‘Hit jobs’ against the regulated industry have ‘eroded’ regulatory credibility and emboldened the black market, according to Rank Group’s Director of Corporate Affairs and Investor Relations, David Williams.
Speaking on a panel at the Betting and Gaming Council’s (BGC) AGM focused on the balance between tax, regulation and the illegal market, Williams lamented the picture of the industry created by targeted takedowns of the regulated sector over the years.
He said: “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 the three factors – a viewpoint shared by Entain’s Group General Counsel and Chief Customer Care Officer, Simon Zinger.
Zinger said: “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.”
Taking a collective approach
Panellists on the day were united in their agreement that the fight against the black market will only sway in the favour of the authorities if there is a collective effort among all stakeholders, given the size and complexity of the multinational organisations behind black market operators.
Although the £26m allocated by the UK government to fight the black market was welcomed, Zinger admitted that it is a ‘drop in the ocean’ given the spending power of organised criminals in places like Russia and Georgia.
He revealed that Entain has set up its own task force to collate information that can be taken to the relevant authorities to guide enforcement action against black market organisations.
However, he also called organisations outside of the industry, such as banks and social media platforms, to do more, describing Meta as ‘negligent’ in its approach to curtailing illegal gambling advertising.
He 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 nightmares
By the time the budget came around in November, the gambling industry was largely resigned to its fate regarding a tax hike. However, Williams admitted that even in Rank’s worst-case scenario modelling, the company did not foresee the implementation of a 40% remote gambling duty from April of this year.
As a result, firms like Rank and Entain have been forced to cut back considerably to mitigate the impact, and Williams laid bare the cost of doing this.
He said: “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.“
