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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
Martyn Elliott (00:02.936)
Hello and welcome to today's edition of iGaming Daily. We're coming to you from Malta where we've been taking part in SBC Summit Malta funnily enough. And all three of us who are on the show today.
took a full part in the conference yesterday, so we're going to talk through some of the highlights, some of the talking points, and just give you some insights into what the industry is talking about. I'm Martin Elliott, Media Director for SPC, and I'm very pleased to be joined by SPC's editor-at-large, Ted Menmure, and iGame and expert editor, Joe Streeter. Ted, how are you doing?
Ted Menmuir (00:45.582)
Very well, Martin. Really good to be in Malta. Yeah, it's been a very, very busy day one, so I'm glad to be providing feedback on it.
Martyn Elliott (00:57.164)
Yeah, great. And what about you, Joe? You were extremely busy yesterday.
Joe Streeter (00:59.991)
Yeah, yeah, yeah, I was and, you know, there's obviously lots of different ingredients to a conference. And at various conferences, you get, you know, tasked with doing different things. My favorite, favorite days are days like yesterday where I'm kind of glued to a conference room. There's an overarching theme that's very interesting in that conference room. And you kind of get to go with the whole narrative of the day. It feels like you're watching the whole film. It was very good, very enjoyable.
Had some fantastic speakers, brilliant written agenda. So yeah, really enjoyed yesterday and excited for today.
Martyn Elliott (01:32.184)
Good, I I was speaking in your room, so I'm going to take that as a compliment. That's a compliment. Yeah. Yeah. Anyway, just before we get stuck into this, obviously, as always, this episode is brought to you by our friends at OptiMove, the creator of positionalist marketing and the number one player engagement solution for iGaming and sports betting operators. Right then, let's see, where should we start? Ted.
Joe Streeter (01:35.045)
Yeah, a few exceptions to the rule, but I didn't want to.
Martyn Elliott (02:01.91)
Tell me one of your highlights from yesterday.
Ted Menmuir (02:06.262)
I think it was, I mean I was shifting between rooms. So again, I was kind of overseeing the market disruptions and kind regulatory affairs room. It was a workshop. But I started my morning in the iGaming expert in the kind of operational risk side. And we had two very strong back to back panels on fraud detection.
and also kind of your the design and engineering of workforce and operations to tackle fraud.
that's becoming more intelligent, more elaborate, and also is using kind of AI tools to deceive consumers and to deceive operators. One of the panels also focused on kind of what path Fintech is taking, and kind of that divergent path between Fintech and iGaming, and whether there's kind of any grounds to meet in between. So I thought those were kind of very prominent discussions. But also stuff that kind
raises your eyebrows of like, is iGaming going to be left alone? And especially as every high-risk sector now views fraud as the most prominent threat and the changes of that.
Martyn Elliott (03:27.383)
Yeah.
Joe Streeter (03:27.409)
Yeah, I was on that panel with the Ted is speaking about around fraud detection and it was very interesting. And one of the things they mentioned was that it's not necessarily changing the tools that are being used by fraudsters. AI is not necessarily changing the tools that being used.
Ted Menmuir (03:39.79)
Mm-hmm.
Joe Streeter (03:46.171)
but it's really just opening up how accessible they are. So they're seeing more and more attacks and more and more things that are just distracting the kind of fraud fighting team and the cyber security team. And there's so much more to deal with. It was very interesting.
Martyn Elliott (04:01.506)
Sure, we always talk about AI as being a...
a general positive for the business world, know, productivity saver, possibly a profit driver. And you know, the negatives tend to be about, is it killing off jobs and so on. But actually the bigger negative is going to be that things like fraud, it's because if I can find my voice, I spent quite a lot of time talking yesterday, more than I like, so my voice is a little bit...
disappearing at this point. no, getting back to that, AI, it's just made these kind of fraud attacks so much easier. It's really easy to program a bot in Claude or in, well, not so much chat GPT, they're less effective, but some of these tools are incredible, what you can do in just a few minutes. And if you are somebody of the mindset,
Ted Menmuir (04:48.51)
Mm-hmm.
Yep.
Martyn Elliott (05:03.862)
you want to steal from, whether it's gaming operators or any other business. It's really a lot more simple than it used to be. So very interesting that we're talking about that fraud stuff.
Ted Menmuir (05:14.189)
Yeah, I mean, I've got a raise and I think it got brought up in Joe's panel. You know, they had three chief risk, chief kind of risk strategy officers and they said, look, part of the thing is like the elements here is like online gambling is a particular environment, right? And these fraud detectors just will stop at nothing. So they're just trying to find something that works, right? And they just can, you know, you know, they might take them.
million times, two million times, 10 million times, but also in doing that, they kind of create their own kind of environment. So returning back to the box, the process is that it's not necessarily that there are good box and bad box, right? It's that there are dangerous box, right? Which you have to detect. And then there are like a million or two million really crappy ones that you have to get through, right? And it just creates this kind of, you know, ever expanding.
uh... know uh... ecosystem of just nothing and again it's a waste of operations, waste of resources but it has to be managed and iGaming is definitely being targeted in that.
Martyn Elliott (06:24.588)
Yeah, mean, any kind of transactional online business will be targeted by these bots. It is big worry and it's a new thing. I'm always quite amazed by and a little bit depressed by society that when this new technology comes out,
Ted Menmuir (06:32.213)
Mm-hmm.
Martyn Elliott (06:44.376)
always appears that the bad actors are ahead of the people stopping their stuff. They're investing a bit more of their time, their effort into doing the wrong thing rather than producing great products that are beneficial to consumers. So yeah, a worrying trend. What about you, Joe? What was your main takeaway from yesterday?
Joe Streeter (07:11.911)
Well, yeah, before I go into that, Martin, watch something it reminded me of yesterday when I was on stage and I didn't make the point. You know, I watch a lot of airport shows. I'm a real guilty pleasure for airport shows. You know, these shows where they just film in the airport and quite often they send the smugglers or whatever they send people through looking incredibly
guilty like they're like they're doing something and then the small security team will take them aside thinking they've got someone meanwhile somebody that's gone subtle that looks very subtle has slipped through the net because they're distracted and yeah that's kind of what ai fraudsters are are doing at the moment and ai is giving them the ability to do that en masse
Martyn Elliott (07:47.416)
Thank
Joe Streeter (07:54.973)
So yeah, it kind of reminded me of that anecdote. I didn't get to share it on stage yesterday. So I wasn't gonna miss it a second time to let people know that I watch a lot of airport security shows. But yeah, one thing that really stood out to me yesterday was just this kind of overarching theme. mean, we had, you know, three or four back-to-back panels where we were talking tax. We were talking taxation levels across Europe.
Obviously largely centered around the UK. You know, have to give credit to our conference team because to put together three panels back to back all on a similar subject, but all having a distinct different flavor is very strong. very, it's a fine art and they did it very well. And each panel did feel very different at a very different nuance discussion about taxation. But there were some overarching themes, I think.
One of the themes speaking to the COO of Flutter was that, and Stephen Hodgson who is obviously now at midnight but was obviously forefront of the BGC campaign to kind of rally back against.
tax rises in the u k was that that the decision was made in the u k was a political decision and you know they they needed to take that decision to to kind of appease and and peace and there was no there was no getting around it really there was nothing that could have been done but also there's a worrying concern there is a concern that other european markets
despite of channelization rates, despite the consequences and the warnings, other European markets will be emboldened by the Netherlands and by the UK. And they will also go in a similar route. And that is a real concern. And if you are those European markets right now, if you're stakeholders in those European markets, you're going to want to be looking at what went wrong and what went right in the UK and the Netherlands when it came to getting the message across around the black market.
Joe Streeter (10:00.447)
and around the impact, the real life consequences of tax rises.
Martyn Elliott (10:07.756)
Yeah, I mean that was one of things I picked up, this idea that there's going to be some kind of contagion coming out of the UK and the Netherlands with other governments just doing something that's actually self-defeating. Because what we've seen is that tax take actually goes down when you put that up. Black market is emboldened.
and all these ideas if you're doing things in the name of player safety, player protection, actually goes out the window because it drives players to the operators who don't care about player protection and so on. There was one little counterpoint to that on one of the sessions I sat in on yesterday where somebody was pointing out that Estonia has actually cut its gambling tax. They...
you know, the government had planned to put it up, but when they went and did the investigation and the consultation on it, they came to the conclusion, actually, cutting it slightly might be better for the economy, might be better for the industry, better for consumers. So perhaps some other nations will learn a bit from that. I'm not optimistic they will, but perhaps we'll see how that goes.
Joe Streeter (11:21.885)
Yeah, there is, I think it's fair to say there is also a kind of wider incentive for Estonia to, know, as markets open up there, you know, with the Finnish market and other markets open up there to be kind of the Malta of that region and to try and build itself as a gambling hub for sure. yeah, also quite the story that they...
They had an error when they first went into, I don't want to knock a stone here, I applaud what they're doing, but yeah, they had an error when they first opened up and just a small slip in the small print meant that gambling companies didn't pay tax for a whole month. So that was quite something.
Martyn Elliott (12:05.014)
Yeah, but what I will say about that is almost all, in fact, maybe all the licensed operators voluntarily paid that tax on the month they didn't have to as a sign of good faith to the government and to just show that they are a proper part of society. It's a proper business, which is a warming thing. Right, let's take a quick break. And when we come
Joe Streeter (12:14.982)
Okay.
Joe Streeter (12:25.756)
Yeah.
Martyn Elliott (12:35.512)
I guess we'll talk about one of the things that is quite depressing for the industry but keeps us going in the journalistic world, is how we're going to tackle the black market and black market operators targeting licensed European markets.
Martyn Elliott (12:58.932)
Welcome back to part two of today's iGaming Daily brought to you by Optimoof. Yeah, are, well, I was going to say we're still in Malta. Would be a bit of a strange thing had we departed Malta in the ad break. yeah, I spent a lot of yesterday listening to people talking about the black market and people I think it's fair to say across a lot of operators are
Joe Streeter (13:13.693)
you
Martyn Elliott (13:29.228)
both worried and angry about the extent of the black market in Europe. And some of the practices they're seeing, what they see is unfair competition because they are sticking, playing by the rules, paying the taxes, not really able to advertise in lot of markets. And they're seeing these guys who don't care about the rules, don't care about players, walking away with, you know, a...
big market share and a growing market share now. So I wondered from what you picked up yesterday about, Ted, about what the industry might do to counter that a little bit.
Ted Menmuir (14:10.988)
Look guys, so frustrations are definitely showing and the begins to come to the horizon.
I think that the ground is shifting here as following what has been kind of successive tax increases across the regions of France, know, Netherlands, the UK, Sweden, right there.
We are a tax-paying industry. But what provisions and what measures are being offered by the government to actually counter a black market? And it's also the recognition that the government is really at ground zero in its fight. Many don't even care. Let's put it that simply, right? So what platforms are these governments going to build?
to actually recognize the black market. when we talk about the black market, it's again, it's returning to, you know, these are criminal gangs. They are using fraud. They're using sophisticated algorithms to target the most vulnerable. And the danger here is that these guys aren't playing, you know, because they want to make X amount per month, right? And it's part of a business strategy. They want to wipe out the customer. They want to take his savings.
They want to take his overdraft. They want to put him in debt. And again, it's, think that at one point, the industry, and again, this is going to point to leadership and how handles this. And just don't necessarily think it's about the trade bodies here. They have to begin communicating with authorities of like, what is the first checkpoint encountering the black market at a European level?
Ted Menmuir (16:00.809)
because it's also, we are talking about a criminality that ranks with drug trafficking and it requires that level of sophisticated cooperation. It's not gonna take one conference, guys.
Martyn Elliott (16:21.464)
Well, that is very definitely true. mean, one of the interesting points that came out yesterday on one of the panels I sat in on was that we've seen through Freedom of Information requests some of the correspondence between the Treasury and the Department for Culture, Media and Sport, which is the government department in the UK that looks after the gambling sector. And in that there was...
Ted Menmuir (16:45.674)
Yeah.
Martyn Elliott (16:50.998)
The DCMS was arguing that the tax rises you propose won't get anywhere near as much money as you think for three reasons. And the last one was, the last of those three reasons.
was some players will go and play offshore markets. We have no way of quantifying what that threat is, how many players will go away. So it's very difficult to make an argument with saying.
We know something bad is going to happen. We don't really know what the scale of that is. You know, that's a difficult selling to the spreadsheet guys in the finance ministry who are just trying to work out how they can get some desperately needed cash in to run public services. I mean, what was your takeaway on this joke? I know you were sitting in the room watching some of these panels about the black market and how the industry can combat it.
Joe Streeter (17:51.559)
Yeah, and kind of just to follow on from what you said as well, the you know, if we see these things come to fruition, and we see, you know, channelization rates could go down and these worrying trends and there even if there is less tax intake off the back of the tax rises, who is still going to be the government or the PM or the you know, the DCMS or whoever that comes in and cuts gambling tax?
once we once these decisions have been made, which they have to go to 40%, wheeling it back is is a very unlikely prospect because as we saw kind of, as we saw, as we've seen for years, really the, you know, gambling is, one of those things that is, an easy target. And it's a very tough target when it comes to, to tax cuts in terms of the news radio headlines. We always talk about the news radio headlines, right?
that to be the PM that cuts gambling taxes, yeah, for PR that's not massively shrunk. That's a hard sell for wider PR, I think. yeah, that's quite a concerning time. That's tough. think whatever evidence is brought to the table now, it's gonna be very hard to wheel back those tax rises. yeah, I don't know what we do about that. And I think...
One of the trends one of the things that I noticed yesterday when hearing about the black market is I was quite keen to hear what the you know, what the source is What what is the driver the key driver in sending players to the black market? I've always been of the opinion that streamers play a big part You know a new generation of influencers. I know you discovered some new influencers yesterday Martin So yeah a new generation of influencers and how they an hour younger generation engages with
digital media plays a big part in exposing a new generation of gamblers to the black market and unlicensed operators. But one of the big drivers yesterday from what I heard from people talking on stage was, and particularly the COO panel, was how frictionless the experience is. People are at one convenience now and having the ability, when the kind of lines are blurred between what looks like the black market and what is the regulated market.
Joe Streeter (20:12.116)
on paper being able to just sign on like that and have very minimal if any barriers to entry is a real kind of user experience on paper a user experience positive for the black market it really gives them a head start so yeah if there's any way that you could retain safety and improve the kind of frictionlessness of the regulated market I think that would certainly give it a boost in terms of
rallying back and kind of getting back some of this market share and swaying the momentum.
Martyn Elliott (20:46.956)
Yeah, I mean, that's a big thing, the difference in the user experience that the companies outside the regulation can offer. I mean, we were researching a feature on the black market and the availability of various games and so on recently. yeah, one of the casinos I signed up to as part of that process, the KYC was so limited, didn't even ask my name. And the option for date of birth was...
exactly 18 years ago and that was it. you know, the lack of scrutiny of players and so on is a real worry in that market.
Ted Menmuir (21:21.003)
Mm.
Ted Menmuir (21:31.723)
In the markets workshop, someone raised a good point because, well they noted this, like, are you going to ask the German government or the Dutch government to kind of re-overhaul their laws once more? Unlikely. But they said that the real kind of where the focus should be would be at kind of a European level.
and really determining laws that act against the principles of the black market. And where can really stamp out or impose blocking on transcontinental transactions, verifying of payments.
recognizing which businesses are completely unrestricted across any European jurisdiction. So that would be the first layer of enforcement that is needed, but no one appears to be pushing for that. I just don't think that it's going to be a question of like we have... I think the UKGC knows that there's a black market. The DCMS too.
But the issue here is that you're not going to get them a year down the line from implementing the gambling review to return to it to impose protections that favour a free market. It's just not going to happen. So I think you've got to think wider elements.
Martyn Elliott (23:02.68)
Yeah, mean, the cross border thing is interesting. I saw another panel yesterday about the route to enabling prediction markets to be legal in Europe. sort of the theme that came out of that is they're saying, you're to need crypto regulation and gambling regulation. The crypto bit.
You can probably do because it's already an EU wide regulation gone in against it. But then you have 27 different sets of gambling regulations. And that doesn't make a great deal of sense to me that you've supposedly got this big trade block. I know we, for whatever reason, we voted to leave that trade block and we're outside it. But the other 27...
Ted Menmuir (23:34.441)
Yeah.
Martyn Elliott (23:56.63)
members still in it can work together more closely if they wanted to, to solve some of this stuff. What they will of course is a completely different matter. so, right, I think that's...
about the end for us, we're running out of time here today and I know the two of you have got more conference panels to go and run today, so good luck with that and I'll leave you with one thought, Joe, you said people aren't going to tax, roll back the tax changes.
Ted Menmuir (24:20.426)
You
Martyn Elliott (24:30.954)
income tax was introduced in the UK to fund the Napoleonic Wars and it was said to be a one-off tax and then it would be repealed after we'd defeated Napoleon. I'm still waiting for that repeal to happen so I'm not that optimistic about the gambling tax they imposed a few weeks ago being rolled back at any point soon. But on that cheery note, Ted, Joe, thank you very much for today.
Joe Streeter (24:47.313)
Hehehehehe
Martyn Elliott (24:59.852)
Thanks for listening and we'll be back again tomorrow with another episode of iGaming Daily brought to you in partnership with Optimove.