LAST WORD

Time to regulate Asian online gambling?

Sharon Singleton | Managing Editor, AGB

While the land-based gambling industry is suffering an unprecedented crisis as a result of the coronavirus pandemic, its online cousin has been raking in the cash.

The online market in Asia is already huge and growing and it’s no stretch to imagine that once players are locked down at home, they will turn to the internet for entertainment.

There are few reliable estimates as to the size of the market in the region, given the fact that online gaming is illegal apart from in the Philippines, but elsewhere there have been some interesting glimpses as to how the crisis is pumping up the sector.

In Australia for example, analytics firm AlphaBeta Advisors and credit company Illion, calculated there was a 67 percent increase in online gambling activity in the first week after pubs, clubs and casinos were shut down. The survey was based on a sample of transactions of 250,000 Australian consumers.

Similarly, in the U.S. online social poker room Global Poker,

said it had seen a 43 percent increase in the use of online poker sites in the United States since social distancing and lockdowns took effect, including a 255 percent increase in first-time poker players.

In the U.K., online gaming site 888 Holdings told the stock exchange that it’s seeing a hit to its sports vertical due to the pandemic, but that it expected a migration to its casino and poker products to mitigate the impact, at least in the short term.

This spike in activity has not escaped the attention of regulators, who are expressing concern over the potential increase in problem gambling. Especially if players are also drinking more than usual and seeking escapism from the grim global reality.

The European Betting and Gaming Association put out a guidance note in late March telling online gambling firms to act responsibly and strongly urged against the use of any reference to the coronavirus in advertising materials. It also warned against portraying gambling as a solution to potential financial woes and told firms to step up their know your customer and other best practices to mitigate harm.

Portugal is considering imposing some limits on online gaming during the crisis, while Spain has also warned operators to restrict their marketing efforts.

In the absence of regulation and hence taxation, governments across Asia are undoubtedly losing vast amounts of revenue to online gambling.

That’s all very well in regulated markets, but in Asia all bets are off. The Philippines has temporarily suspended operations of its Philippine Offshore Gambling Operators on concern employees cannot work from home. Elsewhere, online gambling websites are finding new and ever more imaginative ways to take bets.

For example, a number of sites have sprung up encouraging punters to place bets on the last digit of daily new cases announced by Singapore, Malaysia, Thailand and Indonesia. They can also bet on whether the number is odd or even, or if the number is higher or lower than the prior day.

In the absence of regulation and hence taxation, governments across Asia are undoubtedlylosing vast amounts of revenue to online gambling. This is also at a time when many are facing their worst economic crisis in a lifetime.

So, could this finally be the tipping point for reluctant administrations to consider legislation? Many jurisdictions were slow to wake up to the potential of land-based casinos. The path blazed by Macau with its new integrated resorts, followed by Singapore’s world-beating properties lead to a change of heart, with many now embracing casino investors with open arms.

Much is likely to depend on the attitude of China, on which many regional economies will be relying for support. To date there has been no sign Beijing is interested in doing anything other than stamp out online gambling targeting its citizens.

However, there may be a case to at least allow some kind of convergence. There have been murmurings that land-based properties should be allowed to offer some kind of online activity, especially in the sports betting field, or potentially live dealer operations.

Those murmurings may swell into a chorus of demand if the crisis protracts and Asia’s casino floors remain empty for too much longer.