GPWA Times Magazine - Issue 19 - February 2012

“spoof” IP addresses through proxy serv- ers, the use of screen-sharing software (e.g., GoToMyPC.com) and the accuracy of IP address databases. Proxy servers act as an intermediary to sup- ply a legitimate or approved IP address for the iGaming site they are attempting to ac- cess. While this has been a known and hith- erto unresolved problem in the implemen- tation of geolocation rules, solutions are now being made available from some geolo- cation providers which can limit this poten- tial threat through the monitoring and ban- ning of known proxy servers’ IP addresses. Screen-sharing software can permit play- ers to bypass IP geolocation in much the same way as a proxy server. In this case a player can access an iGaming site through a remotely controlled computer that is in a regulated state, even though the player is in another state or country. To combat screen sharing, operators must ensure that their geolocation solution includes the spe- cialized software required to detect when screen-sharing programs are running. The accuracy of IP databases can lead to a discrepancy between the location of a player and the location of an IP address. This is of particular importance when try- ing to geolocate people who live near a state border. In scenarios like these, peo- ple who live just inside a regulated state could be counted as living in the adjacent state and thus denied access to a service they rightfully should have access to. At the same time, people living just outside a regulated state might be counted as living within it and granted access, which would violate the UIGEA. Although some geolocation companies claim an IP-to-state database accuracy of 98 to 99 percent, other figures put the ac- curacy of IP geolocation at anywhere be- tween 70 and 99 percent. For these reasons operators should ensure that their geolocation provider utilizes other sources than just IP to determine a player’s location more accurately. By har- nessing the additional metrics which the newest geolocation solution providers cal- culate, a player’s location can now be pin- pointed with 10-50–meter accuracy. Age Verification Amajor social concern when talking about the regulation of any form of gambling is the possible effect it will have on the prev- alence of underage gambling. This is of even greater concern when talking about online gambling because the openness of the Internet makes people believe that it is impossible to enforce age regulations. However, this perception is far from the truth. There are technologies that already exist which can meet the strict require- ments of federal legislation to protect mi- nors from accessing products or services they are not permitted to use. One such technology is Aristotle’s Integrity Direct, which is a Web-based age and iden- tity verification service. The service is able to work in real time, verifying the age and identity of a website user against a data- base of government-issued IDs for over 3.4 billion citizens in 135 nations. The system is currently being used by to- bacco delivery sellers to meet the require- ments of the U.S. government’s Prevent All Cigarette Trafficking (PACT) Act of 2010. The act stipulates that tobacco de- livery sellers cannot sell or deliver any tobacco products to people under the minimum age required for legal sale in the place the delivery is made. Technologies such as Integrity Direct, which are already being used to comply with government legislation, should be easy to integrate into iGaming systems to ensure that all players are of legal age. Banking With the uncertainty created by the UIGEA with regards to processing financial trans- actions for online gambling it is difficult to ascertain if and which financial institutions would be willing to step forward to service iGaming companies. For now, discretion rather than valor seems to be the order of the day among banks as they seek to avoid any associations with iGaming in the U.S. At this point it does not appear that any of the U.S. states looking to regulate iGam- ing have floated a Request For Proposal addressing financial transactions, nor have any of the major U.S. banks shown much of a presence at iGaming conven- tions, which leads to a couple of questions. First, what will make banks get interested in iGaming (is one state at a time a big enough prize for them?), and second, but more importantly, do they have the neces- sary tools to integrate into existing iGam- ing systems? Neither question is answerable at this time; however, with the recent clarifi- cation from the Department of Justice (DOJ) that the Wire Act does not apply to non-sports wagers, banks may begin look- ing to develop a viable system for process- ing financial transactions for the launch of iGaming in the U.S. Other questions about players’ willing- ness to use online financial systems will always be around, but recent data indicates this should not be a concern. A 2011 sur- vey by the American Bankers Association showed that Internet banking was the pre- ferred method of banking for 62 percent of people, up from 36 percent in 2010. Even among people 55 and older, Internet bank- ing was the preferredmethod at 57 percent. Not Quite There Yet The issues presented here certainly are not permanent roadblocks to iGam- ing in the U.S. In fact, age verification doesn’t appear to be the issue that some might claim it is. Yet, there is no getting around the fact that more work has to be done. However, these issues should now be much easier to address with the DOJ’s clarification on the legality of intrastate iGaming in the U.S. and by the upgrading by operators of their location-verification processes and systems. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Anna Sainsbury , former commercial director of TST, has over seven years of experience in regulation and compliance across both the land-based and online gaming industries. Anna has worked with regulators, operators and vendors throughout North America, Australia, Asia and Europe. More recently Anna has taken up the challenge of developing and delivering a reliable geolocation solution for the U.S. intrastate market. As CEO of GeoComply, Anna is now working with some of the first movers in the emerging U.S. online gaming market to harness the latest technolo- gies to ensure compliance with the UIGEA and other governing laws. “ As with many divisive issues within U.S. domestic politics, the fate of iGaming is likely to fall to individual states, as it has for land-based gambling.” 21