Finding the regulatory balance

Gambling regulation usually pursues several legitimate objectives at the same time: protecting players, preventing illegal activity, ensuring a safe and transparent market and generating public revenue.

The interesting question is how these objectives are weighted.

In my experience, regulatory frameworks tend to lean towards one of two approaches. They may focus primarily on protecting players within a controlled gambling environment, or they may place greater emphasis on reducing gambling participation through product restrictions and additional friction.

Neither approach exists in a pure form. Most markets combine elements of both.

A system focused on protection within the regulated market aims to keep players on licensed platforms. This allows operators and authorities to monitor behaviour, identify potentially harmful patterns and intervene where necessary.

For that model to work, the legal offer must remain sufficiently relevant to players. Product choice, payments, customer experience and marketing all influence whether players remain within the regulated environment.

A more restrictive model may seek to reduce gambling activity by limiting stakes, deposits, product features or accessibility. These measures can support player-protection objectives. They can also create an unintended risk if the legal product becomes significantly less attractive than unlicensed alternatives.

The relevant question is therefore not whether restrictions are good or bad. It is whether they achieve the intended result.

If players move outside the regulated market, the available protection mechanisms no longer reach them. Their activity becomes less visible, intervention becomes more difficult, and the associated taxes or levies are no longer generated within the licensed system.

A lesson from Switzerland

I experienced this balance directly while running a regulated Swiss online casino.

One conversation with the then head of the Federal Gaming Board left a lasting impression on me. My takeaway was that the regulator and the licensed operators depended on each other to make the regulated market work.

Swiss players needed credible reasons to use Swiss licensed websites. Operators were expected to grow their businesses and market their products successfully, while remaining within the regulatory framework and meeting their obligations around social protection.

The regulation was demanding. The initial implementation involved technical complexity, individual game approvals and substantial certification work. Processes were subsequently developed further, including the use of recognised testing laboratories and certification documentation provided by game manufacturers.

The underlying direction remained visible: create a controlled legal market that can attract a meaningful share of player demand and apply player-protection measures within that environment.

The Swiss framework also allows higher-value customers to participate in the regulated online market. This does not remove the operator’s protection responsibilities. It places greater emphasis on monitoring behaviour, assessing financial sustainability and intervening when indicators require it.

Germany as a contrasting development

Germany initially placed stronger emphasis on uniform restrictions. The original framework for virtual slots included a cross-provider monthly deposit limit of €1,000 and a maximum stake of €1 per game round.

Since July 2026, higher stakes and deposit limits have become possible under defined conditions. These changes introduce more differentiation while retaining monitoring, affordability checks and additional safeguards.

It will be interesting to see how this balance develops as the Glücksspielstaatsvertrag 2021 is evaluated.

The same principle applies to taxation. Tax levels and tax structures influence product economics, payout ratios and the ability of licensed operators to compete. This does not mean that taxes should simply be lower. It means their effects on player behaviour and channelisation should form part of the assessment.

For operators, suppliers and investors, understanding the regulatory rules is therefore only one part of evaluating a market.

The broader question is how the framework balances protection, channelisation and commercial viability.

That balance influences player behaviour, the effectiveness of protection measures and the resilience of the underlying business case.