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have old school legal frameworks and lots of ex ante regulation, extremely prescriptive rules on financial reporting, AML reporting, and lots of demands on operators. Regulations are often so complex that it’s hard to achieve compliance efficiently, which can damage the relationship locally. Culturally, it’s challenging too, making sure that even though we are in Malta we are speaking the same language and things don’t get lost in translation. Peru has been a priority this year. We have tech and product teams working around the clock to make sure we’re ready to go live when we get the regulatory and compliance piece complete. Brazil is about to start in earnest as the window is open to apply for licenses there, and so it starts again. SP : You have followed quite different market entry strategies, with acquisitions, partnerships and your own standalone B2C operations. How do you assess that mixed approach? CV : We used to favour acquisitions, but forming partnerships is a strategy we have adopted for a few years now. We find it advantageous to retain the local knowledge, and it helps us gain a stronger foothold in a shorter time. In Brazil, that partnership is still active, and they are actively involved in the business. In Argentina, we need to have a land-based local partner under the regulations. We formed this partnership some years ago – they [the partner] run the land-based operation while we focus on the online part of the business. When regulation started in South America, we thought it would be effectively a copy paste of the regulations in Spain, but it turned out to be very different country by country, so there’s no possibility of cookie cutter. There are quite a few considerations for each country: which brand are we entering with, our flagship brand Betsson or a local brand that we’re acquiring? Which platform are we going to use – we have our own platform, will we use that? If we are using our platform, we may have to reshape it to accommodate a new brand. We do consider 3rd-party platforms where the brand we are acquiring is working well, but that brings lots of legal complexity. When you add another party to the mix, you have the responsibility for the license on a platform that may not be able to deliver what
you need. At the end of the day, you have to have the right mix of elements to be successful in whatever regime you are going into. SP : We have a regulatory patchwork even in Europe, in spite of its comparatively small size and the existence of a European Union. How do you manage licenses in over 20 countries? And is there a pathway towards greater regulatory harmonization? CV : I started in gaming about 15 years ago when harmonisation was already mentioned but was almost immediately shut down following the developments in European courts and then the other institutions. During those times, we thought – well, if harmonization can’t happen, then at least we should aim for some standardization. But even then, when we spoke about the idea of harmonisation and standardisation and the havoc it would wreak if it were not adopted, we couldn’t possibly imagine the situation we are in now. Today it’s so much worse than we thought it would be and so difficult and expensive to be compliant. Everyone is regulating differently, maybe not completely, but differently enough. And we don’t only have Europe - we have the US, Canada, Africa, LatAm. So you have to come up with a different way of complying each time, supported by a focused compliance team, and a different product. We have to spend hours convincing product teams that we cannot do in Brazil what we are doing in Argentina, for example, that the way they are supervising in this country is different from somewhere else, and being compliant will have different outcomes for the product. I have resigned myself to the fact that we just have to deal with it in the best way we can, which comes back to where we started. It is about getting the team, in place, but that means sustainability becomes a question as the team has to be large. The only way to justify it is if that market is profitable enough. If it’s too expensive to comply, considering everything, we have to exit those markets. To be sustainable you need to be very big and very aggressive or you have to go down a different route. As we know, there are operators out there who simply ignore the regulatory frameworks. We are compliant, but there are some who stay under the radar and are doing very well. The black market is huge, and this is who we are competing with in regulated markets.
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IMGL MAGAZINE | SEPTEMBER 2024
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