TECHNOLOGY

IS CASH STILL KING? IS CASH STILL KING?

The Canadian Gaming Association’s Standards for Cashless Systems

BY CHANTAL A. CIPRIANO & SHRUTI JOSHI

Cashless gaming options are one step closer to becoming a reality in Canada. After engaging in a lengthy analysis and drafting process over the summer, the Canadian Gaming Association (“CGA”) recently released its Standards for Cashless Systems (the “Standards”).

The purpose of the Standards is to provide a framework to implement cashless systems that would allow players to participate in wagering activities using an approved and secure method. In order to achieve this objective, the Standards provide basic minimum requirements with respect to cashless systems and devices, as well as player accounts requirements. The Standards do not specify any particular methods, algorithms or technology, but rather are drafted in a manner that allows for a variety of methods to be used to conform to the guidelines. Not only does this flexibility encourage new methods to be developed in the future, but this also allows for new and creative ideas to be explored, and provides an opportunity for the gaming industry to expand to include new virtual entrants.

THE STANDARDS

Implementing cashless payment systems in casinos has been a discussion point over the years, both in Canada and abroad, primarily in an attempt to tackle the on-going issue of money laundering in casinos. The Standards recognize how internal control systems such as monitoring anti-money laundering efforts are continually evolving, and therefore highlight that such guidelines should not be incorporated into the Standards, but rather be included within the regulatory framework of each province. Although the CGA and Canada’s gaming industry as a whole work closely with the Financial Transactions and Reporting Analysis Centre of Canada to ensure suspicious transactions and large cash transactions are reported for analysis and will continue to do so, the Standards provide an additional safeguard to ensure compliance with various regulations across the provinces.

From a player perspective, cashless systems provide levels of convenience and security that traditional cash wagering simply cannot match. Higherdollar players would be able to engage in gaming without having to carry large sums of cash and can rest assured their money is safe without foregoing their own personal safety. This would also be beneficial to casinos from an operating and security perspective by reducing cash handling costs as well as the safety and security risks associated with having large amounts of cash on the premises.

The Standards also outline guidelines to mitigate concerns surrounding cashless gaming such as excessive and irresponsible gambling, without causing player disruptions or disputes. Taking into consideration the endeavours of the Responsible Gambling Council, the Standards require that any cashless transaction that would exceed a predetermined limit will only be processed if the player is clearly notified that they have received or deposited less than requested.

With the novel COVID-19 pandemic and its infectious nature forcing gaming establishments to close across the world, the contactless benefits of cashless gaming have been highlighted during discussions regarding the reopening phase of casinos. Between the amount of cash and chip handling, touchpoints on instant-play machines and high turnover on table seating, cashless gaming systems would help reduce the spread of infectious germs amongst staff and players. This would also be beneficial in reducing the spread of other contagious illnesses such as the common cold and flu, which are ailments that we continue to battle with each year.

OTHER JURISDICTIONS

Cashless gaming options are already being successfully explored in other jurisdictions, for both casino and online operators. On October 13, 2020, International Game Technology PLC announced that it is launching its Resort Wallet, a cashless solution at the Resorts World Catskills Casino and Resort in Monticello, New York. The Resort Wallet allows patrons to engage in a cashless gaming experience by using their physical club card to load cash into a secure digital wallet, from either the casino cashier or any slot machine, and access those funds from any slot machine. Similarly, on October 26, 2020, Boyd Gaming announced that it had partnered with Aristocrat Technologies to develop a cashless gaming experience for patrons at the Blue Chip Casino in Michigan City, Indiana. Blue Chip patrons can visit the cashier’s cage to deposit money onto their loyalty card and play the slot machines without any physical cash. Although players can only use the card to play slots at the moment, the goal is for players to eventually be able to buy chips for table games as well as use their card at the resort’s restaurants and other retail shops.

Perhaps most notable is Swedishgaming operator Svenska Spel’s launch of its cashless gaming option earlier this year, which allows players to draw funds directly from their bank account to play their favourite online games. What is particularly unique about Svenska Spel’s cashless option is its ability to re-deposit any unused funds back into a player’s bank account after the player has decided to stop gameplay. Not only does this product allow players to engage in convenient online gaming, but it also promotes responsible gambling, which could set a new standard for online gaming operators.

1 Online Gambling Market Size Worth $127.3 Billion By 2027, April 2020 www.grandviewresearch.com/press-release/global-online-gambling-market 2 “Why Mazooma?” Mazooma http://us.mazooma.com/why-mazooma/

CONCLUSION

It is clear that the gaming industry is quickly pivoting to implementing cashless gaming options in order to allow players a more convenient gaming experience, both in person and virtually. Such a change in the Canadian market provides an exciting opportunity for new and existing gaming operators to take advantage of the opportunity to participate in traditional casino operations, as well as the online gambling industry that is projected to be worth over US$127 billion by 20271 . Having processed over $35 billion in online gaming and sports betting transactions2, Mazooma is excited and ready to embrace this industry development.

Chantal A. Cipriano is the Senior Director of Legal & Compliance with Mazooma. Shruti Joshi is Junior Legal Counsel with Mazooma.