LatAm regional analysis

Luis Gama: "Worse than not regulating the activity, is to do it badly"

Luis Gama, an international consultant who specializes in gambling, former head of Uruguay's gambling regulator and of CIBELAE lotteries association.
2021-10-15
Reading time 3:24 min
In his analysis of the industry as a generator of resources, and on what type of regulation is desirable, the international consultant Luis Gama shared his vision on the matter with Yogonet and explained: "We must first point out that the countries in the region lack a state policy that focuses on developing the entertainment industry".

According to Luis Gama: “There are no clear objectives, no management tools and there's no global view of how we imagine the industry, in the medium and long term. To the lack of regulation is added the fact that many existing provisions are not up-to-date and, consequently, do not have the desired effectiveness”.

“The partial regulations - he added - which are applied as the different game modalities appear, do nothing other than temporarily correct some particular situations. But this path is followed as something that's temporary, and not framed within a general strategy”.

“Many times these regulations are aimed almost exclusively to the tax collection aspects. From the various states, and when issues related to gambling are addressed, the generation of greater resources is fundamentally prioritized. To prioritize the increase in revenue is regarded as short-term action. One thing is to increase revenue and another to bet on the growth of the activity as a whole. We are looking at the tree and not the forest,” he said.

“We understand that the most effective way to regulate the activity is by including all the aspects that are part of it, addressing the problems without losing sight of the consequences of the measures that are to be implemented. The State should not be oblivious to all that the industry implies, and it should be strongly involved as the Regulator of the activity. The State has responsibilities and, as such, it must assume them. It must lead all the actions that are carried out. We must insist on a strong state that diligently carries out its tasks”.

“Along the way, the contributions that may come from the private sector should be considered, as long as it is in line with general and not specific objectives. Today some countries, and only as a consequence of the impulse, commitment, and personal learning from their regulators, are on the path that I believe should be followed. Clear objectives, transparency, protection of the gambling public, safeguarding minors, and establishing provisions aimed at responsible gambling, are some of the aspects that are under consideration”, the consultant explained.

He also added: "Other countries are having difficulties and are enacting provisions that the only thing they achieve is to further aggravate the situation. A bad resolution can cause, for example, an increase in illegal gambling. Because I am convinced that worse than not regulating the activity, is to do it badly”.

“A regulation that is not oriented towards an integrated perspective, with clear definitions -among other things- about whether or not it has to be restrictive in terms of the number of licenses to be granted or what kind of requirements will be required to be able to acquire them, tends to lose effectiveness and present weaknesses that make it inefficient. Currently, there are common objectives such as addressing the entire issue of online gambling and fighting illegal gambling in all its forms”.

The development of online gambling is constantly advancing, and this means that every effort must be made to accompany this process by adopting a standard-setting character. As the main objective, the supply should be adapted to the current demand”.

Another issue to take into account is the role of private operators acting in harmony with the different Regulators. They play a fundamental role and are a factor to take into account when discussing alternatives related to the regulatory issue. But we also have to be very clear about what type of companies we want to incorporate into the market. In general, and what we must pay attention to, have a great reputation, solidity, guaranteed experience, and fundamentally a great disposition to discuss and advance in a completely professional way. On the other hand, there are other companies, which in many cases are unknown and that do not belong to the industry, that have been taking up space causing very negative consequences for the sector”.

To conclude, Luis Gama assures: “The industry must be taken care of and this type of company affects credibility, transparency, causes a setback, and transmits a clear negative signal to the entire society. Consequently, acting in a responsible manner and widely discussing all the issues that will define where we want to go, the joint work between regulators, operators, and suppliers, will bring us closer to carrying out a regulation that adapts to reality and is in tune with the needs of all the players that make up the industry. The various states must understand the importance of the need to regulate as a way of ordering and controlling. Analyzing the results and the type of regulation that those countries that have advanced developed are more than important facts to take into account. Accelerating the political definitions and regulatory processes will make the expectations generated in the region definitely be considered. There is great confidence that this will happen”.

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