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Keith McDonnell, KMiGaming: Balance between taxes and regulation

10 September 2019, 15:18
Votes: 1

Keith McDonnell expressed his opinion of the Asian gambling market and shared professional insights into the issue of taxes and regulation.

Keith McDonnell, KMiGaming: Balance between taxes and regulation

Asian gamblers are far more interesting, because they are less emotional, lower margin, higher staking. For them it’s more of a serious activity. If they don’t win, they don’t enjoy the game.

Concerning sports betting here in this region, which is far larger than any other sports betting market in the world, but remains to be unregulated. In your opinion, what is the best approach in dealing with this, given the very bureaucratic nature of the region?

Yeah, it’s a really tricky one, but it’s one that some six or seven countries are currently looking at really closely. Having spoken to a lot of people here, I think the primary hurdle to fully regulate the market of individual countries, it’s been a stigma surrounding sports betting. They understand they can have huge revenue streams earned from legalized sports wagering. They can get tax, protect the people. But sports betting really has a stigma. The segment is being looked at to invest in it, to find talent because they haven’t got the talent to design and introduce taxation or legislative system. It’s not part of their culture. So, for me though it’s getting the negative issues to the surface, breaking them down and discussing them and then coming up with a framework that works.

Do you see any countries that may take the leading regulation?

I was at a panel this morning with professors from Vietnam and Taiwan. Both of them know that others have put a lot of time in Africa to come up with something that works. I liked what I heard on the Vietnamese side. Going back to what I said before, they are able to destroy the negative connotation of sports betting. For me it’s a race to “Who can be the U.K. of Asia?” You know, UK made good progress in the context of online taxes and regulation.

How do you think taxation actually impacts sports betting’s thriving in this region?

It’s such a critical point. If you overtax, the effect could be quite opposite – you feed the offshore industry. If operators are paying high taxes they are unable to compete in value with bonuses or sports prices with offshore companies that do not have to pay any of that. This means that if you charge too much you risk feeding the offshore market by educating customers who then go offshore. Of course you need a minimum level of taxation to cover overheads and costs and investing public protection, but it’s hard.

Given that, what are your tips to those international operators that are looking into the Asian sports betting market?

My number one tip is to look for a good local partner. It’s impossible to learn culture in a couple of years. If to speak about marketing, payments perspective or even key operational issues the necessary thing is to find a good local partner. When you get that, it gives you an advantage over other international companies entering the market. It’s not just about translating the website into Mandarin and getting the customer service speak the language. It’s about a lot more, and only local partners can give you that.

As mentioned earlier, a large-scale Asian Gaming event, G2E Asia, is going to launch its global edition in Manila at the end of the current year.

Read more: Europe Faces Major Changes in the Matter of Gambling Policy in 2019

Read more: Italian gambling crackdown failed – Quirino Mancini

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