MM: The reason in Sweden is that, according to official statistics from the Swedish gambling authority, we had a very high channeling in the beginning in 2019. They were seeing over 90% and subsequent investigations by other associations, and also operators have shown that it’s very high with former monopoly products like trotting or harness racing, whereas with online casino its is actually fairly low. So the Swedish legislator and regulator have high hopes that this B2B permit for software, or gaming software will help increase the channeling to the Swedish market. And they expect B2B providers to contribute to the enforcement against the unregulated industry. I suppose part of the reason is the same in UK right? What is your experience, Susan? And is it efficient? Is it working? SB: It is helping although I think we are making a slightly psychotic sort of argument, which is fundamentally that the operators you’re looking at are seen as the first line of defence. That’s the entire ecosystem around the customer. And most regulators will be concerned to ensure that their operators are looking at harm prevention, customer protection, and keeping crime out of gambling. So at its most fundamental, simplistic level, they are the two pillars that you wrap all these rules and regulations around. I see nothing wrong in game platform licensing as a concept, particularly where you’re interacting with remote, although you could easily do that by simply requiring operators just to contract with responsible B2B suppliers. I think if you look at the output, does it change the system in the UK? Probably not. Because if you look at enforcement of the B2B market, it is minimal. And it is an exception rather than the rule. As far as I can tell, there’s only been two B2B enforcement settlements in the last 18 months, and they’ve been at around £2-300,000 which may still sound a lot for other jurisdictions, but they’ve been AML focused and they have been on white labels, but not any other providers. So I would say whether it’s with or without this, the licensing of B2B the system works. The eyewatering issues are happening at operator level. I know a lot of affiliates and other clients of mine will say they have no objection, in principle, to being licensed. But it is about how does the pathway between the operator, the consumer and the third party relationships work, and you don’t have to be licensed to be a responsible, effective third party provider. MM: So you’re saying B2B providers are ok to be part of the solution but sometimes there’s a gray area where their responsibility actually ends? SB: I think then you’re in to the dynamic between where does fault, responsibility and governance lie. So to pick up on the point about international reach in stopping bad actors coming within the circle, you would think that a logical extension of the UK Gambling Commission’s view that you have to be licensed, you have to be very careful about your third party relationships, particularly about poker AML, particularly. And then they say to their B2B licensees, I’m not going to stop you dealing with black market entities, where is the logic there? And I suspect the logic is because they’re trying to control the UK ecosystem. They are certainly seeing as a priority the outlawing of illegal gambling, and particularly the black market, they’re encouraging, but they’re not mandating that operators and B2B suppliers don’t deal with unlicensed unregulated black market, because that’s a reach too far. They are trying to do that, I suspect by closer cooperation with regulators and other jurisdictions. So it’s a bit of a hybrid in the UK, I don’t think there’s much objection within the UK industry to the way it works. There are bigger problems for the industry around operator relationships with the regulators, and operator relationships with consumer groups, public health groups. But in terms of B2B, yes, it’s probably about right, but you then have the fight as to who’s responsible for what if the thing hits the fan? MM: What is your opinion about this? Vanessa, should be Paysafe be responsible for contributing to enforcement? VH: Generally, I think where there’s a clear, regulated market, there’s, of course, no question who can and cannot be serviced. Where we see issues are in gray markets, or, for example, countries where a licensing regime has just been implemented where there might be a gray zone, of who can and cannot be serviced if licenses have not been issued yet, or licenses have trusted data to be issued. There are numerous operators who show a willingness to be regulated, but just weren’t able to obtain the license yet. And I think in that context it is important to note that PSPs also have a contractual obligation towards their margins, we just can’t stop servicing our margin for no reason if there’s not a clear
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