TEAMING UP GAMING MARKET MOBILE CREATIVITY - Betsson AB

– THE ONLINE GAMING MAGAZINE – THE LEGAL ENVIRONMENTthe betsson group works under increasinglystrict regulatory standards,which place many and varied requirementson the organization. The mainregulatory requirements on the operatingpart of the business originatefrom the gaming regulation in thecountries where we operate. There isalso, however, many other sets of regulationsthat apply. For example, weare subject to stringent anti-moneylaundering and data protection legislationthat often have far-reaching implicationsdue to the inherent crossbordercharacter of the business. Inaddition, the operating companiesface various marketing restrictions,while the rules and regulations of theStockholm Stock Exchange (NASDAQOMX) govern many aspects of theholding company Betsson AB (publ).On top of this there are meticulousfinancial and certification standardsthat the group adheres to and continuouslyupdates.These often overlapping setsof rules are complex in themselvesbut also subject to rapid change asthe online gaming industry is evolvingand maturing. The ongoing “reregulation”ofsome online gamingmarkets, primarily in Europe, willcontinue to be a challenge for alloperators, especially as long as thenew local regulations remain immature.Betsson and other stakeholdershopes and believes therewill be a gradual harmonization anddevelopment of joint standards thatwould make it possible to “passport”approvals in one country to another,but this scenario is probably quitefar away. A common view shared bymany in the industry, is that it is likelyto become even more complex beforethe different regulations inevitablyare brought closer together.Betsson is in the process of expandinginto locally licensed marketsand in December 2011, it was granteda gaming license in Denmark. In addition,Betsson has been granted alicense in Italy during 2012. We aim toapply for additional licenses in continentalEurope during 2012, providedat all times that the relevant licensingstructures are commercially viableand compliant with the principles ofEU law. Our intention is to continueto be proactive in these processesand to work closely with the authoritiesin jurisdictions seeking to reregulate.We believe we have beenreasonably successful in Denmarkand we hope to be a vocal partnerin other jurisdictions as well, in orderto aid the development of wellregulatedand commercially attractivemarkets.EU criticism against monopoliesWhile the re-regulation has gainedmomentum we continue to tradeunder our Malta license under theprotection of EU law and internationalprivate law principles in the socalledcross-border segments. Asthe restrictions in many EU memberstates in reality protect the localmonopolies, they do not pass thetests set out in EU case law for suchrestrictions, which renders them invalid.Our position in the continuinglegal debate on whether EU memberstates may restrict gaming servicesfrom other member states wasstrengthened during 2010 by theEuropean Court of Justice decisionsin the Winner Wetten, Markus Stoss,and Carmen Media Group cases. TheEuropean Commission has continuedto criticize legislation protecting localmonopolies during 2011 — for examplethe federal legislation in Germany— with the effect of pushing the reregulationand liberalization of differentmarkets forward.The European Commission greenpaper on online gaming has also increasedawareness of the issue onthe EU level. It remains to be seenwhether the Commission will proposemeasures to address the fragmentedmarket situation once the paper ispublished in 2012. In any case, the developmenthas increased the chancesof re-regulation and liberalization inadditional EU member states and alsolowered the practical risk of enforcementagainst the Betsson Group becauseof the cross-border operationsmaintained from Malta.The level of regulation in the onlinegaming industry is likely to continueto increase. While this is certainlypainful for any company westill welcome the development as itgoes hand in hand with our ambitionto continuously invest in the credibilityof our company and our brands.Gaming is one of the most regulatedindustries in the world and we lookforward to being involved in the improvementof gaming regulations andto further improve our compliancewith new and existing legislation.– 23 –