Clearing up some misconceptions on player protection and industry standards.
7 May 2010 – The magazine of the Gambling Portal Webmasters Association has published a candid interview with the chief executive officer of player protection and standards body eCOGRA which clears up some of the misconceptions, and perhaps even misinformation, that has been posted about this industry body.
eCOGRA’s Andrew Beveridge was remarkably forthright in his responses to a set list of questions directed at him by the GPWA, an organisation that encourages professionalism and provides guidance to webmasters and affiliate marketers involved with online gambling companies.
The GPWA prefaced its list of questions with the comment: “There appears to be a lot of information – and misinformation – swirling around regarding eCOGRA and eCOGRA’s investigation into Grand Prive Affiliates. The purpose of these questions is to clear up the misinformation and bring clarity to the situation by bringing in a little sunlight.”
The Grand Prive Affiliate Program issue
Affiliates were clearly most interested in the Grand Prive Affiliate Program, which closed in a unilateral and controversial move that allegedly left many of its affiliates out of pocket in December 2008.
A protracted and bitter Internet feud between program and affiliates ensued, with the program claiming that it had met its obligations in an agreed settlement with its affiliates on closing, and affiliates alleging that it had not.
Certainly it is intriguing that no affiliates came forward to confirm such an arrangement, although on the other hand there were surprisingly few affiliates who subsequently claimed they were owed.
In November 2009 the management of the now defunct program approached eCOGRA and asked the standards body to conduct an independent audit of the program database, presumably in the hope of putting the feud to rest.
With a substantial team of professionally qualified and experienced accountants, IT specialists and auditors on its staff, eCOGRA was one of the few independent organisations in the industry capable of carrying out such a specialised task, and Beveridge agreed to take it on at no charge as a service to the industry.
Following a widespread affiliate-targeted communications program inviting claims, 58 affiliates came forward. However only 26 of these were found to have valid claims, and eCOGRA negotiated a settlement with Grand Prive based on the records to which it was given access, including a calculation that took into account an average life of customer some three times more generous than the actual rate.
The affiliate program then paid these settlements out – some $63 000 – but affiliates remained unhappy with the situation, and implied that Grand Prive had acted in bad faith and had not included historical data going back two years or more, thus misleading the auditors.
No evidence could be provided to substantiate this accusation, and eCOGRA stood by the professional audit it had carried out on the database with which it had been provided.
Grand Prive declined to comment or participate further, advising that it regarded the matter as closed.
Apparently at least some affiliates believed that there had been interference from the software provider Microgaming, because among its questions, the GPWA wanted to know whether the Isle of Man company had approached eCOGRA asking that it become involved in the Grand Prive issue.
Microgaming was the software used by Grand Prive’s online casinos at that time, and was a founding member of eCOGRA, along with its competitors 888.com and Ongame.
Beveridge responded: “At no time did Microgaming ask us to be involved, although they were pleased when we accepted the assignment. Microgaming had absolutely no involvement in the way this investigation was conducted, which I think is appropriate given that Microgaming was never party to any agreements reached between Grand Prive and its affiliates.”
Another issue that affiliates brought up was eCOGRA’s refusal to involve affiliates in its inspection and assessment of the Grand Prive Affiliate Program’s database.
“I did not consider formally appointing an affiliate representative to assist with the investigation, since eCOGRA would then be responsible for that party’s actions,” said Beveridge.
“As a matter of policy, eCOGRA only appoints staff with at least 7 years’ worth of academic qualifications in the field of auditing, with experience at Big 4 audit firms.
“eCOGRA also provides its staff members with extensive onsite and offsite training, and has conducted hundreds of investigations and compliance reviews involving most of the leading operators and software providers in the industry.
“It would be a very risky proposition for eCOGRA to take responsibility for someone who we have never met or interviewed, and there is an incomplete appreciation of their qualifications and experience for a task of this nature.”
Nevertheless, Beveridge noted that he had taken advice from a prominent affiliate through correspondence during the process.
In answer to a question regarding unsubstantiated allegations that information from a previous database had not been included in the information presented to the auditors, Beveridge commented that he was given a firm assurance that all players were included on the GP Affiliate Program database, and that no other database existed.
Beveridge added that the program management had been cooperative during the audit, and noted that eCOGRA’s ‘average life of customer’ calculation had triggered a “robust debate” but that “ultimately management agreed” with its recommendations.
Founding and funding
Much of the real meat in the interview concerns eCOGRA itself, and may change all but the most stubborn misperceptions.
In particular, the link between eCOGRA and Microgaming is not as exclusive as some affiliates appear to believe, judging by the list of questions. Answering these, Beveridge explained that eCOGRA was established in 2003.
The motivation for its formation and initial funding by two competing industry giants [888.com, and Microgaming] stemmed from a perceived critical need at that time for effective player protection and best practice operational standards throughout the industry.
All four major and competing casino software suppliers (Boss Media, Cryptologic, 888 and Microgaming) were initially approached to help fund and set up the organisation and become members.
Boss Media and Cryptologic declined to become involved, and Microgaming and 888 stepped up to the plate, joined later by Bwin-Ongame.
“Our relationship with Microgaming hasn’t really changed since then, other than the fact that we no longer rely upon them for funding and we also provide services to dozens of other competing software suppliers,” said Beveridge.
He went on to explain how eCOGRA remains independent of its founders.
There are eight members of the board, including the CEO, with one non-executive director from each founding company, and four independent and executive directors who exercise day-to-day operational control and make key decisions.
“The four independent directors control the board and are responsible for all decisions regarding eCOGRA’s compliance, advisory and certification activities,” said Beveridge, describing the current independent directors as “eminent, well qualified and experienced professionals” and providing their identities:
- Michael Hirst, OBE, a former Board member of Ladbroke Group Plc, and formerly Chairman and CEO of Hilton International.
- Bill Galston, OBE, retired Chief Inspector for the Gaming Board of Great Britain
- Frank Catania, former Assistant Attorney General and Director of New Jersey Division of Gaming Enforcement and a recognised international expert in regulatory drafting
- Bill Henbrey, former head of gaming services at leading international accounting firm BDO
“eCOGRA is presently entirely self-funded by rendering independent professional business services to companies, such as data analysis, compliance and advisory services,” Beveridge noted.
Answering a question on the professional staff at eCOGRA, Beveridge said that all testing and monitoring [of online gambling operators, software providers and other business clients] is in the hands of a dedicated full-time team of Chartered Accountants, auditing and IT professionals with extensive Big 4 audit firm and online gambling experience:
- Andrew Beveridge CEO – Chartered Accountant, MBA .
- Kyle Harris Manager Compliance and Advisory Services Department – Chartered Accountant .
- Gary Lupton-Smith Manager Data Analysis Department – B.Com, CISA .
- Sean Roberts Chartered Accountant .
- Louise Chunnett Chartered Accountant, CISA .
- Gareth Muirhead Chartered Accountant, CISA .
- Bradley Khoury Chartered Accountant
- Shaun McCallaghan Chartered Accountant (part qualified) .
- Grant Bruintjies National Diploma Internal Auditing .
- Martin Theunissen MCDBA,MCSA .
Tex Rees currently heads eCOGRA’s responsible gambling training and initiatives, and as Fair Gaming Advocate manages the dispute mediation service provided free to players if they have problems with any eCOGRA-accredited operation.
The compliance, advisory and data analysis services are overseen by eCOGRA’s Audit and Seals Compliance Committees.
The Audit Committee is chaired by Bill Henbrey, a Chartered Accountant and former head of gaming services at leading international accounting firm BDO, whilst the Seals Compliance Committee is chaired by Bill Galston OBE, retired Chief Inspector for the Gambling Board of Great Britain.
KPMG, as a recognised international accounting firm, performs an annual quality assurance review with the objective of ensuring that the governance structure, responsibilities, processes and approach implemented within eCOGRA’s Data Services, and Compliance and Advisory Departments are in line with best practice and industry requirements, and comply with recognised audit practices and principles.
Since its inception in 2003, eCOGRA has established an impressive reputation with many of the major companies in the industry, and is currently working with some eighty tier one companies, Beveridge revealed.
“An enormous amount of money and effort has been invested to ensure eCOGRA is able to operate independently of any software suppliers and operators, and we will never deliberately compromise our professional reputations or the company’s future by favouring one of our members or seal holders, all of whom are in competition with one another in one form or another,” said Beveridge.
He explained that one the more recent professional services offered by eCOGRA is the professional assessment and accreditation of affiliate programs – those companies which manage and administer affiliate marketers working for operational gambling companies.
Like the Safe and Fair and Certified Software seals awarded and controlled by eCOGRA, the Affiliate Trust Seal applies relevant business standards and a range of systems to affiliate programs in a rigorous inspection and review regime.
eCOGRA points out that its Affiliate Trust certification program, which relies strongly on stringent audits and assessments by fully and formally qualified auditors, is the only professionally backed certification of its kind in the industry. Five major programs have already been accredited.
In his closing comments in the GPWA interview, Beveridge addressed persistent misconceptions among certain affiliates regarding his organisation, explaining that some critics appeared to be ignorant of the fact that eCOGRA has a solid and extensive business record with scores of top companies in the industry, and employs qualified staff of integrity.
“In particular the repeated and totally false allegations that we were mere puppets of Microgaming rankled, simply because Microgaming has no more influence on how we carry out our professional duties than the other two Founding – and competing – Members. This sort of allegation is also deeply insulting to the Independent Directors who exercise operational control at eCOGRA,” he said.
Acknowledgement: This article is based on an interview carried in the GPWA Times print magazine, which can be obtained f.o.c. from: http://www.gpwa.org/magazine/