In this interview with CalvinAyre.com’s Becky Liggero, Wes Himes of Instinctif Partners talks about how the new developments in European Union regulation affect the gambling sector in the region.
Policymakers in the European Union have always remained vigilant to the latest trends in the gambling industry.
Over the decades, they continue to enact, implement and amend various gambling laws and regulations to ensure growth of the industry and at the same time protect the consumers’ welfare. Online gambling regulations weren’t available back in the 70’s, 80’s, 90’s, and early 00 since the sector isn’t as popular as it is today.
Wes Himes of Instinctif Partners noted that gambling regulations and the laws in the EU have positively developed and progressed over the years, despite minor kinks along the way.
“I think the general trend has been positive. You see more and more EU member states looking to create regulated, open system for private operators to get a license, provide a wide variety of product at a feasible tax rate. It’s not always golden, there are member state that are quite slow in the mark, will create a more restrictive version in their first time at reform,” Himes told CalvinAyre.com. “But others are on the second, third, and fourth stages of reform and really bringing the online gaming market in the mainstream leisure market. In general, positive but you know like everything, it is one step forward and two steps backward or two steps forward and one step back.”
Two of the latest regulatory developments in the EU, according to Himes, are the issuance of the fourth anti-money laundering directive and the implementation of restrictions on big data sharing.
In terms of the new anti-money laundering directive, EU member states are now doing a risk assessment on where various products in the gambling sector fit.
“So what is happening is that we have the fourth anti-money laundering directive passed. People are now working on implementation,” Himes explained. “Obviously if there’s a tough regime for products, it’ll mean enhance due diligence which will require new forms and new systems in order to verify customer funds and source of funds. So that’s the big challenge for the industry and is an immediate challenge for the industry.”
Himes said the data regulation poses a challenge to online gambling operators since it can impinge on the free flow of data.
The other one is data protection, of course general data regulation over the next two years it will be implemented and requires all sorts of consents for usage of data where you can store data. Many of the member states are now localizing that,” he explained. “And ultimately, as an operator, you want to have the biggest pool of data as possible because then you can discern and understand the trends and habits of your customers to better service them.”
Despite the challenges that some regulations pose to gambling operators, Himes pointed out that there are still lots of opportunity in the European Market.
He cited Greece as an attractive EU country where operators can find business growth due to its propensity of gambling per capita. Himes also noted the potential of Germany as growth driver for most gambling operators.
Himes said Germany is a good bet for investment due to its large market of over 80 million people. However, he said Germany is only for those who “are willing to play the long game and get integrated into the discussion of policy and scope of products and tax.”
“Other than that, some of the second, third and fourth generation jurisdictions perhaps after the elections in France next May, they might open up the market, perhaps online casino. There are opportunities here and there depending on what type of company you are,” Himes said.