Technical Standards: What Regulators Want You to Know

Technical standards can be a complicated, divisive issue in the gaming industry. Last year we looked at standards from the testing labs’ point of view. This year, it’s all about the regulators. We often hear the concern that regulators are slowing down innovation in gaming and we wanted to know why. We also wanted to find out what regulators wish the rest of the industry understood about the way they interact with technical standards and why. Read on to learn more from two candid conversations I had with two well-respected regulators.

In the Beginning
One of my go-to resources, Norm DesRosiers, is the person many industry leaders go to when they have a question about regulation. It’s a no-brainer that DesRosiers will likely have the answers you’re looking for. But it hasn’t always been this way, he reminded me. Rookie regulators should find comfort in knowing that DesRosiers, too, had to find his way. And this happened at a time when the path was non-existent, if even imagined. The story of DesRosiers’ journey with technical standards is one that will help us understand how many of the standards we know today got their start in the United States.

Craig DurbinDesRosiers says that at his first job, he didn’t know anything, but then he started working with Gaming Laboratories International Co-Founder James Maida, and the learning curve began. It all started when an operator and manufacturer wanted to put new bingo equipment in place. DesRosiers recalls saying, “I’m not going to allow you to put this in here until I have a lab test that says it does everything you say it does.” He recalls knowing he wasn’t technically proficient enough to determine if the machine worked the way it was supposed to. He remembers Maida saying GLI would love to test the machine, but to what standard? DesRosiers told GLI, “I don’t have any for bingo equipment! Just certify that it does what he says and is reliable and has an RNG and everything.” That’s when GLI and DesRosiers pulled in standards that were being used in Mississippi. This is how DesRosiers became the first regulator in Indian country to require Class II gaming equipment testing. For years, he was the only one.

This experience is how DesRosiers realized, as he says: “The lab testing game was all about technical specifications. Any time that a manufacturer wants a lab to test something or a regulator wants a lab to test some gaming equipment, the first question out of the lab’s mouth is, ‘To what standards do you want us to test and certify to?’ ”

Gaming manufacturers and newcomers must understand and wrap their minds around the fundamental reason why technical standards can cause such confusion. As DesRosiers says, “All standards are not created equal and they differ from jurisdiction to jurisdiction.” It’s up to the chief regulator in each jurisdiction to determine what the standards will be for gaming equipment in their jurisdiction.

After wrapping his mind around the issue, DesRosiers went on to work for years on the advisory committee for the National Indian Gaming Commission. Their task was to develop technical standards for Class II electronic bingo systems. DesRosiers says he was still learning, stating “If anybody would’ve ever told me that bingo could be that complicated, I would’ve thought they were smoking something.”

The complexity stretched into Class III gaming as well, when it came to some state compacts that left technical standards up to tribal regulators. DesRosiers recalls: “I don’t know if there was anybody besides me that had experience in technical standards when these compacts were first put together. So, as a service to Indian country—and I credit James and GLI a great deal with this—they came up with some model standards. GLI 11 and 12 were kind of the beginning of the program. I worked with James, I reviewed those.” DesRosiers says he, at Viejas at the time, and regulators at Barona took GLI 11 and 12 in the spirit they were intended and used them as a starting point to which they added specific, tighter requirements that were right for their jurisdictions.

What DesRosiers wishes state regulators and others understood today is that GLI 11 and 12 were created to serve as model sets of standards and best practices from multiple jurisdictions around the world. He adds, “They were not meant to be, never intended to be, a set of standards that any particular jurisdictions would be expected to adopt in their entirety.”

Today, as commissioner for the San Manuel Tribal Gaming Commission, DesRosiers has a team of compliance workers who do nothing but test machines once they arrive at the casino before they’re installed. Their work in creating the standards is done … until new technology comes along, which we’ll discuss later. The compliance team validates software, compares software against test lab papers and certifications and makes sure the casino received the correct machines. “Actually, now it’s all online,” DesRosiers says. “They’ve got a library with tens of thousands of certified programs that we have to compare against. That’s what we do.” The team also does random sampling testing, to make sure nobody has switched anything once the game has hit the floor.

Evolving Technology
With evolving technology, a regulator’s work is never done. New programs, games and systems that there are no specifications for come up and regulators work with testing labs to set standards for them. DesRosiers gives the example of player tracking or online accounting systems, for which there were no standards for years. He recalls: “So you had products all over the board—functional, dysfunctional, good, bad and compatible. I’d have one system compatible with Bally and not IGT, and some systems would record this data but not that data.” Although the systems were not affecting the outcome of the game, they were tied to gaming and so regulators and labs worked together to create technical standards and regulators started demanding the labs to certify that they were functioning properly.

DesRosiers says regulators rely on the labs to figure out how to keep the manufacturers honest and test for unforeseen glitches by using their knowledge and technology. He says even with his background, “The standard old regulator like me isn’t expected to be a computer engineer and techno wizard.”

However, the major manufacturers spend millions of dollars to employ techno wizards whose sole task is to see how creative they can be in coming up with gaming ideas that keep pushing the envelope. This obviously creates a disparity in technical knowledge between the people creating the games and the people tasked with making sure they do what they say they’re supposed to.

A second disparity in technical knowledge comes in the form of a generation gap. Young gamers and developers at manufacturing companies are more technically savvy. The problem comes when older players sit down at the games. “There are games on the floor, slot machines out there, with middle aged people, not just the old geezers, playing them and they literally do not know what they’re playing,” DesRosiers says. A game more complicated than the player can understand creates an atmosphere in which the player simply and blindly trusts that the machine is right.

This creates a problem for regulators, DesRosiers says. “Players start complaining or claiming that they should’ve got the $100,000 jackpot because ‘I think this is what should’ve happened’ and nobody knows how this thing operates because we’ve got such clever engineers that got so creative and made it so complicated. The average regulator doesn’t even know how the game is supposed to be interpreted due to its complexities.”

Craig Durbin, Oregon State Police Gaming Enforcement Division Major, offers another point of view. He oversees nine tribal casinos in the state and the Oregon lottery. Durbin’s position provides a diverse set of challenges with the use of video slot machines, traditional products, Powerball and casinos with Class III games all under his supervision. “With that, I have a windshield view of how the areas of lottery and casino gaming are rapidly crossing over,” he says. “Before, they were islands in and of themselves.”

Durbin also serves on the Lottery Committee for the North American Gaming Regulators Association (NAGRA). It’s a forum for regulators to discuss their issues with evolving technology, standards, investigations, Internet gaming and more. NAGRA also provides regulators a voice in Washington, D.C.

In addition to advancing technology in land-based gaming, Durbin is watching for what’s next with Internet gaming. He sees manufacturers or vendors and operators working hard to position themselves for the legalization of i-gaming in the United States. In the last couple of years, GLI has introduced four new technical standards to help the industry, but Durbin says they are very sophisticated and technical. “So here is the regulator attempting to deal now with this landscape, to be able to understand this landscape, to have the infrastructure in place to handle it, to be able to have the knowledge, skills and abilities to be able to have the due diligence process in place and the technical standards is very daunting,” Durbin says. “There are so many more questions than answers for right now.”

Manufacturer Acquisitions
Even more questions fly through Durbin’s mind when it comes to keeping track of who is actually creating the products operators are buying. As manufacturers position themselves to operate in increasingly technical and connected environments, we’re seeing an increase in the number of acquisitions and the speed at which they take place. Durbin says: “The companies did not necessarily have the internal expertise to offer products and some of the new technology that the operators were asking for. So what they did was, they went and bought subsidiary companies. Then they bring them in and start to offer them to operators.”

Durbin says this means operators and regulators need to ask two questions: Do the systems run as you proposed and where have they been operated? Are they secure and have they gone through proper certification? “If you don’t ask those questions and you don’t have those systems certified under technical standards, then you are at extreme risk,” Durbin adds. “You’re really putting yourself out there.”

For example, Durbin says, operators may run into this when a vendor is offering server-based or server-assisted gaming or the connection of games to player management systems and player-user interfaces. “When it’s all together, am I secure? Have I put it through a certification process?” Durbin asks.

Durbin has asked a major manufacturer these important questions and found that the compliance person he spoke with did not even know his company had bought the subsidiary company. He says that is a prime example of why regulators must ask these questions.

Are Regulators Slowing the Development Process?
Next, Durbin says, is a question regulators need to ask themselves. “Are we able to be adaptive and nimble as vendors evolve?” He believes to do so there is a need for common standards so regulators aren’t increasing cost and time to market.

“Sure, we’re slowing the vendors down a little,” DesRosiers says. “But not because we’re trying to ruin the business.” DesRosiers wants the industry to understand that the regulator is looking at things to see how it will be perceived by the public and how it’s investigated if things go wrong.

Recently, DesRosiers had an issue with a new, complex game in which he believes the rules were not clear enough. Although the game was tested and certified, the complexity resulted in confused players. In the course of two and a half weeks, he had three patron disputes on his hands. “So then I’m spending thousands of dollars in man hours, in testing and investigations to put these together,” DesRosiers says. “Then if they don’t like my ruling, they have the right to demand arbitration, mandatory arbitration in this state.”

Durbin echoes DesRosiers’ concerns, even saying there is a real danger in the rush to new technology. “You have the pressure of the dollar sign that’s coming in, and at the same time this technology has never been tested, never been used before and it’s being brought in very quickly.” With the introduction of games with skill, cashless wagering and more, Durbin wonders what technical standards should be used. “How do you change your internal state’s policies and rules and statutes and compacts and MICS? How do I take and align those in such a way that they are able to move technology forward without being a barrier, but at the same time, provide the integrity and security and honesty of the game?”

A New Collaboration
Durbin is excited to share the news of a new collaboration between leading regulatory and standard organizations that are working together with a goal of solving the slow-down problem discussed above. NAGRA, the North American Association of State and Provincial Lotteries (NASPL), Gaming Standards Association (GSA), other associations and testing labs are actually beginning to collaborate to work toward creating a set of technical standards that would serve as common, ground-floor standards to be used by all jurisdictions who wish to use them. Durbin says, “NAGRA, NASPL and GSA have all committed to this goal and in principle agree that there is a need to find commonality in as many areas as possible.”

The goal is to create a basic set of standards to which systems could be certified to ensure the security and integrity of the systems. Then the systems could go on to meet any other specific needs of specific jurisdictions.

The benefit of various organizations working together on this project, according to Durbin, is that the group will leverage the expertise of leaders from many jurisdictions. He adds, “I think that is really the only way we can wrap our arms around the rapid advances of technology.”

This level of standardization and cooperation would help regulators, manufacturers and labs, but could it really happen? Would states and tribes want to participate? An industry-wide shift in thought to a whole new level of sharing that’s never been seen before may be needed in order for this idea to become reality.

Durbin admits it will be difficult. But he believes that as regulators begin to understand the complexity of staying ahead of or even in step with evolving technology, they will understand why cooperation is necessary.

In general, DesRosiers wants regulators to work together. He has been helping his colleagues at other gaming commissions for years. He encourages other experienced regulators to do the same and new regulators to ask for help. “There’s no need to reinvent the wheel,” DesRosiers says.

He also hopes emerging jurisdictions will use existing expertise in the industry to get started on the right foot. “They’re going to have to hire some experts from out of state and not just rely on pulling a bunch of people out of the state department of safety and taking a group of state employees who were criminal law enforcement officers one day and calling them ‘gaming regulators’ the next day, when they have no experience in that arena,” DesRosiers explains.

This new collaboration will continue meeting to first determine where to start and who to work with. Some in the industry can’t wait for the results, believing the group could come up with the solution they’ve been waiting for. Some say it will never come together. But it does seem everyone can agree that it will be an interesting group to watch as technology continues pushing the envelope and testing regulators’ abilities to evolve.

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