Without a doubt, among the hottest topics at G2E 2022 are cashless gaming and digital wallets. So it might seem surprising that a panel concerning government and regulatory perspectives on the subject led with the comment that neither the federal Financial Crimes Enforcement Network (FinCEN), the National Indian Gaming Commission (NIGC), nor most tribes have a solid definition of “digital wallet.” Everyone seems to know what it is, but with evolving technology, the term can defy a set meaning.
Moderator Steven Brewer, a training manager with NIGC, asked, “What are the benefits of digital wallets?”
Tim Cotton, IT Audit Manager with NIGC, responded, “It’s a natural evolution of our marketplace. It becomes easier for folks to transfer funds on and off a game.”
Likewise, Jay Song, Director of Compliance with FinCEN, talked about the increased collection of important financial data in real time and the efficiencies involved.
From the operator’s perspective, Crystal Houston, the Assistant Regulatory Compliance Manager of the Chickasaw Gaming Commission, agreed with Song on the benefits of digital payments: less currency to drop, less to count, and easier cage operations. She added that digital wallets may come quickly, alluding to the speed of adoption of the Ticket-In Ticket-Out (TITO) technology years ago.
As far as why gaming is so far behind the rest of the retail world, in its second decade of digital transactions, Cotton responded that the tribes sought to balance the convenience of new technology against the issues of fraud, money laundering, problem gaming, and cyber security. He said, “There’s a slow approach in Indian country, so we don’t end up in the headlines.”
Song mentioned that in some areas, digital wallets may actually benefit efforts to enforce the Bank Secrecy Act (BSA), aimed at preventing money laundering. He and the others noted that the sign-up procedures for establishing digital accounts are better than dealing with cash and produce excellent data trails.
He added, “Digital wallets should make the Know Your Customer requirements from FinCEN more seamless as we can collect more information. There is always a challenge in looking at identification verifications in general. But digital can help.”
The pandemic may have also given a boost to digital-wallet efforts. Song mentioned that Congress passed the “Touchless Transaction Act of 2020” largely for health reasons, but it encouraged all government agencies to work with digital solutions.
All the panel members cautioned that everyone had a responsibility to do their homework, in part by questioning vendors, consulting with regulators, and working together to bring this technology successfully to the floor.
Another often-heard concern with digital wallets is problem gambling.
Brewer commented, “The last thing we want to hear is that Grandma drained her life savings.”
However, all cited the importance of the vendors providing tools to set limits, spot problems, and give actionable data to enforce responsible-gaming standards.
There are countless vendors currently in the digital-wallet space and Houston said, “It’s the responsibility of the tribes to do their own research. The vendors will promise you everything. But the tribes are responsible to see if that’s what we want to bring to our customers.”
She also expressed the concern that with digital solutions, “another vendor does part of those transactions that we cannot see or control. We need to make sure the vendor does their part. It’s new, as we were used to having control over all transactions, and now we don’t. We have to carefully define who is responsible for what.”
In their final remarks, Cotton urged the audience, “Know your customer. Test your networks and make sure you know your vendor and that they’ve gone through certification.” Houston added, “Get your regulators involved earlier. Operators don’t have a regulatory mindset or don’t always consider the risk to the tribe.” Song stressed, “FinCEN is on the same team. It really is a partnership of helping on another. Digital wallets can be a new avenue for crime, so it’s critical to pursue innovation responsibility.”
