29 PUBLIC GAMING INTERNATIONAL • NOVEMBER/DECEMBER 2023 In the end, at the macro level, everyone wants a regulatory framework that applies standards, rules, and technical requirements that are consistent, enforceable, and clearly understood by everyone. Legislators, regulators, operators, suppliers, and the independent test laboratories need to all be on the same page. Fortunately, we do all have the same big-picture goal. The regulatory structure must support a gaming marketplace that serves the interests of a wide variety of stakeholders while protecting the consumer and the integrity of the marketplace. A diverse set of commercial enterprises, government agencies, and regulators must work harmoniously to ensure the games work according to specs and requirements, that responsible gaming controls are in place and adhered to, that taxes are collected correctly, and that everything gets done right. How has the proliferation and easy accessibility of gaming options affected the evolution of regulatory structures over the last few years? J. Bunevith: That is a massively complex question on many levels. For one thing, there is a wide variety of interest groups that include legislators, regulators, suppliers, industry groups like the American Gaming Association (AGA) and NASPL, EL, and WLA. One result of a sound regulatory framework is that instances of integrity violations or corruption are identified. Identifying the violations would be the first step towards enforcement of the laws and the reduction of violations. Proof that effective regulatory structures and enforcement mechanisms work better than the prohibition of gambling is evidenced by the fact that crimes are now being uncovered in ways that they were not under prohibition. Infractions are now more visible and are publicized, so everyone is more aware of it than ever before. Of course, regulations did not cause the problem any more than your “low oil” light caused the oil to be depleted in your car. Instead, the effective regulatory framework just brought the existing problem to light so it can be properly addressed and stopped. The AGA estimates that over $50 billion a year was being wagered on sports before it was legalized. That is a $50 billion illegal underground economy that was untaxed and unregulated. We may never know the extent of the integrity issues, money laundering, fraud, and corruption that riddled this underground economy of illegal betting. We can be sure, though, that the absence of regulatory oversight provided a very fertile environment for illegality of all kinds to flourish. If the public policy objectives include optimizing security and integrity of the games, protecting the consumer from fraud, minimizing money laundering, channeling economic benefit over to society instead of enriching criminals … then regulating games-of-chance, including iLottery, is always preferable to prohibition. What is the most important change in the games-of-chance industry over the last ten years? J. Bunevith: The biggest change that is happening is the transition from brick-andmortar to digital gaming. Whether it is buying a lottery ticket at a retail store or playing the slots or table-games in a casino, the players in the pre-digital era were anonymous, with no access to the tools and resources afforded today in the digitally connected world. Digital gaming starts with player registration. The resulting PAM (Player Account Management System) provides the platform for the player to manage their accounts and playing activity; enabling them to communicate with operators about what they want and do not want. Maybe they want to set play limits, maybe they want to receive promotional offers, or maybe they do not. It enables the operator to communicate with players and implement responsible gaming policies. How are responsible gaming measures even being applied in the anonymous play environment? Putting a tiny message with a phone number for a problem gambling hotline at the bottom of the lottery ticket or slot machine? Advertise “Responsible Gaming Month” or the annual campaign against gifting of lottery tickets at Christmas? How effective do you think these methods really are? The registered player is dialed into a communication system that powers a whole new level of effectiveness when it comes to responsible gaming strategies and methods. Digital gaming enables two-way communication with a registered player base that is the basis for the recreational gaming industry to grow in a healthy, productive, sustainable way. The broad scope of Digital Gaming in general, and the Player Account Management System in particular, constitute, in my opinion, the biggest delta between today and the previous era of anonymous betting. Digital Gaming enables a whole new relationship between operator and player that is the basis for long-term sustainable growth. The operator can now communicate on a whole new level with its players, delivering information about its products and promotions that enhance the value of its products, instructions on how and where the games are available to play, and whatever communication and informational features the player values. The players now enjoy a whole new level of support and guidance that helps them play responsibly so that they can enjoy recreational gaming long into the future. The operator now knows where the players are located, how old they are, how much and how often they bet, and what they want in terms of games, promotions, and kinds of communications and support services. GLI’s role is to ensure the systems all perform to regulator and operator specifications. Much of this new functionality will be driven by Artificial Intelligence. AI is powering an increase in speed that amplifies algorithmically driven computer capabilities exponentially. Tasks that have been done for years by marketers and operators are now being performed in a tiny fraction of the time it used to take. And that enables the application of a whole new level of data collection, organization, and analysis, which is transforming the industry. I would submit that we keep this whole notion of AI in proper perspective, though. It is not doing anything that was not done before. It just does it all so much faster and better that the impact is and will in fact be quite dramatic. Part of the GLI mission is to keep abreast of rapidly changing technology, like in PAM’s, to help its clients ensure proper security and operational integrity of these new systems, right? J. Bunevith: Yes. These new technologies are delivering incredible value to players and operators. We just talked about PAM’s which, as you point out, need to be tested to ensure they protect the confidentiality of private player information and transaction data, have effective registration and geolocation procedures, and otherwise work properly and meet players’ expectations and operators’ specs and regulators’ requirements. How does digital gaming differ across the different game categories? J. Bunevith: I’m sure there are differences. More interesting, though, is how the same Continued on page 50
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