The general consensus from a compliance perspective is that gambling is no-go territory. There have been many cases won with millions of pounds and dollars lost, due to the lack of data in proving sufficient anti-money laundering systems and risk mitigation processes were in place. However, in the same way we have seen technology revolutionise the way we manage our finances is the same way we are seeing technology evolve within the gambling industry.
The multi-jurisdictional nature of gambling makes data management extremely key in protecting the integrity of operators and their clients and so the adoption of new technologies is slowly being accepted into the fold. This is where blockchain comes in.
Data is easily corruptible if not stored with care and blockchain provides a sure and perfect form of protection which is required within a regulated environment. It provides time stamping, helps keep track of client behaviours ensuring that problem gambling is picked up with speed and it also allows for potential risks to be raised in good time. The use of blockchain alone provides coverage for operators against a number of requirements set out by the UK Gambling Commission, The Financial Conduct Authority and the Anti-Money Laundering Act.
The number one reason for fines and prosecution within the gambling industry is poor data logging, tracking and retention so regulators have placed more attention on this area, making it an urgent pain point if your compliance systems cannot withstand the amount of data you are processing. Traditional compliance structures would tend to steer clear of the usage of blockchain because of its association with cryptocurrencies; a type of digital asset that is yet to be totally accepted by regulators and so deemed to be high risk. The difference though with blockchain is that it focuses on the data behind the asset. So although this view is valid, it cannot uphold an operator wishing to scale the business and provide sufficient data monitoring along with it, without the help of technologies that can carry out that function sufficiently.
Blockchain is expensive, but fines not only affect the financial ability of an operator, it also affects its reputational standing which can prove to be more detrimental when trying to build relationships and expand. This makes it fair to say that regardless of the hefty price to pay for blockchain compatibility within the gambling industry, it is the future of gambling as we know it.