Transforming the customer experience and regulatory innovation: common cause or polar opposites?
By Donald J. Bourgeois
Co-Chair, Regulatory Innovation Working Group
Principal, Gaming & Regulation Group
May 27, 2020
The Canadian Gaming Association (CGA) established in 2019 the Regulatory Innovation Working Group. The Working Group is a collaborative activity within the Canadian gaming sector to encourage technological and operational innovation. Why? The CGA, as a member-based organization, sees value in assisting participants in the sector in using innovation to enhance customer experiences. Further, the CGA sees enhanced customer experience and regulatory innovation as being a common cause – gaming of integrity that is responsible and compliant with the law and public policy objectives while being customer-driven. They are “hand and glove” rather than opposites.
The Working Group is focused on technological innovation in the gaming sector. The underlying approach is to bring together all of the relevant participants and stakeholders to discuss and identify processes to obtain approval for the use of technology by operators. The purpose in doing so is, of course, customer focused. Operators are providing products to customers and those customers expect and want quality gaming products and ancillary services that have integrity, entertainment value and convenience.
The first project for the Working Group is “cashless wagering”. This project is intended both to test the Working Group’s approach and to bring forward the concept of cashless wagering for use in gaming facilities across Canada. Cashless wagering does, of course, exist in gaming facilities but it is largely based on 1990s and early 21st century technology and customer demands.
Today’s customers expect – demand – greater flexibility with respect to “cashless” payments. Customers in 2020 use a wide variety of cashless payment systems to purchase goods and services on a daily basis. Customers do not want to be limited to TITO when they are accustomed to many other forms of payment, including mobile phones.
There are, though, several implicit public policy issues that need to be addressed prior to the introduction of a broader concept of cashless wagering. These issues include:
- Integrity, security, reliability and auditability of any system or systems to be used, including integration into a centralized gaming management system for legal, operational and business requirements;
- Demonstrable compliance with responsible gambling policies and initiatives, including assuring that persons who are self-excluded or who otherwise are not eligible to gamble do not do so;
- Demonstrable compliance with anti-money laundering and anti-terrorist financing objectives; and
- Protection of personal privacy and financial information.
The system must also be as “friction-free” as possible from the customer’s perspective and be operationally efficient and effective for operators. The end-result must be something that the customers want and will be willing to use to improve the quality of their experiences in gaming facilities.
What the customer wants is, of course, a critical component. There is little point in proceeding with a proposal that does not address or meet the expectations of the customer. Market research is one tool that can be used to understand better what the customer wants and why. While a substantial amount of market research is proprietary and confidential in nature, the Working Group believes that its collaborative approach will assist in identifying in sufficient detail the trends and priorities for operators and conductor and managers to make reasoned decisions on what solutions to implement.
The Working Group is not intended to promote one supplier’s or operator’s product over another; rather, it is intended to address issues that are common for suppliers and operators so that they can be dealt with once across Canada rather than multiple times by numerous suppliers and operators. It is also not intended to “impose” on any regulator or “conductor and manager” a solution. Rather, the Working Group intends to develop a consensus where that is possible. A collaborative approach respects jurisdictional differences.
How will the Working Group develop this consensus? Largely through a collaborative process that involves representation from suppliers, operators, testing laboratories and regulators. This initial phase will identify the issues and assess whether there is a common perspective on those issues and an approach to resolving the issues. In the case of “cashless wagering”, for example, does the above list identify all of the significant public policy issues? Legal issues? Operational issues? If so, is there sufficient market for the proposed “solution”? The intention is not to find a solution to a problem that does not exist but rather to address common issues for products that will enhance the customer experience and improve operational efficiencies and effectiveness while maintaining or improving integrity of gaming.
The collaborative approach continues, however, beyond this initial phase. The second phase involves a greater depth of analysis on what should be the “solution”. If there is a need to develop regulatory standards or requirements, the Working Group, on a collaborative basis, will propose such standards or requirements for consideration. In doing so, the intention is to address the public policy issues that are why the standard or requirement exist and – equally important – respect that each jurisdiction will make its own decisions based on its own context and boarder public policy objectives for gaming. However, the Working Group believes that it is easier to consider and comment on another person’s draft than to start afresh each time for each jurisdiction.
The regulatory oversight goes beyond the setting of standards and requirements. It also involves testing of gaming equipment and systems to ensure that any supplier’s or operator’s specific proposal meets those standards and requirements. The Working Group, as part of its mandate, may also provide recommendations related to the testing and approval – again, in the spirit of addressing common issues once rather than multiple times. Ultimately, it will be a decision of each regulator whether to approve a cashless wagering system or other technological innovation on both technical and public policy grounds.
The collaborative process will be both accountable and transparent, subject to necessary confidentiality requirements in a competitive world. Ultimately, that is the objective of the Working Group – to assist the gaming sector to transform the customer’s experience.
Please join us on June 11, 2020 at 1 p.m. EST for a special gaming industry webinar entitled: Canadian Gaming Association's Draft Standards for Cashless Wagering in Canada's Gaming Industry. For more information and to register for this free event, click here.