Q & A: Hugh Monypenny

IGN takes an in-depth look at the services provided by accredited independent testing agencies through an interview with Hugh Monypenny, managing director of BMM.

BMM is one of the three Australia-based agencies currently utilized by online gambling software firms and casino operators. All three are being featured in a series of IGN executive interviews. The first, an interview with John Cargnello of Technical Systems Testing, was published January fourth.

IGN: How long has BMM been around and how did the company get started?

Hugh Monypenny: BMM was established in 1981 as a firm of independent computer systems engineering consultants. One of our early assignments was to assist the Victorian government with the upgrade of its TAB's (OTB) computer systems. One assignment led to another, and within a few years BMM was recognized as the leading independent consultants on wagering systems and wide-area high-performance, high-transaction, high-reliability systems. Other business areas included hospital systems, pathology systems, insurance systems and racing administration systems.

When the Victorian government introduced regulated gaming in 1991, it commissioned BMM to put together the technical requirements specifications (TRS) for wide area (pubs and clubs) gaming systems, in-venue equipment and casino systems. The TRS aimed to set the highest standards then available in the world, including online real-time central monitoring. We were also commissioned to set up a test laboratory to conduct the compliance testing for all gaming systems seeking approval in Victoria. We did this and within six months had completed the simultaneous testing for both licensed operators, Tabcorp and Tattersall's (CMS, networks and in-venue equipment).

BMM has since grown to over 50 staff, with offices in Melbourne and Sydney and is widely recognized as the leading testing agency in Australasia, covering the full range of wagering, gaming, lottery and Internet gaming (IG) systems.

IGN: Can you tell me a little bit about the company's business plans now and for the future?

HM: Broadly, our plans are to expand into other geographic markets, starting with the U.S. early in 2001. We have been doing a small amount of business in South Africa for some years and are seeking to expand that in 2001 also.

We also offer system testing services in other markets such as government, e-commerce and business applications, and have a software services division that offers development, support and consulting services in non-gaming markets.

IGN: How does a company become an official accredited testing facility (ATF) in Australia or other nations?

HM: In July 1999, the state gaming regulators established a new regime of ATFs. A national assessment panel received applications and produced an assessment report on each laboratory's capability to test in-venue equipment. Each state regulator then decided whether or not to accredit each applicant in their jurisdiction. Manufacturers and operators are able to engage any ATF to test and certify their gaming devices and systems. ATFs are subjected to close scrutiny by the regulators to ensure they remain independent and maintain their capability.

Prior to July 1999, laboratories were engaged directly by the regulators. Regulators then decided which laboratory should test what. The Victorian regulator, the Victorian Casino and Gaming Authority, exacted the highest standards of the two laboratories it engaged, subjecting them to regular process, technical capability and probity audits. BMM was the only laboratory which satisfied the requirements to test all types of systems.

IGN: Why are you opening so many offices around the world?

HM: BMM's headquarters are in Box Hill (Melbourne, Victoria). We recently opened an office in North Sydney, and will be opening a subsidiary, BMM North America, out of Las Vegas, in early 2001.

BMM has established a reputation as being the most thorough, experienced, highly qualified and highest standard laboratory in Australasia. The Australasian jurisdictions set the highest standard in the world for gaming systems. As the Australasian gaming industry has matured, BMM has established solid relationships and credibility with many of the leading and largest manufacturers of gaming systems in the world. It is only natural that we now wish to provide the same high standard of service in the other well-regulated markets.

IGN: Can you explain what BMM does, especially for the online gaming industry? Does BMM only provide certification services to the e-casinos and e-bookmakers or do you also assist these companies in the development of their sites, software, backend systems, etc.?

HM: BMM is first and foremost an independent and accredited testing facility. The majority of the work we do is testing gaming equipment to certify its compliance with the technical requirements of one or more gaming jurisdictions.

But, we do much more than this. When developing a new gaming machine or other device, the manufacturer wants to find its problems as early as possible. The last thing a manufacturer or software developer wants to happen is to find that the production model he submits for testing has a basic design problem which effectively means he has to go back to the drawing board if he is to achieve compliance with the regulators technical requirements. BMM offers a full lifecycle service aimed at addressing this issue. The objective is to minimize the cost and the time to market. But the service is limited to reviewing products throughout their development lifecycle from the compliance point of view. We do not provide specific advice on design as this would disqualify us from then conducting independent compliance tests for the product.

We cover the full range of computer-based gambling system, from traditional lottery and wagering systems, through casino and wide-area gaming systems, keno, sportsbetting to all types of Internet gaming systems.

IGN: How does the certification process work? What are the biggest concerns for online gaming operators? Is there a common problem that these sites need to overcome before receiving certification?

HM: The certification process is centered very much around the regulator's Technical Requirements Specification (TRS). To put it simply, we have to go through the TRS and verify that the system submitted for certification complies with all the requirements. This is easier said than done, because the TRSs are very generic. They are written specifically so as not to place design or technology constraints on the developer. Therefore it requires a good understanding of the intention of the TRS, i.e. what risk it is trying to minimize, so as to establish whether or not a particular system complies. Once that is clear, the next challenge is to develop the test plan and specific scripts (including the technology which needs to be used) to establish beyond a reasonable doubt that it complies.

The TRS tries to be very specific without being prescriptive and is aimed at ensuring that a system is fair, secure, reliable, accurate and auditable. But, an overarching requirement is that the system works. This can sometimes lead to us chasing problems which, while not addressing any of the specific requirements, do lead the tester to believe that a particular set of circumstances could result in a failure mode which is clearly not acceptable.

But these are generally all technical issues that the supplier of the system needs to overcome. The main issue from the operator's point of view is that it has very good operating procedures in place, and that its staff are well trained to be able to handle problems.

Also, the infrastructure tends to cause problems with operators that are not across the issues involved in running a high quality, secure and industrial-strength e-commerce site. The Australian TRS are very exacting in this area, because it represents the biggest risk to the operation. BMM has developed a range of services aimed at enabling suppliers of infrastructure systems to gain pre-certification of their system. This means that, if compliant, the operators purchasing the pre-certified infrastructure can expect to get the selected gaming software integrated onto the infrastructure, tested and operational much faster than it would with an untested infrastructure.

Another common problem area is ensuring that the site is resilient and has good restart and recovery capabilities that ensure that no player transactions are lost, even in the event of a major disaster at its main site.

IGN: What kind of work have you done for Internet lotteries? Is there a different set of concerns for lotteries than there are for gambling sites?

HM: The essential difference between an Internet lottery and an Internet casino is that in the latter the gaming activity occurs online real-time. An Internet lottery is basically an order entry system for products that will be processed and delivered during an off-line batch process. The latter are much easier to control than the former. While I am not belittling the complexities and risks involved in setting up an industrial-strength full-blown Internet lottery, it is nonetheless technologically simpler than setting up an Internet casino.

IGN: Do you work with clients who are offering gambling via the wireless Internet or iDTV, etc.? If so, what are the special concerns these clients that need certification? Are these concerns different than what faces the more "traditional" Internet gaming sites?

HM: No, we are not at present. But we have the expertise to do so when it comes our way. Wireless Internet or iDTV will allow an increasing number of people to easily access the World Wide Web and all it has to offer, including gambling. As an increasing number of people have access to gaming through the Internet, it will become increasingly important that the systems and games are well-regulated.

Internet gaming regulation, whether delivered through wireless, iDTV, or another means yet to be developed, should be based on the rules and regulations that have successfully evolved within the traditional gaming industry. As technology advances, the same strict regulatory requirements and technical standards should apply to the evaluation of systems and games. And, every attempt should be made to allow gaming regulators access to new technological tools, such as transaction specific audit trails, that can assist in protecting the gaming public against social concerns and provide assurances of honesty and integrity within gaming systems.

IGN: Is BMM hired by the various online gaming companies prior to the certification process or brought in only when the site is ready to get their certification?

HM: We get both situations. But, as indicated before, we prefer the former because we know we can add far more value if we get involved early. It is incredibly frustrating when we are presented with a fait accompli and five minutes into the initial familiarization and review process we find a basic flaw or a gaping hole in the product submitted for testing, which renders clearly non-compliant.

IGN: Do you work with online gaming operators only in Australia or with operators from around the world? If so, is there a difference between the needs of Australian clients and those outside Australia?

HM: To date we have been working mostly with Australian operators, but over the past year we have been steadily increasing the number of overseas clients, particularly in the IG market. Most of them are primarily interested in gaining certification to Australian standards because this is recognized as state of the art and the best recommendation an IG operator can have, whether or not they choose to operate out of Australia (which is not happening at present, of course.)

The needs are essentially the same, and this is a reflection of the soundness of the Australian standards: they require strict but realistic attributes of IG systems. The main differences relate to taxation practices and reporting requirements.

IGN: BMM was a sponsor of the Online Gaming Forum held in August. It sounded like a rather stormy meeting, with many regulators and operators openly scoffing at some of the messages federal government officials were trying to convey. What topics raised during the meeting interested you the most? How involved were you in the issues?

HM: I would have described the atmosphere as one of amazement and incredulity rather than stormy. The industry, mainly operators and regulators, has good reasons to believe that it has done very well in implementing rules, regulations and technical standards which address well the real and recognized issues which can arise from the significant increase in accessibility of gaming services. It recognizes that there is more that can be done, and is being done, to improve on the measures already taken. The industry and the state regulators invited the federal government three or four years ago to participate actively in the regulation of IG but it declined saying that it purely a matter for the states. For it to come along now with these extremely draconian measures after regulators and Industry have invested scores and probably hundreds of millions of dollars in setting up and complying with an extremely proactive and high standard regulatory environment beggars belief.

The main topic in our, and everybody's, view was what the industry now needs to do to "get it together," as the federal government put it without really saying what it means. BMM has been reasonably involved in its own way to try and bring some logic to the argument. I presented a paper at the forum, which aimed to do that, and I have tried to get the messages in that paper across to all the politicians actively involved in the debate.

IGN: What do you think is going to happen on the federal level? The Internet Industry Association (IIA) has expressed some concern that the government's moratorium efforts could effect the entire Australian e-commerce economy? Do you agree?

HM: Now that the moratorium has been enacted, and the obvious initial fallout has occurred (Federal Hotels, GoCorp, etc), we have to focus all our efforts in ensuring that logic and common sense does prevail in the end. Unless we (the governments) can control the development of technology, which they clearly can't, then there is no point in retrospectively slapping bans on galloping horses after they have bolted. The Internet is a reality, as is Internet gaming, and governments are going to have to learn to live with it. Where they are concerned that unscrupulous operators may take advantage of uninitiated customers, they should set in place regulated options which will allow the customers to obtain the services they want in reasonable safety and security.

The moratorium has made Australia a bit of a laughing stock because we were first showing sensible and strong leadership in an area of concern to all fair-minded citizens. The next moment we scuttle these efforts by applying a measure which clearly does nothing to address the real problem, which is that arising out of land-based gaming services where the player is usually anonymous, and therefore difficult for responsible gambling initiatives to assist.

I agree that this moratorium and the threat of a ban has potentially serious repercussions for the Australian e-commerce economy. The measures, which would have to put in place to bring a total and effective ban into being, are uncontainable in a modern liberal democracy. If there is a small percentage of potential problem gamblers, is it not reasonable to put measures in place to help them help themselves rather than preventing the vast majority of citizens who wish to do so to partake in what they regard as an acceptable and harmless leisure activity? Are we next going to start limiting who can have access to online stock market services, banking or retail services?

IGN: Has BMM been involved in the development of any legislation for online gaming and wagering? If so, where and how?

HM: BMM has been involved in the development mostly of the regulations and technical standards which attach to online gaming and wagering legislation. We are computer systems engineers and as such tend to look mainly at the technical aspects of these activities. But, as engineers, we are often invited to comment on legislative and contractual matters because engineers seem to have good logical minds and clear-thinking abilities. Having said this, other than taking leading roles in developing technical requirements specifications, this is not a core activity of BMM.

IGN: What do you think are the biggest issues or concerns that online gaming operators around the world need to address?

HM: The main issue they need to address is to present a fair and reasonable view of the product they offer to the gaming public. Far too many are focussed on the big money the player can win rather than on the entertainment value they can offer for the player who views this activity as such. There are very, very few players who win big-time, and anybody who goes to a gambling site or a land-based casino with that expectation is deluding him or herself.

Operators need to make a very serious and credible effort at promoting responsible gaming. It is vital that children are taught what gaming is really about, in the same way as they are, in some cases or at least should be, taught about understanding the media. Only then will they be able to make informed and responsible choices. The gaming industry, and governments as a by-product, cannot expect to grow their revenue exponentially without regard to the potential damage they can cause to the unwary player. If the Industry is to avoid a fierce and inevitable backlash from the community, they must be, and be seen and perceived to be, responsible about the product they are offering. I think the Australian Industry and Governments are making significant progress in ensuring that this is the case in Australia. But, with IG it automatically becomes a global issue. We are years away from achieving a globally enforced standard that would be acceptable to first-world jurisdictions, but we have to start now to move in that direction. It is up to such first-world jurisdictions to show the leadership necessary to achieve this long-term objective. Sticking our collective heads in the sand and trying to apply pre-Internet practices will only allow unscrupulous operators and governments to get away with blue murder