COMTRADE
The Standardised Way for Regulators Remote Audit
ComTrade’s Director of Gaming Ales Gornjec discusses remote auditing for the gaming industry
R
egulation in the gaming industry has always been a key part and played a vital role in providing control and traceability of all gaming operations. Regulation, regardless of origin,
applies for every single operator whether online or land based and who must comply with requirements of regulation authority.
For online gaming, which is the most
dynamic and fastest growing gaming sector, several regulatory gaming commissions have been set up under the Gambling Acts issued by the governments. Although many exist around the world, white listed European licensed jurisdictions such as UK and Malta provide a higher degree of trust over those that are based in the Caribbean.
More than trust, risk assessment is used for
tailoring regulations in order to meet their goals which in most cases include: keeping crime out of gambling, ensuring gambling is conducted fairly and openly, protecting minors and vulnerable people from being harmed or exploited by gambling and adequate taxation – a highly regulated environment.
One issue that has arisen is that every
European gaming commission has developed different, non-standard methodologies and procedures to regulate the online gaming operations in their countries. As many online operators cover multiple markets they have to comply with the local market jurisdiction for example, Italy and France. This requires additional time and cost in complying with local regulation and obtaining a license. At the same time this strains submission of information to each of the local commissions about gaming activities and players as each jurisdiction requires a different format of reports, information or even integration with the regulation authority. On top of that gaming taxations are different from country to country.
There are also a set of differences from the 38 SEPTEMBER 2011
The land based gaming operation supervision has a long standing history. Operators are usually obligated to submit a certain amount of periodic reports like end of month performance reports and bi-weekly cash flow reports. Some of the jurisdictions also require dozen of forms and others less.
In the past these reports were produced
based on hand reading of every electro- mechanical counter of each gaming machine. Gaming table operations and cash flow reports are based on counting performed by committees which are formed from staff and supervisors. In both cases a lot of manual work increases the possibility to make mistakes. With adding some advanced functionalities like progressives and bonusing, this situation becomes even worse.
Casino management systems were primarily
introduced to help operators, operate their venues and better track activity on the gaming floors. These systems also served as infrastructure for implementing several advanced functionalities such as Ticket in Ticket out and cashless. Once the operator has had all
Standardization in monitoring online gaming
operations across multiple gambling commissions would definitely ease the integration or the reporting process and data collection from the operator’s standpoint in order to increase transparency.
The same issues presented above apply to the land based gaming segment.
players perspective such as how they limit their online play. UK remote gambling and software standards require limits in the form of deposits, spend or lost limit for the periods no less than one day, Belgium commission introduced hourly lost limit for A+ and B+ licenses, while Maltese jurisdiction requests that players can limit wager or lost amount within a specific period of time, or limit the amount wagered in a single session.
relevant data inputted in to the information system, filing or rather preparing and printing reports was just a small step forward and a timely affair. Today it is hard to imagine casino floors without a Casino Management System in place although from time to time we still hear that such operations exist.
Regulators or supervisory agencies always performed onsite audits of gaming operations. It is not expected that this will ever cease. However, effectiveness of such audits depends on data quality they get from operators beforehand. When auditors see both performance and cash-flow reports, they may look for known patterns of discrepancies or known fraudulent cases. During on site visits auditors may focus on problematic areas such as gaming machine hopper fills, cashbox clearance counting’s and discrepancies between soft counts and table closings.
When there is no quality data available
before the audit takes place, the auditors approach is by verifying both the already known problematic areas and randomly selected gaming machines, table or two and all of cashiers to perform add-hoc verification of how business was conducted. These checks require a significant amount of time and prevent auditors from verifying all of gaming floor relevant stations. Such a semi random approach may also discover problems to late or fail to detect them at all.
This is where Central Monitoring comes into
play. In order to reduce possible errors and hand work with data-re-entry into supervisory systems, regulators or supervisory agencies already accept reports in electronic form. Some of them have gone even further by requiring operators to grant them limited access to data collected by Casino Management Systems. By having access to all of the performance and cash flow meters, together with cabinet events and money in/out transactions, extensive multi- level verifications may be performed optimally.
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