GPWA Times Magazine - Issue 13 - June 2010

“Themovement towardcreatinga common standard for the regulation of onlinegaming hasbeengaining momentumover the past several years.” Will smaller jurisdictions like Antigua, Kahnawake and Alderney be able to maintain their market share in view of the rapidly shifting political and legal positions inother, larger jurisdictions? In my view, in the short andmedium term, it is likely that smaller jurisdictions will continue to play an important role in the industry.However,tosurviveinthelonger term theymust focus on advantages that larger jurisdictions cannot offer – in particular, preferable taxation rates. Smaller jurisdictions would also benefit from developing closer working relation- ships at a regulatory level. A network of like-minded smaller juris- dictions that would allow for reciprocal recognition, or portability of licenses would be of significant interest to online gaming operators and would offer aplatform that could com- petewith themonopolistic approach that seems to be favored by larger jurisdic- tions. Confluence of regulatory oversight In the early years of the industry (mid-1990s), regulatory oversight of online gaming was either nonexistent or focused more on “licensing” with little attention to “regulation.” The first credible regulatory model emanated from Australia and in particular, Queensland’s Interactive Gambling (Player Protection) Act, 1998. The Queenslandmodel served as a basis for the original regulations developed by several other jurisdictions including Kahnawake, Antigua and Malta. These earlymodels were essentially land-based gaming regulations looselyadapted to the onlinegaming industry. In the first half of the 2000s, although a number of jurisdictions established regulatory regimes for online gaming, therewas little if anyattempt to reconcile thesevariousregulatorymodels–creating a global patchwork that provided little certaintyorprotection toplayers. Since approximately 2005, some jurisdictions initiated efforts to develop working relationships among their respective regulators. For example, the Kahnawake Gaming Commission (KGC) entered into Memoranda of Understanding with its counterparts in Antigua (2005) andMalta (2006). Over the past several years, regulatory models have become much more sophisticatedandmorespecifically tooled to address the unique requirements and demandsof the Internetgaming industry. New categories of licensure were created — particularly inMaltaandAlderney— to address thedistinctionsamongnetworks, operators and software providers. In the latter part of the 2000s, in response to industrydemandsforredundancy,several jurisdictions created mechanisms that allowed operators to locate their servers within their territories for the purpose of “disaster recovery.” Themovementtowardcreatingacommon standard for the regulation of online gaminghasbeengainingmomentumover thepast several years. A subcommitteeof the International Association forGaming Regulators (IAGR) is actively addressing this issue.eCOGRA,whichdescribes itself as “a non-profit, London-based player protection and standards organisation thatprovidesan international framework forbestoperationalpracticerequirements with particular emphasis on fair and responsible gambling,” has developed a comprehensive set of requirements for the auditing and monitoring of online gamingoperators thathasbeenapproved by the European Gaming and Betting Association (EGBA) andby theKGC. There is little doubt that the next few yearswill see a confluence of regulatory regimes for the online gaming indus- try. The development and implementation of com- patible regulatory stan- dards are clearly in the best interests of players, and are a further indica- tion of the maturation of the industry. Murray Marshall has been a practising Cana- dian lawyer for over 22 years and is a member of the bars of Alberta and Québec. He has served as legal counsel andadvisortotheKahn- awakeGamingCommis- sion since its inception in1996and,in2009,was namedasGeneralCoun- sel totheCommission. 35 Gazing into the Crystal Ball