Gambling monopolies are dead, says Danish Executive

An executive at Denmark’s state-owned gambling firm has said that “the days of gambling monopolies are over” and told lotteries to instead embrace the competition that comes with the opening of a market.

“You shouldn’t fight de-regulation and the farewells of monopolies,” said Niels Folmann, CEO of state-owned Danske Licens Spil. 

“It’s like wishing for your youngest daughter not to grow up and fall in love with the nasty guy with a motorbike next door. It will happen and you will be de-regulated in one way or another.”

Folmann, who is the head of Danske Spil’s sports-betting and online unit, told executives at the World Lottery Summit in Rome last week that opening the gambling market could be more beneficial to a country’s government than having a monopoly.  

He said: “The best thing is that we now have fair competition. We have the same restrictions, same tax regime, we have to comply with the same rules and keep the same data and we have the same regulator to make sure we comply with all regulations.” 

Folmann said during a debate on the merits of competition versus monopolies that the total tax contribution to the Danish government is now bigger than before a licensing system was introduced in 2012.

Danske Spil has had to be innovative in the fields of advertising and product scope to remain a market leader in a competitive environment, he said. Since the opening of the market, Danske Spil has managed to capture around 35 percent of the online market and 60 percent of the overall market. However, lottery executives from Africa and Asia questioned whether liberalisation was the right option for every country.

Younes El Mechrafi, CEO of La Marocaine des Jeux & des Sports en Ligne (MDJS), the monopoly holder in Morocco, said there were concerns about a liberal gambling market, including the lack of proper control and the risk of increased problem gambling.

A recent study in Denmark showed that problem gambling had increased tenfold over the last eight years, prompting the government to open an investigation into gambling addiction.

Folmann said that Danske Spil is funding research into problem gambling but added that it is an advantage that the issue is now “out in the open” and can be tackled.

“It’s like wishing for your youngest daughter not to grow up and fall in love with the nasty guy with a motorbike next door. It will happen and you will be de-regulated in one way or another,” said Niels Folmann of state-owned Danske Licens Spil.

Mechrafi said that there is no proof that opening up gambling markets has brought more money to the state but instead said that in countries such as Italy the tax contribution from gambling has fallen drastically since the market was liberalised. 

He added that the trend seen in Europe to liberalise gambling markets is not an option for all continents. 

“It looks like this is mainly a European concern,” he said. “Most of the African countries share problems that make opening the market not an option for them.”

He highlighted the low maturity level of the African gambling market, lack of research, technological disadvantages as well as moral and religious reluctance as obstacles for African countries to allow an open market. 

Although Morocco had “overcome” these issues with MDJS now offering lottery games, scratch cards and sports betting online, opening the market is not a good option, according to Mechrafi.

Jim Yu, vice president of Chinese sports lottery, agreed and said that “one nation can’t have two queens”.

He added that social responsibility is enhanced with just one operator and “one brand is less confusing for customers” as it makes it easier to identify the illegal operators.

Ludovico Calvi, head of betting at Italian operator Lottomatica, said that finding a balance between social needs and market needs is the most important thing. 

“We believe very much that lotteries can be in a competitive environment and be profitable and can be more sales oriented, more consumer and market oriented as long as there are controls by the state, the regulator,” Calvi said. 

He added that a competitive market is healthy and brings value to the market.

Written by: Lina Sennevall