currently the case in Croatia.
In Croatia, according to the latest estimates, illegal gambling operators account for 38% of all revenues – we’re talking about multi-million amounts on which taxes are not paid, creating a direct loss in state funds that would otherwise be used to combat addiction.
From an advertising perspective, financial analyses show that a significant portion of advertising spending in the region goes to global platforms like Google and Meta, BigTech companies that regulations don’t cover. They are not “afraid” to profit from advertising illegal operators and delivering ads to audiences based on their internal company rules, not regulatory ones.
In 2024 alone, revenues from BigTech companies will amount to almost €200 million in Croatia, a figure that increases every year. At the same time, the EU’s attempts at regulation have not proven particularly successful, from taxing revenues earned in European countries to regulating advertising to protect citizens from unwanted content. BigTech operates by its own rules.
The experience of states has shown that banning legal gambling advertising harms independent media more than the pandemic and recession. In cases of total bans, illegal operators, websites, and influencers promoting them will take over the market, BigTech will continue their advertising under their own rules, and states will lose millions of euros from the gambling industry and advertising.
Restricting gambling advertising – solution or problem? It’s a problem if approached hastily. It’s a solution if all stakeholders and the entire ecosystem are considered, and rules are defined that:
- Won’t push players exclusively to illegal operators,
- Won’t reduce media revenues that support media freedom, independent journalism, and industry development,
- Won’t reduce state funds due to lower taxable revenue and income,
- Won’t put people at risk of job loss.
Due to these risks, many European countries don’t have strict legal regulations, only general rules prohibiting advertising aimed at minors.
A good example of combating illegal gambling operators comes from Denmark. They are monitored in two ways – through user reports and regular monitoring several times a year. The Danish regulator has the option to ban illegal operators’ advertising, block their websites, or block payments to them.
Ultimately, effective gambling advertising regulation requires a balanced approach that considers all market players: citizens, (il)legal gambling operators, and media. It is necessary to ensure that protective measures do not encourage the growth of the illegal market but support responsible advertising and the protection of vulnerable groups. Only then can we achieve the goals of reducing addiction and protecting society while ensuring stable revenues for media and the state.
