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Copyright Giulio Coraggio 2018

Top 5 takeaways from DLA Piper Gambling Event

gambling

Top 5 takeaways from DLA Piper Gambling Event

What are the gambling markets to watch? What the major legal hardles for gaming operators and suppliers and what to expect in the future?

As anticipated, we ran the 3rd edition of the DLA Piper gambling seminar  the day before the beginning of the ICE gaming conference 2018. We had three great external speakers

  • Trevor De Giorgio, Chief Legal Officer – Greentube
  • Corinne Valletta, Head of Regulatory Affairs And Group Compliance – Betsson Group
  • Harry Willits, General Counsel – William Hill

accompanied by my colleagues from Spain, UK, Germany, Sweden and Portugal. And below are the main takeaways from the discussion:

1. Sweden is the next gambling market to open, but Italy and Spain still create major interest

A licensing regime is going to be established soon in Sweden with conditions quite favourable for operators, also because of an 18% GGR tax which seems reasonable and a quite liberal approach by local authorities. However, in the short term, operators will have to watch Italy and Spain where the application window for new licenses is now open, but will not be for too long as this is going to close in Italy on the 19th of March 2018. Therefore they have to hurry up!

2. High taxes and product restrictions only support the black market

The high tax regime in Portugal is preventing the growth of the market. At the same time, delays in the establishment of the German licensing regime are not actually preventing operators from actually offering their games to local residents under foreign licenses. And the considerable regulatory restrictions introduced in the UK are making operators’ life very tough. This is all supporting the growth of the black market, also due the difficulties in taking enforcement actions against it.

3. Over regulation is bad, but the importance of compliance requires a cultural change

It is becoming quite hard for operators to be after frequent regulatory changes in all the jurisdictions where they operate, and the UK seems to be at the moment the most difficult country to deal with. However, as it happens with any issue, the truth is in the middle since operators are still inheriting the “freedom” they could enjoy at the time of the .COM and at the same time the current fragmentation and inconsistency of gambling regulations across different jurisdiction requires considerable compliance investments, also in the identification of skilled compliance managers. Under this scenario the General Data Protection Regulation and the new anti-money laundering obligations seem to be the hardest obstacles to be overcome during the year.

4. The time of expansion to “any” jurisdiction is over

Up to a few years ago, there was a tendency among operators to get any possible gaming license that was becoming available. The approach has now changed since operators are running a deep assessment before entering into any market which takes into account, among others,

  • the applicable tax regime;
  • the types of products that can be offered; and
  • the type of local players and whether they will find appealing the operator’s products.

The above is also happening because operators understood that they cannot just turn their website into the local language, without any type of customization for the local players, in order to have success.

5. Brexit will have some legal and tax consequences

Brexit has not happened yet and therefore nothing has to be done now. However, before it takes place, operators based in the UK and Gibraltar shall consider that countries like Italy and Spain require operators to be based in an EEA country. This means that they will have to relocate the company which might trigger some considerable tax related costs under the laws of the countries where they hold a gaming license.

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@GiulioCoraggio

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Giulio Coraggio
giulio.coraggio@gmail.com

I am the head of the Italian Technology sector and the global head of the IoT and Gaming and Gambling groups at the world leading law firm DLA Piper. Top global IoT influencer and FinTech lover, finding solutions to what's next for our clients' success.