Belgium: Struggle Continues for Land-based Operators, while Online Bridging the Gaps
Gambling activities were unregulated until the introduction of Gaming and Betting Act of 1999, which paved the way for establishment of the Belgian Gaming Commission. Legalization of casinos, slot machine arcades (gaming arcades), drinking establishments, staffing and licensing of such establishments and equipment manufacturers were added under the responsibilities of the Gaming Commission. As technology advanced, online gaming too was included under the purview of Belgian Gaming Commission. However, the legislation mandates land-based licenses to offer online services to the residents, creating a virtual barrier for the international operators to enter the lucrative market. Lotteries continue to be administered by the Belgian National Lottery, which through The Lottery Act of December 31, 1851, enjoys monopoly on various lottery games in Belgium.
With continuous efforts towards curbing illegal gaming practices, the Belgian gaming commission has been routing players towards providing a more contained and legal gaming experience following the 2010 amendments to the Belgian gaming and betting act (effective from 2011). Financial viability of land-based traditional operators has been one of the biggest concerns for the industry, as their growth has been shadowed with massive expansion in the online platforms coupled with stringent regulatory requirements. Traditional casino and lottery segment has been witnessing a decline over the past few years, however, an exponential growth in the online segment helped drive the industry’s revenue at a CAGR of 8.53% during the review period (FY2010–2014), recording EUR1,095.64 million (US$1,453.62 million) in FY2014. Operator segment led the gambling market with 80.19% contribution towards the total revenue, followed by casino and lottery segments contributing 10.04% and 9.77%, respectively (see chart below).
Belgian Gambling Market (US$ Million), 2010–2019
Source: Belgian Gaming Commission, National Lottery, Gambling Research
Gambling environment in the country remains stringent with limited number of licensed operators. Both online and terrestrial forms of gambling activities are permitted within the country, but a closed and limited licensed environment makes Belgium a tougher market for new entrants and foreign players to come in without a legal liaison. Digital integration of land-based activities for every traditional operator is quite difficult, considering current financial challenges they are going through. Hence, to maintain their competitiveness, the gaming commission has laid down the concepts of consolidation and certain structural reduction measures aimed at improving profitability by limiting unnecessary spreading of offers from supply side. Government’s intentions for increasing class I establishments (casinos) from nine to eleven and gambling on international cruise ships in Belgian territorial waters may help in bringing more revenues to the industry. The industry is expected to grow at a CAGR 6.26% over FY2015–2019, with online channel increasing its share from 17.95% in FY2014 to 37.35% by FY2019.
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