Mike de Graaff: “Reinventing the wheel is not possible”

Mike de Graaff, Chief Compliance Officer at BetComply, sat down with Casino Guru News to discuss the current state of iGaming regulation. While he acknowledges the good intentions behind most regulatory efforts, de Graaff argues that there’s often a mismatch between what regulators aim to achieve and what their policies actually deliver. He outlines the key do’s and don’ts of effective regulation, cautioning that every regulator tries to "reinvent the wheel" — but, as he puts it, that’s simply not possible.

Q: For the first time in its history, the iGaming industry is witnessing an unprecedented level of scrutiny and a rapid shift in regulatory focus to consumer protection in its purest form. While this is the right sentiment, do you think execution has been aligned with the operational realities of the industry?

Not consistently, no. Everyone starts with the same goals: protecting consumers and fighting crime (and generating tax), but some frameworks simply don’t align with the operational reality of the industry or with how players actually behave. Especially when we see blanket-style rules, such as rigid affordability thresholds or mandatory interventions, the effect of the framework starts to diminish.

Q: One example of a mismatch between intentions and consequences has been the Netherlands, where the local regulator admitted that a recent increase in the tax rate has negatively affected the competitiveness of the local market and possibly exposed players to more harm. In your experience, are regulators generally reflective about the unintended consequences of their policies?

Not usually, the Netherlands was an exception, and they deserve credit for admitting it. The industry had warned about the likely consequences before implementation, and unfortunately, they turned out to be right. The belief that you can protect players more by restricting licensed operators more, or generate more tax revenue by simply raising the rate, doesn’t align with reality. And the data now shows it.

Q:How can the industry communicate to regulators and lawmakers the need for more balanced gambling measures to ensure that the legal market can compete effectively against offshore operators?

By presenting evidence that aligns with the regulator’s goals. Regulators don’t care if a licensed operator’s margins are under pressure; they care about consumer protection and channelization. So speak their language. Focus your communication entirely on how balanced measures keep players in the regulated market and make protection effective.

Q:Why do so many markets, despite years of development, still lose close to 50% of their total gambling spending to offshore operators? And is there a way for the regulated market to catch up?

Because players like to play, and they like to get something in return for it. It’s quite simple. If you’re stopped at every step, asked if you’re still mentally okay, forced to provide endless proof of income or wellbeing, and then face a slow product (spin delays, no near-misses, no bonuses), while two clicks away there’s a casino offering all of that without friction, the temptation is obvious.

Q:In your experience, is there a market that has come the closest to regulating its iGaming industry in a way that aligns with your view of what a regulated gambling market should look like?

Denmark is getting close to getting it right. The rules are firm but predictable, enforcement is consistent, and the regulator listens. That combination keeps the market competitive and compliant.

Q:Italy is known for being particularly stringent when it comes to its gambling rules. How does Italy fare in terms of limiting the impact of offshore operators compared to places such as Sweden and the Netherlands?

With the recent overhaul of Italian gambling law taking effect soon, we’ll have to see how it plays out. A €7 million license fee, around 25% GGR tax, no multi-brand strategies, and strict RG measures; those are heavy conditions. Licensed operators will expect the regulator to protect their interests in return. Whether that happens, we’ll find out.

Q:Why do you think we see regulators facing the same recurring challenges when proposing draft laws for regulating new gambling jurisdictions?

Two things happen over and over: regulators say they’ve learned from other markets, but then don’t; and they don’t trust the industry’s input, even when it’s valuable. Every government seems convinced it can reinvent the wheel, and it can’t.

Q:Given the current state of regulation in Europe, do you think local jurisdictions can ever completely defeat the offshore gambling market?

A: Not entirely, but the optimistic side of me believes we can build an onshore market strong enough to compete. Success means creating a regulated environment so competitive, safe, and accessible that the offshore option becomes irrelevant for most players.

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