Having undertaken drastic adjustments to mitigate the impacts on an unprecedented 2020, industry leadership bluntly stated its assumption that a recovery against compounding global business headwinds will be the sector’s toughest challenge ever.
A ‘global outlook’ provided from the perspective of igaming’s upper deck closed the SBC Summit Barcelona – Digital’s Big Stage, stating that thinking has moved beyond seeking a return to normal.
In its road to recovery igaming faces a myriad of challenges, with certain factors in the control of incumbents (operations, conduct, product offering), running in parallel against the individual reactions taken by governments in their recovery from the pandemic.
Pontus Lindwall, group CEO of Betsson, underlined that the above scenario had already become a reality, with regulators in the UK and Sweden, believing that consumers would be gambling more online – ‘a fear that did not transpire’.
“We could not see that in our figures, and no CEO that I spoke to saw these concerns in their results,” Lindwall said, pointing to Betsson interim results.
“Unfortunately, some politicians made judgements on guesses and presumptions of the market of how players would behave. Their guesses led to restrictions being put in place, which forced us to close some markets down completely.
“Of course those players didn’t stop. They just simply chose to play outside of the regulations.”
Tim de Borle, chief executive of Napoleon Sports and Casino, shared Lindwall’s frustrations that licensed incumbents continue to operate within ‘grey frameworks – which are open to interpretation’ across multiple European jurisdictions.
Case-in-point, de Borle pointed towards Napoleon’s home market of Belgium, where the ‘regulators good intentions’ to ban bonus incentives have seen the black-market actors take a significant market share as channelisation to licensed incumbents has dropped to 80 per cent.
Furthermore, de Borle noted that regulatory changes are being undertaken without adequate government oversight as Belgium has operated without an elected government for more than 550 days – “a world record Belgium is championing” de Borle stated.
“We need rules that can protect the customer, strengthen the regulators whilst maintaining a balanced marketplace”
“The initiatives carry good intentions, but we are missing a legislator that is educated and knows how to support the type of environment a regulator wants to impose.
“In Belgium the rules are open to interpretations. We need rules that can protect the customer, strengthen the regulators whilst maintaining a balanced marketplace environment”.
The CEOs’ anxieties were further compounded by the topic of industry taxation, which has been placed at the forefront of all government’s ‘crisis discussions’. On the delicate subject matter, Lindwall underlined that European governments face a ‘sliding scale’ whereby increased taxes only serve to push the player to the black market
Lindwall bluntly explained: “It’s very simple. If you put the tax up 100 per cent, there will be no regulated industry and all consumers will shift outside the market, there would be zero tax income and that’s how it will be decided.”
Having led drastic COVID-19 adjustments across his firm, Eric Olders, CEO of Netherlands casino JVH Gaming, observed changing mindsets on taxation policies, attached to gaming.
“A government’s objective to all these tasks seems to be maximising tax revenues,” Olders stated.
“I think that the other side of the equation is to protect their players in a proper way and therefore it’s a specific balancing act that they need to focus on.”
On the balancing act of taxation, Olders pointed to the opening of the Dutch online gambling marketplace, delayed to March 2021, where the government has sought to open its licensing window to new tax contributing incumbents.
“If I look at the Dutch situation, the gaming tax is already very high,” Olders explained. “Looking at entering the Dutch market, that’s certainly a consideration there if they run their financial model, and so, would I.
“A new market is going to open, taxed at 29 per cent for online gambling services. This is something that has to be clearly considered by companies entering the marketplace.
“I think it would be a very silly move from my perspective to have been taking over 10 years to approve the legislation in place and to open the market and have it fail because the tax rate is too high.”