“The need to invest in compliance has been demonstrated with an increase in fines and regulatory settlements”

“The need to invest in compliance has been demonstrated with an increase in fines and regulatory settlements”

While the effects of the pandemic on the gaming industry have been widely documented from the perspective of land-based operators, which were forced to close venues for extended periods of time and struggled to maintain their businesses afloat, the ongoing COVID crisis has also seen its fair share of impact on sector regulation. As companies look to expand offerings and strategies to stay operational, an increase in fines and regulatory settlements proves the way out of the crisis must also contemplate investments in compliance and consumer safeguarding.

Dr. Jason Lane, President of the International Association of Gaming Regulators (IAGR), spoke with Yogonet on the challenges faced by the industry in 2021, and the role regulation plays in the road to recovery. Lane talks about IAGR plans for next year -including a pledge to develop partnerships with third sector / non-profit organizations-, and issues expected to drive the regulatory agenda in 2022, including staff safeguards, increasing gambling politicization, and governmental pressure on regulators.

What would be your year-end assessment of the gambling industry’s recovery in 2021, and its emerging markets, from a regulatory perspective?

This past year has been one of enormous challenges, particularly for the betting and racing sectors. The need for resilience in terms of product offering has proven its worth with those companies supplying niche areas more susceptible to failure than those with a more varied portfolio. Interest in the sector, however, remains strong, both in terms of a growing customer base as well as investment, with a significant number of large M&As. This in particular demonstrates confidence in the industry. 

The need to continually invest in compliance has been amply demonstrated with an increase in fines and regulatory settlements for firms whose AML or onboarding procedures have fallen short of requirements, a feature found worldwide and one which can be expected to grow as regulators make more frequent compliance assessments.

Overall, the industry should take some pride in its ability to ride out the ‘Covid storm’ but make sure that its messaging about safeguarding the consumer is delivered transparently and appropriately.

Where will IAGR’s focus be in 2022? Which priorities, goals and plans for next year could you anticipate?

IAGR is all about fostering co-operation, exchanging experience and building partnerships. In 2022 we are seeking to look beyond our traditional narrative and not only grow our membership, but more importantly, develop partnerships with third sector / non-profit organizations that share some of our regulatory objectives.

That could be in terms of technical standardization, providing research and assistance into problem gambling issues, or raising the profile of regulatory education. This will build on the existing successful partnership which we have developed with the International Gaming Standards Association over the past 12 to 18 months.

2022 will also – we hope – see a return to a fully ‘in person’ conference. In Boston, we successfully delivered our first hybrid conference, with local attendees and other delegates remoting in. That was challenging technically, but it also allowed us to record and save the content which is something that I expect IAGR to do more of.

Based on the feedback you receive from your members, what are your outlooks, expectations for 2022, and what do you think will be the new challenges for regulators, and the gambling industry in general? What will be the main issues driving the agenda?

It’s hard to consider anything at the moment without also thinking about the ongoing effect of the pandemic. While regulators have always been focused upon protecting customers and particularly the vulnerable, there is now a growing realization that regulators need to ensure that licensees put in place appropriate safeguards for their staff, in a health sense, and ensure that this is properly assessed as part of a company’s risk register.

Gambling also seems to be becoming more politicized in a number of jurisdictions. For this reason, the industry is going to face increased challenges in 2022, particularly in terms of restrictions on advertising and increased regulation to ensure that customers are properly assessed and monitored in terms of their gameplay. 

Regulators will also be under pressure from government to demonstrate that the industry is acting responsibly and some may face changes to their statutory base and responsibilities. In terms of legislative change, think of increased regulatory powers and sanctions. Greater levels of technical knowledge will be needed and regulatory bodies may find that this puts pressure on their bottom line, requiring additional funding from government or industry depending upon their financial model.

Having said all that, I still believe that 2022 offers a more positive outlook than the previous two years. Both industry and regulators have learned to adapt to the changing climate in terms of response to increased concerns over mental health, anti-money laundering and advertising. This should lead to a period of stability, so long as the measures put in place can be demonstrated to work effectively.