As the market landscape continues to transform before our very eyes, regulators and other industry stakeholders face a mounting challenge to sustain healthy industry growth whilst creating a protected playing environment that still is able to maximise the customer experience. This unavoidable and, to some extent unique, industry dynamic will no doubt be keeping many of our iGaming industry leaders awake at night.
We caught up with Yanica Sant, Head of Policy and International Affairs at the Malta Gaming Authority to hear her perspective on the developing regulated iGaming market and what the future opportunities are for those wishing to grow within it.
What key lessons do you think gambling regulators can learn about this year’s events that can be used to benefit the regulated betting markets going forward?
“The pandemic shook the industry in different ways. All the stakeholders, be they regulators, operators, and also players, were suddenly faced with circumstances that were most definitely unprecedented. Despite the changes, it was more important than ever for regulators to meet their regulatory objectives, i.e. to keep gambling safe, fair, and lawful and free from crime.
Sports betting took a great hit due to all major sporting events being cancelled during the first major lockdowns in the first half of 2020. This naturally affected the revenue stream of most sports betting operators, and we witnessed these same operators reacting to this by shifting to different avenues, including betting on events with different risk profiles to those traditionally offered. Betting on virtual sports, as well as betting on esports were definitely on the increase. The first problem that the MGA faced here was the lack of regulation of the esports sector in itself. Just like other sports, esports has varying levels of professional, semi-professional and amateur tournaments, and whilst many esports events are organised in a highly professional manner, others may not. In a new sector such as esports, the distinction is not always easy to make. The MGA recognised that this posed a risk for both the operators, and the players, and safeguarding the integrity of these events benefitted all involved parties. To this end, the MGA issued recommendations to operators intended to assist operators in identifying legitimate events, and to assist players in being able to recognise the differences between betting on these events, and betting on more traditional sporting events. Going forward, shifts to new and unregulated markets are inevitable and so gambling regulators must take a proactive approach to regulation and pre-empt major shifts to ensure a secure framework is in place to protect the players and the integrity of the industry.
The MGA was also cognisant of the fact that the introduced ‘lockdowns’, the mandated isolation, and the low morale brought about by the circumstances, could have negative repercussion on players who are more likely to develop a gambling problem. The MGA reminded operators of their duty to ensure that commercial communications remain socially responsible, and to this end, any direct or indirect reference to the lockdown, the pandemic, or to staying home were considered to amount to a breach of regulations.
The greatest takeaway for Regulators from this pandemic was the importance of objective-based regulation. There were instances throughout this period where as a Regulator we extended deadlines for submission of administrative documentation. It was considered a priority for operators to focus their efforts on responding to the resulting circumstances, so that they themselves could maintain the resources to continue ensuring the fairness and integrity of the product they are offering. The importance of regulating on the basis of evidence was also considered as very important. Unprecedented situations like this, will more often than not provide unexpected results. Regulators must seek to collaborate with the industry and with the public at large in order to properly understand the effects of the situation in order to regulate in the most effective manner.”
South-Eastern European regulated markets have developed significantly in recent times, creating great growth potential. What can regulators do in these regions to ensure the market stays both safe for players and competitive for operators?
“Regulators must ensure that a balance is found between protecting the interests of the players, while also allowing gaming operators to establish themselves and grow responsibly. An open licensing regime which is subject to clear regulation and adequate supervision should underpin these emerging markets. An open and regulated regime will allow operators, who are fit to offer gaming services and prove that they fulfil pre-determined conditions, to provide their services to the market while being continually supervised to ensure that their licence conditions are being honoured. Such a framework fosters diversity among operators, which highly benefits players who are free to choose the provider which best meets their needs and wants.
It is paramount that the supervising authorities have sufficient oversight of the market and licensees. Guidelines and measures to protect vulnerable individuals (particularly minors and problem gamblers), guidelines on responsible advertising and any measures that seek to reduce or eliminate the negative effects of gambling and to ensure a safe gambling environment must be at the top of the priority list of the supervising authorities.
Moreover, supervising authorities should foster a culture of communication and transparency between themselves and their licensees as such a relationship benefits both parties.”
With more people now staying at home due to lockdowns, how can legislators across Europe ensure that the regulated, safe platforms to play are the most recognisable? How will advertising bans affect this?
“The mandated isolation naturally results in an increased risk for players who are stuck indoors. Restrictions on the content of advertising is definitely warranted, and any operator who exploits the unfortunate conditions of the pandemic with the view to entice people to gambling should be punished. The MGA fears that a blanket ban on advertising, on the other hand, could in itself be a measure that places the general public at an increased risk. Legitimate commercial communications have the purpose of drawing attention to the existence of a regulated product. A ban on advertising could leave the public in the dark as to the operators which are subject to strict regulations, and those which are subject to none at all.”
How can multi-jurisdiction licenses such as MGA still be of benefit to operators in the future as jurisdictions around Europe are increasingly creating their own independent frameworks?
“Malta was the first EU member state to regulate online gambling, has years of experience under its belt, and published its second wave of legislative and regulatory requirements in 2018. Requirements which are not only more robust, but which also form the basis of a more transparent and reputable licensing process. The requirements make up a highly supervised framework within which an approved gaming service provider can operate. Furthermore, the framework and the accompanying regulatory oversight act as a foundation on which an operator may choose to obtain additional licences.”
Editor’s Note: From speaking with Yanica its clearly evident that, within these novel times especially, a proactive approach to regulation and compliance is going to be needed to create a competitive and safe gaming market.
The threat of customers turning to rogue operators for their playing pleasure is ever-present and Yanica believes the only way to prevent this and keep the player protected is with a balanced approach to issues such as advertising. Blanket bans and other heavy restrictions run the risk of making the best and safest brands invisible to customers.
New regions opening up in areas such as Southern Europe are a fantastic opportunity for growth and the MGA has set out a comprehensive template of what a transparent and reputable licensing process should look like. Setting a benchmark for iGaming regulation that we expect to see increasingly adopted industry-wide in the future.