Can we trust gambling industry veterans to help regulate the industry?

Europe has a gambling problem and, specifically, an offshore gambling problem. 71% of the market’s total gambling spend is now channeled through unregulated operators that are not beholden to any local laws.

Despite our best intentions, channeling the biggest chunk of the money back into our legal markets has failed, and consumer protection measures seem to drive an ever-growing cohort of people and money outside the licensed market.

While I acknowledge that the news coming from the Netherlands is somewhat positive – 94% of gamblers stick to regulated operators - this does not change the fact that 51% of the total gambling spending is channeled through non-KSA-licensed websites.

This begs the question: are regulators failing, and is there something we can do to change things up?

Gambling regulation will continue to fail unless regulators incorporate the expertise of people with direct industry experience.

Without that insider knowledge, we will keep designing rules that look tough on paper but drive players offshore and increase harm – the exact opposite of what any sensible regulator is trying to achieve.

Can the gambling industry fix the problem?

The idea that the gambling industry can self-regulate is not only strange to the majority of people but also something I believe we should not waste our breath on, although I would still mention in passing that there are European markets where it works. We live in a society of checks and balances, and the phrase "who will guard the guards themselves" applies in this case.

Not everyone follows the rules, but the rules apply to everyone all the same. However, I believe there is a grain of truth in this statement. We have increasingly polarized the debate about gambling regulation and coached in terms such as "them" and "us."

The industry has largely limited itself to ticking the compliance boxes without delivering real change, while regulators have tried to look tougher but routinely either go too far or miss the target entirely. The problem is cyclical, with measures passed only to be realized, at a later point, that they have usually backfired, prompting new regulatory action that often intensifies the rules on the local market.

But what if gambling industry insiders could help fix at least some of the industry’s problems, boost channelization, improve safety, and raise standards, all while empowering the regulated market? I would argue that overlooking the advice of insiders to chase ill-defined political goals is largely detrimental.

I can only speak from my experience, but I feel it is relevant here. My work with Casino Guru has demonstrated how business and commercially motivated ventures can affect real and impactful change that ultimately serves the consumer.

Casino Guru developed a credible reviewing system, called the Safety Index, which demands significant resources, expertise, and experience to work. This system was based on impartiality – review casinos and assign ratings so that people can find the most trustworthy websites.

We have similarly spearheaded the Complaint Resolution Center, drawing from our extensive knowledge of the industry, to resolve and settle disputes between casinos and players, demonstrating that the private sector can drive positive experience for everyone.

I feel strongly about certain aspects of regulation, at least from a market point of view, and what I know is true is that regulators can do better if they tap into industry experience. Right now, channelization is, if not in tatters, then at least not optimal, gambling spending continues to go abroad, and we continue to tighten rules without a clear idea of whether this would blow back on us, with the Netherlands a recent example.

Differentiating between public sentiment and what needs to be done

Ask just about anyone if they support tighter restrictions on the gambling industry, and the answer will likely come quickly: "Absolutely!" Yet while this reaction may seem ethical and well-intentioned, it often leads to the opposite effect.

When regulators impose stricter rules in the name of pleasing the public, licensed operators are weakened, while unregulated and black-market platforms grow stronger. Over time, this cycle repeats itself until many start believing that a complete gambling ban is the only remaining solution — a move that would ultimately be disastrous.

Regulators have been trying to address a public concern, whereas they should have focused on the hard facts – over-regulation doesn’t work, because it often comes from a lack of understanding of the industry.

We hope to see the number of people experiencing gambling-related problems magically shrink, but we end with arguably more people spending unreasonable amounts of money with websites that may not have their best interests at heart.

Worse still, these websites often make local markets less competitive, and, in the process, create an unsafe experience. As I have argued before, consumers do not care about regulation. They favor bonuses and whether or not they are having fun.

Yet, regulators want to appear tough on the industry, and I welcome this, because a steady hand at the rudder that doesn’t give in to private interests is precisely what a regulator ought to be doing. However, I urge caution and ask if regulators with no inside knowledge of the industry can really regulate it to the effects they seek to achieve.

Hiring the right people matters, and I understand it’s a big leap from consulting with former insiders to letting them run the whole thing, but watchdogs need to be more open-minded about understanding the industry’s needs, because this is what will ultimately protect consumers. Regulators hardly need chief executives who once ran the gambling company they regulated against, but their voices, if well-meant, would be best heard. Right now, we continue to experience a withdrawal from the regulated gambling market, which hurts businesses and still exposes many people to gambling-related harm.

We could probably conclude that "it’s better this way," allowing a small percentage of people to gamble offshore and bear the consequences of their actions, but ultimately, we as a society are enmeshed, and one man’s suffering has a knock-on impact.

This is not to say that the industry should be spared the tough action that is meaningful and impactful – effortless affordability checks, age restrictions, and tougher control on gambling advertising that is inundating broadcasts, along with a tech-savvy approach to tackling online gambling ads, are a must and non-negotiable.

Paying the political price

Regulators are not inured to political squabbling. Gambling is a politically volatile topic, and political opportunists could use any perceived leniency on the sector as the "ultimate proof" that a given government is acting softly, or even in cahoots with the industry.

What we are seeing, across markets, is a pattern of repeated failure. Italy has moved to eradicate all gambling advertising. Spain is oscillating between hard and soft restrictions.

The United Kingdom is preparing a tax hike that has sent the industry into a tailspin, prompting a swarm of damage-control campaigns invoking "the good the industry does" and "the tax money it delivers." Germany remains in a permanent stalemate; regulators and trade bodies are locked in disputes over methodology. And the Netherlands, to its credit, may be the only regulator openly acknowledging mistakes as they arise.

Hiring gambling industry veterans – not a silver bullet – but worth a shot

With this said, by tapping into insiders’ experience and knowledge, we could see meaningful action taken. Industry insiders can shake things up, and given executive powers, they may muster important changes that will still need to be overseen by regulators and aligned with their strong understanding of regulatory frameworks.

In light of all this, the conclusion is unavoidable: regulation designed in isolation from industry expertise will most likely continue to falter or, worse still, backfire. Bringing in people who understand the machinery from the inside is not something that should be misconstrued as a weakness or concession to powerful interests.

Rather, it is a prerequisite for creating regulation that actually protects the public rather than pushing them offshore. I can understand the qualms about making this decision, and that it would be largely unpopular, but we need to wake up and look at the hard facts. Regulators are losing the fight against unregulated operators.

Ironically, while we have spent the better part of regulatory attempts around the idea that we need to be protected from the gambling industry and its predatory instincts, we have failed to maintain the core principle of checks and balances: Who will guard the guards themselves? Who will ensure that regulators are acting in the players’ best interests?

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