Promoted feature: Surveillance in the gaming industry

EGR Intel talks to Tony Sio of Nasdaq about how its technologies monitor the markets and keep them fair and safe as well as the challenges facing the gambling sector

EGR Intel (EGR): Why did you turn your focus to market abuse within the gaming industry?

Tony Sio (TS): A lot of people think of Nasdaq as the stock exchange. But really, that is just one part of what we do, having also become one of the dominant financial technology providers out there. We provide our technology to exchanges, regulators, brokers and banks all around the world. One of our most successful lines of business has been in our provision of market and trade surveillance. The solutions aid in monitoring the markets and keeping them fair and safe.

One thing that’s unique for us compared with others is that we provide the regulating entities, the operators and the participants with different solutions for each of those players. And it so happens that the gaming industry has many parallels with that of finance. The gaming industry and its trends today look similar to where the financial markets were about 20 years ago, so we view gaming as an industry well placed to utilise Nasdaq as a surveillance partner.

EGR: What factors are challenging in the gaming space?

TS: With the greater diversity of venues and providers, increased electronification, proliferation of products, new forms of and more continuous forms of betting, these create a huge challenge from a surveillance perspective. When this happened in financial markets, we were forced to develop more advanced approaches to monitoring the markets. Separately, we acquired a company called Longitude, which performs pari-mutuel calculation for pool betting. In our talks with Longitude, it became clear that there was an opportunity to apply our surveillance technology to this space.

We take all of the information we can get around betting – whether that’s prices, odds or actual bets – and we take all of this information, which a bank or exchange may have, and feed that into an advanced detection system. We look to see if we can detect patterns from a criminal, abusive behaviour standpoint within a large data perspective, and we continue to evolve the technology over time. For example, we recently started using AI to monitor activity in the Nasdaq US stock market.

We look at the full life cycle of an investigation, starting by pulling in all of the data and applying advanced detection processes against it. Once identified, we have case management tools. Then we provide investigation tools, a lot of which are about building out visualisations to help an analyst quickly identify anomalies of relationships.

We started in stock markets, then moved to the bonds and derivatives. But since then, we’ve applied our techniques to the likes of physical electricity and other industries outside of capital markets. All physical electricity trading flows in Europe currently go through our system. For example, we are looking for an Enron type of situation and trying to prevent that in Europe.

This isn’t the first time we’ve worked to adapt the system to other industries, and I think we take a humble approach when we make that change. We bring a lot of experience in the challenges that the gaming industry will be facing, because we have faced them ourselves, but it’s important that we listen and work with the relevant experts when we get involved in a new space.

Visit Nasdaq’s website to learn more about Nasdaq’s technology in the sports and gaming industry.

Tony Sio is the head of marketplace regulatory technology at Nasdaq. This includes responsibility for the Nasdaq Market Surveillance solution, which is used globally by 50-plus marketplaces and 18 regulators. His team uses the latest technology to provide surveillance solutions for all tradeable products in the world’s largest markets. Sio brings extensive experience implementing or advising upon financial technology and surveillance practices at exchanges and regulators across the US, Europe, the Middle East, Asia Pacific and Africa.