Nov
29
2012

US online gaming reaches point of no return

Despite recent coverage of the US elections virtually eclipsing the issue of online gaming, moves towards it were quietly progressing behind the scenes.

Nevada, closely followed by Delaware, have now approved the nation’s first interactive gambling licenses, while in August the Federal District Court for the Eastern District of New York determined that Hold ‘em Poker was not actually ‘gambling’, instead ruling it a game of skill and expertise.

All three moves are clearing the way for online gaming across the US, albeit within state lines. They also fly in the face of a strict long-standing federal ban imposed by the UIGEA.

Opponents of the UIGEA have argued that the act has simply failed to tackle the dangers of online gambling and pushed it off-shore where it largely went beyond the reach of regulators.

It’s also clear that many determined US gamers have continued to gamble online. Despite the concerns of some at consumer abuse, underage gambling, problem gambling, or money laundering, it is now believed that regulation of online gambling is a far better alternative.

Given Nevada and Delaware’s position on online gaming, the next 12 months are likely to become a tipping point for internet gambling.

From here on Congress will be under even more pressure to act – even if it’s just the very beginnings of drafting what will become very comprehensive legislation.
It’s how the US regulates that is the critical challenge.

The US has an opportunity to duplicate Europe’s success with online gambling, while creating a cost-effective revenue stream that satisfies the regulators’ strict compliance demands.

Regulators have already insisted that interactive gaming systems must be robust enough to be able to weed out both underage and out-of-state players.

But given the internet’s global reach, it’s inevitable that the games will be available to people outside of Nevada or Delaware’s boundaries, therefore imposing technology that imposers regional restrictions on gamers is vital.

In many respects the US is already in a very good place. It’s clearly going to be an intelligent, mature market place with access to a wealth of expertise, broader experience and knowhow built from a groundswell of home-grown talent that has developed skills overseas and largely in Europe.

Regulators will also be carefully looking at how the industry operates elsewhere to ensure the model the US eventually adopts reflects the very best practice and most effective technology.

The likelihood is that licensed US online gaming operators will be under a fair degree of scrutiny from the outset with strict deposit or wager limits imposed along with a sizeable, regularly updated exclusion lists of individuals barred from using licensed sites.

It’s not how to prevent online gaming, because clearly like it or not, it’s now a well-established, multi-billion dollar global industry. The issue is how US gamers’ are protected by a transparent, effective regulatory structure that is underpinned by the very best of breed authentication, verification and anti-fraud technology – which is already in widespread elsewhere.

The precise details are still being worked out by the pro-gaming states. But the likelihood is that they will follow the most effective European models, where brand and reputation are also critical drivers in ensuring companies win, retain and safeguard their customers.

Many already go to great lengths to ensure they strictly adhere to gaming legislation by verifying customers’ identities, shutting out fraudsters and under-18s.

So-called ‘friction’ is also key with businesses acutely aware that customer sign-up technology hinges on the speed of validation underpinned by identity authentication platforms that consistently perform in a slick and seamless manner in an extremely busy and competitive online environment.

The principal tool set any online gaming business has to include are a slew of well-established, fast and adaptable electronic platforms that includes the validation and regional allocation solutions to ensure participants are who they say they are and are where they say they are. At the same time, the companies have to be absolutely confident they can maintain full compliance because they will be under close scrutiny from regulators – right from the outset.

As gaming goes online it is clear that the regulators will require the same level of due diligence as they have for off-line gaming. Although ironically, it could also be argued that this challenge now carries even more weight in the US than it does in Europe, given that historically American casinos are often far more willing to extend very sizeable credit lines to players.

It puts Experian, which recently snapped up UK-based gaming-centric company 192business, in a good position to provide gaming companies with flexible and adaptable systems thanks to its fully proven technology and the vast wealth of its datasets. They hinge on extremely reliable and robust authentication, credit information and knowledge-based validation technology that already have a proven track record across the globe.

The stakes are high, but there are also enormous opportunities for all.

 

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