Emerging Technology Gaps for Government Gambling Regulators

In our modern era of ever escalating technological advancement, government gambling regulators are racing to keep pace with a rapidly evolving regulatory environment. As the evolving digital environment continually redefines the resultant gambling landscape, technology gaps arise creating both emerging opportunities and potential threats for today’s regulators.

To ensure your agency addresses these technology gaps on a timely basis with the proactive planning and suitable software solutions required, let’s take a moment to examine the key technology gaps that are currently demanding the focus and resources of government gambling regulators across North America.

1. Data Analytics and AI Integration

The ability to fully harness the capabilities of data analytics and artificial intelligence (AI) is one of the most daunting challenges for the modern regulator. Today’s gambling landscape generates vast quantities of data every second across every channel, yielding massive potential to monitor and detect irregularities consistent with indicators of potential problem gambling or illegal activities.

Effective integration of AI algorithms capable of real-time pattern recognition empowers regulators to detect emerging compliance issues more quickly, while simultaneously guiding staff towards the most proven and effective enforcement tactics consistent with your current legislative and regulatory environments.

However, many gambling regulatory agencies lack the expertise or resources to develop and deploy such technologies on a timely basis.  Further, bridging this gap necessitates considerable investment in suitable training programs and ongoing collaboration with technology experts to sustain the robust analytics infrastructure required for today’s complex gambling industry.

2. Cybersecurity

The rapid growth of online gambling legalization has been a massive boon to jurisdictions keen to grow state and provincial tax coffers. Unfortunately, the vast fortune that flows through online gambling platforms to facilitate this taxation largesse also present an increasingly attractive and vulnerable target for cybercriminals. From distributed denial-of-service (DDoS) attacks to data breaches stealing sensitive customer information that leads to subsequent identity theft, cybercrime is a multifaceted threat landscape that presents as a never ending ‘arms race’ for government gambling regulators needing to stay one step ahead of evolving cyber-attacks.

Despite the critical need for sufficiently fortified cybersecurity defenses to fully protect consumers, many government regulators are still making do with insufficient cybersecurity expertise and outdated infrastructure ill equipped to effectively combat today’s sophisticated cyber criminals. For many, the situation creates an overreliance on monitoring and maintaining sufficient cyber defenses within the agency’s licensee portfolio, thus creating a transparency gap impeding sufficient oversight to gauge the true effectiveness of consumer cybersecurity protections on a consistent and timely basis.  

Going forward, government gambling regulators will look to address this gap with comprehensive cybersecurity training for regulatory staff and the building of collaborative partnerships with best-in-breed cybersecurity firms and technology platforms.

“Cybercrime is a multifaceted threat landscape that presents as a never ending ‘arms race’ for government gambling regulators needing to stay one step ahead of evolving cyber-attacks.”

3. Regulation of Cryptocurrency / Blockchain

Today’s rapidly evolving digital gambling industry presents significant challenges for government gambling regulators striving to stay abreast of the rapid developments in channel access, product sophistication, and collusion that contributes to issues such as location spoofing, game fixing, account fraud, and money laundering. Now, consider the ramifications of cryptocurrency wagering and the blockchain.

Given the decentralized nature of blockchain technology, the eventual widespread regulation of cryptocurrency wagering presents a massive challenge for government gambling regulators long reliant on the centralized oversight mechanisms systemic to traditional regulatory frameworks.

Currently the intrinsic anonymity afforded gamblers by crypto wagering is a core contributor in preserving the ongoing viability of the unregulated gambling marketplace, undermining the broader regulatory mission to fully eliminate black market operators. In addition to blunting the appeal of more private and lower cost avenues for gamblers (with crypto processing fees typically less than standard fiat currencies), the rapid proliferation of cryptocurrency adoption across other industries virtually ensures that gambling regulators will be forced to contend with the effective regulation of this decentralized technology to meet the growing market demands of today’s digital centric consumers.

As the regulation of cryptocurrency-based wagering goes mainstream, bad actors could feasibly become emboldened by the potential to exploit emerging regulatory blind spots to facilitate identity fraud, money laundering, and terrorist financing. Strengthening anti-money laundering (AML) measures and know-your-customer (KYC) regulations in conjunction with crypto adoption will prompt today’s modern gambling regulators to solve this emerging technology gap through the deployment of innovative technology solutions that achieve a genuinely sustainable balance between the oft conflicting agendas of robust risk mitigation and increased customer convenience.

4. Regulation of Mobile Gambling

With modern smartphones and mobile devices, today’s gamblers enjoy unparalleled convenience and accessibility to access an abundance of gambling products anytime, anywhere. The absence of uniformity amongst app-based gambling platforms along with the lack of a standardized regulatory framework governing mobile gambling is forcing many government regulators to rapidly adapt existing regulations to address the inherent dynamism of mobile gambling. These efforts can often result in a fragmented regulatory environment, one that contributes to compliance and enforcement inconsistencies for agencies, operators, and consumers alike.

Through jurisdictional cooperation at the national level, government regulators working in partnership with industry stakeholders will increasingly need to work towards a more cohesive regulatory framework, one capable of ensuring sufficient consumer protections and responsible gambling practices are achieved within an increasingly mobile marketplace. Such policy advancements, in conjunction with suitably adept technology platforms capable of monitoring and measuring location intelligence, will level the playing field for modern regulators needing to restrict the gambling footprint of a regulated product offering within well-defined borders.

5. Emerging Technologies

One of the core challenges in regulating the gambling industry is the products of tomorrow are very likely to bear little resemblance to the online casinos and sportsbook experiences of today.

From augmented reality and virtual reality (VR) redefining the ‘look and feel’ of gambling interfaces to the advent of biometric authentication processes improving security protocols, tomorrow’s gambling regulators will be asked to navigate an ever-evolving landscape of technology innovations requiring agile regulation, nuanced compliance, and responsive enforcement techniques.

Closing the gap between today’s effective regulation technologies and tomorrow’s insufficient toolset requires a predictive approach to technology planning, one that assimilates the best practices of ongoing trend monitoring, multidiscipline collaborations, and innovation strategy planning. By proactively investing in research and development now, today’s gambling regulators ensure they’ll have the necessary resources and infrastructure in place tomorrow to anticipate and respond to game changing technologies that will fundamentally reinvent gambling experiences and the corresponding regulatory frameworks needed to ensure robust regulations and consumer protections.

“One of the core challenges in regulating the gambling industry is the products of tomorrow are very likely to bear little resemblance to the online casinos and sportsbook experiences of today.”

Filling the Gaps

As demonstrated by this brief summary, the technology gaps challenging today’s government gambling regulators are significant and in many instances are widening at an alarming pace. Crossing these chasms places a greater emphasis than ever on modern gambling regulators having a suitably robust gaming control software solution in place to facilitate the multistakeholder information exchange, workflow automation, and risk management capabilities needed to align your agency’s innovation objectives in lockstep with an ever evolving regulatory landscape driven by technology evolution from every conceivable direction—from the way your citizens will access, consume and pay for gambling services to the ways in which unscrupulous criminals will target your regulated marketplace with sophisticated cyber techniques and global resources.

To learn more about POSSE GCS, our streamlined regulatory and compliance solution for the government gaming enterprise, visit our POSSE Gaming Control Software page for more information OR contact us today to schedule a no-obligation demo.