EU REGULATION
E urope's patchwork of regulation has long been a bugbear of licensed operators. They point to the unjustified cost and friction of doing business across 27 member states who each insist on creating their own legal environment. Harmonization seems like a political and practical impossibility, but is that actually the case? Experience across diverse sectors shows that top-down legal harmonization in the European Union (“EU”) is often necessary, but it is neither sufficient for, nor the sole driver of, meaningful convergence. This article explores the possibility of a viable path towards harmonization for the EU’s online gambling industry which may lie in incremental, bottom-up functional convergence. By examining successes and failures of EU harmonization efforts in other regulated industries, the authors argue for a gambling law harmonization model based on mutual collaboration, technical standards, third-party conformity assessments, and market-facing clarity. Introduction The European experience across regulated industries shows that regulatory harmonization rarely succeeds through top-down political acts alone. Although single, top- down legislation has recently gained more popularity as a harmonization tool, the maximum harmonization often develops through incremental convergence that combines law, implementing instruments, technical standards, and, most importantly, coordinated supervision and enforcement. This would suggest that legal harmonization is necessary but insufficient. Convergence only becomes effective when supervisory expectations, enforcement practices, and operational standards and interpretations are aligned. Otherwise, even highly harmonized legal frameworks can magnify significant differences in national regulatory culture. This realization is equally critical for the online gambling industry, as full legal harmonization from “above” is neither politically nor legally realistic, given the wide national
discretion over moral policy, public health, fiscal interests, and enforcement efforts. Simultaneously, continuous reliance on national rules in a borderless online market has already proven ineffective. The most viable path for the gambling industry is therefore incremental, functional convergence. This involves building a shared technical and operational understanding before even attempting to build a shared political one. Analysis: The mechanics of harmonization The current state of harmonization in financial services, data protection and product safety may illustrate how this process works and, most importantly, where it fails. What is harmonization? At its core, regulatory harmonization in the EU is the process of aligning different sets of national laws, standards, and practices into a coherent, compatible framework. Its primary goal is to eliminate “regulatory friction”, the extra costs and legal risks that arise when businesses must follow 27 different sets of rules for a single product, which is particularly difficult in a borderless digital landscape. Financial Services: the evolution of the Single Rulebook Financial services illustrate both failures and successes of harmonization. Early EU frameworks relied on minimum harmonization via EU Directives to be implemented in the laws of Member States, mutual recognition, and home- state supervision. The financial crisis exposed the limits of this model, as fragmentation became a systemic risk to the internal market. The EU’s response was the creation of the Single Rulebook 1 , described by the European Banking Authority (“EBA”) as “a single set of harmonized prudential rules” applicable across the EU. The shift toward instruments such as MiFID II,
1 https://www.eba.europa.eu/single-rulebook
IMGL MAGAZINE | MARCH 2026
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