Speech René Jansen, 19 september 2022
Speech by René Jansen during Gaming in Germany, in Berlin, 19 September 2022.
Good afternoon to you all, It is good to be in the historic city of Berlin. Thank you for inviting me to speak here today.
The previous conference block was about regulation of the German online gambling market, and I listened with great interest. Moreover, while preparing for this conference, I already gained an idea of how our neighbours regulate the various gambling sectors. In all countries, we see that methods of regulating gambling sectors have, in one way or another, developed over the years, for instance in the form of monopolies. In a federal state such as Germany, this had led to a particularly complicated picture – or at least so it seems to outsiders. To me, it seems very logical that the Länder, the federal states, have now joined together in an alliance to organise the supervision of online gambling operators centrally in the Gemeinsame Glücksspielbehörde der Länder (the GGL). It is also a logical step that the GGL will be empowered to issue licenses for online gambling – after all, traffic on the Internet does not stop at physical borders.
The creation of a central regulatory body in Germany prompts, to a certain extent, a comparison with the Netherlands. The Kansspelautoriteit or Ksa, was set up in 2012. One important reason for this was the proposed legalisation and regulation of online gambling. In the end, legislators needed until February 2019 to pass the Remote Gambling Act. After this, it took until 1 April 2021 before the Act actually came into effect and until 1 October of that year for market opening. Partly due to the coronavirus pandemic, this process experienced some delay as well. I suspect that the GGL will face pretty much the same issues that are being experienced in the Netherlands and other European countries. I will spotlight three areas where our experiences may be relevant to those involved in the upcoming German market developments.
Firstly, tackling the remaining range of illegal online offerings. Legalisation of online gambling involves two important elements. On the one hand, we have the creation of a safe legal gambling environment. Gamblers must not become addicted, they must not be tempted to keep gambling for too long and they must not forfeit more money than they intended. Besides the gambler, the operator too bears a strong responsibility: the operator must intervene if the customer demonstrates high-risk or excessive gambling behaviour.
On the other hand, we need to robustly tackle the illegal gambling offerings. In the Netherlands, we saw that many illegal operators withdrew after we announced that much heavier fines would be imposed as soon as legalisation came into effect. Many European operators also feared that they would no longer be eligible for a license if they persisted in illegally serving Dutch gamblers. Whatever the case, we do not hesitate to deal with any remaining or newly appearing illegal offerings. To give a few examples, in July, we imposed an administrative order with periodic penalties of a maximum of 4.5 million euros on the illegal operator Gammix and earlier this month also we imposed administrative orders with periodic penalties to M.K.C Limited and L.C.S Limited. And I can assure you: we will be taking further action in this field. Before we impose and announce sanctions – especially administrative fines – we go through a careful and hence long legal procedure. What I can tell you is that our Enforcement department has passed various administrative reports to our Legal department to facilitate further steps.
One thing that has helped the Ksa to deal with illegal gambling is that it has been granted an additional power since the legalisation of online gambling: the possibility to issue a binding directive to payment service providers, Internet service providers and advertisers to cease providing their facilitating services to illegal gambling operators. In the past, all we could do was request this.
There was one factor that undoubtedly played a role in the withdrawal of several illegal operators from the market in the Netherlands. This was that the Minister and Parliament demanded that operators who carefully complied with the law would not be placed in the same starting position as operators who did not do this. We met this demand by specifying that, before operators were allowed to submit a license application for online gambling, they must previously have refrained from offering any form of gambling to Dutch consumers for a period of almost three years. We monitored whether this was actually the case by examining a large number of illegal websites. As a result, various well-known operators that held licenses elsewhere in Europe were only allowed to enter the Dutch market at a later date. Some of them may even still be waiting for a license today. We started with the relatively modest number of 10 license holders; today, there are 20.
I cannot say anything, based on my own experience, about combating illegal online operators by means of IP blocks – the Ksa does not have this power. I understand, however, that the GGL does indeed have this power. In this respect, I will point to the Enforcement Working Group of the Gaming Regulators European Forum, GREF. This has recently been set up to promote the exchange of experience and best practices in enforcement by the various regulatory bodies. Its members include countries where IP blocks are actually included in the toolbox of enforcement instruments. They can tell us more about how effective this instrument is. Speaking generally, I understand that imposing an IP block requires a lot of work, and it seems that gamblers can get around IP blocks fairly easily. I am interested to learn how this will work in Germany. As the Chairman of the GREF Board, I would strongly support my GGL colleagues to make use of the knowledge acquired by the other regulatory bodies.
A second theme I would like to discuss is advertising. As soon as the online market opened, we were met with a bombardment of advertising. I consciously choose the term bombardment, because that is how we experienced it in our country. Strictly speaking, the operators were not doing anything against the law here. There are no rules on the volume of advertising. There are time slots within which advertising for high-risk gambling is forbidden. There are also requirements in terms of content: advertising may not be misleading, may not encourage excessive gambling behaviour and may not be aimed at vulnerable groups, including minors. Things occasionally went wrong with regard to these requirements, but not in structural terms. In particular, the quantity of advertising on radio and television caused a stir in our society; the public got really annoyed. Moreover, a lot of opinion leaders said they were worried this might increase the number of gambling addicts. The minister responsible for the policy on gambling felt pressured by Parliament to intervene quickly: since the end of June, it has been forbidden to present role models (like celebrities) in advertising, and a ban on untargeted advertising is planned to be introduced soon. The latter, however, first requires a change of secondary legislation. The experiences gained during the market opening in the Netherlands might be of interest for the German situation. Here in Germany, too, controversy might arise due to the limited social acceptance of gambling. Especially with the upcoming Football World Cup, additional advertising pressure can be expected. New license holders will want to present and showcase themselves to the general public. This also relates to an important general interest: channelling gamblers from illegal to legal operators. Here too, there is a considerable risk of public discontent, which may prompt you to think about additional – and above all preventative – measures. Not only by the government, but also by the sector itself. One possible option here would be overarching agreements made by the sector that aim to control the volume of advertising.
The third theme I would like to highlight, and in my view the most important, is this: the duty of care that gambling operators have. We received many indications and signals that legal operators were not taking their duty of care seriously enough. For instance, there were examples (also in the media) of people who were able to gamble away a lot of money without any intervention by the operator. Or the operator just limited this to a noncommittal chat message. It was possible for customers to set limits at operators that amounted to gambling 24/7 and spending 100,000 euros a day. It appeared that young adults were not given extra protection. In June, our Parliament arranged a round-table discussion that focused, among other things, on concerns about fulfilling the duty of care. We were already increasing our regulatory activities on this issue. We also commissioned an international comparative study to see if lessons could be learned. This study was published on our website in the beginning of August, including an English summary. It shows that there is a wide range of ways in which the duty of care can be modelled and how this can be enforced better and more effectively with legislation. I warmly invite all regulatory bodies as well as operators to learn from the results of that study. Strikingly, Germany has chosen a gambling limit of 1,000 euros, applied over all license holders. To my knowledge, Germany is the first country in Europe to decide on such a strict limit. It will be interesting to see how this works in practice and whether it will have an effect on channelling gamblers and how effective it will be to prevent gambling addictions and financial harm.
At the same time, I would like to stress one thing: it all starts with the operators, because they play a key role. They have to feel responsible for not leading gamblers into difficulties. Gambling is not just another product; this is something that operators have to be properly aware of at all times. I am not telling you anything new when I say that the gambling sector does not exactly have a rosy image. Legal operators face an important challenge here. Trust is something that needs to be built. We must realise that trust takes years to build and just a moment to shatter. Or to translate literally from the Dutch proverb: trust arrives on foot and leaves on horseback.
To conclude, I wish the Gemeinsame Glücksspielbehörde der Länder – GGL – great success with the important and challenging task it will be undertaking. I wish Germany a good and calm reform of the online gambling market, with a high level of protection for German consumers. The GGL and the Kansspelautoriteit are sure to come into contact again. For instance, in GREF, the Gaming Regulators European Forum. But we will very probably meet bilaterally as well: if we can somehow be of use with the experience we have acquired, then the Ksa is happy to share this with our colleagues. On the other hand, we will also be very interested to hear about the experience gained by the GGL. This is something we can learn from and use to improve our own regulatory work.
I will be taking my seat on the panel in a moment; if you have any questions for me, I will be happy to hear them. For now, I thank you for your attention.