To try to understand what has happened and what is happening to the gaming industry on a global level, we have entrusted some reflections to an attentive and expert observer like Charmain Hogan, head of regulatory affairs at Playtech and with an important background in European institutions, of of which we report the complete interview below.
Has 2023 brought more opportunities for gambling industry?
“2023 has been another year of significant developments for the gambling industry, from the momentum in Brazil to regulate sports betting, to Finland’s decision to do away with its monopolistic model, to more US states legalising sports betting. As the year is coming to a close, Peru has completed its regulations, ready for a 2024 launch, legalisation of online casino in France remains on the table, and efforts continue in US states for online gaming. At the same time, Europe’s two large and mature gambling markets, Italy and the UK, are still in the process of implementing legislative overhauls. Regulators in both countries have been trend setters when it comes to setting progressive and mature regulation, and are jurisdictions that have inspired others to set out robust regulatory frameworks. As more jurisdictions regulate online gambling, we see fresh opportunity for growth. However, there is a need to ensure that regulation does not inhibit innovation. At the same time, each jurisdiction is developing their own bespoke requirements, where even a slight deviation can impact on development. From an industry perspective, operators and suppliers aim to adapt swiftly to localised requirements and nuances, whilst also continuously meeting player expectations across a diversity of demographic categories. Today, there is a much higher cost of compliance, many operators and suppliers are present in several regulated markets. For instance, in Germany, (slot) games have not been coming to market quick enough, which can play into the hands of illegal sites. Hopefully, this improves as the Joint Reguatory Authority becomes more familiar and confident in its supervision of the German market.”
Regulated markets are at different levels of maturity, has this brought about any significant impacts in 2023?
“A crucial shift in regulated markets continues to be the focus on strengthening player protection requirements. This has been the case particularly in European markets and a trend now closely mirrored in newly regulated and soon-to-be regulated markets, including the US as well as in South America. Additionally, there has also been a focus in regulators requiring operators to use technology to help with early identification of at-risk behaviours, using predictive analysis to process individual player behaviour. This year, New Jersey introduced such measures and other US states are following suit, and just recently, so has Colombia, in Latin America. Online gambling platforms have a responsibility, alongside regulators, to promote responsible gambling and protect vulnerable players. As an established supplier, we continue to engage with policy makers and regulators, and a number of these are introducing regulatory requirements on behavioural analysis and personalisation intervention. In 2023, we also saw an ongoing discussion about illegal markets. For instance, some stakeholders have argued that legislative and regulatory proposals to strengthen responsible gambling may inadvertently push players to illegal sites. Regulatory changes are frequently triggered by media and public scrutiny on gambling advertising, and this year gambling advertising continued to dominate debates across regions, including calls for blanket bans. Equally, industry has continued to call for well-informed and balanced measures, so as to avoid unintended consequences, such as players moving away from playing on legal sites. Channelling rates in individual markets are usually weighed against the illegal market share, without sufficiently delving into the causes of player leakage. For example, Sweden introduced supplier permits this year, in part to improve the channelling rate, and whilst this has not happened (yet) gambling taxes are expected to increase next year. In relation to the channelling rate the authorities should probably take a closer look at main drivers of the illegal market. Neighbouring Denmark, that has traditionally boasted high channelling rates, intends to revisit its gambling legislation. It just launched a consultation. In the North America, industry trade groups launched and/or revamped responsible gambling and marketing codes of practise and began to review responsible gambling strategies more broadly. For example, both the American Gaming Association and the Canadian Gaming Association have stepped up efforts in this area. The industry is increasingly recognising the need to stay ahead of the curve and avoid European-type regulatory scrutiny. A common theme during 2023 has been the ongoing need for constructive dialogue between regulators and the industry, as well as other key stakeholders. For instance, Ontario was criticised by industry stakeholders for moving quickly with changes to advertising rules. It heeded industry calls and those advertising rules will be revisited. This is a good example of how engagement can help avoid potential pitfalls of regulatory changes.”
Can the industry balance the need to offer attractive and viable products while also preventing gambling related harm?
“In summary, the answer is that the industry can take a long-term sustainability approach focused on player well-being. Companies can balance the offer of an enjoyable gambling experience for players whilst also prioritising player protection measures. Measures such as spending limits and limited bonus incentives for at-risk players, as well as gambling alerts to keep oneself in check can all be useful tools to mitigating gambling related harm. Proactive play management and timely interventions are also crucial to prevent a minor issue from escalating. In my view, both regulation and operators play a key role. No single solution is going to be fully effective on its own in identifying and interacting with problematic players, but there have been improvements in this area during 2023.”
You have touched on a number of important issues, anything in particular to take into 2024?
“Two intertwined issues will continue to be important as we look ahead to 2024: upholding player protection and product innovation. On the one hand, player protection should revolve around controlled environments where players can enjoy their leisure activity whilst having safeguards in place for all types of players. A holistic approach integrates harm minimisation across operations, technology and collaborative partnerships. Regulatory reforms bring compliance and operational considerations across regulated markets. As an industry, being able to continuously innovate around core products is important. We are supportive of regulatory reforms in a fast-moving industry, and we encourage research and sharing findings, to inform balanced policymaking and that can be mirrored in soon-to-be regulated markets. There are a number of markets presenting expansion opportunities in 2024 that we look forward to."