Carl Brincat, Director of Policy & Regulatory Affairs at LeoVegas Group, has unique insights into the relationship between operators and gaming authorities, as well as how they collaborate. We had a quick chat with Carl to hear his latest thoughts on the regulatory landscape and the current state of many regulated markets.
Why is the black market in online gambling growing, despite stricter regulation?
“The black market, regrettably, continues to grow because one or more of the pillars required to curb its expansion, depending on the market, are not being adequately addressed. In practice, ensuring that players remain within a safe and regulated environment primarily requires three things:
- Education: Players need to know how to identify licensed operators and understand why it is in their best interest to play with them. Conversely, it should be clear what the disadvantages are of engaging with black-market operators.
- Equity: The regulatory framework to which licensed operators are subject must be robust, equitable, and balanced, ensuring a safe and sustainable gaming experience for players while also enabling licensed operators to provide a competitive and entertaining service that meets players’ expectations.
- Enforcement: Regulators and law enforcement authorities must have the appropriate legislative and practical tools, as well as sufficient human resources, to effectively act against black-market operators.”
Which types of regulatory measures risk driving players to unlicensed sites?
“Measures that detract from the customer experience are those that risk driving players to unregulated sites. There will always be a certain level of additional friction when playing with regulated operators; however, this is necessary to ensure we have sufficient information about our players to help them play sustainably and to keep gaming free from bad actors. What is essential is maintaining a degree of flexibility in how we, as operators, introduce these elements of friction, allowing us to innovate and integrate them in ways that still preserve a positive user experience.
Aside from friction resulting from the direct collection of player information, measures that restrict or ban certain products or incentives can also reduce the entertainment value players derive from our services compared with unregulated operators. Bonuses and other incentives are highly sought after, yet in some markets we are either restricted from introducing innovative games or required to implement product features that detract from the experience, such as minimum round durations for slot games. These factors can lead to an overall gaming experience that is, regrettably, inferior to what unregulated operators can offer.”
What role should regulators and licensed operators play in tackling the problem?
“Open and consistent communication between regulators and licensed operators is essential. Licensed operators should not only implement all regulatory requirements in the best possible manner but also proactively communicate to regulators and legislators what, in their view, can be improved. It is crucial that we are active participants in regulators’ efforts to achieve their legal objectives, as a safe and sustainable gaming environment is our objective as well.
Of course, this can only work if it is a two-way street. It is therefore of paramount importance that regulators view licensed operators, such as ourselves, as partners in their pursuit of a safe environment for players. While it is important that regulators ensure all licensed operators adhere to their obligations, it is equally vital that they dedicate sufficient resources to combating the black market, an environment in which all safeguards built into the regulatory framework are entirely absent, and which therefore directly undermines the regulators’ raison d’être.
These efforts to combat the black market must encompass all three of the aforementioned pillars; disregarding one or more of them will inevitably render such efforts ineffective.”
Ultimately, what will it take to win players back from the black market?
“Regulated operators must be able to provide an experience that is as rewarding as, or more rewarding than, the black market. Regulators need sufficient tools and resources to combat the black market effectively and must assign it the right level of priority. Finally, players must be well informed about how to identify licensed operators and understand why choosing to play with us, rather than with unregulated operators, is in their best interest.”
