Responsibility
Licensing and Regulation
Licensing
Regulated and licensed by the Government of Gibraltar, the Kahnawake Gaming Commission and the Alderney Gambling Control Commission, the Group has around 1,200 employees located in the head office and operations centre in Gibraltar, a business process outsourcing operation in India, and a marketing services subsidiary and multi-lingual customer service operations in Europe. The Group has customers throughout the world.
Regulation
Generally, given the regulatory dynamics of our industry, we believe that a more conservative, rather than aggressive approach will deliver substantially superior returns over the medium to longer term. As part of our overall risk management process, the Group monitors the regulatory and legal position in many countries around the world. The detailed monitoring of any individual jurisdiction may be because we already have customers in that particular country or because it harbours potential opportunities for us. Our financial performance can be substantially impacted, either positively or negatively, by a change in the regulatory or political environment in an individual country or region and therefore this is an important ongoing business process for the Group.
Whilst some of our competitors have chosen to ignore the introduction of new legislation in the US towards the end of 2006, we ceased immediately from taking deposits and wagers from customers based in the US as soon as the UIGEA came into effect. The impact on our business was immediate. Whilst we may disagree with the principles enshrined in that law, we respect it.
In June 2007 we chose to approach voluntarily the US Department of Justice (‘DoJ’) after having become aware that it was actively looking at our industry, regarding possible legacy issues associated with revenues generated from customers based in the US prior to 13 October 2006. Our discussions with the DoJ are ongoing and our focus is on removing any uncertainty regarding the Group’s legal status in the US. A successful conclusion to these discussions is one of our key strategic objectives for 2008.
Our ongoing management of regulatory risks, through dialogue with governments and politicians around the world, also remains an important priority for the Group. This is achieved both directly as well as through industry associations such as the Remote Gambling Association and the European Gaming and Betting Association. In 2007, the Group was an active participant in the consultation process leading up to the implementation of the UK Gambling Act that created a legal framework for the regulation of online gaming. Also in 2007, the Group testified before the Canadian Senate in order to clarify a point of Canadian law regarding its application, or otherwise, to offshore online gaming operators. The Group continues to engage with the Canadian Government with a view to assisting it in the possible development of a regulatory framework for online gaming. Similar discussions are taking place with other governments around the globe.
For a more detailed analysis of our regulatory issues please see page 35 of our 2007 Annual Report.
