The benefits of operating under a license and regulatory regime
A higher value for the operator, on account of greater certainty to investors and the market in general. "Cleaner" operation is of higher value, even if carries with it smaller revenue.
Avoiding regulatory pitfalls with the regulators; operating without a regulatory license could prevent the operator from obtaining future licenses, in the jurisdiction of operation or other jurisdictions.
Third party intermediaries & customers
The procurement of a regulatory license is also important for the relationship with various intermediaries such as payment processors, banks, internet service providers and more. Without a license, the manner of doing business becomes more difficult and the costs associated are increased. Customers also tend to prefer operators with a regulatory license.
A regulatory license issued in any one EU jurisdiction can be passported into all other EU jurisdictions and be valid there without the need to obtain another regulatory license.
Obviously, avoiding various sanctions due to operating without a regulatory license.
Implications of the introduction of a regulatory regime
Exit of operators / less competition / consolidation of the market
Existing operators that are not able to obtain a license will exit the market / sell their business to new licensees, leading to larger market share of the licensees.
New operators will delay entry until the market stabilizes
Operators that have yet to enter the market due to the lack of a regulatory regime will prefer to delay their entry until the new regulatory regime stabilizes. This allows the existing operators to catch market share without new competition.
Close relationship with the regulators
Being involved in the legislative process that creates the licensing regime allows for a close relationship with the regulators, that could benefit the future licensees.
New investors entering the market
A new licensing regime allows for investors that up till now avoided the market due to the lack of a licensing regime, to enter the market and provide additional funding for the licensed operators.