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NEWS 27 November 2019

Analysis: Regulators should replicate Gambling Commission and Spelinspektionen’s partnership

By Matthew Enderby

The Gambling Commission and Spelinspektionen shook hands over a partnership that will increase cooperation between the two regulators. They are both responsible for overseeing two of gaming’s largest markets and through this partnership, can build and share knowledge. This is a forward-thinking initiative and should it be successful, must be replicated across the global gaming industry.

The Memorandum of Understanding (MoU) is set up to support closer working between the two organisations and to encourage the sharing of best practices, such as regulatory policies and procedures. One of these regulators needed this relationship more than the other.

While the Gambling Commission often receives criticism from operators, suppliers, journalists and politicians; Spelinspektionen has faced a far more critical year. In January, when the Swedish market opened up to private operators, the regulator rebranded and prepared for a busy year. Lotteriinspektionen became Spelinspektionen and began handing out operating licenses for companies looking to make the most of the jurisdiction.

It has nearly been a full year since the change and I can picture the phones in the offices of Spelinspektionen; ringing immediately after each call is ended. Throughout the year, we have seen case after case of operators complaining about how the Swedish market is regulated.

One of the recent and stand-out examples is Global Gaming; it reported a 76% year-on-year revenue drop to SEK 60.3m ($6.3m) for Q3. The operator’s CEO Tobias Fagerlund said: “Saying it was dark times would be a gross understatement. The regulator’s eagerness to show decisiveness, instead of offering guidance and support in how the new regulations should be interpreted, has led to the present situation.

“Fundamentally, I am very positive about the Swedish re-regulation but, like many others, am of the opinion the so-called channelisation does not work satisfactorily.”

It is quite clear that while Fagerlund supports the re-regulation, he does not believe it has been carried out in the best way. Global Gaming had its license revoked in June and has since seen its appeals rejected. Fagerlund emphasized to Gambling Insider that the regulator made a mistake in enforcing a law that is unclear and that Global Gaming would get its license back.

The CEO goes on to add that Spelinspektionen seems determined to focus on companies that have applied for licenses and are seeking help with legislation, rather than those who evade the law altogether and operate illegally.

With its new partnership, Spelinspektionen can go to the Gambling Commission for advice on offering support and guidance. The Gambling Commission invited trade journalists to explain its current expectations of operators at a press event; it would be advisable for Spelinspektionen to do something similar as a start.

Online is where the majority of revenue is accumulated now and where most players place their bets. This makes it increasingly essential to view the gaming industry as operating in a world-encompassing space. Yes, we can still break down markets country-by-country. We can still look at state-by-state comparisons too. However, we must accept that this is a global industry, especially where the online vertical is concerned, and regulators must anticipate innovations and stay ahead of them.

The forming of this memorandum between the Gambling Commission and Spelinspektionen does not mean they have never worked together before. I’m sure there have been times when one regulator needed to chase the other for some information or expertise. But to draft formal press releases and push the information far and wide marks a commitment to the cause and sends a message to operators.

Business models and programs can be replicated in country after country. Should an operator lose its license for one market, it can spring up in the next and at a quick pace too. This will often encourage laziness from operators; instead of fixing the issue that lost them a license, why not just move on and see if the next regulator notices? Now with the Gambling Commission and Spelinspektionen’s agreement, operators, especially offshore companies, will think twice and hopping from country to country.

The agreement went live on 11 November and we will monitor events to see how the partnership pays off. The sharing of information is critical to the success of this initiative and it is likely we will see further regulators commence similar causes.

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