A blast from the past to understand the value of casino & sports betting regulation
LeoVegas Casino & Sports is a Swedish online gambling operator founded in 2012. Now, seven years later they have finally opened the doors for Swedish players. Since the start LeoVegas main market have always been Sweden and in 2017 they spent $35 million in advertisement to attract Swedish customers.
So how does it come the doors have finally been opened for Swedish players?
LeoVegas has been operating in a legal grey zone up until the regulation of the Swedish gambling market the 1st of January 2019. They, together with 100 other Swedish casino operators, have made use of a legal glitch which allows casinos based outside of Sweden to target players inside the borders.
Prior to the regulation, all operators hosted their real money games from the gambling friendly island Malta. A tiny, progressive island which also is a member of The Commonwealth but have decided to take an open approach to online gambling, cryptocurrency, cannabis and Artificial Intelligence – compared to some other of its’ members.
Malta’s goal is to stand in the forefront for digital and technological debated topics. The island, which is a part of the European Union since 2003, quickly realized the value of attracting foreign investment. The benefits of taxing companies inside the country on gambling activities performed abroad became a gold mine. Taxation from online casinos and sportsbooks accounted for 12% of the GDP in 2018.
Now, when Sweden has regulated its own market, Malta can wave goodbye to their tax income on Swedish players.
How deceptive marketing methods are used for short wins
There is much India can learn from this. India is standing in front of either battling 1000’s years of betting culture, or follow a recipe which has successfully been working in many other countries.
We can already see clear traces of how modern technology is running in circles around the outdated betting laws.
Indian Facebook users have over the past few months seen a sponsored Facebook article flooding the newsfeed. The article says the CEO of LeoVegas, Peter Newsted, was fired due to a loophole in a promotions terms & conditions.
This was something which was picked up by Guide 2 Gambling, a consumer advice website within online casino and gambling games for Indian punters. They debunked the fake news article and managed to prove there’s nobody at LeoVegas named Peter Newsted.
The sole reason behind the fake news article was to attract Indian casino players with a deceptive promotion by lying about the mistake.
LeoVegas accept Indian players at their website, but they are not actively doing any type of promotions towards India. If a player comes to their website, they are welcome, but there’s no pursuing of the customers as of today.
Since the Indian online gambling market is a “wild wild west” LeoVegas cannot take any legal rights towards the fake news articles.
If the market was regulated, the situation would have ended very differently.
It’s not only about the money
When you are regulating a market, it is not all about the tax money or controlling your partners marketing initiatives. No, the foremost purpose is supervising the health of the players. A regulated market is a safe and sustainable market for the online punters.
Sweden, who are known for their bullet-proof welfare system, did not go easy on responsible gambling and self-exclusion once the regulation went into force. All casino operators must obey by some of the strictest guidelines for responsible gambling. During the first week of regulation 10 000 players self-excluded themselves from a central system, so they will never be able to place bets again. Not on any form of online gambling site in Sweden. None. Never.
The other day the Swedish online casino Ninja lost its license to operate in Sweden, since they had not fulfilled the criteria for responsible gambling. A tough blow for a company which relies 95% of its revenue on the given market.
What can Indian online casinos & sports books learn from this?
Unfortunately, not too much, since the local operators are not invited to the party.
As of today there’s a long list of websites hosted abroad which accepts bets in INR, LeoVegas being one of them. The economical mathematics are easy to calculate, and it does not benefit the Indian tax system nor employment opportunities. All the bets are wagered and taxed outside of the borders.
Malta stands as a happy chap though.
However, this also means all valuable player data on behavior is stored abroad. Data which can be used to enhance the experience for the users. Lacking this valuable data means the Indian casino’s and sportsbooks will fall short on product knowledge, which will further push the market advantage for the international gambling operators.
What will happened within the legal field in India is still unclear. What is not unclear is the fact that international casinos will continue to pursue their economic dreams within our borders. What we will do about it is entirely up to us.
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Read more about online gambling in India.