It was right here in Global Gaming Business magazine that we first heard it directly from Sheldon Adelson that he was none too fond of internet gaming.
In late 2011, Adelson told GGB Publisher Roger Gros he was “officially neutral” on internet gaming, and most in the iGaming industry wish Adelson had officially stayed that way. But then, Adelson began to mount an aggressive offensive against the spread of U.S. iGaming legalization, forming and funding the Coalition to Stop Internet Gambling, which continues to employ numerous lobbyists and former lawmakers to do Adelson’s oratory bidding when he’s not taking the trouble to do so personally.
Why does Adelson dislike iGaming so much? Despite routine comparisons, his reasons seem markedly different from those of his supposed ideological ally Steve Wynn, who told Nevada political reporter Jon Ralston in early 2014 he did not consider iGaming “a good entrepreneurial opportunity.” (It’s no secret many people within the iGaming world are starting to agree with him.)
But the bulk of Adelson’s rhetoric against internet gaming has little to do with revenue. His camp does occasionally bring that up as part of a broader effort to undermine iGaming in every possible way, but for the most part, Adelson doesn’t say iGaming is unprofitable.
He says iGaming is unsafe.
The majority of Adelson’s talking points are focused entirely on iGaming consumer protections. He claims repeatedly that iGaming exploits youth and the vulnerable by enabling addiction and being too easy to access. When he’s told that underage and problem gambling affect the land-based industry as well, Adelson credits a land-based gaming environment with being much better equipped than the internet to confront and diminish both challenges.
Practically everyone who has some sort of investment in U.S. regulated iGaming has come to resent Adelson for his incendiary remarks, and there has been no shortage of online literature rebelling against him. Sometimes, the bitterness he instigates among his adversaries gives way to the total opposite of the same extremism: a passionately defensive belief that internet gaming isn’t just as safe as brick-and-mortar—it’s safer.
But is that really true? Disparaging Adelson has certainly become fashionable among some circles; so has taking it for granted, if you’re against him, that he’s just “wrong,” even if you don’t understand algorithmic science any better than he does. But that isn’t an honest way to address the controversy—nor is it necessary in view of all the resources available to the iGaming industry in support of this issue. If you took Adelson’s claims at face value, you would think there’s practically nobody in the world who goes the extra mile to make sure kids can’t gamble on Daddy’s computer.
In reality, by the time a regulated internet gaming platform goes to market, it’s been vetted by an industry the size of an army dedicated exclusively to the study, development, testing and refinement of iGaming consumer protection technology, carried forward by the work of thousands of smart, eloquent people who can tell you exactly what Sheldon is missing.
We were lucky to talk to a few of them.
Safety First
Most of the time, iGaming operators aren’t even required to develop their own consumer protection devices; they are free to outsource this to any one of the numerous suppliers who exist to make sure Junior can’t play. CAMS, run and founded by Matthew Katz, is one of the companies that leads this space.
Even vendors like CAMS are often subject to additional scrutiny by independent testing and compliance labs such as Gaming Laboratories International (GLI), which specialize in making sure gaming platforms, analog or digital, function exactly the way regulations require them to.
Regulatory standards can vary by jurisdiction, but the “big three” principal preoccupations of iGaming consumer protections can be listed thus: operators must make sure access to the iGaming product is denied to a) the underage, b) people outside the geographic area in which the product is allowed to operate, and c) the “vulnerable”—typically this means those given to problem gambling, and the self-excluded.
Coincidentally—or not—Adelson thinks iGaming fails at all three. In his personal criticism of iGaming—for reference, see his keynote interview, also with Roger Gros, at G2E 2014—Adelson frequently claims the reliability of age and identity verification online is questionable, because you can’t ever be completely sure—meaning, see with your own eyes—who is behind the computer screen. By contrast, Adelson says, land-based casinos like the giant ones he owns in Vegas and Macau are stalked around the clock by well-trained patrolmen.
This, supposedly, would make land-based gaming less permeable to illegitimate play. What Adelson glaringly fails to mention is that unlike its regulated online counterpart, the land-based gaming environment is completely without a sign-in requirement. In online gaming, users are asked who they are up front, before being granted access to the product. Not so in land-based. There is no pre-emptive device of any kind standing in the way of a child and a slot machine.
It is certainly fair to acknowledge the presence and competence of the casino employees who do keep an eye out for underage players and act appropriately when they think they’ve spotted one. Adelson’s properties undoubtedly employ many of these fine workers.
But the enforcement is almost always retroactive—the child is apprehended after he has started playing—instead of proactive—the child is denied play before accessing the product.
This isn’t just theory. As anyone who has worked the floor knows, underage gamblers are busted all the time. Prior to his current role as vice president of government relations for GLI, Kevin Mullally was the executive director of the Missouri Gaming Commission.
“I can recall very vividly two instances of an underage player gaining access to a physical casino,” he told GGB during the GLI Regulators Roundtable in Las Vegas earlier this year. “One was a 6-foot-4, fully mustached, slightly balding 20-year-old, with sunglasses on. He was caught because he was intoxicated, not because he was ever ID’d as an underage player.
“Another was a 12-year-old who sat at a slot machine for at least half an hour—that we know of—and the only reason she was ever identified is because she won a jackpot.”
Let’s consider what would happen if the same 12-year-old girl tried to gamble on a U.S. regulated iGaming site. It is extremely doubtful she would have as easy a time of it as she did in Missouri, where she was able to literally just walk in and start placing bets. Online, the very first thing she is asked is: Who are you? Date of birth? Address? Social security number? Credit card information?
This isn’t a mere formality, or some useful way to keep records, explains Matthew Katz from CAMS. If the info she enters doesn’t check out, access is denied, plain and simple. “Online, we take the information provided by the user and we hit it against hundreds—if not thousands—of different public and private databases (consumer information, credit bureaus, etc.) plus millions of different data points, to compare the information provided by the user to as many available resources as possible.”
This does not sound like the kind of thing you see a video poker machine do very frequently.
But Katz goes on:
“We can cross-reference this information against these databases and determine: Does what the user is saying match what we see? If there is concern, we can go back to the user and ask additional questions—this is called knowledge-based authentication (KBA). For example: ‘Of the following five addresses, which one have you not lived at in the last 10 years?’”
Adelson says all the measures are doomed to fail, since “kids can get around anything these days.”
It’s worth dwelling on this incredible generalization only to marvel at what the average child would need to do to successfully “get around” this system. Because it’s certainly possible. If a child can lay his hands on Daddy’s wallet, he could reasonably expect to find Daddy’s license (DOB: check), credit card information and, with any luck, a Social Security card.
But this enterprising young degenerate will also need Daddy’s cell phone.
All regulated iGaming sites in the U.S. make use of mobile phone verification for every registration and successive login. Primarily, this is for geoverification purposes—but at a time when kids and adults alike are more reluctant to part with their phones than their wallets, it’s also a very convenient way to assume the person behind the screen and the owner of the phone connected to the account are the same person. Additionally helpful are mandatory PIN codes, which are texted anew every time a user wants to withdraw or deposit funds.
Maybe Daddy came home, left his jacket at the entrance with all his stuff in it, and went to take a nap. Score! Wallet in one hand, phone in the other, Junior is now guaranteed to get away with this illicit infiltration scot-free.
As long as he also has control of Daddy’s email and can intercept his bank statements.
That’s because all regulated iGaming transactions would come with an email receipt. “Your $1,000 deposit has been approved,” is what WSOP.com would dutifully let you know. Of course, he might never find out if Junior had the good sense to delete that email, which he can probably access on Daddy’s mobile—as long as he can also figure out Daddy’s unlock code, an increasingly standard feature of smart phones today.
Location, Location, Location
This is the part where some iGaming proponents stop reading and proudly exclaim, “See? We told you iGaming was safer!”
Not so fast. Take geolocation. Can even the most cutting-edge geoverification platform match the land-based industry’s 100 percent success rate ensuring the gambler is within the legally permissible gambling area?
“Geolocation is a totally different animal,” Katz explains. “If you’re in a land-based casino, you are obviously physically there. Online, geolocation was not designed for the concept of state borders, and therefore, the risks are greater for geolocation on the internet than they are for land-based.”
So in spite of the deployment of notoriously stringent geolocation technology like we’ve seen in New Jersey—where people who live too close to the border continue to have trouble signing in—there is always a possibility, no matter how small, of a glitch, or an error, or a server crash, which will always account for an online geolocation success rate under 100 percent.
Ironically, this technical Achilles’ heel is the one Adelson brings up the least often—perhaps because it’s not as dramatic. It certainly evokes a lot more outrage to envision a child playing online poker versus a hipster doing the same in Bucks County. It is also upsetting to imagine that a ubiquitous internet gaming platform could enable the self-destructing habits of people who are at risk of gambling addiction. (Adelson and the like-minded have a catchy proverb for this: “Click a mouse, lose a house.”)
Adelson says internet gaming won’t just endanger problem gamblers; it will also create new ones. But Connie Jones, director of responsible gaming for the Association of Gaming Equipment Manufacturers (AGEM), argues that these are only speculative suppositions at best. As far as we can tell, no body of work or research exists that demonstrates a correlation between regulated internet gaming in the states and countries that have it and an increase in the incidence of gambling addiction. Jones points to the U.K., where internet gaming has been regulated for years, no discernible spike in problem gambling was ever recorded.
This is not the same as saying that internet gaming absolutely, positively does nothing to upset or complicate people’s lives—particularly for those who are already at risk for problem gambling—because maybe it does, or it might in the U.S., and we simply haven’t got the means to measure it yet.
But Adelson does the credibility of his argument no scientific favors by trying to support it with repeated references to his family’s past struggles with addiction. This would not be admissible evidence in any laboratory. With appropriate respect to the hardships the Adelson family has undoubtedly endured, it’s just hard to see how gambling on a computer will cause one harm because Adelson Sr. had a fondness for the racetracks.
If anything—and here the iGaming cheerleaders can record another win for their cause—a digitized gambling product is the only one that can offer the unique ability to detect, monitor and subsequently try to mitigate problem gambling. The power of being able to track every hand, decision and transaction is simply too great to ignore or undervalue. The mandatory sign-in process allows an iGaming operator to connect and deal with every user up front in a manner completely foreign to the land-based environment.
Come to think of it, the meager standards of problem gambling mitigation in the land-based environment are—there is no better word—embarrassing when compared to certain iGaming measures, like what Jones tells us is called “reactive messaging,” which are mandatory in some states, notably New Jersey.
Reactive messaging was adequately illustrated in a YouTube video showing UFC President Dana White playing online blackjack on now-defunct Ultimate Casino inside a hotel room in Atlantic City.
“I like how this thing tells you how long you’ve been playing,” White says before humorously paraphrasing what the system is telling him: “You’ve been playing for two hours, you sick bastard; go home!” Which is exactly what he did, shortly after.
Once again, this is not to say that this system is foolproof. White could have easily ignored the message and kept playing; undoubtedly, many users in his position would. But when we compare the mere existence of these measures, and their modest ability to achieve some success, to the utter absence of anything even resembling reactive messaging in today’s U.S. land-based environment, one can’t help but wonder why it is iGaming that gets all the heat.
When was the last time a slot machine asked you who you were? Or bothered to inform you how long you’d been playing, and how much you had wagered? The answer is: never.
Better or Worse?
Compelling as it may be, this side-by-side comparison of online consumer protections versus their land-based equivalent does little to determine whether internet gaming should be legal. Nor is the end goal to award recognition to which side is “better.” An impartial and rational examination of all issues inevitably leads to the conclusion that consumer protections on each side are vulnerable to some failure, and online and land-based regulations alike are limited in their capacity to prevent all wrongdoing before it is committed.
But this incapacity is hardly singular to gaming, live or online. Nothing tangible beyond plain good conscience can consistently stop an adult from buying alcohol legally and handing it to his kid the moment he gets home.
Ultimately, with gaming as with every controlled product or potential vice, we are forced to rely on the general good sense of responsible adults. As for minimizing the damage perpetrated by the opposite of good sense, the best we can ever do is develop reasonable punitive measures that can discourage violation and contend with it when it’s discovered. “I don’t think you can ever be sure. I don’t think there is ever 100 percent certainty, in online or land-based casinos, that everything is being done legally every minute of every day. But that’s why you have regulations and compliance functions to alleviate the risks and to minimize the damage as much as possible.”
Those are the words of A.G. Burnett, chairman of the Nevada Gaming Control Board, which has overseen the regulation of intrastate online poker for almost two years. And if there has been some sort of outbreak of iGaming addiction or widespread incidence of super-kids besting the system during this period, Burnett certainly hasn’t seen it.
“Internet gaming has not been a problem. It has not been a regulatory headache for us by any stretch,” Burnett says. “Age and ID verification, protecting the vulnerable… Those were all at the forefront of our minds when we went forward with the iGaming regulatory process. Looking back, none of those things has been a serious issue.”
When Burnett concludes by claiming that the threats to game integrity are practically the same online as they are for land-based, it should make us realize this debacle is becoming way too divisive—and the only loser will be the gaming industry as a whole. By continuing to degrade the vitally important issue of consumer protections down to a contest over which form of regulation is “better,” we forget that live and online gaming regulations are supposed to work together to address many of the same problems.
An especially powerful viewpoint to this effect is supplied by Mackenzie Haugh, director of engineering for GLI, who has tested, evaluated and tinkered with more iGaming consumer protection platforms than possibly anyone else in this space.“There is some truth in many of these arguments,” says Haugh. “It does not matter what ‘side’ you’re on. If you’re trying to make internet gaming fail, you will. If you’re trying to make it a success, you will. So what are your goals? Regulation is about urging prevention and coupling it with disciplinary action. It’s not about absolute prevention. Nothing is ever absolutely preventable.
“What I would say to Adelson is: Give us a list of what you have a problem with. Because I guarantee that, on a technical level, all of it could be addressed.”
It’s hard to imagine Adelson changing his mind about internet gaming in the near future. But it’s not impossible that Las Vegas Sands may one day decide to enter the space. Should that day ever come, the company would be glad to find that much, much progress in the way of iGaming consumer protections has already been achieved by the very same people who are presently under accusation of enabling kids and the vulnerable to do harm to themselves.
