“ Fostering open dialogue with your regulatory officials and communicating in a way which is both honest and open are a key part of the relationship .”
— Tommaso Di Chio , Chief Legal and Compliance Officer , Bragg Gaming Group
service teams and marketers who may design a ‘ one size fits all ’ betting line , game , promotion , or responsible gaming program .”
Tommy Shepherd is a partner with the Mississippi branch of Jones Walker LLP . He says iGaming and online sports betting took technology to the next level . “ There are always advances in technology in gaming , but for these forms of gaming , it ’ s all technology and it ’ s very complicated .”
Heidi McNeil Staudenmaier , a senior partner with Phoenix-based Snell & Wilmer LLP , believes it ’ s just another technology improvement that comes with these forms of gaming .
“ From my perspective ,” she explains , “ the general regulatory environment has not changed ; however , with the advent of online sports betting and iGaming , there are further areas of regulatory oversight required and many of the regulatory authorities have had to increase staffing , increase training and provide related oversight to ensure these new areas are adequately covered from a regulatory standpoint .”
EDUCATION FIRST
With those complications , it ’ s crucial that regulators understand the issues if not the technology . Robert Russell is the chief gaming analyst with Michigan ’ s RMC Legal . He believes some of the issues are resolved with outside help .
“ The majority of regulators apply testing standards by independent testing labs such as GLI and BMM , and as standards evolve and are improved it helps to narrow complications ,” he explains .
“ The issues that can be challenging are when a standard is not met in a live gaming setting — how best to resolve the issue to ensure further compliance , while not unfairly penalizing an operator ? Getting both the regulators and company advisers familiar with the unique differences in the online gaming world and opening up lines of communication is key .” Schrier says no one in the U . S . was up to speed before 2013 . “ It was all new ,” he says . “ Everyone in the U . S . had to learn from the companies and regulators abroad . The iGaming states got a head start , and learned by trial and error how the software , geolocation , player account management systems and platforms operated .
“ Their labs were trained or relied on GLI , which had a wealth of experience in foreign jurisdictions . In 2018 , a whole new slate of state regulators started to launch sports betting . We , as legal counsel , were required to understand enough to explain how these technologies fit into the regulatory scheme of each state .” Di Chio says the complicated technology makes education difficult . “ Education can be challenging , in respect of what we as individuals working in the compliance sector focus on ,” he says . “ That is where inviting regulatory officials to speak at the various industry trade shows and conferences can be so beneficial , in that it allows us operators and suppliers to understand their points of view , how they work and vice versa .”
Developing healthy relationships with regulators is crucial .
“ Fostering open dialogue with your regulatory officials and communicating in a way which is both honest and open are a key part of the relationship ,” Di Chio says . “ Maintaining regular communication channels with them beyond just the standard regulatory reporting responsibilities is vital . By doing this , you can more greatly anticipate changes to regulation , provide your insights to the regulator concerned and make a valuable contribution to the overriding debate .” Shepherd uses the “ golden rule ” when dealing with regulators . “ Treat them as you would wish to be treated if the roles were reversed ,” he says . “ Try to make their job easier — use diagrams to facilitate understanding of transactions , prepare descriptions of the transactions that can easily be copied and pasted into investigative reports , etc . Do the research and analysis before you meet with the regulators .”
“ It is very important to educate regulators on the technology and as noted , many operators are proactive in their communications with the regulators to ensure that there is a ‘ team environment ’ as opposed to an ‘ us vs . them ’ attitude ,” says Staudenmaier .
REVOLVING REGULATORS
Most regulators have set terms and are often replaced by new officials who likely have little to no experience in gaming regulation , land-based or online . Shepherd has one reaction when a trusted regulator is replaced by an inexperienced one .
“ Panic !” he jokes . “ This is why it is so important to bring multiple parties from a regulatory body into the discussion regarding a client issue . Then you have the ability to reach a consensus decision instead of only a single party having been involved in the discussion and the result .
“ It is also important to create a written record of the dialogue and the decision . Memories fade over time , and having a written record regarding the confirmation of a decision helps .”
Scott Sherer , a shareholder with the Reno , Nevada branch of Brownstein , says it can be very frustrating and often adversarial when a regulator is replaced .
“ With most regulators , the education process has to start over ,” he explains . “ You have to be patient and be willing to put in the work to help a new regulator understand your company and your products .
“ Even more importantly , you need to be respectful . A new regulator has been put in that position for a reason and brings their own strengths to the position . Be willing to learn and understand those strengths and , where necessary , be prepared to help compensate for the weaknesses we all have .
“ Unfortunately , some regulators see themselves solely as adversaries to the industry and resist cooperative efforts . In those cases , you may need to rely on the law to show that you are in compliance , whether it is with that particular regulator , other members of a regulatory body or , if necessary , the courts .” Russell believes that the answer is to foster a network of relationships . “ Much like the established executive networks of the casino industry , the regulatory landscape is similar ,” he says . “ Often regulators are promoted within an agency or transfer to new jurisdictions . This ensures the continuation of knowledge , and therefore relationship management is key with not only senior agency staff but throughout an agency .”
OCTOBER 2024 www . ggbmagazine . com 33