After years of putting their heads in the sand, governments around the world have begun reevaluating the online gaming industry, and now see it as a way to raise tax revenues.
There continues to be widespread legal uncertainty over online gaming, which is largely the result of legislators being slow to act to the growing market when the internet developed to a place where gaming could thrive in the early 2000s.
Governments generally considered online gaming to be impossible to regulate, and so with the exception of a handful of countries including the UK, which legalised online gaming with the 2005 Gambling Act, they have avoided addressing the industry at all.
However, since the financial collapse in 2008, countries around the world have begun to look again at the gaming industry and see it as a field that could be regulated and taxed to shore up the finances of the public purse.
The lack of national boundaries on the internet means that citizens could not be stopped from joining online gaming sites, and so countries have begun to take a more pragmatic approach to the industry. By legalising the industry, governments could make gaming companies comply with laws aimed at reducing problem gambling as well as boost tax revenues.
Fantasy sports companies such as FanDuel and DraftKings have made the headlines recently with their dramatic growth and questionable legality within the US, but more traditional online games like roulette continue to be a growth industries as well as more and more people become comfortable with spending money on the internet and through their smartphones and tablets.
All online industries remain difficult to regulate, whether they are search giants failing to pay their fair share in tax revenues or online gaming companies attracting customers from overseas. However, governments need to act to create certainty and improve consumer protection around online industries, and that can only be done by addressing the issues head on with legislation.
It will take a number of years before governments find a sustainable way to regulated and tax internet-based industries, but countries around the world are finally taking the first step by addressing the elephant in the room and working together to find a solution.
