Compliance Updates

Maths Compliance, the key to a successful certification

Published

4 months ago

December 21, 2023

George Miller

Maths Compliance, the key to a successful certification

Reading Time: 5 minutes

by Lorenzo Nardini – Head of Technical Compliance and Maths at ComplianceOne

If you have ever undergone the certification process to enter any regulated market, you have probably encountered issues relative to Random Number Generators and the maths models of games of chance. The two parts of the certification process have most likely endangered the planned time to market.

In this short article, I would like to help you understand good practice and reduce these risks, by sharing some tips and best practices to follow that I have learned in my 6 years’ experience as math analyst.

The start

In principle, maths requirements are only a small part of the full list of criteria that apply to a gaming technology platform, and they do not vary wildly between land based or iGaming solutions. Nevertheless, they can be quite difficult to check.

The first step in this process is typically the Random Number Generator approval. This is because, in the same way car suppliers want to first ensure that there is a functioning engine that enables the vehicle to move, game suppliers need to be able to generate unpredictable game outcomes that are fair to the players.

At first glance, the RNG can look like a scary topic preferably discussed only with a very limited audience. However, it is not necessarily the case, if you have a good understanding of the main technical standards governing this component and a team of professionals to support you.

In general, regulators want to ensure that the RNG can output unpredictable numbers without introducing any form of bias. For some markets the unpredictability requirement can be very strict, allowing only secure RNGs (known as cryptographically strong). This is where many issues can rise since RNG technology continuously evolves over time and methods that are currently deemed as secure may not necessarily be in the future. In fact, cryptographic security is a vastly researched topic in information technology and its evolution has large repercussions in many areas other than Gambling: from Finance to Healthcare, from E-commerce to Military. Fortunately, you don’t need to be a crypto guru to have a well-functioning cryptographic RNG and stay ahead of time! Most operating systems have embedded cryptographically secure sources of entropy, different cryptographic RNG solutions are easily accessible, and if you want a source of true random numbers you can opt for hardware-based solutions that use the laws of physics to generate truly unpredictable events. On the other hand, something that is not advisable is to try to develop your own RNG algorithm as this can be a very cumbersome task and independently asserting its security might take a very long time.

The tips for successful management of RNG certification

What you should focus on if you want to reduce your time to market while ensuring compliance for your RNG can be summarised in the following tips.

You should probably opt from the very start for a cryptographically secure RNG, even if you are currently aiming for a market that does not require the RNG to meet this level of security. This is because, as technology is advancing, so are the requirements, and more and more countries are moving in this direction. Furthermore, once you have finally obtained a license for your target market, you might probably want to expand operations to other jurisdictions that might require a secure RNG. Already satisfying this requirement will certainly save you some valuable time! If you are unsure on what type of algorithms to consider, try to address some experts that can guide you in the right direction.
Interestingly, the most common mistakes I have noticed concern a much easier component of the RNG solution: the process of performing final outcome mapping without introducing a bias. RNGs typically produce numbers in specific binary format (32bit and 64bit are the most common cases). It is then up to you to add some functions in your code to enable to generate outcomes in a specific format. This typically includes a target range (for instance 0-36 if you want to use your RNG to give outcomes for a single-zero roulette) and the possibility to perform shuffling to output unique outcomes within a single play (as in the case of card games). These methods are prone to introducing bias and experts can assist you to avoiding these commons mistakes.
Try to set up your system architecture so that the RNG is encapsulated. This is because, once your RNG is approved and since it is such an important component of Gaming Platforms, you only want to modify it when necessary, and avoid that any change to other files nonrelated to it can trigger the recertification of this component. Ideally, once you have a secure RNG algorithm, unbiased scaling, and mapping methods and, where necessary, a dynamic monitoring feature, you should update your RNG only if disruptive technological advancements require so. A review of your RNG architecture can be performed by experts to help you maintain a compliant RNG solution.
Ensure that your RNG is tested for general use. Many regulated markets require that the RNG passes statistical testing for all the possible configurations for which it is requested to generate random outcomes by the associated gaming applications. Having your RNG tested upfront for a vast variety of cases will save you from having to apply for updated RNG certifications whenever you want to release a new game.

Now that you have your RNG approved, it is time to start the certification process of the associated games.

The maths in Games

A good game’s maths is the differentiation between a good game and a bad game. The maths is where your company new ideas can be implemented to making more and more appealing features to attract players.

All games are unique and require passing independent testing to ensure their compliance. The standard requirements related to maths mostly concern the following aspects: minimum Return to Player (RTP) allowed, odds of specific outcomes such as the top prize, and limitations enforced by the regulator such as on the maximum possible win in a single play or maximum average loss per hour that players can expect while playing the game.

To pass these requirements you need a sound mathematical model of your game and, most importantly, very detailed and accurate documentation to ensure its reproducibility and independent verification. In my experience, insufficient/unclear information is the number one responsible for a slow math evaluation. Whether it is for inexperience or for trying to protect their intellectual property, it often happens that young suppliers do not submit accurate and complete math documentation (PAR Sheets). This irremediably results in a tedious testing process full of long email threads and JIRA tickets to address. A thorough revision of these documents before the certification commences is then recommended and it is something that my team is happy to perform.

At the same time, efficiencies can be found by allowing simultaneous testing against different markets: after all the underlying game math model is the same! In order to do that, your main thing to worry is to have performed a complete compliance research for all applicable requirements.

Conclusion

The usual piece of advice is preparation; the successful certification with a quick time to market requires expertise in this area, sound maths documentation to submit to the lab and remembering that complexity isn’t always good.

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Balkans

Expanse Studios Launches in Bulgaria with Inbet

Published

2 days ago

April 26, 2024

Alan Campbell

Reading Time: < 1 minute

Expanse Studios, a leader in online gaming innovation, has secured a Bulgarian iGaming license and is now live on Inbet’s website. This expansion brings Expanse Studios’ popular game offerings including turn-based strategies gamified for iGaming, classic slots, traditional card games and the highly-acclaimed ones like Titan Roulette, Clown Fever Deluxe, Wild Icy Fruits, White Wild Whale and Joker Poker to Bulgarian players.

Diverse Gaming Portfolio Now Available to Bulgarian Players

With the Bulgarian market entry, Expanse Studios introduces a versatile gaming experience to Inbet’s platform. The offerings include a dynamic range of games tailored to diverse player preferences:

Turn-based strategy games: Leveraging gamification, these games transform traditional strategy gameplay into engaging iGaming experiences, suitable for both novice and experienced players.
Classic slots: Players will enjoy a variety of themed slots that combine traditional gameplay with modern graphics and sound.
Traditional card games: A selection of popular card games offer something for every card game enthusiast.
Titan Roulette: This standout feature, known for its immersive experience and innovative design, continues to be a favorite among roulette players.

Commitment to Quality and Compliance

Expanse Studios not only cultivates a diverse gaming library but also adheres to stringent regulatory standards to ensure a secure and fair gaming environment. The acquisition of the Bulgarian iGaming license is a testament to Expanse Studios’ commitment to compliance and excellence in the gaming industry.

The partnership between Expanse Studios and Inbet marks a significant milestone in Expanse Studios’ expansion efforts. By combining Expanse Studios’ innovative gaming solutions with Inbet’s established market presence, both entities are set to offer a superior gaming experience to players in Bulgaria and potentially beyond. As Expanse Studios continues to develop and release new games monthly, Bulgarian players can look forward to a continually evolving and enriching gaming landscape.

Compliance Updates

EGBA Welcomes European Parliament’s Approval Of New EU Anti-Money Laundering Framework

Published

2 days ago

April 26, 2024

George Miller

EGBA Welcomes European Parliament’s Approval Of New EU Anti-Money Laundering Framework

Reading Time: 2 minutes

The EU’s new anti-money laundering package aims to create a more consistent regulatory framework and will benefit online gambling operators by standardising AML rules and reporting requirements across member states.

Brussels, 24 April 2024 – The European Parliament has approved the EU’s new anti-money laundering (AML) package at its plenary sitting today, marking a significant milestone towards a new EU framework for combatting financial crime. The European Gaming and Betting Association (EGBA), representing Europe’s leading online gambling operators, welcomes the Parliament’s approval of the new AML package and believes the incoming rule changes will strengthen the EU’s approach to tackling money laundering.

The new package will contain:

A single rulebook regulation – with provisions on conducting due diligence on customers, transparency of beneficial owners and the use of crypto-assets.
The 6th Anti-Money Laundering Directive – containing national provisions on supervision and national AML authorities, as well as on the access of authorities to necessary and reliable information, e.g. beneficial ownership registers.
The establishment of the European Anti-Money Laundering Authority (AMLA) – which have supervisory and investigative powers to ensure compliance with AML requirements, operating in conjunction with national AML authorities.

EGBA believes the new rules will benefit Europe’s online gambling operators by ensuring a consistent regulatory approach across EU member states. Another important feature, under the competence of AMLA, will be the creation of a harmonised reporting format for Suspicious Transaction Reports (STRs). This will ensure that Europe’s online gambling operators encounter the same STR requirements across all EU member states, thereby setting clear and consistent expectations that will reduce administrative burdens and costs.

To assist online gambling operators in complying with the EU’s new AML rules, EGBA has developed industry-specific guidelines on anti-money laundering which apply a risk-based approach and include practical measures that operators can take – on customer and business risk assessments, customer due diligence processes, suspicious transaction reporting, and record keeping. EGBA members already apply the guidelines and submit annual reports to EGBA that summarise their progress in implementing its measures. The guidelines are also open to all operators based in the EU and EGBA encourages operators to sign up to them.

The AML package now awaits formal adoption by the Council of the EU, expected in May, before being published in the EU’s Official Journal.

“We welcome the European Parliament’s approval of the new anti-money laundering package. The new framework will set high standards and ensure greater consistency in the application of AML rules across the EU. Online gambling operators, especially those operating in multiple countries, will benefit from a single rulebook and harmonised reporting requirements that will unravel national complexities. We will look to review our industry guidelines on AML to ensure their alignment with the new EU rules. By signing up to the guidelines, operators can already prepare themselves for the incoming changes in the EU rules and join our members in their efforts to proactively and positively contribute to the EU’s fight against money laundering.” – Dr. Ekaterina Hartmann, Director of Legal and Regulatory Affairs, EGBA.

Source: EGBA

Australia

Crown Reinstated at Sydney Casino

Published

3 days ago

April 25, 2024

Niji Narayan

Reading Time: 2 minutes

The NSW Independent Casino Commission has found Crown Sydney suitable to retain its casino licence after nearly three years of intensive remediation.

Chief Commissioner, Philip Crawford, said Crown has come a long way and must now demonstrate its long-term commitment to maintaining suitability.

“The NICC is confident the Crown we deemed suitable today has a strong model to keep operating into the future,” Mr Crawford said.

The NICC’s suitability assessment established that Crown Sydney has fundamentally reformed its business and is operating the casino within the objects of the Act, the requirements of the suitability deed, and in compliance with its regulatory obligations.

In addition to proving it can run the casino lawfully, Crown has remediated its business in other meaningful ways such as building a culture of transparency and accountability across its integrated resort.

“Hard work and transformation aside, the NICC has not forgotten the level of misconduct exposed in 2021 when Crown was found unsuitable,” said Mr Crawford.

“Crown Sydney has ongoing work to reach steady state and it must continue to lift standards and maintain its cultural transformation.

“There is and will always be room for improvement, but Crown is a changed business that is looking toward the future.

“Likewise, the NICC is a changed regulator with enhanced powers, a singular focus on casinos, and a mandate to address the risks of harm.

“This decision is a positive outcome for Crown Sydney, its staff, and the community – who can be sure the NICC will use all of its powers to keep the casino in check.”

In addition to the implementation of hundreds of new internal controls, the Bergin-based reforms have been reflected in a new licence and new regulatory agreement between Crown Sydney, the NSW Government and the NICC.

These agreements include updated settings, such as the removal of fetters to the NICC’s powers, as well as previous compensation trigger clauses that are no longer part of the casino legislation.

Mr Crawford said: “Crown cannot disregard the responsibility and privilege that comes with holding a casino licence. Crown Sydney’s ability to provide a destination hospitality and entertainment venue underpinned by the restricted gaming facility is contingent on its steadfast commitment to continuing suitability, accountability and compliance.”