Increasing online and modest organic revenue growth will support 'low but steady' earnings growth in Europe's gaming industry throughout 2017, despite increased regulation and rising costs in some markets, according to Moody's.

In a recent note to clients, the ratings agency projected annual earnings before interest, tax, depreciation and amortisation (EBITDA) growth for gaming companies in EMEA of below 2% for the next 12 to 18; the upper range for a stable outlook of EBITDA growth of -5% to +5%.

Donatella Maso, senior analyst at Moody's, said: "Revenues and EBITDA will continue to grow, although at a very modest level.

"This growth comes despite constraints from Europe's sluggish economy and the effects of the recession in Argentina, where several European gaming companies operate, as well as rising regulatory and other costs.

Moody's said gaming operators with large online businesses will be in a better position to cope with low economic growth and squeezed disposable incomes as the online segment is likely to generate high single-digit growth in the next 12 to 18 months.

Furthermore, the agency expects that market consolidation, like the £2.3bn ($3bn) merger of UK-based Ladbrokes and Gala Coral, will continue as players seek scale and diversification to offset increasing compliance costs and taxes, while maintaining a competitive advantage.