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Gambling suppliers have been forced to say goodbye to the era when licensing oversight was either an afterthought or a jurisdictional idiosyncrasy. Now, firmly in an era where scrutiny on the B2B sector is at an all-time high, European jurisdictions are bedding in a new normal for the sector.

Although it was far from the first jurisdiction to license suppliers, Sweden was in many ways at the vanguard of the still growing wave of supplier oversight.

The nation made it mandatory for B2B firms looking to supply local online gambling operators to acquire licences of their own in 2023.

The stated aim of the project was to restrict the ability for suppliers to sell their content to both licensed operators and those who attempt to lure players from Sweden to offshore websites.

This formed part of a rising tide of action against the global gambling black market, which is still building momentum.

The idea that choking off the supply of top quality content to the unlicensed ecosystem will hamper illicit operators, by making their products less appealing to consumers, had been percolating in gambling circles for several years.

But the tactic is now at the forefront of regulation in several jurisdictions in Europe and beyond, with Sweden the first nation to craft new rules with this explicit focus.

Despite the fact that it has since gained prominence as a regulatory tactic around the world, results from the Swedish market have been mixed.

Suppliers still hoping to service both locally-licensed and dot.com operators have made attempts to sidestep the regulations - often by continuing to sell to all comers, but requiring that any operator targeting Sweden geoblock their specific content for that market.

The SGA has said in no uncertain terms that it considers this to be insufficient from a compliance perspective and has found success in the courts in backing this position.

The impact of the policy on the Swedish grey market has been small, but notable, say local experts, pushing channelisation upwards 2 to 3 percentage points.

However, the industry continues to have serious frustrations with the B2B licensing system.

Gustaf Hoffstedt, the secretary general of online trade group BOS, said that the regulator should be using the licensing system to forge a closer relationship with suppliers to allow for the rapid rollout of new types of content.

Hoffstedt also said he believes that the authorities are wasting energy in the row over geoblocking, when they should instead be focused on those companies not licensed in Sweden which continue to support the country’s black market.

“We believe that the SGA is hunting down the innocent while at the same time giving free rein to the real crooks of the gambling market,” he told 91����ԭ��.

Despite these frustrations, Hoffstedt acknowledged that the endeavour to more closely regulate suppliers had at least been a partial success so far.

But, he said: “B2B licences are by no means Sweden's or any other jurisdiction's solution to the large leakage to the unlicensed gambling market that we are witnessing in Europe. The solution to that challenge is to offer gambling consumers a more attractive gambling offer on the licensed market.”

Meanwhile, in neighbouring Denmark, the approach has been typically conservative.

Suppliers have been required to hold licences since the start of this year, but unlike Sweden the focus is not on curtailing the black market in Denmark, where channelisation rates have historically been strong.

“I’m not sure the introduction of B2B supplier licensing has had a significant impact on the market,” said Morten Ronde, the CEO of the Danish Online Gambling Association.

Ronde’s primary concern is that the tentative approach taken by the authorities is giving an upper hand to those offshore.

“B2C operators do regularly raise concerns about the limited product scope permitted under Danish regulation,” he said, pointing to banned verticals such as crash games, virtual sports and lottery betting.

Unlike Sweden and Denmark, where supplier licensing is relatively new, Romania has had a regime in place for many years.

However, it too has responded to the shift in thinking around suppliers and the black market in the past year.

In July 2024, the Romanian government demanded that all of the market’s licensed suppliers disclose any deals they had globally with operators that were not licensed in Romania.

The fear within the industry was that authorities would use this data to inspect whether any of those deals were facilitating black market gambling.

After almost exactly a year of quiet, the Romanian regulator has now delivered an ominous warning suggesting that it is indeed poised to take action.

On July 1, the ONJN issued what it called a “firm warning to all [B2B licence holders], in particular payment processors, software producers and affiliated entities, regarding the involvement, directly or indirectly, in facilitating the operation of unlicensed and/or unauthorised gambling on the territory of Romania”.

The regulator warned that it is a criminal offence to support the gambling black market and that it had spent the last year closely analysing the data submitted by suppliers.

It stood ready to hand over details of offenders to law enforcement and revoke licences, the ONJN said.

In lockstep with this warning, the Romanian government has, in the last few days, introduced a bill that would, among other changes to the country’s gambling law, make it a criminal offence.

“Suppliers cannot offer their services to unlicensed operators who allow access to their websites from Romania,” under the terms of the law, explained Andrei Cosma, a partner at Baciu Partners law firm in Bucharest.

A similar threat of enforcement for suppliers has also been issued by the UK Gambling Commission.

Last month, one of the regulator’s senior officials called on operators to do a better job of holding their supplier partners to account and warned that it would only wait so long before stepping in.

The UK regulator has already taken some action against B2B providers, most notably the ongoing investigation of Evolution.

Regulators across Europe and North America also say they are increasingly sharing information between one another, including on suppliers, suggesting that it will become more and more challenging for B2B companies to embrace regulation with one hand and hold offshore markets close with the other.