Challenges in regulation and co-operation for companies eyeing overseas markets.
THE world of gambling is changing and both operators and regulators must keep up. As a result of the rapidly increasing volume of new games and the range of devices from which to access games, jurisdictions have to consider whether or not to regulate and, if so, how to regulate.
It is crucial to find best practices. However, it may prove difficult due to the existence of various jurisdictional regulatory models. Most probably agree that things would be much easier having the same approach when it comes to the regulation of gambling. But jurisdictions around the world have decided on different regulation and, even in Europe, gambling legislation differs sometimes significantly from country to country. The US is no exception with online gaming shaping up to follow a state-by-state model as Nevada, Delaware and New Jersey each move forward independently.
Regardless of whether an operator considers establishing in North America or Europe, similar challenges exist due mostly to this patchwork of regulatory frameworks. Thus, operators will need to assess and consider the applicable regulatory framework in the different jurisdictions in which they plan to enter and from that decide whether and where to establish. Regulators, through organisations like IAGR, are focusing on what we can do to address these challenges. In 2013 and beyond, regulators recognise we will have to face the global task of sharing advantages and experiences in regards to online gambling. For instance, experienced European jurisdictions can offer valuable insight to less experienced North American jurisdictions. IAGR is a prime example of a platform that supports this type of knowledge sharing through its meetings, website and members-only portal. As a result, regulators have a unique opportunity to learn from other gaming regulators around the world.
Fostering co-operation and knowledge sharing is a parallel that can be drawn between the two continents – not only between regulators but also between regulators and operators. This is key to achieving the goal of protecting consumers who play online. Focus has to be on creating an environment, within the respective regulation, that the gambling industry finds attractive and feasible, and ultimately erect a wall between the legal and the illegal market. For that to happen regulators and operators need to insist on dialogue and mutual will to build and maintain a compliant gambling market – even when the same game is regulated differently in different jurisdictions.
Nevada, an IAGR member, began interacting with the industry to fully understand online gaming long before its regulations were introduced. In addition to significant internal research, both investigative and technology-based representatives visited online gaming companies outside the US. These efforts assisted the Nevada Gaming Board and Commission in becoming comfortable that online gaming was legal and something that could be regulated appropriately.
Nevada ultimately created its own set of standards that met the State’s regulatory needs. According to A.G. Burnett, chairman, Nevada Gaming Control Board: ”We received significant input from industry players and service providers. The idea was to try and regulate interactive operators in much the same fashion as we did other gaming operators.
“To some extent that is impossible, but we found that in most cases it was quite doable. The regulations have now been drafted such that intrastate interactive gaming can go forward after completion of the same rigorous suitability investigation adhered to by our land-based operators, and upon successful completion of technology testing.”
Co-operation is also at the forefront of work in Europe following the EU communication of October 2012, Towards a Comprehensive European Framework for Online Gambling, which focuses on five priority areas including: • Compliance of national regulatory frameworks with EU law • Enhancing administrative co-operation and efficient enforcement • Protecting consumers and citizens, minors and vulnerable groups • Preventing fraud and money laundering • Safeguarding the integrity of sports and preventing match-fixing areas
In particular, the EU states have found that administrative co-operation between regulatory jurisdictions can be a useful tool for exchanging knowledge and information. It also contributes to establishing protocols to facilitate mutual assistance in regards to crosschecking information and data concerning all parts of the operations of joint licensees. Moreover, administrative co-operation is essential in establishing knowledge sharing in relation to technical requirements and standards that optimise the application processes.
From a Danish point of view, it is significant to increase co-operation on a European level, securing a regulated gambling market that protects consumers as well as legal operators. The focus on enhanced co-operation should be a priority since the online gambling market is in a constant state of development and, thus, presents ongoing challenges to member states. Building on overall positive experiences from the first year with new online regulation in Denmark only becomes a success if both the knowledge and experience from other regimes and from the operators themselves are included in the implementation of a new legal framework. A compliant gambling market on a national level is essential but online games are being played regardless of borders and calls for global co-operation - and perhaps even common standards etc - despite legislative differences.
As online gambling spreads, regulators and operators who seek and take advantage of opportunities to co-operate will find themselves at an advantage when facing the challenges of online gambling going global.
