Are a new generation of leaders helping to ease the pressure on the gambling industry?

As regulatory forces went into effect in Sweden at the start of 2019, we have seen in the past year that the market has performed quite unexpectedly, at least for the majority of operators. Seeing the negative results already in the financial announcements from all of the big, mid-sized and small firms, the paradigm change had begun and it continued throughout the year.

The growth and/or diversification of the market had declined and the optimism of the marketplace and investors turned for the worse, forcing companies to reduce workforces, call redundancies and cut innovative initiatives.

The industry had already at this point been falling behind, ever since the main body of the original founding fathers stepped down over the last few years – the generation of great leaders, trailblazers and ground breakers leading companies and driving the industry to the multi-billion industry it is today.

They have now been replaced by a new breed of leaders, the kind that had no solid feel or empathy for what’s going on, reshuffling the focus away from the customer, product, the respective individual/employee and stockholders. In my opinion, they are not up to the task nor equipped to lead the industry or the companies out of the pit we found ourselves in. All of this only added and increased to the blow and subsequently added to the low conjunction we see across the Nordic (and other) markets at the moment.

The regulators and the black markets

As RAIG chairman Clive Hawkswood and Rory Anderson of 12BET point out in their predictions for 2020: “The hard times in the UK apply not only to the UKGC but also to other regulators like the ASA and ICO. That pressure, unfortunately coupled with persistent industry failures, will embolden them to impose tighter controls and harsher punishments.” This leads me to sadly point out that we have seen this trend carried on from the Swedish Gambling Authority (SGA) as well. We all hoped for a more lenient and more sensible approach.

This lack of knowledge only creates a breathing ground for the grey/black markets, and that is not what we, nor the regulators, wanted to achieve. The main purpose for the regulated market holders is RG and protecting the problem gamblers, not to fine compliant operators.

The ‘clean’ operations cannot support themselves on the current set-up. Revenues and profitability are down, while at the same time resources poured in to AML, compliance, tech, RG, legal matters, licensing fees and taxes are soaring. In the future, many will think twice before applying for a licence again. However, I would like to see the SGA, UKGC, MGA and other regulators crack down on black-market providers, but also protect the law-abiding operators.

The next vital steps forward

So, in 2020 we must first and foremost, as an industry, realise we’ll never again see the golden days of the past. However, on the brighter side, we saw in the dying part of 2019 that the markets are stabilising. It is going to be a tough year and the industry must be more agile and resilient as we have been relying too heavily on history and what worked in the past. Also, we need to work towards a more open and direct dialogue with the regulators.

It’s a brave new world and the industry needs to adapt. Change is a double-edged sword. In this case, the industry has suffered initially (and still is), but we also need to remember that the same crisis that staggers innovation from a monetary point of view also could be a strong driving force. And innovation is often the way of progression.

Kim Larsen is a seasoned and experienced egaming professional. He has led, built and worked with some of the strongest brands and companies in the Northern European markets, including Betsson, Cherry, Metal Casino, ComeOn and River iGaming. He has held several executive positions such as COO, MD, CEO, head of brands and country manager.