The domino effect of gambling regulation

Abstract: This comprehensive exploration delves into the global trend whereby jurisdictions replicate measures initiated by other countries when it comes to the regulation of gambling particularly when it comes to advertising and responsible gaming restrictions. We examine cases from Italy to Colombia, Spain, the UK, Ecuador, and Peru, shedding light on instances of regulatory emulation and its potential consequences. Emphasizing the need for nuanced, evidence-based approaches, the conclusion stresses the importance of recalibrating regulatory strategies. It calls for a flexible and inclusive framework grounded in data-driven policies and tailored to individual country needs to foster responsible gaming, innovation, and industry growth. The article underscores the risks of over-legislation and the need to consider the unique dynamics and challenges of each jurisdiction before imposing standardized regulations.

Since the implementation of the Dignity Decree (Decreto Dignità) in Italy in mid-2018, introducing a ban on gambling advertising, numerous countries have followed suit, sparking a domino effect. Italy, it seems, set a trend and the imposition of marketing restrictions has transcended European borders, resonating globally. This article explores the contrasting approaches taken by the different nations, shedding light on the need for meticulous evaluation of data before implementing restrictions.

The common thread behind the adoption of such stringent measures is the goal to combat gambling addiction or pathological gambling within society. However, this article aims to question whether the measures adopted are appropriate to achieving that goal, it examines the studies conducted to support their adoption, and their alignment with the specific needs of each population. It seeks to critically examine whether the regulatory actions taken are well-founded, considering factors such as cultural context, societal dynamics, and the potential unintended consequences of the universal replication of measures aimed at addressing gambling-related issues.

In the context of regulatory trends, Spain serves as a clear example. Its approach closely mirrors the steps taken by Italy, with the approval of the Royal Decree on Gambling Advertising in 2020. Despite initial attempts to present this decree as distinct from the Italian version, it has gradually evolved into an almost perfect replica. Marketed as a being less restrictive than the Italian approach, the accompanying impact assessment justified its implementation by emphasizing its role in combating gambling addiction in Spanish society. The paradox becomes apparent when examining prevalence studies in gambling disorders. Spain, at the time it adopted the Royal Decree, maintained a stable percentage of 0.3%[1] of adults aged 18 and older with gambling disorders, whereas Italy reported figures of approximately 3%[2]. This discrepancy raises questions about the correlation between prevalence rates and the strictness of regulatory measures. The fact that Spain has essentially replicated the Italian model, and in some aspects, even intensified it, indicates a broader trend towards adopting standardized measures without a comprehensive examination of their suitability for specific societies. This highlights a propensity for regulatory convergence, where countries may copy the approaches of others without conducting a thorough assessment of their appropriateness within their own socio-cultural contexts. The lack of conclusive evidence supporting a direct link between advertising and gambling disorders further complicates the justification for such strict regulatory measures.

The most recent cases illustrating this replicative trend are Belgium and the Netherlands. Their respective regulations strictly banning gambling advertising came into force on 1 July 2023. They are unlikely to be alone in the coming years.

It is interesting and worth noting the case of the UK, which has actively addressed gambling advertising since the enactment of the Gambling Act in 2005. In December 2020, the UK Gambling Commission’s Call for Evidence sought information regarding the benefits and drawbacks of allowing gambling operators to advertise, the effectiveness of mandatory safer gambling messages, the impact of promotional offers, and the effects of gambling sponsorship in sports and eSports.  The subsequent White Paper, released in April 2023, faced criticism for its perceived light-touch approach to marketing and advertising regulations. The government’s stance was influenced by the submissions during the Call for Evidence, which indicated a lack of conclusive evidence linking advertising to harm or gambling disorders. The White Paper’s proposals reflect a cautious response, acknowledging the complexities and uncertainties surrounding the relationship between gambling advertising and potential harm, while also considering alternative protective measures already in place or under consideration.

It is noteworthy that the prevalence of gambling disorder in the UK is similar to that of Spain, remaining stable at 0.2%[3]. While it may seem that both countries share similar needs in combating gambling addiction, their approaches differ. The UK separates the direct impact of gambling advertising from the development of a disorder. On the other hand, in Spain, the approach leans towards almost a total prohibition of gambling advertising.

Despite the seemingly more consistent and proportionate model in the UK, we observe a prevailing trend towards restrictiveness not only in Europe, but also extending to other parts of the globe.

In Colombia, in October 2023, Coljuegos published what could be interpreted as regulations for online gambling advertising, known as the “Advertising Resolution”. This resolution appears to be influenced by advertising restrictions implemented in the aforementioned countries, such as Spain. From this regulation, two aspects merit attention. Firstly, its formulation as an administrative act raises concerns about the principles of hierarchy and legal rank. Contrary to the legislator’s intent, an administrative act should not take precedence over laws and regulations of higher rank. Secondly, the absence of a technical study or justification based on actual data tailored to the needs of the Colombian population is notable. This lack of comprehensive analysis raises doubts about the adaptability and suitability of the regulatory measures. A poorly formulated regulation lacking comprehensive analysis risks undermining its effectiveness in addressing specific challenges and dynamics within the Colombian context.

In August 2023, the President of Ecuador approved the regulations for the enforcement of the Organic Law of Communication, prohibiting sports betting advertising, sparking controversy, particularly among football clubs. The decree bans misleading advertising and all forms of sports betting or predictions. This prohibition poses challenges for football clubs who have signed contracts with foreign online operators, potentially jeopardizing their financial sustainability. The abrupt restriction has stirred concerns within the football community, highlighting potential economic implications and uncertainties about the future of partnerships with foreign online operators.

Another example of a country where regulations appear to be grappling with the consequences of advertising restrictions is Perú. In October 2023, the Supreme Decree 005-2023-MINCETUR (DS 005-2023) was published, approving regulations governing the provisions established in Law 31557. Key provisions include restrictions on promotions targeting minors and on legal entities lacking authorization from MINCETUR. It mandates that advertisements related to gaming and betting, as well as in gaming establishments, must include warnings about the potential development of gambling addiction. It will be interesting to observe the evolution of these measures and whether they ultimately translate into prohibitions akin to those observed in other jurisdictions.

The examples above demonstrate a trend to replicate regulations in numerous different countries without truly pausing to analyze the specific needs of each. It raises questions about how countries universally escalate the prohibition of gambling advertising, ostensibly in the pursuit of combating gambling addiction or promoting responsible gaming, without scrutinizing the impact or coherence of such measures within their distinct populations.

This lack of nuanced examination could result in regulatory overreach, imposing restrictions that may not align with the actual challenges faced by the respective societies. This pattern underscores the importance of conducting comprehensive analyses before replicating legislative frameworks, ensuring that regulatory interventions are well-suited to the unique characteristics of each society rather than being a one-size-fits-all approach.

As outlined at the beginning of this article, the domino effect is not only evident in restrictions on advertising or marketing. Another noteworthy area is that of responsible gaming, a topic that remains at the forefront of discussions. Joint deposit limits are one example of a measure that has been introduced to promote responsible gaming in countries such as Spain based entirely on what has been done elsewhere.

A strict system of joint deposit limits was enforced by Germany in 2021, leading major online gambling operators to exit the German market altogether. Consequently, the market has transformed into a marginal and unattractive space for such operators.

A similar scenario unfolded in Sweden, where the implementation of joint deposit limits disrupted the market dynamics to such an extent that the number of players resorting to unregulated websites skyrocketed. In both the German and Swedish cases, the impact on responsible gaming is negligible at best, and likely overwhelmingly negative. This pattern prompts the question of why states persist in replicating legislative measures without exerting the slightest effort to analyze the appropriateness of the measure in the specific country where it is intended to be implemented.

Even with an awareness of the implications, we once again observe countries replicating regulations without addressing the specific needs or consequences of such measures. This trend raises concerns about the potential lack of adaptability and consideration for the unique challenges each jurisdiction faces, emphasizing the importance of a nuanced and context-specific approach to policy making.

In conclusion, the growing trend of jurisdictions adopting measures previously implemented in other countries raises serious concerns. The emphasis on restrictions implies that jurisdiction not replicating these measures are less secure in terms of responsible gaming. This completely overlooks the importance of data-driven and context-specific policies. Over-legislation in prohibiting gambling advertising or responsible gaming tends to sideline crucial areas that merit regulation or enhancement.

One noteworthy aspect being neglected is the industry’s adaptation to technological advancements. The ongoing progress in technology offers immense potential for the gaming industry, yet regulatory efforts seem disproportionately focused on restrictions rather than fostering healthy innovation and growth.

Furthermore, these restrictive regulations often disregard the interests of the key stakeholders in the industry, namely the gaming companies and operators. There is a glaring lack of legislation designed to safeguard the interests of these entities striving to create a healthy gaming environment. A pertinent example is the issue of fraudulent gaming, where operators find themselves without sufficient legal support to combat fraudulent players, revealing a significant regulatory gap.

In essence, it is imperative to recalibrate regulatory strategies, embracing a more flexible and inclusive approach that considers the industry’s multifaceted dynamics. Such an approach should be rooted in data-driven policies tailored to individual country needs, ensuring a regulatory environment that not only promotes responsible gaming – which is undoubtedly crucial and necessary – but also supports innovation, growth, and the overall health of the gaming industry.

[1] Regulatory Impact Assesment of the Royal Decree on Gambling Advertising. Ministry of Consumer Affairs, 2020.

[2] Pacifici R, Mastrobattista L, Minutillo A, Mortali C (Ed.). ‘Gambling in Italy: research, training, and information’: results of an integrated project. Rome: Higher Institute of Health; 2019. (ISTISAN Reports 19/28)

[3] Statistics on participation and problem gambling for the year to March 2022. Gambling Commission.