Compliance in Gaming Industry
With gaming regulatory authorities across Europe coming down heavily on the anti-money laundering failures of iGaming companies, it comes with no surprise that compliance is still high on the agenda within this sector, particularly due to the fact that iGaming companies have only recently been placed under the spectrum of AML regulations.
Nowadays, gaming regulators do not remain the sole authorities responsible for supervision of compliance but the iGaming industry is also answerable to a multitude of other government agencies, departments and regulatory bodies both locally and internationally. Moreover, compliance is not limited to anti-money laundering and funding of terrorism but extends to an array of other areas including data protection, responsible gaming and consumer protection.
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It is no doubt that in 2019 iGaming companies are still struggling to get a grip on this increase in compliance requirements with anti-money laundering measures extending their reach to the industry and the introduction of the General Data Protection Regulation both emerging in 2018.
Gaming operators are further pressured by the thought of being the next target in light of the latest development whereby Sweden’s gambling regulator decided to strip a gaming operator of its license only 6 months after having been granted with such and this without warning or chance to remedy their AML and responsible gaming deficiencies.
Internally, for iGaming companies ensuring compliance requires considerable investment, not just in terms of money but also of time and personnel. On the other end of the spectrum, non-compliance would likewise require a significant outflow of resources with fines issued by gaming regulators hitting the millions, not to mention the negative impact that the company’s reputation and brand name would have to endure particularly where a gaming operator’s license is revoked.
One of the main contributors to this struggle in ensuring compliance, like with many other areas, is the lack of harmonisation that exists on an international level. Although countries implement the same or similar foundations, significant differences can be seen between the laws and regulations of each country. Certainly, ensuring conformity with the regulations of the different countries in which one operates is a challenge and this puts ever increasing pressure on the industry.
Moreover, what operators need to understand is that compliance is an ongoing activity. It is definitely not a matter of one-size fits all or a tick-box exercise. Compliance needs to be tailor-made to address or mitigate the various risks faced by each individual company and continuously updated and fine-tuned to meet the ever-changing iGaming environment.
This is what operators are slowly coming to terms with : that policies and procedures must be wide enough to allow the operator to make an assessment of the circumstances before it and implement the appropriate measures demanded by those specific circumstances. The attention should be on finding effective, practical and appropriate measures which address these risks but which also complement the day-to-day activities of the company.
The concentration on compliance is evident from the increased call from iGaming companies for compliance-based roles over the last few months in an attempt to expand their internal compliance departments to keep up with such demand and pressure. The obstacle however proves to be the lack of skilled personnel in this field. The most practical solution at this stage would be seeking the external assistance of professionals with extensive knowledge and experience in this area.
Devoting resources to compliance should be seen as an investment in the company’s image and brand and on a bigger scale, promotes the iGaming sector and the reputation of the Maltese jurisdiction as Europe’s iGaming capital!
Although the iGaming industry’s commitment towards reaching the current high standards of AML compliance has been strong and there has been a visible movement from paper to practice, room for improvement still exists.
