Running a legal gambling venue is a complex process. It involves licensing, approvals, equipment and more importantly, a legal framework that outlines clearly the rules. With any market, the first step involves the legalization of the activity and the establishment of a gambling regulator.

Then, this regulator ensures that licensees adhere to the rules and constantly monitors retail and online gambling activities within the jurisdiction. One such gambling expansion is currently underway in Nebraska. But one challenge the regulator in the state is reportedly facing involves manpower.

Back in 2020, Nebraska voters showed overwhelming support for the expansion of gambling activities in the state to include casino gambling via horse racetracks. Since then, much has changed, and two temporary gambling locations opened their doors to visitors. A third temporary casino, located at Platte County Agricultural Park in Columbus recently secured a license from the state gambling regulator, the Nebraska Racing and Gaming Commission (NRGC), and is expected to open its doors for visitors soon.

While the market in Nebraska seeks to grow and operators are eager to offer their services, the process of launching a gambling venue is complex and requires a lot of scrutiny, primarily from the gambling regulator. One challenge the NRGC is currently facing is the number of employees, a recent report by KETV suggests.

It was last summer when the regulator started hiring employees. Last year in June, the first license fees were received, allowing the NRGC to officially start hiring employees. In a year, from a total of three, now the regulator’s workforce is approximately 18 members. But according to Tom Sage, NRGC’s executive director, the current number of employees is “not near enough.”

More State Regulator Employees Will Be Needed

Sage explained that with more temporary and permanent casino properties opening doors, more Commission employees will be needed. He acknowledged that once Nebraska hits its full casino capacity, the NRGC may need between 50 and 60 employees.

A prime reason for that is to implement effective regulation, one that keeps minors away from the casino floors and ensures fair gambling entertainment. “We want to have personnel at these casinos 24 hours a day, and when I mean personnel, I mean state employees,” explained the Commission’s executive director.

According to Sage, the ultimate goal of the regulator is to see Nebraska residents and out-of-state guests “feel that our industry is regulated and they’re getting a fair shake.” He also spoke about the benefits gambling taxes bring to the state. Finally, Sage acknowledged that while increasing manpower can be a challenge, other states are surprised by the rate the Commission has been growing.

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In December, the EC updated its rules regarding high-risk third countries. The nations included in the ignoble list face systemic anti-money laundering (AML) or countering the financing of terrorism (CFT) failings. The recent inclusion of Gibraltar deserves special mention, as the territory is one of the largest online gambling hubs. Tightening regulations may significantly hamper the day-to-day operations of operators stationed there, forcing them to search for alternatives.

An EC Listing Is Bad News for Everyone Involved

The EC is one of the founding members of the Financial Action Task Force (FATF). The international organization focuses on preserving the financial system’s integrity by combating money laundering, the financing of terrorism, and other such threats. As such, the Commission’s list of high-risk third countries carries significant negative implications for all nations unfortunate enough to be included.

A recent warning by the EU may significantly impact businesses involved with such countries. Regulators now face increased pressure to ensure due diligence and will likely crack down on all related parties. Such updated rules may significantly impact many gambling operators, especially those operating out of Gibraltar. The accompanying loss of face can also have severe long-term consequences.

Gibraltar-Licensed Operators Will Face Rising Difficulties

The FATF greylisted the territory in June 2021, followed by an EC listing as a high-risk third country. The implications of such measures for a thriving financial hub like Gibraltar are not pleasant, as all transactions in and out of the country will face increased scrutiny and potential delays. 

The gambling industry, in particular, will bear the brunt of the impact. As of May 2022, the territory hosts 45 licensed online gaming operators employing over 2000 people. The EU demanded enhanced due diligence measures from all businesses and individuals involved with listed nations. 

Such measures aim to combat money laundering and terrorist financing, maintaining the financial system’s integrity. Despite the EC’s attempts to cooperate with local governments and address the issues behind the listing, implementing an action plan can sometimes take years. Meanwhile, bureaucratic pressures can drive current licensees away and dissuade operators from considering a Gibraltar registration.

The Government Aims to Preserve Gibraltar’s Reputation

The EC listing is a significant black mark in Gibraltar’s ongoing efforts to prove its regime robust and effective. Andrew Lyman, the territory’s chief commissioner for gambling, denied any AML/CTF deficiencies, insisting that the local regulator was doing an adequate job. However, the EC did not share the sentiment, leading to this unfavorable situation.

A FATF greylisting can significantly hamper a nation’s international prospects, disincentivizing foreign investments. Despite ongoing uncertainty, Gibraltar’s economic attractiveness and favorable licensing conditions helped it secure several new high-profile licenses. However, the subsequent EC listing may significantly degrade the country’s reputation, meaning the government is hard-pressed to address its ongoing issues.

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