At the SBC Leaders Summit in Lisbon, the chairman of the Kansspelautoriteit, Michel Groothuizen, sounded the alarm: while it is essential to regulate, over-regulation could seriously undermine the functioning of the market. In his view, there is a wide gap between theory and reality on the ground.
A European panel to discuss balance
Sitting around the table with his counterparts from Denmark, Norway, Malta and Portugal, Groothuizen took part in a panel moderated by Quirino Mancini from WH Partners, a law firm specialising in gambling legislation.
The theme of the day was how to strike the right balance between regulation that is strong enough to protect players and ensure legality, and regulation that is so strict that it renders the market dysfunctional. Groothuizen put it this way:
“In theory, I completely agree with you that over-regulation should be avoided and that it would be useful to find some sort of optimum. Where the market can work and where it is simplest, most effective and most impactful for us, as a supervisory authority, to regulate, so to speak.”
But, in his view, the gap between this theory and what actually happens is still too wide.
Red flags: when regulation becomes a straitjacket
Groothuizen is not alone in pointing the finger at the negative effects of overly rigid rules. One striking example is gambling advertising. Anders Dorph, from the Danish regulatory authority, pointed out that massive advertising campaigns had provoked a strong political reaction in several countries, often without calling into question the reasons for the initial regulation.
Another sensitive subject is online crypto-casinos. Here, traditional financial surveillance tools (banks, money laundering authorities) are less effective, or even powerless, when transactions are made in digital currencies. Groothuizen clearly admits that the influence of regulators in this area remains limited.
Towards an alliance against illegal gambling
Determined not to let the situation get out of hand, Groothuizen is proposing a strategy of closer collaboration. He mentions the creation of a task force in the Netherlands bringing together the Ksa, legal gaming suppliers, affiliates, banks and the government.
But not everyone is on the same wavelength. The banks, for example, are reluctant: for them, the work imposed by anti-money laundering laws is already onerous. Integrating the fight against illegal casinos represents an extra effort, especially as the landscape is mixed. The legal and the illegal are sometimes inseparable.
Affiliates, on the other hand, are showing an interesting dynamic. Groothuizen confides that many of them come up with ideas that the Ksa itself had not considered. Their creativity and knowledge of the field offer valuable leads.
Michel Groothuizen is a firm believer in balance. It’s not a question of deregulating everything, but of regulating intelligently. Avoiding excesses, encouraging cooperation between all players and using modern tools are the keys to ensuring that online gaming remains safe and innovative. The challenge remains a major one, particularly when it comes to cryptocurrencies, aggressive advertising and the effectiveness of banks in tracking down illegal platforms.