Christos Mavrellis, Chairman of the Cyprus Gaming and Casino Supervision Commission is addressing today the 4th Annual Cyprus Gaming Show taking place in Limassol from 5 – 6 October 2021.
Chairman’s speech – Cyprus Gaming Show, October 2021
I thank you for your invitation today. It is good to be able again to address people and not screens. I hope that this event signals a return to more normal times.
A major theme of Cyprus Gaming Show is technology and innovation. I think it is obvious that the pace of technology development is increasing as are the opportunities to exploit these within the gambling sector.
In this short address I will outline how the Cyprus Gaming and Casino Supervision Commission is seeking to fulfil its responsibilities without unnecessarily slowing the pace of change or the ambitions of our only licensed Casino Operator; the Integrated Casino Resorts (Cyprus) Ltd .
Whilst gambling business understandably seek opportunity to maximise benefits as quickly as possible, the message from the Commission is that it is vital to reflect that technology and business innovations have to be considered not only in terms of commercial opportunity but also in terms of regulatory risk, as well as compliance with existing laws and regulations and taking always into consideration whether changes in business activity or organisation can lead to increasing risk with regards to keeping gambling compliant with law, crime free and fair.
The Past Year
The past year has been challenging for the Commission and the Operator with periods of casino closures and working restrictions.
The Commission has maintained and developed its systems for the licensing, supervision, and control of land-based casino gaming to ensure that the management and operation of the casino gaming is crime free, conducted honestly, and in accordance with the law.
We now are preparing for the opening of the Integrated Casino Resort in mid-2022, with its increased volumes of customers and gaming revenues, additional operating complexities, and the Operator’s desire to be innovative in terms of what is offered and how it is offered.
An important consideration for the Commission is how the Operator protects the welfare and interests of its customers. We continue to work with the Operator and other partners to prevent and minimise potentialy harmful effects of gaming upon Cypriot society, particular minors, and vulnerable groups.
A good example of innovative technology being introduced by the Operator and approved by the Commission is the use of facial recognition software, implemented in the past year to improve the capability of the Operator to identify persons excluded from the casino for reasons associated with problem gambling, AML compliance, cheating or inappropriate behaviour.
More recently the Commission has been engaged with the Operator regarding the introduction of technology to support decision making in support of their anti-money laundering controls. Our engagement continues as the implementation of the system progresses.
A time of continual change
The Commission recognises that the Operator competes with national and international gambling providers, for the leisure euro – an obvious motivation to provide modern, high quality, personalised and attractive gambling and related leisure facilities, which means that it will seek to exploit opportunities through being innovative in terms of technology, products, and ways of delivering its facilities.
However, the Commission expects the Operator in a business environment characterised increasingly by rapid opportunities for new technology and innovations, to rise to the challenge of maintaining a system of management controls to ensure that as new technologies and innovations are considered, they review and develop their controls accordingly so as to meet at all times their regulatory obligations.
Similarly, the Commission recognises the challenge for us is to be aware of possible new technologies, casino products, services and facilities and business changes and evolve our understanding of regulatory risks possibly associated with these.
Technology and innovation are often referred to as ‘disruptors’’. We do not start from a position that this term has necessarily negative consequences, but we do think that innovative technology and innovative application are not necessarily the same thing and recognise that new technology or innovation can lack initial refinement or can have initial implementation problems.
How new technology and business innovations are incorporated into the regulated operations of the Operator is an extremely important early consideration and we seek to engage with the Operator at early stages to influence thoughts as to the regulatory considerations that should be alongside commercial considerations.
The Commission does not wish to discourage or unnecessarily slow down the development and use of technologies and innovative thinking in our casinos. We want to see technology and innovation used to improve not only profitability, but to benefit customers and provide opportunities to improve the Operator’s management of its regulatory risks.
We see our role as being important within the innovation process – influential in shaping the Operator’s thinking about their innovation opportunities, particularly about opportunities to improve and demonstrate their regulatory effectiveness to achieve positive outcomes.
To achieve this, we believe it is important not only to have the professional capability to understand the technology of change, but also to have early insight into the intentions that accompany it and how it is proposed to be implemented. We want to to see technology and business innovation through the eyes of the Operator.
As such we are establishing structured communication channels and process that enables engagement about the details of proposed innovations, the thinking behind business innovation and the opportunities that are presented to enhance customer protection and risk management.
There are two key matters for us to address.
- Firstly, we must have effective communications channels with the Operator to give us sufficient opportunity to identify the proposed technology and business innovations, and
- Secondly, we must have the professional capability to understand not only the technology but the possible regulatory implications of what is being proposed.
The Commission considers the sooner we are aware of what changes are being considered and understand the considerations of the Operator about any associated regulatory risk and their prosed controls the sooner that decisions can be made and the less likely the Commission could be perceived as acting as an unhelpful brake.
Communicating early and regularly.
We have established a two stage procedure for initial and formal engagement to enable us to respond efficiently.
The first stage is the early notification by the Operator of matters being considered. To achieve this we have focused on establishing professional relationships with the Operator and encourage early person to person contact to highlight changes being considered.
Meetings may then follow between the relevant people of the Operator and ourselves, and dependent upon the nature of the ideas or possible proposal these can be escalated as required and can assist us quickly in identifying the need for external expertise, likely to be from other regulators and expert commercial specialists.
This enables the Commission to gain a quicker understanding of what is being considered and why, and to formulate and communicate our thinking to the Operator, particularly as to what aspects of regulatory risk need to be considered and the mitigations that may be appropriate.
At the heart of this first stage approach, is our Commission and Casino Technology Group (CCTG) comprising our technology and licensing specialists, data analyst and Director of Compliance.
The second stage is the formal submission of a change proposal by the Operator for approval which should includes evidence of an evaluation of associated regulatory risk.
Depending on the type of technology proposed, and where specific reference is made to compliance with the Commission’s Technical Standards the submission should contain the respective testing laboratories’ certification reports.
Upon completion of the proposals evaluation, the Operator will receive a written notice of approval or rejection from the Commission’s Director of Policy and Compliance or the CEO.
We see three keys to making this approach work,
- Firstly, having colleagues who understand the technologies and systems of the Operator and other casinos, as well as the business processes being considered. Our investment in staff knowledge and professional development will have to be continual.
- Secondly having effective communication channels with the Operator, with a willingness to listen and consider each party’s thinking and positions.
- Finally, as the complexity of technology and innovations accelerates, we will likely have increasing need to engage expert third parties in such areas as gaming technology, information systems / management to advise us on policy and our assessment methodologies.
We believe that whilst technology and innovative thinking offers opportunities to improve offers to customers and profitability, it also provides opportunities to give more control to customers to manage their gambling responsibly and for gambling technology developers and operators to adopt timely and accurate information systems that will support the ability to answer the question – “how effectively is the regulatory risk, particularly so with regards to preventing crime and protecting customers welfare and interests being managed?”