Compliance is one of those unsexy yet critical subjects for the online gambling industry, especially when it comes to age verification and Anti-Money Laundering (AML) obligations. In fact, there is an entire conference dedicated to responsible gaming and compliance, Clarion’s upcoming WrB London on September 8th.
The reason why I decided to focus on compliance for this week’s edition of Becky’s Affiliated is because my friend Ben Jordan noticed the CalvinAyre.com “Elevator Pitch” video series and pointed out how start-ups can save money by using a third party supplier to remain compliant. Seeing how we at CalvinAyre.com like to foster start-ups in any way we can, such as connecting them with investors, I thought some advice on how to remain compliant for less money would be helpful.
Jordan is an expert in risk management for both the financial and online gambling industries, with a rich history working in fraud detection and risk management for PokerStars, SportingBet and now serving as the European Business Director for the integrity division of Aristotle. He believes there is an enormous cost-saving opportunity for start-ups in outsourcing compliance.
“For start-ups in particular compliance can be very costly, but it doesn’t have to be. Outsourcing all or part of your compliance process or functions to somebody such as Aristotle that have years and years of global compliance experience offers huge operational savings”, he shared.
According to Jordan, companies outsourcing compliance will be able to skip hiring full-time employees dedicated to maintaining routine dialogues with all the regulatory bodies and keeping on top of compliance development. Leave this to the supplier instead, he advised.
“[Outsourcing compliance] not only provides business owners and shareholders with peace of mind, but it means you can boast apex level compliance at a fraction of the cost”, Jordan explained.
Another benefit of remaining compliant as an operator is enhanced customer trust and as a result, increased revenues.
“Done right, a robust compliance framework can foster trust and actually increase revenue from a number of different levels. Players feel safer, they’re less concerned about holding a higher balance which in turn decreases payment processing costs, because if they’re happy that their money is safe with you, they’re not going to be constantly depositing and cashing out, so they’re happy to hold that balance with you”, explained Jordan.
The iGaming industry has matured since the early 2000s and customers have grown to accept the age verification and AML practices operators are required to take in order to provide a safe environment for everyone. Now that we’re out of the industry’s Wild Wild West days, operators should not be concerned about disrupting the user experience by remaining compliant.
“A compliant system shouldn’t impede business, it should be leveraged to support best practice risk management. This isn’t the early days where all of a sudden you ask for a copy of a passport, their driving license and they think the operator is trying to rob them. Players are fully aware that this has to be done now”, explained Jordan.
He added, “The difference is that you’ve got multiple different routes and multiple different channels to do this be it via mobile, webcam, email. I think they key thing is having multiple ways to get that customer verified as quickly as possible. So I would say that optimizing the different channels by device – tablets or phone or desktop- is the best thing. Players know they have to do it, just make it as easy for them as possible.
Arriving early next year, European operators will have to comply with the 4th EU AML Directive obligations, although Jordan claims if operators are already compliant with the 3rd AML Directive, the impact should be miniscule.
Something to note is cryptocurrencies have been added to the 4th EU AML, which brings up an interesting point…how will the rise in the use of crypto-currencies such as Bitcoin impact age verification and AML regulations, especially considering anonymity is a perk for some Bitcoin users? Since Bitcoin is so secure and no central banks are involved, would casinos using just Bitcoin even need regulation?
Maybe, just maybe compliance is on its way to becoming a sexier subject than we originally thought.