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Viewing the Online Gambling Industry Through a Big-Tech Lens
By Shane Addinall Feb 20, 2023 LegalityJoin us as we dig into Tim Miller's comments on the ways in which the online gambling sector functions and act more like Big Tech than a casino company in the current stage of its evolution.Tim Miller is the Gambling Commission executive director responsible for, among other things, the UK’s national strategy for reducing gambling harms. Speaking at the ICE London event earlier this month, he raised several interesting points highlighting how the Gambling Commission is maturing its view of the market and its participants.
Defining the Parameters of Tech and Gambling
What we found particularly interesting when he spoke at the ICE World Regulatory Briefing was his assertion that online gambling companies have evolved into international ‘Big Tech’.
While the end-user experience is that of an online casino or betting shop, the day-to-day operations revolve around new technology and how they can create new experiences. He specifically pointed out that:
- They are investing heavily in Research & Development.
- They are innovating the use of new tech to enhance their product offering.
- They embrace digital and multi-national operations.
Miller asserted that not only does this change in focus impact the casino business itself, but it must shift how local and international oversight committees govern them.
Blurring the Line Between Gambling and Tech Products
As the way these businesses comport themselves begin to shift and change, so does the need to clearly define which digital products are gambling and which are not.
Miller raised the issue of two very hot topics in the online gambling space:
✓ Mergers and Acquisitions:
With increased company mergers and buyouts, the online gambling sector is keeping pace with the broader tech space.
Miller quoted the following stats:
Quote“Here in Great Britain, the now top 3 operators have increased their market share from around 1/3 to 1/2 in just the last five years. The top 10 operators now represent 77% of total B2C GGY in Great Britain and the top three represent over 50%.”
One of the challenges the regulator faces is determining the impact of these agreements on the industry and the player base. The deals are becoming increasingly complex with layers of participating companies and investors, making it difficult and costly to review and manage effectively.
✓ Soft or Novel Products:
He also raised the governing body’s concerns over new or adjacent products which seek to monetise the gambling space without being gambling or betting products according to the letter of the law.
Miller said:
Quote“Products such as non-fungible tokens (or NFTs), ‘synthetic shares’, cryptocurrency are becoming increasingly widespread, and the boundaries between products which can be defined and regulated as gambling are becoming increasingly blurred.”
He also raised the issue of products like loot boxes in video games which managed to avoid prosecution or banning in the UK due to the country’s precise definitions of ‘gambling’. While now new action was announced in this regard, he noted that this is “an area where we are vigilant” and investigating further action.
Increased Global Collaboration is Needed
The only way to aggressively and intentionally address the challenges presented by the growing globalisation of online casino providers is to enhance cooperation between the global online gambling regulatory community.
Miller said:
Quote“Going forwards, I also see regulators being able to identify areas where we can achieve even more through collaboration. As a trustee of GREF, I’m fortunate to see close up some of the exciting work that collaboration across Europe is beginning to deliver. I also see the immense appetite for better and increased sharing of intel and for more feedback on operators between regulators where it's appropriate to do so.”
The collaboration between these bodies would allow for shared agreements and standards for what passes as online gambling and how to address products that might not cross the letter of the law but trod on its spirit.
Further adding:
Quote“What might be illegal in one jurisdiction might not be in another. Let’s also remember that legitimate, licensed operators from one jurisdiction can actually be the illegal or black market in another.”
There would also be greater potential to shut down black market operators who hide their operations outside of the regions they are targeting illegally and the ability to institute more rigorous safer gambling policies that cannot be avoided by simply gambling offshore.
Miller commented that the Gambling Commission is already making great strides in this regard, working closely with the Irish Government on their new Gambling Act and assisting Curacao in reforming theirs. Add to this the regulation of several US states, Germany, the Netherlands, and other European countries, and the operational capacity of unlicensed casinos is shrinking by the minute.
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