An online sportsbook can be very lucrative since the online betting market is worth $89 billion in 2023 in the world. Thus, although the rules and regulations have been shown to be cumbersome especially for the international businesses the benefits that accrue from adopting the system justify the effort.
Knowledge of the legal factors and policies of the market is very important in investing in the market. I have put together a primer for you to review to find out the areas and related legal sports betting market and legalities.
How legal is online sports betting?
Each one of the holders of an online sportsbook is fully aware of the challenges and dynamics in relation to the legal status of sports betting at the international level. Nevertheless, most states offer favorable conditions for Internet-based legal sports betting.
However, there are certain differences in laws even in those countries where the operation of Internet-based sportsbooks is legal and permitted. Rules depend on particular countries; there are countries that do not allow betting in some particular sports or only some kinds of bets are permitted.
Also, the connection between online and land-based operations differs with some countries setting a criterion that an online business must be affiliated to an overseas license, while others either allow them to be separately regulated or unregulated.
These divergent restrictions and regulations require extra precautions by the operators so as to avoid violating the laid down legalities.
The world’s largest markets: the UK, Australia, and the USA
The United States
Currently, in the USA, gambling is controlled by both federal laws and state laws, hence the level of control varies greatly from one region to the other. Utah and Hawaii prohibit all forms of gambling and the remaining other states have varying degrees of legal forms of gambling with some states legalizing online sports betting in increasing numbers.
In May 2018, the US Supreme Court nullified the PASPA to make a return to the state level on the regulation of the betting activity on sporting events. Nevertheless, the modern tendencies show that there are more and more states allowing the legalization of sports betting, and many of them already have doing so.
Operators have to draw special attention to the nature of the regulations that exist in every state and industry. For instance, both Mississippi and North Carolina allow betting on sports only physically and do not allow betting through mobile, while Tennessee only offers betting through mobiles.
Despite the trends in the individual states and the opening of more and more states to the regulation of sports betting, the future of US sports betting remains uncertain.
While traditional legal attempts at regulating sports betting, such as the federal bill that did not make it to passage in 2020, there are shifting dynamics in Congress; hence, the likelihood of a change in the legal jurisdiction aggressing online sports betting in the future is high.
United Kingdom
The legal betting on sports is permitted in the United Kingdom and operators must obtain the local license. Punters prefer to bet on football games, horse racing events, and dog racing events most of the time. The market is highly participative, according to surveys, more than half of the adult population of the countries bets at least once a week.
The United Kingdom Gambling Commission (UKGC) estimated that the Gross Gambling Yield (GGY) for the industry reached £15.1 billion in 2023 just an almost 7% rise from last year. The British have a long tradition of betting, and the legal requirements regarding the activity similarly suggest.
The market is quite regulated at the moment, and there are already talks about the limiting of marketing for iGaming operators and even the complete prohibition of advertising. This trend reflects how the government is keen on exercising some level of control over the gambling sector to make betting in the UK a well-monitored activity.
Australia
Currently, online casino games are unlawful in Australia; however, the state can allow land-based and online betting on sporting events. The absence of a centralized regulatory agency leads to a disorganized structure; each state has its own licensing board.
Nevertheless, Australia is still one of the most prosperous gambling markets globally, along with being among the leading countries in terms of the population’s gambling attendance rate.
Legal sports betting is allowed and active specifically in Australia in the online segments that are expected to reach €8.92 billion in 2024. The market has a developing pace of growth, rising at a 5.19% CAGR within the 2024-2028 period, with the market volume reaching €10.92 billion in 2028.
Sports betting in Europe
Betting on sports is legal across most European countries, while there are standard laws that lay down the rules for the activity, which are considerably different in each country.
There are so many laws that explain the legal grounds for sports betting across the nations of the European union that has made it quite complex and different from one nation to the other.
Germany offers a representative example of how gambling laws are quite intricate and vary at the federal and state levels, with the authorities adjusting the legislation quite often.
Frankly, online sports betting is legal across the country; however, due to the restriction set under the 2021 Interstate Treaty on Gambling, the channelization rates are still not very high.
On this basis, Hungary and Sweden continue to maintain a state monopoly on gambling, thereby questioning their compliance with the European Union requirements concerning the provisions of services and business enterprise.
The EU Court of Justice has largely supported the measures to liberalize the betting market, though it does not absolutely react to monopolistic behavior.
The information about the alteration of the regulatory environment can be illustrated by the example of the Netherlands. While at one time the country transitioned to the open betting market, recent decisions made by the House of Representatives sought to restrict the market, including the banning of betting advertisements and online gambling classified as high risk, including slot machine betting.
These changes are far from the planned regulated online gambling to start in 2021 in a slow manner. New regulations that have had the backing of the majority also provide for certain financial risks and identification associated with gambling. The picture of how these restrictive measures will affect gambling activities in the Netherlands remains to be seen.
Sports betting in Africa
Betting, especially sports betting in the African continent with 1.3 billion people is huge. While recognizing the legal status of betting in various African countries, one should state that 54 countries of the continent cover only 7 countries that prohibit any type of gambling.
While some countries have banned gambling, especially within their territories, such as Tunisia and Egypt, they allow foreigners to indulge in gambling. In this category, some countries, for instance, Nigeria, still categorize sports betting as a game of skill and not a game of chance, contrary to the belief held by many.
Online sports betting, for the most part, remains an unlicensed undertaking in many African countries, hence the unstable business climate. Despite the fact that the globalized gambling business is legal in numerous countries, local authorities can ‘suddenly’ change their attitude toward gambling operations.
For instance, in May 2019, Uganda’s Finance Minister Matia Kasaij challenged the authorities to cease with our new gambling and betting license, but the authorities never made an official stand to discourage licensing.
Such GDP dynamics are typical for Kenya as well. The government of Uganda ended the license issuance of sports betting in July 2019 despite being challenged by legislatures urging them to reverse the same.
In July last year, Kenya scrapped the 20% excise duty tax on betting stakes but committed to the tax’s reintroduction soon after. The Gambling Control Bill 2023, which is still under consideration in the legislative chamber, has intentions of reforming the industry.
However, South Africa, despite its many legal prohibitions, remains the biggest market on the continent. Though general online betting is prohibited, bookmakers licensed in a province can carry out its operations online. However, it is difficult to obtain sports betting licenses due to conflicting rules among different provinces.
Nigeria: This is the second-largest consumer market in Africa. This market also has similar multiple jurisdictions issues at the federal and state levels, resulting in a possibility of dual taxation. There have been verbal from both countries concerning the possibility of introducing general gambling laws to help establish a more coherent legislation.
Other than the three prominent African countries, namely South Africa, Nigeria, and Kenya, other African markets, such as Tanzania and Mozambique, are prospective markets for international sportsbook operators due to relaxed regulations.
New gaming regulation system has been introduced in Tanzania and many laws have been changed recently, the country attracts a lot of investments.
Sports Betting in Asia
So, it shouldn’t come as a shock that Asia, led by China and India, which possess 60% of the world’s population, also contributes to at least half of the global betting GGR. However, sports betting is legalized only in a few countries in the South Asian region.
For instance, Macau has stringent laws in place and approves Macau Slot as the only concessionaire of football and basketball bets, telephone and Internet betting. Likewise, Singapore and South Korea have heavily regulated betting markets, mainly state Monopolies, with only a few exceptions.
The Philippines is entitled to be noticed as the most open and popular market in Asia to bet on. It is similar to licensing because it is exclusive only to offshore operators, while domestic entities and events pose no threat; this guarantees many companies’ entry into the market.
In Myanmar, gambling is prohibited, and most forms of betting are prohibited as well, with exceptions concerning tourists and foreigners only. This is indicated by debates on the decriminalization of casinos in the 2018-2019 period, which makes it possible to predict further liberalization in the future.
Sports Betting in Latin America
Following the formulation of the Colombian market, which became the first in Latin America to give the nod to online gambling back in 2016, which, in turn, stimulated the boom of the market, other countries started to liberalize it.
The degree of legalization, nonetheless, differs from one country to the other. In Argentina, for example, the practice of online betting is legal in some provinces, yet there is no harmonized legislation.
In 2008, Brazil, which was considered one of the most promising and widely discussed emergent markets, made considerable progress toward complete legalization. Finally, the regulation of the market will be approved in 2024 after the adoption of proposed bill 3 dot 626 / 2023 regulating bets on sports and allowing gambling.
The details of this bill are still under consultation and will go through the final ratification by the President of Brazil – Luiz Inacio Lula da Silva. Also, all tax measures the Economic Affairs Commission introduced were passed in a vote on November 22, while full regulation of sports betting will be completed by July 2024.
Mexico can be considered one of the most prominent and dynamic markets within the area. Clearly, more and more people tend to use online sportsbooks, especially when retail stores were badly affected by the crisis. In any given country, the rules and regulations are fairly well laid out and easy to comprehend.
Having understood the struggle for the legalization of gambling in Costa Rica, it can be noted that the country remains ambiguous in its hypothesis, neither leaning towards increased legislation in the mentioned field nor openly supporting the gambling industry.
The online sector is still an uncontrolled market, whereas the land-based markets are more restricted and controlled, governed by many set guidelines. It only remains to be seen if the government will make efforts to bring down online sports betting.
Countries Where Online Betting is Illegal
Thus, as has been mentioned before, there are many countries that allow the practice of sports betting, yet there are quite a few which do not allow it at all.
These areas often limit internet betting based on religious issues, moral issues or due to possible effects on the societal vices resulting from betting problems. In these places, it is unlawful to wager on sports online and hefty fines prevail if apprehended.
One enacted provision is the Anti-Betting ban, where betting is allowed only under license, and this helps in reducing unregulated and possibly fraudulent activities. They make certain that this market is regulated and only the approved providers are allowed to provide the gambling services. This assists in safeguarding the virtues of the sports and the bettors.
Conclusion
Getting licenses is very important, especially when developing an online sports betting platform or expanding sports books to new regions. Even if it is crucial to understand global trends in the sphere or feel ready to expand to new markets, it is impossible to neglect the opportunity to get a betting license.
The licensing process cannot be over-emphasized because it helps in following the legal requirements of respective and other countries and does matter in creating credibility among the customers.
Every state has its peculiarities and rather strict regulations that should be met, thus, customers have to prove their financial health and proper management of the possibilities of becoming addicted to gambling. Indeed, many of these issues require one to be well-acquainted with legal regulations and market conditions of the markets under consideration.
