The Compliance Process™ – by Steve Donoughue

Start-ups in the online gambling industry, like in any industry do everything by the seat of their pants. Strategy and planning are not what they are renowned for. Hard work, enthusiasm, creativity and a burning desire to succeed is what they are rightly famous for, just don´t expect this to be done in a methodical manner. No great artists ever painted by numbers.


Left to right: Dr. Simon Planzer & Dr. Steve Donoughue at SiGMA15

Unfortunately, our darling regulators have not designed a regulatory regime to fully accommodate less than a handful of people, trying to build, promote and fund their business idea often from rented desks and often after doing their real job that pays to keep the lights on. The compliance requirements of every gambling regulator do appear to have been written for the likes of well-established gambling business with the funds to employ a whole phalanx of expert compliance staff to ensure that everything is above-board, t’s crossed and i’s dotted.

Part of the issue is that regulatory compliance is not exciting, costs money and can even be perceived as irrelevant, as if you have only two customers, why are you spending so much resources on what to do on the slim chance they may be a problem gambler or a money launderer. I have a client who sells raffle tickets for £1, bans anyone spending more than £80, yet we have to do a policy and procedures for what to do in the freakish event someone wants to buy over £1,734 of them.

So understandably for many start-ups, once the licensing process is completed, compliance sometimes takes a back seat as all efforts are put into growing the business. I have seen a few clients who thought that just having the telephone number of a gambling lawyer should be enough if something hits the fan. Unfortunately, this is never going to work out as hopefully while you have two customers one week, you may have two thousand the next (if you’re very good!). German military strategist Helmuth von Moltke stated that “No battle plan survives contact with the enemy”. The same is true with online gambling customers. Very rapidly you will have one who is trouble and you will need to have your compliance procedures in place or you will have the regulator down on you like a ton of bricks. Your dreams of dominating the online gambling world can easily come crushing down just because you didn’t have the right procedures in place. So how do we solve the problem of start-ups with limited resources getting compliance right?

My answer is to have compliance wired in to the very core of the business from the start. To do this, I use what I have imaginatively called The Compliance Process™. It’s a business process model that is still currently under development but showing amazing results so far. It’s based on system which identifies what triggers compliance events and then dictates what needs to be done when those events are triggered. Think a computer programme that gives and takes the relevant information from the right people at the right time and gets them to do the right thing. It’s almost like an automated compliance director yet with his/her job being done by everyone in the company.

The main advantage of The Compliance Process™ is that everyone in the company gets to understand what needs to be done, why and when and the outputs are exactly what the regulator wants. The most useful output though is arguably the peace of mind it can give all the licence holders and the regulators. With The Compliance Process™ in place there is more time for being a start-up, you know: Foosball, beard competitions and thinking everything is awesome.

Steve Donoughue has been a management consultant specialising in the business strategy and politics of the gambling industry for the last twenty two years –

Steve will be a speaker at Payments & Disruptive Technology Conference during SiGMA17. Register and secure your place for the conference now!

Relive the highlights from our last show and stay tuned for this year’s SiGMA. Watch out for what we’re branding as the ‘iGaming Village’ this year.
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