Virtual Sports Betting Regulation in the EU

Understanding Virtual Sports Betting

Virtual sports betting represents a unique intersection between casino gaming and sports wagering. Unlike traditional sports betting where outcomes depend on real athletic competition, virtual sports are computer-generated simulations where results are determined entirely by Random Number Generator (RNG) algorithms. This fundamental distinction has significant regulatory implications across European markets.

According to research published by the European Gaming and Betting Association (EGBA), virtual sports have grown substantially as a product category, particularly during periods when live sporting events were unavailable. The products offer 24/7 availability with events running every few minutes, making them attractive to both operators seeking continuous revenue streams and players who prefer on-demand gaming experiences.

Common virtual sports products available in EU markets include:

• Virtual horse racing: Simulated races with animated horses, jockeys, and realistic track conditions
• Virtual football: Computer-generated football matches with teams, formations, and match statistics
• Virtual greyhound racing: Simulated dog racing events with variable track conditions
• Virtual motor racing: Car and motorcycle racing simulations
• Virtual tennis: Simulated tennis matches between computer-generated players
• Virtual cycling: Bicycle racing simulations with stage-based competitions

The Classification Challenge: Sports Betting or Casino Gaming?

The core regulatory challenge for virtual sports lies in their hybrid nature. While they present as sports betting products with odds, form guides, and betting markets similar to real sports, the underlying mechanism is identical to casino games like slots or roulette—RNG-determined outcomes with no skill element or real-world athletic performance involved.

This classification question has practical consequences for operators. In jurisdictions where online casino and sports betting are regulated differently, the categorization of virtual sports determines which license is required, what tax rates apply, and which consumer protection rules must be implemented.

Jurisdictions Treating Virtual Sports as Casino/RNG Products

Several EU member states classify virtual sports primarily as RNG gaming products:

• Germany: Under the GlüStV 2021 framework administered by the Gemeinsame Glücksspielbehörde der Länder (GGL), virtual sports are treated as virtual slot games (virtuelle Automatenspiele) and subject to online casino regulations including the EUR 1 per spin stake limit and 5-second minimum spin duration where applicable
• Netherlands: The Kansspelautoriteit (KSA) classifies virtual sports as games of chance requiring an online casino license, subject to the same affordability check requirements as slots
• Sweden: Spelinspektionen treats virtual sports as casino products under the commercial online gaming license category

Jurisdictions with Specific Virtual Sports Categories

Other EU member states have developed distinct regulatory frameworks for virtual sports:

• Italy: The Agenzia delle Dogane e dei Monopoli (ADM) regulates virtual sports as "scommesse virtuali" (virtual betting) under Decree 111/2017, with specific technical requirements and event scheduling rules
• Spain: The DGOJ permits virtual sports under the sports betting license with specific technical certification requirements
• France: Virtual sports fall under the ANJ's jurisdiction with classification depending on the specific product mechanics

Jurisdictions Including Virtual Sports in Sports Betting Licenses

Some jurisdictions permit virtual sports under sports betting authorization:

• Malta: The Malta Gaming Authority (MGA) allows virtual sports under Type 2 (fixed odds betting) or Type 1 (casino) licenses depending on operator preference and product structure
• Denmark: Spillemyndigheden permits virtual sports under the online casino license with RNG certification requirements

Licensing Requirements Across EU Markets

Operators seeking to offer virtual sports across multiple EU markets must navigate varying licensing requirements. The following analysis covers key regulated markets.

Germany: GGL Virtual Gaming Authorization

Germany's regulatory approach to virtual sports underwent significant change with the 2021 Interstate Treaty. Key requirements include:

• License type: Virtual Slot Games license (Virtuelle Automatenspiele) required
• Stake limits: Maximum EUR 1 per bet/spin applies to virtual sports events
• Pacing requirements: Minimum 5-second interval between virtual events
• Deposit limits: Monthly EUR 1,000 deposit limit applies across all online gambling products
• OASIS registration: Players must be checked against the central exclusion register

Italy: ADM Scommesse Virtuali Framework

Italy maintains one of the most developed virtual sports regulatory frameworks in the EU. The ADM requirements include:

• Specific authorization: Virtual betting (scommesse virtuali) requires dedicated ADM approval
• Event scheduling: Minimum intervals between virtual events to prevent rapid-fire betting
• Visual standards: Graphics and animations must meet specified quality thresholds
• RNG certification: Random number generators must be certified by ADM-approved testing bodies
• Market restrictions: Certain bet types may be restricted on virtual events

Spain: DGOJ Technical Standards

Spain's gambling regulator has established technical requirements for virtual sports:

• RNG testing: Products must undergo testing by accredited laboratories
• RTP disclosure: Return-to-player percentages must be documented and available to regulators
• Event integrity: Virtual event outcomes must be independently verifiable
• Advertising compliance: Advertising restrictions apply with particular scrutiny on virtual sports promotion

Netherlands: KSA Casino License Requirements

Under Dutch regulation, virtual sports fall within the online casino category:

• License requirement: Online casino license (vergunning online kansspelen) required
• CRUKS checks: Central Register for Exclusion of Gambling (CRUKS) verification mandatory
• Affordability monitoring: Enhanced player monitoring requirements apply
• Addiction prevention: Strict responsible gambling messaging and intervention requirements

RNG Certification and Technical Standards

All EU jurisdictions require virtual sports products to demonstrate fair and random outcome generation. The software testing and certification requirements for virtual sports include:

RNG Testing Requirements

Virtual sports RNG systems must undergo comprehensive testing covering:

• Statistical randomness: Outcomes must pass tests such as NIST SP 800-22, Diehard tests, or equivalent statistical analysis confirming unpredictable distribution
• Seed generation: Initial seed values must be generated from truly random sources (hardware entropy, atmospheric noise, etc.)
• Cycle length: RNG algorithms must have sufficiently long cycles to prevent pattern prediction
• Independence: Each virtual event outcome must be statistically independent from previous results

Accredited Testing Laboratories

EU regulators typically accept certifications from ISO 17025 accredited testing laboratories including:

• eCOGRA (eCommerce Online Gaming Regulation and Assurance)
• BMM Testlabs
• Gaming Laboratories International (GLI)
• iTech Labs
• NMi Gaming (Netherlands)
• Quinel (UK)

Testing must cover both the core RNG algorithm and its integration into the virtual sports product, ensuring that game logic correctly translates RNG outputs into fair event outcomes.

Return-to-Player (RTP) Requirements

Virtual sports products must comply with RTP regulations similar to those governing casino games:

• Minimum RTP: Most jurisdictions require minimum payout percentages (typically 85-92% depending on the jurisdiction)
• RTP verification: Theoretical and actual RTP must be documented and verifiable
• Player disclosure: Some jurisdictions require RTP information to be available to players
• Audit trail: Complete records of all virtual events and outcomes must be maintained for regulatory audit

Consumer Protection Measures

Virtual sports are subject to comprehensive responsible gambling requirements across EU markets. These measures address the specific risks associated with RNG-based products that run continuously.

Continuous Availability Risks

Unlike real sports which follow natural schedules, virtual sports events run every 2-5 minutes, 24 hours a day. This continuous availability creates specific consumer protection challenges:

• Session length concerns: Players may engage in extended sessions without natural breaks
• Loss chasing: Rapid event frequency can facilitate loss-chasing behavior
• Time distortion: The fast pace may reduce player awareness of time and money spent

Mandatory Protection Measures

EU regulators have implemented various safeguards specifically relevant to virtual sports:

• Reality checks: Mandatory notifications after specified time periods (typically 60-90 minutes) showing session duration and net position
• Session limits: Options or requirements for players to set maximum session durations
• Stake limits: Maximum bet amounts per event (e.g., Germany's EUR 1 limit)
• Cool-down periods: Mandatory pauses between events in some jurisdictions
• Self-exclusion: Access to national and operator self-exclusion programs

Information and Transparency Requirements

Operators must provide clear information about virtual sports products:

• RNG disclosure: Clear statement that outcomes are computer-generated, not based on real events
• Independence statement: Confirmation that each event is independent (no "due" outcomes)
• Odds explanation: How virtual sports odds are calculated and what margins apply
• Responsible gambling messaging: Prominent display of mandatory warnings and support information

Country-by-Country Regulatory Summary

The following table summarizes virtual sports regulation across major EU markets:

Advertising and Marketing Restrictions

Virtual sports advertising is subject to the same advertising timing and content restrictions that apply to other gambling products, with additional considerations:

Content Restrictions

• No confusion with real sports: Marketing must not suggest virtual sports are real sporting events
• RNG disclosure: Advertisements may need to indicate that outcomes are computer-generated
• No skill claims: Marketing cannot suggest skill or strategy improves outcomes
• Bonus restrictions: Bonus advertising rules apply to virtual sports promotions

Channel Restrictions

Virtual sports advertising faces the same channel restrictions as casino products in most jurisdictions, including:

• Broadcast watershed restrictions
• Sports sponsorship limitations (where applicable)
• Social media targeting restrictions
• Influencer marketing compliance requirements

Taxation of Virtual Sports Revenue

The tax treatment of virtual sports follows from their regulatory classification. In jurisdictions where virtual sports are classified as casino products, casino tax rates typically apply. Where classified as sports betting, sports betting tax rates apply.

Key taxation considerations include:

• Germany: Virtual slot games taxed at 5.3% of stakes (like online slots)
• Italy: Scommesse virtuali taxed at sports betting rates on GGR
• Spain: Taxed as sports betting revenue
• Netherlands: Casino tax rates apply (29% GGR from 2024)

B2B Providers and Platform Requirements

Companies developing and supplying virtual sports products face B2B licensing requirements in many EU jurisdictions:

• Software certification: Virtual sports platforms must be certified before operators can offer them
• Supplier licensing: B2B suppliers may need separate licenses (e.g., MGA B2B license, GGL certification)
• Integration standards: APIs and data feeds must meet regulatory technical standards
• Audit trails: Suppliers must maintain comprehensive records accessible to regulators

Future Trends in Virtual Sports Regulation

Several developments are likely to shape the future regulatory landscape for virtual sports:

Enhanced Graphics and AI

As virtual sports graphics become more realistic and potentially incorporate AI-generated elements, regulators may need to address:

• Distinction between virtual and real event wagering
• Use of real athlete likenesses and branding rights
• AI-driven odds and event generation

Integration with Esports and Gaming

The line between virtual sports, esports betting, and video game wagering continues to blur. Regulatory frameworks may need to address convergent products that combine elements of esports and virtual sports.

Harmonization Efforts

As with other gambling products, there is ongoing discussion about greater harmonization of virtual sports regulation across EU markets through regulatory cooperation frameworks.