A survey instrument was developed and disseminated to all known remote gaming operators in the EU, as well as the regulatory authorities in Gibraltar and in Malta. As of mid-February 2006, a total of 19 companies from Malta, Gibraltar, and Finland had responded. Because we did not have any information on the size (as measured in GGRs) of the respondents relative to the size of non-respondents, we were unable to use the survey results to estimate the aggregate size of the remote gaming sector in the EU. However, we could draw other conclusions from the survey data based upon the assumption that the companies that did respond are representative of the sector as a whole.
Due to the sensitive nature of the data collected, respondents were informed that the data would not be presented in raw form but rather only in the aggregate to display the overall significance of the sector. The survey instruments sent to remote gambling operators is presented in the Appendix. Not all survey respondents answered all questions requested.
ACTUAL AND PROJECTED GGRs, RESPONDING REMOTE GAMING COMPANIES 2000-2009 (Millions of Euros)
In the estimation of the 19 respondents, they were generating GGRs in 2004 of approximately €1.2 billion, having expanded from only about €115 million in 2001. They forecast that their GGRs would grow to in excess of €6 billion by 2009. This would suggest an average annual rate of compound growth from 2004 to 2009 of about 40%, considerably greater than the GBGC global forecast (discussed below.)
Based on overall GGR estimates for the remote gaming sector, the 19 companies that responded to this survey reflect about half of the remote gaming services industry for the year 2004. Though we cannot assign much accuracy to this, we can use it as a rule of thumb to roughly estimate certain parameters for the entire industry, such as levels of employment.
PERCENTAGE OF GGRs FOR REMOTE GAMING COMPANIES FROM OTHER EU COUNTRIES, 2000-2009
Respondents were also asked to differentiate between the percentage of their EU gaming revenues that were generated within the Member State where they were primarily based versus cross-border GGRs within the EU. (For purposes of this analysis, responses from Gibraltar were treated as if they were primarily based in the United Kingdom.) The respondents indicated that between 15% and 30% of their revenues came from other Member States between 2000 and 2003, increasing to about 45% in 2004 (probably due to the expansion of licenses in Malta.) The forecast through 2009 had the percentage of EU cross-border spending in the 20% to 30% range.
Respondents were asked to identify the proportions of their business coming from consumers in the various EU Member States. Based on their responses, roughly half of the custom is from the United Kingdom, followed by about 15% from The Netherlands and Belgium/Luxembourg, around 10% from Germany, and smaller amounts from other countries.
The survey also examined what remote gambling activities their customers purchased. The conducted survey attempted to segregate the gaming market into five sectors: betting, casino gaming, virtual slots, bingo and lottery, respectively. The categories of poker, lotterystyle games, and virtual games were added by respondents. The information on each gaming sector was derived from the survey based upon personal characteristics of players as reported by respondents.
PERCENTAGE OF REVENUES FROM DIFFERENT REMOTE GAME OFFERINGS, 2005
Based on an unweighted average of the 19 respondents on this question, betting services generate over half of the GGRs for remote gaming service companies, casino games about another third, and virtual slot machines much of the balance, with the remainder picked up by bingo, internet poker, and lottery products.
- Age: Percent of total registered gamers
- 18-35: 63%
- 36-55: 32%
- 55 and over: 5%
The remote gaming companies were also asked to provide information on the demographics of their registered players, All respondents reported a growing number of registered players within both their primary EU country of operations and other EU member states. They reported an aggregate of 63% of all registered players to be within the 18-35 age group, 32% to be within the 36-55 age group, and 5% to be of age 56 and over.
Remote gaming companies were also queried with respect to their employment levels, in their primary EU country, elsewhere in the EU, and outside the EU. If indeed this cohort of respondents reflects about half the remote gaming industry in the EU, then the employment growth for the sector went from less than 500 in 2000 to around 5,000 in 2004. Forecasts for future employment growth would push total employment (within and outside the EU) to about 10,000, of whom about 6,000 would be employed within the EU. Thus, even though the remote gaming sector may become an increasingly important part of the gambling services sector in the EU, it is likely to remain a relatively small employer.
EU REMOTE GAMING EMPLOYMENT ALL LOCATIONS 2000-2009
Based on the survey results, the proportion of employees with remote gaming companies located within the company’s primary EU country of operation declined from about 75% in 2000 to around 50% in 2004. Forecasts through 2009 suggest this ratio will fall further, to about 40%. The proportion of employees working elsewhere in the EU ranged between 10% and 15% between 2000 and 2004, and was expected to be around 15% in 2009. Finally, the proportion of employment outside the EU grew from 10% to 40% between 2000 and 2004, and was forecast to stay about 40% through 2009. , with negligible amounts of employees based in other EU countries and outside of the EU. Looking forward to 2009, employment within the EU is projected by respondents to grow at an aggregate of five percent each year for the next four years, while employment outside of the EU is estimated to remain somewhat constant, or grow only in proportion to over-all business growth.
It must be noted that within the past ten years the growth rate of technology—as applies to the remote gambling sector—has far surpassed that of legislation. In the United States, the law currently being applied to internet gambling cases dates back to 1961 when Congress enacted the Wire Wagering Act, which was aimed at curbing illegal betting over the telephone. It remains to be seen whether this law and similar pre-internet perspectives will survive the age of wireless technology as recent legal cases (i.e. United States v. Jay Cohen, Antigua vs. United States) sort themselves out through the courts or the World Trade Organization. The Wire Act is generally put forward in the United States as banning all forms of internet gaming within the United States, though thee is considerable difference of opinion on this matter.16 Thus, even though a case can be made that internet gambling remains technically illegal within the United States, demand for remote gambling has clearly grown significantly as increasing numbers of U.S. citizens continue to participate in this activity.
While it is theoretically possible to keep an entire nation from accessing online gaming through static IP control or internet service provider limitations, there would be nothing to stop consumers from going around these preventative measures as the collective public learning curve overcomes attempts by government to suppress the activity.
In the EU, by comparison, there are not the legal sanctions against the gambling activities per se, and as internet and remote technology access expands, we can expect that remote ambling sectors will also continue to expand at rapid rates. The questions of market access that are before policy makers and the courts in the wake of Gambelli and other legal decisions may very well determine the extent to which remote gambling sector growth will be allowed to take place.
© European Union