Casino & Gaming International: Issue 38 by Casino & Gaming International

ISSUE 38 - 2019 Q3

WELCOME ::

Welcome... Publisher Jamie Kean jkean@cgimagazine.com Client Services Director Tracie Birch tbirch@cgimagazine.com Editorial Assistant Harry Wainwright hwainwright@cgimagazine.com Production Designer Nancy Rae nrae@cgimagazine.com Circulation Manager Natasha Harvey nharvey@cgimagazine.com Commercial Director Daniel Lewis dlewis@cgimagazine.com Account Manager Nathan Charles ncharles@cgimagazine.com

Editorial Contributors Melanie Ellis, Richard Williams, Charlene Seychell, Susan O'Leary, Alessandro Fried, Keith O’Loughlin, Greg Brower, Mark Starr, Amy Riches, Anthony Ure, Mark Bonello and Mark Griffiths, Norbert Teufelberger, Annamaria Anastasia

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or the first time in her new partner role at Northridge Law, Melanie Ellis joins us for another well written piece looking at the dilemma the Gambling Commission currently faces regarding it's three objectives; preventing gambling from being associated with crime, protecting children and vulnerable people from being harmed by gambling and ensuring gambling is fair and open. Richard Williams (Keystone Law) shares his thoughts on whether the arrival of mandatory financial limits are just around the corner, whilst Charlene Seychell (KPMG) takes a detailed look at the effect intelligent automation is having on the technology-driven gaming industry. We welcome back Susan O'Leary (Alderney eGambling) who offers her thoughts on the latest regulatory issues and Alessandro Fried (BtoBet) looks at personalisation and customization within the sports betting industry. Staying on the sports betting theme, Keith O’Loughlin (Scientific Games) discusses how innovative features in sports betting will bring new excitement levels to the user experience, whilst Greg Brower and Mark Starr (Brownstein Hyatt Farber Schreck) take a look at inside betting in the U.S. Amy Riches (Evolution Gaming) takes a look at the latest live casino trends, Anthony Ure (Digital Isle of Man) offers his thoughts on responsible gaming following iGB live and Mark Bonello and Mark Griffiths provide us with an in-depth overview of behavioural tracking, responsible gambling tools and online self-exclusion. We speak to Norbert Teufelberger, co-founder and former CEO of bwin, ahead of his appearance on the Hall of Fame Panel at Betting on Sports 2019. And finally, Annamaria Anastasia (Betsoft) discusses the latest online slots games.

© 2019 Danancy Media Limited. The opinion expressed in each article is the opinion of its author and does not necessarily reflect the opinion of the publisher. Any form of reproduction of any content in this publication without the written permission of the publisher is strictly prohibited.

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Jamie Kean, Publisher

The 2019 Q4 edition (Issue 39) of CGi will be published on 7th November.

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CONTENTS ::

FEATURES 7 13

GoldilockS And ThE ThREE licEnSinG objEcTivES Melanie Ellis, northridge law

GAMblinG AFFoRdAbiliTY – ARE MAndAToRY FinAnciAl liMiTS iMMinEnT? Richard Williams, keystone law

bETTinG on AUToMATion

MoRE cARRoT And lESS STick

ThE indUSTRY conUndRUM: PERSonAliSATion And cUSToMizATion

A MATch winninG ExPERiEncE

Charlene Seychell, kPMG Software

Susan O’Leary, Alderney eGambling

Alessandro Fried, btobet

Keith O’Loughlin, Scientific Games

CGiMAGAZINE.COM

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CONTENTS ::

FEATURES 29

INSIDER BETTING: DEEP THREAT OR NO HARM, NO FOUL

THAT’S ENTERTAINMENT!

IGB REACTS; BALANCING RESPONSIBLE GAMBLING WITH BUSINESS NEEDS

BEHAVIOURAL TRACKING, RESPONSIBLE GAMBLING TOOLS, AND ONLINE VOLUNTARY SELF-EXCLUSION: IMPLICATIONS FOR PROBLEM GAMBLERS

Greg Brower & Mark Starr, Brownstein Hyatt Farber Schreck

Amy Riches, Evolution Gaming

Anthony Ure, Isle of Man Digital Executive Agency Department for Enterprise

Maris Bonello & Mark Griﬃths

SUCCESS, INNOVATION AND LOOKING TO THE FUTURE

IS THE INDUSTRY LOSING SIGHT OF QUALITY OVER QUANTITY?

Interview with Norbert Teulfelberger

Annamaria Anastasia, BetSoft

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LEGAL ::

GOLdILOCKS ANd ThE ThREE LICENSING OBjECTIvES E

veryone is familiar with the tale of Goldilocks, who upon entering the house of the three bears seeks to find a bowl of porridge, a chair and a bed that is “just right”, not too hot and not too cold, not too soft and not too hard. In many ways the British Gambling Commission faces much the same dilemma, they too must find the “just right” approach to each of the three licensing objectives (in summary, preventing gambling from being associated with crime, protecting children and vulnerable people from being harmed by gambling and ensuring gambling is fair and open). Regulation that is “too soft” allows regulated entities to fail to reach the required standards, but regulation that is “too hard” risks driving business into an unregulated black market.

Melanie Ellis Partner Northridge Law

There is no denying that the Commission’s approach over the past few years has become “harder”, resulting in an increasing number of investigations and licence reviews. An unprecedented level of regulatory action by the Commission over the past 12 months has led to a total of around £24m in financial penalties being paid by gambling operators. Whether they have been the subject of enforcement action, an investigation or a routine compliance assessment, licensed operators will certainly be feeling the effects of an increased regulatory burden. Despite this, Tom Watson MP, Deputy Leader of the Labour Party, believes that we “have inadequate regulation” (debate in the House of Commons on Problem Gambling, 2 July 2019) and, in a speech to the Demos think tank on 18 June 2019, called for the creation of a gambling ombudsman, asking of the current CGiMAGAZINE.COM

:: LEGAL

system “where is the framework of consumer protection?”. So, with accusations of being both “too hard” and “too soft”, has the Commission in fact got things “just right”? Penalties Operators may understandably be wondering what use has been made of the £24+m paid in penalties in the last year. Just over half of this amount represents fines imposed by the Commission (these go into the Consolidated Fund – essentially the Government’s bank account), around £9m went to GambleAware, “accelerating delivery of the National Strategy to Reduce Gambling Harms” or more generally a “gambling harm related charity”, and around £2.4m was repaid to victims of crime. It certainly seems fair to say that the level of fines has generally increased, with seven figure sums being far more common that they had been in the past, and penalties as high as £7m should certainly make operators sit up and take notice. The Commission launched the new “National Strategy to Reduce Gambling Harms” in April this year. Teasing out how the funds given to accelerating delivery of this Strategy this will actually be spent is challenging, as the Strategy’s “implementation plan” has yet to be published. It appears from statements such as “The aim is to make significant progress towards an effectively commissioned, comprehensive national treatment and support offer that meets the needs of current and future service users” that some of the money will go towards increasing the availability of treatment and support services, such as the helpline provided by GambleAware, although the strategy document notes that “waiting lists for access to these services are relatively short”. It would be fair to operators paying significant sums to support the Strategy to receive more specific information about what the money will be used for; hopefully this information will be forthcoming soon. To put these amounts into context, however, using figures put forward in the recent Problem Gambling debate in the House of Commons, the gambling industry generates around £14.5bn in GGY per year and £3bn in tax revenue. The annual cost to the economy of gambling addiction is estimated at £1.2bn. It may well be fair to expect the costs of gambling addiction to be met by the industry, in which case its tax payments more than cover it. But if the gambling industry is supposed to cover the costs of gambling addiction in addition to the tax revenues, the revenue from fines, financial settlements and voluntary donations comes nowhere close. Enforcement themes With so much on the line, what can be done to minimise the risk of enforcement action if you are an operator? A good strategy is to understand the failings made by your peers and look to make sure your own policies and procedures don’t leave you open to the same charge. The public statements published by the Commission show similar recurring issues. One of the main themes is failings in enhanced due diligence, which often become apparent following customers spending significant sums of money which

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turn out to be stolen or obtained through fraud. Often, enquiries have been made about the customer’s overall wealth, but no evidence has been obtained of the source of the actual funds received by the operator. Another common theme is that the operator failed to interact with a customer either early enough, properly, or at all. As demonstrated by the past years’ enforcement action, customers are sometimes able to spend significant sums of money before any enquiries are made to assess the legitimate origin of the funds and/or whether the customer may demonstrating problem gambling behaviour. An emerging theme is that of “affordability”. Increasingly operators are being expected to consider whether a customer’s level of gambling is affordable for them and, in its recent Enforcement Report, the Commission has been more specific about what this should involve. Source of Funds enquiries In the recent case of Platinum Gaming Limited (aka Kindred and Unibet), a customer lost a total sum of around £620,000 in a 21 day period in October 2017. The customer had been flagged as a high-risk player when he first played at a significantly lower level in February 2017, however the Commission say the operator did not make “adequate enquiries” about the source of funds (“SOF”) he was using to gamble. After 18 days of play in October the operator made source of wealth (“SOW”) enquiries and once it received a completed SOW questionnaire from the client it requested SOF information. The customer did not provide this which led to the account being closed, however

LEGAL ::

condition which states that: “Licensees must interact with customers in a way which minimises the risk of customers experiencing harms associated with gambling. This must include: 1. identifying customers who may be at risk of experiencing harms associated with gambling. 2. interacting with customers who may be at risk of experiencing harms associated with gambling. 3. understanding the impact of the interaction on the customer, and the effectiveness of the Licensee’s approach.”

by this time the customer had spent £620,000 of what turned out to be fraudulently obtained money. If the operator had requested SOF information in the first few days after the customer returned in October, it is likely that the account would have been closed before such large sums were spent. The Commission has always been reluctant to specify an exact figure which should trigger a requirement for SOF evidence, perhaps fearing that it would lead to a “race to the bottom”, with enquiries being carried out unless and until that figure was hit. However, the fact that a large proportion of enforcement action relates to customers, frequently those suffering from a gambling addiction, spending six figure sums which turn out to be stolen, indicates that the current regulatory approach is not “just right”. A step towards the Commission being more specific as to what is required was made in the recent case of Casino 36 Limited. As part of a regulatory settlement with the operator, the Commission imposed new licence conditions, including that the licensee must carry out, on an annual basis, enhanced due diligence on its top 125 customers by drop and top 125 customers by loss. The licensee also agreed to instruct independent auditors to carry out a review of the current top 100 customers in respect of their SOW and SOF and report back to the Commission on the results. Customer interaction The Commission has recently carried out a public consultation on customer interaction. It proposes to introduce a new licence

Without wishing to downplay the importance of carrying out interactions with at-risk customers, in my view, the proposals go too far. Perhaps unintentionally, the proposed wording of the new licence condition seems to impose a strict liability on operators to identify and interact with all customers who may be at risk of experiencing harm. A failure to identify one at-risk customer, to interact with them and/or to understand the impact of the interaction on them, would potentially be a licence breach. The proposed condition confuses the desired outcome (customers who are at risk are identified and subject to an effective interaction) with the required behaviour of licensees. The latter is the appropriate subject for licence conditions. The Commission should require operators to implement policies and procedures which maximise their chances of identifying at-risk customers, but cannot require them to actually identify every such customer. The outcome of the consultation and final wording of the new licence condition is still awaited. Affordability A further theme of recent Gambling Commission commentary has been the issue of “affordability”. On the one hand, it is clear that if an individual’s gambling is not “affordable” for them, there is a risk that they are suffering from problem gambling and/or turning to criminal activities to fund their gambling. On the other hand, “affordability” is very difficult to measure or estimate and, perhaps more importantly, gambling operators are put in the difficult position of dictating to a customer on what they should or should not spend their income or savings. Certainly, for higher value or “VIP” customers, affordability has always been considered, perhaps indirectly, under EDD procedures. If EDD on a customer spending £10,000 per month reveals that they have personal wealth in the hundreds of millions, it would be reasonable to allow them to continue gambling because (in the absence of other indicators) the risk this spend level is indicative of problem gambling or criminal activity is low, in other words, they can easily afford this level of gambling activity. The Enforcement Report, however, focuses on the average person in its section on affordability. The Commission gives data from a YouGov survey which asked participants how much “discretionary income” they had to spend each month. The Commission concluded that the reasonable range of disposable CGiMAGAZINE.COM

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income was between £125 and £499 for much of the population. The Commission states that “the above disposable income data identifies clear benchmarks that should drive Social Responsibility (SR) triggers”. I’ve replicated the data published by the Commission below because there is some mysterious missing data: one would expect the total percentages for each age range to add up to 100%, because they ranged from £0 to £1,500+ and should therefore encompass every possible disposable income. But, for example in the 18-24 age range, only 74% of the population are represented. Even if 26% answered an unshown option “don’t know”, the accuracy of this data has to be questioned. No link is given to the survey results to enable operators to use the source data to form an evidence-based view on affordability for their own target market.

Source: Raising Standards for Consumers: Enforcement report 208/19, Gambling Commission

Concerns about the YouGov data aside, the Commission is implying that, in the absence of documentary evidence of the disposable income of their actual customer base, operators should be assessing affordability for those customers whose spend exceeds that which would be realistic for someone with an average amount of disposable income. In the Enforcement Report the Commission recommends that operators “consider their customer base and their disposable income levels as a starting point for deciding benchmark triggers” and “if an operator is going to set specific triggers for a customer base not representative of the general public, various documents sources should be relied upon, but they must contain sufficient information to substantiate the trigger level set.” The Commission does not set out how the affordability assessment should be done, but it would presumably need to go further than an assessment of the customer’s income. An individual with an annual income of, say, £50,000 could have a monthly discretionary spend ranging from nothing (for example if they are the sole earner for a family of five), through £3,000 (for example if they live at home with no expenses other than tax), or higher (for example if they have considerable inherited wealth). Gathering more detailed information than a customer’s annual income will inevitably be a complex process and it must be questioned whether it would be proportionate to carry out such an investigation on all customers spending the suggested figure of £125-499 per month. What should be done based on the affordability assessment is also not the subject of any recommendations. A communication from a gambling operator to the effect that “we’ve done some digging and decided that you’re spending too

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much on gambling as compared to what we’ve found out about your annual income” is quite likely to be unwelcome. As ever, there is a need to balance individual freedom to spend money on gambling as a legitimate leisure activity with the need to protect the public from the dangers of problem gambling and gambling using stolen funds. Whilst there are obvious difficulties in assessing affordability and then acting on that information, there may be commercial benefits to doing so. As long as a customer is gambling in way that is affordable for them, they are likely to continue to be a good customer on a long-term basis. Whilst (subject to concerns about the accuracy of the figures) it is helpful that the Commission has given some guidance here as to when checks should be carried out, it ought to clarify what those checks would entail and what operators should do based on the results. “Just right”? The story of Goldilocks ends with the little girl waking up to find the three bears looking down at her, whereupon she jumps out of Baby Bear’s bed and runs away into the forest. It was never made clear in any version of the story I read whether she suddenly felt remorse for her actions and saw the error of her ways, or was just running away to find another house to cause havoc in. The comparison between Goldilocks and the Gambling Commission breaks down a little here, but it is does raise a pertinent question: to the extent that gambling operators are under increased scrutiny by the Commission, will it lead to better customer outcomes, or just more uncertainty for operators? I would suggest that action taken out of fear of enforcement action is unlikely to be as effective as changes made out of a genuine understanding of the risks and potential harms to the business. The approach to regulation that I would like to see is therefore not “harder” or “softer” but “more collaborative”. Rather than just specifying the ultimate outcome to be achieved (for example at-risk customers being identified or customers gambling in a way that is affordable) and highlighting cases where that outcome is not met, the Commission could better promote the three licensing objectives by guiding licensees to what acceptable procedures would be. :: CGi MELANIE ELLIS Melanie Ellis is a partner at Northridge Law LLP, with 13 years’ experience as a gambling regulatory lawyer. Melanie advises on all aspects of gambling law including licence applications, compliance, advertising, licence reviews and changes of control. She has acted for a wide range of gambling operators including major online and land-based bookmakers and casinos, B2B game and software suppliers and start-ups. She also frequently advises operators of prize competitions and social gaming products. Melanie has a particular interest in the use of new technology for gambling products and novel product ideas.

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17-20 SEPT

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LEGAL ::

GAMBLING AFFORdABILITY – ARE MANdATORY FINANCIAL LIMITS IMMINENT? W

Richard Williams Keystone Law

hilst the Gambling Commission’s recent enforcement action has very much focussed on anti-money laundering failings, it’s clear that as the remote industry becomes more AML compliant, the Commission’s focus will turn towards protecting consumers. To some extent this action is being driven by the anti-gambling media in the UK and certain politicians who view the gambling industry as an evil beast which must be tamed, or preferably driven out of existence. Given the current political turmoil in the UK, it remains to be seen whether those advocating action will prioritise tighter gambling regulation, if they ever get in a position to legislate. I suspect that, whilst criticising the gambling industry is popular with middle England, Brexit and the state of the UK economy will be a more pressing concern in reality. However, it looks like an ever-increasing focus on protecting consumers will happen, irrespective of who is in power in Westminster. Going back to first principles, the duty of the Gambling Commission as the regulator, is to promote the licensing objectives of the Gambling Act 2005. One of those objectives is to “protect children and other vulnerable persons from being harmed or exploited by gambling”. Parliament didn’t enlighten us on who these “vulnerable persons” are, so it’s not certain who the regulator must protect. Are the vulnerable those with a gambling addiction, those who are susceptible to addiction, or those feckless individuals who choose to spend all of their disposable income on things other than life’s essentials? Gambling is addictive of course and without doubt, certain individuals need to be protected, but it’s a difficult decision to CGiMAGAZINE.COM

know quite where to draw the line. There are many who argue that an individual has a right to spend their money how they like and that the state should only take action in order to protect the most vulnerable in society from harming themselves and their families. This is not to say that protection of consumers is a new thing for licensed operators. The Gambling Commission’s “Remote Gambling and Software Technical Standards” (“RTS”) have for a considerable time required operators to provide a facility for customers to set their financial limits on their spending. RTS 12 requires operators to offer financial limits as part of the registration process, which must include deposit, spend and loss limits for specified periods. These limits, once set, can only be raised after a 24-hour cooling-off period. In addition, the Commission’s “Licence Conditions and Codes of Practice” (“LCCP”) require operators to monitor customer behaviour for evidence of problem gambling and to have policies and procedures in place to interact with those customers. The Commission has also produced some very detailed guidance for remote gambling operators , setting out how at-risk customers might be identified, including risk indicators and methods of interaction. Despite all of this, it is acknowledged that selfimposed financial limits are not widely used (see below) and are

CGiMAGAZINE.COM

often forgotten as customers rush through the registration process to get on with their gambling. Whilst sensible people may set limits, those with a propensity to gamble too much are likely to ignore them. As such, financial limits do not generally benefit the very people they are designed to protect. The Commission now appears to have decided that gamblers need further protection and there has been a clear move towards the regulator imposing mandatory limits on gambling spending. Pressure has been building for a while, but particularly since the Commission issued its “Review of online gambling” in March 2018 . In its Review, the Commission stated that “we plan to investigate the effectiveness of mandating the setting of deposit limits on accounts…….deposit limits are a good way for consumers to manage their gambling budget.” The Review also contained research showing that some remote gambling operators had fewer than 5% of customer who had set their own financial limits and that “there does appear to be a lack of awareness amongst consumers of both the availability and benefits of setting limits.” As a result, the Commission stated that it intended to consult on revisions to the LCCP which would require operators to impose mandatory account limits until further financial information had been verified about a player.

LEGAL ::

The Commission’s Review in March 2018 was then followed by its “Consultation on age and identity verification” , which ran between September and November 2018. Whilst the Consultation focussed primarily on age and identity verification, a question on mandatory account limits was also included. The Commission stated that “we are not proposing at this stage to introduce a specific licence condition or code to require mandatory account limits”, but that it was seeking evidence of existing good practice and what is possible, to prevent gamblingrelated harm. The Commission appeared to suggest that it might consider variable financial limits tailored to each customer, using credit profiling or postcode deprivation indices. Due to the impact on revenue that mandatory financial spending limits is likely to have, one imagines that the gambling industry, still reeling in many quarters from the FOBT stake cut, welcomed the Commission’s announcement that it would not be immediately introducing mandatory account limits. However, mandatory limits have not gone away and are still on the Commission’s radar. It’s clear that the Commission is going to press on with its focus on affordability and consumer protection. This is evident from the Commission’s 2018/2019 Enforcement Report which analyses disposable income across the UK as a measure of what the average person is able to sensibly spend on non-essentials. The Report states that, according to Office for National Statistics earning surveys (2016/2017), 50% of UK full time employees were paid less than £29,000 per year and 50% of full-time managers, directors and senior officials were paid less than £43,000. These figures exclude Income Tax, National Insurance and the cost of living. A YouGov survey of GB adults conducted between June 2018 and June 2019 indicated that across various age groups, individuals’ disposable income ranged from from less than £125 to £499 per month (less than £1500 to £6000 per year). However, these disposable income figures did not include unavoidable monthly costs or annual costs, such as transport, fuel, monthly contractual payments, vehicle maintenance, clothing and personal care. As such, “spare” income available to spend on leisure activities such as gambling would be significantly lower than this. In the Review, the Commission states that “we have seen nothing to indicate that gamblers have more disposable income than the general population and most people would consider it harmful if they were spending all their disposable income gambling.” It also advises operators to use these disposable income figures to help identify gamblingrelated harm by considering affordability. Of course, there will be people outside of this range who have more disposable income to spend gambling, but it’s a clear indication of what the average individual has free to spend. We know that the Commission appears to be moving towards introducing mandatory spend limits based on disposable income, but how will this actually work in practice? If the measures are introduced, these are likely to be via revisions to the LCCP. I envisage that new social responsibility code provisions will require operators to impose a mandatory deposit, spend or loss limit on all new and existing customers.

The simplest approach would be to impose a fixed limit on all customers, irrespective of their income or location, until the individual is able to prove that they have sufficient disposable income to increase the limit. In my view, it’s simply not feasible to impose variable limits for different customers, based on factors such as their location or income. As a result, the gambling industry would be asked to move towards a complex assessment of a customer’s income and outgoings, similar to the enquiries that are made when a loan or mortgage is applied for. This process could be complicated and time consuming and it’s possible that the small margins from gambling could not justify the expense of undertaking these enquiries. Imposing mandatory spend limits would have a very dramatic impact on operators’ revenue, particularly in relation to VIP casino customers, who often spend well in excess of any limits that would be imposed. Faced with lengthy disposable income enquiries, players may accept that their spending is out of control, or simply give up and play elsewhere. Customers may seek out unlicensed and offshore operators, who are not subject to the same financial restrictions. The proposals paint a pretty bleak picture for remote gambling operators in GB, who are still reeling from diminishing VIP casino customers, as a result of thorough source of wealth enquiries. In line with the reduction in stake for FOBT machines, maximum stakes per spin and slower play speed in online casino games have also been mooted by politicians and those opposed to the industry. It remains to be seen where the gambling witch hunt will head next, but it’s clear that consumer protection is going to receive increased focus over the next few years. Some operators are already getting ahead of the curve and assessing individual affordability and setting financial limits. In light of the FOBT stake outcome, operators may find it’s better to actively take steps to protect consumers, rather than having more draconian measures imposed on them. :: CGi

RIChARd WILLIAMS Richard is a London based gambling lawyer at Keystone Law, focussing on the remote and land-based gambling sectors. He has a particular interest in e-Sports betting, cryptocurrency, marketing and advertising rules and AML and social responsibility regulations. He is experienced in advising operators about compliance assessments and licence reviews and has recently been involved in a major judicial review of gambling legislation. Richard holds the ICA Certificate in Money Laundering Risk (Betting & Gaming) and is a regular contributor to industry publications and a speaker at international gambling conferences. With his corporate and commercial colleagues at Keystone, Richard advises on agreements and corporate transactions involving gambling operators.

CGiMAGAZINE.COM

INTELLIGENT AUTOMATION ::

BETTING ON AUTOMATION M

uch like the intense wave of automation which became apparent during the First Industrial Revolution, we are on the cusp of a similarly radical change to our approach to work as human beings. First consider the manner in which ATMs became the norm, freeing customers from lengthy queues restricted to bank working hours in the process. Now ponder the rapid reduction in our need for cash due to the efficiency of digital payments and mechanisms. In a similar sense, automation will continue to infiltrate, and integrate itself within our lives, eventually becoming a very standard part of the world we call home â&#x20AC;&#x201C; for now.

Charlene Seychell Business Analyst KPMG Software

Automation has already made its mark on the technology-driven gaming industry. It is expected to give iGaming operators a revamped and incredibly different operating model. This will surely encourage the delivery of greater value with significantly less effort. Operators will also benefit from increased agility, allowing more rapid responses to the fast-changing needs of their iGaming business. Industries around the world are greatly being affected by automation, and the iGaming industry is no exception. Innovation is a key driver for prolonged success in this bustling era filled with frequent and dynamic change. The iGaming industry has been rooted in technology since inception and is fully embracing the next generation of automation. The advent of Intelligent Automation The exponential growth of new emerging technologies, such as Intelligent Automation (IA), is allowing forward-thinking iGaming CGiMAGAZINE.COM

:: INTELLIGENT AUTOMATION

<< The reality is that malicious minds capable of carrying out illicit transactions are part of societies all over the world, posing a serious threat to several industries, including that of iGaming. Each year money-laundering transactions around the globe account for around $3 trillion USD, equating to approximately 5 percent of global GDP. >> operators to get ahead of the competition in attracting, and retaining, customers. This is critical given the high customer churn rates across the iGaming industry. The term intelligent automation serves as a catch-all phrase for disruptive technologies, as it combines Artificial Intelligence (AI) with Robotic Process Automation (RPA). At its most basic level RPA replicates the execution of a task on any computer application where the said task is normally performed manually by a human user. Some explain RPA as a swivel chair product due to its ability to move and adapt to perform repeatable, rules-based tasks, thus allowing valuable resources to focus on value-adding tasks. By integrating AI elements such as natural language processing, image recognition and machine learning within the RPA framework, the extraction of unstructured data such as scanned documents may also be automated. This allows for the analysis of large volumes of information, aiding the identification of trends and patterns. This level of automation can also enable the broadening of margins and brand safeguarding. Integrating IA within gaming operators’ KYC procedures The recent KPMG International and HFS Research report, Easing the pressure points: The state of intelligent automation found that “cost savings alone should not be the only end-game for IA investments” . As IA becomes more embedded within operations, business leaders indicate that their strategic objectives are increasingly focused on better analysis of data and improved operating insights. One area where this is evident is within the ‘Know Your Client’ (KYC) on-boarding procedures, which includes the collating of various identification documents

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to confirm the player’s identity and the evaluation of any potential risks that might jeopardise the operator’s reputation. Since most of these documents are scanned copies and vary in language, IA can be used as a means to indicate the validation of a document. In fact, KPMG Software is currently working on a Proof of Concept (PoC) that uses AI to validate documents together with RPA to extract and analyse data in order to verify a player. This will speed up the overall player on-boarding experience, thereby increasing efficiency and accuracy for the operator. Addressing Social Issues with IA The reality is that malicious minds capable of carrying out illicit transactions are part of societies all over the world, posing a serious threat to several industries, including that of iGaming. Each year money-laundering transactions around the globe account for around $3 trillion USD, equating to approximately 5 percent of global GDP. Indeed, money laundering became the leading source of compliance fines for North American and European institutions. A study by KPMG International found that inefficient AML and KYC processes also lead to lower productivity, greater government scrutiny, and to potentially decreased customer satisfaction, whilst also bringing heavy fines and last damage to a brand’s reputation . RPA can act as a facilitator to meet the increasing demands of regulators. This can greatly simplify and improve AML control processes, with the added benefit of significantly reduced compliance costs. In this regard, KPMG Software is backing AI-based mechanisms in monitoring player activity, and in identifying patterns and trends to enable real-time analysis of, and reaction to, transactions. AI

INTELLIGENT AUTOMATION ::

may also help to foresee future transactions based on historical data. Given the stringent regulatory climate, iGaming companies are becoming increasingly motivated to make online gaming a safer and more responsible experience. IA-enabled tools possess the power to sift through vast amounts of transactions to analyse and predict user behaviour, enabling operators to take a proactive, rather than reactive, approach in protecting vulnerable customers. Transforming the Customer Experience via AI-enabled bots Shocking as it may be, the potential of AI in allowing gaming companies to excel in customer services was recognised almost two decades ago when PhoenixVegas.com became the first online casino company to integrate AI within its Customer Service department. Players could communicate and ask questions directly to a ‘smartbot’ which had both a name and face, giving the players a more human and engaging experience. Fast-forward to 2019 and one can find that leading gaming operators are increasingly incorporating similar AI technology into their operating models. These chatbots are AI-based software that use text-based live chat as instructions to carry out certain tasks for customers on behalf of the operator. For instance in the past year the Newgioco Group launched ‘Chatbot’, a service to assist customers through customised pattern recognition and machine-learning algorithms allowing it to assist with, customer interactions, developing customer betting profiles, and providing the most effective play options for customers, amongst other processes. KPMG Software is working toward the development on of algorithms and platforms which could greatly enhance the customer experience. Revamping back-office tasks The McKinsey Global Institute (MGI) estimates that nearly half of all the activities staff carry out could be fully or partially automated via emerging technologies . Compliance with increasing regulation is causing the daily workload and pressures on staff to increase. Automation can play an important role in developing greater efficiency and accuracy in back-office tasks, including finance and administration. While this is very promising, it is important to highlight that human insight and review will still be critical in the most qualitative processes in an iGaming company, so there is still hope for us yet. Automation can empower organisations by delegating the time-consuming, error-prone manual tasks to machines, allowing humans to focus on strategic, high-value tasks. RPA will be complementing human activity rather than replacing their roles with faceless robotic algorithms. When integrating a number of emerging technologies together in an organisation, the end result will be a digital workforce where the collaboration between digital and human workers results in greater organisational capacity and employee empowerment.

What’s next: Cognitive Process Automation (CPA) Cognitive Process Automation, referred to as ‘judgment-based automation’, combines basic automation with disruptive technologies, incorporating advanced self-learning capabilities based on technologies such as machine learning and data analytics. It provides real-time decision support on complex processes that generally involve human judgement. The solution would then be able to respond to stimuli, since it would have learnt to act in a similar manner to a human. Procedures that contain an element of subjectivity are good candidates for CPA as humans often make poor judgements, driven by emotion and other biases. A properly trained neural network would not have such issues and would be able to produce more consistent results, with greater levels of reliability. In the midst of the iGaming industry’s heavy regulatory climate, clear leadership, good governance and good governance and agile operations are needed to steady, and steer, the ship. Whilst many organisations have begun to implement for one-off automation solutions, efforts must be done to embed such technologies into regular business operations in the months and years to come. The next generation of business leaders will be those who continue to innovate and implement emerging technologies which are aligned with their strategic vision. :: CGi REFERENCES

1.https://assets.kpmg/content/dam/kpmg/xx/pdf/2019/03/easing-

pressure-points-the-state-of-intelligent-automation.pdf

2.http://www.independent.com.mt/articles/2019-05-09/business-

news/How-AI-can-help-combat-money-laundering-and-make-online-ga

ming-safer-6736207886

3.https://home.kpmg/xx/en/home/insights/2019/03/combating-

financial-crime-fs.html

4.https://www.mckinsey.com/featured-insights/digital-

disruption/harnessing-automation-for-a-future-that-works

ChARLENE SEYChELL Charlene Seychell is a Business Analyst at KPMG Software. She forms part of the Intelligent Automation team and holds a B.Sc Business and IT (Hons). Her focus is primarily on automation projects within various industries, with a special emphasis on Gaming practises. KPMG Software is a tech company offering expertise within the software development field powered by a team of developers with decades of experience in various areas of software development, focusing on emerging technologies such as Blockchain, IoT, AI, Machine Learning, and Intelligent Automation. Through collaboration with experts across KPMG's global innovation labs, the team is building PoCs, models and solutions to inform our clients and empower them to transform their businesses.

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REGULATORY ::

MORE CARROT ANd LESS STICK A

Susan O’Leary CEO Alderney eGambling

mid the reports of further punishment, it is time the industry adopted a more collaborative approach to regulation, according to Alderney eGambling CEO Susan O’Leary.

The recent spate of penalties levied against a number of leading operators in the UK have cast a further shadow over the industry and done little to improve its reputation in the wider world. In what some parts of the media described as the latest crackdown, first Gamesys and then Kindred were hit with seven figure sanctions for breaches of money laundering rules and failures to prevent players being harmed by gambling. Just days later the regulator in Sweden opted for the nuclear option and permanently revoked the licence of Global Gaming’s SafeEnt subsidiary for repeated violations of the country’s laws. It could be argued, in much the same way that the increased reporting of crimes sometimes heralds the start of an actual improvement in its prevention, that there is some good news behind the dark headlines. After all, these historical misdemeanours and their punishment to follow serve as a lesson for the future conduct of operators themselves, as well a warning to their peers to make sure they always have the requisite safeguards in place. Speaking more generally, however, the lack of compliance that led to the punishment may also highlight an unfortunate gulf between the expectations of regulators as a whole and the actions of their licensees. When I speak to operators and suppliers, as I do every month at exhibitions around the globe, I’m often struck by the weariness which marks the start of any conversation when it swings toward regulation. For far too many of them the word CGiMAGAZINE.COM

:: REGULATORY

characterises the hardest and least enjoyable aspect of their working lives. For these executives, the regulator is at best a necessary evil and at worst an adversary who imposes a burden on their profits and a very real threat to innovation. Rather than providing a safe nest for the goose that laid the golden egg, they are the seen as the thief that is intent on stealing it. But it really needn’t be the case. Alderney eGambling, of which I am CEO, is the body that is responsible for promoting the Alderney Gambling Control Commission (AGCC), a leading global regulator with over 20 years experience in the industry. At a strategic level we have developed a network of connections with governments, fellow regulators, operators, and service providers and we are responsible for providing assistance, developing strategy, and facilitating collaborations globally. Our aim has always been to provide a consultative service that leads any licence applicant through the whole process of understanding the licensing framework and applying for a licence. That includes making all of the necessary introductions to recommended service providers en route. The AGCC’s approach to licensing is a pragmatic, risk-based one, delivering the highest standards of regulation, while having the insight and capacity to limit the perceived ‘burden’ when appropriate. We like to think that it is a far more user-friendly approach than is the case elsewhere as a result. To that end, the AGCC is unique in assigning clients with an individual account manager and has an open-door policy that genuinely welcomes discussion and dialogue. Ultimately rules are in place and there is no intention to cut corners, but the framework will always be collaborative in its approach, never losing sight of the fact that the regulator exists to help rather than hinder. It isn’t a one-way street, of course. Licensees need to play their part too. I’d like to think that the days of operators and suppliers paying lip service to regulation are well and truly over and yet they still need to adopt a regulatory mindset if they are to make the most of their opportunities. That means taking their obligations seriously and allocating the appropriate time and resources to working closely with regulators. Through collaboration and an honest appraisal there is the potential for efficiencies and synergies which will be of benefit of all stakeholders. The AGCC has extended this collaborative approach beyond the boundaries of its own jurisdiction to advise other regulators on the development of their own regimes. In the United States, for instance, we’ve assisted Nevada and New Jersey with their approach to iGaming and continue to help out where we can. In addition, we’re working with a number of existing Alderney licensees who are looking to expand their businesses in those vanguard states who are looking to adopt an online industry. Whilst deep-rooted cultural, social, and economic differences may always prevent any form of harmonised gambling regulation standards, there is no reason why the spirit of cooperation can’t prevail in order to assist legitimate businesses with an interest in multiple markets. After all, good regulation and best practice are universal. A recent example of this in progress is the multi-

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jurisdictional testing framework. The initiative, introduced by the International Association of Gaming Regulators, is designed to streamline the testing of game products in order to establish a common process. Any jurisdiction participating in the scheme recognises the standard of the testing undertaken by a fellow party member in order to avoid needless and expensive repetition. This saves operators and suppliers alike from further regulatory and administrative burden when undertaking multiple licence applications. I’m pleased to say we have also seen progress with the establishment of the UKGC’s new national strategy to reduce gambling harms. The three-year strategy brings together health bodies, charities, regulators and businesses in a co-ordinated attempt to minimise the number of consumers who are adversely affected by the industry and its products. Crucially, it involves the use of data from operators themselves which holds the key to identifying those customers who may be at risk. It is to be hoped that as well as preventing untold numbers of vulnerable people coming to harm, it also cuts down on the number of companies who face the sort of severe punishment described above. If all of this sounds like we’ve gone soft, then a reality check would be welcome at this point. We must never lose sight of the fact that the primary role of regulators is to protect the young and vulnerable. They must also keep criminals out of the industry and ensure the consumer can enjoy a fair game that promotes responsible play and exudes integrity. Above all else it should have enough muscle to punish offenders who step out of line, as we discussed earlier with the UKGC and Swedish regulators. But perhaps it is time we adopted the ideology of U.S. President Theodore Roosevelt, who achieved fame by maintaining a ‘big stick’ approach to diplomacy. Whilst the president had the clout to wield the big stick when things went wrong, as they frequently did in foreign affairs, he was a great believer in ‘speaking softly’ to those involved before it ever came to that. In the light of the draconian measures taken recently in our industry, maybe we should look to a more conciliatory and collaborative approach that extols the carrot over the stick. :: CGi

SUSAN O’LEARY Susan O’Leary is the CEO of Alderney eGambling, the Alderney regulator’s strategic and development body. As a lawyer, she represented some of the world’s leading eGambling operators and gambling service providers including many of Alderney’s licensees for many years; and as such has perspective on both the commercial and regulatory elements. Susan has a clear understanding of the online landscape and is a regular speaker at key industry conferences and events globally.

SPORTS BETTING ::

ThE INdUSTRY CONUNdRUM: PERSONALISATION ANd CUSTOMIzATION D

uring the past few years the mature European industry has evolved into a congested market characterized by increasing challenges in terms of player acquisition, and retention, and problematics from a brand differentiation point of view. These challenges arise primarily from the technological inadequacy of the majority of the iGaming platforms’ core technology not only to provide a tailored UX on a micro-level to each and every player, but also their inability to provide operators with the the “freedom” required to deliver a distinct betting experience reflecting their brand’s unique values. This ultimately results in a flat experience across the vast majority of the industry, increasing the risks in terms of player churn rate. The key to circumvent these issues are true personalization and customization.

Alessandro Fried Chairman BtoBet

A changing sports betting scenario The whole online bookmaking industry has literally changed its stance during the last few years, especially from a content offering perspective. Whereas before operators used to fight it out amongst themselves from a quantitative point of view, with their primary aim being to provide their players with a myriad of markets and events, even to the detriment of the whole betting experience, nowadays this perspective has changed, with bookmakers more keen to present their players with a more restricted choice of events that however reflects a more tailored UX. And this is where a platform’s capability in terms of AI, machine learning and advanced filtering and segmentation capabilities should assist operators.

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:: SPORTS BETTING

A unique UX for each and every player As a starting point it must be said that there is no single and predefined character profile that fits an individual player. If this would be the case, it would totally preclude the whole concept of bettering the user experience through a tailored and personalized experience. For an operator to truly realize the importance of having the right management tools in terms of sports betting analytics, one would have to imagine a scenario where a gambler, on a typical Sunday, and using a smartphone device, with all the major football leagues’ events occurring within practically the same time window is attempting to place a betting ticket with no technology filtering and segmenting the offerings according to his preferences. The end result? A cacophony of information resulting in a chaotic user experience and poor engagement. The tailoring of the player experience relies solely on the technological proficiency that the operator has at his disposal. Because even though most platforms offer some form of customized user experience, only a select few offer the opportunity for advanced player segmentation based on his

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previous activities resulting in a highly augmented sports betting UX on an individual level. Data harnessing And this is particularly true in the case of a player who can be classified as a live casino player, or fall under the segment of an avid football punter, whilst at the same time also being a potential daily racer. It all boils down to the platform’s technological impetus to assimilate and process all the data generated by the player as close to real time as possible. Each and every decision that a customer makes is key to the data stream from which predictions on his betting behaviour, based on complex machine learning algorithms, can be generated. The betting experience of each and every player can be tailored from the very beginning of his lifecycle on a bookmaker’s site. The personalization of this UX process depends on the platform’s ability to further integrate and segment the data to the most minute level in order to deliver a truly holistic and tailored experience. And even though one of the major elements to deliver an

SPORTS BETTING ::

<< Gamiď&#x20AC; cation is still relatively new in terms of sports betting, but there is no doubt that it is set to revolutionize the personalization aspect in the sports betting scene in the short to mid term period. >> optimal user experience is the user interface, yet again, the approach to the UI must be adaptive according to the player profile. The UI, such as the positioning of certain features and the different default functionalities, must be based on certain definite parameters according to the different jurisdictions and markets. A bespoke UI does not only limit itself to the element of visualization. The personalizing of the content through an advanced content management system is also key to the whole personalisation process, with the player being able to interact with specific content that fits their preference database. Personalisation through gamification? Gamification is still relatively new in terms of sports betting, but there is no doubt that it is set to revolutionize the personalization aspect in the sports betting scene in the short to mid term period. Being able to offer an additional layer of entertainment to the usual betting approach will undoubtedly bolster player interaction, engagement and retention. Essentially it is a win-win situation for players and operators alike, with players receiving rewards for a predetermined bet or set of bets performed from their side, whilst ensuring operators with continued player engagement. Adding these classic gamification elements will augment the all-around entertaining experience, whilst increasing positive engagement between bookie and player even when a bet has been lost. As personalisation becomes more and more prevalent, individual customer-specific retention strategies will be more manageable, and gamification can play a significant role in this with tailored offerings delivered in real-time. It is one more tool in the box for operators to differentiate their platform from those of competitors. Unlocking the shackles for operators Another aspect determining a lackluster betting experience is the lack of brand differentiation and unicity that is characterizing the current European market. Although the player is presented

with an infinite choice of sports betting sites where to place his betting ticket, the vast majority are portraying the same events, and ultimately the same flat experience. This should not be the case since the design and interface and the resultant UX itself should not be predefined but must be an asset that all operators need to make their own. The current reality is that the player is being provided with the core platform UX features and not the unique elements that should distinguish one brand from another. It is with this in mind that service providers should seek to tackle a clear and defined approach, where you have the role of the operator that is fundamental to deliver its own interface, and the way they want their brand to communicate with their players, whilst on the other hand there is the platform provider whose role is to provide the core technology required by licensees to manage their business. The end result should be a platform where the platform disconnects itself from the whole UX process, be it the design or the interface, placing the operator at the heart of his business and thus pushing the betting experience he seems fit for his targeted player. :: CGi

ALESSANdRO FRIEd Alessandro Fried is BtoBetâ&#x20AC;&#x2122;s Chairman after being CEO for 2 years. He is widely recognized as a visionary in the igaming sector and is frequently invited to speak at national and international igaming forums. He designed, developed and launched many successful products on the international market, and also obtained the first European license in remote gaming from Malta Gaming Authority (MGA). He pursues the strategy in BtoBet of setting the new standards for the iGaming industry, refusing to settle for quick fixes or half measures, striving to anticipate the future needs of our global audience, anticipating and meeting global industry needs.

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A MATCh WINNING ExPERIENCE K

Keith O’Loughlin SVP Sportsbook & Platforms Scientific Games

eith O’Loughlin, SVP Sportsbook and Platforms at Scientific Games, looks at how innovative features in sports betting will bring new excitement levels to the user experience.

Sports betting is one of the world’s most popular forms of entertainment, and it’s imperative that as an industry we constantly look at ways to evolve and enhance the user experience. There are a number of ways to achieve this goal. Whether it’s increasing the breadth of markets available for punters to bet on, improving the way in which they place a bet, or enhancing how they experience the outcome of their bet. While pricing is everything for the seasoned sports bettor, it’s a different attraction for recreational punters. They simply want to place bets and get an experience out of it all. They are here for the entertainment and it’s important to cater to those players as well. We need to be creating extraordinary experiences for this audience, ensuring they get more for their money. Let’s not forget that sports betting is competing with other forms of entertainment, which means the product we offer has to keep up with changing trends and remain as slick as possible to keep consumers from switching off. At Scientific Games, we’re constantly looking at ways to achieve this, and through the launch of our new Match HQ™ scoreboards feature, operators can provide their customer base with an exciting feature that is seamless and intuitive. Match HQ is all about providing players with real time data to help inform betting decisions on events across European and US CGiMAGAZINE.COM

:: SPORTS BETTING

sports, including football, basketball, baseball and tennis. The data, displayed succinctly in a scoreboard widget, includes current score, play-by-play animations, commentary, and in-play team and player statistics. Bringing a bet to life One of the biggest thrills of sports betting for punters is that it adds an additional layer of excitement to one of their main interests in life. Watching the outcome of a bet right before your eyes is the ideal option, should you have access to live pictures of the event in question. Despite the vast volumes of games being shown live on TV, not everyone has access to them, particularly because of the costs involved in TV subscriptions. Also, for those that offer an extensive range of events, live streams will be unavailable for most of these. Scoreboards and in-game visualizations, like our new Match HQ, provide a fun alternative when you can’t watch the live stream of a game that you have a bet on, as the animations provide the detail of how the gameplay is developing and creates a vivid image for the user as to what could happen next. Real time, play-by-play information complements the engaging animations perfectly, as they provide the end user with everything they need to know to take that next step and place a wager. Data centric Sports bettors today have access to a wide range of content that helps them make informed betting decisions. For instance, social media provides the perfect platform for observers to give their views on upcoming matches, as well as during in-play, which often influences a bettor’s decision as to what to wager on. Many of today’s punters lean on the use of data to make an accurate assessment on what move they’ll make next. Scoreboard features, such as Match HQ, carry a wealth of data and provide players with information on every aspect of a game. These scoreboards and visualizations significantly enhance the in-play experience and fit perfectly for US sports. There’s no doubt that in-play wagering will prove popular with US sports fans as the market evolves. The nature of games like baseball and American football mean there are plenty of breaks during the game, which opens the window for bettors to assess and update their position and bets. Real time play-by-play information and editorial commentary means players are aware of the developments of a featured match. Seamless integration One of the key areas of focus in the coming months will be on the role of technology in taking the experience to the next level. The personalized UX will become increasingly important as competition grows across Europe and North America, with user expectations changing. It’s a trend that Scientific Games is all too aware of and is working on ways to provide such a user journey.

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Scoreboards are already being used by some of the world’s leading sportsbook operators to great success, with bettors engaging with the service. It is the connection between the punter and the heart of the action of the game. SG Digital’s partners have provided strong feedback, citing that Match HQ is helping to increase dwell time and drive further customer engagement. For the operators looking to upgrade their sportsbook with this fun and informative product, Match HQ allows for a simple integration to meet the needs of every customer. Our plug and play solution is flexible enough to meet the requirements of every sportsbook, while it also allows for differentiation as the layout and placement of the scoreboards can be adjusted upon request. Match HQ is embedded as either a React component or via an iFrame integration. Product development will undoubtedly help to enhance the user experience and create a match-winning experience for sports bettors. Scientific Games, with its history of innovation and player-first betting technology, is set to take the sports betting sector to new heights. :: CGi

KEITh O’LOUGhLIN As Senior Vice President, Sportsbook at SG Digital, Keith is responsible for delivering product management, direction and project implementation for sportsbook and related platforms across the group. Keith has previously held senior positions at some of the industry’s leading sports betting operators, including sportsbook director at Ladbrokes Coral, as well as CEO and CTO of BoyleSports.

SPORTS BETTING ::

INSIdER BETTING: dEEP ThREAT OR NO hARM, NO FOUL

Greg Brower

Greg Brower & Mark Starr Brownstein Hyatt Farber Schreck

ith last year’s U.S. Supreme Court decision in Murphy v. National Collegiate Athletic Association declaring the Professional and Amateur Sports Protection Act (“PASPA”) unconstitutional, several states have rushed into the legal sports wagering market. Indeed, some experts estimate that within the next five years, at least 40 states will have legal sports betting in one form or another. While wagering on the outcome of sporting events is obviously not new, the proliferation of legal sports betting in the United States is unprecedented. As with anything new, the rise of legal sports betting has not occurred without a some considerable scrutiny. Some industry opponents and advocates alike have raised concerns about the impact this trend could have not only on the integrity of the underlying sporting events, but on the integrity of sports wagers themselves. One specific concern that some lawmakers and regulators have raised centers around the potential for certain bettors to use “confidential,” “nonpublic,” or “inside” information to gain an unfair advantage when a wager. The scenario often referenced as an apt example of the supposed danger of insider information influencing sports wagering occurred during the 2018 NBA Finals. According to post-season news reports, then-Cleveland Cavaliers star LeBron James, frustrated by his team’s loss to the Golden State Warriors in Game One of the series, punched a white board in his team’s

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:: SPORTS BETTING

<< At the time of PASPA’s adoption in 1992, only four states—Nevada, Oregon, Montana and Delaware—allowed some form of sports betting. PASPA included a “grandfather” provision allowing sports betting in those states to continue. >> locker room after the game, apparently injuring his right hand. This incident was not made public until after the Cavaliers dropped the following three games, ultimately losing the series 4-0. When LeBron’s altercation with the white board finally did become public, some sports handicappers observed that had the public known the true nature and extent of LeBron’s injury in real time, such knowledge would likely have affected the betting action on the subsequent games. Moreover, the fact that LeBron’s injury was not known to the general public, but certainly was known to a small group of insiders, arguably would have given those insiders an advantage had they decided to wager on the remaining games or outcome of the series. Opinions vary as to whether and to what extent this type of scenario deserves regulatory attention. At the time of PASPA’s adoption in 1992, only four states— Nevada, Oregon, Montana and Delaware—allowed some form of sports betting. PASPA included a “grandfather” provision allowing sports betting in those states to continue. Another provision in the law gave New Jersey the option of legalizing sports betting in Atlantic City, providing the state acted within one year of PASPA’s adoption. New Jersey initially failed to act within the allotted time, but years later, in 2011, New Jersey voters approved an amendment to the state’s constitution allowing the state legislature to authorize sports betting, which it did in 2012. Because of PASPA’s apparent prohibition on sports betting outside of the four grandfathered states, New Jersey’s efforts to legalize sports wagering were met with considerable controversy and, ultimately, legal attacks by the NCAA and major professional sports leagues. This litigation eventually culminated in last year’s decision in Murphy, where the Supreme Court found that PASPA violated the U.S. Constitution’s “anticommandeering” clause. Murphy thus enabled New Jersey to legalize sports betting within its borders, and opened the floodgates for other states to do the same. Since the Murphy decision, several other states have followed New Jersey’s lead. At last count, at least seven states have legalized sports wagering in some form, and many others

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are currently considering legalization. Three distinct factors drive this trend: (1) consumer demand; (2) a desire for additional state tax revenue; and (3) a belief that legal sports betting will

undermine the proliferation of illegal bookmaking. But, with this trend has come a variety of regulatory efforts to ensure the integrity of legal wagering on sporting events. These new regulations vary from state to state, with some regimes much more detailed and onerous than others. Predictably, given the integrity concerns noted above, some new jurisdictions have adopted regulations aimed at prohibiting betting with “inside information.” Most new regulatory schemes address this concern by banning certain “insiders” from wagering on certain sporting events because they are presumed to be privy to nonpublic information that could influence the outcome. These prohibited bettor lists typically include players, coaches, referees and others who are team or league insiders, or who otherwise play some role in the game. A few jurisdictions have gone a step further by not merely banning insiders, but also prohibiting any person with “inside information” from wagering. However, defining “inside information” in the sports betting context is not easy. And, even if regulators can craft a workable definition, some gaming experts question whether it is necessary, or even possible, to enforce such rules. The concept of regulating the use of inside information by individual actors within a marketplace is well-established in the stock trading context. In the United States, federal law includes the Securities Act of 1933 and the Securities Exchange Act of 1934, which, together, provide a range of restrictions and disclosure requirements on the sale of stock by corporate insiders, and impose civil and criminal penalties for violations of these laws. The U.S. Supreme Court, in United States v. Carpenter, explained the rationale behind this regulatory scheme as follows: “[i]t is well established, as a general proposition, that a person who acquires special knowledge or information by virtue of a confidential or fiduciary relationship with another is not free to exploit that knowledge or information for his own personal benefit ….” This concept may

Mark Starr

SPORTS BETTING ::

seem simple enough in theory, but, in practice, the application of such a ban has been challenging. In fact, for decades, the questions of who qualifies as an insider, what inside information is, and when and how it can and cannot be used when buying and selling stock have been the subject of considerable litigation. In the sports betting context, the foregoing questions will likely be even more vexing. As noted above, some new sports betting jurisdictions have attempted to address the issue in various ways. For example, New Jersey gaming regulations ban sports wagering by certain categories of persons, including athletes, coaches, referees and others who have a connection with the subject game or event. Pennsylvania goes a step further by banning certain categories of persons—athletes, referees, officials, coaches, managers, trainers, other employees—from wagering on an event “in which the person is participating or otherwise has access to nonpublic or exclusive information.” Interestingly, while Nevada has long made it a crime to “place, increase or decrease a bet after acquiring knowledge, not available to all players, of the outcome of the game or any event that affects the outcome of the game …,” this prohibition has never been applied to prohibit a bettor with inside information from wagering on a sporting event. Although Nevada regulators did recently adopt a new regulation that prohibits wagers by “an official, owner, coach, or staff of a participant or team or participant” in the event, the new Nevada regulation stops short of specifically prohibiting an otherwise eligible bettor from using inside information. No state has yet attempted to prohibit bettors who, while not officially connected to the game or event, nevertheless possess material

or nonpublic information that could affect the outcome of a sporting event. Beyond state attempts to regulate the use of inside information in the sports betting context, federal legislation was proposed last year that would have both prohibited certain categories of persons—athletes, coaches, officials, etc.—from wagering on an event to which the person has a connection, and would also have prohibited anyone from placing a wager based on “material nonpublic information.” However, this bill’s prohibition, while largely modeled after the federal securities laws, was very narrow in scope. Basically, the bill would have made it unlawful for a person to make a sports wager if the person is in possession of material nonpublic information relating to the wager, and that person knows that the information had been “obtained wrongfully.” The bill defined “obtained wrongfully” as information obtained by theft, bribery, misrepresentation, espionage, deception, or in violation of any federal law protecting computer data, or as the result of a breach of any fiduciary duty or any other personal or relationship of trust and confidence. Thus, while this federal proposal would have gone beyond any of the new state regulations, it was limited to the use of wrongfully obtained inside information. Going back to the LeBron scenario, it is not clear that any of the current state regulations or the proposed federal law, if enacted, would actually address that situation. Teammates, coaches, trainers, and other team personnel who would have known of LeBron’s injury would and, arguably, should be prohibited from betting on Cavaliers games no matter the status of the star’s shooting hand, simply because they are affiliated with the team. But what about others who are not team or league insiders, such as an employee of the facility where LeBron’s hand was likely x-rayed, or the driver who transported LeBron to the hospital? What about the friend of the locker room attendant who heard about the locker room incident? The information about the Cavaliers’ leading scorer obtained by these individuals is certainly material, and is arguably not public, but was it “wrongfully obtained,” and should these third parties be prohibited from betting based on what they saw or heard? Is such information truly inside information of the type that should be the subject of regulation? A real-life case from the stock trading world, but with a sports angle, is illustrative of the challenges in trying to regulate the use of so-called inside information. Back in the 1980s, the Securities and Exchange Commission (“SEC”) filed a civil suit against former Dallas Cowboys head coach Barry Switzer, and several others, alleging that they profited from trading stock in a particular company based upon material, nonpublic information. Switzer admitted that he was at his son’s high school track meet when he ran into an acquaintance who happened to be the CEO of a local company. Switzer further CGiMAGAZINE.COM

:: SPORTS BETTING

admitted that while sunbathing on the bleachers behind where the CEO sat with his spouse, he overheard the two talking about the CEO’s desire to sell the company. It was undisputed that Switzer was not part of the conversation between the CEO and his spouse, and Switzer had no connection to the company. Switzer admitted to overhearing the conversation about the sale and thinking it might be material to the company’s future stock price, and further admitted to sharing this information with others who, along with him, then purchased shares in the company based on this information. A few days after the defendants purchased the stock, the company publicly announced its intent to liquidate, causing the company’s stock price to significantly increase. Switzer and the other defendants then sold their recently purchased shares, each making a profit. Upon the defendants’ motion to dismiss the case against them, the court found that although the information overheard by Switzer was material and was not public at the time of the defendants’ stock purchases, because the disclosure of the information from the CEO to Switzer did not constitute an improper tip, there was no violation of the securities laws. Arguably, the driver or hospital employee, or friends of either, in the LeBron scenario are analogous to Switzer and his codefendants. They are not team or league insiders, just as Switzer was not a company insider. LeBron did not intentionally provide material, nonpublic information to others to give them an advantage were they to wager on the next game, just as the CEO did not intend to tip Switzer. Like Switzer and his friends who came upon some information that could affect a stock trade, the third parties in the LeBron scenario just happened to be in the right place at the right time, and learned , but did not wrongfully obtain, a fact that could affect the outcome of a wager. And, just like the judge in the Switzer case did not find a violation of the securities laws, it is hard to see why the LeBron hypothetical would or should be a violation of a gaming regulation. While potential threats to the integrity of sports betting and to the sports themselves must be taken seriously, regulators would be well-advised not to overreach when considering whether to regulate betting on inside information. Certainly, a prohibition on certain categories of bettors—true insiders like players, coaches, etc.—makes sense. But to go too far in trying to prevent the use of inside information by bettors will likely result in regulations that are both confusing and ineffective, and therefore ultimately unenforceable. :: CGi REFERENCES

1.Murphy v. Nat’l Collegiate Athletic Ass’n, 138 S. Ct. 1461 (2018).

2.See AM. GAMING ASS’N., STATE OF THE STATES 2019: AGA SURVEY OF THE COMMERCIAL CASINO INDUSTRY (2019).

3.PASPA, 28 U.S.C. § 178 (1992).

4.Murphy, 138 S. Ct. at 1482.

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5.Carpenter v. United States, 484 U.S. 19 (1987). 6.N.J. Admin Code § 13:69

7.58 Pa Code § 1401 et seq.

8.See Sports Wagering Market Integrity Act, S. 3793, 115th Cong. (2019).

9.Id. § 302(b)(3).

10.See SEC v. Switzer, 590 F. Supp. 756 (W.D. Okla. 1984).

GREG BROWER & MARK STARR With more than 20 years of experience both as a first-chair litigator and in public service, Greg Brower’s practice focuses on civil and criminal litigation, as well as regulatory and enforcement actions (including FCPA matters), corporate investigations, cybersecurity matters and federal and state government relations. Most recently, Greg served as the assistant director for the Office of Congressional Affairs at the Federal Bureau of Investigation (FBI), serving as the FBI’s chief liaison to Congress on a wide range of critical oversight and investigative matters. He previously served as the FBI’s Deputy General Counsel, managing a diverse portfolio of legal matters, including litigation, privacy, procurement, compliance and ethics. During his time as a senior FBI executive, spanning two administrations, he worked closely with high-ranking officials in the U.S. Department of Justice (DOJ), the U.S. intelligence community and with key leaders on Capitol Hill. Greg is a regular commentator and contributor on national security, legal and cybersecurity issues, regularly appearing on CNN and MSNBC, and he is the featured contributor on white collar crime and corporate compliance for the Washington Legal Foundation’s Legal Pulse blog. Even as a young attorney, Mark Starr brings unique expertise in gaming law to his corporate practice. Mark combines an entrepreneurial spirit to his project management experience. While in law school, Mark participated in the drafting, proposal and presentation of Senate Bill prior to its passing by the 2017 Nevada State Legislature. The bill amended state law to allow sports books to offer mutual betting on events outside of horse and dog racing and sports. He also worked as an extern focusing on gaming law and regulation with the Nevada Gaming Control Board.

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ThAT’S ENTERTAINMENT! A

stream of new Live Casino titles from Evolution in the first seven months of 2019, including some powerhouse-brand game show titles, has proved that innovation is very much alive and well in the iGaming industry — and that entertainment is now the name of the game.

Amy Riches Head of Marketing Evolution Gaming

At Evolution, our goal is always to provide our players with the ultimate gaming experience. We continually strive to bring players engaging games that, once played, they will fall in love with. It's not enough for us to offer games that have barely changed in the last 100 years. For us it’s about creating a balanced and exciting games portfolio that offers not simply world-class casino classics but also new and innovative game variations. We spend a significant amount of time reviewing our games and monitoring comments in the chat channel. That way we are in tune with what players are enjoying, and what they are hoping to see and play. We also spend a significant amount of time coming up with brand new ideas. In 2017, we took a gamble with a totally new game for Live with the release of our Dream Catcher money wheel. No other Live Casino supplier had a live money wheel and it was a new concept for our operators and their players. It went on to become one of the most popular games in Live Casino. Dream Catcher was really our first game show style game. It was a simple format, it was incredibly easy to play, it was big, colourful and very visual, and critically it had multipliers. What's more, it had the possibility of multipliers hitting one after the other, which could result in super-sized payouts of up to CGiMAGAZINE.COM

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€500,000. Overnight we were attracting players who had never played a table game to the world of Live Casino — and they were loving the experience! We saw that players loved this digression from the traditional table game. We believe that was largely due to the addition of multipliers, which added extra layers of excitement and more opportunities to win big. But that wasn’t the whole story — it was also down to the game show format, the charismatic game hosts and the feeling of being involved in something bigger alongside other ‘contestants’. Players could share and take enjoyment in each other’s victories. Building on what we learned with Dream Catcher we released Lightning Roulette in 2018. Lightning was essentially a brand-new take on Roulette, but played in a game show style setting and with an electrifying user interface in which lightning regularly strikes to award players the potential of multiplied winnings. Again, it was very visual and it had the big attraction of random multipliers. Lightning was a runaway success that truly broke all records at Evolution in terms of player numbers and rapid player adoption. It also went on to win three Game of the Year awards. With Dream Catcher and Lightning Roulette we saw a monumental shift in what players were looking for in a Live Casino game. They were not looking for a traditional table game as such, but for something in the entertainment sphere. Something that was fun and drew players into the action. We had had the hunch that players loved multipliers and we were spot on. The addition of multipliers delivered an extra layer

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of excitement for players with the chance to win seriously big payouts. When we began this focus on creating innovative games that seamlessly blended the worlds of Live Casino and RNG multiplier elements, we were very clear on what we had to achieve. We knew that for Live Casino to surpass RNG and slots in terms of appeal to a certain type of player, it needed to offer a style of game and a level of entertainment that could keep the attention of a slot player. After all, a slot player is used to playing a new game every six seconds. That’s where multipliers come in. With this in mind, this year, we made the decision to realign our product roadmap in step with these trends, for the benefit of our operators and their players. Importantly, we concluded that we were no longer just in the gaming business — we are in the entertainment business. Our many new releases for 2019 were centred well and truly around entertainment. We partnered with some huge powerhouse brands such as Hasbro and Endemol Shine Group to create, respectively, MONOPOLY Live and Deal or No Deal Live. Both games are very much game show games that redefine Live Casino and both are exclusive to Evolution. In parallel, our internal product development teams also worked on custom-made, in-house innovations that have further allowed us to tailor our games offering to what players are reaching out for. The success stories of each of our new games are astonishing. MONOPOLY Live’s record-breaking first month

LIVE CASINO ::

prompted some licensees to say that it is the most powerful Live Casino cross-sell tool ever created. MONOPOLY Live is an all-new special edition of our Dream Catcher money wheel, in which the world’s most popular board game meets Live Casino — complete with augmented reality, 3D Bonus rounds built around the adventures of MR. MONOPOLY, and with the chance of big multiplier wins. It's a multi-level game that really does redefine Live Casino in so many ways. It has taken an amazing skill set to transfer the essence of this much-loved board game into such a technically advanced and thoroughly engaging online gambling game. Deal Or No Deal Live is another truly innovative and entertaining game concept. We stayed 100% true to the TV show format that people know and love. We’ve retained the engaging presenter and the thrill of waiting for the offer from the banker but made it compatible for online players to play along in the live game from wherever they happen to be. Like MONOPOLY Live, the game is also multi-layered. In Deal Or No Deal Live, players must first go through the qualifying round to take part in the actual game show. Along the way they also get the chance to top up the prize values in any of the 16 briefcases. The game also has a mix of RNG elements, including multipliers, giving players the chance to win big. Deal Or No Deal Live has been the most complex studio that Evolution has ever built, with the universally recognisable studio set design and rich sound effects for UI actions that recreate the atmosphere of the hit TV show for online players. Developing and launching our new game show games category has been hugely satisfying and rewarding. We have seen not only seasoned players flocking to these games, but also large numbers of first-time players. These are first-time players who had never entered the world of Live Casino before, and they are thoroughly enjoying playing these multi-layered games. We have invented an entirely new way to gamble and be entertained online akin to becoming immersed in a favourite TV game show. Of course, variety and choice remain key watchwords in our product roadmap. Looking across the Live Casino world generally, we felt that dice games were under-served. Although a great many people love dice games, it seemed to us that there were no fun dice games in the online gaming world. That has all changed with the recent releases of our Super Sic Bo and Lightning Dice games. Again, players have flocked to these new titles, proving what we suspected — that there was definitely demand for a new class of dice game. With Super Sic Bo, we took the ancient dice game and added our own modern touch with the random high-payout RNG element. This makes the game super-exciting and superengaging as multipliers of up to 1000x can hit in any round. As a result, the game has received a fantastic reception from players and is attracting huge player counts. Our other dice release this year was Lightning Dice, a unique first-of-its-kind game, where we went out of our way to keep the game simple but highly visual. The central feature of the game is a giant, transparent Lightning Tower through which

three standard dice come tumbling down. Again, just as in Lightning Roulette, lightning strikes random ‘Lightning Numbers’ applying multipliers of up to 1000x and giving players the chance to win big money prizes. It’s been an incredibly exciting 2019 to date. But MONOPOLY Live, Deal or No Deal Live, Lightning Dice and Super Sic Bo are only part of the story. Since ICE 2019, we have also launched a yet more games in what has been our busiest product development and launch period ever. Side Bet City, a stunning 80s-themed poker variant, Free Bet Blackjack, 2 Hand Casino Hold’em and two First Person games — First Person Lightning Roulette and First Person Dream Catcher — have added considerable extra variety and choice for our licensees and their players. As to the remainder of 2019 and the run-up to ICE 2020? Well, you could say we’re on a roll. You can bet your shirt we won’t be resting on our laurels with the success of this recent batch of launches. We will be taking a good, hard look at our classic table games to reinvent them for a 2020 audience. Additionally, we are looking at other ways to appeal to those who have never entered the world of Live Casino, and how we can develop games suited to this type of player. We’re getting very excited already about ICE 2020 and the chance to showcase another set of amazing new games, so watch this space. In the meantime, we will continue to develop our exciting game show category, while also building in greater entertainment value cross our entire games portfolio. :: CGi REFERENCES

Endemol Shine Group IP B.V. Deal or No Deal is a registered trademark

The MONOPOLY name and logo, the distinctive design of the game

board, the four corner squares, the MR. MONOPOLY name and

character as well as each of the distinctive elements of the board and the playing pieces are trademarks of Hasbro for its property trading

AMY RICHES Amy Riches is Head of Marketing at Evolution Gaming, a role that sees her involved across corporate and product marketing for Evolution’s world-leading Live Casino services.

CGiMAGAZINE.COM

RESPONSIBLE GAMING ::

IGB REACTS; BALANCING RESPONSIBLE GAMBLING WITh BUSINESS NEEdS T

he e-Gaming industry continues to evolve at an alarming rate, as innovative technology enhances and improves the way in which people play online. I recently attended IGB Live, which brought together industry leaders to present, debate and assess the latest cutting-edge issues and trends in the e-Gaming sector. The talks and networking throughout involved clear ‘hot topics’ such as the continued development of blockchain’s multiple uses and how such platforms will move the industry towards a faster and more transparent sector at great pace. However, amongst the wide range of areas touched upon, the issue of responsible gaming was a constant and recurring theme discussed by the various experts in attendance.

Anthony Ure Head of e-Gaming Isle of Man Digital Executive Agency, Department for Enterprise

In this article I will outline potential policies deliberated at IGB; preventative measures suggested to solve addiction issues, the challenges and significance of measuring the success of such actions and finally, the rehabilitative aids and solutions that could be implemented to ensure those negatively impacted by ‘problem gambling’ are protected and supported. However, I will also explore and highlight the importance of a balanced approach that doesn’t promote blanket regulation and, as a result, ’hamstring’ businesses, players, and the quality of product alike. With various opinions and possible solutions tabled at IGB Live, the one point that received unanimous agreement was the industries absolute priority; the safety, security and health of all players. Yet, alongside this, there was definite consensus that, whilst protection is fundamental, there is also a balancing act to be had. Introducing protective measures must also ensure CGiMAGAZINE.COM

:: RESPONSIBLE GAMING

that the vast majority of people, who gamble in a fun and responsible way, businesses, and innovative products are not impacted negatively by overly encroaching regulation. Currently, there is the potential for over-bearing regulation to negatively impact player experience and product launches and therefore, the gaming businesses as a whole. Whilst there was no doubt that gambling must be enjoyed in a fun and responsible way â&#x20AC;&#x201C; aided by the introduction of key measures - this must not become a burden on the industry. There is a clear need for education, data sharing, and research to help and identify â&#x20AC;&#x2DC;problem gamblersâ&#x20AC;&#x2122;, but blanket regulation that ignores the functioning and complexities of the gaming world will be detrimental. Beyond this, coupling regular reviews of current and new legislation and proactive rehabilitative protocol is vital. Preventative measures Before the issue of addiction comes to play, there must be an introduction of wide-ranging and extensive preventative

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measures from both industry and governments. This collaboration is crucial to prevent accusations of self-interest. However, with many initiatives already being launched, the sharing of data and research across jurisdictions should become the norm first. Research is already delving further into AI and algorithms, which amalgamates data to identify spending patterns faster and more effectively, and this should be shared when valuable developments are made. This would allow business and government to learn more about key areas such as when and how addiction develops, providing opportunities to spot red flags faster and prevent otherwise undetected issues. Encouragingly, there is already a desire to share such insight, information and research. Creating a global information network will speed up processes, save businesses money and improve results at a rapid rate. Whilst government funding is currently available in the sector, evident through such initiatives as the Responsible Gambling Fund, it must be stressed that government should

RESPONSIBLE GAMING ::

continue to progress its policies and play a proactive role in educating the public on the dangers of addiction, and its emotional and financial impact should be clarified to young people in an informed and open way. This should include education on the importance of all-round wellbeing, positive mental health, a balanced lifestyle, and open discussions with friends and family. This education should continue at university, a potential pressure point for addiction issues for many students, with safe spaces and networks available to discuss matters in a supportive space. These preventative measures are no doubt critical when assessing how we can protect players. However, perhaps of equal importance is the ability to accurately measure the success of such methods. To do this, independent, overarching reviews that report, publish and audit the progress and success rates of legislation are required. These reviews should be audited by independent adjudicators, a combination of experts in mental health and consultancies that can assess issues and developments from an external standpoint. A good case study and pertinent example given Paddy Power’s recent marketing campaign is the banning of gambling companies sponsoring football shirts in Italy and the proposed changes in Spain. Initially considered a positive step by many gambling activists, I am yet to see concrete evidence that this will decrease the level of ‘problem gambling’ on football in any of these countries. It is imperative that we consider business interests alongside such protection measures, and do not prohibit them, otherwise we risk decreasing important revenue streams for industry and job creation, not to mention the enjoyment of the vast majority of players that gamble in a fun and responsible way. Bearing in mind that Paddy Power are also sponsoring countless football teams this season in England without shirt sponsors, it is clear that gambling and football cannot be limited to shirt sponsorship alone. Rehabilitation As outlined earlier in this article, preventative measures should be the first and foremost strategy for the solution of addiction related issues. However, for the minority of people who are impacted negatively, they should receive extensive rehabilitative support from industry, government and health services to guarantee their swift recovery. Various rehabilitative measures were mentioned at IGB Live, and prescriptive steps can and should be promoted by the eGaming world as best practice. Following the reduction in stake for FOBT’s from £100 to £2 the industry should take a much more proactive approach to online gaming. I have not seen any evidence that the 11.5% of FOBT problem gamblers reported by the Commisssion have not simply moved to another product. Industry should position itself as taking a leading role in the rehabilitation of problem gamblers. This has been evident recently, with the UK’s biggest gambling firms, including William Hill, Ladbrokes, Skybet and Bet 365 increasing their voluntary levy on UK gambling profits from 0.1% to 1%, a contribution of £60m. This funding, from both government and industry, should

be used to provide treatment for those struggling from addiction. This ought to include a variety of measures, including residential treatment and rehab programmes. Cognitivebehavioural therapy should also be considered, focusing on changing unhealthy, addictive behaviours and thoughts, such as rationalisations and false beliefs. Finally, more mental health care centres and support groups should be created, in order to ensure those negatively impacted are able to access medical expertise in a safe and secure environment. As a leading player and regulator in the gaming industry, the Isle of Man is fully committed to pushing for and progressing the rehabilitative and preventative measures discussed throughout this article. Our first and fundamental priority is the health and safety of players, but we understand and promote a balanced approach that does not prohibit businesses from thriving in the gaming environment. Measures of prevention need to be put in place to ensure that users are protected, but the establishment of metrics to determine the success of such procedures are crucial and we will continue to create flexible and progressive policies. Our aim is to ensure that the gaming world is fun for the majority, but also continuously adjusts its policies and measures to provide encompassing help and support for those who struggle with addiction issues. :: CGi

ANThONY URE Tony Ure is the Head of e-Gaming in the Isle of Man. His role is to facilitate inbound investment from the e-Gaming sector to one of the world’s leading gaming jurisdictions, encouraging diversiication, growth and innovation in this industry. Prior to working for the Isle of Man Government, Tony spent over 30 years working in senior roles for some of the most recognisable names in the industry.

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CUSTOMER BEHAVIOUR ::

BEHAVIOURAl TRACkInG, RESpOnSIBlE GAMBlInG TOOlS, And OnlInE VOlUnTARy SElf-ExClUSIOn: IMplICATIOnS fOR pROBlEM GAMBlERS

Maris Bonello

Maris Bonello & Mark Griﬃths

echnology has made a substantial impact on gambling over the past decade. Consequently, online gambling has seen major growth via the availability and convenience of the internet and through innovative technology that has made remote gambling possible. Online gambling provides convenience and the ability to gamble from home and the workplace (Griffiths, 2009a). The rapid expansion in internet gambling has meant that gambling regulation has often lagged behind. For instance, online gambling and the lack of regulation at a European Union level has opened the possibility for gambling business to be offered to consumers from remote locations. An illustration of this is the large number of gambling operators that reside in Malta where these operators abide by license requirements which are imposed by the local Maltese authority, rendering borderless gambling possible (Auer & Griffiths, 2013a). This raises concerns about both increased gambling availability and consumer protection. However, new technology has given rise to innovative ways in protecting online gamblers (Harris & Griffiths, 2017). Despite internet gambling often being seen negatively due to its high accessibility and convenience because it may increase the occurrence of problem gambling due to higher gambling exposure (Griffiths et al., 2009), research suggests that online gambling providers can offer superior, more accessible and tailored responsible gambling tools (Harris & Griffiths, 2017). Through the growth of online gambling, new opportunities have arisen to analyse data for consumer protection, which in CGiMAGAZINE.COM

:: CUSTOMER BEhAvIOUR

<< Increasingly, regulatory requirements have focused upon providing consumers with responsible gambling features such as being able to choose and activate deposit, time, and monetary loss limits, and voluntary self-exclusion (VSE) options. >> turn may be used by different stakeholders such as academics, gaming operators, regulators, and policymakers (Griffiths & Whitty, 2010). This has raised a further argument that consumer protection and the behavioural tracking of online players may cause tensions for the gambling provider because the commercial interests may supersede the operator’s responsible gambling interests (Jones, et al., 2009). However, this consumer monitoring is not something novel for the industry because it has previously been used (and still is) for marketing segmentation and risk management (Dragicevic, et al., 2011). Furthermore, being able to help and tailor responsible gambling approaches for the consumer is key to risk management because mishandling of responsible gambling issues may raise problems for the operator with the regulator that may incur financial and reputational risks (Stradbrooke, 2016). One example of this, can be seen in the United Kingdom where the Gambling Commission has fined gambling operators for failing consumer protection and has also taken action against the individuals who were responsible for these failings (Gambling Commission, 2018). Increasingly, regulatory requirements have focused upon providing consumers with responsible gambling features such as being able to choose and activate deposit, time, and monetary loss limits, and voluntary self-exclusion (VSE) options (Dragicevic, et al., 2015; Harris & Griffiths, 2017). VSE is an essential tool offered by gambling operators that is designed to limit access to gambling opportunities in both land-based gambling venues and online gambling websites for predetermined periods of time (Dragicevic, et al., 2015). Research conducted on 30 major gambling operators just as online gambling was starting to take off noted that 29 of them showed no evidence that gamblers could access such a feature as VSE (Smeaton & Griffiths, 2004). However, this has changed over recent years because responsible gambling has increased in importance, and jurisdictional regulators are imposing more pressure by requiring gambling operators to have player

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protection measures in place before the issuing of an operating license and the maintenance of one. In 2017, we carried out a similar study to that of Smeaton and Griffiths where we examined the websites of 50 leading online gambling operators and reported that 86% of the operators were offering VSE. Some allowed activation of VSE online, whereas other operators allowed VSE by contacting the operator’s customer service department (Bonello & Griffiths, 2017). An additional tool that is unique to online gambling (as opposed to land-based venues unless they require a player card to gamble) is the possibility of monitoring and logging consumers’ activity at minimal costs for the operator (Griffiths, 2009b; Griffiths & Whitty, 2010). This goes hand-in-hand with the increased consideration displayed by the online gambling operators, and the regulators that are advocating harm minimisation (Percy, et al., 2016). According to Adami, et al. (2013), by analysing risk factors utilising online gambling data, online operators have the possibility to give better feedback to the consumers who in turn can make more informed decisions about how they gamble. Through this proactive approach, operators achieve a greater chance to reduce and prevent gambling-related harm. Moreover, this availability of behavioural player data allows researchers to examine whether such protective measures are effective. Despite this, one of the greatest limitations is how to interpret such data to its fullest, particularly in relation to gambling intensity and the early detection of possible online problem gambling (Griffiths, 2009b). In a simulation study of 300,000 gamblers, Auer et al. (2012) developed a measure to assess gambling intensity to which they refer to as ‘theoretical loss’ which is done by simply multiplying stake size by the probability of winning. This was then tested by Auer and Griffiths (2014) on a real sample of 100,000 online gamblers and they demonstrated theoretical loss is a robust and reliable measure of gambling intensity. The measure has subsequently been used to evaluate the effectiveness of various

responsible gambling tools including limit setting features (Auer & Griffiths, 2013b), loss-limit reminders (Auer, Hopfgartner & Griffiths, 2018), and personalized feedback (Auer & Griffiths, 2015, 2016). A study by Haefeli, et al. (2011) examined customer communication leading to VSE by online gamblers in order to determine whether there were behavioural indicators for online problem gamblers. The study found that customer correspondence, such as the frequency of customer service contacts, and tonality of the emails were useful predictors for online gambling problems. This was an innovative way of examining problem gambling because online operators use online customer communication as a cost-effective measure to reduce face-to-face customer contacts. Dragicevic, et al. (2015) analysed de-identified player data from GTECH G2 (an internet gambling software provider) and found that voluntary selfexcluders suffered greater losses and played a larger variety of games when compared to a control group. This study provided the opportunity of analysing consumer data across different operators because other studies have been limited to data from one gambling provider only. However, most online gambling operators have more than one gambling software provider, therefore the data might have been limited from another perspective in that not all account information might have been available for analysis. Research carried out in collaboration with Bwin Interactive has analysed data from gamblers participating in online sports betting. LaBrie et al. (2007) analysed the data of heavily involved gamblers who had registered with the operator in February 2005. Although this may provide possible indicators of problem gambling, being heavily involved in gambling may not always mean that the behaviour is problematic because this is dependent upon other social and economic factors, including disposable income and the sporting teams they support (because specific gamblers might gamble more if the team they support is playing). Another study using data from the same gambling operator examined the first 90 days of gambler activity in order to determine possible problem gambling indicators. This showed that the highest betting activity was observed in the beginning of the account registration and was followed by a gradual decrease. This research also indicated that there was an episodic increase in betting activity approximately every seven days (LaPlante, et al., 2008). Although this might provide information about the gambling behaviour for online gamblers, there are other issues that must be taken into account. Primarily, the initial days with a gambling operator is unlikely to be the gamblerâ&#x20AC;&#x2122;s initial betting activity overall because these gamblers are likely to have been playing with other operators prior to registering with Bwin Interactive. Secondly, higher initial betting activity may also be due to gamblers exploring the website and trying out different gambling opportunities provided by the operator, or due to the fact that most operators give acquisition bonuses which must be used within a specific time period after registration. The increase in the betting activity every seven days

Mark D. GriďŹ&#x192;ths

CUSTOMER BEhAvIOUR ::

is likely to be due to the availability of sporting events to bet upon because there is typically a higher occurrence of sporting events to bet on at weekends. Haeusler (2016) evaluated behavioural data of 2,696 realmoney gamblers by exploring payment transactions of gamblers who used VSE. The results showed an inconsistency of withdrawal amounts (i.e., switching between very high and very low withdrawal amounts) and may be viewed as a possible online problem gambling indicator. Using payment data to identify a problem gambling indicator might be innovative but not all gamblers who choose VSE are using this option due to problem gambling behaviour with the operator or overall (Griffiths & Auer, 2016). In fact, it was observed by Haeusler that 23.3% of those who had used VSE in January 2015, had no deposit payment at all in 2014 with that specific operator. This may be due to the gambler self-excluding because of problem gambling with another operator, or simply due to annoyance with the current operator they had registered for (Griffiths & Auer, 2016). In another study to identify possible behavioural markers of problem gambling, gamblers who actively used responsible gambling interventions were examined (Gray, et al., 2012). These interventions included, amongst others, gamblers reporting a problem, changing of money limits, partial account blocks, complaints about fair play, and cancelling payment withdrawals. The study also showed that those using responsible gambling tools had significantly more gambling activity across different products. Although this gives a possible indication of problem gamblersâ&#x20AC;&#x2122; activity, these responsible gambling events only considered gamblers who had contacted customer service. This excludes online gamblers who might be too ashamed or did not wish to contact customer service. In another study using Bwin Interactive data, individuals who used a web-based account closure system were analysed (Xuan & CGiMAGAZINE.COM

:: CUSTOMER BEhAvIOUR

Shaffer, 2009). This is arguably a better way to study behavioural indicators for problem gambling using gambler data because it provides a more representative gambler sample who are utilizing preventive tools in their online gambling activity. This study showed that just prior to closing their account, gamblers had increasing losses and chased losses through higher stakes on less risky bets. The higher amount of money risked and increasing losses were also evident in problem gambling account closures in another study by LaBrie and Shaffer (2011). VSE has been used as a proxy measure for problematic gambling in previous studies (e.g., Percy, et al., 2016; Braverman & Shaffer, 2012; Haefeli, et al., 2011; LaBrie & Shaffer, 2011). The problem with using this proxy measure is that VSE – especially in the online gambling environment – may not always be the best measure to use as an indicator for problem gambling (Griffiths & Auer, 2016). Despite studies examining gambling activity prior to VSE, there is little published empirical research on the effectiveness of it for online gamblers. LaBrie and Shaffer (2010) used VSE as a proxy measure for problem gambling due to evidence from previous land-based studies. Ladouceur et al. (2000) showed that the majority of self-excluders in the landbased casinos met the clinical criteria for gambling disorder. Nonetheless, online gambling is psychologically and structurally different from land-based gambling in many respects such as increased disinhibition and perceived anonymity which can negatively impact gambling behaviour as well as evidence showing online environments can impair decision-making judgments and increase impulsivity (Griffiths, 2003). As highlighted by Griffiths and Auer (2016), VSE is not necessarily a good proxy measure for at-risk or problem gamblers because there is no proof of a direct relationship and online gamblers display several other reasons for self-excluding. In fact, the research by Dragicevic et al. (2015) showed that a large proportion of online gamblers self-exclude within the first 15 days of activity, with 25% self-excluding within the same day of account registration. This could be due to gamblers experimenting and evaluating the online gambling operator, or the sign-up bonuses not being up to the gambler’s expectations (and therefore, VSE having nothing to do with problem gambling). Online VSE does not appear to have the same stigma and bureaucracy associated in the land-based setting (Dragicevic, et al., 2015). Moreover, it must be kept in mind that by self-excluding from one operator, this does not mean the individual cannot gamble online. A gambler may self-exclude from one operator and within a few minutes be registered and/or gambling with another one. Although behavioural prediction may provide (i) individual player protection and interventions tailored to the gambler’s needs (Haeusler, 2016), and (ii) data objectivity due to very large sample sizes (Auer & Griffiths, 2014), there may be a greater need to actually understand gambler activity without the predisposition of affirming problematic gambling utilising VSE. Primarily, VSE only covers one part of the spectrum of gamblers’ behaviour (Haeusler, 2016). Furthermore, VSE – particularly short-term VSE, also referred to as time-outs under the UK

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license – may be used as a responsible gambling measure rather than a problem gambling prevention measure as demonstrated in a survey study of almost 2500 Swedish gamblers by Griffiths, et al. (2009). In a study by Hayer and Meyer (2011), the reasons for VSE were explored. Although most indicated potential problem gambling as a reason for self-excluding, such as losing too much money gambling (51.7%) or spending too much time gambling (35.5%), 26.3% of the self-excluders did so due to simply being annoyed with the gambling operator. In fact, online gambling provides very quick and easy access to responsible gambling tools, including VSE (Philander & MacKay, 2014), and so this might make it easier for someone to self-exclude for reasons that have nothing to do with responsible gambling or problem gambling. This should not be interpreted that online gambling operators should make VSE or any other responsible gambling tool harder to access, but potentially to look at better ways of preventing the misuse of VSE. Moreover, this should always be considered when examining the activity of self-excluded gamblers to determine behavioural indicators of possible problem gamblers. There is a high chance that by examining VSE only to determine risk indicators, the gambling operator is either examining a limited group (i.e., not all problem gamblers) or gamblers with no problem gambling-related experience. Providing tailored help and attempting early detection of problem gambling will help players to regulate their gambling. This will lead to more sustainable long-term revenue for the gambling operator (Percy, et al., 2016). :: CGi REFERENCES

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M. (2013). Markers of unsustainable gambling for early detection of at-

risk online gamblers. International Gambling Studies, 13(2), 188-204.

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Bonello, M., & Griffiths, M. D. (2017). Analyzing consumer protection

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gamblers. CyberPsychology and Behavior, 12(4), 413-421.

Haefeli, J., Lischer, S., & Schwarz, J. (2011). Early detection items and responsible gambling features for online gambling. International

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Haeusler, J. (2016). Follow the money: Using payment behaviour as

predictor for future self-exclusion. International Gambling Studies, 16(2),

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minimisation tools available for electronic gambling. Journal of Gambling

Studies, 33, 187–221.

MARIS BONELLO & MARK GRIFFIThS Maris Bonello is an integrity analytics manager at Kindred Group Plc in Gzira, Malta, and a doctoral research student of Professor Griﬃths at Nottingham Trent University (UK). Dr. Mark Griffiths is Distinguished Professor of Behavioural Addiction at Nottingham Trent University, and Director of the International Gaming Research Unit. He is internationally known for his work into gambling and gaming addictions. He has published over 750 refereed research papers, five books, 150+ book chapters and over 1500 other articles. He has won 19 national/international awards for his work including the US National Council on Problem Gambling Lifetime Research Award (2013).

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Save the date and join IAGA June 16 – 18 at the Culloden Estate & Spa in Belfast, Norther n Ireland Ireland for the 2020 International International Northern Gaming Summit. Held in parallel with the 2020 Gaming INTERNA RNATIONAL ATI ASSOC IATION ATI ADVISORS OF GAMING A

Regula tors European European Forum (GREF) Annual Meeting, you’ll have Regulators an excellent opportunity to meet with global regulators, regulators, operators and advisors to discuss the opportunities and challenges facing betting and gaming. gaming. VVisit more isit theiaga.org theiaga.org for mor more details.

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LEAdERShIP INTERvIEW ::

SUCCESS, INNOvATION ANd LOOKING TO ThE FUTURE T

here are few people better qualified to assess the state of the online sports betting and igaming market, and what the next developments may be, than Norbert Teufelberger. Whether you judge status on a purely financial basis or in terms of lasting influence, his reputation as one of the industry’s most successful innovators is assured.

Interview with Norbert Teulfelberger Chairman EveryMatrix

He was part of the team who founded bwin and oversaw the company’s growth ahead of its IPO on the Vienna Stock Exchange in 2001. As CEO, he drove further rapid expansion, leading to the establishment of what was then the world’s largest listed online gaming firm when bwin merged with PartyGaming in 2011. Teufelberger continued as Co-CEO of the newly-formed bwin.party until it was bought by GVC Holdings in a deal worth £1.1billion in 2016. That valuation was in part generated by breaking into markets new to online gambling across Europe, but that is far from the only thing that makes Teufelberger such a key figure in the sector. He has also demonstrated an ongoing commitment to innovation, which has driven change in the industry as a whole, as well as financial success for his own business. From its roots as a sportsbook, bwin and its successors added online casinos, a soft games platform and online poker rooms, while also becoming leaders in the fields of sports sponsorship and live sports streaming. But it was perhaps the launch of its revolutionary in-play betting service in 2002 that has had the biggest and most long-lasting influence on operators around the world and the products they now offer to CGiMAGAZINE.COM

:: LEAdERShIP INTERvIEW

players. Teufelberger’s contribution to shaping the modern online betting and igaming sector was recognised when he was inducted into the Sports Betting Hall of Fame last year. He will join some of his fellow inductees for what promises to be one of the highlights of Betting on Sports 2019 at Olympia London this September, a Hall of Fame Panel discussing the latest developments in the international gambling sector. Teufelberger, who continues to keep a close eye on the industry as part of his current role as non-executive Chairman of the board of platform provider EveryMatrix, gave CGi a preview of some of the things he’ll be discussing at the conference. CGi: Norbert, how do you see technology changing in the sports betting industry over the next few years?

NT: As in the past, technology will continue to act as an enabler of innovation and change. As newer, faster processors become available to enhance fast-trading capabilities, live betting becomes even more attractive. In addition, fast-paced sports with rapidly-changing results then become available for live betting. It is likely that the costly live streaming of sports to small devices will end to be replaced by simulated graphics, with customers consuming the live action on second, larger screens. Official data provided by sports organisations directly into the operators’ bookmaking tool then becomes vital in order to reduce time lapses between live events and broadcast results. If you were to step back into the hot seat at a major operator, how would you go about standing out in a sea of standardised sportsbooks with homogenous pricing?

NT: Standing out from the competition has always been about the creative and innovative abilities of the executive team, coupled with flawless technological and operational execution. But while that sounds simple, it is difficult to achieve. We will soon see whether Virgin Bet (the sportsbook recently launched in the UK market by Gamesys, powered by SBTech’s platform) can come up with something new and innovative. It will, for sure, not be pricing, but could be communication or sharing capabilities. The team working on the Virgin Bet launch is one which has the ability to surprise the industry. As someone with experience of setting up an online gaming operation in New Jersey, how would you assess the current US market opportunity for European operators in light of the changing regulatory picture? The US opportunity is always a long shot due to the fragmented, state-by-state and diverse regulatory framework. Financial power, a clean corporate structure and individual backgrounds, and strong local partners are all required to succeed.

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Most newly-licensed operators have European roots, so it is an industry that could eventually be dominated by large-scale European operators. The way there, however, is long and tedious, with many obstacles to overcome. For example, technical integrations with local regulators, including geo blockings, are not easy to deliver. What achievements are you most proud of in your career? I’m proud that we foresaw the upcoming regulatory framework developing early and responded by founding the European Gaming and Betting Association (EGBA) and the European Sports Security Association (ESSA, which recently rebranded to the International Betting Integrity Association) as bodies that help the industry to speak with one voice and battle betting corruption. While the regulatory changes are taking much longer than anticipated, setting up these associations has proved to be the right decision. Also, we launched the first interactive, live betting application for bwin in 2002. At its core, this important piece of innovation is still leading the sports betting industry. And what would you do differently? One thing I would not do again is invest in poker which, with the benefit of hindsight, was a big mistake. My view now is that it is a game with stagnating revenues and without a future. Why are events such as the Betting on Sports conference and exhibition so important for the future of the industry?

NT: Betting on Sports helps newcomers to familiarise themselves with the industry in one go, and to collect and exchange information with ease. For established professionals, it is a welcome event to build out your network and stay up to date with new developments. Last, but not least, it is a welcome distraction from your day-to-day routine! :: CGi

NORBERT TEULFELBERGER Norbert Teufelberger is best known as the co-founder of bwin, alongside Manfred Bodner, which grew into one of Europe’s largest online bookmakers. Having guided bwin from launch to IPO and on to the merger with PartyGaming and subsequent acquisition by GVC Holdings, he left the business in 2018 when he stepped down from his role as non-executive director at GVC. During his 30 years in the international casino and betting industry, he has also held positions with Century Casinos, Casinos Austria and Novomatic Group. He currently holds a number of non-executive directorships in the gaming sector, including as the chairman of EveryMatrix Ltd.

SLOTS ::

IS ThE INdUSTRY LOSING SIGhT OF qUALITY OvER qUANTITY? T

he gambling market today is more competitive and more crowded than ever with the volume of content flooding through every month at unprecedented levels, so is the industry losing sight of quality over quantity?

Annamaria Anastasia Marketing Director BetSoft

Ever since we were founded in 2006, we have maintained the same values and work ethic; to bring to market the most cuttingedge cinematic casino and slot content to the widest possible audience, using proven math models that return higher than industry average KPIs, in the most responsible way. Playing our slots and table game titles, and any other realmoney game, should first and foremost be a fun and fair experience. However, the sheer volume of content coming through today is arguably blurring the lines and stifling innovation with many best-in-class titles lost in the noise. In the 13 years we have been in business we have produced close to 200 titles. This is a far cry from the amount being released by some studios, yet top tier operators keep coming back to us for more of our content. So, what is the secret sauce? Quality over quantity is one of our guiding principles and one that has seen many of our flagship, proprietary titles consistently appear at the top of the industryâ&#x20AC;&#x2122;s best performing games, culminating with the company winning its first EGR B2B Award in June 2019 for RNG Innovation of the year. In the time we have been operating we have found the right balance between quantity and quality. The fundamental reason for our success, however, has been the combination of highly engaging and profitable math models, classic and emerging themes and trends, and new and innovative game mechanics CGiMAGAZINE.COM

:: SLOTS

that continue to attract, engage, and retain players time and again. We are very proud of the innovation we have and continue to deliver with recent releases including Spinfinity Man and Chillipop and forthcoming release Gold Canyon, while games such as Max Quest: Wrath of Ra have taken game development and design in a completely new direction to appeal to a new generation of players. Catering to today’s slot players High quality user experience is a prerequisite for today’s slot players and is something we pride ourselves on delivering in every game we launch. Prior to and throughout the game design and production process we carry out extensive market and player research and analysis, with every Betsoft game designed with players first and foremost in mind. We use both proven math models that we know players love and keep coming back to, as well as adding new features to ensure our mobile-first content remains current, unique, and most of all fun for players across a host of regulated and newly regulated markets. Today’s market is highly competitive and Betsoft titles stand out due to their engaging gameplay, best in class artwork, audio, graphics and animation that are proven to attract slot fans across a host of demographics. All our games are designed to be cross-platform, and developed with a mobile-first mindset, delivering the complete desktop experience on the go to a new generation of slot players. This is a must in today’s market. Our rapidly growing content portfolio is supported and managed by our advanced, modular and fully customisable back office - Casino Manager, the most complete and powerful game reporting and administration system available today. The platform has recently been updated to include a range of cutting-edge marketing tools that optimise game performance and streamline an operator’s day-to-day administrative and support tasks. This enables us to provide an unmatched iGaming experience for players and a seamless operation for commercial casino operators with 24/7 support and 99.9% uptime. Our globally located staff work continuously to produce the most highly engaging, ‘sticky’ games with the best math models on the market. From our development team to customer support and our management team, every department is focused on working side-by-side with our partners and providing the highest levels of service. Client service is an absolute priority for us and has been for the 10+ years we’ve been in this industry. We have built a fantastic reputation for excellence in customer service offering our partners a highly robust platform and back office with award-winning innovation and design, a series of advanced marketing features and promotional tools, dedicated account management and technical support, and not forgetting our award-winning, mobile-first content with new releases available every month across all devices.

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Importance of regulated markets and responsible gaming Betsoft has successfully entered multiple iGaming jurisdictions, obtaining independent certifications and adhering to and complying with all the required responsible gaming legislation, and building an extensive client base that covers all the regulated gaming territories worldwide. Our culture is built around an ongoing commitment to responsible gaming, an issue which is growing in importance across both mature and newly regulating markets. Across our entire suite of products and services, worldwide, we comply with the industry’s most stringent regulations. From our stateof-the-art, independently certified RNG system to our development and integration platforms, we believe in transparency, honesty, and fair play. Both our short and long-term plans will continue to focus on growing our presence in existing markets as well as entering and launching in new territories, with an emphasis on securing and establishing new licenses to make our games available to more players. Our commitment to service, delivery and designing the highest performing and most innovative content remains stronger than ever with some highly engaging and disruptive games due for release Q3 and Q4 of this year. We are a global company with staff located all around the world meaning we can deliver on time, every time and respond to any request within any time zone. Our head office is in Malta which has fast become one of the main European gaming hubs giving us easy access to our clients which, in turn, has helped us build and maintain relationships with them on an ongoing basis. Driving innovation Today’s slot players not only require the best and most consistent user experience, they also want to see new features and functionality introduced across real money products. Our slot games are instantly recognisable. Across a range of themes designed to appeal to a variety of demographics, our vivid artwork, crisp audio, graphics and animation are proven to attract and retain players. We are the market leaders in cinematic slot design, putting innovation at the forefront of everything we do, producing firstclass, best-performing story-driven games that players around the world love to come back to time and again. Our portfolio includes the ideal blend of classic, best performing titles with proven math models and mechanics that produce higher than industry level KPIs, and new and highly innovative slots that are pushing the boundaries of game design and functionality. :: CGi

ANNAMARIA ANASTASIA Annamaria Anastasia is Marketing Director at BetSoft.

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Balkan Entertainment & Gaming Expo

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