Feature 10 Minutes With...Andrew Beveridge from eCOGRA
14 June, 2004
Andrew Beveridge: I assumed the role of CEO on a full-time basis in October 2002. I initially embarked on a career in investment banking in London and Hong Kong, having qualified as a Chartered Accountant and complimented this with an MBA. About 8 years ago I became involved with an international supplier of pay-television and interactive services ... and subsequently I've been extensively involved in a number of online gambling initiatives, including operations and software development. It had been obvious to me for some time that an organization such as eCOGRA could add tremendous value to this industry, and therefore I welcomed the opportunity to become involved as CEO. ....
Max Drayman: In 25 words or less, what is eCOGRA?
AB: In a nutshell eCOGRA is a genuine initiative to provide real regulation of quality online casinos through internationally set standards enforced by independent inspection and monitoring, and to provide a dispute resolution service to the player community where issues arise between a casino member and a player that cannot otherwise be satisfactorily settled.
MD: In your words how will eCOGRA benefit the online gaming industry?
AB: Essentially by guiding players to online casinos where they can expect to encounter fair gaming, honest and efficient treatment in all respects and operators that have been thoroughly checked out for financial and personal probity. We do this through our Seal system, and casinos awarded with this mark of quality and safety have had to submit themselves to precise, tough standards of honesty, efficiency and capability set by independent experts. We call these the eGAP or eCOGRA's Generally Accepted Practices. ...
MD: And how will it benefit the online player?
AB: Players have reached the stage where they demand better treatment. No unreasonably delayed payouts; no questionably disqualified bonuses; no badly applied wager through rules; no ignored emails. They want fair games, financially sound casinos with efficient and responsive Support and an avenue through which legitimate complaints can be independently investigated. All of those legitimate concerns have been front-of-mind in devising the eGAP or standards of eCOGRA and we intend to enforce them with our approved casinos. This is no cosmetic exercise - it is a hard-nosed business approach to providing the consumer (player) with the safe, fair and business-efficient services to which they are entitled in our view.
MD: A number of verification and certification organizations have preceded eCOGRA. Unfortunately most of those have either failed to win widespread player acceptance or collapsed due to internal pressures and mismanagement. How does eCOGRA propose to both win player confidence and survive the considerable pressures of the online gambling scene?
AB: I honestly believe that eCOGRA is on another and significantly higher level than any of our so-called predecessors, and we have strong funding, realistic goals and practical methods of achieving these to the benefit of the player and the Industry. We recognize that misconceptions exist, and we are determined to prove by our conduct and that of our member casinos that we can and will make a positive contribution.
MD: Microgaming Software Systems Ltd. is listed as one of the founding members of eCOGRA and Microgaming casinos were among the first casinos to receive eCOGRA certification. This could be seen as simply a case of a principal online gaming software provider awarding certificates to it's own licensees through a third entity that it created. What is it about eCOGRA that makes this an incorrect interpretation of those circumstances?
AB: Microgaming and CON (Casino On Net) ... had the vision to see that continued malpractice and uncontrolled activity in the Industry hurts everyone. They are sufficiently successful to do something constructive about improving player protection and the regulation of serious minded operators. The initial funding provided by them does not, as some seem to believe, give them control of the organization.
How is eCOGRA's independence assured? Through the structure of the Board of Directors to whom I am responsible. All decisions regarding how casinos are tested and who gets the Seals and what other software providers and casinos are admitted fall under the control of the three independent directors on the Board. This is clearly set out in the company's constitution. These are all eminent and well-qualified and experienced professional men, on whom you can find full information at www.ecogra.org. Most important of all - they are all independent of the funding entities.
There is nothing sinister in the fact that our first 41 Seal awards went to Microgaming powered casinos - these happened to be the first groups to apply and submit to inspection. Other casinos are currently undergoing the process, and yet others are about to start. By the end of this year there will be a significant number of Seal casinos available to players from different software providers.
Finally, much of the testing and monitoring is in the hands of a totally independent and completely professional third party - the internationally respected audit group PricewaterhouseCoopers.
MD: There is an obvious emphasis here on the respectability and credentials of the casinos, the Board and the auditing company. Why do you believe that will be sufficient to convince the players to believe in eCOGRA's certification process?
AB: An enormous amount of effort has gone into making sure that the best people and organizations suited to their respective functions are involved in eCOGRA. For example, the independent directors have each been carefully selected based on their integrity, industry experience and ability to remain independent. On top of this we've tried to create the right structure and constitution, which will enable these people to fulfill their responsibilities properly and achieve the organization's objectives. We're also keen to make ongoing improvements wherever these are identified.
This is the groundwork and the next step is to communicate to the players of the advantages of playing at eCOGRA approved casinos. Promotional activities and awareness campaigns are being planned, and I can assure you that there will be considerable future effort in this area.
MD: The eCOGRA site states that "eCOGRA advocates an 'outcome-based verification' approach" to verification which is quite unlike the source code testing commonly adopted by the land-based gaming industry. For the purposes of eCOGRA's certification, why is the 'outcome-based verification' sufficient? Why has source code testing been omitted?
AB: We don't believe that outcome-based testing (TGTR) is merely 'sufficient' in the absence of source code testing, but rather it is a far superior means to verify the fairness of the software in an online gaming environment.
[In online gaming] the server does much more than house a random number generator. It has to link into a highly sophisticated transaction processor and controller that routes the millions of messages coming into the system each minute, providing each message with a response, creating complete records of all messages (in and out), while being able to provide summary information. All of this is done in real time. The design of these amazing servers is jealously guarded by software developers, who are constantly refining them to offer a better and faster experience for the end user, while increasing security and reducing maintenance costs. The server is the core competitive advantage for these companies. It is the culmination of the intellectual property that is their primary asset.
Much of the modern world, in both business and government, depends on the products of companies such as Microsoft, Oracle, Sun and SAP. Yet they do not supply their source code to their customers. Their products are assessed on the basis of their total performance, not on their source code.
By continually checking both the input and output of the system, it is perfectly feasible to test that the system is meeting the regulatory requirements while providing the operators and software developers with complete operational flexibility. By checking each and every transaction for its completeness, together with spot testing of transactions, it is possible to verify that all transactions are faithfully recorded.
By performing further analysis of the summary data and subjecting the vast amounts of data to rigorous statistical testing, one can further confirm the integrity of the random number generator in particular and of the system as a whole. After all, it's the fairness of the final outcome that players, and the regulators who protect them, really care about.
MD: There is widespread feeling amongst players and player advocates that such a body will need to open it's tests and procedures to public scrutiny in order to gain player trust. Will any part of the eCOGRA verification process be open for public scrutiny?
AB: Regarding fairness verification, eCOGRA relies on the competence of internationally respected professional organizations that make up our outsourced Audit Panel. Participation on this Panel is restricted to certain international auditing firms operating out of major financial centers, such as PricewaterhouseCoopers. Some of the reasons for selecting audit firms in this role is their independence, integrity and professional credibility, the fact that they are governed by professional standards and codes of ethics, have access to high caliber employees with diversified skills, and relevant industry experience.
The testing methodologies adopted by the audit firms are left to the audit firm's discretion, and the Board does not dictate what tests should be adopted and the degree of testing. This kind of information is proprietary to the audit firms - it is at their discretion whether or not they wish to make this information public.
MD: Let us assume for the purposes of this discussion that the player community does not accept those "internationally respected professional organizations" without question. Since there is no reason to believe that those organizations are going to open their test data and/or processes to public or third-party scrutiny it would seem that the requests from the player community for same will go unanswered. Any comments on this?
AB: PwC has done a remarkable job of getting all the major software suppliers (CryptoLogic, Random Logic, Microgaming and Boss Media) involved in the TGTR process, and I can understand why they wouldn't want to make public their proprietary information and technology which competitors could potentially exploit to take away market share. I think the players should respect this, and appreciate that this process is now tried and tested by PwC and these software providers over the last five years.
MD: It's clear from the Procedures section of the eCOGRA site that a given software provider needs to become an eCOGRA Member in order for casinos using that software to be eligible for the eCOGRA "Seal of Approval". Is this correct?
AB: Indeed, for an operator to be eligible for eCOGRA certification, the provider of its online gaming software must be an eCOGRA member. The main reason for this is that in the online gaming environment many of the casino's operations are under the direct control and influence of the software provider. You cannot be assured that a casino offers fair gaming and protection of players without directly substantiating that the software provider is also compliant in the appropriate areas. ....
A further benefit of this structure is that, as members, the software providers are responsible for funding eCOGRA. The operators (casinos) currently do not make any financial contributions to eCOGRA, which further enhances eCOGRA's ability to make a truly independent assessment of the casinos' eligibility for the Seal. From a cashflow perspective, it makes absolutely no difference whether we ultimately approve 100 casinos or 10 casinos.
MD: So what would be the procedure if Boss Media and Cryptologic casinos wanted to receive the seal of approval, assuming they were to submit to the process?
AB: The first step would be for the software provider to be accepted as a client of an Audit Panel firm. This would involve the normal audit firm client acceptance procedures, such as thorough financial, management and shareholder probity. Since both Boss and Crypto are already PwC clients, they could theoretically skip this part of the process, but they would still need to submit the same information to eCOGRA's independent directors, including affording the independent directors the opportunity to meet with senior management and major shareholders. The founding members have been subjected to this process.
Once this process is completed to the satisfaction of the independent directors, membership is formalized in a detailed members agreement. The software supplier and its applicant casinos then undertake the eGAP review process, following which the Audit Panel firm will submit a report to the independent directors. These directors are then responsible for determining which casinos may be awarded the seal based on the software provider and operators' reported compliance with the Standards, and any other information which has come to the independent directors' attention.
In order to maintain the seal, both the software provider and the casino operators' will be required to submit to ongoing eGAP compliance reviews, and the operators will be required to adhere to a strict license agreement.
MD: eCOGRA promises that player "queries and complaints are promptly responded to" and already has a player dispute mechanism in place. Assuming that a player meets all the necessary qualifications, what is eCOGRA's procedure once the player submits their dispute?
AB: One of our key requirements is that the player must have made an honest attempt to resolve his problem with management at the Seal casino before coming to us. The reason underlying this is that our research has shown us that almost all disputes can be fairly resolved between fair-minded people with the requisite authority. If he or she has been ignored, or has not been able to reach a just conclusion we will accept an online complaint and attend to it within 48 hours. Tex Rees, the eCOGRA Fair Gaming Advocate is responsible for this and she has the experience and independent advisory contacts to quickly investigate any issues. If a decision is against the casino, immediate remedial action is required.
MD: That completes my list of questions. Thanks for the interview Andrew and all the best.
