Seattle conference report
also increasing the sophistication of Class II games to a point where they are much more like Class III games. This gives tribes the opportunity to enter new market segments which would otherwise have come at a considerable cost to sovereignty. One of the biggest areas of disagreement between tribes and commercial operators can be seen in California where the legal and political equivalent of a slugfest has been playing out over several years as reported in the earlier article. The conflict will come to a head in November when Californians will vote on how they would like gaming to proceed in their state but it comes against a backdrop of litigation between the sides. The tribes argue for exclusivity over gambling activity in the state as per their agreement and view the multiple card rooms as operating illegal gambling. With 40 million people, another 40+ million annual tourists, and more professional sports teams than any other state, there is no doubt that California would be a gold rush for legal sports betting apps in the US. Until the people make their views known there remains no sports betting in the state, whether retail or online, but there is no doubt that the stakes are high for the tribes, the card rooms and the big brands who all would like to grab a piece of the action. Technology the top topic with big legal opportunities As the main theme of the conference, discussions on technology dominated lots of the sessions. The breaking news panel introduced the emerging technologies that gaming lawyers need to know about and ways the industry can respond to them. As befits a conference with a legal audience, panellists pointed out that privacy laws took as long as two decades to emerge after the advent of web 2.0 which saw consumer data as its currency. As we hurtle towards web 3.0 with its metaverse and decentralized blockchain anonymity we may be reaching a point where the law and lawmakers may no longer reasonably aspire to keep pace with technology. Perhaps as a result, many of the technological innovations are taking place in the unregulated market where they can be implemented without having to navigate outdated laws. This may not always be sinister: it may be as simple as a Netflix-style algorithm based on customer data to recommend future bets. This enhancement to the customer experience may nevertheless fall foul of regulations. Even relatively established technology like the cloud is
increasingly out of step with regulation based on geographic location. This doesn’t just apply to tribal lands or US states but also in Europe where law makers are keen to retain gambling regulation under the control of nation states. One of the emerging challenges identified by panellists is to agree the legal location of gaming transactions. Identifying where (and sometimes when) a wager takes place, whether that be the location of servers, premises or customers, will determine jurisdiction. Geolocation is set to provide plenty of work for gaming lawyers arguing that their clients (in the case of Tribal gambling) have the same rights as commercial operators to extend into the mobile space or are not bound by regulation at all when distributed technology makes the whole notion irrelevant. The proliferation of internet-enabled devices was considered by panellists to raise the possibility that wagers can be placed on smart goods that don’t track location. For regulators who have rushed to create the regulatory framework in their jurisdictions, there are two technological challenges: first is the choice between compliance or security and second concerns the allocation of resources. Some highlighted a tendency to tick the regulatory boxes – penn testing, geo-location solution, responsible gaming hotline, self-exclusion program – without any sense of prioritizing for greatest risk areas or management oversight as to how the systems are working and whether they result in greater network security. The same thinking goes for resource allocation where the technology and cybersecurity risk management team is the poor relation of the other departments. Payments is an area where technology is playing an increasing role. The advent of new payment and cash apps working with gaming platforms in collaboration with banks has brought a welcome reduction in friction but it is already in danger of being superseded by a new player on the market. Apple pay is effectively a tokenized system with some significant advantages for gambling. The amount of customer data including biometrics held by Apple means verification gets a lot easier and more reliable. This is already leading to online casinos prioritizing Apple pay but recent developments are taking this a step further meaning Apple will own identity like never before. Apple’s restriction of tracking hits advertisers especially in gaming and hands a potentially huge amount of power to Apple. No discussion about technology today is complete without a look at cryptocurrency and NFTs. When crypto was mentioned about 12 months ago, the talk was balanced
48 • IMGL Magazine • July 2022
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