June 20, 2008

Spain to license egaming operators by 2009

Spain is on course to have a system in place for regulating online betting and gaming by the spring of 2009, according to legal observers.

Discussion of the various conditions the eventual regulation would need to fulfil dominated the agenda at the most recent quarterly meeting between federal and regional betting and gaming authorities in Barcelona on Tuesday. Senior representatives from the LAE (the National Gaming Commission), the Spanish tax authorities, the Home Affairs Ministry, the Ministry of Industry and the gaming offices of each of Spain’s 17 regions were in attendance.

In addition to arrangements for distributing the tax income collected by central government among the 17 regional governments according to the origin of the bets placed or games played, the importance of developing a system which was 100% compatible with EC law, but which also offered full protection to consumer and sensitive groups, such as minors and problem gamblers; was debated in detail, according to Xavier Munoz, betting and gaming law specialist at Spanish firm Legal Link.

Also raised was the possibility of creating a registry of self-excluded players, which all operators authorised to do business in Spain would be required to access, to ensure bets originating from those on the registry would not be accepted. Finally, the Spanish authorities declared their intent at the meeting to be much more aggressive towards non-authorised operators than at present, following the introduction of the new regime.

Referring to conversations he has had with LAE officials since the meeting, Albert Agustinoy, betting and gaming lawyer at Barcelona firm Cuatrecasas, said: “Adverts, promotion or sponsorship by non-authorised operators in Spain will lead to a tougher approach by the Spanish authorities and quite likely to enforcement action.”

Although formal drafting of the bill has yet to commence, Agustinoy said Tuesday’s meeting represented something of a landmark for the egaming industry. “It was the formal launching of the legitimate process, which will lead to a system that will allow operators throughout the EU to legally develop their activities in Spain,” he said.

Agustinoy predicted the Spanish authorities would likely follow a similar schedule to that recently set out by the French authorities, with licences to be issued to operators by the end of 2009.

The drafting of formal guidelines should be underway by the time the state and regional betting authorities meet again in the autumn.

June 12, 2008

William Hill aims for 50% contribution from online division

William Hill emphasised its renewed focus on online betting and gaming on Tuesday as chief executive Ralph Topping provided an update of the company’s development of its new internet gaming platform, which is set to launch on November 27.

Topping admitted the company had lost its focus in relation to internet gaming over the past two years and would aim to generate up to 50% of group revenues from its online offering once the new platform had been launched.

“William Hill has decided to work with established experts rather than operate the technology ourselves,” Topping said in reference to its current online sports betting platform, which will be replaced by the Orbis sportsbook technology in November.

Topping added that he had been chief executive for nearly three months and while “William Hill was not broken, it needed a new sense of direction”, he said. “William Hill is a betting and gaming company, for too long we have been bookmakers with a bolt-on gaming product range. Gaming now represents 50% of our online revenue and everyone at Hill’s now knows that it is as important as betting,” Topping added.

William Hill currently generates around 20% of its group revenue from online betting and gaming and would aim to increase that to 25% to 30% shortly after it had launched the new platform. Although Topping did not want to make predictions or tie himself down to revenue forecasts, he said the longer term objective of the company was for its online gaming and betting division to provide up to 50% of group revenues.

Topping added that William Hill was an open-minded firm and was now recruiting the best staff it could find in order to grow its remote gaming division. The company has recently increased its marketing effort for its online betting and bingo products and will raise its advertising and promotional spend in the coming months.

“William Hill is known as a conservative company that doesn’t like spending, but we don’t mind spending if we see the benefits from our investment. We will spend more on clever, targeted marketing that is designed to increase profits,” Topping said.

“We were still the biggest online operator only two years ago, but we stopped playing to our strengths, took some wrong decisions and gave up the lead we had acquired. We have been lucky the competition hasn’t taken full advantage of this in the meantime and we are confident our online offerings will provide us with strong growth in the UK and internationally,” he added.

The sportsbook interface will focus on in-running and providing punters with live price and market updates and will have an emphasis on being easy to use and navigate. “Online punters are more demanding and sophisticated (than retail punters), so it’s vital that we make the site easy to use and bet on,” Topping said.

Ian Chuter, director of gaming at William Hill, said the firm’s current poker liquidity was “not big enough to provide massive prize offers” for players and it could not compete with other sites in terms of prize pools. “For William Hill to compete, we will either change or merge with other networks that are facing the same problems as us,” Chuter said. William Hill is on the CryptoLogic network, and Chuter added: “Our supplier contracts are up for renewal at the end of the year and we will look at the situation then. Overall, we plan to make more use of affiliates and will focus on CRM to understand our customer base better. This is nothing revolutionary but we will deliver on these targets and they are achievable.”

Topping said William Hill would look at consolidation and acquisition opportunities if they were of benefit to the company’s shareholders and investors and if the regulatory landscape allowed them, in reference to potential action by the US authorities against operators that were taking bets there prior to the internet gambling ban in 2006.

Dresdner Kleinwort issued a ‘Buy’ note on the back of William Hill’s presentation and said the Orbis platform should provide it with the technology for online growth in the medium term.

“Ralph Topping was clear that William Hill sees online as the major growth driver, both on a national and international scale. The new sportsbook launch is a medium term catalyst, however it is the change in culture at William Hill that we believe will provide incremental gains, with a marked improvement in communication with investors - the previous lack of which has been reflected in William Hill's discount to Ladbrokes,” the note said.

June 09, 2008

France sets out 'controlled opening' timeline

French Budget Minister Eric Woerth set out the guidelines behind which France would move towards a controlled opening of its online betting and gaming market this afternoon.

Woerth met with European Commissioner for internal market and services Charlie McCreevy on Wednesday to discuss the main guidelines for the opening of the French market and will present them in detail to the French government during a cabinet meeting on Wednesday next week.

The key points Woerth and McCreevy discussed centred on the European Commission’s infringement procedure against France, what methods would be used to implement the opening of the French market and a provisional timeline for these measures to be passed through the French legislature.

Woerth said the level of taxation for online gaming firms operating in France had not yet been set as he wanted to consult with relevant parties in order to “set up something that works, especially with regard to the issue of financial returns towards sport” and sports bodies, with the principle of a levy applied across the sports betting industry. The issue of sponsorship of sports teams by operators will also be addressed with the relevant parties. Technology that enables the control of all electronic data and financial transactions and the levying of taxes will be implemented.

The bill to open the French online gaming market will be presented to Parliament during the next parliamentary session in the autumn, the regulatory body will be set up during the first semester of 2009 and the award of licences will happen during the second half of 2009.

In the intervening period, “operators will be asked to respect the current legislative set up. To be clear, online games remain forbidden, along with any advertising related to them. The behaviour of operators during that time will be sure to be take into account by the relevant authorities when the time comes to award the licences”, Woerth said. Any opening of the market would also lead to any “unauthorised” sites being pursued even more vigorously by the French authorities, Woerth added.

In reference to the European Commission’s infringement procedure, Woerth questioned whether France should continue to defend its monopoly system in the face of growing competition that was becoming harder and harder to repress.

He said: “It is in the name of realism that the (French) Government has decided to engage in a process of controlled opening of its online gaming sector; and I am happy to tell you today that the dialogue I have had with the Commission, in partnership with State Secretary for European Affairs Jean-Pierre Jouyet, has enabled us to avoid a pointless conflict.

“Commissioner McCreevy recognised the work that had been accomplished and viewed as positive the general guidelines presented to him. We will present the Bill to the Commission in September this year just before it is submitted to Parliament’s vote.”

The liberalisation of the French market will only concern pool betting for horse racing and fixed-odds bets on other sports such as football or tennis, online poker and casino games such as blackjack and roulette will also be authorised.

A regulatory authority will be set up to award licences in a transparent and non-discriminatory way, to protect against under-age gambling and promote safe gambling and ensure the number and nature of bets and games offered fall within set guidelines. It will also be tasked with preventing any conflict of interest and ensuring all transactions are transparent and adhere to anti-money laundering rules.

The licences will be awarded to operators according to industry sectors (sports betting, casino or poker games) for a five year-period. Operators that are licensed in other European states will be able to apply for a licence in France. The licensing requirements of the EU states in which the operators are licensed will be taken into account but will not necessarily lead to the award of a French licence.