Gambling-industry leaders are having to divert too many resources toward complying with increasing regulatory requirements for them to continue to innovate their products.
A panel of five industry leaders agreed that the level of resources they must dedicate to compliance means that it is the only area that sees any innovation.
Speaking on the “SBC Leaders: Navigating The Opportunities And Growing Pains Of Global Transformation” panel at the SBC Barcelona Summit Wednesday morning, Glitnor Group CEO David Flynn said, “Unfortunately these days, if the player wants a really innovative experience, they’re going to go to a grey market, because you know, those are the operators who are actually able to spend more time on developing software that’s really interesting and a nice player experience.”
Betsson Group CEO operations Jesper Svensson agreed, arguing that the level of resources diverted to compliance does not necessarily lead to the best product being delivered to the customer.
“You want to enrich the experience in the casino in various ways, but I think innovation today is focused on how you do KYC flows in the best way possible, for example. It’s more toward that end and the [operators] who do that in the best way”, he said.
However, Pinnacle CEO Paris Smith was more pragmatic about the role of regulation. Commenting on the evolving regulatory regime in Curacao where Pinnacle is headquartered, she said she would welcome the enhanced regulatory regime if it lifted the “black mark” from the jurisdiction.
Smith said the regulators in Curacao have cooperated with operators on regulation, although she felt the anti-money laundering (AML) processes could risk becoming too onerous.
She said operators had to comply with AML and KYC procedures in their relationships with payment processors, so there was a risk that the regulator might stretch the requirements to a “banking-type approach”, which could be excessive.
The panel also discussed the repercussions of the Ukraine war on the industry, with Parimatch CEO and Supervisory Board Member Maksym Liashko saying the war had led the company to pivot to a B2B business model, making it less reliant on in-house operations in Ukraine.
Parimatch still has around 1,500 staff members in Ukraine, but Liashko said that after the initial few months’ shock of the invasion, the business started to evolve to operate in its new context. This included developing a new attitude, not just of work-life balance, but a “work, life, and defence balance”, he said.
Likewise, Svensson said the war had revealed an over-reliance on Betsson’s technical knowledge base in Ukraine, which meant the operator had to work on sharing that knowledge with other teams in other regions to avoid “a single point of failure”.
“When something like this has happens, as a business, you need to make sure you don’t have a single point of failure if something would happen. So for us, it has been very much focused on the technology and making sure that the people working on the critical elements of our business are actually available in different offices”, he explained.