The CEO of iGaming.com warns: “The Wild West is just a click away”  

At the Gaming in Holland trade show in Amsterdam, Dr Andreas Ditsche spoke very positively about his experience in Canada. The German-born entrepreneur, investor, professor and CEO of the iGaming.com group observed an approach there which, in his view, differs significantly from what is happening in many European countries.  

In an in-depth interview with Gambling Club, Mr Ditsche discussed regulation, taxation, channelling, the role of affiliates and the future of the regulated online gambling market in the Netherlands, Belgium and beyond.  

Canada  

At the Gaming in Holland trade show, you spoke highly of your experiences in Canada. What struck you most there?  

“What struck me most was a statement by a Canadian politician: ‘We don’t have a big red button that would allow us to shut down gambling. That’s why we try to make the most of it: investment, jobs and tax revenue. And we do so responsibly.’  

This statement reflects a certain pragmatism. I also got the impression that the regulatory authorities and politicians work with the sector in a spirit of partnership and trust.” 

You also mentioned that a Canadian minister even gave you his direct telephone number. What does this say about the relationship between the regulatory authorities and the industry?  

“Although the regulatory authorities and the industry have different roles in the world of gambling, I sensed a strong willingness to collaborate. There is an openness to listen to all stakeholders, as well as a willingness to act on their feedback in a practical way. 

It is clear that regulators support a healthy market and that the legal market must be attractive enough to retain players. Otherwise, they turn to the black market.”  

Netherlands  

How do you compare this experience with your dealings with the Dutch regulatory authorities?  

“Dealing with the regulatory authorities in the Netherlands is pleasant and professional. Communication is open. The regulatory authorities have an excellent understanding of how the market works.  

At the same time, they do not make the laws, nor do they determine tax policy. I see them as a bridge between the market and the legislator.”  

Does the Gaming Authority have a sufficient understanding of how the online gambling market actually works?  

“Absolutely. But enforcing the rules and drafting them are two completely different things.” 

In your opinion, what is the biggest mistake made by policymakers in regulating online gambling?  

“First of all, I believe that policymakers act with the aim of protecting players and creating an orderly market. However, good intentions do not always lead to good results.  

I see two weaknesses.  

The first is taxation. When taxes on the legal market become too high, players turn to the illegal, untaxed market. The decline in the capture rate in the Netherlands indicates that taxes are too high.  

The second problem is the high level of regulation and restrictions within the legal market. This too can drive players towards the black market.  

The Wild West is just a click away.”  

You previously described channelling as a moral test. Why, in your view, do so many regulators nevertheless accept low channelling rates?  

“Put yourself in the shoes of a regulator or a politician. Imagine you reduce taxes, make the legal market more attractive, and it proves effective.  

In our sector, we would celebrate higher channelisation and increased revenue. But what does the general public see? More gambling. 

That’s not necessarily good news for a politician. At the very least, it requires a solid communication strategy. It’s not easy to explain that you want to make gambling more attractive.”  

If you could change one aspect of Dutch regulations tomorrow, what would it be?  

“I would reduce the tax.  

That would immediately make the legal market more attractive. More players would stay within the protected environment and total tax revenue for the Netherlands might even increase.  

Even though academics debate it, I believe the general principles of the Laffer curve are correct. Above a certain level of taxation, revenue decreases. In the world of online gambling, this often results in an increase in illegal gambling.”  

Do you think the Netherlands is becoming too restrictive?  

“If you don’t like the food at a restaurant, you don’t eat less as a result. You look for another restaurant.  

When the legal market becomes unattractive due to restrictions, players will look elsewhere for what they want. If the current restrictions are too severe, this will become apparent in the coming months.”  

Is there a risk that the regulatory authorities might, on the contrary, strengthen the black market?  

“Yes, that risk exists. 

What makes the problem worse is that the fines imposed on illegal operators are often virtually impossible to collect.  

Instead of imposing ever more rules on the legal market, the regulatory authorities should, on the contrary, join forces with the legal sector to combat the black market.”  

What will success look like for the Dutch market in five years’ time?  

“A channelling rate of over 90 per cent.  

Added to this will be high customer satisfaction and a sector that complies with the rules without the constant need for severe enforcement.”  

Belgium  

Belgium has raised the minimum age from 18 to 21. Will this provide better protection for players?  

“I’ve read that many young players have their first experiences on the black market.  

It remains to be seen whether an 18-year-old will wait three years to access the legal market or whether they will turn directly to offshore providers.  

I’m sceptical, as enforcing the law will be difficult. The forbidden fruit is just a VPN and a click away.”  

How do you view Belgium compared to the Netherlands and Germany?  

“Belgium seems more restrictive than the Netherlands and Germany and is clearly opting for player protection.  

Even Germany, which is already very strictly regulated, is now looking for ways to make the legal market more attractive in order to improve channelling.” 

Has Belgium struck a better balance between protection and attractiveness?  

“On paper, Belgium offers a higher level of protection.  

In reality, according to recent studies, the channelling rate stands at around 62 per cent. This figure is below the European average of 74 per cent.  

Belgium does, however, perform better than the Netherlands (55%) and Germany (47%).  

These figures vary depending on the source, so they should be regarded primarily as an indication.”  

Belgium has some of the strictest advertising restrictions in Europe. Is this a success?  

“In theory, advertising restrictions help reduce people’s exposure to gambling.  

In practice, people who still want to gamble are not automatically directed towards the legal market.  

The black market does not comply with advertising regulations.  

Too many restrictions can therefore have a counterproductive effect.”  

Are you concerned about the Belgian channelling effect?  

“Yes. We have also observed this phenomenon in other countries.  

It must also be recognised that taxation plays an important role in channelling.”  

What advice would you give to the Gaming Commission?  

“Take inspiration from countries that have a high channelling rate and low figures for problem gambling.”  

Research, affiliates and the future 

Why does collaboration between researchers, psychologists, regulators and the industry remain such a sensitive issue?  

“I get the sense that researchers, psychologists and regulators deliberately wish to keep their distance from the industry in order to safeguard their independence.  

That is, in itself, a good thing.  

I am a professor and researcher myself. I have met many open-minded researchers.  

I firmly believe that we can collaborate transparently to further improve responsible gaming.”  

What role should affiliates play?  

“Affiliates bring players to operators. They act as the bridge between players and operators.  

That is why they must provide transparent information and educate players about responsible gambling.  

Policy-makers’ understanding of this role varies greatly from one country to another.”  

In your view, which country currently has the best regulations?  

“England and Denmark are two good examples of effective regulation.”  

What would be your key message to the KSA, the Belgian Gaming Commission and the German regulatory authorities?  

“We are all in the same boat.  

Operators and affiliates in the legal market, regulatory authorities and legislators all face the same adversary: the illegal offshore market. 

Let’s join forces to fight the real villains, rather than getting lost in a maze of ever-increasing regulations for the legal market.”