A Regulation Too Far For E-gaming
The G8 meeting in Deauville in May was held under the auspices of the French presidency and the French President Nicolas Sarkozy was keen to press for the need to tighter regulate the Internet, which France feels is chaotic and does not provide sufficient assurances for privacy and copyright protection.
At the same time France also hosted the e-G8, a two day conference on the future of the internet, attended by Eric Schmidt, Chairman and co-founder of Google, Marc Zuckerberg, founder of Facebook, Niklas Zennstrom, founder of Skype, Rupert Murdoch, chairman of News Corp. and more than a thousand other internet entrepreneurs.
Not surprisingly, the attendees at the e-G8 were against the idea of over regulating the internet, and a delegation including Schmidt and Zuckerberg addressed the main G8 meeting for an hour to give their views on what the future of the internet should be like. They warned politicians against over-regulation as it would inhibit innovation.
A few days later, however, the CEO of Vodafone, Vittorio Colao, weighed in. Mr Colao, in an article for the Financial Times, went against the policy supported by the internet entrepreneurs and stated that Internet companies should comply with national laws just as telecom operators like Vodafone have to do, particularly regarding privacy and consumer protection.
It is likely that this debate will go on for quite a while, and at present it is difficult to see who will gain the upper hand.
This is a debate that could have further consequences for the online gambling industry.
The regulation of Internet gambling markets across Europe has had a dramatic effect, mostly negative, on the margins of online gambling operators. Even if there are no details on the type of Internet regulations the French President would like to see, there is no doubt that another layer of regulations with which to comply could only make things worse. And it would not be limited to pure online gambling operators; even land based operators make a sizable slice of revenue from online activities.
It is no coincidence that more Internet regulation is being championed by the country that has done its utmost to limit online gambling activities by imposing high tax levels on online gambling operators and has asked ISPs to act as policemen at the behest of the state. French policy makers’ predominant reflex seems to be to protect state sponsored operators, who tend to be monopolies, and limit, or ban, anything that undercuts their predominance. As they see it, the danger always lurks in cyber space.
Mr Colao dismissal of the e-G8 delegation’ point of view has to do more with the fact that telecom operators, including Vodafone, Telefonica and France Telecom, would like to charge online content providers for delivering video materials to their customers and Google has refused to pay.
The offspring to come out of the marriage of the French and telecom industry’ agenda would make online business much more expensive, burdensome and censurable. Their agenda has to do more with control and profit margins than consumer protection.
The gambling industry would undoubtedly be one of the first sectors to come under fire if this marriage of interest did indeed succeed.