The U.S. Internet Gambling market has learned from the experience of other industries that being both proactive and cooperative in regulating their industry is the fastest way to move forward. Leading regulators and industry participants agreed at the July 2014 Global iGaming Summit and Expo in San Francisco that the market is off to a strong start from a regulatory perspective, but also emphasized that greater harmonization will be imperative as more states pass legislation.
David Licht, executive chairman of the 888 joint venture All American Poker Network, which is live in New Jersey and will soon launch in Nevada, said he was “excited about the regulatory success to date.” Looking back, he said it took roughly 13 years for commercial casino gaming to expand beyond Nevada and New Jersey, but only three years for Internet gambling to spread to the three states where it is now on offer. “I think — and I’m as guilty as anyone with being impatient — I think people really need to take a step back and look at what we’ve accomplished and what’s ahead of us,” Licht said.
With more states expected to legalize Internet gambling in the near future, regulators and market participants said the need for greater regulatory harmonization between states is dire.
“From a technological standpoint, the prospect of developing 50 different platforms for 50 different states is not feasible,” 888 chief executive Brian Mattingley said. Mattingley said his company has already developed variants of its software for the international dot.com market; the United Kingdom, Italy and Spain in Europe; and now Delaware, Nevada and New Jersey. “I believe unless we can come up with some harmonization in the way that our software is patented, I can see us having a version for California, a version for Pennsylvania, a version for Wyoming, etc., and that’s something that from a software and technology point of view really is a very difficult set of circumstances to keep and maintain,” he said.
To minimize variance in compliance requirements, Ultimate Gaming chief Tobin Prior said states, with input from current market participants and regulators, should hash out uniform rules for issues including customer registration, geolocation, age and identity verification, problem gambling and payments. Rather than “recreate the wheel,” Mark Lipparelli, founder of Gioco Ventures and formerly chairman of the Nevada Gaming Control Board, said states considering Internet gambling legalization should use elements from existing U.S. regulatory regimes to form the bases of their own. “The bottom line is: I don’t see a justification for creating a whole new model of regulation for the next state to legalize,” Lipparelli said. “I think they can look to Nevada, they can look to New Jersey, they can look to Delaware and be comforted to know that we haven’t seen widespread scandal, we haven’t seen widespread failure,” he said.
Regulators in those states, consumed for the better part of a year with moving Internet gambling from legal concept to commercial reality, are now beginning to explore ways by which to bring their regimes into closer alignment. Toward that end, Nevada and Delaware in February became the first signatories to the Multi-State Internet Gaming Agreement. This is forward thinking, self-regulation management of standards and a lesson likely learned from seeing the experience around the globe of all businesses either develop responsible regulations or get ready to outside intervention by local governments committed to consumer protection and ensuring the health of financial systems.
Identity and age verification will continue to be one important element of online gaming. Uniformity of standards for verification, protection of minors, and other KYC protections will likely follow the path of other industries and mature over time. For now, businesses are benefiting from collaboration and working with companies like Trulioo to provide compliance processes in this emerging cross-state industry.