Illegal Online Gambling 'Tsunami' Threatening Casinos, Says ECA

April 12, 2022
​​​​​​​Land-based casinos have been “through a valley of tears” over the past two years and now a “tsunami” of illegal online gambling is threatening their recovery, according to the head of the European Casino Association (ECA).


Land-based casinos have been “through a valley of tears” over the past two years and now a “tsunami” of illegal online gambling is threatening their recovery, according to the head of the European Casino Association (ECA).

Per Jaldung, chairman of the ECA and CEO of Sweden’s Casino Cosmopol, opened the International Casino Conference at ICE VOX London by taking aim at what he called “European licence holders” using local European licences to offer online gambling throughout the European Union.

“There is no such thing as a pan-European gaming licence. All rulings of the European Court of Justice have repeatedly clarified that these licences are, at most, sufficient to offer gaming within their issuing countries. This is a state of affairs that is no longer sustainable or bearable,” Jaldung said.

The ECA is not against online gambling, in fact, 60 percent of its members already offer online casinos, but it does believe regulators need more enforcement powers online to tackle illegal online gambling, he said.

The ECA supports the type of online licensing model Switzerland has in place, which requires online licences to be issued to local casinos.

According to the ECA’s own economic impact studies in 2020 and 2021, land-based casinos were the hardest hit among all the gaming sectors, with revenues in 2020 down 47.7 percent compared with 2019 pre-pandemic levels.

In comparison, online casino gaming revenue across 13 regulated markets in Europe grew at an average of 52.5 percent in 2020 compared with 2019, and then a further 54.1 percent in 2021 versus 2020, according to data aggregated by VIXIO.

To best protect the interests of land-based casinos in Europe, the ECA said it strongly endorses Switzerland's restrictive licensing model, which only allows land-based casinos to offer online casino games.

“ECA members' access to online distribution channels for casino games is a necessity for an industry that guarantees more than 50,000 jobs in Europe. It is not just casinos in Europe that are still recovering and dealing with the impacts of COVID,” Jaldung said.

"Land-based gambling venues and online casinos in Africa are also dealing with a similar knock-on effect of struggling national economies and the encroachment of illegal gambling operators, some of which have already damaged the industry’s reputation,” Charmaine Mabuza, CEO of Ithuba, South Africa’s National Lottery operator, said during a separate panel.

“Illegal operators have a strategy too, even legal departments. We have to harness our voices as one industry in the future or we will have to battle to survive against the second pandemic for the industry, illegal gambling,” Mabuza said.

US casino bosses have said they are not focused solely on the threat of illegal operators, and they are also being challenged by their ability to attract employees.

Paragon Gaming CEO Diana Bennett explained that the pandemic changed the way people think about employment in the US, with benefits such as working from home becoming more attractive.

“Nevada had the largest unemployment during the pandemic. Gambling typically being a 24/7 job is not what people want to do now. The hospitality industry has been hit hard,” Bennett said.

One way for casinos to try and compete with other employers in the new hiring landscape is to win them over with flexible working opportunities, as well as other benefits such as additional time off, according to Agua Caliente Casinos COO Saverio Scheri.

“We are trying to make sure people don't just have a job with us but a career. Our entry-level jobs pay $3 less an hour than fast food entry-level jobs. We need benefits to counter this,” Scheri said.

Even if the casinos can hire people, there is a need for them to be seen in a positive light, Jan Jones Blackhurst, a board member of Caesars Entertainment Corporation, said.

“We hire more people than the US car manufacturing industry and we pay better too. The gambling industry must focus on letting people know all the good that we do. Employment, reinvestment into communities, as well as non-government organisation (NGO) funding should be publicised more,” Blackhurst said.

In a separate talk, looking ahead at the future of the land-based casino industry, Guido Berghmams, Luxembourg-based Casino 2000 director-general, warned the world will see a series of crises in the next ten years that will have an impact on land-based casinos.

Berghmams predicted growing political tensions, such as the Russian invasion of Ukraine, are leading to increased social concerns, as well as contributing to rising living costs, which in the long run would impede people's ability to visit or spend money in casinos.

In the next 6-18 months, Berghmams is confident casinos will continue to see instances of record-breaking gross gaming revenues (GGR) as consumers catch up on spending opportunities they missed out on during national lockdowns during the COVID-19 pandemic.

However, when this bumper spending runs out, Berghmams said casinos must have combined online and offline offerings, leverage their brand recognition, and develop novel products that cannot be replicated online to be ready for the uncertain future.

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