Joe Saumarez Smith, chairman of Bede Gaming, was a guest and roundtable chair at EGaming Review’s Power 50 conference in Marbella, Spain. He reviews the two day conference.
The Power 50 is one of my favourite online gaming conferences and not just because it is held in sunny Spain. The relatively small number of attendees and the fact most are the major decision makers within their companies is a big plus. It also means that in discussions people are more willing to share their experiences and admit what is going badly for them, as well as what is going superbly.
Unsurprisingly, the two main themes of this year’s Power 50 were what is happening to online gaming regulation and the potential opening up of the US market.
Regulation and in particular the need to ensure that Responsible Gambling measures are put in place by all operators was a particular theme across almost every panel and roundtable. The recent UK Gambling Commission fines were widely discussed and there was a general surprise that no operator had yet lost their licence. Over a couple of drinks later in the evening I heard that there is a £10 million plus fine for a household name in the offing, which will certainly cause some big problems for the overall industry.
The imminent announcements around PASPA – which at the time of the conference had not been announced but of course is now the main topic of all conversations – was something that was widely discussed. While most operators were excited about the prospect – especially those who already had businesses operating in New Jersey or Nevada – there was also a feeling that if PASPA was repealed that it wouldn’t be as simple to make money in the US as many commentators would be expecting. Some of the more experienced (or should I say cynical or realistic?) operators were concerned about the potential high levels of protectionism against European operators coming into the market but their greatest concern was the likely level of taxation. Most states seem to be expecting an enormous payday from sports betting and have very little idea about what the correct level of tax should be to allow for a competitive product. Talk was of multi million dollar licence fees, $20 million security bonds and tax rates similar to land-based casinos (mid 30% and upwards) which would make sports betting economically unviable. Add in the sports leagues’ desires for an integrity fee and it starts to get hard to see how anyone is either going to have a decent product or make any money.
I chaired two sessions of roundtable discussions about how the online gambling industry could improve its public image. Surprisingly they were two very different sessions. The first group agreed that the industry has a massive problem with society’s general perception of online gambling (and gambling altogether) while the second was more bullish, saying that the industry was going through a bad patch but that society needs to accept that gambling is a legal activity that pays high taxes and that it is better that it exists in full view rather than as a black market. There was a bit more of nuance to the arguments than that but the opinions did strike me as being quite different, depending on the individuals in the room. It would be pushing it to say that we agreed on a way to radically improve the industry’s public image but there was a feeling that in the UK in particular there is not a single person to whom the media can come to who represents the industry in a credible way. That person could acknowledge that gambling is a ‘sin’ industry but that it is better that it is taxed and highly regulated and that for a large percentage of customers gambling is a fun pastime which does not negatively impact them. However for the small number of people who have problem gambling then the industry should be showing that we support addiction programmes and that we do everything we can to stop them from developing those problems further and to stop gambling. How the industry finds and funds that person was not something we tackled in the hour long sessions but there did seem to be an acknowledgement that it would help a lot to have that person in place to represent the industry.
As ever, the Power 50 was brilliantly organised and I regret that I was not able to represent Bede Gaming better in the Annual Online Gambling Hill Climb Cycling Challenge over a 11km course, where I could only manage second place, 12 seconds behind David Shapton of Akur Capital.