IGN Q & A: Rick Smith

In February 2000, former New Zealand gaming regulator Rick Smith was named the executive director for the Interactive Gaming Council, a trade association that seeks to establish fair business practices throughout the burgeoning online gaming industry. The ensuing eight months saw a lot of activity, with the IGC taking on several new members, implementing its seal of approval program and fielding a ton of criticism regarding complaints about a few of its members. IGN recently caught up with Smith for a brief chat about the Council's progress and his role at the helm.

IGN: Can you give me some background on what did you did before being named the executive director?

Rick Smith: From mid 1994 to mid 1997 I was in New Zealand assisting the government department responsible for regulating gaming with the introduction of land-based casinos in Christchurch and Auckland and performing a review of the licensing regime for gaming machines (slots) operating in venues outside of casinos. Upon my return to Queensland I assumed responsibility for developing the interactive gambling legislation, the Interactive Gambling (Player Protection) Act 1998.

IGN:C What kind of perspective does your experience as a regulator in New Zealand and Queensland give you on the gaming industry compared to the operators and other industry members who make up the IGC Board?

RS: Different perspective. Being from a government background, I am poorer. Also, I believe that coming from a regulatory background, I view things from a more holistic perspective of regulatory acceptance, perhaps with a slightly heavier focus on the net cost/benefit in the social and economic areas rather than arguing primarily on the basis of pushing for something simply because it can be done.

IGN: Where is the new IGC office located in Canada? Is there any new staff?

RS: The IGC has been extra-provincially incorporated in the Province of British Columbia with the head office based in Vancouver. I have recently (long overdue) taken on an (understanding) assistant to help with ensuring a more efficient and effective head office.

IGN: What are your immediate goals for the IGC? Do you have any intermediate or long-term goals also?

RS: Initial priority is on "cleansing" membership records and updating this information in conjunction with the cooperation of members. Apart from the Seal of Approval program, being handled primarily by Keith Furlong, and the Citadel project (a joint venture with eSuccess) there are matters such as improving the internal processes of the IGC, a joint research project with a tertiary education institution, a redesigned / revamped web site, a greater service focus for members, specifically, becoming more strategic and with greater diversity. As in any service industry, there is always the need to review and improve existing communications with members.

IGN: What do you think are the biggest issues facing the interactive gaming industry?

RS: I would place education of the industry, the government and the public and striving for cooperation among industry and government as major issues. Unfortunately, politics being politics, there will always be personalities involved. There is also a growing move toward a more responsible approach being adopted by gambling operators regardless of the form of gambling.

IGN: Does the IGC ever assist governments that are developing legislation and licensing regulations for interactive gaming sites?

RS: This question raises one of the key objectives of the IGC. Specifically, working with governments. Wherever it is able to participate/cooperate with governments, the IGC is keen to go the extra yard to ensure that it provides appropriate input, whether a written submission or oral testimony. Recent evidence of that is the submission to the U.K. Gaming Board as part of its review of gaming and an invitation to speak on a panel in London at the European Interactive Gaming 2000 conference where European regulators will be in attendance and participating as speakers. The IGC also attempts to meet with regulators outside of such controlled processes, either formally or informally, for example, in association with meetings such as meetings of the International Association of Gaming Attorneys (IAGA) and the International Association of Gaming Regulators (IAGR) recently in Venice. I suppose the potential benefit is largely dependent upon the willingness of the audience to listen. If the consultation process is one that is in pretence only, then no person will benefit.

IGN: Some players have been extremely vocal about player bonuses and whether online gambling sites are paying them. What's happening on that front? Can you give some details about the disputed players' funds Golden Palace turned over to the IGC for charitable donations?

RS: In short there are 2 sides to the story: compliance by the operator with rules and regulations and compliance by a player with the same set of rules and regulations. This is why strict government regulation is essential, to help resolve issues such as this, especially where a player is equally likely to "have a go" when money is involved. While the IGC attempts to assist with disputes, it lacks legislative / sanctioning "clout". There is also the opportunity on open chat sites for a biased perspective to be established by people with a vested interest or by those with a genuine intent but without full facts - minds are made up in advance and "victims" hung before a trial. There needs to be a balance across the board and not solely a focus on an operator. How many of these people have actually gone to the licensing jurisdiction using the contact details provided to them, to make a formal complaint with the sanctioning body?

As for the funds provided to the IGC, they were not designed purely for a "charitable donation". It was thought more appropriate to look at possibly funding some research that would provide a broader benefit and to this end I have explored several options, narrowing down the decision in recent weeks. I shall not name the institution or state the amount at this point given that no formal agreement has actually been signed. However, the intended direction of the project(s) is likely to involve advertising standards and/or criteria for consideration (as it relates to interactive gambling) for inclusion in educational curriculum (prevention rather than cure in the context of responsible gambling).

IGN: Do you think there are any really obvious security tools that site operators need to be using? Do you think that biometrics could be a viable option? What about this REGIS (responsible electronic gaming Internet system) proposed by the Australian government earlier this year?

RS: Technology being technology, there is obviously no end to what can potentially be done. It becomes a matter of what is practical and cost-effective and not simply a matter of what is technically feasible. I am sure that biometrics will blossom over time; to what extent I am unsure. Biometrics has been around for some time and appears to be slowly growing in popularity. As everyone is aware, there are software packages available for parents aimed at controlling access by minors to sites on the Internet. Again, it may be the situation that, as with something such as a credit card, the strength of the control mechanism is largely dependent upon the quality of the implementation, in the case of a credit card, control over the access to a password. If the child has access to the password then regardless of the technological qualities of the system it becomes ineffective. As for REGIS and like products, I am sure that developers will love the opportunity to explore the options. With specific reference to the technical capability or feasibility of such a system, I am not the person to ask.

IGN:What's happening with the Seal of Approval program? Who can participate and what is the benefit?

RS: Keith (Furlong) has been handling this issue. The first successful SOA applicants "received" the seal a couple of weeks ago. The SOA is open to applications from IGC members with the proviso that to actually display the Seal the successful applicant needs to have been an IGC member for at least 12 months. The benefit is to provide a tangible means of identifying those bodies that willingly subject themselves to a higher level of compliance than other participants in the industry, including a formalized dispute resolution process.

(Editor's Note: The first two companies to participate in the program and display the seal are VIPSports.com, operator of VIPSports.com, VIPSoccer.com and VIPCasinos.com, and Sunny Group Casinos, operator of Casinofortune.com, Mapau.com and Miamibeachcasino.com.)

IGN: How about the risk management database program? Is this program only available to IGC members or can other operators participate? Is there a cost for the program?

RS: Citadel is up and running. It is a great product that has been developed by a company called eSuccess (who have diverse and comprehensive experience in "automated" systems in the gambling environment) in conjunction with the IGC. Not only does Citadel offer a fraud detection capability, it also offers the ability to block individuals or classes of individuals (e.g., problem gamblers) and utilizes an intelligent neural network. The IGC developed criteria and, together with a team comprised of representatives from the interactive gambling industry, a product has been created for the interactive gambling industry by the industry, thus addressing the peculiarities not necessarily confronted by similar systems. The operators of Citadel are bound by stringent privacy constraints, subject to comprehensive physical and logistical security measures (working with Deloitte and Touche to achieve Systrust compliance) and offer users the right to retract their information. "Ownership" of the data is therefore not an issue unlike certain operations, including non-gambling, where private information is sold or passed on to a third party. This is not permitted with Citadel. In short, I am very excited about this leading edge product and my congratulations go to the eSuccess team.

More specific information on Citadel, such as cost, would be better obtained by contacting eSuccess directly at Sales@esuccess.ca or ask for Citadel sales at 1-604-588-6962.

IGN: Also, has there been anything happening with the Code of Conduct? What are the rules that make up the code? How enforceable is it?

RS: The Code of Conduct, like other statements of best practice and codes of behavior in this field, is never "finalized"; they are constantly subjected to review and change. It's a living, breathing document. The Code can be found on the IGC web site at www.igcouncil.org. To this end it is planned to conduct a review of the existing Code with a view to refining its content.

When joining the IGC a member undertakes to comply with the Code of Conduct. As with any self-imposed standard the degree of enforceability is questionable, with the range of sanctions being extremely limited; you are in or you are out. Unlike the SOA where there is a fine mechanism, the code is not supported by any range of sanctioning powers other than revoking membership of the IGC.

IGN: Will the IGC be working closely with some of the other interactive gaming organizations that are around? (There are at least two or three other ones that I'm aware of, including a new one in Australia.)

RS: It would be great if the various bodies could work cooperatively and share resources to optimize the service that is provided to members and the public - working in unison rather than in "opposition". Unfortunately, despite various attempts at cooperation, there have been obstacles to a united front. Some of the bodies may be operating in a commercial sense and not as a non-profit association, thus immediately raising concerns about the proper focus of the body. On occasions, there have been personal attacks on representatives of the IGC and specific criticism of IGC members by parties who appear not to have the full facts (or at least as full as is permitted) or else who depend upon emotive outcry to attract readers / membership. The IGC is currently talking to one of these others bodies to see how we may be able to work more closely and has arranged for a representative of the Internet Industry Association from Australia (the body that absorbed the Online Gaming Association of Australia) to speak to IGC members at a forthcoming Members meeting.

IGN: Several nations are debating interactive gaming issues. What do you think are the biggest differences between the concerns voiced by the Australian, U.S., and U.K. governments? In your view, what do you think is going to happen in these nations, prohibition or regulation?

RS: In my opinion, governments have introduced gaming as a "golden egg" revenue-raising concept without evaluating the net overall cost-benefit to the whole community. It is not merely interactive gambling but more deciding upon the future direction of revenue streams, the degree of intrusion into freedom of choice and the "loudness" of a vocal minority and what politicians perceive will get them reelected. In a cyclic sense all countries face the same challenges; some just reach them at different times, in the same way that some gaming products are more advanced (and associated technology) in some countries than in other countries. I think that industry, if it is to take a strategic longevity view, will need to reassess its position in regard to how best to be socially more responsible so as not to harm the person it needs most - the player. As for governments, there will always be the challenge of cooperation - recognition of products and tax-sharing arrangements. If there is more of a focus on player protection than on revenue raising priorities may alter. Existing laws and agreements in place with current operators also need addressing to ensure that governments are not in breach of commercial arrangements if they wish to look beyond existing borders. Gambling is an emotive issue, but one that does not need a sledgehammer to crack the nut. I think that a cooperative regulatory approach is the answer.

IGN: Internet penetration is growing around the world and is matched by growth in gambling over WAP/wireless devices, interactive television and other devices. How will this change the interactive gambling industry?

RS: It will mean that government and industry across all sectors of the interactive industry, not just gambling, will need to work more closely together to resolve emerging challenges. I believe that interactive gambling is a subset of e-commerce generally and that certain developments arising in this arena, out of the concerns relating to gambling, will lead the way in the broader e-commerce industry. Industry has the resource and the know-how and government has the ability to provide the go forward. Government alone is not resourced sufficiently to properly regulate/control e-commerce in the same sense that it can regulate a land-based casino with 4 walls. There needs to be optimization of available resources.