Auditing Helps Sites Maintain Integrity

5 October 2001
In an industry where customer trust often correlates with the bottom line, one of the leading auditing companies for the gaming business is letting operators know they are on the lookout for fraudulent operators.

Bob Rudloff, the director of internal audit services for PricewaterhouseCoopers, which specializes in the gaming sector, said more and more Internet casinos are using the Pricewaterhouse name without ever having the company look at their site.

"Unfortunately we find our name attached to a lot of sites that we have no relationship with," he said. "We haven't done any work, but someone has taken a snip of our logo and put it on their site. There is a difficulty in trying to track down where that came from. We are constantly on the Internet checking to see where our name has been placed where it doesn't belong."

Those who do seek the services from PricewaterhouseCoopers often find that a third-party audit from such a highly respected company can mean the difference in gaining an edge in a sector full of competition, Rudloff said.

"Some stories have gone around about sites that have been hacked and manipulated," he said. "We can look at them to make sure certain types of protections are in place so that won't happen again. You have to have the customers' confidence and the major players in Internet gaming and the minor players have to have the confidence of their customers."

Rudloff said the company doesn't audit gaming sites based in the United States for legal reasons, but he did say the global market for online gaming companies is in high demand.

"We have done audits for Internet lotteries and Internet casinos," he said. "Just our name alone has brought clients to us because of our worldwide reputation."

Rudloff said the demand for audits from within the gaming industry has steadily grown within the last couple of years. He said a recent trade show generated nearly 40 inquires from online gaming operators requesting their sites be audited by his firm.

An operator who seeks an audit from PricewaterhouseCoopers can be certain of a thorough process covering nearly every aspect of the operation, Rudloff said.

"We have got people that specialize in all the IT platforms that exist out in the market, and those that have been accommodated to take on the Internet gaming market," he said. "We have people that know the industry inside and out."

The process begins with the IT platform, but doesn't end there. Rudloff said depending on how in-depth of an audit an operator is seeking, the process can include everything from security to fairness of games.

"We look at the integrity of the host site and make sure there is firewall protection," he said. "We want to make sure that whatever levels of security are necessary to protect the integrity of the business and the customer are being taken."

As for fairness of the game, Rudloff said the process is relatively easy to determine, but can be time consuming as auditors play the games over and over again to make sure they are operating correctly.

"We want to make sure that the odds of the game are fair," he said. "Similar to what a lot of companies do with land-based slot machines, we can do that in the online world."

PricewaterhouseCoopers offers a wide range of services for the online gaming business. How often an operator wants to get audited, and to what degree the site is tested, is entirely up to them, Rudloff said.

"It is up to the client and what they are looking for in our services," he said. "It all depends on what level they want us to be involved and what is it that they want us to attest to."

Rudloff said although all of his company's business from the online gaming sector comes from outside of the United States, his Las Vegas office is preparing itself to be in a good position when Nevada starts to give licenses for online casinos and sports books.

"We are waiting for Nevada to finish its process," he said. "We are preparing strategies within the firm so that we can go to market with services once it is legalized."

A lingering question with the process in Nevada is how safe can online systems be and how safe should they be in order for Nevada to be confident with its regulatory process.

Rudloff feels that some officials in the industry are missing the boat on the issue. He feels it isn't so much to what degree a site can be safe, but how much damage can be done if a site is attacked.

"It (the security issue) has to be assessed from the standpoint of what can happen during that threshold," he said. "Is it that one percent or that one one-hundredth of a percent that allows the system to be vulnerable? What can someone do if they are able to get into the system?"

Rudloff explained that some sites can afford to be vulnerable in specific areas while other sites may only leave themselves open slightly, but in areas that could cost them big bucks.

"That doesn't mean that if a site has a one percent vulnerability that they could steal millions of dollars," he said. "But with that one-one-hundredth of a percent maybe they can steal millions of dollars, it all depends on where and what the vulnerability is."

To insure that the online gaming industry is not vulnerable to attacks that could cost millions, Rudloff feels it should take a lesson from its land-based counterparts and the steps that industry has taken.

"The gaming industry at large over the last ten or 20 years has been built on very critical systems of internal control," he said. "There are proper checks and balances in place to make sure that there is proper playing of games. Those types of standards now have to be moved over to the Internet."

United States-based companies that have already had to comply with tough standards will want to venture online Rudloff said, since they already have a high level of standards for their online customers.

"Any operator, whether big or small, that is licensed in Nevada, New Jersey, Mississippi or anywhere else will not be willing to put their operations at risk by going online and doing something at a lower standard than what they are already doing at their real-life gaming sites."

In the meantime, Rudloff said the gaming branch of his company will continue to position itself as a leading auditor for online casinos. It continues to seek operators who use the PricewaterhouseCoopers' name in bad faith. Unfortunately there is no way for players to know which sites have been truly tested by the company and which ones are bogus. He said many sites copy actual approval letters from legitimate sites and scan in their own information to make it look like they have been audited. Rudloff said it is often nearly impossible to tell the real seal of approval from a fake one.

"We are not in the business of endorsing sites, so we don't put our list of clients on our site," he said. "As far as the customer goes, it all comes back to the confidence they have with the operator."

And like many in the gaming business, Rudloff feels that once traditionally strong brands from Vegas' Strip and other gaming hot spots around the world bring their brands online, there will be a shift in where consumer confidence lies.

"When the Park Places and MGMs of the world go online they are going to have a much stronger brand that customers can have confidence in," he said.

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