iGB Diary's world trip: Gibraltar's diplomatic hang up, UK football in the dock, NJ geo-blocks works (overall, sort of) and German reg' uncertainty

29 November 2013

Bag for more
The British government was left fuming earlier this week when some klutz on the border between Spain and Gibraltar decided it was wise to open a diplomatic bag being sent over from the mainland to the Rock. Diplomatic bags are used to carry documents and other items between governments and their diplomatic missions abroad, and are protected by the 1961 Vienna Convention on Diplomatic Relations.

This has only ever happened once before with Zimbabwe causing an international incident in March 2000 when it also unwittingly unzipped a sack stuffed with classified documents. Relations between both countries have soured ever since. We’re just wondering, what was in the bag? Here are a few theories:

  • Christmas cards for every one of the Gibraltar Betting and Gaming Association’s members courtesy of the UK Treasury – complete with a note that Point of Consumption Tax will remain at 15% and a handwritten cartoon of a small boy pulling a moony,
  • 300 Paddy Power-sponsored monkey-sized T-shirts for the peninsula’s famous Barbary macaque inhabitants,
  • The BBC’s Doctor Who set to relocate to the Rock and live in the red phone boxes on Main street,
  • After decades of putting up with hotels that make Faulty Towers look like he Ritz, a decent property is about to open and promise not to serve bananas wrapped in bacon ever again.

UK match-fixing arrests should ring alarm bells
News of the arrests of seven people on charges of alleged match-fixing in the UK is a serious reminder of how pervasive the issue of corrupt betting and bribery in the world’s most popular sport has become. The Daily Telegraph’s investigation into the issue shows that for just £20K a referee can be bought and a result fixed. Like many such claims, there’s definitely some bravado from the fixer, but without doubt some of it is also true. The finger is invariably pointed at the “$500bn illicit gambling market in Asia”, which benefits from a lack of regulatory enforcement, massive enthusiasm from punters and huge liquidities, the theory being that said liquidity enables the dodgy bets to be placed as they get lost in the volume. It’s hard to ascertain how much of all this is really accurate, but events this week have brought the stark message to the home of football’s door. As an industry that has such close sponsorship ties to football, is it worth asking ourselves if we are doing enough to educate players, execs and administrators in the sport? After all, mainstream media is so quick to blame bookies whenever these stories appear. And if a regular stream of dodgy betting stories keep on appearing, it will eventually impact on the premium product which is so popular around the world. And if fans across the globe stop believing what they’re seeing, then the whole edifice and all its components will be in danger of collapsing.

Half of US tries to gamble in NJ
Our favourite New Jersey story of the week has to be the fact that thousands of US citizens from half the country, around 23 states, attempted to access NJ’s new online casino sites but were prevented from doing so because of geo-location software. The good news is that this is proof the technology works, the not so good news is that some people, just yards from the bricks and mortar casinos where the gaming equipment is housed, were, on occasion, blocked from participating. We hear these issues are quickly being ironed out, and it is inevitable there will be glitches when this type of exercise takes place, but the fact that there is so much appetite for regulated gaming is surely the best news. We wish everyone every success out there. Make sure you attend our iGaming North America conference next year where we will be discussing how the first three intrastate markets have fared since launch.

German uncertainty works...
... well, for those operators licensed in Schleswig-Holstein at least. Most un-German like, the licensing process for the federal betting licences currently managed by the Interior Ministry of the state of Hesse is not going smoothly, never mind efficiently. Almost a year late, licence applications are massively over-subscribed and Hesse is expecting myriad lawsuits from the operators not approved. This of course is for the federal licences that will only allow sports betting to be offered while banning online casino and poker sites. And of course all the German casino and poker enthusiasts will just stop playing online won’t they?  Talk about shooting yourself in the foot, all the while operators with Schleswig-Holstein licences are preparing to go live in Germany...  looking at the market, it seems being licensed or not doesn’t make much difference anyway and the current delays in federal regulation mean operators will continue working in market that generated €10.7bn in gross gaming revenues in 2012. And as for the German market regulating at federal level, many operators are probably not in that much of a hurry, the French could probably tell them a thing or two about the “benefits” of regulation.