RGA refutes online gambling report in UK newspaper

Clive Hawkswood,  the chief executive of the trade body Remote Gambling Association, responded Tuesday to weekend reports in The Independent newspaper that ‘A huge increase in gambling addicts will make Britain’s obsession with online betting a GBP 2 billion business’, by calling the article “inaccurate” and “sensational”.

He added that there is no hard evidence that problem gambling, let alone addiction, is ‘soaring’.

“Although it is something we have become accustomed to, it is always disappointing when a subject as serious as problem gambling is dealt with in such an inaccurate and sensationalist manner,” Hawkswood explained.

“We should be very clear that there is no hard evidence that problem gambling, let alone addiction, is ‘soaring’.  The figures used refer to the results of the last UK Prevalence Study from 2010 so it is hardly new research.

“The Gambling Commission said it may be a blip rather than an upward trend and of the two measures used it stated that one showed a change that is not statistically relevant and the other was at the margins of statistical relevance.

“However, even if there has been a slight increase, there is absolutely nothing to show that it is as a result of online gambling.”

The Association was also voluble Tuesday on high licensing fees in the Hungarian market, and on the Greek protectionist and monopolistic situation.

Hungary

On Hungary, the RGA warned that the eastern European nation risks closing its market with high licensing fees for online gambling operators.

The Association said it is concerned that the presence of high ‘one off’ licensing fees within the new Hungarian Gambling Act could threaten the creation of a fully liberalised online gambling market.

“The Hungarian government has submitted an amendment of their 1991 Gambling Act to the European Commission which proposes a gross profits tax (GPT) of 20 per cent for licensed operators,” the RGA statement revealed. “The industry considers GPT the correct method of taxation and is encouraged by its presence within the legislation.

“However, alongside the tax proposals, the government is also proposing that operators pay a concession fee of HUF 100 million (GBP 300,000) for each type of game they offer in order to gain a five year licence.

“State owned operator Szerencsejatek ZRT would be granted a license automatically with the Hungarian government deciding on all other applications. The RGA considers the concession fees to be unrealistically high and likely to deter many operators from entering the market.”

The RGA statement claims that several leading experts have predicted that as the bill would frustrate entry to the market for the majority of operators, it would reduce consumer choice and lead to a reduction in expected tax revenues.

Hawkswood, said: “If the new regime is to be successful then it must offer appropriate regulation and a viable fiscal framework. Unfortunately, the combination of the new gambling tax and an unrealistically high concession fee would frustrate entry to the Hungarian market.

He added: “International experience clearly shows that if the right balance can be achieved then it will result in clear benefits for the Hungarian Government and Hungarian consumers. Unfortunately we also have experience, from jurisdictions such as France, that measures which effectively prevent the establishment of a competitive domestic market will encounter very serious problems and will lead to consumers continuing to seek out operators in other jurisdictions.”

Greece

The Remote Gaming Association has also complained to the European Commission this week, telling it that Greek enforcement measures against online gambling firms are “unworkable and illegal”.

The RGA said that the enforcement measures introduced by the Greek government to protect the OPAP online gambling monopoly are illegal and unworkable, and the trade body called on the Greek administration to regulate an open market in online gambling for the benefit of Greek customers, the government and online operators.

The RGA, which represents the majority of the largest European remote gambling operators, has had to make a number of complaints both directly to the Greek authorities and to the European Commission about the Greek gambling regime, the body said in a statement Tuesday.

The key concern is the extension of OPAP’s land based monopoly to online gambling products and this is the subject of a separate complaint.

“In order to protect this monopoly, the Greek Gaming Commission issued a Decision which sets out a range of enforcement measures including the blocking of other gambling websites (internet blocking), and preventing banks from facilitating gambling transactions (payments blocking),” the statement notes.

“The sanctions include fines on Operators, Internet Service Providers, Media companies, Payment/Credit Institutions and even the consumers themselves.”

The Association said that it has complained again to the European Commission because internet and payment blocking disproportionately restricts the freedom to provide services, the free movement of capital and payments, and the fundamental freedoms to conduct a business, provide and receive information and of respect for privacy, in violation of EU law.

Hawkswood said: “The measures that the Greek government want to introduce have not worked in other jurisdictions such as Norway, where the regulator has admitted that its online payments ban has not been a success as research showed more than half of internet gamblers now play as often as they did before the prohibition.

“Furthermore there is no legal justification for ISP and PSP blocking.

“Members of the RGA expect all operators to be offered a level playing field across Europe. In Greece we have OPAP’s monopoly being protected and extended for a short term gain when in the long run the Greek people would benefit from additional choice and better value if the remote gambling market is opened up.”

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