1on1 with Michael Capen at GLI
1on1 with Michael Capen at GLI
Michael Capen, director of client services for Gaming Laboratories International (GLI), discusses the changing shape of the global lottery industry.
Totally Gaming: GLI was created in 1989, and the company’s first client was the South Dakota Lottery. This machine-testing contract was for the first organised video lottery system in the US. What are the main changes the lottery sector has witnessed over this near 30-year period?
Michael Capen: We were recently visiting with the South Dakota Lottery, and they are in the midst of planning for their 30th anniversary. That caused us to pause and consider the many ways the lottery sector has changed over the past three decades.
One of the most significant changes is that there are simply more lotteries today than there were when we first began testing for the South Dakota lottery. There is also a larger proliferation of gaming generally. For example, back then, South Dakota was the first to have a video lottery, and Nevada and New Jersey were the only states with casino gaming. Of course, today, lotteries are everywhere, and nearly every state has some form of gambling, which means there is a lot more competition for a patron’s gaming dollar.
Lotteries’ online presence has also grown. Thirty years ago, the internet didn’t exist in the rich format it does now, and today, lotteries are online, some with online games and nearly all with a strong social media presence and online marketing as they promote their own points of differentiation from other gambling opportunities.
Today, more lotteries are allowing parts of their function to be performed by vendors instead of exclusively by lottery staff; meanwhile, lotteries are also expanding their staff to include more technically trained people.
Testing has also evolved over the past 30 years, driven by advances in technology. Today, gaming devices and systems – like those used by lotteries, online, mobile apps and in land-based situations like VLTs and traditional gaming devices – are much more technologically advanced and have greater capabilities than the devices and systems three decades ago. That means testing requires better-trained people with more expertise.
We continually update all our standards to reflect the changes in technology. For example, GLI-11 is now in version 3.0 and contains guidance for cryptographic RNGs.
The evolution has been exciting as well as challenging, and at GLI, we are very pleased with the ways we have been able to stay ahead of the technological curve so that we can serve our clients to our best ability.
TG: Could you provide a rundown of GLI’s current involvement in the global lottery industry? How many jurisdictions are you currently working with, and what is your primary remit?
MC: GLI works with regulators in more than 475 jurisdictions worldwide, including approximately 65 lotteries. Some of the services we offer to lotteries include security audits, ticket testing, user acceptance testing, project management, performance testing and code analysis. However, these are just tasks. Our primary responsibility is to help regulators maintain the integrity of the lottery and of the gambling industry and to maintain public trust.
If the integrity of the lottery is compromised, that gives consumers pause, and it gives lawmakers pause. That puts incredible pressure on regulators, and as the lab, we see our job as assisting lottery and other gambling regulators to ensure integrity through accurate testing and certification, along with our other professional and consulting services.
TG: Could you describe your relationship with industry associations such as WLA, NASPL, CIBELAE and European Lotteries? How closely do you work with these associations and/or regulators when it comes to establishing new technical standards?
MC: We are associate members of the European Lotteries, CIBELAE, NASPL, and WLA. While we do not work with them in terms of technical standards, we do work with them on training and information sharing. Much of this is accomplished through our GLI University programme, which produces our annual Regulators Roundtables. We invite these groups to participate as attendees and occasionally as presenters, too. Additionally, we attend their events and have spoken at them in the past.
TG: In the wider context of GLI’s operations, does the lottery sector present any specific challenges? How are you working to overcome these hurdles?
MC: The challenges are more for the lotteries. Think about the iPhone. How many versions of the iPhone have been released in the last 10 years, each more technologically capable than the last? Now, take that idea and apply it to a lottery.
Technologies are moving so fast, it can sometimes be challenging for lotteries to prepare for what’s next, especially when you take into consideration the fact that there are some built-in limitations with regulations and laws. That is why, at GLI, we place a high priority on staying on top of new and emerging technologies, and we are fortunate to have labs in 21 locations around the world with more than 1,000 staff members, which gives us a ‘boots-on-the-ground’ approach to monitoring advances worldwide.
We must be aware of anything and everything that could affect our clients’ businesses so that we can consult and advise ahead of the curve. We want to make sure that when technologies do come to fruition, they are prepared to act accordingly.
TG: In December 2015, you opened a dedicated Global Lottery Instant (Scratch Card) Ticket Testing Laboratory in its Moncton. How is this facility performing? How would you assess the health of the instant win sector?
MC: Our lab in Moncton is doing very well, and client response to our services has been very positive. We are glad to see the health of the instant-win/scratch ticket sector is strong, and interestingly, we have noticed that in instances where lotteries that have online instant win as well as paper tickets, there is a synergy that is not cannibalising other markets, meaning paper ticket sales and online sales are both doing well, as they tend to attract different types of customers.
TG: Finally, what does 2017 have in store for GLI’s lottery operations? What’s top of the agenda for your testlab this year?
MC: We continually add more qualified personnel to support lotteries as new technologies continue to add to their business potential. We are also working hard on instant ticket testing, QA user acceptance and security audits, whether those are physical audits or on a network or both. Lotteries are increasingly relying on our consulting and professional services. For example, we have provided project managers for system installations, and our global IT experts help to ensure the entire project is properly and efficiently managed, from RFI or RFP, through install, launch and beyond.