The chairman of the European Gambling and Betting Association, Norbert Teufelberger, makes some interesting observations on regulation in the Association's latest newsletter.
EGBA numbers most of the European industry's biggest and most integrity driven betting companies among its members, and is a firm protagonist for regulated online gambling in a free market.
Noting that the European Court of Justice (ECJ) is presently considering more than ten cases relating to online gaming in Europe, Teufelberger writes that online gaming is a market reality and there is an urgent need to develop a regulatory framework that meets the interest of consumers and the state, and creates a level playing field for operators.
"The incoming Parliament and [European] Commission have a tremendous opportunity to sweep away ingrained misconceptions and polarised positions on gaming," the highly experienced online gambling executive comments. "Gaming is a clear economic reality. The simple fact is that no matter what governments decide, people will always play — and in the information age, they will play online. So, if governments choose to ignore fair regulation, they will be failing millions of consumers by forcing them go to unsafe sites outside the EU. This could, in turn, open the floodgates to fraud, money laundering and poor consumer protection.
"Let me make it clear, EGBA welcomes and encourages regulation. No responsible operator wants the free for all that an unregulated market brings — if nothing else, it’s bad for business."
Teufelberger points to the regulatory regimes of the UK, Malta, Italy and now Denmark and France as encouraging signs that there is a growing recognition of the benefits of a regulated online gaming market under a multi-operator licensing system.
"Such reforms must, however, be workable, economically viable and in line with the rules of the EC Treaty," he cautions. "Moves towards harmonisation of member state regulation will hopefully lead to pan-European harmonisation sometime in the next decade. EGBA, through events such as its Responsible Gaming Days held at the European Parliament in 2008 and 2009, aims to be a respected, authoritative and trusted adviser throughout this process."
Turning to the threat of money laundering, Teufelberger points out that in a properly regulated environment, online gaming transactions are traceable and transparent and have to pass and return via highly regulated financial institutions.
"This provides for a more robust audit trail than in the traditional land-based environment, where transactions are unrecorded and anonymous. Rigid checks and balances ensure that online gaming is not conducive to fraud," he emphasises.
Gambling addiction is also considered in Teufelberger's article: "Some suggest that the wider choice offered by internet gaming acts as a catalyst for problem gamers, but this is simply not true. The fallacy is exploded by recent studies conducted both in regulated (UK) and prohibitive markets (Sweden, Netherlands and Norway), as well as a study from Harvard Medical School’s Department on Addictions.
"Nevertheless, EGBA members are not complacent and have a responsible approach to gaming — through EGBA’s Standards — not only protecting the vulnerable and ensuring that customers do not develop a problem, but also addressing topics such as fraud prevention and data protection. The relative youth of the online gaming sector suggests the need for investment in more research to understand the real concerns."
Perhaps the most telling argument of all in these days of economic stress and tax-hungry governments is Teufelberger's observation that governments are starting to acknowledge the potential economic and fiscal implications of market openings.
"Europe’s online gaming industry is, after all, a world leader, accounting for 40 percent of the global market in 2008; around Euro 6.7 billion. Tax revenues and contributions from operators to the sports world are a significant and growing part of it," he writes.
"Indeed, the industry is becoming an increasingly active participant in the sports ecosystem, creating additional interest in sporting events. That’s why a growing number of clubs and sports enter into multi annual sponsorship deals with online operators. Relentless global competition means, however, that unless regulation keeps pace with a fast-developing industry, we could squander a huge opportunity.
"Whatever decisions are made by courts throughout Europe, online gaming will and should remain high on the political agenda. It is my hope that we can all base the upcoming debates on facts. If we can, then the new Parliament and Commission will better understand this new and promising industry so that, together, we can explore the new opportunities that it will bring," Teufelbrger concludes.
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