The Problem With Regulation
By Warwick Bartlett
The UK government has announced in the Queen’s Speech that a ‘place of consumption tax’ (POC) will be introduced for the providers of online gambling services. It is to be done to create a level playing field amongst those that are licensed in the UK and for the Gambling Commission to have greater control for the protection of the consumer. It will, naturally, also raise more tax.
The inference is that the gambler will get a fair deal. If regulation could achieve that then we would not have had a banking crisis.
There was an interesting article in the Money Week newsletter in February 2013 by Bengt Saelensminde entitled “Some people deserve horsemeat.” He goes on to say that this food scandal has many parallels with the financial world.
It would seem that this horsemeat scandal is rooted in the fact that people are finding life hard and supermarkets are trying to meet the people’s budgets by finding ever cheaper sources of protein.
Parallels can be drawn with what has happened in the intensely regulated financial markets.
The problem is that the public believes that the Government is doing its job of oversight 24/7. The public takes it for granted that if a company is operating in a regulated environment all will be well.
This is clearly not the case. But rewind to a world without regulation.
That is how it used to be in the betting and gaming industry. You made sure that when you placed a bet you did so with a firm with a decent track record of paying out. The expectation now is that the Gambling Commission is doing its job 24/7 and that the sports are being run honestly and fairly.
In our last newsletter we covered the case of Wilson Raj Perumal, a man on the move from Singapore to Finland. In our globalised world oversight in the UK is of no consequence when crimes are being hatched in Asia where the UK Gambling Commission has no jurisdictional power.
But in market where there is intense regulation how could this have possibly happened?
The answer I am afraid to say is in regulation.