Online casinos, and online gambling in general, have overcome a series of obstacles since the verticals rose to prominence to become regulated businesses in most jurisdictions. However, different regulatory approaches have been adopted by different jurisdictions, depending on the region.
Taking part in the panel entitled: ‘The Evolution of Online Casinos’ – sponsored by IMGL – host Joseph Borg, partner at WH Partners, asked Susan Hensel, co-founder of Henselgrad, about the evolution of online gaming regulation in the United States over the years.
Speaking on the bet365 Games and bet365 Casino sponsored Marketing & Affiliation Track, Hensel said: “Online gaming itself in the United States is very much still evolving. We are very much in the infancy of the industry in the United States. Right now, there are six or seven states that have authorised online casinos. We have 30-or-so states that have authorised or are operating sports wagering online.
“We thought that internet gaming would lead the way, but it has turned out that since the fall of PASPA – the law that prevented sports wagering in the United States – sports wagering is really dragging online gaming along with it as we see sports wagering in an online environment.
“We’re still very much at the front end of the learning curve for the regulator, for the industry and for the player. What we do know is that in the United States, any type of gambling authorisation is a state right issue so we have in the online space, as we have in the land-based world, a fragmented approach to the regulation and to the legislation that oversees the various forms of gambling.
“That means each state has its own regulatory scheme, so if you want to do business in the United States you have to be familiar with the particular rules of that jurisdiction. We have some states that have a more closed licencing approach… so you really need to understand the nuances of the regulations in the United States if you want to do business there.
“We are going to see more states come online in the coming months and years. It seems every day we are reading about more states that are authorising sports wagering, but we’re all working our way down that learning curve together and I’m sure that the industry and the regulatory approach to the industry will evolve as we go forward.”
Joining Borg and Hensel on the panel were Harris Hagan consultant Hilary Stewart-Jones, and Yanica Sant, general counsel at the Malta Gaming Authority.
Stewart-Jones talked about how the UK’s gambling industry and regulatory framework has evolved over the years, where she said it has been impacted by politics, and that during the mid-1990s the general view was that telephone betting was a ‘fad’, a stark contrast to today and the success of the online gambling industry.
She added: “Everything has evolved in terms of the online gambling industry to see that obviously it’s a mainstay now for most. Even bricks and mortar companies now have an online presence, but also the regulation has evolved as well.
Stewart-Jones noted that the UK gambling industry has been on ‘a rollercoaster ride’ as, during the mid-1990s, betting shops were blacked out and they weren’t allowed to advertise. Online gambling, she added, was a ‘game-changer’ for the industry as it also pushed for a new way to regulate through the UK Gambling Commission.
“We’ve ended up with a lot of people in our licensing net. We’ve got operators, suppliers, host providers. Any type of product is effectively the subject of separate licencing criteria. We’ve got software providers, gaming machine manufacturers. We’ve even got betting intermediaries. We also have a concept of personal management licencing in the UK so that executives who have key roles are personally on the hook and can be personally prosecuted.
“What also changed things massively was a gradual, not falling out completely, but a gradual growing sense of mistrust from the regulator to the operator base, less dialogue and a political head of storm that has built up around concern about protecting consumers and ensuring that gambling habits are curtailed.”
Sant talked about how she is seeing things evolve in Europe in the immediate future, to which she reflected on Malta’s second wave of regulation in 2018.
She stated: “The best improvement is that the legislation, the legislative framework, is now objective-based, so we have a set of regulatory objectives which we aim to achieve by virtue of every regulation that we enact and impose upon our licensees.
“The most relevant fact is the fact that the industry in itself does not exist in a silo, it exists in an ecosystem that influences the way in which it is regulated. So there are other regulations that are extraneous to specific gambling regulations, such as AML, that will naturally influence the way which we regulate the industry.
“There are always emerging technologies that we need to address and, as a country, we have always believed that banning something is not conducive to effectively regulating it and making sure that we meet the regulatory objectives of keeping gambling fair, safe and free from crime.
“As a jurisdiction, we have always believed in mutual recognition. We have always been a point of supply jurisdiction and we believe that as long as a company is licensed and regulated in Malta, or in any EU jurisdiction for that matter, as long as we all have the same regulatory objectives, then we will always acknowledge that licence from another EU jurisdiction.”
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