For example, in a news story on Canada.com, Housing and Social Development Minister Honorable Rich Coleman said it is estimated that British Columbians spend approximately $100 million each year on illegal offshore gambling sites, and that he wanted to see that money spent in the province instead. The article went on to quote the Minister as saying there were about 2,000 unregulated online gambling sites.(1)
Additionally, in a recent presentation at the National Indian Gaming Association trade show in April 2011, a representative from the accounting firm Joseph Eve presented survey results comparing the average number of visits per month where money was wagered. Conventional casino visits per month averaged 2.7, while online visits averaged 9.2 – three times that of conventional casino visits. (2)
It goes without saying it’s not Technical Systems Testing's (TST) role to argue either side of that discussion or to advocate for or against expansion of iGaming. However, it is TST's role to test and certify iGaming and to help jurisdictions develop and implement standards that will aid in assurance of fair, secure and auditable iGaming practices, should those jurisdictions decide to allow it.
Identifying iGaming Channels
Current iGaming mediums primarily consist of three basic delivery channels: the Internet, interactive television (or “iTV”), and mobile wireless devices. It's important to understand these, as well as the differences between ‘Internet’ gaming and ‘Intranet’ gaming.
Intranet iGaming is essentially what exists in B.C. and Québec today. The games there are intra-provincial, meaning B.C. players can participate in various forms of iGaming that are conducted and managed by the British Columbia Lottery Corporation (BCLC), as long as they reside within B.C. Similarly, it follows that citizens of Québec can participate in various forms of iGaming that are conducted and managed by Loto-Québec, as long as they reside within the province of Québec.
Internet gaming is exactly what you think it is: gaming that can be accessed online by players across provincial and country lines. The “Canadian Poker Network”, launched in late 2010, is a perfect example of legal Internet gaming in Canada, because citizens of both British Columbia and Québec can participate.
Of course, similar to land-based gaming, there are several platforms for iGaming, including (but not limited to) betting exchanges, bingo, skill-based, casino games, lottery, pari-mutuel, RNG and live dealer-driven platforms, and poker rooms. And while each medium and platform can exist separately, the intranet trend is moving toward convergence, where players can participate in their choice of game on their choice of device.
Enter: Gli-19
The best kind of iGaming is one which is properly regulated, fair, secure and auditable. TST tests electronic devices and systems for numerous jurisdictions around the world, and it believes there is a clear need for technical standards to properly and thoroughly test iGaming, so as to ensure the public's trust. Fortunately for Canada, as provinces throughout the country look to iGaming, the arena of technical standards is not without precedent.
For example, in the U.K., iGaming is regulated under the Gambling Act of 2005, with standards established in 2007. In Alderney, rigorous technical standards have been in place for almost 10 years; the latest version having released in June 2010. In Italy, guidelines for certifying gaming platforms were enacted last year. Furthermore, the Isle of Man, France, First Cagayan and the Philippines all have established standards in place.
Now, TST has released a new technical standard known as GLI-19. GLI-19 is a technical standard based on an extensive review of several key interactive gaming jurisdictions which have experienced great success in regulating the inherently complex systems associated with iGaming.
GLI-19 is the culmination of more than a year’s worth of in-depth consultation with iGaming regulators, software developers and operators from around the world. TST was the lead in compiling GLI-19, and a consortium of seasoned regulators, suppliers and operators provided valuable assistance in comment and review.
GLI-19 is the first set of common standards for technical regulation of iGaming markets. It encompasses the best practices in regulated jurisdictions from Europe and Canada, where the majority of iGaming regulation is currently occurring.
Securing iGaming
Now with a knowledge of the basic iGaming mediums and platforms, and the global standards that have structured its regulation to date, let’s turn to some of the concerns surrounding iGaming and the controls that are currently in place to protect the public's trust and interest.
Just as it is in land-based gaming, iGaming poses a concern for money laundering. Most jurisdictions around the world have very strict guidelines for land-based operations regarding money laundering, and early this summer, a U.S. casino was fined US$250,000 for non- compliance with U.S. anti-money laundering guidelines. The concern in iGaming is that a criminal can obtain a player account, deposit “dirty” funds, lay off-setting bets, and walk away with clean funds that can then be used for other means such as funding further illegal operations.
Fortunately, properly tested, certified and regulated iGaming operators use third party software and systems providers to guard against money laundering. Strong technical standards and regulations protect against money laundering by flagging large monetary transfers, reporting unusual player patterns, alerting use of multiple bank accounts, f lagging name inconsistencies, reporting unusual system activity or connection attempts from unusual or prohibited geographic locations, while also recording and storing of all the associated data. Accordingly, rigorous regulation is critical in order to protect the operator and the consumer in the iGaming space, and to protect the public at large who may be at risk of becoming victims of the crimes funded by laundered money.
As with land-based gaming, underage gambling is also a concern in iGaming. In a land-based casino, there are typically two checks for legal patron age: the player’s ID, and the player’s physical presence in the casino. Of course, in iGaming the physical presence check is completely eliminated, so rigorous regulation requires a multi-layered system of checks that combine technical resources with tested safety controls and procedures to identify age, identity and residence. Some of the more widely used third party software providers include (but are not limited to) companies such
be required to provide answers to what are known as “identity challenge questions” at different times of the gaming session to ensure a specific player hasn’t switched places with another player, or is being impersonated.
Monitoring iGaming Borders
Another chief concern is location verification. How can a jurisdictional regulator be sure a player isn’t violating the law by playing a casino game or poker from outside the authorized jurisdiction, which in Canada’s case refers to those as Aristotle and GB Group.
These systems verify personal identity records against a combination of government- issued ID and other personal identity databases when a new player tries to register their account. Some jurisdictions default to a manual process when an account registration through automated checks results in some form of error or inconclusive result. In such cases, this results in a request for physical copies of identification documents, such as a driver’s license and/ or a utility bill to be physically submitted and verified. Once they have an account, registered players may also
outside of B.C. or Québec? Operators have successfully turned to existing third party geo-location software and system providers to overcome this valid concern.
Geo-location software and systems helps regulators verify the location of player despite their chosen gaming medium. In the PC world, this software delivers detailed demographic and network data about an IP address,
including the user's country, province or state, city, and postal/ZIP code. The technology approximates the location of the player using geographic location of all routable IP addresses assigned, allocated, and in use on the internet.
It should come as a relief to current regulators (and to those who are considering entering the iGaming world) that third party software such as that provided by the company Quova has been proven to have astounding accuracy of 99.9 percent at the U.S. state level, and at 99.8 percent for provinces and states in countries outside of the U.S. This incredible level of accuracy is achieved in spite of admitted potential impacts on coverage, including available data, challenges with local documentation, language and government restrictions.
In the mobile gaming world, existing mobile geo- location software providers such as the company Loc-Aid deliver detailed demographic and network characteristic data about longitude / latitude (or street address and postal / ZIP code) of any mobile device from any Tier 1 carrier.
iGaming Going forward
We have covered the basics of Internet vs Intranet gaming, the standards that govern regulation, as well as concerns and controls regarding topics such as money laundering, underage gambling, and location verification. Canada can be very proud of the work B.C. and Québec have done to successfully implement, test, certify, and regulate iGaming. As for the rest of Canada, despite already offering some form of games via the Internet, the Atlantic Lottery Corporation (ALC) is working its way through political concerns about casino and/or poker iGaming. Ontario is in the RFP gathering phases, and has announced its intention to facilitate regulated a regulated form of iGaming by 2012. Some operators, including crown corporations and Indian tribes, are either patiently waiting for regulations or elections while various regulators are waiting to see how it all plays out in neighboring provinces and other global jurisdictions before they enter the iGaming space.
iGaming remains an incredibly exciting and burgeoning arena, and will undoubtedly continue to become more exciting as new technologies evolve and other avenues such as social network channels continue to advance. As they move forward, regulators must rely on proven standards, testing methodologies and experienced reputable independent labs. They will also rely on proven existing software to ensure that iGaming meets the highest standards. Anything less will surely miss the mark when it comes to maintaining the public trust and public interest.
GLI-19 is available as a free download on TST’s website at www.tstglobal.com.
1. “B.C. launches province-backed online gambling site,” Tiffany Crawford, Canada.com, July 15, 2010.
2. “Getting your property ready for the inevitable...online gaming,” Paul Girvan, The Innovation Group; Ehren Richardson, Joseph Eve; Steve Neely, Sol Casinos; NIGA Trade Show, 2011.