The vitality of compliance in the igaming sphere and the science behind it

This article was written in recognition of the unsung heroes in the gaming industry. I am referring to those in compliance positions whose contributions are often overlooked by companies that favour their marketing, finance and product teams. The truth is, you will not find a group of harder-working and caring individuals than those who work in compliance.

Compliance professionals have the unenviable task of working with management and staff to ensure they comply with relevant laws, regulations and internal controls. Their duties include identifying potential risks, implementing policies and procedures to uphold laws and regulations, and monitoring the company’s adherence to those policies and procedures.

Compliance is a broad topic in the gaming industry that encompasses more than just licensing, AML, data protection, tax and labour. Instead, it covers various legal and technical requirements impacting all aspects of gaming operations. As such, most companies in the gaming space recognise that compliance is essential to a successful and sustainable business.

Well-established companies often employ experienced and highly qualified compliance staff. However, the rapid growth of online sports betting has left the industry competing for a small group of individuals with the experience necessary to fully understand the compliance function in the highly regulated space of casino gaming and sports betting. Not to mention keeping pace with the patchwork of regulations that exist nationwide.

In many cases, CEOs and compliance committees get a false sense of security once they have received test lab approval for their product. Additionally, in a rush to “go live,” companies may focus on immediate issues like licensing, technical compliance, payments, hiring and customer acquisition rather than preventing future compliance problems. As a result, internal controls may not be fully thought out or represent how the company operates.

Focusing on the small wins is tempting because preventative action rarely pays off immediately. However, the best CEOs recognise that leadership is about solving today’s problems and anticipating future problems and how to deal with them. Those leaders recognise the importance of funding their compliance function and emphasising compliance as part of their corporate culture. As a result, compliance consulting companies, like the one I work for, have emerged to ensure nothing is overlooked.

As previously mentioned, the compliance function encompasses all aspects of an organisation. Whether we are talking about rules governing advertising, responsible gaming, change controls, licensing or any other aspect of a gaming operation, compliance officers are challenged with not only understanding the rules in every jurisdiction that they operate in but also ensuring internal controls are effective and appropriately communicated to staff.

Time to check

Internal controls cannot be a checklist item that is required to go live and then forgotten. They need to be living documents that are revisited and adjusted to ensure their effectiveness and alignment with changing operational needs and regulatory requirements. Their value can’t be overstated when there is a problem or failure. For instance, they allow an organisation to determine whether an issue resulted from an employee mistake or poorly designed internal controls. Similarly, regulators may consider the adequacy and effectiveness of internal controls when considering potential regulatory action resulting from an incident.

Lastly, it is important to note that compliance requirements are not always black and white. The best compliance professionals can interpret regulations and present alternative methods for compliance, often working with their technical teams or consultants to employ innovative solutions to manual procedures and regulatory requirements. A combination of technology, training and compliance consulting will remain vital to the long-term success of any compliance programme.

Looking to the future, investment in compliance will continue to be vital to a successful gaming operation. The need for experienced compliance and audit staff will grow as more states permit sports betting and online casino gaming. As such, the compliance function can’t be seen as a barrier to business. Instead, it will be relied upon to maintain the public’s confidence that sports betting and casino gaming are safe and well-regulated.

Eric Weiss is currently the vice-president of technical compliance and audit for Odds On Compliance, a consulting firm founded to help gaming companies navigate the complicated world of state regulatory requirements. In August 2021, Weiss retired from the New Jersey Division of Gaming Enforcement, where he held administration and investigation positions and was the director of the Division’s Slot Laboratory, which oversaw technical approvals of all casino gaming equipment and internet gaming technology used in the state. In 2016, Weiss was promoted to chief of staff. Weiss also serves as the vice-chair of the Esports Trade Association’s Regulated Videogame and Esports Committee.