Compliant, but for how long?

For more than a decade now, jurisdiction after jurisdiction has introduced new regulatory frameworks for online gambling. The successes of early adopters to this approach – including Denmark and the UK – have encouraged countries, states and provinces the world over to follow their lead in search of building a safe and sustainable industry.

For gaming companies searching out growth opportunities in newly regulated markets, this adds a level of complexity that simply didn’t exist during the days when a Malta licence opened the door to a large proportion of the global market.

Each regulation contains something new, a different requirement that can make your technology outdated or more difficult to maintain. And it’s not just new markets that present a challenge. With the industry under greater scrutiny in well-established and already licensed jurisdictions, the regulatory landscape has never been more fluid.

Understanding change management

Aside from the complexity of the requirements to implement at product level, an increasing number of regulations have included requirements for how to manage changes to products. Failure to correctly build your change management framework or rationally set up your architecture could lead to restrictions on changing key parts of your platform or high costs of maintenance.

In an ever-changing competitive environment, this is clearly a major hindrance. When running an online gambling business, the key factor of advantage is being able to improve and enhance your technology as often as you need. If you are either restricted from doing so, or face a huge cost every time you wish to make such a change, your product risks becoming obsolete. The days when a great piece of technology could prosper for a decade or more are long gone. Constant evolution is now the name of the game.

With more sophisticated platforms enabling new features to be built, it is critical to acquire a deep understanding on the building process, infrastructure and architecture. Remember, simply obtaining a certification does not in any way guarantee that the platform is built in such a way to efficiently support future operations in light of unpredictable changes.

Nor does it ensure that a new certification won’t be needed in the future. Think of certification as a photograph of your platform at a moment in time. The green light you receive is often only valid if you leave the platform in that exact state. As you build out your product and the platform evolves, you risk triggering a recertification, or worse, becoming non-compliant.

It is important to have a change management process in place, which should create a framework for when changes are to be reported or certified. But this does not account for the impact of releasing a feature late or the cost of recertifying your platform.

A new approach to market entries

In the last few years, we have seen both player account management and gaming platforms entering regulated markets without really considering these issues. It’s no exaggeration to say that in many cases, the results have been disastrous. We’ve seen high recertification costs and slow, often delayed releases of key features. Costs have increased while products have failed to keep pace. It’s a dangerous combination for any business.

I’d argue that this stark reality is particularly evident in the US, where a combination of emerging technologies (such as the use of the cloud) combined with the differing individual requirements of each state has created some real headaches.

Understanding how to correctly set up the architecture of your critical components is paramount. Seeking innovative solutions that not only comply with the law but also make sense from a tech and business point of view has never been more important.

Technology governance and technical implementation are key for the success of a B2B supplier. It is an edge companies already investing in these innovative implementations will have against those simply following the pack and hoping for the best. Working with experts to transform these challenges into opportunities is how the most forward-thinking businesses are now approaching things.

Because the convergence of compliance, technology and governance isn’t just inevitable, it’s already well underway.

Antonio Zanghi is an online gambling compliance expert with years of experience in the field. He has previously worked at IGT where he was involved with both regulatory and technical compliance, successfully managing compliance in Canada and Europe. He now runs ComplianceOne Group, a full-service compliance consulting firm supporting online gambling businesses.