IMGL Magazine April 2022

World Regulatory Briefing report

The French market has witnessed a dramatic increase in promotions particularly around major sports tournaments. This has generated a backlash among the public and some high-profile players. ANJ responded with new guidelines at the end of 2021 to de-intensify advertising pressure. Beyond these immediate challenges Pierrotin could foresee huge growth in the sector and predicted that continuing to maintain gambling as an entertainment activity would not be easy. “We need a discussion with operators and regulators,” she said, “to agree on KPIs which define risky behaviour, for example. If we don’t agree, there will be a huge gap between expectations and the reality of a legal responsibility to identify and support risky players.” “The industry is undergoing huge change, with regulation based on things which are changing. The question as to how to integrate things like crypto, NFTs etc while ensuring player protection was a live one as gambling becomes more generic. How do we keep protecting consumers when the definition of gambling is broadening into new areas?” Spanish regulator Mikel Arana, Director General of DGOJ echoed these concerns saying: “We are reaching a point where we can’t always decide what is gambling and what isn’t and whether we have to regulate such products. Taking that decision is not the end of the matter, either,” he added. “It takes 18 months to bring in a new law which is equivalent to 10-20 years of evolution. There is a risk that the industry is always behind the curve and regulated games are outdated and everyone has moved on.” The Spanish approach has been to bear down on supply by trying to curb a burgeoning in marketing. Arana pointed to a more than doubling of operator marketing spend from €220 million in 2016 to €460 million in 2020. New regulations brought into effect in October 2021 have pegged back the amount of advertising without any apparent reduction in GGR although it is early days, he conceded. “When big losses among a small number players contribute disproportionally to industry profits, that’s a problem,” he felt. Spain is considering a new royal decree to be introduced in September to distinguish between different types of players and provide different protections for each group. Restrictions on stakes, maximum duration of play and use of credit cards are among the measures foreseen although he accepted that GDPR brings challenges in this area. Germany and Netherlands are among the newest markets to legalize gambling in Europe and in many ways are still finding their way. Dr. Jörg Ukrow , Deputy Director of the State Media Authority of Saarland said their approach was to prioritize player protection as they expand provisions for

online poker and slots to other sectors, a process they hope will be complete by the end of June. The provisions, he said, would be reviewed regularly and he conceded that they may become outdated as products and marketing technology evolve. “The means to achieve protection may become outdated,” he said, “but not the purpose. Protection is still the central goal and the aim is to create a market which is free for those who respect the goal.’ The opening up of the Dutch market in October ’21 heralded a massive increase in advertising of remote gambling from a starting point of zero. Rene Jansen , Executive Chair of KS said this has already generated a big debate fuelled by political opponents and the healthcare sector. As a result the Ministry of Justice is considering restrictions on untargeted advertising and promotion of high risk products despite the fact that the market is only six- months old. It’s early to identify trends, he said, pointing to a detailed prohibition requirement and player protection. With 150 types of regulation and law that operators have to fulfil under the terms of their licence, everyone is finding their feet especially around intervention. In the short-term they must learn to supervise and oversee on a data-driven risk-based basis. Longer term there will be the challenge of adapting to new products and keeping pace with change. Chasing channelization Channelization, the extent to which players gamble via regulated channels is seen as a key indicator of the success of market regulation. Yet, despite this, rates vary widely. Data present by H2 Gambling Capital showed the top jurisdictions of New Jersey and the UK have channelization rates above 97 percent whereas in Australia it’s around 80 percent and in other developed markets like Canada, Netherlands and Ireland it is under half and sometimes as low as 26 percent. This session of the World Regulatory Briefing polled the audience to see whether they agreed that high channelization automatically meant well-protected players. The results were surprising: over 70 percent agreed with the link, but a clear 28 percent were not so sure. The views of the panel were equally conflicted with former Danish market regulator Birgitte Sand describing channelization as ‘the regulator’s olympics’ whilst Lolita Sumskaite, Head of Unit at the Ministry of Finance in Lithuania preferred a more nuanced approach. Their focus was on player protection rather than channelisation, she said. But she did agree that it was hard to protect players on unregulated sites. The key was good regulation which made a strong link between high channelization and player protection.

44 • IMGL Magazine • April 2022

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