Fast Track

One Direction, the World Cup and…er…regulated markets

9th July 2014 9:22 am GMT

There is not a lot that competes with the World Cup – especially this World Cup – but boy band One Direction have generated a fever pitch at the W Hotel in Barcelona not seen since Brazil beat Colombia the other night.

One Direction are staying at the same hotel as the World Gaming Executive Summit (WGES) in Barcelona. Their presence has meant delegates have had to walk a gauntlet of screaming teenage girls on entry to the hotel.

It’s a first for just about all of them bar – maybe – former Mayor of Las Vegas Jan Jones, who must have encountered a few screaming hordes at political rallies in her past life.

In her present role as Director of Communications and Government Relations for Caesars, Jones did not resort to screaming at the mere mention of her dreaded rival PokerStars but she came mighty close.

Jones’s contretemps with the Poker Players’ Alliance chief Jon Pappas at GiGse last year has gone down in industry legend. This time her adversary was another PokerStars lobbyist in the shape of Bill Pascrell of Princeton Public Affairs.

The very hint of a mention of PokerStars makes Jones bristle in such a way that she seems ready for an explosion that never quite materializes.

First Pascrell states quite clearly that he believes PokerStars will be back in the New Jersey market by the end of the year: “You can rehabilitate capital and corporations. Corporations cannot commit crimes, people do. The DGE (Department of Gaming Enforcement) was concerned about Isai Scheinberg’s indictment. That issue is now resolved.”

“You’re right,” admits Jones. “Corporations can’t go to jail but if a customer database was accrued when a market was said to be illegal, should that database be used or should there be a restriction of that database?”

Pascrell replied that the DGE will decide that issue. When the moderator then asked Jones about Caesars’ relationship with Amaya (it supplies CaesarsCasino.com in New Jersey) and whether the PokerStars acquisition affects that relationship, Jones had to stick to the company line.

“Amaya has been a good partner in its current construct and it continues to be a good partner. I can only speak to Amaya today,” replied Jones through gritted teeth. It was clearly a painful question for her.

Despite the PokerStars pain, Jones (and her co-panelists) were fairly upbeat on the prospects of New Jersey (and the US generally) despite the slow start. Fairly upbeat…

“When casinos realize that online does no cannibalize, it is how they find new customers,” said Jones, before saying that she thinks it will be between five and seven years before the US market truly takes off.

All agreed that the perceived failure of the New Jersey market was ridiculous considering it is only seven months old. Pascrell pointed to the problems in payment processing, which have held back the market and the “abysmal marketing” – a point, which Jones agreed on.

Pascrell pointed out that Mastercard has only processed around 66 per cent of credit card transactions, Visa, a measly 10-12 per cent while American Express and PayPal will not touch the sector yet. Once these issues are sorted out – as they surely will be – then the US market has a chance of taking off.

However, don’t hold your breath for any newly-regulated states. With Governor elections due in November, nothing is likely to happen this year. But…. Illinois, Oregon, Florida and Michigan will be regulating sometime soon. California? Don’t hold your breath. We are all waiting for the tribes to come to an agreement. That may take some time.

If Jones’s appearance was always likely to be the most fiery of the day, Annette Kok of  EUROMAT (European Amusement and Gaming Federation) came close.

Kok’s defence of the land-based gaming establishment in Europe was generally made via an attack on the online gaming sector, which was represented on the same panel by Remote Gambling Association (RGA) chief Clive Hawkswood.

“In the Netherlands, for example, the land-based sector has a 29 per cent tax rate. Online will have a 20 per cent rate. We don’t understand that. The argument goes that they won’t go legal unless you keep the tax low – interesting [raised eyebrow] – they’ve never paid tax before.”

Hawkswood showed the delicate touch, which no doubt he has employed time and time again with Europe’s regulators and politicians, by refusing to rise to the bait.

While stating that online is a completely different business to offline, he also acknowledged that he believed the land-based sector is over-taxed.

The lawyers of GamingLaw.eu were next on stage to give a fairly grim account of the current state of play in Germany, Italy, Spain and the Netherlands. However Quirino Mancini of SCM Partners did tell us that Italy, France, Spain and the UK are coming close to an agreement on sharing liquidity.

“It will not happen tomorrow,” said Mancini, “but it will happen.”

UK Gambling Commission chief executive Jenny Williams was next on stage to give an extremely reassuring take on the new UK regulatory regime. She had a few messages.
Regarding third party contracts she said: “Think carefully who you deal with.”

When writing contracts make arrangements so that you can ensure that your partners are not breaking the law.

On grey markets she just asked whether companies are willfully breaking another country’s laws. The only blindingly obvious example she could come up with was sports betting in the US.

The general message was that there is not a massive change of policy here. And the Gibraltar Operators’ Association’s application for a judicial review will not change anything. The new tax regime will go live at the beginning of December.

When asked if deadlines were really deadlines, Williams all but answered in the style of one of the teenagers outside: “Well yeah stoopid!”

Only four operators have applied for a licence thus far but around 150 are expected. The new regime will go live on October 1st…..and then Germany beat Brazil 7-1.

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