David Williams, Director of Corporate Affairs and Investor Relations at Rank Group, stated that “hit jobs” on the regulated industry have undermined regulatory credibility and strengthened the position of the black market.
Speaking on a panel at the Betting and Gaming Council (BGC) Annual General Meeting, focused on balancing tax, regulation, and the illegal market, Williams expressed concern over how targeted attacks on the regulated sector over the years have shaped a negative perception of the industry.
He noted: “For every hit job that there is on the licensed [sector], and I’m not saying we have been without blame down the years, that is not true, but some of it has been excessive. Each time it happens, it generates a round of applause from black market operators because, as the erosion in the credibility of licensed operators happens, the black market celebrates.”
Williams also described the growth of the black market in recent years as a “symptom of an imbalance” between three key factors, a view shared by Entain’s Group General Counsel and Chief Customer Care Officer, Simon Zinger.
Simon Zinger added that “The balance broke many years ago. I think the balance broke a long time ago when we started to tolerate criminality in our regulatory framework, when we started to tolerate people being able to go offshore.
“A lot of us are in agreement that the tax changes are a catalyst for needing to take more action.”
A Collective Approach
Panelists agreed that the fight against the black market will only be effective with collective action from all stakeholders, given the scale and complexity of the multinational organizations behind black market operators.
Although the UK government allocated £26 million ($32 million) to combat the black market, Zinger admitted that this is “a drop in the ocean” compared to the resources of organized criminals in countries like Russia and Georgia.
He revealed that Entain has established its own task force to gather data that can be shared with relevant authorities to guide enforcement actions against black market organizations.
At the same time, he called on external organizations, such as banks and social media platforms, to do more, describing Meta’s approach to curbing illegal gambling advertising as “negligent.”
Zinger added: “Banks are nowhere to be seen here. We’re working with intermediaries because big banks think of us as a sin industry and group us together with black market operators just because of gambling. Those intermediaries are not held to account in preventing the black market from working into their hands.”
Tax Challenges
By the time the budget was released in November, the gambling industry had largely resigned itself to the upcoming tax hike. However, Williams admitted that even in Rank’s worst-case forecasts, the company did not anticipate the implementation of a 40% remote gambling duty from April this year.
As a result, companies like Rank and Entain have been forced to make significant cuts to mitigate the impact, and Williams spoke candidly about the cost of these measures.
He emphasized: “You have to do immediately the financially responsible thing, so that is, for example, bringing the shutters down on above the line marketing, going out to renegotiate with suppliers, and, most painfully, you’ve got to address your cost base and that involves people. We know that there are people out there who don’t value the jobs in this industry, [but] we do, and it really hurts when you’ve got to do that.“
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