My inner skeptic is skeptical. That little voice keeps telling me that regulatory policies across the planet are not keeping pace with technological advances in gaming. This all-too-polite voice is relying on a well-worn metaphor: Unregulated gaming is out running at top speed, while regulators and legislators are still lacing up their running shoes.
Of course, that modestly skeptical voice gets drowned out by its seriously skeptical counterpart: The unregulated gaming industry is cruising at top speed while regulators are still trying to figure out what shoes to wear.
This harsh view is supported by the longstanding recognition that advances in regulatory policies and procedures are outmatched by technological changes.
The history of legal, regulated gaming in the United States and most other countries commenced under a clear formula: Policymakers established the goals and set the rules for gaming, and licensees adhered to those rules.
In that simple, horse-and-buggy era, elected and appointed government officials acted with care and deliberation to determine the various parameters of gaming: Which games could be offered? What is the minimum payout percentage on slot machines? How many licenses could be issued, and in what locations? What would the tax rate be? And so forth and so on.
The questions and the answers were, in theory, equally clear. How quaint.
In 2025, the pace is being set by those who have no ties – at least not yet – to the established order. Consider the existence and continued expansion of so-called “skill” games in taverns, convenience stores and other locations across the physical landscape, as well as the existence and continued expansion of “sweepstakes” games across the digital landscape.
Both sweepstakes and “skill” games exist and expand because they operate under the premise that they are not “gambling,” but are rather benign forms of entertainment that lack the critical elements of gambling: chance, consideration and reward. Clearly, they are endeavoring to identify gaps in the meaning and law, and while they continue to grow, the response to both phenomena has been slow, confusing and disjointed.
As these new forms of gaming grow, should they be regulated? Should they be taxed, and if so, at what rate? Such questions (and there are many) miss the core point: You will never identify the right answers if you continue to ask the wrong questions.
Naturally, many of the questions that have been raised are appropriate, and need to be fully considered, including:
- What is the impact of unregulated gaming on regulated gaming, and on the policies that regulated gaming is supposed to advance?
- What impact will iLottery have on retail lottery, and what impact would both iGaming and iLottery have on physical casinos?
- Will the ongoing, dramatic expansion of digital gaming fuel problem gambling?
- Should licensed operators who came in through the front door and have played by the rules be forced to compete against those who seek to enter through a back door?
The answers to a wide range of such questions are emerging as regulated iGaming and iLottery grow. For example, states that give iGaming exclusivity – or primacy – to physical casinos will clearly be more likely to advance policy goals such as growth in employment, tourism and urban development, among others.
At the same time, advances in technology at private companies such as GLI, GeoComply and idPair have shown that the good guys can win some rounds. Such organizations have the technological wherewithal to help ensure adherence to established rules. We can know who is playing, where they are playing and how much they are playing, and that should give policymakers some comfort that rules governing problem gambling, for example, can achieve greater conformity and success in a digital world.
The former regulator in me knows that, over time, regulatory policies that stick to the goals of ensuring integrity in gaming can get the job done. Integrity is the indispensable ingredient that continues to course through gaming, whether at a craps table or an iGaming site. Licensees that have proven integrity will focus on policy goals such as addressing problem gambling, thus lending confidence to all of us.
The former college professor in me is giving policymakers a homework assignment: Do not sit back and let the unregulated operators set the pace for the future of gaming. Time is not on your side. Responses that are difficult may also be necessary. That could range from removing unregulated slot machines to shutting down unregulated sweepstakes and similar gambling sites. It should also include working closely with licensees to identify and advance clear policy goals.
Horses and buggies did not win races, but they were not in a race. Regulations that focused on the basics got the job done. As regulators and legislators respond to this new world, they should focus on what has worked, and what can be improved, not discarded.
By way of example, Spectrum Gaming Group CEO Fredric Gushin notes that, even when states require licensure and investigate applicants, they need to maintain uniform, high standards. He points out that, even when states require applicants for licensure to meet certain standards of good character, honesty and integrity, the standards are not uniform across jurisdictions.
Gushin, whose experience in gaming regulation dates back nearly a half-century and includes working as Assistant Director of the New Jersey Division of Gaming Enforcement, points out that short-cuts do not save time, but are actually costly, creating a wide range of issues for regulators in other states as well as with the licensees themselves.
As states consider the authorization of digital forms of gaming, policymakers should set the policies. If they let the unregulated operators set the pace and, in turn, the policies of gaming’s expansion, they are failing in their core mission.
Technologies will not slow down to allow regulations to catch up. That reality does not mean that those who have no stake in effective policies should be allowed to set the policies. The skeptic in me still recognizes that today’s leaders should not be anointed tomorrow’s winners. Elected and appointed policymakers, along with regulated, licensed operators and suppliers can still come out ahead if they focus on what has long been the priority of legal gaming: Setting and advancing public policy, and focusing on the integrity of gaming, as well as the integrity of all who participate in this industry.
