Online Gaming Regulation Amidst the Ever-Changing Technological Environment Devon Dalbock General Manager GLI Africa

A Short History of Gambling Evidence of gambling dates back 2300BC The Romans wrote about gambling A loaded dice was found in the ruins of Pompei dating back to 79AD The Kings of Norway & Sweden rolled a dice to determine how territory should be divided Blackjack, Poker & Roulette developed in the 18th century First slot machine developed in late 1800’s On-line gambling starts in the Caribbean in 1994

Betting in Africa According to a recently concluded study, 60 million Nigerians between the ages of 18 - 40 are active sports bettors. They spend an average of 3000 Naira or $15 per day on sports bets. South African government statistics show that over 50 percent of South African adults place sports bets on a regular basis. According to a 2014 PWC report, the betting markets of Nigeria, Kenya, and South Africa will be worth $37 billion by 2018. Gambian government to overturn the 2 year ban on gambling.

Reasons for the Rise of Sports Betting in Africa High population of unemployed youth 200 Million people between the ages of 15 & 24 25% Unemployment African people love Sport Lack of adequate regulation Rising popularity of Mobile Gaming Mobile Payment Systems M-Pesa, tcash, Airtel Money, etc.

On-Line Gambling Market Growth

Regulation and the Future… 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. Prohibition and/or out of date laws can result in illegal circuits and ultimately less control for the authorities

Six Pillars of iGaming Regulation

Preventing Underage Gambling Make it a criminal offense to allow persons under the desired age to participate in internet or mobile wagering Conduct age verification checks at account opening stage Birth date ID / Social Security Number Suspend account if age not verified, and request further information Drivers license Credit Card statements

Geolocation Accurately verify a player’s location Cell Phone triangulation Wi-Fi triangulation IP Address Internet Service Providers Block Payment Systems

Network Security Security is listed as the No. 1 concern for CIOs in almost all IT survey’s 2 billion records compromised in the last year 8350% increase in Ransomware usage The average data breach costs $4 million, according to a 2016 IBM survey Annual ISS Audits & Penetration Testing

How a Fish Tank Helped Hack a Casino Fish tank connected to the WiFi Accessed the network through the fish tank 10Gb of data sent to a remote server in Finland

Player Protection Player Funds Bank Guarantee Trust Fund Client Account 7 Day Waiting Period on Limit Increases Include a clock in game software Ongoing Reviews Advertising & Marketing Policies

Game Fairness Independent Testing Source Code Review & Comparison Software Functionality RNG Testing Math Analysis Emulation Event Handling Metering & Reporting Jurisdictional Requirements

Payment Processing Deposit & Withdrawal Limits Verification Procedures Processing Time-frames Pending Withdrawals vs Manual Flushing

Questions for Regulators Competence / Requisite skills Do we have necessary skills and/or competent personnel? Is the relevant training easily accessible? 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 time it takes to review the technical standards?

How can GLI help Regulators? GLI University Training Regulatory Framework Technical Standards Jurisdiction Comparison Regulatory Workshops Compliance Assistance Regulatory Briefings Advisory Role On site Inspections Forensic Evaluations

GLI Standards GLI 11 Gaming Devices in Casinos GLI 12 Progressive Gaming Devices in Casinos GLI 13 Online Monitoring & Control Systems GLI 14 Finite Scratch Ticket & Pull-tab Systems GLI 15 Electronic Bingo & Keno Systems GLI 16 Cashless Systems in Casinos GLI 17 Bonusing Systems in Casinos GLI 18 Promotional Systems in Casinos GLI 19 iGaming Testing GLI 20 Redemption Kiosks GLI 21 Client-server Systems GLI 23 Video Lottery Terminals GLI 24 Electronic Table Game Systems GLI 25 Dealer-controlled Electronic Table Games GLI 26 Wireless Gaming Systems GLI 27 Network Security Best Practices GLI 28 Player User Interface Systems GLI 29 Card Shufflers and Dealer Shoes GLI 31 Electronic Raffle Systems GLI 33 Event Wagering

GLI Services Certification testing and auditing services Specialize in geolocation and Know-Your-Customer (KYC) controls/audits to satisfy the needs of payment processors and/or regulators Network security testing services Internal and external infrastructure testing ISMS audits ISO 27001 audits Vulnerability testing

General Manager – GLI Africa Thank you! www.gaminglabs.com Devon Dalbock General Manager – GLI Africa +27 11 314 6877 d.dalbock@gaminglabs.com