Event Reports: EEGS 2016 (EEGReport Magazine – Issue 5 – February – May 2017)

The ninth Eastern European Gaming Summit (EEGS), held in Sofia, Bulgaria at the end of November, has once again proven to be the nexus linking experts, professionals, representatives of land-based and online gaming in the region. Organised by the Bulgarian Trade Association of Manufacturers and Operators in the Gaming Industry (BTAMOGI), the agenda emphasized on providing updates on regulation, compliance, innovation and disruptive technologies. More than 230 visitors joined the conference, 14 discussions were held with speaker line-up of 60 distinguished experts. According to the feedback received from its regular delegates that was the most successful and beneficial of all editions so far.

Angel Iribozov, Chairman of the Bulgarian Trade Association of Manufacturers and Operators in the Gaming Industry (BTAMOGI) and Ognemir Mitev, Chairman of the Bulgaria’s State Commission on Gambling, performed the official opening of the event. In his opening speech Angel Iribozov pointed out that the gaming industry is stable and the revenues in the state budget are exceeding the expectations and guarantee the stability. According to Ognemir Mitev, the conference serves as a great opportunity to exchange information and good practice on the manufacturing, operations and regulatory aspects of the gaming business. Local companies and operators showed great interest in the conference that proved once again their open-mindedness about the European experience in all topics, related to developments in the gaming industry.

The seasoned consultant Andrew Tottenham, followed the official opening with a keynote presentation based on important issues such as what could be the future of cash and why big banknotes might be on a way out, influenced by two main pressures – money-laundering and financing terrorism. One of the main trends that will influence the industry and the cash flow is that governments are trying to cracking down on anti-money laundering.

 

The regulatory changes and challenges in Europe were the most debated issues during the first day of the summit. As there are different regulations in every country, which keep evolving, the beneficial discussions led to more understanding of the various markets for the delegates. The first regulatory update session was dedicated to the recent developments in European jurisdictions, such as Belgium, The Netherlands, Switzerland, Malta and Greece and Cyprus. One of the hot topics in the industry now are the upcoming changes in the legislation of Malta. Joseph Borg, Senior Advisor in the leading Maltese law firm WH partners, made a peak into to the new regulatory regime: “We still don’t know all the details, nothing has been published yet, but we know from the discussion and comments during past industry events in Malta in November, is that there are going to be a B2B and B2C license, so whoever currently have a class A license will be shifted to B2B license and whoever has any form of license 1, 2, 3 – those will be shifted to B2C license. One of the biggest problems of the Maltese regulatory regime has been always the class of the licenses, so in order to use many casino games from different suppliers you needed to get separate licenses – this will be completely erased.”

During the second session, legal experts presented regulatory updates about the Eastern European countries such as the Czech Republic, Romania, Poland, Hungary and Bulgaria. Of a great interest in the region is the Romanian market, which has a very dynamic year in terms of licensing after the adopted second legislation in February 2015.
“Novelties in the Romanian legislation compared to other jurisdictions are that the supplier licenses are not required only for software and platform providers, also for marketing affiliates, also for payment processors as they are regulated as a financial service supplier. They will get a 10-year license, the process to get a license is significantly easier than for the operator, but they need a license, they need to pay a fee, which is 6 000 euros per year plus a contribution to a foundation, which has the role to fight gambling addiction”, stated Cosmina Simion, Co-Head of Gaming at NNDKP.

A detailed Q&A session on the EU anti-money laundering enforcement and implementation was led by Dr. Simon Planzer, Lecturer in Law at the University of St.Gallen, Switzerland and practicing at his firm Planzer Law, with the participation of Bertil Vagnhammar, Policy Officer at the European Commission, DG Justice and Consumers.
„Before adopting the Directive the regulations were only intended for casinos. Now, all segments of the industry are covered. The Directive must be implemented in all EU countries by 2017”, stated the moderator and expert in EU law Dr. Simon Planzer. He shared also that until the Directive was adopted the money laundering was a problem of the national authorities, now it has become a European problem.

Knowing that of a great importance to the sector is facing challenges to keep the business crime free, a thorough analysis on important aspects was made during the module.
“One is to emphasize the risk-based approach that we have for this Directive, so it is not a rule-based approach, it is a risk-based approach on four different levels – it’s a European level, national, the obliged entities like gambling operators, who might be also the best position to make risk assessments, because they know the business much more than governments or the EU Commission and the forth level of risk assessment would be the supervisors, who also should focus on areas where the risks are the greatest. The second issue to highlight when it comes to our priorities is that we would like to improve the cooperation between financial intelligence units, so that is both the cooperation and exchange of information between them. Third thing and that might also be in view of the Panama revelations that we have seen as well, we have added a tax crimes as a predicate offense to money laundering to the fourth directive that was not there before. The fourth thing on general remarks, I would highlight the sanction regime that we have strengthened the sanction regime, that will be transposed in the EU member states”, shared Bertil Vagnhammar regarding the main aspects of the EU Commission in the revision of the 4th AML Directive.

The important topic of responsible gaming was highlighted during the press conference with media representatives.
“We must educate all the participants in the industry in order to protect the final consumers”, said Dr. Joerg Hofmann, Senior Partner, Melchers Law Firm, former president of the International Masters of Gaming Law (IMGL). The education is of great importance in meaning that casino revenues in Europe are exceeding 4 billion euros and the trend is to increase even more, explained Carlo Pagan, General Director of the Casino Campione D’Italia and Vice President of the European Casino Association.

“It becomes even more important with the development of technology and its entering in the sector. The education takes time, but the results will be presented soon” explained Rossi McKee, a member of the board of BTAMOGI. The influence of technology innovations used in the gaming industry was discussed during the second day of the conference. “Sometimes technology and innovations in the gaming industry are way ahead of the regulations”, Angel Iribozov said.

During the traditional IMGL Masterclass, the bright minds that represented the association, reviewed the issues of licensing and taxation in offshore jurisdictions versus the regulated onshore markets.
There a lot more challenges that opportunities for those operators currently targeting the European market and the manner in which the European market is evolving right now. The cost associating with running a successful operation in one of those countries is immense and when you couple that with some of those jurisdictions putting a tax rate, which are nonsensical, what you are going to end up with a restricted number of operators within the particular market. Those operators will try to survive, but in order to so, what are they going to offer to the consumer is not the best possible offering and finally the fact that unfortunately you cannot restrict the unlicensed offering which will carry on targeting a particular jurisdiction. And the pity is that we have examples what are successful models of regulation and operation like Denmark, Italy, the UK, but some still are not doing it right.”, stated Trevor De Giorgio, Head of International Legal Compliance at Greentube Malta.

The compliance in emerging European markets has always been a key industry topic and the speakers succeeded to present the matter in all possible angles, explaining the standards and factors in the process of certification in various jurisdictions. Leading experts have presented the main factors of the process to evidence compliance in markets such as Poland, Portugal, Lithuania, Romania and Czech Republic. The compliance session was opened with a brief presentation about the technical requirements by Gert Telkamper, Client Services Manager for Europe, Gaming Laboratories International.

Afternoon hours of the first conference day were dedicated to most influential trends that shape the rapidly evolving gaming market. At the panel “Casino floor of tomorrow”, led by Arjan Kortjens, Lecturer of Totally Gaming Academy, panel speakers agreed that land-based casino gaming is closely linked to the innovative technologies and it is crucial for operators catch up with the latest trends and to adapt, especially with the interest of the Millennials.

Having in mind the trends that influence the gaming industry, there was a special session during EEGS on channelization of gaming experience. As the omni – channel is of an incredible interest lately, experts in the field revealed the magic formula for making it successful. Main benefits that were outlined by the seasoned speakers is that omni-channel is strategy to retain customers, increase their lifetime value and the intelligence that we have so far that shows actually being online is an opportunity, not a threat. As the online casinos gain more popularity with every year to come and virtual reality enters with big steps in the industry, a time will come when players would be able to stay home with their glasses on, entering the casino without even leaving their armchairs.

In terms of product development and the experience of the player on multiple channels, David Johnson, Chief Commercial Director of NYX, stated: “We have seen an explosion in instant win games and scratch games recently. In terms of how we build games – we started out way back when by building our games in flash and then converting to html5. We learned very quickly that player is not that stupid and you have got to build the device and certainly we have seen that with offline, in the shops – you cannot just modify a game that has been built up for online to a shop, because it has different regulations, different math model and restrictions. You have to build each saturation for each device, for each audience and that is the biggest challenge for suppliers”. Gerard El Allaf, International Business Development Director at GAMING1, has added about the success of games “This is the strategy we apply and we believe it’s a key success factor. A game that is already popular in the land-based has really big chances to be a success online as well.”

The evening has served as a great opportunity for networking between attendees and speakers during the traditional EEGS Networking Party, sponsored by Gaming Laboratories International and followed by the Royale Palms Casino Afterparty, where special poker and blackjack tournaments with prizes were organized for the guests.

For the third consecutive year, EEGS hosted the initiative Global Gaming Women. It was held first in the morning during the second conference day as a preceding event of both EEGS and BEGE Expo. The session brought together industry women for special networking and a motivational conversation with which to start the busy show day. Selected female leaders discussed women’s career challenges and how the trends in gender equality have changed in the recent years.

Industry experts from the region discussed the rising opportunities in the Balkans and presented the current market state at Bulgaria, Romania, Croatia, Greece, Serbia and Macedonia. Key aspects were covered such as favorable circumstances, key strategies for a successful market entry, what challenges each market is currently facing and the possibilities that the future could bring.

During the second day of the conference, the panel “The Newcomers” observed the influential issues regarding trendy sports that target the younger generations, especially the Millennials. In the spotlight for the Daily Fantasy Sports session were Jeffrey Haas, Chief International Officer of the fastest-growing company in the field – DraftKings and Benjamin Carlotti, Managing Director of the leading fantasy football site – Oulala.

In regard of the potential for DFS in Eastern Europe, Jeffrey Haas has shared:
There is a great potential for DFS in Eastern Europe as well as around the rest of the world. The fact is, our addressable audience is sport fans and there are everywhere – people love football across Eastern Europe. We are also seeing the emergence of a number of operators already. I know that there is one operator licensed is Serbia, we are expecting an operator in the Czech Republic to launch early in January and hopefully in time DraftKings comes to the region and is able to build a very successful business.

The second part of the panel was about the interesting matters in the eSports sector, which is also a buzz in Europe, but still new for the regional markets with a great potential for rapid growth in the upcoming year or two. The category of the product and how both DFS and eSports should be regulated has been an essential aspect of the discussions during the panel. All speakers agreed that there is still a gap between the business’ point of view and the regulatory bodies’ view. The upcoming changes in Malta were given as a good example of the proper perception of regulation.

The virtual and augmented reality are crucial part of a youngster’s life so experts in disruptive technologies analyzed the similarities and differences between them during the panel about the game changers, moderated by Konrad Gill. The co-founder of the first VR casino SlotsMillionVR.com – Alexander Tomic and Russell Mifsud, Senior Manager – Gaming at KPMG, led the participants through the brand new horizons that the virtual reality opens for the gaming industry.

Last, but not least was the session dedicated to financial partners of the gaming industry, which have presented the current state of the alternative payments sector in Eastern Europe and even Russia and an overview of issues and regulation examples of Bitcoin with possible legal models for settlement.

The Eastern European Gaming Summit has once again secured its strong position as a leading event in the region. The upcoming 10th anniversary edition, which will be held in November, 2017 will be surely, one not be missed, bringing together leaders and visionaries to positively shape the future of the rapidly evolving gaming industry.

For more information, please visit www.eegamingsummit.com or contact info@eegamingsummit.com