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The Massachusetts Gaming Commission hosted a day-long forum on Internet gambling at the Boston Convention and Exhibition Center last week.
The forum consisted of five panel discussions, with noted speakers representing virtually every corner of the iGaming industry as well as regulators from all over North America.
Below are the highlights from the third panel at the forum.
This article covers the third of five panels. Coverage of panels number one and two can be found here.
Panel number 3 focused on the perceived risks of online gambling and the vulnerabilities of the sites from geolocation and player verification to how they could potentially be used for such things as money laundering.
The panel consisted of:
Richards was up first and used most of his time discussing money laundering and why money launderers were extremely unlikely to use licensed online gaming sites to accomplish their aims.
Richards also touched upon some measures that could be put in place to help ensure underage gamblers could not gain access to online gaming sites.
Perhaps the most poignant part of Richard’s presentation was his infographic showing recent fines for money laundering imposed on banks — implying that even when money laundering is a potential risk, it doesn’t mean we should shut the entire industry down.
Richards also took a swipe at Sheldon Adelson, citing the recent money laundering settlement [paraphrasing] “that one land-based casino recently paid.”
The comment almost certainly refers to the $47 million settlement paid by Adelson’s Las Vegas Sands Corp. to resolve a money laundering case.
Richards also did an excellent job of explaining why money laundering would be far more prevalent in unregulated markets, noting the following typical qualities of unlicensed sites:
When it came time to talk about thwarting underage gamblers who may have gotten a hold of their parents’ credit card (a common refrain from anti-online gaming advocates), Richards offered a fairly ingenious solution, positing that knowledge-based questions like those used by credit reporting agencies are the answer.
As Richards explained, by asking questions that a child was unlikely to know even about their parent (what bank is your mortgage through, what street did you live on in 1986, what model car did you drive in 1981, etc.), what is already a periphery issue could be even further reduced.
Our first sobering speaker of the day was Mark Vander Linden of the MGC.
Vander Linden started his presentation by going over some of the conflicting data concerning links between problem gambling and Internet gambling, which in some cases shows a rise in problem gambling when Internet gambling is introduced while in other studies no discernible difference is detected.
Perhaps the most interesting facts relayed by Vander Linden related to a study of people who entered into a problem gambling treatment program, of which only 4% had gambled online in the previous 30 days.
Additionally, only 17% called Internet gambling the “primary vehicle” which led Vander Linden to conclude that in most cases, online gambling is an “add-on” to other forms of gambling the person is already engaged in.
Vander Linden also made the often-overlooked point that Internet gambling can lead to the establishment of safeguards that don’t currently exist in brick and mortar casinos or any other gambling establishment.
The third speaker was also expected to throw some cold water on the whole “let’s legalize online gambling” movement, but like his predecessor, Keith Whyte was more measured than I expected him to be.
Most of Whyte’s presentation was focused on social gaming (specifically social gaming casinos) and how the unregulated industry is attracting kids as young as 13 (legally).
It is also creating an environment where players must play every day to maintain their ranking and get their bonus chips.
Overall Whyte provided a fascinating look at social gaming and how it is monetized, but a bit off-topic to legalizing real money online gaming.
On that front Whyte was far more sympathetic, explaining how there are already multiple ways to gamble online, from horse-racing to fantasy sports to clearinghouse sweepstakes, which Whyte claimed used gambling-like behaviors and triggers.
The most likely opponent of expanded gambling finished his presentation by saying, “You can’t eliminate Internet gambling risk but you can minimize it.”
Panel 3 wrapped up with Lindsey Kininmouth (a copy/paste name if I ever saw one) from GeoComply.
Kininmouth’s presentation was fascinating, and despite occurring right before the lunch break and running over in time, she was still peppered with more questions than any of the panelists up to that point.
If you couldn’t guess, her presentation was on geolocation and she explained the following aspects of the process:
Among the interesting facts she divulged were:
Tim Richards stated that Global Cash Access can be audited up to 50 times in a single year.
According to an Iowa study, 5% of adults have gambled online, but that number is reduced to 2% if narrowed down to just the past 30 days. This is an interesting figure that gives us some rough estimates when it comes to market saturation.
Social gaming sites tweak their algorithms depending on whether you are winning or losing. Social gaming is soooo rigged!
Google and YouTube have videos about spoofing.
IP address can be spoofed very easily which is why geolocation checks will fail if you are running a proxy, VPN, or remote desktop software, even if they are for legitimate reasons.
This was a very educational panel, and offered a lot of good takeaways for both the casual online player and even an iGaming aficionado like myself.
Generally speaking, even longtime opponents of gambling expansion see regulated markets as a way to curtail problem gambling, not as a means to exacerbate it.
Tim Richards also made the case that money laundering is not only a bogeyman issue, but would be far more detectable in a regulated market.
Geolocation and player verification are not foolproof but they are not easily thwarted, either.
More research needs to be done on problem gambling and Internet gambling to see if there are any links that could help us do a better job of identifying problem gamblers.