President of La Banca on online casinos: “Liberalism applied to gaming is a serious mistake”

You have been quite critical of the bill that the Senate has already voted on to regulate online gambling. This week he was in the Finance Commission of Deputies. What reception did you find from the legislators to your position?
We have a very important criticism because this project has an implicit contradiction. And it is that on the one hand it promotes the assistance of multiple platforms and, simultaneously, it talks about taking care of people’s health. The experience that we learned from Europe –and ourselves– is that if you have multiple platforms that compete with each other, that desire to compete leads to an aggressive marketing policy, increases the game offer, improves the payment of prizes, they give more prizes to the bettor; that is, they encourage play. The maxim in the game for 180 years in Uruguay, and in other countries, is that the game is tolerated, but not promoted. Liberalism applied to responsible gaming is a serious mistake. There are activities in which you cannot apply liberalism but the State has to intervene, which is the one that defends the general interests of the population.

What changed now?
Those who changed this rule of the game were the English in 2005, who with their large companies, intend to dominate the world game market. They support a philosophy where free competition should prevail, with an ideological focus of liberalism, that there should be competition. And what we’ve known for a long time is that competition, no matter how liberal we are, is not applicable to the game. And why won’t it apply to the game? Because it can cause harm to the population. Gaming disorder was determined to be an addiction by the American Psychiatric Association as early as 2013; that’s when we started to worry about gambling disorder. It is an addictive disorder with the same satisfaction mechanisms in the brain as drugs or alcohol; we release dopamine In turn, the clinical effects of gaming disorder are the same as the drug, of acting impulsively and resorting to friends to ask for money to play. Now we are buying an idea that the English applied in 2005 that does not work throughout Europe and that now several countries are backing down because they realized that liberalism cannot be applied to the game. There is a contradiction between cross-platform competition and responsible gaming. Responsible gaming is a lie when there is competition.

You say that you agree with the State regulating and casinos having their games online, but you ask that it be through a single platform. Isn’t this creating a monopoly?
In Finland there is very interesting research on the advantages of a single platform. When there is free competition, the platforms increase the prize rate and what is called the gross betting margin decreases. And what happens? The tax that governments charge is on the win (gain), on that margin, which is shrinking. For example, in Spain the government raised €53 million from a €14 billion deal. You can’t make companies compete and then tell them to take care of the players. On this topic, with the competition, the guy is dying, he’s sick and the companies keep selling him. On the other hand, with the single platform (by La Banca), if we see that you are sick, we take you out and don’t let you play anymore.

I assume you mean Supermatch. How do they do that?
We realize by various behaviors that reflect this addictive attitude. For example, a guy who gets sick starts playing more and more hours, he plays first three hours, four hours; he increases the number of hours because he assumes that he is going to make up for everything he lost. So he starts playing more and more sports. If we play a ball game for him, he also plays; they end up playing 15 hours a day at all sports with exorbitant figures. We just took out one (player) who was playing crazy. We are the first lottery in Latin America to certify responsible gambling. If you want to apply responsible gambling measures with several companies in competition, it is useless. The dangerous games are those of continuous draw, they are the casino machines, roulette, sports betting. There is no gambler in the pool or the raffle because the draws are the next day. We use predictive gaming software. It is a very interesting tool that, taking into account the characteristics of each game, determines its dangerousness. It is a kind of traffic light. We passed all the games through that filter and it gave us one with a red light, which was the Supermatch. There, our technicians, when they see a game that is in the red, which attracts the sick, we apply responsible gambling measures to mitigate that effect of attraction on the gambler.

Palermo believes that online casinos should operate through a single platform.

Isn’t the fact that Supermatch advertises a bit contradictory?
There are actually some pretty strict rules, which are now being followed by European countries. For example, do not use the figures of famous athletes, minors. In Spain a mess arose because they used the figure of (Rafael) Nadal or (Cristiano) Ronaldo, who appears playing on an online casino platform. So they stopped that. You saw that Supermatch never uses popular sports figures. Luis Suárez came and we hired him for Abitab, but not for Supermatch. The other thing we try to do is not to promote the club shirts.

Do you expect the gaming business to continue operating as a monopoly through La Banca?
Let me tell you that the monopoly has always been held by the State. We have a license to exploit the games that is revocable at any time. Secondly, here there are 240 companies that exploit the game, we are not La Banca de Montevideo. There are 28 benches throughout the country and there are departments that have more than one competing bench. We have no interest in this law that Parliament is discussing; We didn’t go to ask for anything. We are not asking you not to let the subject of online casinos enter. What we are saying is that this law has a very negative effect on society. What’s driving us now is some sense of social responsibility.

But do you understand that online casinos need to be regulated?
Yes. That online casino gambling be regulated at all, because I have already learned that the way to avoid the damage of online gambling is to regulate, but not in this way. It is easy to fix. It is enough that they put an article that it has to be exploited through a single platform.

And does La Banca want to be that platform?
No. It would imply that the six, seven casinos have to come together to operate through a single platform with a single operating policy. There is competition, but above are the rules of the game that are common to all.

That would imply that Enjoy (former Conrad) has to agree with the Cipriani Group, for example.
Well, basically he hasn’t built anything yet (per Cipriani). Until you build (the hotel and the casino) you will not be able to have this because otherwise you would set a very bad precedent in the country. I would be giving casino permission to people who do not make the investment, that is, they should make the investment and then exploit the online casino patent.

Diego Battiste

Robert Palermo.

With what feeling did you leave the Deputies? Can there be changes in that bill?
The first thing is that very little is understood about the topic of games, which is very specific. The feeling I had in the Deputies is that they listened carefully to what I proposed, with plainer and clearer words. What I say is irrefutable because it is backed by experience in the empirical part that is happening in Europe. It seems to me that there is going to be a change, at least they are questioning it from an ideological point of view. There is a contradiction between talking about platform competition and simultaneously taking care of the health problem; it is impossible. The British lobbied the government – ​​which wanted to raise more funds – and they came up with that agreement, but they totally forgot about the social dimension. Let’s see how it fixes. We are going to warn the population, the journalists, the President of the Republic, at all levels.

What position do you have with the tax scheme proposed in that project?
The tax part cannot remain in the hands of the regulator as it is. That is unconstitutional, you can’t. It is necessary to determine for the online game an equal tribute for all. That’s where we come in. Today we pay 18.03% on the win, almost three times more than the casinos (7.5%). If the tax scheme is not the same, the casinos are going to put that difference in prizes and they hurt people there too. The other thing I said in Parliament is that it is very important to expressly ban bonuses because it is a mess. It’s a huge incentive to play because you broke, they give you a bonus, and you start playing again; This is what happens in Europe.

Profile

Roberto Palermo is 74 years old and defines himself as a “merchant”. He assumed the presidency of the network of agencies Abitab in 2002 and in 2003 that of La Banca. He says that between the two companies about 30,000 direct and indirect jobs are generated. There are 28 banks and 240 agencies throughout the country.

Campaign

As part of its position of rejecting the bill that is being studied by the Chamber of Deputies, La Banca launched a dissemination campaign under the slogan You don’t play with health. The institution intends to involve the population in the discussion of this issue. For this he made the site available www.gameresponsable.uy