It’s been two years since the independent i-gaming standards, testing and certification company eCOGRA was the subject of a management buy-out from the original 2003 founders and the organisation has undoubtedly flourished.

In a management update this week, Executive Director Tex Rees revealed that ten additional professional staff, predominantly in the fields of chartered accountancy, certified information systems auditing and software test engineering have recently been selectively recruited by the company, extending its capacity to service a growing client base of tier one operators and software suppliers who have chosen to contract eCOGRA for i-gaming testing, monitoring and preparatory certification work in numerous regulated markets.

Among newly signed clients has been the respected and itself rapidly expanding Swedish online gambling software development group Net Entertainment.

eCOGRA has also won new eGAP standards and monitoring contracts with other leading industry companies, the most recent being the online gambling operator Paf (Ålands Penningautomatförening).

Rees says that her company has made significant financial investment in new audit software and programmes, internal control systems and testing laboratory infrastructure to support effective management of the growing business.

"Our substantial investment in technology and human resources will favourably enhance our ability to meet clients’ needs and the licensing jurisdictions’ stringent criteria for accredited testing facilities," Rees said this week.

"Based on unsolicited feedback, we are confident that our clients are more than satisfied with our testing and certification services, particularly in regulated markets such as Spain, Denmark and Italy.

However, the foreseeable introduction of diverse regulations and requirements by national licensing jurisdictions will continue to provide unique challenges for both licensees and testing houses, an industry dynamic for which eCOGRA is suitably positioned to excel." she said.

There is huge money to be made in the gambling industry, in particular in low cost wagers where life-changing amounts of money can be won. The Irish are selling their National Lottery with a €600 Million price tag, and Minister Brendan Howlin has been warned that he should be compelled to introduce measures that will protect players from gambling addiction. This comes as a section of a social responsibility charter that the new private operator must be prepared to adhere to.

A Gambling expert has been advising both buyers and sellers in this new deal. This expert is of the opinion that the sale actually calls for new measure to be put into place. This is a very controversial sale of a licence which will allow the private operator to run this lotto for a period of twenty years.

At the moment, despite the price, any buyer would be taking a gamble. The new operations company would have to be able to increase both turnover and revenues substantially. Last year sales for the Irish Lotto dropped by 10.6% – down to €252.3 Million, so any return on investment for the new operator, looks particularly bleak, unless they can pump up the sales.

However with the need to increase ticket sales, a massive push into advertising would obviously be a necessity, and it is this that causes concern. When a lottery product and the amounts of money that can be won are advertised on a grand scale, this takes place amidst fears that vulnerable members of society may be drawn into purchasing tickets that they can actually not afford. Or that under-age gambling may take place online.

There are a number of online gambling concerns that have an interest in this Irish license, and this is chiefly due to the fact that the online market for it remains largely untapped. Gaming giant Gtech (Italian) has shown an interest, and have actually admitted that this aspect is its chief selling point.

Declan Harkin who is chief operating officer of Gtech has hinted that if their bid were to be successful, a roll-out of self-service points in retail shops, as well as a "significant refresh of technology support", would definitely be on the cards. However, present laws need to be relaxed before lotto purchases may be made online.
Currently a cumbersome system is in place in terms of player registration.

This system is intended to be relaxed under a new Lottery Act, and experts in gambling, and gambling problems, believe that as long strong social responsibility ethics are adhered to by operators of online lottery-style games. Problem gambling will not be inevitable.

The online gambling industry is still moving in the right direction, and this direction is up. In other words the industry is still generating a great deal of turnover, as well as showing positive growth. It is considered to be a mainstream industry, and has become vital to the financial welfare of quite a few small, as well as politically independent nations that are close to the UK.

These are the offshore sites where servers for online gambling sites are licensed and kept, which has had the knock on effect of investments in infrastructures which maintain sizeable internet operations. These are regulating and licensing jurisdictions which have opened their doors to the industry in return for lower taxes. The result of this is that most online operations – even the big guys like William Hill, have taken these ops out of the UK and re-located them to places such as Isle of Man, Gibraltar, Malts, Alderney, and more recently Jersey in the Channel Islands.

Small, politically independent states such as these have come to depend to a great extent on the taxes the industry generates, as well as the employment, and growth opportunities it creates. While the online gambling industry does have its ups and downs, it also has an astonishing ability to roll with the punches. Many of the well-established online gambling concerns have had to reinvent themselves. And have done so in their efforts to survive, but what about British land Bingo, it seems to be taking a turn for the worse?!

There have been some serious changed in the gambling industry when it comes down to British tax law. And the one industry that appears to be worst affected is that of bingo. New taxes have been imposed on certain activities run by these business, which sees a recent hike to 20% on slot games in bingo halls. This poses a serious threat to the industry as a whole, but is an even bigger problem for smaller concerns.

Things started to go pear-shaped for this industry around 2005, and since then 150 of these clubs have closed down.

There is a real concern that this game may go completely extinct, which is rather sad rally considering it has become a big part of British culture. We have the Chancellor of the Exchequer to thank for the demise of this Great British game, as things stand now George Osborne could be the one to go down in history for killing the game. Bingo employs 13 000 people, but this also seems to mean nothing to him.

It is no secret that the European Union finds the online gambling industry to be problematic . But the problems actually don’t lie with the industry, it is in the way EU countries just do their own thing with regards to trading regulations. The EU is committed to a policy of free trade within the Union, but there are all kinds of issues that come into play, so individual countries tend to make their own laws regarding the industry.

One of the chief concerns of many EU partner countries is the problem of match fixing. So, they attempt to put an end to corruption in sports by stopping activities such as online sports betting, and it is this that affects industry players. While the European Union themselves battle with the case of creating a unified, or rather, common, platform for operators in the Internet gambling biz.
The real problem seems to be that the gambling sector is vulnerable, so protection, as well as stamping out corruption is the EU’s main points of focus.

There has also been a great deal of deliberation surrounding inconsistencies in the rules that apply to online gambling ops within EU member nations. We have seen evidence of this in Belgium, Germany, France, and other member states. These states seem determined not to come to the party in terms of this industry.

Their actions have been seen in the light of a monopolistic approach, and this

goes against the basic mandate of the European Union – that fairness and free e-commerce is an integral part of the structure.

The European Commission has requested industry input, and responded with an action plan, however, this has made very little difference to the way in which certain countries respond. Despite the fact that Michel Barnier – the EC Commissioner for internal trade has called for member states to fulfil their obligations, they simply go their own way.

Apparently there are five areas in which increased cooperation is required, but Mr. Barnier has also mentioned that the EC is “not proposing EU-wide legislation on online gaming”. However, they are still proposing that a common protection principle be adhered to, as well as requesting that all member states follow an across-the-board set of actions.

It is obvious that both the EU and member states have concerns such as underage gambling, cheating in sports, and money laundering, but these issues should not be used as an excuse for monopolistic gambling practices to take place. Age verification technology and other tools to protect the vulnerable have become highly sophisticated – operators in regulated jurisdictions are visibly making use of these. However the new EC action plan wants advertisers to be more responsible too.

For years we have been seeing exponential growth in the online gambling market, and a recent report released in the UK only confirms this for us yet again. Since 2008 when £1.27 billion was the number, this industry has grown to be generating a pretty impressive £2 billion in 2012. This is an 80% revenue growth. Internationally the business is worth a whopping £30 Billion.

William Hill claims to hold the largest market share in this UK industry. They are certainly one of the “Betting Giants” in the bricks and mortar biz, where online they control approximately a 15% share. This does not seem like a huge percentage in the bigger scheme of things, but the other large betting brands fall behind by 4% and more. This is quite a big deal when we are looking at figures in the Billions of pounds range.

The most dominant revenue spinner in the UK online gambling market place is sports betting, this has been the case for quite some time. It is also the fastest growth sector, with a high percentage of bets being placed from mobile phones – mostly smartphones. Online/mobile sports betting makes up for a total of 44% of the entire online gambling industry in this country! It has grown by a massive 102%, and is estimated alone to be worth £1 billion!!

Because the industry is such a massive revenue spinner, we have previously reported that the UK Government also wants to get in with a chance to win. Although nothing is concrete as yet, they are contemplating changing the law to lower taxes for online operators. We think this is a case of too little – too late. Gibraltar does not – they are resisting changes to UK Gambling Laws, and understandably so. They stand to lose a huge slice of this industry should UK developers, and operators up and leave from their shores.

Gibraltar has tried to ensure that the EU encourages the UK to drop new draft Gambling Tax Legislation. The Gibraltar Betting and Gaming Association have even threatened legal proceedings should the new laws ever be enacted. The current UK daft proposals could see significant changes taking place, including removing “White Listing”, as well as requiring all offshore operations to be secondary licensed to offer gaming to residents in the UK.

Gibraltar is an island state that is White Listed which means, they enjoy status as a recognised UK gambling jurisdiction. If White Listing status was removed, taxation was dropped, and or secondary licensing became required, the well-establish Gibraltar online gambling industry might suffer quite significantly.