14 May 2008
In times past the online gambling industry was, often justifiably, described as the Wild West of the Internet with too many untraceable, unregulated and unscrupulous website owners appearing and disappearing, sometimes splattering the real businesses in the industry with the mud of their passing.
Thankfully, the bulk of this multitude of miscreants has fallen victim to tighter business conditions and the evolution of gaming firms with more cogent and better funded business models; there are undoubtedly still integrity-challenged operators out there, but the numbers have substantially declined.
Increased emphasis on operator professionalism verified by qualified and independent third parties will add to the pressure on these remaining down-market operations going forward.
In common with other player protection and regulatory codes, eCOGRA has experienced a marked increase in the demand for respectable online gambling certification and assurance from Internet gambling firms prepared to commit to genuine standards of integrity, fair gaming and business efficiency.
I believe there are several reasons for this trend:
A real desire to better serve the customer and increase business potential;
The increased competitiveness of the European and Asian market sectors following the significant loss of US business in the wake of the Unlawful Internet Gambling Enforcement Act;
The advent this year of a practical national regulatory regime in the United Kingdom, and the impact that policies like advertising white lists have had on the industry as a whole;
The growing savvy of the international player community and its ability to communicate with new players shortly after they have entered the market;
The gradual erosion of old European national betting monopolies thanks to the fair and equitable free trade policies of the European Union, opening up opportunities for well managed Internet gaming businesses;
Growing numbers of successful and now well established gaming and software companies that want to distinguish themselves as tier one operations and are prepared to make the investment necessary to do so, and;
More intense media coverage of the industry, especially in relation to responsible gambling issues.
The independent directors at eCOGRA anticipated this increased demand for meaningful accreditation and in recent years we have been building both expertise and capacity. This is backed by five years of inspection, monitoring and dispute resolution empirical knowledge, where necessary bolstered by commissioned external expertise in responsible gambling and other critical elements in the standards mix.
In recent weeks eCOGRA’s early adoption of the principles of outcome-based testing were vindicated when the UK Gambling Commission recognised the validity of this method, finally putting to rest the traditional source code vs. outcome-based testing debate.
Our own systems monitor every single live transaction constantly at accredited operations and therefore go further than the Gambling Commission’s requirements, but it is encouraging to know that the route we have followed is accepted as a valid method to test compliance within the excellent operating standards framework that has now evolved in Britain.
The eCOGRA system is being applied at 118 eCOGRA accredited online casinos and poker rooms, all of which have been rigorously examined before being awarded the ‘Safe and Fair’ seal denoting their commitment. Judging by current work-in-progress and new applicants those numbers will soon rise significantly.
In addition to the outcome-based testing, both eCOGRA and the Commission require verification that the development, implementation and maintenance of the gambling software is representative of best practice standards – checking out the software in other words.
Responsibility for outcome-based testing at eCOGRA lies with a dedicated professional team that operates the organisation’s Total Gaming Transaction Review and the analysis and ongoing monitoring elements that support it. The team’s work is subject to regular review by auditors KPMG in London, and our website carries a full and transparent explanation of the process.
In response to demand, at the end of July this year we opened up our professional services to online gaming and betting operators that do not necessarily use the software of eCOGRA member software providers, provided the necessary testing access was given.
There is no reduction in inspection and monitoring levels, or the standards required to satisfy our independent directors before an organisation is certified. However, the policy now opens up our services to a wider range of online gambling operators who want to achieve third party verification that the players are protected, the games are fair, and responsible practices are implemented.
Under this new initiative, eCOGRA recently partnered with the European Gambling and Betting Association (EGBA) in an agreement whereby EGBA members are professionally reviewed for compliance with agreed and consistently applied standards. These are in line with best-practice standards adopted by leading licensing jurisdictions, and give full confidence that the standards match or exceed appropriate European state monopolies’ requirements such as those drawn up by the European Lotteries Association.
These developments, and the parallel activities of tier-one jurisdictions like Alderney, Malta, the Isle of Man, Gibraltar and Kahnawake will inevitably have an increasingly positive impact in a far more competitive industry of the future, making it essential that companies measure up to the highest standards of player care and business integrity in order to succeed.
That has to be good for the player, and augers well for a maturing and more responsible industry.
About eCOGRA eCOGRA sets online gambling standards and provides an international framework for best operational and player protection practice requirements. These are enforced through inspections and reviews, and continuous monitoring. Companies that have achieved accreditation with eCOGRA are entitled to bear the organisation’s “Safe and Fair” seal, indicating to players everywhere that all operational systems and games are continuously monitored to consistently high standards. eCOGRA’s independent directors determine which operators qualify for the seal. These directors are Bill Galston, OBE, retired Chief Inspector for the Gaming Board of Great Britain; Bill Henbrey, former head of gaming services at leading international accounting firm BDO; Frank Catania, former Assistant Attorney General and Director of New Jersey Division of Gaming Enforcement; as well as Michael Hirst, OBE, a former board member of Ladbroke Group Plc, and formerly Chairman and CEO of Hilton International.