‘Canute in front of the waves’ – regulatory relationships debated at CBS

Regulatory reform has swept across Europe in recent years, with the UK, Spain, Italy, Germany, the Netherlands and Belgium, to name a few, embarking on reviews and introducing new rules. But how has this impacted business

For Colin Stewart, CEO of Palasino Malta, the answer to this question at the CasinoBeats Summit in Malta was ‘not quite sure’. Zeroing in on the UK, where the White Paper has finally been published, he reflected that regulated companies are ultimately the ones most likely to bear the brunt of restrictive measures.

Much has been made of black market operators in debates around the UK’s Gambling Act review. The end issue is that regulation has not quite addressed the illicit sector, the one that operates in violation of the law.

“Obviously, regulation is required,” Stewart said. “Again, the biggest issue that we find is the companies who keep to the regulations are the ones who get controlled. 

“When you’ve got the black market and the other operators, they’re not interested in that, they don’t want to go and check out that everything they’re doing is okay etcetera, they forget about.”

Finding common ground with Stewart, Peter Wilson, CEO of PWL Legal, noted that it is much easier for regulators to initiate enforcement actions and campaigns against licenced entities.

This is because, firstly, regulators already possess all the necessary data on these firms, whilst there are also investigative complications and heavier costs when probing the activities of black market firms.

He said: “We’ve identified one of the first issues here, which is, yes, we have more increased regulation and that makes it more expensive to run a business now.

“However, the black market has not really been tackled, and that’s a perceived unfairness with the way regulators operate. And I think that goes across the board in every jurisdiction.”

Regulatory enforcement actions have become commonplace across Europe in recent years, although the UK and Dutch betting markets appear to be the most prevalent.

In the UK by April 2023 a total of £76m in fines were issued as a result of 27 enforcement cases, in comparison to £1.7m from three investigations during the 2016/17 financial year.

Two of the country’s leading bookmaker groups, William Hill and Entain, have found themselves facing regulatory wrath for social responsibility and AML failures

The companies were both hit with record financial penalties with the record first set by the £17m charge against Entain in July last year before being beaten by the £19.2m action against William Hill earlier this year.

“They’re not a bad guy,” Wilson commented on the William Hill case, in which the firm was – like its rival Entain – charged with a range of legacy compliance breaches dating to 2021 and prior.

“They are one of a whole number of leading gambling operators, we’re not talking about fly by night operators, we’re talking about people with very comprehensive management, very comprehensive departments dealing with every aspect of their centre. 

“And yet still, they’re falling foul of the regulator. Why is this? Something’s going wrong.”

Building on the comments of his fellow panellists, Fortuna Entertainment Romania CEO Carlo di Maio noted that conflicts of interests make communicating on a regulatory level a difficult process.

Finally, concluding his assessment, Stewart doubled down that some regulators “have no idea what a casino is about, they’ve never been in one, never worked in one, so how can they sit down and make the rules?”

Some regulators are looking at their industry relationships as a case of ‘their way or the highway’, remarking: “If the regulator is not willing to sit down and discuss and work with you, you know, it’s like Canute sitting there in front of the waves and asking them to stop coming through.”

Read CasinoBeats full report on this panel session from Malta HERE