Aggressive expansion: How Betsson Group is exploring new regulated markets and whether European harmonisation is achievable

Expansion – it’s the one word that is an essential element of the egaming industry, but is also the one thing that takes the most time to undertake. Operator expansion is necessary to increase diversification of its offering and markets but it is becoming a more perilous environment due to the presence of increased regulation.

Corinne Valletta, Betsson’s General Counsel chats to EGR Compliance about how the Malta-headquartered operator is using this need as a rallying call to improve regulatory knowledge throughout the organisation.

EGR Compliance: In your opinion, which of the jurisdictions that Betsson is currently looking to expand into presents the biggest opportunity from an operational perspective?

Corrine Valletta (CV): I think expanding out of Europe is a challenge in its own right, and whilst I can’t really comment on which markets we are or aren’t looking at, any market outside of Europe brings a new set of challenges – they have a different environment and all have their own particular way of doing things. We even see differences in Europe between Western Europe and Eastern Europe, for example. However, the differences are mainly cultural – so we must take different approaches to how we do things, or have different speeds in doing different things. In some other areas, the style of regulation is indeed completely different.

EGR Compliance: Do you believe European regulatory authorities will move towards a stricter or laxer method of regulation over the next 5-10 years?

CV: At the moment, it is only looking like there will be stricter regulation in the future. Compliance requirements have increased and have been on the increase for several years and I don’t see any sign of that slowing down. The only hope I have is that the more they regulate, the more they will realise that, to a certain extent, they are stifling the industry. In addition, the more we see very similar regulations being used across different countries, the more we come to a point where regulators will realise that by making us jump through the same hoops, they are simply making us repeat ourselves, with no added value to anyone. Hopefully this will lead to regulators reducing the number of requirements placed on operators, because they can see that we meet these (same) requirements in other jurisdictions.

EGR Compliance: Well, the word by law is harmonisation. Getting every bit of regulation all in one big package. Is that something that you think may happen?

CV: Honestly, to me, the word harmonisation was a little bit of wishful thinking by operators back in the 2000s, when things were very different. I’m not saying that it will not happen, but I don’t see it happening anytime soon. Definitely not in the next five to ten years. The gambling scene is a very political one and it always has been, and I don’t see why it’ll not continue to be so over the next 10 years. The most we could hope for is for some form of standardisation in regulation.  For example, the realisation that from a technical perspective, we’re repeating a lot of the same things between jurisdictions, could lead to an agreement that allows operators to use or submit technical reports that have already been used in other jurisdictions.

In a way we already have some form of standardisation instruments running and influencing the market. A lot of operators today are aspiring to get ISO certified, a process which requires certain technical requirements in different jurisdictions. There are also the standardisation initiatives from a wider European Commission level and are currently being tested by them. There’s a lot going on and therefore, the wishful thinker in me would say that once standardisation starts, grows and progresses, then regulators might take a step back and realise, ‘oh we’ve all been doing the same thing for years, why don’t we harmonise?’.

EGR Compliance: How is Betsson preparing for the new Dutch online gaming market?

CV: It’s no secret that we have been following the market since the acquisition we made in 2013. Recently the KSA issued its policy documentation , describing the cooling off period and we have put in place several measures and made changes to our website in order to become compliant with those requirements and prepare ourselves for regulation. We do intend to be regulated as soon as possible on the Dutch market.

As one becomes two, how will international operators be hit with Brexit issues?

EGR Compliance: How will Brexit change the way Betsson approaches the UK market?

CV: We have performed an analysis of how it would affect us and as such we don’t see much of a change, especially since we have a UK licence which applies to our UK offering. The Gambling Commission itself has not published anything but from a gaming licensing perspective I think that it isn’t going to affect us. What will affect us, if anything, is more likely to be coming from a data privacy or customer data perspective.

Overall the company already operates GDPR-compliant policies. However, there could be some issues in supplying customer data to external testing and verification parties to satisfy anti-money laundering obligations, and we must bounce that data back to the UK which is a non-EU country.

EGR Compliance: In your opinion is the Swedish market becoming a hostile environment for operators from a regulatory perspective?

CV: I can’t say that the first year of the Swedish market has been straightforward. Several operators have openly said they are not getting enough clear guidance from the regulator, so it’s been a challenge. However, there are some indications that the regulator is realising that this needs to change in the drawing up of some directives for some subjects. In other areas, we might have to wait for the administrative courts to pass judgment on the interpretation of some rules.

The Swedish regulation is sufficiently wide and allows operators the flexibility to determine how they want to operate on the market, to a certain extent. But when you have a regulation like that, which is quite open, it’s up to the regulator to implement it properly and provide interpretation through directive – that is where I believe more work is needed.

EGR Compliance: What are the biggest legal challenges that egaming firms face and how does Betsson address this?

CV: I think the biggest challenge is the fact I alluded to in my earlier comments – the fact that no one regulation is similar to another and of course to grow, operators want to grow in different markets and that means being licenced under multiple jurisdictions, with all the different licences and regulatory models that it brings. The gambling industry is not straightforward at all. We have a multitude of different regulations that we need to follow. Besides needing to understand what our respective licenses allow us to do between the different countries, we also have all of the horizontal regulations – the anti-money laundering, data privacy, consumer protection, advertising, etcetera, all of which are effectively operating at the same time. The challenge for us is coping with this deluge and making sure we are up to date on the latest changes. That is the biggest challenge for us as a regulatory affairs team – we’re always thinking that we are going to miss something, because things are constantly changing.

EGR Compliance: What initiatives does Betsson use to expand awareness of legal issues among its employees?

CV: We have several initiatives in this area, including training for employees on key relevant issues like anti-money laundering, advertising, and data privacy which are done automatically as part of our onboarding process. We also have our own online tools for dealing with legal issues which we have to circulate amongst our colleagues on a regular basis. Then obviously, when we identify a team which needs some knowledge on a specific issue, we hold one-to-one meetings or training. For example, at the moment our whole legal team is holding meetings with key members within the commercial department to raise the main regulatory points they need to be aware of in their day to day work. This is just an initiative we’ve undertaken in this quarter, the next quarter it might be something else, as we try to be open and accessible to the rest of the business.

EGR Compliance: In what ways does Betsson share its legal knowledge of egaming with the wider industry?

CV: In many ways. We do this through participation in several lobby associations and interest groups that we form part of. We are members of 12 interest groups and lobby associations. We also follow developments in Europe keenly through our membership of the EGBA and participate in the legal meetings of this organisation. In doing that, we are sharing what we know about the industry and how we think we can do certain things. We also participate in numerous conferences and workshops where sometimes myself or any other members of my team are speakers – in this way we share our knowledge on our views and also our processes at Betsson.