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This article is an opinion piece by Lee Hills, CEO of leading iGaming regulatory advisory service SolutionsHub.

For years, operators have built cross-border strategies on the assumption that European gambling regulation would gradually move closer together. It made commercial sense to think that way. A single market, a single set of rules, a single compliance framework. Less friction, lower cost, cleaner structure.

Instead, the opposite has happened.

For the past decade, regulation has moved towards greater national control. The jurisdictions that matter most to iGaming operators have each gone their own way, on their own terms and at their own pace. That assumption was not just wrong. For the operators who built strategies around it, it has become commercially dangerous.

The myth of pan-European harmonisation

The European Commission does not have a direct mandate to regulate gambling at a pan-European level. It never has. What it can do is put pressure on the areas around gambling, whether that’s state aid, freedom of services, data protection or financial crime.

But every time a member state has been challenged on its gambling framework, the outcome has been the same. Sovereignty wins.

Germany is the clearest warning sign. Malta-licensed operators once treated EU market access as a question of legal argument and commercial risk appetite. German courts have treated it far more simply. If gambling was offered in Germany without the required German permission, German law applies. The later dispute around Malta’s Bill 55 only sharpened the point. Malta sought to protect its licensed operators from certain foreign judgments. Germany and other member states continued to assert their own consumer protection and public policy rules.

By now, it should be clear enough that gambling regulation is not moving away from national control.

What matters is whether operators have built for that reality, or whether they are still pricing risk as if Europe will eventually fall into line.

What sovereignty actually means in practice

For operators, sovereignty is a commercial reality. It has direct consequences for every operator building across multiple markets.

In recent years, the focus has moved firmly to where the player is, not where the licence sits. The legal tensions surrounding Malta’s Bill 55 have made that principle hard to ignore. But the principle itself is not new. It has been quietly reshaping enforcement, banking relationships and payment processing for years.

For operators, this means one thing above all others. A licence in a well-regarded jurisdiction does not automatically protect you from regulatory exposure in the markets where your players actually are. Governance, compliance, and oversight must follow the player. In practice, that is now the central regulatory reality for any operator building across multiple markets. It cannot stop at the edge of the licensing jurisdiction.

Take an operator running on an offshore licence, taking revenue from a market that expects local authorisation. The first call usually comes from the bank, the payment provider or the platform partner, asking why revenue from that territory should be treated as acceptable. The answer cannot simply be that “we are licensed elsewhere.”

They have to make the case for that specific market. The controls have to hold up there, the local position has to be explainable, and the activity has to be justifiable where the players actually are. That is sovereignty in practice. The player’s jurisdiction is now where much of the commercial and regulatory exposure exists.

The structure that reflects this reality is the hub-and-spoke model. Operators are building this way because regulation is now fragmented market by market. The centre of the structure should be a Tier 1 jurisdiction. This is where governance, risk and strategic decisions are managed. Around that, market-specific licences are held in ring-fenced subsidiaries. Risk is contained within each spoke. Revenue recognised within appropriately licensed entities.

Commercially, it makes sense. More importantly, it reflects how regulation actually works, because every market still needs its own compliance framework.

The licence arbitrage illusion

For a long time, the gap between Tier 1 and Tier 2 licensing was manageable. A lighter-touch jurisdiction offered speed to market, lower cost and operational flexibility. Banks and payment providers asked fewer questions. Counterparties were willing to work with different licences as long as the basics were in place.

That space is shrinking.

Pressure is now coming from all directions. Banks and payment providers are no longer comfortable relying on the licence alone. They are looking at the governance behind it, the compliance culture, the ownership structure and the reputational exposure. Institutional partners are asking harder questions. The licences that were once “good enough” to unlock commercial relationships are increasingly being scrutinised in ways they were not before.

Game studios, platform providers and operators can still launch quickly through a Tier 2 structure, but the friction increases when they try to scale. Larger aggregators, regulated operators, banks and payment partners are now asking more questions about where the business is controlled, where revenue is coming from, who provides oversight, and whether the licence genuinely supports the markets being targeted.

In some cases, the issue is not whether a Tier 2 licence allows the relationship to happen at all. The issue is friction. Onboarding takes longer, the pool of available partners narrows, and extra conditions appear before revenue can move. That is where the commercial pressure is building. A licence may still get a business live, but that does not always mean it gets properly banked, distributed or supported for long-term growth.

Tier 2 licences still have a role to play. What is changing is the assumption that they offer long-term protection. In many cases, the underlying exposure is simply being deferred rather than removed.

What this means for conference season

As the European conference season accelerates through early summer, the industry will gather to discuss growth, technology and market opportunities. Yet behind much of that conversation is a more practical challenge. How do operators build for the long term when the regulatory picture continues to shift from market to market?

The answer lies less in the licence itself and more in the structure behind it.

Stop treating licensing as a badge-shopping exercise. The question is which markets you need durable access to, and what structure will still hold up when banks, payment providers, regulators and institutional partners start asking harder questions. This means building a hub-and-spoke strategy from the outset. A credible hub for governance and oversight, with local spokes added where player location, revenue, regulation or commercial counterparties justify them.

The businesses getting ahead here are not treating licensing as a shortcut exercise. They have recognised that gambling sovereignty lies with individual markets and regulators, and have built accordingly rather than assuming a cross-border structure will solve everything indefinitely.

Price matters, but it should not be driving the decision. What matters more is which structure gives you durable access to the markets you actually want to be in.

The operators who understand sovereignty will be the ones best placed to scale in the markets that matter.

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According to Section 7(1) of the Anti‑Money Laundering Act, gambling operators are required to identify and assess the risk that they may be misused for money laundering. The risk assessment must be based on the operator’s business model and must cover risk factors associated with customers, products, services and transactions, as well as delivery channels and countries or geographical areas.

The Danish Gambling Authority points out that this obligation means that any new technology used by a gambling operator must be risk‑assessed before it is launched, ensuring that no part of the operator’s business remains unassessed. New technology could, for example, include the introduction of new games or new payment solutions. The introduction of new technology therefore constitutes a change to the operator’s business model, which requires an update of the risk assessment.

When launching a new game product or other technology with which the operator has no prior experience, the operator must investigate whether relevant sources exist that can support the risk assessment.

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