European Gaming Lawyer magazine Spring 2014 | Page 24

International Pooling Networks: What are the regulatory issues? By André Wilsenach, Executive Director, Alderney Gambling Control Commission André Wilsenach Background Network or business-to-business (“B2B”) gaming is an established form of remote gambling that pools the customers from different business-to-customer (“B2C”) operators to play against each other on one B2B network. It is generally used in peer-to-peer or community gambling such as poker or bingo, but can also be used to pool rake from player bets against the house in order to build progressive jackpots, in effect, a significantly greater jackpot than any one operator can offer alone. Peer-to-peer gambling requires high volume player participation and financial liquidity in order to operate successfully and many B2C operators will therefore rely on arrangements with a B2B network as they have insufficient liquidity as stand-alone entities. The recent concept of international pooling operates along the same lines as existing network gaming, but with the added distinction of pooling players from different jurisdictions onto a single gaming platform. Currently there is a presumption against this happening and although some national regulations may allow cross-jurisdictional pooling in theory, there is a lack of international standards and regulatory co- 24 | European Gaming Lawyer | Spring Issue | 2014 operation to provide operators with the certainty they need to invest in international pooling networks to tap into this prospective international market. Operators are increasingly looking to regulators to come up with a solution that will provide a secure framework to enable investment in international pooling. This paper proposes a solution to remove the regulatory uncertainty for those operators who wish to participate in international pooling networks and who are keen to adhere to the very highest international standards set by those regulators who are interested in regulating this business. Why is there a need for international pooling? Operators have long recognised that the key to growing the overall size of the market in relatively mature regulated gambling environments is the ability to introduce high levels of liquidity into the market, which creates a network effect that is greater than the sum of the parts. There is also player demand to increase the breadth of skill of players in peer-to-peer or community forms of gambling such as poker by allowing players from different jurisdictions to play