A NEW SET OF STANDARDS

Richard McCall, Armalytix CEO, and Mike Ward, the supplier’s Executive Chairman, speak to Gambling Insider Editor Tim Poole about affordability checks; and how the gambling sector must develop mutually accepted guidelines – avoiding the mistakes of other industries

Can you walk me through the company and your main pitch for standing out in the market?

We’ve all come from a finance background, so we understand the money laundering, financial harm side of things. And as a company, what we did was cut our teeth on conveyancing, which is an industry that until quite recently hasn’t had to worry about financial checks. But actually, more and more is becoming required to conduct source-of-funds and source-of -wealth checks on its clients when they’re putting large amounts of money into a transaction. What we’re seeing is that the gaming industry is moving the same way, where they are now being required to – more than ever in the past – check the prominence of funds that’s coming in from their clients and to check whether those clients can afford to spend the money they’re spending.

So that’s where we’ve come from. I guess our relevance to the gaming industry is that we have a lot of knowledge from having done these things in different industries, which we think we can provide to help this nascent industry to evolve in the right way. Because they’re suddenly being asked to do a whole load of stuff they didn’t have to, finance got hit with a lot more rigour in 2008. With that, we can understand the change which has to happen in an organisation first. It just starts with this idea that things aren’t going to be done the same way. And whether you like it or not, that’s going to be the case. I totally understand the rhetoric you see, which is ‘oh, why do we need to do more?’ We have to have policies where the many have to do something to protect the few, in most industries. It’s not that there are whole-scale problems across every single playerbase. The question is how do you manage that balance by getting enough people to follow a process to allow you to guard against a few? You need to dig into whether you’re looking for money launderers or whether you’re looking for people whose own practices may be harmful. You need an understanding of how to look at financial data and also get the balance right; how much data do we need? So you’ve got that balance and I think banks, love them or loathe them, have always been conscious that people’s financial data is their own. It doesn’t belong to the banks. So how do you get that balance right?

Gaming is relatively new for yor organisation. You work with Buzz Bingo and recently partnered with Betsmart. How are you looking to grow within the sector?

We look across industries and the themes are the same regardless of any industry: that society is changing. Financial crime is being taken seriously, whether you’re in gambling, conveyancing or a financial institution. In today’s world, if you have a business which might do harm to some people, whether that’s in finance – so that could be providing loans or whatever – or people gambling beyond their means, these are common themes; and it’s really about consumer protection. So for us, yes, gambling is new, the themes are not. We are definitely not gambling specialists. Hence why our collaboration with Betsmart is so important because they’re the industry experts, and they help translate the needs of the industry into what we see as a successful process. as a trusted third party that potentially restricts the amount of information a person has to firms don’t necessarily want to receive a whole

The recent William Hill settlement, where it paid £19.2m ($23.6m) to the Gambling Commission is a well-timed example. If an operator has all the data and technology available in the world, isn’t it still down to the mentality of that operator in the engine room?

I think ultimately this sounds like a question of liability in terms of: are we telling William Hill, Buzz Bingo or anybody else what to do? No, what we’re doing is we’re making it easy for their customer to provide the information they need for them to make a decision, and we’re hopefully making it easy for them to identify the customers who might ultimately turn into a problem. So we’re not trying to say to anyone you can or can’t do this. We’re basically making it easy for people to provide information; a way that makes their situation easy to understand if we give them the tools, and we give their clients the tools, to provide their information in an easy way.

That’s the ultimate question in this situation with onboarding and customers that come in. Is it always the case that you’re going to have to increase customer friction?

Well, I think what we can do is we can sit in there as a trusted third party that potentially restricts the amount of information a person has to share with a company like a gaming firm. And that works both ways because the gaming firms don’t necessarily want to receive a whole load of information about someone’s financial position, either. So I think the idea that we sit in there and are actually protecting both sides from either sharing or receiving too much information is an important one. I do think gaming operators have tried to use proxies for people’s finances to not have to ask that person to sides from either sharing or receiving too much gaming operators have tried to use proxies for ask give them any information.

I think if you actually want to understand you do ultimately have to ask them. What we do is make that asking process as quick and easy as possible. I think this is all part of coming to terms journeys may be slowed down and I think that’s the nature of the checks that need to be in place. we’re not trying to say to anyone you can or people to provide information; a way that makes do something?’ How do we get people and the important, and something that both matter for matter from the risk and reputation standpoint? We saw with the coverage William wrong, the reputational risk as

I think more generally from our experience of the banking industry, it all starts with cultural change. So certainly if you look at banking, you first had that attitude of ‘Why do I need to change? I’m not sure I do’ – and I think we’ve gone through that. Now it’s that question of ‘Right, how do I instil cultural change to make sure people understand we are going to need to do something?’ How do we get people and the hierarchy to understand that these checks are important, and something that both matter for the minority of people who were harmed but also matter from the risk and reputation standpoint?

We saw with the coverage William Hill got that, if you get that balance wrong, the reputational risk as well as financial risk can be meaningful. So this is what happens when you get regulatory change. You tend to get large fines or settlements, and you tend to then make changes to your organisation, to recognise that these checks are important and then you turn it into process work. Where we come in is where you’re looking at a process you want to do with scale. How do you get the right tool in place? How do you increase the amount of checks without increasing friction?

I think if you actually want to understand something about someone’s financial situation, you do ultimately have to ask them. What we do is make that asking process as quick and easy as possible. I think this is all part of coming to terms with regulatory changes. So you have to accept in certain circumstances, clients' journeys may be slowed down and I think that’s the nature of the checks that need to be in place. But it doesn’t have to happen in every circumstance. It’s very easy to get into a binary world where everyone’s checked for everything or they don’t get in every circumstance. It’s very easy to get into a binary world where everyone’s checked for everything or they don’t get checked at all.

The reality is it’s not binary: it’s understanding customer playing profiles. Our aim is for when that point is where you need some financial information, you make that seamless and a fair exchange of information, which would take both parties – meaning it will slow them down. When it comes to money-laundering checks, I think one has to accept you’re going to have to go further. I think what we learned from finance

The reality is it’s not binary: it’s understanding customer playing profiles. Our aim is for when that point is financial information, you make that seamless and a fair exchange of information, parties – meaning it will slow to money-laundering checks, I think one has to accept you’re to is, in circumstances, you do have to slow down. The job of the technology is trying to make that slowing down as painless as possible.

What can gambling learn from conveyancing, finance and banking, so that the sector can come to terms with new regulation quicker?

I think what we saw in finance and what we’re seeing in conveyancing, because it’s an ongoing process, is that the regulator tends not to prescribe a set of rules that everyone has to follow. It’s more like a set of guidelines. Those guidelines tend to, over time, form into a set of industry-accepted standards, although they’re not written down. And so the quicker you can get to, ‘Well, what do we think is a sensible set of industry rules?’ – the better. What tends to happen is that the bigger firms get hit with some fines or settlements by the regulator, then they start to make the changes because they know they’re in the crosshairs of the regulator, and then everybody else watches what they’re doing and starts to do the same; everybody eventually coalesces around a similar set of solutions and standards.

It becomes a set of standardised ways that people do business. So I actually think, in the gaming space, whether you’re a big or a small firm, have a sensible look at what would be reasonable in front of the regulator and quickly come to a set of agreed standards. Because, actually, the quicker you get there, the quicker everyone can get on with day-to-day business, right? The longer you drag it on, the longer you’re just dealing with a problem that, ultimately, you’re going to have to deal with at some point anyway.

Finally, do you have any specific aims or aspirations for the gambling industry? Do you have a target market share or something concrete you want to achieve? Well, we started from nothing, not being known 20 months ago, and I think by the end of this year we should be aiming for one in 10 comparing transactions in conveyancing, having an Armalytix report involved in those source-of -funds checks. I think what I’m most excited by, in the betting sector, is working towards finding out: what are these industry standards and are we able to help dramatically improve the process of where they are today? If you do that, you’ll tend to win clients – which of course, we’re a business, so we always want to win them. But I think getting in the middle of that discussion, seeing the modules we have can help fix that for me. I’d love to be able to come out at the end of it and look at a problem which the industry may have seen as a huge barrier to dealing with their clients, and turn around and say, 'actually that wasn’t too bad.' We’ve come up with a process which protects the minority and that the majority is prepared to do without ruining their gaming experience.

The gaming industry is being hit from all sides, and I don’t think it’s a tremendously difficult problem to solve. We might be able to help it in such a way as to not take a tremendous amount of time and money out of anyone’s equation, and improve the process for those problem customers that ultimately none of the gaming firms would like to have on their books. Really, 99% of their clients are not a problem, But, for example, with William Hill, how many cases did they cite? Three or four. How many customers must they have had in that period? Millions. I’m sure if they could go back and stop those three to four customers coming on board in the first place, they would absolutely do so because it would have saved them a whole load of pain and trouble.

Will crypto payments become the preferred method of payments? Malcolm Atuona, CFO, CoinPayments

that empowers businesses to accept various cryptocurrencies, including Bitcoin, Ethereum and stablecoins. This unprecedented level of flexibility has sparked significant interest among iGaming operators, who are keen to capitalise on the growing demand for digital currency options.

In my opinion, one of the primary drivers behind the adoption of crypto payments in the iGaming industry is the unparalleled security and privacy they offer. Traditional payment methods often require players to divulge sensitive personal and financial information, making players vulnerable to hacking and identity theft. In contrast, cryptocurrencies operate on decentralised networks, providing additional security and anonymity. This increased sense of safety is particularly appealing to players who prioritise safeguarding their data.

integration by offering a user-friendly crypto payment gateway that can be easily incorporated into most existing iGaming platforms. This straightforward process enables our clientele greater access to a broader client base.

CoinPayments keeps a close eye on the development of regulatory frameworks surrounding cryptocurrencies and the iGaming industry as this will play a crucial role in shaping the future of crypto payments. As governments and regulatory bodies continue to establish guidelines and standards, it is safe to assume that the adoption of digital currencies in the iGaming sector will soar. It is crucial to CoinPayments’ go-forward strategy that we are at the forefront of these developments and working closely with regulators to foster a responsible and compliant ecosystem that nurtures the growth of the sector.

In today's ever-evolving digital landscape, the iGaming industry has thrived by harnessing innovative technologies to deliver seamless, secure and captivating experiences for players. As a tech-focused CFO (Chief Financial Officer of CoinPayments), I've witnessed first-hand how crypto payments are revolutionising the way we interact with iGaming platforms. Now, with an increasing number of players and businesses embracing the incredible benefits of digital currencies, the question arises: will crypto payments emerge as the favoured payment method in the iGaming space?

Here at CoinPayments, we have a presence in over 190 countries, a network of more than 120,000 merchants, with a platform

Secondly, the borderless nature of cryptocurrencies is a game changer. It empowers iGaming platforms to cater to a global audience without the complexities of currency conversion and international transactions. This results in a much more seamless experience with reduced transaction times and fees.

Another huge benefit of crypto payments is their potential to remove chargebacks and reduce fraudulent transactions. With traditional payment methods, iGaming operators often face disputes that heighten the risk of financial losses and tarnished reputations. However, cryptocurrencies offer transparency and immutability, making it difficult for malicious actors to exploit the system. By embracing crypto payments, iGaming businesses can safeguard and futureproof their revenue streams. Safeguarded revenue streams from nefarious activities ultimately mean higher revenue, lower operational costs and increased credibility.

At CoinPayments, we facilitate seamless

At CoinPayments, we remain laser-focused in our commitment to facilitate this transformative shift and provide crypto payment solutions for iGaming.

Will crypto payments become the preferred method of payments?

Anton Komukhin, Head of Product, Praxis

payment methods such as cards and e-wallets are widely available and easy to use –making them a more convenient option for many consumers. It’s also important to note here that the Covid-19 pandemic really boosted the card-related payments evolution.

Competition is another obstacle to widespread adoption of cryptocurrencies. Card payments haven’t had competition for decades and have been entirely unrivalled online… Until now. Mobile payments, QR, Open banking and Tokenisation are all new payment methods gaining popularity and competing for market share. With so many options available, it’s difficult for cryptocurrencies to become the preferred payment method.

"Global dominance

Methods

The growth of cryptocurrencies over the last decade has led to an increased interest in using them as a payment method. While traditional card payments are still dominant, the rise of cryptocurrencies has prompted the debate about which payment method is better.

Predicting the future is not the business of data-driven companies. However, data does allow us to talk about certain patterns. And at the moment, the patterns allow us to conclude that the massive distribution of crypto payments has long become a reality. It’s even the norm in many industries, for example, iGaming, eCommerce etc.

However, talking about global dominance over other payment methods like cards and e-wallets is a little premature. Especially when you consider that 76% of the world's population has access to traditional methods like cards and e-wallets (Global Findex Database). Looking ahead, it is worth noting that this is generally unlikely.

There are many reasons for this.

Regulation is one of the biggest obstacles to widespread adoption of cryptocurrencies. Most countries don’t have clear regulations regarding cryptocurrencies, and there’s still uncertainty regarding their legal status. This makes it hugely challenging for businesses to accept cryptocurrencies as a payment method, as they may face regulatory and legal risks. And, despite the recent announcement about the world's first comprehensive regulation approval by EU Parliament, it’s still a long road for mass adoption of crypto payments. Availability and simplicity, as well as overall customer experience, are also factors to consider. While crypto payments have become more accessible in recent years, they’re still not as widely available as traditional payment methods. Many people aren’t familiar with how to use cryptocurrencies and don't understand the risks involved. Even the process of buying and transferring them can be complicated. In contrast, traditional

Despite these obstacles, there are still several reasons why cryptocurrencies are gaining that momentum. Firstly, cryptocurrencies offer a high level of security, which is crucial for online transactions. Cryptocurrencies are decentralised, and transactions are verified through a distributed ledger, making them more secure than traditional payment methods. This is particularly important in the gambling industry, where there is a high risk of fraud and hacking.

Secondly, cryptocurrencies offer faster transaction times and lower transaction fees. Transactions can be processed in a matter of seconds, compared to several days for traditional payment methods. This makes them a more efficient option for both consumers and businesses. Finally, cryptocurrencies offer a level of anonymity that traditional payment methods do not. This is particularly important for consumers who value their privacy and do not want their financial information to be tracked.

So, while it’s unlikely that cryptocurrencies will become the preferred payment method, they’re gaining momentum and are a viable option for businesses and consumers. While there’s still regulatory and adoption challenges to overcome, the benefits of cryptocurrencies - such as security, speed, and anonymity – make them a valuable addition to the payment landscape.

ROUNDTABLE: HOW IS AI CHANGING GAMING?

Experts from the gaming industry discuss the bene ts and implications of AI technology

Joe Hall is a hands-on financial technology, iGaming and ecommerce expert with 15 years’ experience across commercial, operational and technology roles in both B2B and B2C environments. Joe is a former member of the management team at Paysafe and former UK Managing Director at eToro.

Rasmus Kjaergaard has grown Mindway AI from a small startup to the fast-growing software company it is today. Rasmus’ focus is on the commercial and strategic development of Mindway AI through product innovation, partnerships and market expansions. Rasmus is deeply invested in the safer gambling agenda and a firm believer in the power of partnerships and collaboration in the pursuit of better player protection. Rasmus has 20+ years of experience in leadership and B2B sales of complex tech solutions and services in both private and public sectors.

Mridula Saini leads IKASI teams for both domestic and global markets. She has demonstrated success in seven countries for over 20 years and has produced unprecedented results in both B2B and B2C segments with billion-dollar enterprises and early-stage startups. Mridula has a Master’s Degree from Stanford University and an engineering degree from Rohilkhand University.

Olga Ivanchik: As Head of WebStudio for SoftSwiss, Olga leads the team, responsible for handling requirements gathering, design project creation, graphics, layout, configuration, testing, licensing, payment system integration, and game provider connection, among many other things, to ensure that operators successfully launch their online casinos for players.

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