Episode Transcript
[00:00:05] Speaker A: Welcome back to another episode of Right to the Source with Robin Harrison and Ed Burke, who seems to have upgraded his tech setup today. We can see a very large microphone. He's looking slightly brighter than usual. What's going on, Ed?
[00:00:19] Speaker B: Well, I thought there's two ways we could improve the professionalism of this product production. One was have better content and one was just to spend a load of money on a microphone and a light.
[00:00:30] Speaker A: So we've gone for spending a lot of money on microphone or a light. Yeah.
[00:00:34] Speaker B: Yeah. Well, I wanted a red one but they didn't have it in stock, so I thought blue is H2's colours, so why not?
[00:00:38] Speaker A: Excellent, Excellent. I like it. And you're sounding crystal clear and your chair is slightly higher because I noticed on one of the little short episodes that we do just to promote this, it kind of looked like it was towering over you.
[00:00:51] Speaker B: Yeah, well, I've actually brought a proper chair in. I have a bit of a strange setup in this office, so I've kind of bodged it together. Hopefully we'll look good even if we don't sound good. But also shout out to the Jags. I know it's a bit late, but after the draft, what do they call it? A franchise defining decision to trade their swap to get.
To get top picks. Things are looking good for next season. Feeling confident?
[00:01:13] Speaker A: Excellent. Excellent. I love your enthusiasm. I think it's definitely misguided, but at the same time, let's see what happens in September. And that's actually a good place to start because obviously it's something that is being covered in IGB's sister podcast, you know, the World Series of Politics with Brian Tyden and Brennan.
[00:01:32] Speaker B: Let's just be honest and call it better Podcast. Flagship podcast.
[00:01:35] Speaker A: Flagship podcast.
[00:01:37] Speaker B: Yeah, we know where we are in the pecking order.
[00:01:40] Speaker A: Tentpole Podcast, a summer blockbuster. Compared to the indie production of Right.
[00:01:47] Speaker B: And Source, indie production's pretty good. Yeah, we'll be the ones at the Cannes Film Festival.
[00:01:52] Speaker A: Yeah.
[00:01:53] Speaker B: The ones on a yacht, you know, retiring.
[00:01:56] Speaker A: Well, this is it. They'll be the ones at the Oscars. We'll be the ones taking home the.
The Berlin Film Festival. Silver Bear or whatever that prize is called.
[00:02:05] Speaker B: I don't think it's good to be down with the people. Down with the people they want within the gritty stuff.
[00:02:11] Speaker A: Lo Fi. Diy.
[00:02:13] Speaker B: Yeah. Anyway, I think we were going to talk about Illinois, weren't we?
[00:02:16] Speaker A: We were. We were. We're going to talk about Illinois because the new budget passed over the weekend.
It's now set, correct me if I'm wrong but it's a essentially a 25 cent surcharge in every bet up to a handle of 25, 20 million. Sorry. And then 50 cents and everything above that and well, I mean it's coming after Illinois last year introduced that sliding scale. It's coming amid a host of tax hikes in the U.S. you know, Chief culprit among them Ohio, but also in the midst of operators, let's be honest here, showing that they were willing to accept high tax rates if it got them into certain markets. So what's this going to do for things in Illinois? I mean is this, how is this going to. Does this just essentially wipe out profitability in the state?
[00:03:08] Speaker B: To be completely honest, I haven't done all the math to see the exact impact on profitability and we don't know that the state level profit but clearly it's going to be hit to profit there. I think the, I think the wider talking points are probably threefold and let's be honest by saying some of this we're probably going to piss off the operators who are subscribers. So apologies to that. But you know, I think we've just got to speak say what we think.
[00:03:31] Speaker A: You see.
[00:03:32] Speaker B: I agree, you know, by accepting 51% tax in new York and then to be honest, if I'm going to be completely frank, naively thinking that they could go and when they had that Congress, whatever, whatever it was speaking to the state politicians and arguing for reduction in it, that was never going to happen. I mean they were never going to reduce it. I think in fairness they were hoping that igaming was going to come through and if it does then maybe it would look like a good decision. But either way, whatever reasons for it, they have accepted 51% and said in a big market we can operate happily to be or at least we're going to operate at a 51% tax rate. So they've set the bar there.
And to be honest, tax rates in the US pretty low at least they were like land based etc New Jersey initially online compared to everywhere else in the world. So to then go to that level I think is shoots themselves in the foot long term. So there's people who look at that. I think the second question to ask is if Illinois are doing this, don't look at the profit in Illinois, are the states going to follow? He's talked about Ohio. I mean almost, why wouldn't you? I mean we can do all the analysis about the optimal tax rate, getting people onshore, etcetera But I think it's a concern, you know, if I were back as an extra analyst, and I'm sure other people are doing this now, you know, the very simple bit is what's the impact on profitability in Illinois? The next one, which is just as important, if not more so, is what is the potential impact if other states do something similar? And so suddenly these three year EBITDA targets that these companies are valued on are, are they even worth anything? And then the third wider discussion is, is it actually fair? And I know it sounds a bit pathetic to say, is this fair? You know, it's very distortive. Should bigger operators be paying higher tax? Intuitively, I'd say no, this is just completely unacceptable. You know, you should have the same, same rules. But I suppose it happens in lots of cases. I mean, in the uk, if you're a small company, you know, you pay a slightly lower rate of corporation tax than a big company. So in the grand scheme of things, is it something we should be looking. Is it, is it? Right. But also, is this a worrying trend where bigger operators will get charged more tax because they have the economies of scale to be able to do that? And then arguably, is it actually a good thing that it allows smaller operators a competitive advantage to invest and compete and make the playing field more fair? I mean, you could look at it the other way around and say maybe this is better for the market dynamics.
[00:05:52] Speaker A: Well, I disagree with you there because ultimately, sports betting is a low margin product.
Sports betting is by its nature, it can't really withstand these high tax rates.
[00:06:03] Speaker B: It's not, it's not, it depends who you're speaking to. I think many of the operators would have us tell that the, the margin is actually increasing structurally, month on month, year on year, and it's just bad sports results.
That's a little dig. As an aside. Yeah.
Okay, let's say it's a 9%. Yeah, it's a low margin product. Yeah. But they are being taxed on ggr, so the margin is irrelevant. The GGR margin. Yeah, that doesn't matter. If they're being taxed on stakes, fine. But the GGR they're making, they're being taxed on it.
You know, is it sustainable to be taxed at 51% everywhere? No, admittedly, going back to is a fair point you made because they are being taxed on stakes. So yes, it is a, it is, it is a low margin in that respect.
[00:06:40] Speaker A: Yeah. And the thing is, I mean, you mentioned New York earlier, one of the Things that I think there's an interesting parallel to be drawn here. When you look at the Downstate Casino project, you know, what's happened there recently, the project is slow moving, put it politely.
You know, there's some. So there's been a few proposals put forward. But when things are looking like they're not going to work, the biggest operators, the winds, Las Vegas Sands, they've stepped back, they've said this isn't working. We can't see that. We can't see how this works, how this is feasible. Therefore we are pulling out. And I'm not saying, I mean, obviously, you know, within these, you know, within the RFP process kind of tender type thing that ultimately resulted in that 51% tax rate for sports betting, obviously, you know, there's going to be a, you know, kind of like safeguards in place, stock collusion. But at the same time, no one said this doesn't work. We're stepping back. Similarly, in Illinois, there was rumblings people would say, well, maybe this market doesn't work for us. But no one step back. You know, no one is willing to seed ground in that. It's not ultimately, I think, and it's even been covered in the the Illinois press recently. Pritzker, the governor, JB Pritzker has said, I don't think anyone's going to pull out.
[00:07:57] Speaker B: So ultimately, I think it's affecting DraftKings and FanDuel. Yeah. And they're just too big to pull out. Like, why would you pull out? You're just giving your competitors on another huge share of the market. You're still going to be, you'd assume, profitable there. Yeah, it sucks. But you know, I agree they're not.
[00:08:13] Speaker A: Going to, it's going to be.
But this is it that sets a precedent which creates that ripple effect for other states. And the thing is, as well, it always feels to me as if there's been this almost unspoken assumption that once you have a sports betting live, iGaming is going to follow. That's not the case. We've seen that we've had that could have been beaten around the head with that. It's a hard thing to pass. The appetite doesn't seem to be there. And to an extent, I mean, obviously the arguments about budget deficits, budget shortfalls, they need to plug these gaps. But it really feels like what we're seeing is they're not looking at expansion as a way to plug the gap. They're looking at what they have already and how they can essentially gouge it for more Money because ultimately, you know it is, it does feel like a misguided tax grab by the state of Illinois.
[00:09:04] Speaker B: Yeah. And interesting on the igaming is I think it was Sands. It was either win or Sans I think was Sans who said when they were pulling out of the the land based casino one of the reasons was you know, the likely upcoming igaming and competition there. So you know, will that happen or not? You know, are New York waiting to get the highest possible amount for the land based casino bids before they say oh actually we're going to have I gaming which would, you know, reduce the thing. So potentially New York is actually for all the slagging off we did about them doing this 51% tax rate, maybe, maybe it will be, you know, a very positive market if they get the igaming there. But who knows. Anyway, I don't think we were due to talk about this.
[00:09:39] Speaker A: Hey, we were, we said we'd use it as a lead in and instead we talked about it for 10 minutes as well as talking about the Jacksonville Jaguars and your a new mic setup. But it does lead us quite nicely into what we really want to kind of talk about today which is so.
[00:09:56] Speaker B: Before that in fact I'm actually just going to give you just quickly done some back of the envelope stuff in terms of the Illinois tax impact. So some back of the envelope quick analysis. And this is based actually on the parlay data that's released by Illinois. So the average stake last year for parlays assume it's similar to the rest graphking $16 bandool $18 so $17. So if you're looking at a $0.50 then that's a 3% tax on stakes. But then actually if we're looking at the GGR that they generated last year on average it was just over $3.3.08 so that implies a 16.7% increase in tax. Now on GGR now that is only for the stuff above 20 million. So obviously the, the overall will be less. But I think what was their merged tax rate there? I think it's around 36% or 35, 36% last year. So you're probably looking without any kind of mitigation of the tax going up to for those two, going up to 50% which actually is pretty much where New York is. This goes full circle and our Illinois saying look, this is a big enough market, you're paying 50%.
New York fine. We're not going to expect all operators to do that because guess what, like in every other market we've got operators who are. I mean, let's look at some of the share of wages here. I mean, they're just tiny for most of them. I mean, let's look at March data. So you've got DraftKings 39, FanDuel 43. I mean, it doesn't really leave a lot. A lot left for everyone else does it again for four and a half.
So you start getting down to even pen, you know, 2%.
So about 365 of that. 3.6. 365 ones to watch in the US so yeah, for the small ones, you know, they're going actually, yeah, these small guys can't afford to compete in this market with a 50% tax rate. You know, the big ones can. I'm not saying I agree with it, but you kind of see why they've gone down that route.
[00:11:55] Speaker A: Well, ultimately, I suppose to an extent it reflects the duopoly that we see in US sports betting, but also that's then kind of building in special treatment for largest operators and that essentially creates, even if they obviously have huge advantages considering their size or scale, that's just almost building in the uneven playing field into the market.
[00:12:19] Speaker B: Yeah, they're using tax policy to generate more revenues and distorting the market. And if you're a smaller operator, you may be like, actually, I'm quite happy with this. Obviously if you're FanDuel DraftKings going to be pissed off. And probably the biggest worry is, you know, is anyone else looking if they can charge them up to 50%?
[00:12:35] Speaker A: But as I said before, you so helpfully interrupted to do some calculator bashing.
[00:12:43] Speaker B: Look, we have to give some data on this. I think this is the first time we've given data in.
[00:12:47] Speaker A: We gave data on the.
[00:12:49] Speaker B: Oh, we did it on Africa.
[00:12:50] Speaker A: Yeah, we did it in Africa. We're starting to integrate it in. You know, we've lured people in with our witty rep artee and now we're overlaying with the data. It's like what we set out to do is to make data fun and so we have to add the fun. Well, well, if you consider that, if you consider the freeform jazz, the first few episodes fun, but now we're bringing the data and we've got the mic.
[00:13:14] Speaker B: We'Ve got the light, we've got the data and we're about to talk about a chart that we're going to put up on LinkedIn with this.
[00:13:19] Speaker A: Like it's, this is professional, constant improvement, constantly iterating.
[00:13:24] Speaker B: Okay, maybe there's only so much we can iterate. We can't promise to keep improving each week. Although maybe if you got a guest on that would help.
[00:13:30] Speaker A: Yeah, a guest would be a nice idea. Maybe. Should have got one in Africa in hindsight.
[00:13:34] Speaker B: Yeah, a bit like I mentioned. Yeah, I mean, admittedly I did mention that as we were doing the show.
[00:13:38] Speaker A: Yeah, I mean if you maybe bring that up before next time, then, you know, we can get one on.
[00:13:44] Speaker B: Look, apart from your witty introduction, the only thing you're contributing is your Rolodex of contacts. So I'm relying on you to get a guest.
[00:13:51] Speaker A: Also my personality and my limited industry knowledge sorted.
[00:13:55] Speaker B: Right. Anyway, what are we talking about? We're actually going to talk about regulators, weren't we?
[00:13:58] Speaker A: We were. We're going to talk about the optimum regulated market because I understand this is something that H2 has been working on in terms of really kind of quantifying what that looks like for a market. And obviously we just come from talking about a market where the tax consideration has really kind of skewed out of all proportion and kind of pulled away from that optimized model. But it would probably be good if we get into specifics here, you know, and really kind of what that regulated market is kind of quant, you know, that optimized regulated market. So we can kind of quantifying that for our valued listeners.
[00:14:35] Speaker B: Yeah, so we do a chart that hopefully will be on LinkedIn or on the podcast or whatever other stuff happens after I hang up and do my day job. And we say the optimum market regulation. So split between three, three buckets regulator operator players. So the regulator gets control of the market tax and acknowledge that this player security players want choice value and also some protection knowing that their price not going to run off with their money. And the operator, you know, wants to know there's a license, there's some market protection from illegal operators and they're getting profit. And that profit is that incorporates, you know, what the right tax rate is, you know, if there's any issues with advertising ban, all those other things all come into market protection and profit, what products they can offer, etc. And I think partly because don't want this podcast to gone too long, partly so we have content for other ones. We'll talk more about optimum market and the other ones. I think today I just wanted to probably do something no one else really does and say actually, you know, let's look at it from the regulator's point of view. They have a really tough job I know it's easy to slag them off, but like we're talking about Illinois just now and the regulators. Is it the regulator's fault? I mean, the regulator in. In some. Some markets, the regulator is the one that makes the rules. In a lot of markets, the regulator is just the vessel that has to implement rules made by politicians.
[00:15:52] Speaker A: Well, yeah, I mean the regular.
[00:15:53] Speaker B: To make a mark. And even the politicians to a certain extent who. Some of the things they do are just some. Even the politicians to some extent, some of the things they do are not necessarily the most sensible things. However, you know, what do you. And this is something I think, you know, we want to do some work on with you guys at some point, but is, you know, how do you. They don't want the market to grow that big. Okay. Gone is the argument of you should regulate a market openly because to get tax revenues. I know we've said Illinois are. But generally they're looking at. We don't want players to be gambling too much. Is. Is a general view in Europe. Yeah, they want to restrict the market size, but at the same time they need to make the onshore market as attractive as possible to get people from the offshore. So a wider question we'll do a whole podcast series on at least one podcast on I think when we know the answer, or at least some thoughts is how do you make the onshore market as attractive as possible to increase onshore channelization without significantly growing the overall gambling market and just kind of having more and more gambling, which is rightly or wrongly viewed as not a particular positive thing to happen by many politicians. And so the regulators, whether they're making the rules themselves, like the gambling commission seem to do, and we can talk about how they've gone back on this affordability stuff because it's now a disaster and they're claiming they didn't even say that in the first place. Or whether it's just like the Dutch regulator, which my impression more that the Brazilian ones, they're stuck in the middle where they just have to implement policies the politicians make, even if they don't think they're good policies themselves. But, you know, they're in a tough position where they want to do stuff to protect players, you know, and. But they also need to and make it attractive to keep people from offshore. But there is no remit, at least in Europe for any market to say we just want a massive expansion of gambling. And that's tough.
[00:17:39] Speaker A: Well, I mean, I think your point on the regulators is valid. I mean they are let's face it, no one likes the referees, apart from Pierluigi Collinha, who was obviously fantastic. But, yeah, no one likes a referee. No one likes the person in the middle that is essentially there to enforce the rules of the game, which is essentially, for the most part, what regulators are. Now, the economic development argument is an interesting one because obviously, to an extent, that is a tenet of gambling regulation. It's economic development through bringing and bringing a potentially kind of unregulated market into the legal realm so that you can collect tax revenues. But also, I suppose, kind of crucially, and where the real emphasis is now is making sure that things are happening sustainably while also diverting players from unlicensed, you know, offerings with no form of consumer protection, no safeguards for unstainable play into that legal realm. And that in itself is almost kind of like a bit of a push pull, because obviously, the more gambling you bring into that legal realm, the bigger the market's going to be, because, you know, like, let's face it.
[00:18:52] Speaker B: But when you say the bigger the market is going to be, are you talking about the overall market or the onshore market? The onshore market will be, but I'm saying the overall, let's say in a market, there's a billion of player losses, GGR 50 of this is onshore and 50% offshore. If you bring half of the offshore onshore, yeah, the onshore market's bigger, but there's no more losses from the players. And that's. That's my point.
They don't want to increase this market size from 1 to 1.2, keep it at 1 billion, just bring more onshore. So, yeah, you make it more attractive. But what they don't want to do is by making it more attractive onshore, suddenly, yeah, you get the 250 million from the offshore, but the onshore players are then spending more.
And that's the tough one.
[00:19:35] Speaker A: Yeah, no, I get your point. But when you look at how markets are monitored, it's very much the legal market is monitored. People aren't looking necessarily at the total addressable market and breaking down from there. I mean, I think the Netherlands regulator does that.
Apparently they've got a reputable data partner that helps with that. Finland, not even through the government, through Vikhouse, has in their. In their annual reporting, has provided estimates for how much of that market share is, you know, kind of like how much of that total market is captured. But for a lot of other territories, there's not really that, you know, there's not really much evidence of that oversight of that illegal market. So that's where I feel there could be, you know, there could almost be channelization, which of course is a positive thing, could potentially be misconstrued as a negative.
People could say, oh, well, we've had this kind of exponential growth in gambling and the market size hasn't necessarily changed, but more of that offshore market has come onshore. I mean, that's obviously not something we're seeing at the moment. We're seeing kind of like the opposite direction of travel.
[00:20:44] Speaker B: I think it's changed. Denmark also use our data to kind of show the onshore offshore comparison and track that. Unfortunately, as we're now changing our offshore from just, you know, effectively, we were tracking people who are licensing the likes of Malta, Gibraltar and Passport across Europe and now including all operators, including completely unlicensed ones, then the offshore sizes is going up to change it. So that's going to be annoying for them, but more accurate. But yeah, I think it is something that people are waking up to. Maybe it's something that we need to educate them more on. But I think it is something that definitely with the growth in the black market, people are looking at, you know, if there's some way we can get out there that, you know, that the focus should be on channelization and we've talked about a bit over recent years, but I definitely think there is a shift into understanding that. But I say it is how you channelize it, move stuff onshore without just making it seem as though the existing onshore market will then just, just grow even more and just an expansion of gambling. Because that's not what regulators and politicians want to hear. They want to want it onshore and if anything, to stop, as you say, the growth in the onshore market. What seems to be happening is more restrictions are coming in place which is throwing more people offshore. So they're looking at this, this market that was growing onshore and it's kind of stopped growing and saying, we've done well without saying it's, it's all offshore, you've done a terrible job. But we were in this, we were starting this saying what a tough job the regulator has and we need to feel sorry for them and politicians and actually all we've now done is just say they're making bad rules. So this has backfired a little bit. Can I also give a shout out as well? I think you are, Rene. We need to talk about, as one of everyone's favourite referee, it was Premier League era.
[00:22:16] Speaker A: Yeah, yeah. Part of the glory days. Uriah Rennie, David Ellery.
[00:22:21] Speaker B: Yeah, but you didn't see as many people protesting around Uriah Rennie as you did David Ellery.
[00:22:25] Speaker A: No, no, that's fair. Well, I mean, for balance, we also had Hugh Dallas up in Scotland. I think he was fourth official at the 2002 World cup final. Collinha, obviously the referee on the pitch.
[00:22:37] Speaker B: Well, I mean, look, if this podcast is getting too long, you can always cut that bit out, but if not, then, I mean, that is great information. For balance. Any other notable Scottish referees you want to give a shout out to?
[00:22:47] Speaker A: There is actually.
There was a guy called John Rowbotham who was another referee that had alopecia like Coligna, and he was in one of the Scottish papers, basically. I mean, this is, you know, going back a long time, but I think it was an article basically saying, hey, this guy looks like Pierre Luigi Collina. And he's also a referee. He also wore very short shorts.
[00:23:09] Speaker B: Wasn't, I mean, talking about one of the greatest referees of all. Wasn't John Anderson Scottish?
[00:23:14] Speaker A: John Anderson was, and he was an outstanding referee. I mean, for listeners that aren't in keeping with UK Saturday night television in the 90s, John Anderson was a very authoritative Scottish referee in the program Gladiators. Very similar to American Gladiators, but being British, slightly. Slightly lower key. But then getting back to.
[00:23:39] Speaker B: Getting back to topic.
[00:23:40] Speaker A: Getting back to topic. Getting away from a actual referees to industry referees.
[00:23:48] Speaker B: Smooth.
[00:23:49] Speaker A: Yeah. Yeah, I'm quite pleased with that.
Clawing it back from wherever Dark Alley we were headed down, I think. Yeah. I mean, I think it's going back to the first episode we did. We talked about regulators as a squeezed middle. They're really this kind of, you know, it's maybe kind of, I would argue, a bit of an underplayed aspect of their role. They're essentially the buffer zone between the operators and the politicians. So to an extent, their role is to educate the politicians to the politicians. But there's a few kind of issues in there. I mean, obviously we talked about the illegal market. One of the things that I think comes out quite a lot from regulators is we don't have the means to a quantify and balance, effectively react against the illegal market. But then I think there is also. And maybe this comes from politicians, maybe this in part comes from regulators. The idea that if you shut down illegal sites, people have to go to the legal ones. You know, this kind of the regulatory whack, a mole of dealing with the illegal market, I think is, you know, Perhaps not talked up enough. You know, it's not. And you see, you know, when there's talk about, you know, new powers for effective enforcement against illegal operators, what's not talked about about is doing that in tandem with viable controls for the market.
And I think in the case of. Just to add one more point, in the case of the uk, around the time of the Gambling act review, you know, comments from the commission, obviously under new leadership now really suggested that, well, it kind of downplayed the offshore market. You know, it kind of say, you know, there was a lot of talk about, you know, it's, it's a small subset to the point where, you know, we don't see it as a threat at this point. We're monitoring. We don't see it as a threat, but it's becoming a threat. Because I think that sort of mindset ultimately kind of, I mean, maybe not complacency, that's not the right word, but it gives regulators and indeed governments confidence to push for strict controls on an industry, not realizing that that ultimately affects the end user.
[00:25:56] Speaker B: Yeah, and I think some. We don't do too long. So I actually think this is. This is probably our best podcast so far, so we don't want to go too long. However, some thoughts on that. So intuitively, I think the regulators should have more control because they know more about the gambling industry than the politicians, and therefore, around the edges, they should be in charge of setting policy, perhaps, rather than politicians who will just make political things rather than what's right for the industry. That said, my understanding is that my view is that happens more in the UK than other places. There's a bit more autonomy of the Gambling Commission, and from what they've seemed to have done, it's been pretty terrible. And legal statement, everything I say now may not be slightly true, and it could be with a little bit of poetic license, but pretty much the couple of bits that, you know, spring to mind is the Gambling Commission, you know, talking about, as you said, there is no offshore market. That is not. That's just something talking about by the operators. There's no risk. Suddenly they do the stuff. They see that the offshore market is real, is taking share, and then they kind of turn around and go, oh, there is an offshore market. You weren't just lying? I mean, no. And then they talk about affordability measures. And so what you like, you know, an operator has, if someone's spending more than average, has to, you know, intervene and show proof or whatever they need to do and talk about affordability measures, then when there's loads of complaints from people about it, from actual players, then they turn around and say, no, we never said anything about affordability measures. And this is what the operators are just doing on their own and there's nothing to do with us. I mean, it's just a load of crap. So I do believe that they should have more power, but they need to be very much held accountable because it doesn't necessarily always work. I do really feel sorry for the ones Brazil, Netherlands, lots of other ones like that, who just have politicians making policy that is going to distort the market, really hurt the onshore market, push players to the offshore market and they can do nothing about it. They just have to implement it. And they're often the ones who kind of get the blame. Oh, the regulators there are crap. Well, they're not. They're just doing what they. They kind of have to do.
[00:27:50] Speaker A: Yeah, everyone blames a referee.
[00:27:52] Speaker B: Yeah.
You have any final thoughts?
[00:27:55] Speaker A: Well, I was actually going to bring up an example of our thoughts. It's just an interesting example of where I think a regulator actually, you know, did quite a good job in terms of being proactive, in terms of being collaborative, but also, you know, kind of making a point. And that was a. In France, I mean, like the French market, you know, we talked a bit about it the other week in our. In our. What we did in holiday episode around advertising. So I think it was. It was either Euro 2020 or it might even have been the 2022 World Cup.
Essentially, around the tournament, they saw a lot of advertising, a lot of aggressive advertising. They were very quick to come out and say, yeah, we felt this was too much, obviously instituted safeguards. So there was, you know, this approvals process to get regulation, to get advertising campaigns kind of approved, which is onerous. Yes. But at the same time, by stepping in when they did, they can work with the industry.
It's less about saying, yeah, we're going to stop you advertising, it's we're going to work with you more closely to ensure that your advertising doesn't go wild. And, you know, it's been likes of pmu, fdj, you know, they've made changes to campaigns because of this. I'm sure there's more examples, but by doing so, they use their power. They didn't just say, oh, this industry, you know, these, these guys are out of control. You know, we need more power, we need more money, we need more whatever. It feels broadly like they, they essentially stopped the scandal, you know, and I Just, I just want to kind of bring that up as, you know, we talk a lot about, you know, regulators in this episode and how ultimately this can squeeze middle. But that just felt like a really good example of a regulator flexing its muscles without major overreach, kind of punitive action really going in hard on the industry and ultimately I think kind of avoided the sort of political hand wringing and lobbying that comes with people that effectively, for the most part are anti industry or anti industry in its current form. I think that was just a really good example of a regulator and industry, you know, can work together.
[00:30:14] Speaker B: You know, I think that is an excellent point and it actually brings into mind rugby refereeing. So football, I know it's harder football, you come in a foul and it's kind of done off soccer, you know, rugby, you see someone getting his hands in, in the ruck where he shouldn't really do or something like that, or maybe standing offside and it's like hands off, hands off. He doesn't just kind of go, he could easily just go, right, you made a foul, that's it, you know, you're penalized, you're fined. They're just going to go, look, you're kind of pushing the limits. I'm here to make sure you don't do that. Not to fine you, not to punish you, not to slag you off to people and say what's in this? But to kind of go, okay, this is pushing it. We need to just keep things in check and work with the industry as the referee works with the players and if they do something wrong, too wrong, then that's it and they get sent off and simbin and stuff. But yeah, working with them like that is, is I think a very good idea. You don't want to go too far where everything needs approval. I think someone on the African operators was telling me they've they've got an ad campaign. There wasn't. It was a, let's say game or something or some other site. I think it was an ad. Anyway, they've got that approved and then they just want to change the color of the background that needs to go in for approval. Like every single thing needs approval. Just a color change which is just wow, you know, ridiculous and, and hence nothing happens. But when you have this kind of wishy washy and you know, don't go back to the gambling commission again, I just kind of know a bit more, you know, more news flow about them comes out in ones where they're, you know, operators looking for proper Guidance on things. And there's been missing anecdotal stories of like, yeah, but you know that, that speech that we gave at so and so event, you know, in June last year, we kind of talked about this and it's like, well, hang on. So. So actually now we need to be looking at transcripts of your speeches rather than what was kind of given as, you know, for guidance. Like, it's just, you know, there needs to be rules, but then they need to work with the industry and I think it's quite.
It could be quite tough. So I don't know if you hear my dog barking, don't worry. Yeah, okay, good.
[00:32:08] Speaker A: I wonder what that looked like in the transcript.
[00:32:10] Speaker B: So, yeah, no, I think that's a very good point. You know, you want someone to work with the industry and that's the most important thing. They are not. They are there to help guide and prevent any issues and not, say, bad publicity, but issues occurring rather than sitting back waiting for them to happen and then just coming down on the operators.
[00:32:31] Speaker A: That's an excellent point to end on as we not sure if we're quitting while we're ahead, but I think we're pretty damn close. Essentially, we want.
Or the industry needs Nigel Owens rather than Pierre Luigi Collina.
[00:32:44] Speaker B: And the final point I'd like to make, because I have given them some, some crap, I would like to say a very positive thing about the gambling commission, that they give good data, which is very helpful for me. It's on the data side of things. I think that's very good. And on that one, I also want to give a shout out to the Spanish regulators who also provide good data. And actually, annoyingly, I, not knowingly, happily, I am now going to Spain for the Gaming Spain conference because my colleague Josh said he was too busy and apparently his time is more important than mine. But no, joking aside, I think it's going to be a good conference because not only are we talking about Spain, but there's a lot of stuff they've got on Latin America. Why the LATAM and Brazil? I actually think some people from Clarion are attending as well. So I'm looking forward to that at the end of the month. But no, the Spanish regulator, any regulator that is able to produce good onshore market data will provide the offshore data. Happily work with them and then we can track this channelization and try and get to a position where we're not spending each episode talking about the growth of the offshore market.
[00:33:40] Speaker A: We can only hope. But everyone, thank you very much for listening. This has been another episode of Right to the Source with Robin Harrison and Ed Birkin. See you next time.
