REGULATION OF GAMBLING VS ADVANCEMENT IN TECHNOLOGY Presentation by: S MOGAPI North West Gambling Board

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INTRODUCTION

In light of the myriad of regulatory challenges posed by the increasing technological advancement in gambling, there have, in recent years, been numerous calls for the reform of gambling regulation to accommodate advancements in technology within the gambling sector. It is fair to state that the regulation of gambling is influenced by various factors which include technological innovativeness. Regulation mechanisms have however remained stagnant amidst this ever changing environment and has raised a number of challenges for the traditional method of regulating gambling and policy considerations.

Currently, gambling is regulated based on two broad models: a licensing regime where gambling providers operate under a rather strictly regulated framework and, a strictly controlled state or other monopolistic regime. The above models did not pose much of a problem prior to the advent of the introduction of technology in provision of gambling. However, as online gambling became more prevalent with the growth of the Internet, the traditional regulatory model has proved to be problematic in many ways.

HISTORICAL BACKGROUND

Gambling in various forms has been around throughout recorded history and has since the 1970’s started to evolve from a fringe activity into the mainstream which organised and attracted a lot of competitiveness from players in the sector. This brought along technological innovativeness from various sectors of gambling in order to outwit and outlast each other. It also quickly developed into a market driven which targeted a certain age group or consumer segment. With the advent of mobile gaming and improvements to hardware used in playing these games, gaming has become a viable form of entertainment for players from all backgrounds and ages.

The 1990s, saw some important advancements in the industry which introduced amongst others digitalised provision of gambling. The processing speeds and sophistication for computers also continued to develop and the size of hardware used reduced significantly to herald the advancement of electronic and mobile gaming. 2004 could be said to have been the defining moment in the evolution of gambling industry where a rapid change in digitalization of gambling occurred with the introduction of mobile and mobile connectivity.

Internet or online gambling Internet or online gambling systems includes a central system and gaming terminals which connect to the central system and may be operated locally over a LAN or span large geographical areas, even entire nations, over a WAN, such as the Internet. This type of system, centralize both game logic and random number generation.

Remote or mobile gambling It involves the playing games of chance or skill for money by using a remote device such as a tablet computer, smartphone or a mobile phone with a wireless Internet connection. It is a server supported system which includes a central system and gaming terminals which connect to the central system and may be operated locally over a LAN or span large geographical areas, even entire nations, over a WAN, such as the Internet however game terminal has to contain a Random Number Generator (RNG) and complete local copies of the games.

Online betting Smart phones have rendered previous technologies useless and have made mobile betting, rather than betting outlets, the new norm. Social, casual and mobile games, played on devices such as smartphones, tablets, or PCs and accessed through online social networks, have become extremely popular, and are changing the ways in which games are designed, understood, and played. These games have sparked a revolution as more people from a broader demographic than ever play games, shifting the stereotype of gaming away from that of hard-core, dedicated play to that of activities that fit into everyday life.

Technology is fast introducing various and alternative platforms of gambling with 6.8 million consumers regularly participating in online gambling of some sort at any given time. Despite this, many countries have in the past been reluctant to regulate online gambling, fearing that regulation will result in an increase in problem gambling or have a negative effect upon existing land-based operators. However, in reality, a lack of regulation or a general prohibition can be more dangerous than permitting and supervising gambling in the first place. Prohibition and/or out of date laws can result in illegal circuits and ultimately less control for the authorities

Competence/ Requisite skills Do we have necessary skills and/or competent personnel? Are relevant trainings easily accessible? Do we have adequate institutions offering the required trainings? Resources Do we have adequate budgets? Do we have relevant tools? Legislative requirements Is our legislation comprehensive enough to accommodate the current and future technological changes? The frequency or the time it takes to amend the legislation?

Technical Standards Are the current standards adequate to cover a wide range of technological aspects? The frequency and/or time it takes to review the technical standards? Risk Assessment and Mitigation Controls Do we have a consolidated gambling sector risk register? Do we risk assess own gambling environment?

CONCLUSION

Change is difficult, not changing is fatal

Our inability to evolve and embrace technology in the regulation of gambling could be catastrophic in the future. Failure to realize and introduce new roles in the evolving industry. Create a lack of regulatory certainty on new market structures. Lead to failure to improve operators agility. Lead to failure to understand gambling consumers wants and needs. Lead to failure to extract value from gambling activities and operations.

TECHNOLOGY IN REGULATION (EMBRACE OR REJECT)

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