Grey-market presence acceptable as long as regulation in the pipeline, says Rootz CEO
Sam Brown makes clear operator only invests in grey markets on the verge of regulation as he points to the risk factor as the “million-dollar question”
Rootz CEO Sam Brown has revealed his comfort with operating in grey markets as long as those countries are on the path to regulation.
Working in countries that deem gambling illegal or lack comprehensive regulations and a licensing process could result in an operator being blacklisted when a country eventually regulates the vertical.
This was the case in the Netherlands in 2021 after the market regulated, with several leading operators having to sit through a cooling-off period before applying for a licence.
While some operators steer clear of unregulated markets, others work in those jurisdictions where there is an obvious path to regulation.
Entain announced in 2020 it planned on ceasing operations in all non-regulated markets with no clear path to regulation, except Brazil, and sped up that process last year with the hope of being solely in totally regulated markets by the end of 2023.
During Wednesday’s NEXT Valetta event in Malta, Brown was asked where the company drew the line in regard to working in grey, dark grey or black markets.
The CEO responded by saying no government should limit people from spending their “hard-earned money” and that every responsible adult should have access to gaming.
While not revealing which non-regulated jurisdictions Rootz is currently active in, Brown stressed that the operator would only invest in markets that are shifting to a locally licensed model.
He said: “When it comes to Rootz, our strategy has always been very clear. The markets that we work in, even if they are .com, we only invest in those markets that we see a path to regulation.
“We are of course passively active in some markets, but all the markets we invest in are either currently locally regulated or they’re on the path to regulation.
“Where do you draw the line? That’s the million-dollar question. I admire my own personal freedom so anything that puts that in jeopardy, that would be a hard line.”
One market Rootz is not working in is Norway, with the CEO saying it was not a market the firm were currently interested in investing in.
Norway is one of the last remaining European markets to use the monopoly system and last September the Norwegian Gambling Authority announced several operators including bet365, Betsson and Kindred Group would be leaving the market.
Brown added: “I think it depends on how things develop in Norway but we don’t actively invest in Norway.”
Kindred Group’s exit from Norway has also been expedited as part of the £2.1bn acquisition of the firm by La Française des Jeux, with a condition of the purchase being the Unibet parent company vacated non-locally regulated markets.