With the recent rapid growth of the iGaming market, will naturally come the rapid growth of regulation of the iGaming market. As new territories open up, operators starting out or expanding into new territories have to anticipate a new set of rules, personalised to the jurisdiction and time. Keeping up with that can be difficult, which is why a lot of operators are turning to compliance management software.
Compliance management software is becoming very popular as a way to better manage compliance, by automating a lot of systems, lowering costs and staff burden. We’re breaking down the different regulations that iGaming operators need to think about, and how compliance management software can help you avoid fines and streamline your systems.
Introduction to Compliance in iGaming
With a growing demand for sports betting, online casinos and mobile iGaming, the industry has boomed. The expansion of legalised sports betting in the US since 2018 has been a land grab, which in turn has prompted new regulations and new operators to expand. All of it is happening very quickly, faces a challenge for operators as they try to keep up with changes in legislation. And if these expanding operators who are working with a patchwork of jurisdictions and demographics get it wrong, they could be facing fines, reputational damage and even the idea of their licence getting revoked.
The True Cost of Compliance Study (2020) by LexisNexis Risk Solutions said that operators spend $5.47 million annually on average for in their compliance efforts, but when compared to the fines for non-compliance can be up that can be up to ten times greater, it’s clearly the better choice.
Operators can use compliance management software like Mindway AI’s GameScanner and Gamalyze to monitor and profile players to give an overview of their player base to simplify and automate processes that will ensure compliance.
For example, GameScanner continuously monitors players’ activity while they are playing to spot problem gambling. When a player is verging into risky or problematic behaviours it will then alert the operator to allow them to intervene to stop problem gambling in its tracks.
Licensing Requirements
Operators’ first move when starting out should be ensuring they have the right licences to operate. However, when you are operating in various territories, with different governments and authorities, it’s hard to keep track of what you need.
You can look into compliance management software that’s designed to track licensing requirements across different jurisdictions. It can automate reminders for operators to process licence renewals and keep an eye on the constantly changing regulations and alert operators when they need to take action.
Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF)
Gambling companies are high on the list of having to adhere to anti-money laundering (AML) and counter-terrorism financing (CTF), which are departments of regulation that are taken very seriously. iGaming operators have to adhere to the regulations of massive systems such as the EU’s 5th AML Directive or the US Bank Secrecy Act.
Operators that don’t check the source of high-risk customers’ fund sources or financial stability, which contribute to problem gambling can cause a risk for AML/CTF.
Know Your Customer (KYC)
Know Your Customer regulations ensure that operators verify the identity of their players in order to avoid underage gambling, fraud, and money laundering. A lot of it can be automated with the right compliance management software.
This creates a more responsible gambling environment where compliance and the safety of the customer are central.
Responsible Gambling
Responsible gambling is another area of regulation that is most important to authorities and it’s a department of regulation that can benefit from compliance management software. By allowing software like Mindway AI’s GameScanner to consistently monitor players’ behaviour, problem gamblers will be flagged up faster, stopping problem gambling before it becomes a bigger issue.
Additionally, GameScanner creates reports of problem gambling, which operators can then use to prove that they are taking responsible gambling seriously to authorities and investors.
This will create a better iGaming landscape for customers, operators, and the industry overall. With more responsible gambling as a culture, customers will continue playing safely, allowing businesses and therefore the overall market to grow.
Conclusion
Compliance management software comes in a range of forms to help with a wide range of processes that can be automated, whether it’s keeping up with changing regulations or enacting on them. We imagine compliance is an area of the industry that in future will play a more and more dominant role as the industry grows and the technology to support it does too.
