Much of the gaming industry first learned of the Apple-online gaming controversy back in May, when SugarHouse.com in Philadelphia deployed its online platform and iPhone users—who comprise some 47 percent of smartphone subscribers—couldn’t get in on the games.
For reasons that have never been fully clear, Apple had decreed that its App Store would no longer offer any app that “provides access to real-money gaming, lotteries or charitable donation.” According to the order from Cupertino, “This functionality is only appropriate for code that’s embedded in the binary and can be reviewed by Apple”— i.e., not the standard HTML5 format—in other words, Apple wouldn’t offer mobile gaming apps in its ubiquitous online marketplace unless providers rewrote them to match its iOS native code.
In a master stroke of bad timing, the directive came down just as online gaming started to expand in the U.S. Worse, the tech giant demanded that iGaming providers redesign hundreds of gaming apps in warp time—by September 3. The decision could have been a major roadblock—even a dead end—for the iGaming industry.
Thanks to intercession from the Association of Gaming Manufacturers (AGEM), Apple gave the industry a break, and an additional three months to complete the complex overhaul. AGEM Executive Director Marcus Prater, who spoke to GGB News last week, said the gaming organization asked for an extension to Monday, February 10, 2020—a week after America’s premier sporting event, the Super Bowl.
Apple went the extra mile, and chose a later date of March 3.
“It was more than we asked for,” said Prater.
When the Apple mandate first came out last summer, AGEM worked with the American Gaming Association (AGA) on a response, drafting a joint letter to the Silicon Valley giant. But over several weeks, when the letter remained in limbo, AGEM decided to press on alone.
“We were worried about the timeframe—the September 3 deadline was looming,” said Prater. In its letter, AGEM asked for a meeting with Apple. When no response came, it tried again, copying Apple’s head of worldwide marketing and CEO Tim Cook.
“We got a phone call within a couple of hours,” said Prater.
AGEM members then met with Apple’s app review team. The resulting give-and-take helped each side understand the other’s expectations and challenges. “Apple needed to be aware of the regulatory structure we work in,” said Prater. “We laid it all out, but communications went cold again.
Then, lo and behold, Apple updated the developer guidelines” and pushed the deadline to March 3.
Though AGEM doesn’t take credit for the change, “we believe our case was heard and acknowledged,” said Prater. “At the heart of it was that anything that Apple wanted changed would need to be reviewed by the regulatory bodies in each jurisdiction—in the case of, say, New Jersey, the Division of Gaming Enforcement.
“There are more than 600 real-money games, and if they all needed to be reworked to Apple specifications, then theoretically they also would need to be approved by those regulatory bodies.” If Apple was worried about privacy, security or illicit transactions, AGEM helped it see that iGaming in the U.S. operates in a strict regulatory environment.
Kent Young, founder and CEO of Spin Games, with U.S. headquarters in Reno, Nevada, expressed relief at the development. “AGEM was instrumental in lobbying Apple, sending letters and having conversations to get it extended, which Apple did. It’s overall a very positive thing.”
He said the conversations added “a lot of clarity to how we can modify our games to work under the new rules. We have a happy medium in terms of how we can embed our games—or more appropriately, to partially embed our games to satisfy the new rules” without running afoul of regulators.
The extension notwithstanding, it’s not time to relax, he added. “Each and every game has to be modified in the next few months, and that’s a significant lift across the whole of the industry.”
While Apple’s motives in the matter have been questioned—one columnist called it an ‘iOS tax” and “an industry-killer”—Young said Apple may have been responding to pressure from the U.S. federal government to safeguard consumers as well as the integrity of any apps that are available in its store.
“Previously, clients would go in through the app and play a game that was essentially running outside the app,” Young said. “Now they want a significant amount of the game to be running on the app. That gives them more control from the standpoint of privacy and integrity. I think that was the motivating factor. And the sooner we can get these issues resolved, the better.”
By the time Apple changed the deadline, companies like GeoComply and Playtech were devising workarounds to keep the games live. “The solving of the riddle had already begun,” said Prater, adding that it can be viewed as a positive that the change was required early in the development of online gaming.
“As the industry continues to grow, we’ll look back and be thankful this was addressed now,” he said. “The App Store is an important marketplace. It’s Apple’s, and we have to play by their rules. We’re thankful they heard the industry’s message.
“We have more time to conform,” he concluded, “but there will be no second chance, I’m certain of that. We have six months to get it done.”
