Finance has initiated a consultation process with the sector and other sectors with respect to the proposed regulation on client identification and signatures. These consultation sessions will provide opportunities for comments prior to drafts of the regulations being prepared. Formal consultations are anticipated in 2015 to meet the requirements for draft regulations pursuant to the Statutory Instruments Act and Treasury Board of Canada Secretariat guidelines.
Finance is considering regulations that would provide greater flexibility. Consistent with other regulators and departments, there is recognition that a prescriptive approach does not encourage innovation, including technological, to achieve the public policy objectives. Finance is expected to propose more open-ended approaches. For example, it is expected that the proposals will move away from the physical signature card approach and include PINs and other “electronic signatures” that have been accepted and proven reliable in the e-commerce world. While a handwritten signature would still be usable, an electronic signature that consists of a combination of letters, characters, numbers or other symbols, or a digitally-recorded voice signature could also be recognized.
Allow for Flexibility
Similarly, the amendments on identification are expected to suggest greater flexibility and recognition of the digital world’s dynamics. While in-person customer identification would remain, there could also be greater ability to do customer identification in a non-face-to-face environment such as the internet. A recurring theme would likely be the importance of “reliable and independent” sources of information – but also recognition that both the private and the public sectors have evolved and innovated new methods that are both reliable and independent of the customer. The use of both a single method to prove identity and a dual method will probably continue, with modifications. The single method could take into account evolving government-issued digital identification being considered in some jurisdictions.
The client identification options will play out differently in different types of gaming channels and in different provinces. Jurisdictions with hospitality-based VLTs, for example, will have different challenges, options and issues than would jurisdictions without these devices. The policies and other control measures to ensure compliance will vary, but the overall objective will remain to comply.
Which leads to the “going forward” opportunity for the gaming sector. As noted above, Finance will be consulting on draft regulations in the near future. It is important for gaming companies to review the draft regulations both in context of their own operations and on a more comprehensive basis. One option is to work with Finance and colleagues through this consultation process to ensure that the final regulations both achieve the legitimate public policy objectives and ensure that they do so in an efficient and effective manner – without making compliance a practical impossibility.
Donald Bourgeois is Principal, Gaming & Regulation Group. He can be reached at firstname.lastname@example.org.