milestone_report_gibraltar2012_digital2

Online Gaming
Regulation and Transparency to Build Trust
Online Gaming leaving nothing to chance
Interview with Mr John Anderson, Deputy Chairman, Gibraltar Betting & Gaming Association
John Anderson is the Deputy Chairman of the Gibraltar Betting & Gaming Association (GBGA). He is also Non-executive Director
of 888 Holdings plc; where he was CEO from 2000 until 2006. During that time he took 888 Holdings to become a member of
the London Stock Exchange. Prior to joining the group in 2000, John had been CEO of Burford Holdings plc – a London Stock
Exchange listed company. He had taken Burford Holdings private via an MBO and still holds the post of Chairman. John had
joined Burford in 1996 from Ladbroke Group plc, where he had been a main Board Director. Ladbroke Group is a FTSE 100
London-listed company where he had spent 26 years. John is Non-executive Director of several other gaming and property
companies, and also holds the post of Chairman of the IGC, an international industry body for betting and gaming.
Milestone GRP - Why was the GBGA created and what role
does it play in the Online Gaming industry?
Mr John Anderson - The GBGA was formed in 2004 to act as an
industry body whose interests were aligned with best practice. It
represents its members only as an industry spokesman and we
have very carefully avoided representing an individual company
on its own. We feel that this maintains the integrity of the GBGA,
which is fundamental when it is talking to Government bodies or
any other bodies who have an interest in the industry.
For instance, we as a body pushed for a regulatory system to be
brought in and all our members were in agreement. This actually
costs us very little as a by-product. We at the GBGA consider
that the more regulated and transparent we are, the more profitable
we will be. After all, transparency and regulation remove
the cloud of mistrust in an ever-changing industry.
The GBGA’s remit has grown from time to time dependent upon
whether or not there are industry issues to address. On a constantly
changing canvas it continues to carry out its roles and
maintain its position as a highly respected body in the world of
business.
Milestone GRP - How does GBGA work to promote a level
playing fi eld for the operators and access to appropriate entertainment
for consumers?
Mr Anderson- The GBGA is an industry body in that it works for
the benefit of all its members. It does have a small number of
behaviorally important membership requirements but these are
precipitous and not toxic. In this way our members all share the
same goals of the GBGA, which are, for instance, to agree upon
methods and procedures giving us best practice operationally.
This gives the marketplace a level playing field on which each
operator can build.
Milestone GRP - How do you compare the operators in Gibraltar
to other operators elsewhere with regards to best
practices, innovation and technological development?
Mr Anderson - I have always said that Gibraltar has the “crème
de la crème” of the industry operators. The line up of operators
is a who’s who of the industry, including many who are London
Stock Exchange members. This situation is due to the Government
being very selective about who they grant a license to.
That being the standard which exists, it will be of no surprise
to know that regulation has been welcomed and the business
systems have been continually upgraded by all, in order to give
best practice to all solutions from a technological development
point of view and a consumer protection position. I have often
made the point that our systems are probably amongst the
best in the world and anyone who visits our facilities will soon
see this.
Milestone GRP - How does Gibraltar specifi cally add value
compared to other jurisdictions, for instance, in terms of regulation,
the agility of its key institutions and its infrastructure?
Mr Anderson - The Government of Gibraltar understands the
online gaming industry and its professionalism. The infrastructure
required to run the industry has been improved enormously.
This improvement has only transpired due to the empathy the
Government has with the industry.
Milestone GRP - What impact does Gibraltar’s Online Gaming
sector have on consumers in terms of service & entertainment,
responsible gaming and trust? How does this contribute
to the ‘acceptability’ of Online Gaming as a legitimate and
successful business?
Mr Anderson - I have often said that the two most important
words in our industry are ‘trust me’. Trust is vital for brand building
and customer numbers. Once you have trust your membership
numbers go up and people come for a long lifetime value
with the operators. It is clear in the industry that first-mover advantage
sticks and lasts for some time.
Once customers come, based on the trust factor, they will stay
for some time. We in Gibraltar sell an entertainment experience
and if necessary we even teach people how to play enjoyably
and responsibly and how to appreciate the games over a long
period of time. As I stated earlier, this is part of our transparency
and regulation.
Milestone GRP - What is the future for the industry globally, in
terms of diversifi cation, licensing, regulation and the opening
of new markets?
Source: H2Gambling Capital, January 2011
Mr Anderson - The future of the industry is an interesting topic.
Regulated markets are now the future if not the norm. Looking at
ten years ago, regulation hardly existed. This regulatory market
situation will continue into the future.
Licensing will be more and more difficult for operators with fewer
start-ups due to the high entry cost barrier. This will leave
only the best operators left standing and this can only help
Gibraltar’s operators.
Milestone GRP - What can be learnt from Gibraltar’s success?
Do you see opportunities for other jurisdictions to replicate
it?
Mr Anderson - We have proved in Gibraltar that the case for
online gaming is sound. The model we see in Gibraltar is a
good one and is likely to be copied, especially in the world
environment of financial crisis in which we find ourselves. In
fact, the case is extremely compelling and Europe and the USA
are adapting to take on board the industry with all the benefits
it has.
Global Market for Online Gaming
Geographical Distribution 2010 / Expected Growth 2011
Online Gaming Global Market
Market Share 2010 & Projected Growth 2011
North America
Share: 20,7%
Growth: 0,0%
Central & South America
Share: 3,2%
Growth: 10,3%
US$ (billion)
40
35
30
25
20
15
10
Europe
Share: 44,2%
Growth: 15,2%
Africa
Share: 1,2%
Growth: 12,2%
5
0
Global Online Gaming Revenue
2002
2003
2004
2005
2006
2007
2008
2009P
2010E
2011E
2012E
Global Online Gaming Revenue Source: H2 Gambling Capital, 2009
Source: H2 Gambling Capital
Asia & e Middleeast
Share: 25,9%
Growth: 5,6%
Oceania
Share: 4,8%
Growth: 6,9%
Source: H2 Gambling Capital, January 2011
66 Gibraltar 2012 67
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