U.S. Regulators Stressed By Relentless Surge Of Technology

September 26, 2022
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Staying on top of advances in online gaming while also maintaining vigilant oversight of brick-and-mortar casinos is pushing U.S. gambling regulators to the brink.

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Staying on top of advances in online gaming while also maintaining vigilant oversight of brick-and-mortar casinos is pushing U.S. gambling regulators to the brink.

Regulators are “just trying to keep pace with ever-evolving technology while not losing anything (in regulating other gambling sectors),” said Stephen Cook, chief counsel of the Pennsylvania Gaming Control Board (PGCB).

“You know, we still have blackjack in bricks-and-mortar casinos that we have to regulate while we’re dealing with high-level IT,” Cook said during a September 23 panel discussion at the East Coast Gaming Congress in Atlantic City.

Pennsylvania still has roughly the same number of gambling regulatory officials as it did in 2019 when the Keystone State became the fourth to launch internet gaming, according to Cook.

“We’re getting stressed in terms of what we can do and how quickly we can react to some of these things,” he said.

June E. Taylor, chair of the Ohio Casino Control Commission (OCCC), said vendors and other online betting professionals who interact with her agency “are really testy these days” as they seek to enter Ohio’s sports-betting market, which is due to launch on January 1, 2023.

“I know that our team in Ohio … is putting an inordinate number of hours in trying to help these vendors and everyone get through the process,” said Taylor, who joined the OCCC in 2011 and became chair in 2019.

Cook and Taylor emphasized the importance of hiring top-notch IT professionals as technology plays an increasingly vital role in gambling’s digital era.

So far, Cook said he has been heartened by the lack of pushback from the gambling industry regarding the cost of hiring technology specialists.

“I think it’s money well spent for everybody,” he said.

Independent testing labs such as GLI and BMM have been particularly helpful to Maryland as it prepares to enter the online sports-betting market, according to John Martin, executive director of the Maryland Lottery & Gaming Control Agency.

“They’re very well versed in technology,” Martin said. “They are able to make us aware of things coming down the line so that we can look at any potential roadblocks.”

Regulators seem to agree vendors and other online gaming applicants would be wise to follow the adage, “You never get a second chance to make a first impression,” when seeking approval of a new product from regulators.

“That first contact — I can’t overstate how crucially important it is, and if it doesn’t go well and leaves a lot of questions unanswered, it delays the process,” Cook, the Pennsylvania regulator, said.

Too often, applicants proposing a new gambling product make the mistake of turning their presentation into a sales pitch.

“Come in and lay all your cards on the table,” Cook said.

“Tell us the upside; tell us the downside. Tell us how it fits in the statute, the regulations. Is it fantasy football or fantasy sports or is it sports wagering? ... Let’s have that discussion early on.”

Another bane of regulators is Zoom appointments, which often turn into endurance tests when an applicant schedules too many in one day with various regulatory agencies.

“They jam like six of them in one day, and it’s one of them after the other … and by the end of the day, those people [applicants] are exhausted, and you can tell they’re exhausted, and they’re not doing a good job, and they’re not answering the questions,” Cook said.

Instead, Cook suggested, gambling vendors and other applicants should schedule only one Zoom meeting per day and “get a good night’s sleep” before the appointment.

Cyrus Pitre, chief counsel of the PGCB, moderated the panel and encouraged gambling operators to reach out to regulators and make them aware of problems.

For example, one complaint persuaded Pennsylvania regulators to create an interim authorization process to accelerate operations for gambling suppliers and manufacturers.

“We didn’t know it was a problem until the industry approached us,” Pitre said.

David Rebuck, director of the New Jersey Division of Gaming Enforcement, noted the absence on the East Coast Gaming Congress panel of Cathy Judd-Stein, the chair of the Massachusetts Gaming Commission.

Judd-Stein was scheduled to appear but was forced to cancel ostensibly because of her work on new sports-betting regulations in Massachusetts.

Rebuck cited Judd-Stein’s absence as another example of the growing workload on gambling regulators.

Nevertheless, the gaming industry should embrace technology and regulations can be changed to adapt to innovation, Rebuck said.

Regulators can be adversaries, “but that is not our first reaction to issues that come to us,” Rebuck said.

“We’re not going to chop your head off.”

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