GRAF 2016 CONFERENCE : GHANA THE RELATIONSHIP BETWEEN GAMBLING OPERATORS AND GAMBLING REGULATORS – IS IT WORKING? Presented by: Edward Lalumbe

Outline Introduction Approaches to Stakeholder Management Shareholder Stakeholder/Pluralist Enlightened Governments’ regulatory objectives Are the interests of Governments’ and Licensees reconcilable? Implications of enlightened approach Conclusion

Introduction The Gambling operators use a gambling licence to advance their objectives of making profit on the one hand whilst Government on the other hand issues a gambling licence with the object of advancing public policy interests. The presentation will review various approaches to stakeholder management including those between the gambling regulator and operator. Whilst both may on the face of it have different interests and objectives, their interests are reconcilable. The relationship between the two is that of partners rather than adversaries.

Approaches to stakeholder management Shareholder approach Biased towards shareholder interests only. Other stakeholders are either not considered at all or to be considered to a lessor or negligible extent. Disadvantage to this approach is that it is narrow focussed and ignores the impact and contribution of other stakeholders.

Approaches to stakeholder management - continued Stakeholder/Pluralist approach Have regard to the interests of other individuals and groups with a stake in the business including the public at large. Cooperative and productive relationships are optimised if the interests of all stakeholders are balanced. Disadvantage of this approach is that it is difficult if not impossible in practice to balance the interests of various stakeholders without compromising some.

Approaches to stakeholder management - continued Enlightened approach Focuses on long term and not just short term while having regard to interests of other stakeholders. Pursue the interests of shareholders but in an enlightened and inclusive way. Creation and maintenance of productive relationship with a range of stakeholders having an interest in the entities business.

Governments’ regulatory objectives Gambling regulatory objectives throughout the world are fairly similar and include the following: Ensuring that gambling is conducted in a fair and open manner Protecting children and other vulnerable persons from being harmed or exploited by gambling Revenue generation Preventing gambling from being a source of crime, associated with crime or being used to support crime

Are the interests of government and licensees reconcilable Gambling conducted in a fair and open manner Loss of confidence and integrity of gambling activities will have a negative impact on both the Government and the licensee There will be a public backlash against the Government for failure to ensure fairness and integrity including loss of tax revenue The licensee will lose players and ultimately impact on its profit objective

Are the interests of government and licensees reconcilable - continued The success of the licensee is intertwined with the attainment of Governments’ objective relating to tax revenue The more the licensee generates revenue, the government receives more tax The more the licensees’ business grows and prospers, the more it is able to increase the economic activity and ultimately create much need jobs

Are the interests of government and licensees reconcilable - continued Both Governments’ and licensees’ interests are not advanced through participation in gambling by vulnerable persons For example a licensee would rather have a player who gambles responsibly for an extended period than a gambler who gambles irresponsibly for a short period Similarly, Governments have an interest in persons who gamble responsibly as problem gambling may in some instances lead punters to commit crime in order to feed their irresponsible gambling addiction and patterns

Are the interests of government and licensees reconcilable - continued Persons involved in crime or who support crime are not suitable for the attainment of both Governments’ and licensees’ objectives Employees who commit crime are more likely to steal from the licensee and its customers Similarly, employees with criminal tendencies are likely to steal the taxes that are due to Government

Implications of enlightened approach Harmonist interests imply the following: The need to collaborate in order to optimise interests of both parties Mature gambling regulation requires a more pragmatic and flexible mind-set in order to advance the interests of both parties The licensees ought to be seen as partners and not adversaries

Conclusion The appropriate relationship between the regulator and licensee requires a collaborative effort from both parties as opposed to a narrow based approach which emphasises one’s interests at the expense of the other. “Gone are the days when the relationship between the regulator and the regulatee are likened to the relationship with a bear in terms whereof one dances as long as the bear dances.”