Web Gambling Sites Form Standards Group

While the U.S. Congress considers legislation to keep Americans from using online gambling sites, a U.K.-based nonprofit group backed by the largest licensor of Internet casinos is organizing to provide “online players with high levels of assurance of fair, honest, and responsible gaming.”

E-Commerce and Online Gaming Regulation and Assurance (eCOGRA) plans to issue “seals of approval” to online casinos that the sites use software supplied by a member of eCOGRA and must comply with the eCOGRA Statements of Generally Accepted Practices, as documented by a review of the site’s procedures by eCOGRAs audit panel.

The sites will also be checked for player protection policies, technical capabilities and anti-money laundering measures.

It is eCOGRA’s intention that its “Statements of Generally Accepted Practices” will ultimately form the minimum requirements for regulated online gaming.

“As the online gaming industry matures, there is a need for responsible software suppliers to take the next step toward increased credibility,” Andrew Beveridge, CEO of the new organization, said. “eCOGRA is this step. Consumers will now have a choice. They can play at casino Web sites knowing that their deposits are secure and the casino games are fair.”

Beveridge added, “This self-imposed regulation overcomes the difficulties of existing attempts to regulate, which are all based on terrestrial gaming models and do not provide the fundamental advantage of total gaming transaction review on a continuous basis.”

The founding members of eCOGRA include Microgaming Software Systems, the largest licensor of Web gambling sites, and Virtual Holdings Ltd, owner and operator of Casino-on-Net, one of the largest internet casino companies.

The initial six directors are Beveridge; three independent directors — Paul Hainsworth, former director of risk management at PriceWaterhouseCoopers for Europe, Africa and Middle East; Bill Galston, former chief inspector of the Gaming Board for Great Britain; and Frank Catania, a former assistant attorney general in the State of New Jersey and director of the New Jersey Division of Gaming Enforcement — together with a representative from each of the founding members.

The three independent directors who will have voting control over board decisions to guarantee eCOGRA’s autonomy from software providers and operators. PriceWaterhouseCoopers is a member of the organization’s audit panel, and other accounting firms are expected to be added as members in the near future.

“eCOGRA is a long overdue initiative in an industry that has been trying to build credibility with consumers and regulators. Our mission is to prove that responsible companies are involved in online gaming and to make them readily recognizable to consumers and government officials,” Beveridge said.

A recent study by Christiansen Capital Advisors estimates that the online gambling industry’s worldwide revenue totaled $4.1 billion in 2002, spread over an estimated 1,800 Web sites.

“These sites run the gamut from highly regulated to completely unregulated,” Beveridge said. “With eCOGRA, the software providers are getting involved in the interest of the gambling public. We will certify operators that players can trust.”

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