Weaponry for the War against Problem Gambling

Those fighting to legalize Internet gaming will soon have a new ally on their side.

One of the main arguments for those in favor of banning Internet gaming is that the activity is very hard, if not impossible, to regulate and control.

Two gaming industry companies, with their sights set taking charge in the war against problem gambling, have developed a product that may weaken that argument considerably.

Gemini Research, a leading research firm focusing on the impacts of legal gambling throughout the world, and Christiansen Capital Advisors (CCA), a source of information and consulting for the leisure and entertainment industries, recently announced a strategic partnership to provide responsible gaming services to the Internet gaming industry.

The new partnership is incorporated as Responsible Gaming Solutions (RGS). A patent has been filed on the behalf of RGS, titled "Monetary Behavior Detection in an Networked Environment and Apparatus," to establish, through the guidance of a new software application, a process for identifying potential problem gambling behaviors from wagering records.

The software could lead to the breakthrough regulators have been searching for in arming themselves with a form of control over Internet Gaming.

Officials at RGS are touting the development as revolutionary.

"Using the pattern recognition techniques in our pending patent, RGS intends to become the first application service provider of responsible gaming tools for the Internet gambling industry; including casinos, lotteries, and sports betting," said Lamar Moore, CEO of Responsible Gaming Solutions. "Problem gamblers cannot be identified with surveys to distinguish at-risk individuals alone. However, the ability to identify problematic behaviors from wagering records, integrated with an online reporting mechanism, allows operators and regulators to proactively address problem gambling."

Sebastian Sinclair, president of Responsible Gaming Solutions and a renowned expert on Internet gambling, said the new system will open up doors for operators, regulators and experts who study problem gaming.

"Regulators the world over are struggling with the question of how to regulate Internet gambling, particularly with regard to problem or pathological gambling," Sinclair said. "RGS answers that call with tools that not only identifies and flags potential problem behaviors, but that with unique technology will allow gambling regulators and operators to learn more about problem gambling and how it develops in certain individuals."

Sinclair feels that those who are opposed to legalizing Internet gaming are convinced that the activity can't be regulated. Those who are in favor of such a move feel it can be regulated with great ease, he admits the reality of the issue is probably a mix of both.

"It is my opinion that neither one of those is entirely true," he said. "The truth, as is often the case, is somewhere in the middle."

RGS was formed once Sinclair started to look at different technologies that could be developed to implement the regulation process. Geographic location technology is just one example that has been introduced already.

Sinclair then teamed up with Dr. Rachel A. Volberg from the Gemini Research Institute whose credentials, Sinclair says, are impeccable.

"She is this country’s preeminent expert on problem gaming," he said. "We worked with her on the National Gambling Impact Study Commission."

The two co-authored a report, which was submitted to the Gaming Review Board of the United Kingdom. It was then that the seed was planted for RGS.

"It (the report) laid out the ways of how, in a network environment, problem gambling could be mitigated," Sinclair said. " The player tracking information is kind of the genesis of the whole thing."

Once the tracking information is gathered, it is then compared with pre-set standards. Sinclair said if a player's patterns are going beyond the standards operators and regulators can get a better handle on the situation.

"There are three different patterns that we are looking for," he said. "Essentially all that it is is pattern recognition. It establishes certain ranges of behavior which would be normal behavior in gambling and whenever behavior goes beyond those ranges a flag goes up."

"Chasing," tolerance and loss of control are the three guidelines to which the initial standards have been set up for the program. "We have developed a scatter chart of certain behaviors," Sinclair said. "We have established certain criteria, upper and lower bounds that normal gaming behavior should be in. Any activity that falls outside of that will trigger a warning."

In addition to the pre-set standards that have been setup, Sinclair says that as the program starts to be used, the standards can be changed to reflect the habits of the current player. This element will give researchers like Volberg data that has previously been out of their hands.

"The recording and continued maintenance of that information will allow us over time to improve on the system," he said. "We will be able to go back after someone has crashed and burned as say, ‘here is where they went off of the rail.’ So the system will be constantly improved."

Being able to see exactly when and where someone went awry with their gambling will enable RGS to stay on top of current trends.

"We really don’t know a lot about problem gaming as it happens," Sinclair explained. "All the researchers ever see is the aftermath after someone has already crashed and burned. But there still are some things we can do, and that is how we came up with our models."

Sinclair also says that the program will not invade a player’s privacy.

"The thing about our system is that it is not intrusive," he said. "It is like a smoke detector."

Even though RGS is still in the early stages of development for its system, the feedback from industry insiders has been a pleasant surprise.

"When I first started developing this I was targeting it more towards regulators," Sinclair said. "But credibility is such an important issue in this business that a lot of operators who have gotten wind of it have expressed interest in it when it is finished."

In addition to operators wanting to boost their credibility, regulators are also interested in having the system on their side.

"There is obviously demand for this," he said. "Regulators are struggling and trying to find out ways to regulate the industry. They are confronted with the issue of can you regulate it versus is prohibition enforceable. They are trying to find a path to meaningfully manage this industry."

RGS is planning to launch a pilot program with a couple of operators by the end of this year with a full launch of the program slated for sometime in the early part of 2002.

Moore said the system is liable to change the market place of Internet gaming everywhere across the world, especially in the United States.

"We believe that the development of a responsible gaming platform of services will lead to increased acceptance of Internet gambling operations," Sinclair explained. "Our detection and alert delivery system will make Internet gambling safer for problem gamblers than traditional brick-and-mortar establishments."