In the fourth of a series of columns on international gambling legislation, GVC Holdings Director of Regulatory Affairs Martin Lycka debates the antagonistic relationship that can develop between the regulator and the industry.
Operators v. Regulators, undoubtedly a top billing in the industry nowadays. Just pause and think how many times in recent past you have bumped into an industry press article spelling out what one ‘team’ thinks about the other.
Ups and downs, ebbs and flows; it’s pictured as a true love-hate relationship of a Rimmer and Lister nature (as pictured), Brianne of Tarth and Jaime Lannister-like acrimony and Han-and-Leiasque proportions.
The truth is though that just like two Sunday league squads that meet every weekend to kick a ball around no matter the weather, the two ‘teams’ in the billing of this feature need each other because otherwise there would be no regulatory game.
Despite the clear need to work together, with an ultimate view to protecting the customers, the frequency of use of the word ‘them’, as in ‘them, the gambling regulators’, has gone through the roof.
“Speak to them, we need to sort this out,” is a staple phrase everyone who works in a regulatory, licensing or compliance function has on their plate on a daily basis. That tiny little word ‘them’ gives an impression that there is an invisible hand, or a Deus ex Machina if you will, that will creep in from its usual shadowy habitat and provide answers to all unresolved questions and persistent mysteries. That same word further fuels the perceived, but not necessarily substantiated, divide between the gatekeepers of the promised land of regulated gambling and those who aspire to reach that land. The never-ending regulatory debate has in many instances been befallen by an ‘us v. them’ mentality at both ends of the field, which in my view is no good.
Let’s now have a look at what I called the regulatory game from a psychological perspective:
Regulation is a process that starts with legislative ideas that are progressively being morphed into draft documents frequently put forward for public consultation – this is where the aforesaid creepy feeling of divide and misunderstanding sneaks in. Opening a freshly baked piece of draft gambling regulation is in many minds associated with the vision of Forrest Gump’s mother of life as a box of chocolates where you never know what you’re gonna get. What products will be permitted; which ones will be left behind? What are the product restrictions; what are the technical requirements? How much will it all cost; did ‘they’ pick an appropriate tax base..? You know the score.
External factors such as politics, cultural traditions or the current state of a given economy are also thrown into the mix. This feeds into the end product of a set of rules that will govern the future regulated market in question. Is the regulation always perfect? Of course not, but we’ve got to work with what we’ve got and make the most of it.
Now the regulation is in place it’s time to apply for a licence. My friends, you may want to “fasten your seatbelts, it’s going to be a bumpy ride”. Licence applications may turn out to be vertigo and hallucination-inducing processes, taking everyone involved to the brink of insanity, if not beyond. It is encapsulated by mad dashes toward the line, moving goalposts, races against time both at the operators’ and at the regulators’ end peppered with prisoner’s dilemma-like games where both sides try to second guess each other.
There are a lot of potential ‘Houston, we’ve have a problem’ moments where documents are missing or are at risk of not arriving on time; moments that call for crazy solutions such as flying documents from Malta to Germany via Moscow (this is not an urban myth; this had to be done once upon a time).
All this would lead a sane person to stop and ask: “Why so serious?” And just when you think you can’t go on shoving round pegs into square holes, your efforts are rewarded and a licence is granted. It’s a stressful way to instigate the “beginning of a beautiful friendship”.
What next? Compliance. Now, the two sides of the divide have struck up “the beautiful friendship”, they need to work on it and make it grow; forget “us and them”, we are in this together because the customer demands it. This naturally requires a lot of mutual respect and understanding, including understanding of cultural idiosyncrasies, because so much has been invested that neither side can simply afford to ‘lose that guy in 10 days’. If that happened then someone might be inclined to exert a Jerry Maguire level of pressure and ask for ‘the money to be shown’.
Bearing all this in mind, I would suggest that the most appropriate form of co-existence of operators and regulators in the field of gambling is a Bridge-like partnership. This would see the two partners having to work together, not always with all cards on the table, to defend against the hands of the opposing team players, in this case formed by unlicensed operators and criminals who seek to exploit the system. It is by defeating those ‘tricks’ that the industry and regulators should come together and put and end to the confrontational ‘us and them’ relationship.
Martin Lycka is Director of Regulatory Affairs at GVC Group. Before that he spent nearly ten years at Paddy Power Betfair working on international markets. Views expressed are personal and not necessarily those of GVC Group.