Adapting to change and learning to capitalise
The latest issue of Casino and Gaming International Magazine is now out and it looks great.
The latest issue of CGi magazine is now out and we were delighted to be asked to contribute once again to this publication.
In this latest article, Susan O'Leary talks about Alderney's world renowned reputation and how we remain at the forefront of the industry, adapting to technological trends and regulatory changes.
To view the magazine online please click here.
Adapt and capitalise
There is an age-old saying: “Reputation is hard won and easily lost.” It is a gentle reminder that while it can take decades of hard work to turn an idea or a business into a success, a simple mistake can see the fruits of one’s labour turn rotten in an instant. In Alderney, we have been a successful eGambling jurisdiction for more than fifteen years now. Our reputation very much proceeds us, but we refuse to take our achievements for granted and remain proactive and poised to adapt to technological trends and regulatory changes.
The key to our success has been the culmination of a benchmark regulatory regime and an innovative commercial proposition in a way that no other jurisdiction has been able to match. My colleagues at the Alderney Gambling Control Commission (AGCC) have produced the purest set of eGambling regulations in the world, designed to provide robust oversight but not to be so stringent as to stifle innovation. It’s a winning combination; our industry colleagues tell us there is no better indication that a business is being run responsibly and to the highest standard than to be regulated by the AGCC.
Of course, none of this would be possible without the talented team of people at Alderney and the AGCC. Never before have I worked with such a passionate group of forward thinkers, highly-motivated individuals who live and breathe eGambling and who are committed to doing everything they can to guide and help licensees flourish and drive new business to the jurisdiction. Without them, our licensing and regulatory framework would not have become the efficient, nimble, quick-to-adapt beast that it is today. They certainly help make my job easier, too.
What we do:
While I could sing the praises of Alderney, the AGCC, and of the talented team that make us the go-to jurisdiction for eGambling all day long, I’d like to talk a little more about what it is we actually do, and how we go about doing it. Our licensees want trouble free access to markets all over the world, and we can certainly offer them that. We have memoranda of understanding with regulators on both sides of the pond, including the Nevada Gaming Control Board, the New Jersey Division of Gaming Enforcement – a leader in US eGambling – as well as Great Britain’s Gambling Commission. We have the most memoranda in place of any online gambling regulator.
These well-established relationships open the door for our licensees to operate in these markets, and as we continue to forge new relationships all over the globe, will add to the list in the coming months and years. Another example of this is our participation in the Multi-Jurisdictional Testing Framework; a group project by the International Association of Gaming Regulator’s (IGAR) to harmonise regulatory requirements across all of its jurisdictions. We continue to work with regulators in the UK, Denmark and the Isle of Man towards the further standardisation of game software testing requirements. We work closely with our operators, and really get to know their business and what it is they want to achieve. While under our watch, we have guided many small start-ups into becoming hugely successful titans of the industry. That said, we are not hand holders; we allow and encourage our licensees to tread their own path within the borders of our regulatory framework. However, we also understand that rules sometimes need to be broken, or at least amended, which is why the AGCC meet with our licensees at least once a year to discuss what changes, if any, they feel should be made to our regulatory structure.
We are proud of our framework, but not so arrogant as to believe it shouldn’t be tweaked from time to time to ensure it remains ahead of the curve and best in breed. In fact, our ability to be quick off the mark when new technologies come along is what keeps us in the driving seat as the go-to-regulator for online gambling. The meteoric rise of daily fantasy sports (DFS), for example, has left regulators the world over scratching their heads as to whether it is gambling or a game of skill, and whether operators should be shut down, licensed, or allowed to continue offering contests unrestricted.
Fantasy sports betting – which is exactly what it is, despite what others may tell you – is already covered by our regulatory framework. As is eSports – organised multiplayer video game competitions played between professional players – and the online betting market that has grown around the sector. So while state lawmakers across the US continue to grapple with how to define DFS, and ensure players are protected, we already have a proven system in place. There are other areas, too, where the Alderney model has easily adapted to new technologies in a swift, sensible and seamless way.
Adapting to change
Last year we became the first jurisdiction to licence a cloud computing platform supplier, JT’s Cloud Platform (formerly Jersey Telecom), we now licence Sure Telecom and Calligo’s cloud solutions also. The approval means that our eGaming licensees can use these platforms safe in the knowledge that they meet the stringent international security standards laid down by the AGCC. Cloud computing is nothing new, of course, and is more widely rolled out in other industries, but at the time JT was given the green light it was an industry-first for online gambling and, I believe, a genuine breakthrough moment. A game-changer, even.
Another area where we are looking to lead the charge is social gaming, and, again, in terms of how the sector can be regulated in a way that promotes growth but in a controlled and sustainable manner. There has been a lot of talk over the past few years about social gaming, and whether it should be brought under greater scrutiny. In this regard there are two tribes – those who do, and those who don’t – and they are likely to go to war over it. Personally, I believe operators in the sector should continue to grow in a safe environment ensuring player protection and best practice within the sector but within a regulatory model like ours so that they can continue to innovate and drive progress. Expect to hear more from us on this in the coming months.
On the subject of innovation, I’d like to briefly mention Pokémon Go and augmented reality (AR). When the game launched at the start of summer, the immediate reaction was phenomenal; the app was believed to have more than 21 million daily active users in the US alone and was generating around $1.6million per day in revenue. Many pointed to the game and its AR platform, and said the future of online gaming had arrived. It was ARs time to shine. However, a few weeks on and the initial hysteria has subsided. Sure, plenty of people still play the game, but for others the novelty seems to have worn off.
It could be argued, then, that Pokémon Go was nothing more than a fad. Following its launch and early success, however, I am sure that countless other app and game developers began looking more closely at AR, switching up their development pipelines to bring their own games to market as soon as possible and cash in on its sudden rise in popularity. 888 are already quick off the mark with their own similar product to hunt for free bets. If I’m honest, this is where the Alderney licensing and regulatory model really comes into its own by allowing operators to innovate and experiment in a secure environment. Our existing framework already caters for all types of gambling products.
Operators need to future-proof themselves against rapid changes in technology, shifting demographics and the types of games they want to play. At the same time, they need to be cautious about investing heavily in a fad, a product that enjoys huge success in a short space of time but then slips into the shadows and further down the Apple Store rankings. Either that, or much like DFS, it faces an abrupt regulatory clampdown. Alderney is the safest place to develop products under a regulatory regime and then tweak it as you go. Our framework is so flexible new products such as AR and VR are already covered.
Aside from our approach to licensing and regulation, there are other benefits to setting up shop in Alderney. We have outstanding commercial attributes, and are fortunate enough to operate in a low-to-zero tax economy. This means operators based out of Alderney find themselves in the most tax-efficient environment to be found anywhere; this is increasingly important as operators look to be as lean as possible in a post Point of Consumption Tax environment. We have also have a more than competitive fee structure, with those being licensed in the jurisdiction for the first time benefiting from a 50% reduction in their first year. The regulatory fee includes all taxes and duties paid to Alderney, there are no other hidden duties and charges as paid in other jurisdictions.
On top of that, Alderney is a fabulous place to work; beautiful, tranquil, with London a little over thirty minutes away by plane. We back that up with world-class telecoms links to Paris and London, and we straddle the main EU/US cables. Of course, when you are here it is easy to take all of that for granted. As we continue to adapt our regulatory framework so that our licensees can capitalise on the key emerging trends in the sector, I will continue to recall that famous saying: “reputation is hard won and easily lost”. Our reputation is very important to us, and we will continue to do all we can to ensure we keep hold of it.
So come join us, and be a part of the Alderney success story.