25 Nov 2020
James Scicluna, Co-Managing Partner WH Partners, gave the keynote introductory speech at the regulation conference at SiGMA Europe Virtual Expo 2020. Here is the transcript of the speech.
2020 is the year of COVID-19, of working from home, of lockdowns and no conference travel, but maybe more importantly for the online gaming industry it is– amongst others:
Overall, there is a sense across the online gaming industry in Europe that this is the year where the drive originated by governments and regulators for tighter regulation, stricter enforcement and more selective licensing has reached an irreversible momentum.
We now have stricter regulation and stricter enforcement of AML and responsible gambling rules. In the latter case, across several jurisdictions (although not a stated policy objective to my knowledge) it seems that the regulation of gambling is heading towards being a “public health” issue – or at least with public health as a foremost consideration (How else explain the very significant restrictions on advertising and on deposit or stake limits in some jurisdictions).
As you will all know this is against a backdrop – drawn in late 2017 – where the European Commission no longer considers that treating complaints in the area of gambling is a priority: so any hopes of at least partial harmonisation have long gone with the wind.
The Gambling Commission in the UK is considered by many to have - so to say - “overzealously led the charge” on enforcement and restrictions in recent years, perhaps jointly the Swedish Gambling Authority, an advertising ban in Italy, and Germany now starting a chapter in the regulation of gambling which has long been in the making; While Holland is preparing (though not without delays) for rolling out regulation in late 2021.
There is a sense this side of the Atlantic that whilst additional restrictions are being imposed on the gambling industry in Europe indicative of a policy which considers it to be a threat to public health, rather than an entertainment industry with specificities which require regulation, the contrary is happening simultaneously in the US.
I dare suggest that there is an important point of economic policy to be considered here: having led the way in the development of the modern online gambling industry and having given birth to most of the major players – do European states want to see their homegrown businesses being relegated to playing second fiddle to US business? I think that it would be a shame not to make this consideration.
In the meantime, we are often asked about so-called new markets, about Ukraine, India, LATAM, Africa. Each comes with several layers of complexity – in legal process, operations, compliance, and payments. The bottom line is that the industry is a young adult now. Quick wins are few and far between, even outside Europe and the US.
The overall regulatory ecosystem is now such that it will inevitably lead to speeding up the process of natural selection amongst operators. The strongest, best informed and most agile will make it. It remains to see whether the stealthiest will too.