CasinoBeats Malta Digital: Industry can’t fixate on ‘compliance harmony’

Compliance harmonisation’, a term that has been referenced many times across industry conferences, is commonly regarded as a virtuous ambition. However, it bears contrasting views on what the concept actually means and how it can be applied to igaming’s current business frameworks. 

Trying to do so was a tough task for the “W2 Global: Harmony on Compliance” panel speaking as part of the Payment Expert track on day two of CasinoBeats Malta Digital Summit.

Session moderator Peter Murray, Head of Sales at W2, kicked off the discussions by asking the panel whether compliance harmonisation can even be categorised for an industry which holds multiple competitors and diverse stakeholders with different remits, functions and business goals?

Warren Russell, CEO of W2 stated that it is hard to answer without engaging in the industry’s ‘other buzzword of collaboration’, especially as all tier-1 operators seek to bolster their USPs in a bid to strengthen their competitive advantages within a saturated marketplace.

“The problem stems from everyone trying to have their own USP, and wanting to do things differently. This is great, you don’t want 20 of the same products in the market, difference and choice are important factors,” Russell remarked.

Leading W2, Russell explained that he often takes a ‘boiled down’ approach to understand harmonisation, in which W2’s objective is to “protect customers while allowing igaming clients to be fully compliant and profitable across multiple jurisdictions”.

Paul Williams, Group Director of Compliance and Legal at Pariplay, interjected by claiming that ‘harmonisation’ is a disconnected term when dealing with the reality that operators and B2B suppliers face in delivering products and services to individual marketplaces.

For Williams, the friction between compliance demands and operator and supplier services is a natural element of a multi-million-pound sector that should not conceal its business demands through the use of broad jargon.

“From my perspective, all companies have legacy issues, especially when you are the size of the tier-1s, who are trying to manoeuvre their operations against fast-changing regulations and instant enforcements,” Williams stated.

“Are we part of the problem? No. This is a problem of our own success, in which companies have been asked to fulfil not only compliance enforcements but wider tech, consumer and customer care demands… we, therefore, need more help from regulators”

Williams’ comments opened up the panel to discussions on the relationship between industry and their prospective regulators, following a year of disruptions across the igaming and payments landscape.

Pointing to current concerns, Murray addressed whether igaming compliance will be in the ‘crossfire of the Wirecard scandal’, in which regulators will likely look to shore up transactional regulations in relation to e-wallets, escrow accounts and international payments.

Russel Wilkinson, igaming consultant at Pay360, detailed that the consequences of Wirecard will be far-reaching across multiple sectors. However, regulatory focus will likely converge on the compliance actions and oversight of corporate governances.

He added: “At Pay360, we have found that internal procedures, due-diligence and corporate governance have come at the forefront of the regulator. In Wirecard’s case there was an obvious lack of these elements, we hope that this is a one-off case for the payment sector” 

Wilkinson explained that Wirecard consequences may see regulators of high-risk sectors place a greater emphasis on which payment processors companies are using, and how transactions and accounts are being monitored, stating that “there are big questions as to how the auditor signed-off”.

Moving beyond Wirecard headlines, Murray focused on whether there will ever be a ‘harmonisation of regulators’ by asking the panel whether gambling compliance will ever secure a cross-market code.

Steven Armstrong, Group Director of AML William Hill, warned against industry leadership becoming fixated by the idea of a ‘single overarching regulator’: “Harmonisation across regulators always sounds like a good idea. But in reality, you are dealing with countries that have diverse social make-ups and economies of scale… can you really put down a regulatory code for all jurisdictions and would it be of any real benefit?”

Of note,  Armstrong pointed out that governments are prone to changing their stance on how they choose to govern high-risk sectors, as was the case with the UKGC instantly ditching its ‘risk-based approach’ for monitoring customers engagements. 

He continued: “When the Gambling Commission changed its on-registration rules, it was clear that there is no more of the ‘risk-based approach’ – you verify your customer on registration before they engage with any of your products.”

Instead, Armstrong stated that the regulator should push for ‘compliance alignment’ on KYC and AML processes, detailing co-sharing data agreements between regulatory bodies as best practice.  

On future risks and compliance alignment, Warren Russell astutely concluded: “It brings me back to my cub scout days…you just have to be prepared. So don’t assume that any single part of your system cannot be probed, blocked or broken”

“There is a hope for greater alignment but is it realistic? I just don’t think so. At the end of the day, operators are faced with a fine balance, in which they are doing everything to keep up with compliance changes, but at the same time not trying to go bankrupt.”

CasinoBeats Malta Digital, delivered in association with Gaming Malta, takes place from 30 June to 2 July 2020 and features 40 virtual exhibitors, numerous networking opportunities, 130 leading speakers, and countless business opportunities for 3,000 senior decision-makers from operators, suppliers, affiliates and other industry stakeholders.

Alongside the exhibition, networking and conference, all delegates also gain access to the full range of entertainment on offer, including free-play slots, daily competitions and a selection of prizes such as iPads and cash. Find full details of CasinoBeats Malta Digital, including information about how to register and the discounts available on company group passes, at the event’s official website: