Monday’s discussion, moderated by H2 director David Henwood, featured panelists from around the world:
- Isabelle Falque-Pierrotin, chair of the French Gambling Authority (ANJ)
- Bashir Are, CEO of the Lagos State Lotteries & Gaming Authority
- Gilbert Remulla, director of the Philippine Gaming and Gaming Corporation (PAGCOR)
- Lisa Osofsky, former director of the UK Serious Fraud Office
“Is (the illegal market) growing? Yes, in most European jurisdictions,” Falque-Pierrotin lamented at the top of the discussion.
Citing Covid and more competitive offerings as reasons for this growth, she acknowledged the difficulty of fighting an uphill battle. Regardless, the fight is necessary.
“If you don’t fight, the legitimacy of the regulation is damaged,” she maintained. In terms of comparable size, she estimated the black market to be about 10% of the regulated market. In the Philippines, Remulla said it’s about half, down from previous levels of 90% or higher.
Communication, cooperation key to success
All panelists spent time detailing the importance of working together to tackle a global conundrum. Each regulatory body by itself has finite resources, they said, but the whole is greater than the sum of the parts.
“If there’s no cooperation, there’s no way you can fight illegal gambling,” Are asserted. “The illegal industry is always going to be ahead of the regulation.”
Osofsky gave input from a law enforcement perspective, and noted that part of the problem is fighting against an enemy that is hard to effectively define. A presentation slide gave examples of black-market revenue estimates from around the world and how much they varied.
In addition to international communication, domestic teamwork is also key to stopping the momentum of the illegal market–Remulla explained that PAGCOR is limited in its police powers but has made great strides thanks to help from other government agencies. Philippine President Ferdinand Marcos, Jr. last year shut down the country’s offshore gaming industry, and PAGCOR is divesting its gaming operations to focus solely on regulation.
Solution can include both business and regulation
In addition to federal buy-in, Remulla also advocated for a more favourable business environment. Dangling the carrot of lower tax rates can be more effective than the fear of prosecution, he argued.
Finding a regulatory balance that protects players and allows companies to innovate is also part of the overall puzzle. Oftentimes the biggest allure of the illegal market is better odds or offerings unavailable elsewhere. This is despite the lack of KYC protocols and other risks, panelist said.
Artificial intelligence is a unique technology that can help solve the problem or add to it. It is expected to become a useful tool in regulators’ arsenal but the consensus was that this will take time and experimentation.
Suppliers also have role to play in combating illegal market
The role of suppliers and the need to enforce their licencing and vetting was another theme noted by all. Are in particular was adamant that suppliers must be held to the same standards as operators to ensure that the fight is prioritised industry-wide.
When asked by iGB about payment providers, Falque-Pierrotin said it’s important to start having conversations with all stakeholders in online gambling. In order for things to improve, she said, regulators have to have “the power and the resources” to command respect from all involved. This includes not just payment providers but also search engines, social networks and more.
“They understand it’s in their interest as well,” she said.
Original article: https://igamingbusiness.com/gaming/gaming-regulation/illegal-market-fight-regulation/
