“From my role at bwin, I propose to keep pushing the way towards regulation”

In EY! you talked about the case of the Province of Misiones. Could you tell us what does the work you performed with the Instituto Provincial de Lotería y Casinos (IPLYC S.E.) consist of and why is it an example to follow?
Five years ago, we applied for an online gaming license that clearly specifies that it cannot be extendable to the offline. It means that it establishes that a physical space cannot be fixed to offer the games, but all the transactions must be done at a distance, maybe through telephone, computer or any other device. It covers all the online modalities: sportsbooks, poker, casino, bingo or any other game.
The steps that must be followed in order to obtain the license are the following: Once it is applied, a field test is performed. The operator has to show its suitability to practise a new activity, it must have a financial support in order to back any situation, it has to have all the control procedures in its place (gambling problems, money laundering, mirror site of the transactions to verify the complaints or difficult situations and bank statements for the Lottery to check each of the transactions performed through the site). Once the field test is approved, the game starts operating.
During the EY! session, I explained that this concept applied in Misiones, which has been improved in these latest four years in which we have been operating, may be extendable to the rest of the country under the firm of agreements between provinces, as well as it happens with traditional games.

Which have been the results?
Being a public company, we do not give that type of information. But it is important to remark that this business has a very low margin and requires a very big volumen of transactions and players, what can just be achieved through massive advertising. For different reasons related to the fact that regulation is still in a “grey-area”, a massive advertising cannot be performed. What I can say is that the business in Argentina is very small compared to other games available in the country, and almost irrelevant compared to the rest of the world.

Have you worked with other regional province’s institutes?
We have been in touch with many of the regional entities. We explained what type of products we offer and tried to convince them that it is very difficult to reach a perfect regulation. To reach perfection, the regulation should be national and each of the provinces would have to transfer their law enforcement powers to a national commission that gathers all the forces. It would mean to expand the Misiones model to an entity formed by several provinces in a national environment. I would not say it is imposible, but it currently seems far-away. We proposed to bring together the different regional lotteries in order to see the interest existing. Unfortunately, we have not been successful so far.

Why?
I think more than anything due to a cultural problem. The business is small, and maybe because of that there are not many reasons to take a way that the parties involved consider unknown. I think it is also hard to understand that it has to evolve at a national level and cannot be an effort province by province.

Is there any Latin American market in a better position than Argentina?
Some countries such as Costa Rica and Panam, and other Caribbean countries, grant online gaming licenses, but mainly for the exterior. They offer the operator the chance to set all its operation in the country and offer their products worlwide buy not for that specific country. Paraguay tried to regulate sportsbooks, without specifying the environment, online or offline. It performed a tender process, but unfortunately, that process has had many conflicts.

Which are the goals that the company set for Latin America?
bwin merged with Party Poker last March. Now the firm is called bwin.party Digital Entertainment and quotes in the London Stock Exchange. It is the biggest public company worldwide. As a company level, our aim and focus are the regulated markets. The priority is to progress in the new regulated markets of Europe, Spain and Denmark. These are markets with more than 10 years of existence, with a great cultural progress and development.

As General Director for Latin America, I propose to keep pushing the way towards regulation, guiding both users and government entities to see which is the best way to reach regulation and to be able to participate of a process with multiple operators or a sole operator, according to what each government determines. We will just enter and invest strong in a country with a clear vision. US is about to be regulated. Our priority is to focus in markets in which transparence is one of the key points and the company can invest without meaning a long-term risky bet.

We want to set our position clear that for us an Internet site is not a gambling den. It has a lot of things behind that perhaps are not seen, and the best way to control it is bringing security to the user in a regulated frame supported by the authorities. We have to work together with the governments so they understand that it is another kind of game and a correct balance has to be searched between the winnings and its return to society as taxes.

While there is not a regulated market, the truth is that, those that, as we do, try to develop our business in a legal environment, are a minority part. A lot of taxes are being lost in the market. I do not think any Latin American country is in conditions to lose that opportunity. I have faith that progress will be performed on that matter.

Do you think that US is closer to regulation despite “Black Friday”?
Through “Black Friday”, US started changing the frame and the way in which some companies operated with the aim to establish a regulation with clear rules in the immediate future. I think it started a regulation process of the market tending to regulate it shortly, in two or three years. For an industry that is just beginning, it would be shortly.