A coherent approach – Legalizing and regulating online gambling

(André Wilsenach) It is often said that it is never too late to regulate gambling, whether it is terres­trial or online or both, as long as you don’t avoid the dark corners of unregulated gambling. Quite rightly proponents of strong regulation are able to refer to many examples around the world where the positive impact of a well-regulated gambling environment is evident, not only by having resulted in booming gambling industries, but also by having led to growth in non-gaming sectors such as tourism, entertainment, telecommunication, etc. Jurisdictions such as Nevada, United Kingdom, Italy, Denmark, Australia, South Africa and several others are good examples. It is worth mentioning that the gaming industry has come a long way from being regarded as a vice that was legally permitted in only a few jurisdictions, to today being considered part of the services sector, competing with other leisure and entertainment industries.

What is not always evident from these discussions is, what is the ideal approach towards legalizing and regulating a hybrid gambling market? Therefore, what are the lessons that can be learned from jurisdictions that have been successful in regulating hybrid gambling markets?

Therefore, the purpose of this article is to identify some of the valuable lessons learned in introducing regulation in an already existing hybrid gambling market with a view to assisting German policy makers in considering the most appropriate approach towards the legalization and regulation of the online gambling market in Germany.

In so doing, it is important to point out at the outset that there is no single gold standard for gambling policy and regulation – the reason being that across the world gambling policy and regulation is matter of subsidiarity, and is normally aimed at achieving very specific policy objectives (e.g. stimulating economic growth, stimulating research & development, creating jobs, the need to find additional funding for social and charitable causes, promoting tourism, protecting consumers against unlawful practices, or a response to public concerns for the young and vulnerable). In fact, it is common course for governments around the world to legalize what has previously been an illegal gambling industry in exchange for some or even all the above outcomes.

Although the functions of regulatory bodies around the world may be similar, they are applied differently depending on the public policy of each jurisdiction. As only governments can legalize gaming, they normally do so with the aim of getting some­thing in return, or to offset the cost associated with the “political and social risks” of legalizing gaming (such as tax income, job creation, or local and foreign investment).

The good news is, there are lessons to be learned from the public policies that have been adopted other jurisdictions around the world which can be translated into generic best practices around gambling policy and regulation.

Dieser Text erschien in voller Länge in der Fachzeitschrift „Beiträge zum Glücksspielwesen“  Ausgabe 2/2017. Diese kann hier im Jahresabo oder einzeln bestellt werden.

André Wilsenach ist Executive Director beim International Center for Gaming Regulation.