Gaming in face of Covid-19: industry and regulators united on responsibility and fight against illegality
Written by Editorial Board
In the international Digital Panel of Gioconews.it, a first-level group of regulators analyzes the effects of the Covid-19 crisis on the gaming sector and proposes a restart plan.
“In an emergency like the one we are experiencing today, it is crucial within the global gaming industry to look at the data to understand how things have gone and how the sector is evolving. We have seen growth in online casinos and other verticals, but we need to understand why. Certainly, operators must very quickly adapt to new opportunities and those mainly land-based must give always more importance to their digital section. I doubt, therefore, that these operators return to be just like before."
This is the analysis by Heathcliff Farrugia, Ceo of the Malta Gaming Authority, who spoke at the GiocoNews.it Digital Panel with the main international gaming experts to naturally speak of the effects of Covid-19 on the sector (here, the full live streaming of the event).
According to Farrugia “it will be difficult to predict the future, many times we have seen decisions made without relying on some data and sure proofs and I believe that if we want to act well both from the point of view of the operator and the regulator, we must carefully analyze all the elements at disposal". By focusing, in particular, on the need to work more and better to combat the illegal market: "To be honest - he adds - I believe that the whole system, therefore governments, regulators and all those involved, we focus too much energy on licensed and legal operators, forgetting - and sometimes it is potentially convenient not to admit it - that the black market exists. Indeed, there is a black market, which is huge and in a situation like this, where there are these restrictions, black market grows. But here there is no consumer protection, we have no idea what happens, we have no idea if there is responsible gaming, we have no idea if there is money laundering or not. Unfortunately, many times because of the black market that doesn't have to implement a series of restrictions from different countries, they are able to give a better offer than that of legal operators because they have less costs to be managed”.
We are in a situation where, I would say, 80 percent of each country's energy is concentrated on licensed operators, who pay taxes, who have all responsible gambling measures in place. And only 20 percent of the energy is aimed at illegal operators who bypass all regulations, who have not purchased licenses from anyone, who simply have apps to attract players. Sometimes, we don't understand that in the online world, a player, most of the players, if he finds an online site, he bets on it and maybe even wins some money, and everything is fine for them. Without wondering if it is legal or not. As long as they get the money back, it's all right for them. And unfortunately some of the black market companies become popular just based on this aspect. So in my opinion, we have to dedicate more energy or at least give the same importance in terms of restrictions to legal operators, but we have to dedicate the same energy in stopping the black market."
Also Birgitte Sand, Iagr Patron for Denmark and with over 12 years of experience leading the Denmark gambling authority, thinks the same. "As regulators, we have never been more busy than today and I believe that all regulators in the world are working hard and aware of the changes taking place in the gaming world, ready for short and long term changes".
"Data is undoubtedly the key and the support for the opening of the land-based market. In times of crisis it is important not to panic and not forget the long-term perspective. We have to stay connected, it is not a race but we have to find solutions on how to support the legal market and protect ourselves from illegal gaming", Sand ends. "It is very important that regulators make choices, they can't take care of everything, and that they stay together and support each other."
"With Covid-19 we have to face a big problem. We know a lot but at the same time too little. We have to do research and find the best practices. Which direction should the industry take? I think it won't change much"
Pieter Remmers, president of Assissa Consultancy Europe, a body that worked on responsible gaming policies and programs in many countries, focuses in particular on communication on social media - "a good means to stay in contact during the lockdown, but meeting people physically it is not the same", he underlines - remembering that the United Kingdom has blocked advertising but that we should also" look at social media such as Facebook. The influence of advertising is limited, while the limits today don't concern social networks, introducing ineffective restrictions". And, often, even harmful ones, from the point of view of opposing illegality”.
As Andrea Rossi, Managing Director Southern Europe & Latam - Betsson Group/StarCasino, highlights, who in addition to explaining how the industry is working to cope with the emergency, also focuses on the issue of restrictions and legality. "
"I believe that, in handling an emergency, we really have to understand both sides and both points of view: the political and the commercial one. As an industry, we have probably been too 'aggressive' in the past, too commercial I would say, we never focused on what I like to call 'brand strategy'. For example, in Italy with our Starcasino brand before the advertising ban was put in place, we had already decided to remove all bonuses and announcements. And honestly we haven't seen a change in acquisitions: indeed, I have to say that we have increased acquisitions. And this makes me think: we are doing something that we probably believe is good for business, but in reality it is not. So I would like to put on the table the proposal to say: we have the possibility of promoting legal brands in an informative way, therefore in a way in which we can inform the customer more than pushing some offer, as in the end all the successful brands we see do, from nike to others. Advertising today must be built on how you perceive it in terms of transparency. This is the way I would like to discuss to be introduced into gaming, instead of going ahead with the bans. Therefore, let's try to embrace different concepts by making our industry more mature in this sense. This may be the best opportunity, in my opinion".
From the business point of view, however: "The crisis from Covid-19 has affected all operators, some more, especially betting operators, while those of online casinos have increased their activity. Our strategy has been to diversify the product and good casino activity" Rossi explains." Sports betting is important to us but casinos can mitigate their decrease. People are more at home and looking for entertainment. Although we have seen an increase in new customers on our platform , we didn't see an increase in the expense".
The key points to move forward? “A strong (mutual) cooperation with regulators, a different way of communicating with customers, the differentiation of products, which will have to increase and be transversal, not just vertical. Unfortunately, there is also a risk that customers move to illegal operators, because of the ban on advertising"
According to Francesco Rodano, Playtech's Chief Policy Officer, “Covid-19 has significantly changed our operating way and we are trying to learn a lot from this situation, which however remains very negative. This has shown that the human being can adapt to situations. In Playtech, we have intensified virtual programs and social responsibility towards consumers".
Gaming data records a 30 percent fall in the sector and it means that even if the industry reacted very quickly, there was no total online transformation. There is greater attention from operators in this market, this is clear.
For this reason, also the approach to gaming by the players has changed: “Bingo and poker players, social gaming players in general have grown, to try more entertainment experience than this, compared to the strong emotions that pure gambling can give. And our intention is to continue protecting problematic players" Rodano continues.
Best practices to be absolutely maintained in order to also create a definitely more performing and social responsible industry: “We should use these attentions in the future in retail gambling too - the CPO of Playtech ends - there may be the risk that the revenues will hardly return to the levels of before, but this greater attention will lead to greater sustainability in the sector with players more attentive to entertainment and their spending power".
The president of Glms, Ludovico Calvi, thinks the same way and highlights the necessary steps for gaming companies to adapt to the Covid-19 emergency. "Review organizational processes to adapt to existing needs." This is what gaming companies will have to do according to Calvi. But it is also "important to carry out tax review programs, to allow companies to continue through a difficult year." Attention also to the products that have a new momentum at present: "We must make esports solid. They are a great opportunity and there is a high rate of attention. What is the new normal? The human being has returned to the center of many companies. We also see how customer behavior has changed. We have also seen the increase in the level of compliance. Governments need to be careful about the degree of compliance. Data are the basis on which decisions will be taken. What do I think is important? We have never experienced anything like this and I don't believe who is sure to exactly define what will happen, because it has never happened before. "
"It is important to create credibility - Calvi ends - and I warn, as licensed operators, that we must communicate with customers. I can see that we must supervise sports organizations more and we cannot lose credibility, not only in the world of gaming but also of sport. We must create credibility towards communication. We must be more careful about what happens in sport."