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In-Play and the Challenge of Regulation

| By iGB Editorial Team
The growing appetite for regulation requires operators to be asking different questions of their in-play suppliers, writes Michael Mikesch of BGT.

Regulation in the gambling industry has always been a sort of ‘catch me if you can’ scenario, with some operators working between the lines before governments and gambling authorities decide enough is enough and close the net. With the birth of the internet exposing the gaps in legislation and tax loopholes, it is only recently that the authorities have managed to catch up.

This isn’t just restricted to the gambling industry, as we’ve seen recently in the UK with the outrage prompted by global internet superpowers such as Google and Amazon managing to legally pay next to nothing in corporation tax for years. The tide is definitely turning. Consumers are educating themselves on the matter and are looking more favourably towards localised companies who play by the rules.

It’s not just public pressure forcing companies into these changes. In Spain, the government is offering lucrative tax advantages to gambling operators who are in possession of a local licence, paying only 10% tax compared to operators holding a national licence, who are paying upwards of 20% 

If you wanted to go down the ‘carrot and stick approach’ analogy, Spain is definitely offering operators the carrot, whereas Italy has shown itself in the past to be more than ready to bring out the stick when necessary. After the unfortunate BetuniQ saga, the strict ADM protocol was brought into force, which has definitely clamped down on the offshore operators. It is also favourable to online operators wanting to set up land-based operations in Italy. This is an approach to regulation that has proven both to generate tax revenue for the authorities and provide jobs for the local community. Other territories are definitely starting to see the benefits, and the appetite for regulation continues to gather pace. With the tide changing, this raises different questions for an operator looking to choose a supplier.

From my time at BGT, I’ve witnessed the transformation from ‘new kid on the block’ to BGT becoming one of the world’s leading sports betting technology providers. Underpinning this story has been BGT’s ability to be consistently versatile as new rules and regulations are introduced.

For example, say I am an online operator based in central Europe and I spend a fortune putting my logo on the kit of a Premier League team. In times past, I could offer betting to everyone, but as regulation comes in, I am now forced into acquiring local licences.

With the right technology supplier, there is an opportunity to make this regulation work in your favour and translate the online success into the retail world, not only in one’s base territory, but also in neighbouring countries. BGT have demonstrated this with one particular client in Spain, where we were
able to open not just the Spanish market but the Panamanian and Mexican markets at the same time. We were able to do the same for an Austrian client, who has expanded to operate in Romania, Slovakia and the Czech Republic.

Being able to negotiate numerous regulatory environments is a key criteria to success in this industry. BGT have been able to implement regional compliance in Spain, work through the heavy regulation of sports betting in Italy, navigate complex South and Central American tax rules and adhere to the local server requirements in Belgium.

Adaptability doesn’t stop with monetary compliance, however. Content is also a factor. In-play betting has recently been at the sharp end of a regulatory clampdown across many countries in Europe. In Germany for example, there has been a ban on ‘action-driven markets’ such as betting on the number of yellow cards, throw-ins, corner kicks, etc. To ensure that such changes are never a problem for operators working in multiple territories, BGT has developed a centralised content management system where operators can easily pick and choose their content across all available channels, ensuring compliance with the evolving intricacies of local and national legislation.

It’s all too easy for suppliers to promote the speed, reliability or overall design of their product. What is much more difficult to achieve – and increasingly attractive to an operator – is a proven track record of success as a supplier in multiple territories. Demonstrating experience and versatility in an ever changing regulatory landscape is only going to become more important as the appetite for regulation grows.

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