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a US land-based environment? The corporate governance requirements and making it all fit together well for the business really are a challenge. SP: That’s been a big change for the business but what transformation has it meant for you in your role? JM: I’ve had to learn ways of finding a balance between the competing interests of different lines of business; to ensure that we’re not setting too conservative a tone but we’re also not exposing ourselves. It’s searching for the right risk profile to advocate for in the business and making sure both sides of the business understand that. For the online teams, they have to know they’re now part of a bigger enterprise that faces these other risks that we have to be cautious about. SP: You mentioned that you see cultural differences around the world and have to lean on your local in-house lawyers and external counsel. Is it just about everyone being professional or are there more profound differences that you have observed? JM: With external counsel, there really are differences in how legal advice is given and what you as the client can expect. There are big differences between countries and the level of comfort outside counsel has with giving advice. There are some jurisdictions where the outside counsel feel they’re really part of the business team and they’re giving advice and guidance. In other places, they are inclined just to give you the law and leave the business people to make the judgement. Some see their role as just to set out the law rather than applying it to your situation. You have to be mindful that the legal advice you are given in Japan, for example, is very different from what you would get in the United States. Then, of course, there are also big differences between legal systems. There are code-based systems versus common law systems, and you just have to adapt to the jurisdiction you’re in. As in-house counsel, I try to know my limitations. I’m pretty proficient in the US but much less so elsewhere, so I’m
much more deferential to outside counsel in places where I’m not competent. I also rely on our in-house lawyers in those jurisdictions. SP: We see regulators, in Europe especially, imposing fines on companies for violations that predate acquisitions. How do you mitigate against such risks and conduct effective due diligence? JM : Unfortunately, that’s just one of the costs of trying to grow your business. You have to take some level of risk. You generally can’t do asset acquisitions; you buy companies and they come with a set of liabilities. You try to find out as much as you can through the diligence process and then make a judgement about whether that’s an acceptable level of risk. Other industries like chemical manufacturers have made acquisitions where they’re now facing mass class actions over incidents that predate their ownership. On a relative basis, the risk of a potential fine for a prior action is something you can manage. It’s just important to do thorough and thoughtful due diligence and rely on local gaming counsel to understand the landscape and the kind of exposure you could be open to. Typically, the lawyer’s risk tolerance is lower than that of the business people. If it’s purely a financial exposure rather than something that threatens your license, then in the end, it’s an economic decision. SP: European data protection laws seem very strict and regulators have imposed high fines following data breaches. Does this approach cause companies like MGM to tighten up their processes and is this a development you also expect to occur in the US in the near future? JM: It’s a different system in the US, but there is still very significant exposure. More commonly, we face actions from state attorney generals, enforcement following a data incident or class actions from private attorneys, and the FTC can issue fines as well. With our entry into the European online market, we certainly have plenty of risk and we also have data risk in
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IMGL MAGAZINE | APRIL 2024
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