Behind the wheel: Non-exec chair Nigel Birrell on his role at Crucial Compliance
Newly appointed Crucial Compliance chair and Lottoland CEO Nigel Birrell shares his thoughts on the direction of travel when it comes to historically, the industry’s biggest roadblock, that of compliance
By Robert Simmons for EGR
As published on EGR on the 15th March of 2021
In a lot of ways, gambling industry compliance is very similar to passing your driving test, in that it teaches you all the standards required but just because you pass the test doesn’t mean you are automatically a good driver or have a good record with compliance. As we’ve seen over the years, operators with often self-confessed whiter than white records when it comes to compliance can often crash and burn when the regulator comes calling. It’s not just the small firms but some of the biggest names in the industry that have seen the wheels come off and been fined because of it.
Effectively serving as a driving instructor, compliance consultancy firms offer operators an independent, impartial eye on their existing practices, something which has over a short period of time morphed into a cottage industry for gambling. One such firm entering into this void is Crucial Compliance, which received a boost in January with the appointment of Lottoland CEO Nigel Birrell as its first non-executive chair. Birrell discusses all things compliance with EGR
EGR Compliance: What, for you, are the great underserved areas of compliance that the industry could be doing more to enforce and why?
Nigel Birrell (NB): Companies are adopting compliance within their businesses and driving customer and company protection policies and processes. However, although this is often reported at board level, there is often a disconnect between compliance departments and day-to-day operations. It is only through embedding a compliance culture and understanding throughout the business that real change can take place. Compliance has to be at the heart of all customer impacting discussions, from strategy to budgeting and marketing. One small example is training, where key teams take part in extensive training (Compliance, CS, Payments etc) but some employees may never do any unless required by regulation.
EGR Compliance: Do you feel the industry has developed a more compliance-led mindset? What in your opinion was the catalyst for this change in thinking?
NB: Yes, and the primary driver has been regulation and regulatory enforcement action. The industry was fairly slow to react to regulation and did so only after enforcement action was taken. There are some genuine reasons for this such as waiting for test cases to allow operators to see the regulator’s interpretation of what is required in regulatory policy implementation, but there was also a commercially led reticence to do it.
Another key factor was the limited innovation around gaming compliance which meant that it was often a case of diverting internal resources to drive compliance solutions rather than buy off-the-shelf systems. Now, with innovative sector technology solutions such as player management systems and increased external support availability having increased, companies have been able to adopt regulation using technology within their business and get internal investment to do it by using enforcement action to build business cases.
EGR Compliance: Why did you decide to join Crucial Compliance as chairman?
NB: Compliance is required within all gaming companies of all sizes globally. Crucial Compliance has been set up to lead the industry and drive operator change one company at a time. They have built one of the most experienced teams in the industry, created innovative data and technology solutions and are now driving player protection improvements across existing, emerging and new markets.
This focus to lead and innovate at such a critical regulatory time meant that I wanted to support them, as I do the industry through my membership of the board of the Gibraltar Betting & Gaming Association and this made it a straightforward decision to join. I believe my skillset will complement the rest of the board and help develop the strategy as they accelerate their global reach.
EGR Compliance: What compliance-led enhancements does Crucial Compliance plan to launch over the coming year?
NB: The company is focusing on player protection and compliance adoption and has an 18-month roadmap of development and product launches. Under this remit they have just launched Crucial Player Protection (CPP) – a global multi-brand technology system, to support safer Gambling and AML within companies. Dovetailing into this system is the UK Affordability Solution developed with W2 which looks at customer spend against banking data feeds to help operators comply with the current source of funds/source of wealth checks and the forthcoming LCCP changes expected later this year where checks could be linked to lower, ONS data affordability limits.
The roadmap sees further development of these tools and the extension of CPP from a solution to a platform. This will allow other innovative solutions developed outside of Crucial by third-party companies to be put onto a single platform to drive Player Protection with the benefit of multiple solutions with a single implementation. There are also the next generation AI and player algorithms which will be developed for adoption within Crucial Player Protection and, lastly, there are affiliate monitoring tools to help drive responsible marketing which will launch in Q2 of 2021.
One of the key operator challenges of regulation is cost. This cost has to be proportionate to that market so that operators can still commercially operate in a regulated and taxed environment. Failure to do this will see a move to the black market as players look for better odds, better promotions, games with greater interaction, all of which may be restricted through licensed operators
EGR Compliance: On affordability what impact do you feel the potential new regulation will have on AML and compliance?
NB: If embraced correctly, as part of the general customer engagement, this will allow players to gamble within their means as prescribed by the regulation. With the implementation of technological, data-driven solutions, this should not affect player choice, but drive positive player and operator behaviour. If a solution can be seamless for the player journey, robust in nature for regulation and easily implemented by operators, then I think it can be a positive step forward. However, maintaining customer choice of when and how they spend their own money linked to maintaining players within regulated operators will be the overarching framework which we need to work within.
EGR Compliance: Does the industry have enough clarity from regulators on compliance issues? If not, in what areas could more specificity be prioritised?
NB: Regulatory frameworks around gambling are similar to any other regulatory framework in that it often has to be tested in a live environment to create the clarity that is required for operators. Enforcement action can lead to greater clarity in some markets while some regulators produce excellent quality guidance pre-enforcement which is what the industry would prefer. As the industry and regulators mature, we hope to see a more open discussion around regulatory implementation and less grey areas which lead to enforcement action. Open consultation by regulators, which is fact-based and not politically driven, will encourage operators to actively prioritise implementation of regulations in the most effective way.
EGR Compliance: Based on your observations, can too much compliance pressure ultimately prove counterproductive and enable the black market?
NB: Compliance pressure, which is considered, effective, easy to implement and in the best interest of all stakeholders is good. However, where this pressure moves outside of these boundaries and starts to create negative operator impact then issues will arrive. One of the key operator challenges of regulation is cost. This cost has to be proportionate to that market so that operators can still commercially operate in a regulated and taxed environment. Failure to do this will see a move to the black market as players look for better odds, better promotions, games with greater interaction, all of which may be restricted through licensed operators. Operators also need a level-playing field in areas such as advertising where the licensees need regulatory support in some areas. An example of this is UK advertising where many non-licensed operators are allowed to openly advertise, which will lead to black-market creation and growth.
EGR Compliance: Over the next two years, how do you see the regulatory framework forming in emerging markets and what are the dangers ahead?
NB: I hope to see measured, appropriate, well written and sustainable regulation throughout emerging markets. There are a lot of case studies of good and bad regulation available to emerging markets regulators and I would encourage a collaborative approach with the industry through a true partnership approach to support the writing and implementation of first-class regulation.
The risks of political and press interference to create fear and drive bad regulation is always a major factor, which has crystallised in several markets. Thankfully, the industry is supporting a huge investment in academic research which will drive decision making for mature regulators. One example is the recent set up by the University of Gibraltar of the Centre of Excellence in Responsible Gaming which has attracted over £2m of initial funding to drive international research into safer gambling and reduce gambling-related harm.
EGR Compliance: Should a compliance solution be in-house written or bought in and why?
NB: All options have merit, the key is the capability of the actual company in areas such as innovation, development and implementation. Many companies are innovative and have substantial development departments but lack an experienced compliance product owner to specify system capabilities for build. The company may also have a full delivery and product roadmap with limited time available to develop or adapt a system. Ownership of the system, integration within the various platforms, constant business processes and operational changes and light touch support can be key drivers. The solution needs to be tailored to the organisation which can mean an off-the-shelf tool with specialist implementation support can drive a quicker and more effective implementation. Crucial Player Protection has been designed around multiple implementation options which fits all three options as flexibility on adoption is the key to success.