Black market concerns addressed in gambling hearing
Representatives of four egaming operators, plus RGA chief executive Clive Hawkswood, explain issues raised by regulation overseas.
Representatives of several leading egaming operators called on the government to introduce “commercially viable” legislation to discourage the rise of unlicensed operators in the UK.
Peter Reynolds, bwin.party director of communications, told yesterday’s Culture, Media and Sport hearing on gambling that the size of the illegal gambling market – both online and offline – is “Damaging to the industry.”
He explained: “I think the more sites you can bring under the umbrella of regulation the better – if you get things wrong there’s more encouragement for illegal operators to stay illegal.”
Meanwhile Martin Cruddace, Betfair’s chief legal and regulatory affairs officer, stated that “The central tenet is to make regulation hit the sweet spot – to make sure those who want to be regulated can get there without as much of a commercial risk for those who do not.”
Citing PricewaterhouseCoopers estimates that “A licence in France would end up costing an operator something close to 8.7m,” Reynolds explained “That in itself is a big incentive to not go for a licence – the best form of regulation is to make it commercially attractive.”
However Remote Gambling Association (RGA) chief executive Clive Hawkswood clarified that “Just because someone is licensed in Europe doesn’t mean they’re not a problem, and anyway there are still companies who are unlicensed but still pay out regularly.”
Cruddace also called for the better education of customers alongside any new UK regulation, citing recent campaigns in Italy.
He said: “I would still say Italy is the poster child for regulation and ahead of the curve. If you look at [Italian regulator] AAMS they have a big advertising campaign telling people ‘don’t get eaten by a shark’ and encouraging them to go with licensed operators only.”
Hawkswood was more measured in his consideration of Italy and other regulatory regimes in Europe, admitting that no country is yet to show it has the optimal rates of taxation.
“Most countries are still at a very early stage of this – we can only tell what is working very badly. I am however optimistic about Denmark and Spain,” he said, while noting that concerns remain in Italy over its “huge black market”.
The issue of advertising and marketing arose in the hearing, with Cruddace suggesting that “Freedom to advertise is important [to any regulatory proposal]”, but he was willing to admit that “In the online world the unlicensed operators will find the path of least resistance, for example advertising virally.”
He said: “It is very important that regulation is positive selling point, not an unnecessary burden.”