The casino and sports betting industry in the United States is experiencing growth and constant innovation. Recently, Rhode Island joined New Jersey, Connecticut, Delaware, Pennsylvania, Michigan and West Virginia as one of the handful of states to establish a legal framework for online casinos, suggesting that the US is on track to slowly, but surely, become more lenient with gambling regulations.
Online casino operators are well-positioned to take advantage of these changes in the industry. However, as they work to incentivize and reward their users—with some ideas including generous welcome bonuses and more personalized user experience mechanics—they may also find themselves piling on to the already complicated task of navigating the complex landscape of rules and regulations. Because in the US, compliance is hard enough to understand, not to mention achieve.
This, among many other reasons, is why RegTech proves so important in the industry. RegTech, which stands for Regulatory Technology, is the trending term that encompasses a huge range of technologies that are optimized to help businesses efficiently meet compliance and other regulatory standards. In the United States, online casino operators can leverage this technology to find their way through uneven and rapidly changing regulatory conditions.
RegTech Applications in the US and Globally
One huge, specific area in which RegTech is being applied with significant success is to verify identities and conduct anti-money laundering (AML) checks. By utilizing AI and machine learning, customer identities—in online casinos as well as several other areas—can be verified with accuracy and efficacy. Transactions can easily be monitored. Fraudulent activities can be flagged.
In Europe, where the General Data Protection Regulation (GDPR) creates unfathomable logistical hurdles for many businesses, including casino operators, RegTech has been crucial. Regulatory Technology assists companies in meeting their obligations by removing the necessity for human research, evaluation and verification of each operational aspect’s compliance. It’s easy to envision the relief that comes with automating compliance, considering the extensive number of articles in the regulation, which exceeds 99.
GDPR also encompasses any company with a website that monitors any form of information about a European visitor. In the era of a globalized internet, that means several US properties. Furthermore, states like California have introduced similar measures through the California Consumer Privacy Act (CCPA), with Washington and New York slated to follow. Any operators not currently using RegTech for customer data protection compliance will certainly be doing so in time.
Meanwhile, in the Asia-Pacific region, several countries have been front-runners in adopting RegTech solutions for risk management and compliance. In Singapore, for example, the Monetary Authority of Singapore (MAS) has actively promoted the use of RegTech in financial services, centering on using the technology for real-time monitoring and data analytics. Online casino operators in the United States have taken note, with several harnessing RegTech for monitoring transactions— with those using decentralized currencies in particular.
Compliance as a Competitive Advantage
As the US online casino industry evolves, compliance is no longer just a legal requirement but a strategic asset. Operators who effectively leverage RegTech not only stay ahead of regulatory challenges but also gain a competitive edge. They are able to demonstrate their commitment to upholding complicated consumer protection legislation using every resource available.
As US states continue to update and refine their legal frameworks, agility in compliance will become crucial. Some major US-based platforms operating in the United Kingdom can already attest—navigating the complex laws and regulations in one region is challenging enough; expanding into other regions hosts an entirely new set of headaches.
Summing Up, RegTech is a solution that offers flexibility, as it allows operators to quickly adapt to new regulations without overhauling entire systems. The online casino industry in the United States is embracing RegTech, not just to fulfill obligations but to lay the groundwork for sustainable and responsible growth. As technology continues to advance, it plays a role in shaping the future of online gambling by ensuring a secure, fair and enjoyable experience for all participants.
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