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Why Ireland’s advertising ban should sound a warning to the industry

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Tom Farrell, Chief Marketing Officer at ClearStake
Reading Time: 3 minutes

 

Tom Farrell, Chief Marketing Officer at ClearStake

At first glance, Ireland’s emerging Gambling Regulation Bill might not be of particular concern to anyone outside the emerald isle – even allowing for Ireland’s influential and outsized position in the related worlds of horse racing and gambling. But recent controversy around a proposed ban on all television gambling advertising before a 9pm watershed should sound a warning to anyone willing to hear.

As it stands, this ban is intended to cover all television channels, including RacingTV and Sky Sports Racing. And as anyone who watches either of those channels will know, they are dependent on advertising from gambling companies. So dependent, in fact, that there is serious talk about both no longer being available in Ireland if the bill is passed.

Exactly what impact that will have on Irish racing and gambling is an open question, but there are already plenty of commentators sounding the alarm. “It will be a disaster” is the considered opinion of racing legend Ted Walsh, and it is hard to argue with him. Effectively it will remove Irish racing from the airwaves for all but a handful of key events, something sure to damage the industry in the medium term. From the perspective of gambling operators, it also means an inevitable loss of revenue as people bet on what they watch.

Will it happen? If (ahem) I was a betting man, I would back amendments to be added to the bill to allow exceptions for dedicated racing channels. But it’s no dead cert and it hasn’t happened yet. It would be foolish to assume that everything will get sorted out and thus sleepwalk toward disaster.

And for the wider lesson? Read on.

 

Where gambling stands today

Let us face facts. For most governments in countries where gambling is legal, it is filed under ‘something we have to do something about’. More specifically, those governments quite rightly want to protect their citizens from harm, and they are inevitably going to look around at ways in which to do that.

So, whilst in 2023, with everything we know about young people’s media habits, a ban on gambling advertising ‘before the watershed’ might seem silly to you or me, to a government ‘doing something’ about gambling, it’s an option. And in this case, they are taking it. As anyone following recent history knows, expecting governments to always make sensible, proportionate decisions isn’t always wise, and this is what happens when they are left to come up with a solution to the challenge of protecting gamblers themselves.

In response, and you can probably see where this is going by now, the gambling industry itself has to proactively engage with the responsibility to protect our customers. Nobody knows the ins and outs of the issue as well as gambling operators themselves, and it is those operators who should be bringing sensible, proportionate measures to the table. Because in their absence, we get the type of potentially disastrous ban on advertising being proposed in Ireland.

The goal, ultimately, is minimising harm whilst maximising revenue. I would argue that this ban actually does neither.

But what are the alternatives? Any member of the Irish government who reads the Racing Post on a regular basis would be forgiven for thinking that sensible, targeted measures, intended to ensure that high-staking punters are not gambling beyond their means, are definitely not an option.

On that basis, they have probably ruled out affordability checks entirely (despite the fact that AML legislation required the checking of financial documentation anyway) and landed on an alternative that has the potential to cause significant damage to the industry. Trebles all round!

 

Let’s finish by painting a slightly different picture.

Gambling operators and their representatives engage with the government in a constructive manner to find solutions that, as above, minimise harm and maximise revenue. That could include affordability checks integrated with existing AML requirements (as hinted at in the UK White Paper). By doing so, legislators get to ‘do something’, and the something that they do is targeted in a way that ensures those that need to be protected are, and those who wish to stake freely can do so, which delivers a top-line revenue boost.

Doesn’t that sound more sensible than slightly random interventions that risk the entire industry? The only thing stopping this happening is the industry itself. Let’s change that.

Compliance Updates

Gammix Limited slams “outrageous and unsubstantiated” €19.7m KSA penalty

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Reading Time: 2 minutes

 

The operator vows to fight on all fronts against the Dutch regulator’s ‘unjust’ ruling.

Gammix Limited has announced its intention to contest the “outrageous and unsubstantiated” penalty handed to them by the Netherlands Gaming Authority (KSA).

In response, Gammix stated that the record €19.7m penalty imposed is based on “falsified data, extreme inaccuracy and highly suspect mathematics”.

In the ruling the regulator said that Gammix was adjudged to have allowed online gambling access for Dutch consumers, as well as not requiring age verification upon sign-up – something the company wholeheartedly disputes.

Gammix reports that accounts used to access its sites during the investigation were created in Luxembourg, with deposits made via credit card. Gammix added that such action violates the sites’ terms and conditions, specifically the provision of false information upon sign-up.

The operator asserts that the penalty, totalling €19,679,000, has been calculated using figures from a proprietary web-traffic aggregation service and a multiplier of 240 Euros per click. Gammix believes this would show turnover that doesn’t exist.

Furthermore, Gammix strongly condemns the KSA’s “mystery shopper” style of investigation, which, the operator states, is an unjust basis for this record-breaking penalty.

Phil Pearson, Director of Gammix Limited, has vowed to “fight on all fronts until it receives an apology and retraction!.

He said: “The KSA has imposed upon our company a penalty that is both outrageous and unsubstantiated. Now that we are able to talk openly about the case, we can confirm that we are fighting on all fronts as, to us, this is an extraordinary and unnecessarily heavy-handed action from a regulator that many already regarded as unapproachable.

“When we received the first notice of a possible penalty, we reached out to them to say we have blocks in place. We also asked for any information they had that was material to the investigation, to ensure we remained in compliance with all guidelines  – a request they appeared to ignore. Our lawyers also approached the regulator, in writing, to gain more information, but again no response was forthcoming.

“We had enabled a block on Cloudflare for any Dutch IP, we have no Dutch language or direct Dutch payment methods, and categorically do not target Dutch traffic. If affiliates list any of our brands on Dutch-facing sites, we cannot be held responsible for those promotions. However, once players reached the end site, they would not be able to register an account.”

Pearson concluded: “This fine is an absolute joke, and we will contest this in every possible way, at every possible turn. We will only rest once this outrageous penalty has been rescinded and we have received the apology we deserve.”

 

 

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Compliance Updates

BHA Chief Executive Julie Harrington Statement Following Parliamentary Debate on Affordability Checks

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Reading Time: < 1 minute

 

BHA Chief Executive Julie Harrington has issued the following statement after MPs debated the impact of affordability checks.

“Yesterday’s debate on the impact of affordability checks on British racing has shone a light on a hugely important issue for our sport.

“It was vital that MPs were given proper parliamentary time to thoroughly interrogate the Government’s proposals and we were encouraged by the high turnout for a Westminster Hall debate.

“Many MPs made valuable contributions to the debate, and we are sure that Sports Minister Stuart Andrew will have listened with interest to the views expressed.

“From MPs of all parties and all sides of the debate, there was a clear recognition of the need for the Government to protect and support British racing when reviewing gambling legislation.

“If our sport is to remain a healthy industry, supporting jobs in the rural economy and remaining competitive with our international rivals, we hope that Government will heed this advice.

“We were encouraged by Minister Andrew ruling out the use of job titles and postcodes in the implementation of enhanced spending checks and confirming that these changes will at least be subject to a genuine pilot.

“We will continue to make the case into the heart of Government that the impact of these checks both on our industry and racing bettors needs to be carefully considered and look forward to further discussions on this important issue for British racing with the Gambling Commission and DCMS.”

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Compliance Updates

Ensuring Integrity: The Role of Assurance in the Gambling Industry

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Ensuring Integrity: The Role of Assurance in the Gambling Industry
Reading Time: 2 minutes

 

By Salvador Garcia-Noblejas, Senior Regulatory Assurance Services at ComplianceOne Group

The gambling industry has its origins in the ancient period, and different types of games are found in almost every culture and civilization.

Over the last few years, we have witnessed an immense transformation, clearly boosted by technological developments. Among these changes, online gambling has grown rapidly, and with this new non-face-to-face reality, regulation and regulators have also embraced new ways to protect players, businesses, and the overall economy. Regulators have the responsibility to set the framework of common rules that define what is right and wrong, the means to protect all parties, and the tools that must be used when anyone does not behave as expected.

Assurance in a world of global risks

It would be inaccurate to assume that regulatory assurance’s only goal is to ensure that operators operate in a fair and transparent manner and meet their legal obligations. On the contrary, assurance also includes helping businesses understand the risks involved in the industry where they operate, analysing their strengths and weaknesses, and setting measures to mitigate those risks.

Assurance’s starting point consists of an interview phase where tailor-made questionnaires serve better understanding the reality to each operator and its actual circumstances. Once the assurance assessment is complete, a detailed action plan assists the operator in fixing any identified gaps, improving policies and procedures, and obtaining the maximum financial gain from refining their processes, products, and operations.

As part of the fast transformation of the gambling industry, with competitive new products, platforms, advertisements, and market expansion, we must not forget that bad actors and illegal practices also develop. This is the moment to ask ourselves if we are ready to face whatever can harm our operations. The most efficient way to know is carrying out a thorough audit of policies, procedures, and processes. This approach will certainly save operators from potential harm to their clients, products, brands, and finances.

Audit readiness

Regulators focus on legislation, supervision, and enforcement. All stakeholders must comply with gambling regulations if they want to offer products and services or provide a safe environment to their clients. An important part of the gambling legal system is the fact that the industry is continuously overseen to ensure that all actors adhere to the established rules. At this point, operators need to ask themselves how ready they are to show sufficient evidence that their operations adhere to the law.

Smart operators will choose to comply with as many rules and regulations as their business is capable of, and they will ensure that records are properly kept. Company leadership is essential in ensuring compliance as it contributes to collaboration between departments and having policies and procedures that make the business run within the parameters of the legislation.

Lessons learned

In recent years, some highly publicized enforcement actions, including fines and penalties, license suspension, and revocation, have alerted the whole gambling industry. From such cases, there have been increasing efforts in reviewing processes, improving systems, and growing compliance departments.

Experience in the gambling industry has taught us that it is crucial to have a detailed understanding of the regulations that govern the relationship between operators and players. Where knowledge has been insufficient, inaccurate, or out of date, some business decisions have led to unwanted consequences, sometimes catastrophic ones.

Knowledge, a solid compliance culture, strong procedures, and willingness are the formula to be ready for a regulatory audit.

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