iGaming is in trouble, and everyone is to blame.

Writing this post is difficult. My job is in iGaming and we are having a very good year. That being said, that is not the case on a global scale. Major companies had huge Q1/Q2 losses in 2019. Year on year values are trending down. Projections are down. Re-locations are becoming more and more frequent, regulators are developing more and more frameworks and regulations for profit/responsible gaming/amusement, therefore companies are actually struggling to compete in 2019. The industry was flipped on it's head, and the creation of it was fast, ferocious, and the fault of every side of the industry.

To work out how, we have to reminisce. Head back to the hay-day of Microgaming. The early 2000's where gaming was about as regulated as a Maltese bus driver. Sites offered insane bonuses, withdrawals were difficult at best, and anyone playing on PokerStars in the UK at that time knows all about the "Water Bill" that shows up on your bank statement every time you processed a transaction. Gaming hit a boom period. The acceleration of broadband release allowed for slot spins to be seamless. The early companies to see this went online and went hard (Story of a teenage boys life there) and iGaming giants grew seemingly overnight. Those who were first and "mostly" not incompetent became behemoths of gaming for years to come, and that continues today.

Poker played a huge part too. We all know of the Moneymaker effect on poker. An accountant, and not specifically a good poker player (I can attest to this, he took me out of an online game by going all in on a huge bluff vs me with J6 and hitting J6x. Sigh) qualified for the World Series Of Pokerabout the price of a non-deformed pack of bananas. He won 2.5million USD. Which is, by most peoples ranges, decent to above average. This gave the dream for people to aspire to. Poker players, for years huddled in smokey back rooms or illegal dens, had a new home. Their own. They could play whenever, however, and for whatever stakes were on offer. And business was good. PokerStars revenues for 2003 increased by approximately twelvety gabillion dollars. But this brought two things, see if you can tell what was good...

1. Increased global government focus.
2. A huge player database and increase in interest of casual gamblers to the internet.

Not a tough question to be fair. Governments, mainly those who tax income from gambling on a full tax rate, wanted to make sure they were getting some action. The USA led the way for years before deciding just to ban it altogether. Their partners in global economy at the time, the UK, went another way, deciding to tax the companies and let the player keep everything. As a poker player in 2008-2011 this was heaven being British. Being American.... sorry! Don' tworry though your current president seems to know what he is doing...

Moving from poker, you started to see fully functioning casino's pop up. The industry had moved from the early stages of WilliamHill on a shocking platform (I had to get in one dig), and the RTG scam casinos were raking in huge volume. Microgaming had competitors. NetEnt were smashing out hits, using great quality graphics for the time and a user friendly interface. Over time this grew. Gambling around the world became a way of life online for anyone with enough money to place a bet and at least attempt to pay their internet bill when they lost everything.

This brought about a cultural change in how gambling was looked at. Companies wanted a piece. New casinos and casino platforms were launching daily. The power had gone from providers offering operators games to make their casinos larger and more exciting, through larger operators and casinos offering more games to the public, to casinos fighting for affiliate attention. The way affiliates have grown from a small kid in his back room who stops looking at porn long enough to create a website with a link to Bet365, to seeing how much money that makes him if he learnt some SEO, they grew faster than the Maltese winter black mould. It spread like wildfire. Companies worth the price of a pack of skittles in 2010 were worth 200 million Euros in 2015. Just ask 50% of Swedish people under 30 who don't see to work. I'm not bitter. I promise.

Affiliates took over. Casinos went from $30 CPA to rev share. Rev share grew and grew to today's mark of up to 75%. SEVENTY FIVE PERCENT. I'm no math(s) genius, but that seems more than half. The operators had to budget. Game providers also had to budget. The swings created by greed from all sides had swung the market in the only direction it could go. To those with traffic.Traffic became, and still is, King.

This had a knock on effect. Big providers who have share holders struggle to move in to new markets fast enough to keep at a good pace. Just look at the recent firings of CEO's around Malta. NetEnt, GIG, WilliamHill, the list goes on for a long time. What happens is companies need to perform some M&A magic to stay profitable for their share price. This gets NetEnt to buy RedTiger for 220+million Euros. This offset's a loss, and grows exposure and share price. But this cannot last. Mergers and acquisitions only cover up a problem, they dont fix it unless the merger works. And with a huge volume of new small providers creating content on the platforms that allow this, such as Relax, Quickfire, Yggdrasil, the market gets more and more flooded from all sides.

We must not stop innovating, but we must control it to be in the greater interests of the future of the industry.

This is where regulators come in. Anyone with half a brain can see that gambling online is safer than real life. You dont get mugged for one if you walk out of the casino with 10k in your back pocket. Game RNG testing. AML. KYC. Source of wealth. Integrity of public companies. Traded shares. The list is endless. Not to say real life gambling isn't fun, it is, more so in some cases, but safer... no.

Regulation is what will save us now. The MGA tried, then got greedy. Just looking at their financial report for 2018 shows this. New framework? The MGA is viewed more and more as a 3rd rate licence. When Germany regulates, and with Holland going, what is left? Malta and..... Japan? Nope, Japan will regulate soon too. What regulators need to do is have a meeting, and come up with the following plan that I have already come up with. I saved you some time guys.

• Speak to Curacao. This is the main grey market licence. I have no issue with grey markets, I am Mr Grey. I live in the grey so much iI started whipping people in he office for enjoyment. They have to, and I mean HAVE TO, create a template for scam casinos. Anyone with issues on player payment or security they have to act. This eliminates casinos bringing down a licence, that for most of the world, works.
• The big regulators get together. UK, Sweden, MGA, whoever else is interested. They sit down and talk. They hash out a plan for a global licence for gaming. These frameworks are IDENTICAL for all countries. But wait... what about players and taxes? Well...
• Players and companies are taxed in the country the player is in. I have seen our back office, and most of our competitors (I am sneaky like a fox). They all show player country. Quite simply, we pay tax yearly to the country that player is from. And we make it reasonable. No need to be greedy. Lets cap it at between the UK and MGA, so 12%. 12% of gaming is a lot of money.
• Next up, player protection. Quite simply this is poor. I know people like Videoslots claim to be responsible, but lets face it, and yeah I guess I am singling them out, but they are huge and can take it, phoning someone up who deposits 20k more than usual, getting no reply, and sending an email to be left unread from a generic outbox, is NOT RESPONSIBLE. Cutting their account off until they call you back IS.The same happens everywhere at all major casinos. A friend deposited 29,000 GBP in ONE DAY before any documents were asked for (I wont mention this casino, as it wasn't directly me). Even simple ID! This needs a huge step up/kick in the ass. Once any player deposits over 1k total, they have to send in Source of Wealth. Immediate automatic ID check on signup, this exists. AI can pretty much do this for us now anyway. AML and KYC is so easily done it doesn't need to be explained.
• Whats left? Game providers. They operate and provide fully regulated games for the new global licence, and pay the same levels of tax. This drives down costs and drives down pointless years wasted on new regulations.
• The UN, G20, whoever, approves this, and all countries who want to allow gambling online opt in. This increases tax income and independence for each country. Those not opting in, the rest of us have the responsibility and core moral process to ban these areas. Anyone found offering games or availability to bet in those markets gets shut down forever. That should be a big enough stick to kick the carrot's ass.
• Affiliate income is capped at 50% rev share. With admin fees etc. that works out as around 30%.

Lets do some fast maths. 30% affiliates, 15% game providers (ish), 5% payments = 50%. Add on 15% tax and regulators. That's 65%. With the casino's paying their tax and player winnings, I think that add's up nicely.

The only way this huge bubble we built continues is if we protect it at its weakest points. That is regulation's job. They cant just sit there and cream money off the top, for the only task of making people jump through hoops. Just like affiliates can no longer demand 70% of a casino's income just to be on a site that lets players moan from anything from stolen money, to a game round breaking 4 minutes ago and they panicked.

We have to be sensible. Now is the time to think of the future of this industry. Not in 2-5 years when to operate in any level of profit you need either 44 licences, or the balls to stick it out in the grey/black markets and shove games online to a developing 3rd world country. As right now if regulators force companies to go grey, the industry dies down real fast, and that ends up with only a few companies. This isn't social media.

So the question becomes, do we work together and grow this into a responsible, regulated, caring industry that takes the time to do the job right, or do we stay at opposite ends of a huge spectrum failing to meet in the middle?

If Donald Trump can get himself out of porn stars long enough to oversee an economy boom, with the IQ of a small ferret with a sexually transmitted disease, I'm sure the great minds we have in this industry can do a better job.