European Parliament adopts Online Gambling Resolution

1.      Why is this resolution of interest to Kyte Consultants?

Kyte’s focus and expertise is in remote gaming. Any resolution that would damage the local gaming industry would have a negative affect on a number of companies whose main customers form part of the industry. Kyte would survive, however, it would have to downsize, as would a number of other companies offering similar services.

2.       What is your opinion on the European Parliament resolution regarding online gambling?

A lot is said but there is no evidence or basis for a number of points. People throw concerns around like money laundering, match fixing, etc without any proof or even when there is proof against such claims. Obviously, it is in the interest of governments, monopolies and land based gambling businesses to destroy or render online gambling business unsustainable so that they can continue to offer their products without challenge to the detriment of the industry and the customers as they do not offer competitive products.

3.       What are the main benefits resulting from the resolution and which points you disagree with?

Its always good to have some minimum standards that would have to be applied across all jurisdictions, and it’s a good idea to have a common database for problem gamblers. These are the only benefits, in my opinion. Once you start to restrict trade, offer inferior and more expensive products then people go elsewhere. With the tax regimes in place where national licensing is obligatory (we are still awaiting results of the infringement procedures against them) operators cannot make money and no-one wants to run a loss making business. We are noting a rise in licensing outside the EU and at this rate we will have a situation that existed prior to 2004, ie when Malta started  regulation all online gambling, where the business is conducted outside the EU. We are also heading into a ridiculous situation where to operate in Europe a company would need 28 licenses with different compliance and tax requirements to follow. This is an unacceptable situation and also totally kills off all the SMEs and any potential start ups.

4.       Do you think the position taken by the resolution takes into consideration all the realities faced by the industry?

The reality is that operators have always been more professional than monopolies, especially with quality of product offering and responsible gambling measures implemented. The Resolution assumes a lot of things, without there being any evidence to support the fears. Fear mongering is very common when politicians want to sell an idea or opinion. Unfortunately, not too many people understand the industry or bother to research further about the issues being highlighted and believe the insinuations. There are always good things mixed in but I would say that the resolution in general is not realistic and does not understand the full implications on economies such as Malta, should each individual country in the EU be allowed to block other countries’ licensed operators. The customers, small businesses, innovation, the EU in general, large operators, will all suffer, and are already suffering due to the direction that the EU wants to take. In other words, no one will benefit except maybe the monopolies in the short term and the Governments will get some extra taxes, but losses will be much much worse than the minor gains.

5.       What measures do local operators take to protect individuals who have a gambling problem?

The Remote Gaming Regulations of Malta, although not perfect, caters for the real issues and potential issues of online gambling, these are: transparency, fair play, protection of players’ funds and player protection. Player protection is ensured through various steps: 1. Age verification 2. Gambling Warning 3. Responsbile Gaming text and links to entities that provide assistance 4. ability to limit losses 5. ability to limit betting amounts 6. ability to limit playing time 7. ability to self –exclude for definite or indefinite period and 8. reality check – which is a reminder of amount played won/lost and time spent playing. These controls are all that a player needs to limit his gambling to acceptable levels or to stop gambling totally.

Prepared by Alan Alden, Director of Contact Advisory Services Ltd

Featured in The Business Agenda - Commercial Courier September 2013

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