Interactive GREENTUBE
Compliance more than a ‘necessary evil’ for Greentube
G3 interviews Greentube Malta’s Managing Director, Trevor De Giorgio about the role compliance plays in the development process
How do you view the role of compliance and where does it fit into the games creation process?
Trevor De Giorgio, Managing Director, Greentube Malta
Dr Trevor De Giorgio is currently employed at Greentube Malta as Managing Director and also occupies the role of Head of International Legal Compliance with Greentube. Prior to this he occupied the position of International Compliance Manager for Greentube. In his current role Trevor focusses on international regulatory and public affairs for Greentube. Trevor also looks into the different markets / jurisdictions which exist in the online gaming sector and following an in depth analysis pushes forward the projects associated with obtaining a license in a particular market and subsequently ensure full compliance, together with the compliance team, within such markets.
Before joining Greentube, Trevor worked within the Lotteries and Gaming Authority's Legal department paying particular attention to EU Affairs and Developments.
Trevor was conferred with an MA in European Law and at the University of La Sapienza (Rome). Earlier, he was awarded an LL.D. from the University of Malta, after writing and successfully defending his thesis entitled, ‘The Constitutional Implications of a Hung Parliament'. In November 2003, Trevor graduated with a Bachelor of Arts (BA) in Legal and European Studies.
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Te ever-changing regulatory landscape means that the role of compliance within a gaming company is always increasing. Regulations establish a lot from the taxation rates, the location of the servers, as well as the seat of the company that can apply for a license. In fact, they also delve into the maximum and minimum stake, the maximum hourly loss and other related matters. All of this needs to be taken into consideration when developing games that will be put out there for the consumers. Tis, in turn, follows the need to have ever-increasing synergies between compliance and game developers’ personnel.
There’s an ongoing great debate taking place around the world as to the rates of taxes big international conglomerates pay to individual countries in which they operate. Against this backdrop, is the gaming industry paying its fair share of taxes both at source and in the country of origin in which the bet is placed?
Taxation is a hot topic in the current regulatory scenario. Te truth is that tax rates can either make or break a successful regulation. I believe it is a matter of balance – i.e. maintaining a balance between the fiscal needs of a particular jurisdiction and the commercial interests of an operator.
How much of the M&A activity we’ve seen recently has been driven by the pressures of compliance and tax? And what will be the long-term effects on the industry?
Both regulatory and licensing costs have increased significantly for operators. What this means is that only well-financed operations can continue to develop and grow, and one of the ways is doing it by M&A activity. Te downside is that by having fewer operators in the market there will be less competition and in the end it is
the competition that drives innovation.
Do you agree with the argument that higher rates of tax lead to decreased consumer protection? The argument being that consumers will seek out illegal sites that are not paying taxes and where consumers are at the most risk.
High tax rates tend to have a negative influence on the pay-out levels of legal/licensed operators. Tis subsequently tends to have a knock-on effect in so far as illegal operators remain more attractive to players, for example, given the possibility of obtaining better odds on these sites. However, one tends to question the standards (or the rather lack of them) which illegal operators adhere to. Furthermore, it is becoming an ever-increasing occurrence that said operators also run illegally copied versions of the original games. Tis indicates the clear lack of standards within such operations and as a consequence puts the players at risk.
Enforcement is inherently difficult in the dynamic and ‘borderless’ markets such as online gaming. Tis could be due to the fact that changes and developments in technology are constant, making it challenging for regulators to always remain ahead of the latest developments. Terefore, given the difficulties of enforcing against the illegal offering, regulators need to be pragmatic and base their decisions on experience. Discussing with other regulators who have done this already and were successful is helpful, and why not – potentially also speak to licensed operators themselves who generally have a very sound knowledge of the markets of interest. Tere is a concrete risk that when a legalized structure is created, licensed operators are put at a clear disadvantage compared to the black market.
Licensed operators need to be given the best possible tools to compete against illegal operators. Although, the best case scenario would be to build a regulatory environment where illegal operators don’t even arise in the first place. Learning from experience - bans on online gaming or strong restrictions only help the growth of the illegal market.
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