Gaming Laboratories International explains the likely impact of dedicated technical standards for the Macau market
Macau recently announced it is to introduce its own set of technical standards for electronic casino games. The local regulator—the Gaming Inspection and Coordination Bureau (DICJ)—indicated there will be a two-month consultation period followed by implementation of the new standards in January.
Inside Asian Gaming spoke to Gaming Laboratories International, the world’s premier testing company for gaming devices, about some of the implications of Macau’s decision. Ian Hughes, Managing Director—GLI Asia, shared his thoughts on the subject during G2E in Las Vegas.
IAG: What is the current situation in Macau regarding gaming device standards?
Ian Hughes: At the moment Macau runs on a self-executing instruction, which basically means that suppliers can choose several standards in which to operate. And the process currently works so that getting device approval is really up to the concession holder.
Can you expand a little on that?
In many jurisdictions, the manufacturer is responsible for obtaining approval of their products and regulatory approval in order to get it on the floor. But in Macau, it’s up to the concessionary holder to make those applications. That means the approval from the regulator resides with the concessionaire, not with the product itself. In other words, Casino A could seek approval for Product X under Nevada standards, while Casino B could seek approval for the same product but under say New South Wales standards.
What they’re proposing now in Macau is to follow a model which is more prevalent throughout the rest of the world. It will mean the supplier is responsible for obtaining approvals, documentation and meeting a specific standard rather than a selection of standards.
So, from an auditing point of view, it would mean that there’s more of a consistent product base. That’s beneficial from a regulator’s perspective. At the moment, Macau can have four or five different product types all approved to different types of standards. What they’re looking to do is to create a common standard so that all operators would have the common core requirements met for Macau.
Will this for the first time establish a contractual relationship between the suppliers and the Macau regulator and/or the government?
I don’t know how that will work in terms of the relationship between the regulator and the supplier. Presently there’s no relationship between the regulator and the supplier. The only relationship is between the regulator and the concessionary holder or sub-concession holder.
How does it work in Nevada, for example? Is there a contractual relationship between supplier and the regulator in terms of when the supplier has to comply with Nevada standards?
Well, the first step is there’s a licensing process. So, before a manufacturer can do business in Nevada or sell, manufacture or distribute product, they have to be licensed by the regulator before they even talk about product compliance.
So, is there any suggestion that there’s going to be a licensing system in Macau for suppliers?
I don’t know their ultimate aim in terms of where they’re heading in terms of licensing and so forth.
Some suppliers have said to us they would like to have a licensing system in Macau so they could talk directly to the DICJ.
It’s not GLI’s role to take a view in the case of Macau. I’m simply explaining how it works elsewhere. If a manufacturer is not licensed by the jurisdiction, obviously there are no conditions that the regulator can really impose on the manufacturer. That goes a long way in terms of notification—if there are software issues or anything of that nature, then unless a manufacturer is licensed by the jurisdiction there’s no relationship, there’s no requirement for the manufacturer to report that to the regulator.
Is there any evidence that having local standards will make the approvals process more streamlined?
By developing local standards, you enhance clarity on what is allowed and what is not allowed. That then gives manufacturers much more confidence in developing a product for that market. Without local standards you may have to work on probabilities. For example, you might develop a product that you believe has an 80% or 90% probability of going through because it has in the past. But there’s still a risk that it won’t.
When a jurisdiction develops standards that are very specific, then manufacturers have the ability to understand with more confidence that such-and-such is specifically allowed, or such-and-such is specifically excluded. So they can develop a product knowing with the greatest sense of certainty that their regulator is not going to either reject it so it never gets approved, or worst case, have it on the floor and have maybe 100 or 200 machines operating, and then retrospectively say that they need to be removed because they violated some policy that wasn’t well-defined or that was open to loose interpretation. So, definitely, clarity is vital.
What impact will having standards in Macau have on GLI’s business in that jurisdiction and in the region?
That’s a great question, because we work in over 455 jurisdictions around the globe and some have adopted GLI-11 as verbatim, and other jurisdictions have additions to GLI-11 and some have very basic standards or very simple requirements. We always ensure that we meet specific jurisdictional requirements however they are written.
At GLI we have a global database. Every single rule from around the world is put into that database. So if Macau or anybody else brings out a specific standard that’s not already included in a GLI Standard we can still test for it. Even if a jurisdiction has some special requirement, we find that in practice 80% to 90% of requirements are the same as a GLI Standard requirement. It’s really only about 10% of the material that is different. So we just make sure we hit that 10% on top of our existing testing.
When jurisdictions do come up with additional requirements, we always work with them to help them understand the impact on the industry. We don’t take a view. We’re simply there to provide as much information as possible so they can see what practices are being used around the world and they can make a well-informed decision.
Technical standards for gaming devices are a different thing from jurisdictional regulations for gaming devices. The latter are in effect laws that can be tested if necessary in court. Has there been any indication from the Macau side that they plan to introduce gaming regulations following the publication of technical standards?
The DICJ has made public for at least two or three years that it will be developing standards for Macau. They haven’t indicated during that time when standards would come into place. I’m not aware of any time frames that they have in terms of when the standards will be developed or released.
What’s the current development status of GLI’s Macau office and laboratory?
We’ve had our office in Macau now for around three years. We have a large engineering team there. We have a compliance team there. We have really good people on the ground. I think having that local resource is beneficial for the local industry. We work very closely with the DICJ on many fronts and are delighted to do so.
