The online world has brought with it unthinkable potential and opportunities, but it has also resulted in increased risks. In the gambling sector, these include financial crime, underage gambling, addiction, and dishonest advertising tactics. As a result, governments and the authorities have responded by laying down many rules that govern various aspects of the sector. Gambling operators are expected to comply, and this is called compliance. So what does compliance look like in the gambling sector? In his latest column for Yogonet, iGaming industry consultant Ron Mendelson dives deep into this topic.
Advertising Guidelines
Advertising is very important for online gambling operators, however, it can be complex. Every jurisdiction and licensee has different rules on if and how gambling can be advertised. For example, in some regions, it is strictly prohibited in all forms, whereas in others, it is allowed after a certain time. In most jurisdictions, it is not allowed to have advertising on sites or in places that children access or use themes that might be attractive to children.
There are rules about calling gambling entertainment or likening it to leisure activities. In most cases, companies cannot make claims or even suggest that players will win or that gambling could be a solution to money issues. Advertising rules are very strict and there are high penalties in most places for non-compliance. Therefore, we recommend sticking to the guidelines to make sure you are on the right side of the law and regulators.
AML/CTF
Anti-money laundering and counter-terrorism financing are the most integral part of compliance in 2022. This acronym refers to a set of policies and rules that are in place to ensure that no individual or company is used for cleaning the illicit proceeds of crime, or funding any kind of terrorism anywhere. These rules include strict internal policies, appointed individuals, and periodic audits. Companies are required to monitor all transactions and players, reporting suspicious activity to the authorities without tipping off the individual.
In addition, policies must be clearly displayed on the operators’ site so players are aware of the measures taken. Failure to comply with these rules can result in criminal proceedings, large fines, license revocation, and a lot of negative press. While AML can be costly and cumbersome to implement, it is essential for all online gambling operators to follow.
Fairness
Online casinos are required to ensure their games are fair for those that play them. In fact, this is regulated by most licensed operators. For example, operators might be required to have a random number generator (RRNG)or a provably fair algorithm. An RNG is a system used in land-based and online casinos and is what is used to decide which numbers appear while playing certain games. In roulette, blackjack, and slot machines, RNGs are used to ensure that numbers are chosen randomly, thus giving players a chance that fits within pre-defined parameters.
Most licensees will require that an independent third party audits the RNG and that the certificate is presented to them. Provably fair is a more modern way of ensuring games are fair. It analyses the fairness of a gambling site and its games and provides information to the player on every game and round. When using a provably fair system, it is essentially impossible for the operator to cheat. Often, the result is stored on the blockchain, meaning it is immutable and fully transparent.
Responsible Gaming
Responsible gambling is a set of different social responsibility initiatives laid down by the gambling industry and regulators. Some are just recommendations that operators pledge to abide by, while others are rules that require compliance. Typically, they include ensuring games are fair, as covered above, but they also include promoting awareness of potential harm caused by gambling, protecting players, and offering help.
For example, depending on the jurisdiction, gambling sites may need to include phone numbers and details of gambling addiction help centers, as well as on-site FAQs and resources. Typically, they are also required to provide the option for self-exclusion, something that can be temporary or permanent. This is where players can opt to exclude themselves from a site or group of sites either for a short period of time or forever.
Responsible gambling can also include not allowing those under 18 or 21 (depending on the jurisdiction) to use their services. This all ties into ethical marketing, site safety, customer satisfaction, combatting addition, and ensuring prompt and fair payouts of winnings.
Wager limits
In some jurisdictions, there are caps in place on how much players can wager on each turn. Perhaps they are limited on how much they put down on a bet or even on a spin. They could also find they are defined in terms of deposits when topping up their account. There can also be limits placed on operators in terms of what incentives they can offer to players, including bonuses, deposit matches, and free spins.
All of these factors are decided by the competent licensing authorities and must be stuck to. It is also worth noting that some jurisdictions have put in place measures that are temporary, such as following the COVID-19 pandemic or similar. Always make sure you are aware of any permanent or short-term caps when you open your gambling company.
For a quarter of a century, Fast Offshore has worked with the iGaming sector. During that time, we have worked closely with compliance in all areas, following all developments. We are experienced in all matters relating to licensing, AML/CTF, payments, rules and regulations, and other regulatory matters. In addition, we can assist with company incorporation, opening bank accounts, and all ongoing maintenance. To work with the best team around and launch your business today, talk to a member of our staff here.
Original article: https://www.yogonet.com/international/news/2023/01/04/65581-what-does-compliance-in-the-gambling-sector-look-like
