Blockchain Provides Transparency Needed for Regulatory Compliance
Most gambling operators view regulatory compliance as something of a hassle. The process is tedious as invoices and other pertinent documents need to be collected and submitted for review. What’s more, when found to have violated regulations, operators are subjected to penalties in the form of fines and suspension of operation. However, regulatory compliance is absolutely necessary in order for a gambling platform to keep on operating.
“Compliance, legislation, payment processing, responsible gambling—these are all big issues for regulated entities—gambling operators, gaming operators at this moment in time because the compliance departments, the UKGC and all the regulated territories throughout Europe are putting more and more pressure upon the operator to become more compliant, to become more responsible with regard to how they’re advertising, how they’re incentivizing their players to continue wagering. There has to be more accountability and more transparency from the operator to the regulator,” seasoned iGaming professional Nick Hill said during the fourth episode of Hashing it Out with Becky Liggero.
And this is where blockchain technology comes in. What the iGaming industry needs to be able to provide the transparency needed for regulatory compliance is a public blockchain, such as the BSV blockchain, that allows for all actions taken on an online gambling application to be immutably and chronologically recorded. Data becomes immutable because blockchain has a decentralized and distributed nature, meaning there is no one administrator in control of data and all miners or nodes on the network have a master copy of the data updated in real time. This not only prevents double spending, but also manipulation of data as all nodes need to approve any kind of change on the system.
“Blockchain has come on in the last few years immensely. It has totally changed. When it first came out, it was BTC in 2012. Nobody really knew what it was doing. It’s a coin, it’s for payment processing. Now, people are starting to wake up to using it as a utility application… It’s only now that it’s starting to happen that businesses are starting to adopt it and look at it—to look how they can reduce costs, how they can make things a little bit more transparent, how they can be more auditable, trackable and traceable,” Hill explained.
This traceable and auditable nature of blockchain allows for both gambling operators and regulators to use its data to verify regulatory compliance. Instead of preparing tons of documents for review, operators can just give regulators a set of keys to gain access to blockchain data. Because all transactions are sorted chronologically, it is a lot easier to sift through it. Blockchain data also serves as evidence whenever operators are questioned for regulatory compliance. And the benefits of using blockchain do not stop there.
“Blockchain enables the operator to not only protect themselves and protect themselves from fines that they’ve been getting, but also to protect the player. So. if you’re using this progressive technology to enhance and protect a player’s experience, you know it’s got to be a good thing. And at the same time, protecting the operator, because they have the ability to store everything on chain, so that it’s on a timestamped and immutable ledger that the operator can always be referred back to. Companies may pick up these fines for not adhering to the rules and regulations in responsible gaming. However, they did do that, but how do you prove that?”
Even though this kind of game-changing technology is in place, a survey of 331 companies still shows that only 12% use blockchain for various utility purposes, excluding digital currencies as payment options. This is because business owners and executives till do not know much about blockchain, which is why Hill said that education is crucial for its adoption.
“We’ve got CoinGeek Conference coming up in Zurich; and again, we’ve got to use that forum to educate—educate the industry and educate our chosen vertical, which is the iGaming industry.” CoinGeek Conference will be held on June 8-10; and everyone is welcome to attend virtually. Liggero and Hill will also act as panel discussion moderators centered on the iGaming industry.
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