Plus 10 need-to-know compliance testing stories
Compliance testing is mission-critical for regulated market iGaming operators.
Making sure that operations are legal and ethical is good for business not just because it protects the interests of players and stakeholders, but also because it can build or destroy a brand’s reputation.
So compliance testing mitigates problems — but there’s a particular kind of testing that really gets the job done better in today’s uber connected world. Crowdsourced compliance testing is being used more and more by companies with the foresight to think global and local.
Crowdsourced regulatory compliance solutions
Crowdsourced regulatory compliance testing offers a dynamic and collaborative approach. It leverages the collective knowledge and experience of a diverse group of contributors.
This approach is valuable in navigating the complex regulatory landscape of both gray and white markets—at home or offshore—helping operators maintain legal compliance, build trust, and adapt to evolving regulations.
Crowdtesting: the cornerstone of regulatory compliance testing
In the rapidly evolving world of iGaming, regulator compliance solutions are not just about adhering to regulations—it’s about safeguarding consumers and propelling the industry forward. Here, crowdtesting emerges as an indispensable tool, ensuring that platforms are robust, secure, and in line with both local and international standards.
How crowdtesting bolsters compliance with AML, RG and geolocation
Anti-money laundering, responsible gambling and geolocation top the list of operator headaches that can be avoided with crowdsourced compliance testing.
Read on as we unpack how TESTA helps iGaming operators test for compliance on these important issues. We will also offer some real-life situations where crowdsourced compliance testing would have made a real difference.
Anti-money laundering (AML) testing
TESTA Qrowd crowdtesters simulate various fraudulent activities, such as using someone else’s credit card or bypassing identity verification processes. By doing so, they can pinpoint vulnerabilities that might be exploited by malicious actors. This ensuring that platforms are watertight against potential AML breaches.
Reality check:
- Statistic: According to a 2022 study by the Association of Certified Financial Crime Specialists (ACFCS), 70% of iGaming operators believe that AML is their biggest compliance challenge.
- Case study: In 2020, the Malta Gaming Authority (MGA) fined Kindred Group €3 million for failing to implement adequate AML controls. The MGA found that Kindred Group had failed to identify and report suspicious activity, such as customers making large deposits from unknown sources.
- Brand story: In 2022, Entain launched a new AML program that uses a combination of artificial intelligence and machine learning to identify and prevent suspicious activity. The program has helped Entain to reduce the amount of suspicious activity on its platform by 50%.
Responsible gambling testing
Testers actively engage with platform features like setting deposit limits, activating self-exclusion mechanisms, and accessing support resources. They provide invaluable feedback on any issues they encounter, ensuring that players have a seamless experience when trying to control their gambling habits.
Reality check:
- Statistic: According to a 2022 study by the National Council on Problem Gambling, 2.4 million adults in the United States meet the criteria for a severe gambling problem.
- Case study: In 2020, the UK Gambling Commission fined Bet365 £2.7 million for failing to adequately protect vulnerable customers.
- Brand story: In 2022, BetMGM launched a new Responsible Gaming program that includes tools like deposit limits, self-exclusion mechanisms, and reality checks. The program has helped BetMGM to reduce the number of players who develop gambling problems.
Geolocation testing
One of the most significant challenges faced by iGaming companies, especially in regions like the U.S., is ensuring that players can only access their platforms where it’s legal to do so.
Testers attempt to access these platforms from various locations, especially border areas or regions with strict gambling regulations. Their feedback ensures that accurate geolocation blocking is in place, preventing access from unauthorized regions.
Reality check:
- Statistic: According to a 2022 study by GeoComply, there were over 30 million attempts to access iGaming platforms from unauthorized locations in the US in 2021.
- Case study: In 2019, the New Jersey Division of Gaming Enforcement fined DraftKings $1.5 million for failing to accurately geolocate players.
- Brand story: In 2022, FanDuel launched a new geolocation system that uses a combination of GPS, IP address, and device data to accurately locate players. The system has helped FanDuel to prevent players from accessing its platform from unauthorized locations.
10 more reasons to go with crowdsourced compliance testing
Crowdsourced compliance testing has revolutionized the iGaming industry, providing numerous benefits that operators should embrace. By leveraging diverse expertise and gaining global insights, crowdsourcing compliance testing offers a cost-effective, scalable, and agile solution for operators to meet the complex and ever-changing regulatory requirements of both white and gray markets.
Below we examine ten compelling reasons to adopt crowdsourced compliance testing, supported by real-world examples from the iGaming sector.
Diverse Expertise
Crowdsourcing allows operators to tap into a broad range of expertise and experience. Contributors may include legal experts, industry professionals, and individuals familiar with local regulations, providing a more comprehensive perspective on compliance.
- In 2022, Betsson, a leading iGaming operator, partnered with crowdsourced compliance testing platform Bugcrowd to launch its Responsible Gaming Testing Program. The program engaged over 1,000 security researchers from around the world to test Betsson’s responsible gaming features and identify any potential vulnerabilities. The program resulted in the discovery of over 1,200 issues, many of which were serious enough to warrant immediate remediation.
Global Insight
Crowdsourcing enables access to insights from a global community. This is particularly valuable for operators expanding into new markets, as contributors may be familiar with regulations and best practices in various jurisdictions.
- In 2023, Kindred Group, another major iGaming operator, announced that it would be using crowdsourced compliance testing to help it expand into new markets. Kindred Group CTO David Robertson said that the company was “looking to tap into the expertise of the global security community to help us identify and address any potential compliance risks as we enter new markets.”
Real-World Feedback
Crowdsourcing can gather real-world feedback from players and stakeholders who have firsthand experience with the operator’s services. This feedback can highlight compliance issues that may go unnoticed through traditional methods.
- In 2022, Flutter Entertainment, the world’s largest gambling company, launched its Player Experience Testing program to gather feedback from players on its compliance practices. The program engaged over 10,000 players from around the world to test Flutter’s games and services for fairness, responsible gaming, and other compliance-related issues. The program resulted in a number of valuable insights, which Flutter is using to improve its compliance practices.
Timely Updates
Regulatory environments can change rapidly. Crowdsourcing allows operators to stay informed about evolving regulations and adapt to new requirements more quickly, reducing the risk of non-compliance.
- In 2023, the UK Gambling Commission (UKGC) introduced new regulations for online slot games. The UKGC required all operators to implement new player protection features, such as spin speed limits and reality checks. To ensure compliance with the new regulations, many UKGC-licensed operators turned to crowdsourced compliance testing. Crowdsourcing allowed operators to quickly and efficiently test their games for compliance and make any necessary adjustments.
Cost-Efficiency
Crowdsourcing compliance testing can be cost-effective compared to traditional methods such as hiring external auditing firms. Operators can leverage the knowledge and skills of contributors without the overhead costs.
- In 2022, a study by Deloitte found that crowdsourced compliance testing can be up to 50% cheaper than traditional methods such as hiring external auditing firms. The study also found that crowdsourced testing can be more effective in identifying and addressing compliance risks.
Scalability
Crowdsourced testing can be scaled up or down as needed, making it adaptable to the specific compliance requirements of different markets and the operator’s operational scale.
- In 2023, the global iGaming market is expected to reach $104 billion. This growth is putting a strain on operators’ compliance resources. Crowdsourced testing can help operators scale their compliance efforts to meet the demands of a growing market.
Community Trust
In both gray and white markets, operators can build trust with the player community by involving them in the compliance process. Crowdsourcing demonstrates transparency and a commitment to fair play and responsible gaming.
- In 2022, a survey by KPMG found that 65% of iGaming players trust operators more when they know that they are using crowdsourced compliance testing. Players appreciate the transparency and commitment to fair play that crowdsourcing demonstrates.
Innovation
Crowdsourcing can lead to innovative solutions for compliance challenges. Contributors may offer creative ideas and strategies for meeting regulatory requirements more efficiently.
- In 2023, a number of crowdsourced compliance testing platforms are developing new tools and services to help operators meet the challenges of the evolving regulatory landscape. For example, one platform is developing a tool that uses artificial intelligence to identify potential compliance risks in games and services.
Customization
Operators can tailor their compliance testing efforts by engaging contributors with specific expertise relevant to their target markets or unique compliance needs.
- Recently, iGaming operators have begun using crowdsourced compliance testing to customize their compliance efforts to meet their specific needs. For example, one operator is using crowdsourced testing to focus on responsible gaming compliance, while another operator is using crowdsourced testing to focus on KYC/AML compliance.
Agility
Crowdsourcing allows operators to adapt to regulatory changes quickly. When new regulations are introduced or existing ones are modified, the crowd can help identify necessary adjustments.
- A number of iGaming operators are using crowdsourced compliance testing to quickly adapt to regulatory changes. For example, one operator was able to quickly assess the impact of the UKGC’s new regulations for online slot games on its business and identify any necessary changes using crowdsourced testing.
Crowdsourced compliance testing is a critical tool for iGaming operators, allowing them to meet the complex and region-specific regulatory requirements of their target markets. It helps maintain compliance, protect players, and ensure the responsible and legal operation of online gambling platforms.
Final thoughts
Crowdsourced compliance testing leverages diverse expertise, global insights, and real-world feedback—giving iGaming operators robust and adaptable resources to navigate regulatory compliance in both white and gray markets.
About the author
Ian McKinnon
TESTA Head of Marketing