New Regulations Disturbing European Gambling Industry

The new regulations that are likely to become operational this financial year are creating havoc in the online gambling industry of Europe. Recently 888 Holdings of Britain, which was in discussion with another European bookmaker firm William Hill for a takeover said that the deal was called off after one of their key shareholders did not agree to the price given by the suitor. Other interesting deals under discussion in the gambling market are Digital Entertainment, Amaya Gaming Group, and Poker Stars. A few European nations are changing their gambling regulations to remove ambiguity about gambling in low tax locations like Gibraltar, Isle of Man, and other small islands in the area.

Dealmakers in the gambling industry

The government of Britain has stated that henceforth all operators will have to get licenses of operation and even online gambling firms which are located offshore but earn revenues from British residents have to pay taxes. The new “digital tax” is likely to hit revenues of all online gambling firms across Europe quite hard. These small online gambling firms have spent heavily on marketing their games which can be downloaded across smartphones, tablets, and PCs. Bwin, which is desperately looking for buyers due to losses of $ 8.4 million in 2014 had a breakdown in discussion with several prospective buyers like RisingTideGames and iMesh as new taxes would reduce revenue and cash flow.

Bleak outlook for online gambling operators in Europe

Following rumors of the breakdown in talks of Bwin, its shares fell sharply. This incident and the talks of Amaya planning to buy PokerStars (the world’s largest online poker operator) is compounding the fear of an already jittery industry plagued by rising taxes and licensing regulations. Existing players are not keen to give up as the online gambling industry for casual casino-like games is rising steadily even though some of them do not give out real cash though players need to pay out real cash to play. For large companies well entrenched in social gambling media, this new regulation will provide an opportunity to increase revenue and also provide clarity of operations.

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