moderator: christian kalb (ck consulting) philadelphia – 29 october 2014 internet gambling session
TRANSCRIPT
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MODERATOR: CHRISTIAN KALB (CK CONSULTING)
PHILADELPHIA – 29 OCTOBER 2014
INTERNET GAMBLING SESSION
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Peter DeRaedt, President, Gaming Standards Association (USA)
Richard Guay, Member, Quebec Provincial Online Gambling Working Group (Canada)
Edward Lalumbe, Chief Operating Officer, Gauteng Gambling Board (South Africa)
Katrina Nepomuceno, Legal Counsel, First Cagayan Leisure and Resort Corporation (Philippines)
Jamie Nettleton, Partner, Addisons (Australia)
SPEAKERS
IAGR CONFERENCE - 29 October 2014
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Challenges on Internet gambling in different regions of the world
Liberal gambling or prudential policy?
Main issues regarding consumer’s protection
The future of the Internet gambling market
OBJECTIVES OF THE PANEL
IAGR CONFERENCE - 29 October 2014
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1. PRESENTATION OF THE INTERNET GAMBLING
MARKET
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TOTAL WORLDWIDE GAMBLING MARKET: AROUND US$ 400bn
(Gross Win – 2012)
Source : H2 Gambling (2013)
IAGR CONFERENCE - 29 October 2014
34%
20%
29%
13%
4%
CasinoGaming machinesLotteriesBettingBingo & others
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INTERACTIVE GAMBLING ONLY REPRESENTS 10% OF THE GAMBLING
INDUSTRY
Source : H2 Gambling
IAGR CONFERENCE - 29 October 2014
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
P
2010
E
2011
E
2012
E
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
1.3% 1.5% 1.9%2.4% 2.6% 3.0%
3.8%
4.9%5.8% 5.6%
7.0%
7.9%8.6%
9.2% 9.4%
Interactive Gambling Gross Win as a percentage of Total Gambling
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EUROPE LEADING THE INTERACTIVE GAMBLING WORLD THANKS TO
REGULATIONS
Source : H2 GamblingIAGR CONFERENCE - 29 October 2014
Interactive Gambling Gross Win by player region as a percentage (2012)
45%
30%
14%
7%
3% 1%
EuropeAsia & Middle EastNorth AmericaOceaniaLatin America & Car-ibbean Africa
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LEADING 10 COUNTRIES(INTERACTIVE GAMBLING)
Source : H2 Gambling / CK ConsultingIAGR CONFERENCE - 29 October 2014
Percentage of each country in the total interactive gambling gross win (2012)
ROW
Japa
nUK
USAChin
a
Nordic
s
Austra
lia
Franc
eIta
ly
Canad
a
Ger
man
y0%2%4%6%8%
10%12%14%16%18%20%
18%
15%14%
11% 11%8%
6%5%
4% 4% 4%
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BETTING TO ATTRACT CUSTOMERSCASINO TO MAKE PROFITS
Source : H2 GamblingIAGR CONFERENCE - 29 October 2014
Interactive Gambling Gross Win by product as a percentage (2012)
45%
22%
12%
9%
6%6%
BettingCasinoPokerState LotteriesBingoOthers
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MOST OF THE INTERACTIVE GAMBLING IS OFFSHORE
Source : H2 GamblingIAGR CONFERENCE - 29 October 2014
Onshore Interactive Gambling as a percentage of total interactive gambling
(Gross Win)
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
P
2013
E
2014
E
2015
E
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
41.9%
37.0%
32.4% 30.9%33.2% 33.9% 33.6% 33.6%
36.2%39.5%
42.0%44.5%
46.5%
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OFFSHORE GROSS WIN IS IMPORTANTOFFSHORE SALES (TURNOVER) ARE HUGE
EXAMPLE OF SPORTS BETTING
Source : Sorbonne University (2014)IAGR CONFERENCE - 29 October 2014
Legal market15%
Illegal market85%
Offshore sports betting sales: Between US$ 300 and 1,000bn (2012)
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2. GAMBLING REGULATORY POLICIES
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A TRADITIONAL QUESTION:
WHAT IS THE BEST REGULATORY POLICY?
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ANOTHER QUESTION: FOR WHO ?
IAGR CONFERENCE - 29 October 2014
FOR SOCIETY
?
FOR GAMBLE
RS?
FOR THE STATE?
FOR OPERAT
ORS?
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ANOTHER QUESTION: WHAT IS THE STATE’S MAIN OBJECTIVE ?
IAGR CONFERENCE - 29 October 2014
Chanel gambling and fight illegal gambling (Example : Belgium, France / Online)
Protection public and social order(Example: Canada, Finland, Morocco, Singapore)
Money for the State(Example: Cagayan, Italy, Malta)
Employment(Example: Antigua, UK in 2001)
Some countries have no clear objectives !
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A FIRST TENDENCY: LIBERAL OR PRUDENTIAL ?
IAGR CONFERENCE - 29 October 2014
EU / Gambling havens: Liberal betting
Africa/America/Asia: Prudential policy
Oceania: The balance ?
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A SECOND ANSWER: WHAT FIGHT AGAINST ILLEGAL GAMBLING ?
IAGR CONFERENCE - 29 October 2014
No or weak fight: Gambling is treated like a “classical” sector
Strong fight: Black lists, ISP and payment blocking, work with search
engines, etc.
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MAPPING OF STATE’S ATTITUDES TOWARDS GAMBLING
IAGR CONFERENCE - 29 October 2014
Priority n°1 = Competitive online gambling market
Priority n°1 = Protection of public and social order risks
Strong fight against illegal gambling
Weak fight against illegal gambling
AUSTRALIA
UK
SOUTH AFRICA
USA
ALDERNEY
CHINA
GERMANY
CANADA
BELGIUM
AUSTRIA
SPAIN
DENMARK
COSTA RICA
SOUTH KOREA
FRANCE
ISLE OF MANMALTA
ITALY
JAPAN
PHILIPPINES
MEXICO
RUSSIA
CZECH REPUBLIC
POLAND SWITZERLAND
SWEDEN
CAGAYAN
Source : Sorbonne University (2014)
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What online requirements to fight social risks ? (stake limits, limitation of payment methods)
What requirements to fight money laundering ? (KYC, obligations to report)
What requirements to fight match fixing? (national platform, international convention, risky bets, alerts)
OTHER IMPORTANT ISSUES REGARDING INTERNET GAMBLING
IAGR CONFERENCE - 29 October 2014
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THREE REMARKS TO FINISH
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THERE ARE OTHER WAYS OF THINKING THAN THE EUROPEAN ONE
IAGR CONFERENCE - 29 October 2014
Monopoly 18%
Prohibition56%
Licences21%
INTERACTIVE SPORTS BETTING (204 COUNTRIES)
Source : Sorbonne University (2014)
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FOR BIG COUNTRIES, OPEN MARKETS DON’T ALWAYS RAISE MONEY
(Case study: sports betting in Italy)
IAGR CONFERENCE - 29 October 2014
ITALY (in €m) 1997 2011 2011/1997
Sales (sports betting) € 2,000m(Totocalcio)
€ 4,000m(mainly fixed odds)
+100%
GGR (sports betting) € 1,000m Around € 800m -20%
Level of betting taxes 36% of sales 2 to 5% of sales (*)
Sports betting taxes € 720m Around € 140m - 81%
(*) Funny thing : the level of betting taxes might reach 20% of GGR in the futureWhat will happen: pay out rates increase, more risks for society and a new potential decrease of betting taxes ! And then more and more slot machines…
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WHAT KIND OF GAMBLING CUSTOMERS DO WE WANT ?
IAGR CONFERENCE - 29 October 2014
Recreational customers: Play for “Fun”
Professional customers: (Including traders, problem gamblers, money launderers, match fixers, criminals)
Gambling: 10% of the customers represent 70 to
95% of Gross Win
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3. PRESENTATION BY THE SPEAKERS
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4. Discussion topic n°1:
Liberal Internet gambling vs. prudential policies
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Gambling operators generally lobby to reduce taxes/gambling duties. What is the point of view of the regulators on this issue ?
DISCUSSION 1
IAGR CONFERENCE - 29 October 2014
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5. Discussion topic n°2:
Main issues regarding the consumer’s protection
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Anonymity of Internet customers and modern electronic payment means create new risks for society. How do you tackle these risks?
A small number of online gamblers “make” the market and realize up to 90% of the revenues of the gambling companies. Some of theses gamblers operate in a grey area. As a regulator, can you accept these “risky” people?
DISCUSSION 2
IAGR CONFERENCE - 29 October 2014
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6. Discussion topic n°3:
The future of the Internet gambling market
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The poker market has now been decreasing tremendously for a few years. Do you think that it is possible to change this tendency ?
Fight against illegal gambling with efficient tools becomes a key issue for many States who want to protect society. Will your country act in that way?
DISCUSSION 3
IAGR CONFERENCE - 29 October 2014
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7. INTERACTIVE SESSION