The last few years have seen notable shifts in compliance landscapes across a number of sectors, with regulators continually seeking to ensure that companies have in place not just appropriate policies but also robust procedures in order to be confident of compliance with regulations and the mitigation of risk.
While historic views regarding regulatory compliance have ranged from viewing it as a prickly thorn in the side of commerciality, to an unfortunate but necessary hurdle with which regulators sought to reign in their respective licence holders, global attitudes towards compliance are undergoing a paradigm shift on both sides of the table.
With corporate spending on compliance now at unprecedented levels, what has traditionally been a delicate balancing act between a strong culture of compliance and commercial sensitivity, has now given way to increased focus on all areas of compliance. The surge in new delivery channels and markets such as mobile payments and eSports has meant that strong compliance methods and tools are now viewed by many companies as the immediate and best defensive frontier in the digital sectors.
The eGaming sector too has begun to see evidence of some pivotal changes occurring across a number of regulatory areas with yet more changes promised on the horizon.
In 2015, the Isle of Man undertook a National Risk Assessment in relation to Money Laundering and the Financing of Terrorism which was further complemented by a visit from MONEYVAL in early 2016. The results and effects of both the National Risk Assessment and subsequent visit by MONEYVAL are only now coming to fruition; with the aforementioned changes in approach to regulatory compliance being felt by all in the Isle of Man regulated eGaming sector. Indeed, a number of regulatory changes were outlined within the recent Gambling Regulation Package 2016 consultation, undertaken by the Isle of Man Gambling Supervision Commission earlier this year.
The theoreticals of regulatory compliance – the provision of comprehensive policy and procedures documentation, no longer represent the golden tick box with which companies sought the approval of their respective regulators. The mechanisms and practical aspects of compliance have been subject to the increasing focus of the regulatory spotlight – a "show me" rather than "tell me" approach has become commonplace among Gaming regulators, none more so than our own Isle of Man Gambling Supervision Commission who continue to embrace this approach through the expansion of regulatory compliance programmes to include distinctly separate hands on compliance audits which are solely focused on the areas of Anti-Money Laundering and Countering the Financing of Terrorism.
The recent introduction by the Isle of Man Gambling Supervision Commission of an Isle of Man Money Laundering Reporting Officers (MLRO) forum further cements this approach – allowing MLROs to come together with regulatory experts in order to discuss common findings and emerging typologies within the sector.
This form of practical hands on engagement with licence holders, coupled with increased regularity of industry consultations, has empowered eGaming licence holders; allowing them to assist in building regulators' understanding of some often overlooked complexities and costs associated with remaining both compliant and maintaining commercial viability while operating across a number of jurisdictions.
With this approach, previously difficult or problem child jurisdictions are slowly being considered as companies seek to tap into new markets – eGaming operators now have the platforms and forums with which to engage regulators on how best to approach regulatory compliance requirements in jurisdictions where certain cultural differences have meant that traditional approaches to regulatory compliance remain less effective.
eGaming has long been at the forefront of digital delivery frontier and it is clear that in many ways, regulation has historically struggled to keep pace with the constant evolution of the sector. This has led to certain amount of fragmentation amongst previously equivalent jurisdictions; to the point that the adherence to the regulations of one jurisdiction could mean that a licenced gaming operator may no longer be compliant in a previously equivalent jurisdiction. The times however, are a changing.
Where a number of jurisdictions had sought to take their own slice of the licence fee pie; creating new and unique regulations in order to attract new business, regulatory bodies across the world are beginning to recognise that such jurisdictional fragmentation is not sustainable for the sector. International regulators are now coming together, seeking to address the issue by introducing common standards across a number of regulatory areas.
Groups like the International Association of Gaming Regulators (IAGR) and the Gaming Regulators European Forum (GREF) are committed to the goal of providing multi-jurisdictional forums with which regulators, licence holders and various stake holders can come together and share their views.
In today's constantly evolving regulatory environment, it cannot be overstated how vitally important these forums, regulatory consultations and hands on compliance audits have become for both licence holders and regulators alike. Indeed, they are a mutual necessity and key for licensed companies to aid in understanding new and complex regulations in a timely manner allowing them to make well-informed decisions to better mitigate risk. After all, a company cannot be compliant if it doesn't fully understand regulators' expectations.
As regulators continue to adapt to new challenges, so shall we in the regulated sector adapt our approaches to regulatory compliance – working with regulators to share knowledge and ensure that the future of eGaming is in safe hands.