IMGL CONFERENCE REPORT
regulator isn’t going to have much effect. We only issue fines for gaming law not AML failures, but in any case, we do not generally regulate using punitive fines. Our view is that you can’t deal so strictly with licensed operators that the cost of doing business drives them out of the regulated market. We have to remember that these are regulated businesses that should make money. We prefer to hold the hands of our licensees to ensure compliance. We need to explain things better to improve understanding between law makers and operators. Transparency is important; why are fines being imposed at the level they are? The regime in Germany is quite new so fines to date have been few and far between. Benjamin Schwanke of the Glücksspielbehörde did not expect levels of fines to rise. “Our focus has been on combatting illegal gambling and we have had our first experiences of sanctions under criminal law,’ he said. “Our gambling law gives us the opportunity to carry out payment blocking and we have good cooperation with banks and card companies. When operators are outside Germany, imposing fines is not an option so payment blocking is more effective. We have an illegal gambling rate of ten percent down from 15 percent, so we feel our approach is being successful. We will start IP blocking in a few months and this will further drive down the illegal market.” Fines are obviously unpopular with operators and with those who represent them. Peter-Paul de Goeij of the Netherlands Online Gambling Association felt that lashing out at gambling companies feels like a good political strategy. “Hitting them with the biggest fine possible makes regulators look tough and effective. Regulators have other free- to-use weapons like giving a warning which may work better than going straight to a fine. After all, the negative publicity resulting from an enforcement action is often more costly than the financial sanction itself. If they do issue fines, regulators must explain how they have quantified the seriousness of the breach and arrived at the penalty they have. The deterrent effect is only
effective if operators know what the risks are, but it shouldn’t be so prescriptive that delinquent operators can game the system. Deterrence is a key factor so fines which can be written off as a business expense are not effective. Saying that, regulators have to look after interests of consumers and not drive a company out of business with the fines they impose.” Reasons to be cheerful The final inputs from regulators took the discussion back to where it started and the high degree of enthusiasm for regulated gambling in markets outside Europe. Puerto Rico’s casino industry is marking 75 years since the approval of the law that authorized the establishment of gambling halls and slot machines. These have generated US$1.4 billion over the past decade for the island’s government. Jaime Rivera-Emmanuelli, executive director at the Puerto Rico Gaming Commission said their job was “to show a clear link between revenue generation and public benefit. That way, the public is much more sympathetic if an operator makes too much noise with their advertising. That said, we will see some advertising restrictions. We also need to improve our approach to responsible gaming, taking a more proactive rather than reactive approach. Caroline Kongwa, chief strategic advisor to the National Gambling Board of South Africa was also positive about the future of gambling in her country. We set clear policy objectives when gambling was legalized: a safe and fair market for punters and licensees, generation of revenue and promotion of economic growth. We have a remit for consumer protection and need to find a balance between economic objectives and industry scale. Combatting illegal gambling is a huge challenge for every regulator as they are also innovating and represent a direct competitor to the legal market. There are challenges but we are determined to protect both consumers and the regulated market in South Africa.
With thanks to: JASON LANE CEO, Jersey Gaming Commission, President, IAGR OLENA VODOLAZHKO Ukrainian Gambling & Lottery Commission BIRGITTE SAND CEO, BS Associates, former Danish regulator MARTIN SYCHOLD , Advisor to the governments of Australia, Switzerland and Lichtenstein CARL BRINCAT CEO, Malta Gaming Authority BENJAMIN SCHWANKE Board Member, GGL Germany PETER-PAUL DE GOEIJ Managing Director, Netherlands Online Gambling Association JAIME RIVERA- EMMANUELLI Executive Director, Puerto Rico Gaming Commission CAROLINE KONGWA Chief Strategic Advisor, National Gambling Board of South Africa
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IMGL MAGAZINE | OCTOBER 2023
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