Geolocation technology and unauthorized use of Virtual Private Networks (VPNs) were discussed in a March 2019 iGaming regulatory hearing before Michigan lawmakers. Here is what we’ve learned.

Geolocation Technology and Regulated U.S. iGaming (Introduction)

On March 12th, 2019, GeoComply Public Affairs liaison John Pappas testified before the Michigan House of Representatives Regulatory Reform Committee on matters concerning geolocation technology within regulated, statewide U.S. iGaming markets.

The 8-minute testimony provides a rare glimpse into how data is accrued in real time to block unauthorized access to licensed online gambling services in the United States, as well as suggested measures to restrict the use of Virtual Private Networks (VPNs).

Michigan lawmakers are currently considering House Bill 4311, which would lawfully permit the (yet-to-be-created) Michigan Division of Internet Gaming to formally regulate “multijurisdictional internet gaming by internet gaming operators to the extent that entering into the agreement is consistent with state and federal laws and if the gaming under the agreement is conducted only in the United States.” If signed into law, the current legislative proposal would stipulate that Michigan internet games “must include, but need not be limited to, poker, blackjack, cards, slots, and other games typically offered at a casino.”

Geolocation Technology Testimony Featuring John Pappas (Video)

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(0:00) Intro, GeoComply currently serves regulated U.S. markets, including the Michigan Lottery
(1:09) GeoComply exists “to ring-fence virtual borders” for “intrastate” U.S. markets
(1:15) The company works to ensure intrastate compliance with the Wire Act, UIGEA, etc.
(1:32) Difference between “open-door” and “compliance-grade” geolocation technology tools
(1:56) Geolocation data compiled from IP addresses, GPS, Wi-Fi, Bluetooth, and mobile devices
(2:11) “Over 350 analytical checks” made before a player is allowed to place a legal bet online
(2:22) Real-time geolocation transactions as they happen (for regulated New Jersey iGaming)
(3:02) GeoComply processes “over 10 million” geolocation transactions worldwide each day
(3:15) Geolocation technology both enables and deters internet gambling through virtual ring-fencing
(4:04) GeoComply presentation wrap-up
(4:22) Questions from Michigan House Regulatory Reform Committee members
(4:40) How many jobs would formally regulating Michigan iGaming create?
(5:10) Clarification of real-time data and potential “false positives” of geolocation technology
(6:00) Pappas testifies that VPN users should NOT be allowed participate in regulated online gambling
(6:20) “We cannot risk allowing somebody who is running a VPN — even if they’re in Michigan — to be able to play if it’s legal here because they could potentially be spoofing their location.”
(6:50) Distinction between false-positives and malicious actors
(7:25) Real-time blockage of a New Jersey player who is using prohibited software
(8:02) Conclusion

Notice to Players Using VPNs within the U.S. (Commentary)

* All commentary belongs solely to the author.

The testimony provided by former PPA Executive Director John Pappas on behalf of GeoComply suggests that geolocation technology is currently capable of both detecting and thwarting unauthorized use of prohibited software such as Virtual Private Networks (VPNs) and other IP address spoofing applications.

Due to this reality, it is suggested that online gamblers who are located within the United States refrain from making use of VPNs and other software which might enable a player to illegally participate in an online gambling activity within America’s borders.

Read More U.S. Gambling News Coverage from Part Time Poker

NAGRA Webinar on Wire Act Opinion (Timestamps) (Mar 3, 2019)
Poker Lobbyist Rich Muny Sounds Alarm for Regulated U.S. Online Poker (Mar 5, 2019)
PokerStars Pros Call Out Sheldon Adelson (Feb 9, 2019)

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