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Monday, August 07, 2006

eCOGRA and Jackpot Factory: independent directors Hirst, Catania and Galston reinstate the beleaguered group's Play It Safe seal

In May 2006 it came to light that the Jackpot Factory group of Microgaming casinos were indulging in an extraordinarily unethical marketing campain.

In a nutshell: articles were published on their web pages, heavy in certain key words, which were designed to entrap disadvantaged and unfortunate members of society via manipulation of the search engines - Google, Yahoo etc.

The practice was discussed, and roundly condemned from all quarters, in discussion threads at Winneronline and Casinomeister.

eCOGRA, who carry Jackpot Factory, were informed. Though slow to initially respond, they temporarily suspended Jackpot Factory's "play it safe" seal until the matter had been investigated.

By August, the investigation, conducted by the three "independent directors" Bill Galston, Frank Catania and Michael Hirst, had been concluded and the results were reported in the eCOGRA compliance commitee report on Jackpot Factory search engine issue article:

On 28 July 2006 the Compliance Committee of eCommerce and Online Gaming Regulation and Assurance, made up of Mr. W. Galston OBE (Chairman) , Mr. F. Catania and Mr. M.Hirst OBE, all independent directors of the organization, considered all the facts regarding an incident in which complaints were received concerning search engine optimisation practices being conducted by the Jackpot Factory group.

The Committee received a report of an independent and on-site investigation which had been carried out by external auditors. This covered the circumstances surrounding the issue, its causes and effects and the remedial actions taken by the company.

The Committee findings are that:

1) The nature and tenor of the Jackpot Factory search engine optimisation project was totally unacceptable because of the fictitious and misleading scenarios it portrayed. This had resulted in widespread public disapproval of the campaign.

True as far as it goes, but somewhat understated. The campaign was totally unacceptable because it specifically targetted certain vulnerable members of society with the intention of entrapping them into problem gambling. The "fictitious and misleading scenarios" were a by-product of this.

2) However, there was no evidence to show that any individual or group of individuals were harmed or persuaded to indulge in potentially harmful behaviour by the campaign, which represented an important mitigating factor.

Absolute hearsay. How would it be possible to know this? This campaign was aimed at the terminally ill, the bereaved and addicted gamblers. How exactly would you ascertain that these people had not been "harmed or persuaded to indulge in potentially harmful behaviour"? How would you know?

How credible is it that, over the course of the year the campaign was running, it was entirely unsuccessful and no such players were entrapped?

Not very, I would suggest.

3) Similarly, there is no evidence to suggest that Jackpot Factory management had any deliberate intention to encourage vulnerable persons to participate in gambling activities at group casinos.

Same problem. How did they guage Jackpot Factory's "intentions"? I do not believe that Hirst, Catania or Galston, exceptional individuals though they may be, brought any mind-reading skills to the investigation.

On the other hand, in the light of the fact that this campaign specifically targetted just these vulnerable people, to claim that there is "no evidence" to suggest just this is quite laughable.

It is a fact that fictitious articles, targetting various disadvantaged members of society, were published on the Jackpot Factory casino sites. How does this square with the assertion that there was no "deliberate intention to encourage vulnerable persons to participate in gambling activities"? Surely the reality is the opposite? Surely we have the evidence in front of us?

This is ludicrous.

4) The investigating team report indicates that it is satisfied that the Jackpot Factory claim to have outsourced the project initially is correct. However, the report finds, and Jackpot Factory management conceded that the company`s supervision of the project was inadequate.

On the basis of what are they satisfied about this?

Assuming that it WAS outsourced, why is this in favour of Jackpot Factory? Did they not instruct the people they employed? One has to assume it wasn't a case of "do some marketing, we'll leave everything up to you and will check none of your work".

It completely beggars belief that this campaign could have been in progress for almost twelve months with the Jackpot Factory management knowing nothing about any aspect of it!

5) The report confirms that internal disciplinary action taken by the company against those responsible was appropriate.

6) The Committee also considered the more positive aspects of the case and in particular the actions of Jackpot Factory in the immediate aftermath of the issue coming to public attention. On two occasions the company admitted fault in the matter and offered public apologies.

That any "positive" elements can be found in a campiagn that entailed targetting such members of society as cancer sufferers, the bereaved, widowed, divorced etc, is quite extraordinary.

It is also extremely revealing the extent to which Hirst, Galston and Catania go to find matters favourable to Jackpot Factory in all of this. In the "immediate aftermath" Jackpot Factory did not, in fact, respond at all, though they were immediately informed and were aware of the publicity within hours. Yet here, the focus is on the fact that they offered a couple of "public apologies".

Management backed this up by re-directing company resources and mounting a committed and energetic exercise to track down every element of the campaign that could be found in order to remove it, at the same time urging the public to report any elements discovered so that these could be addressed.

Then why were many articles still up, days after they had been reported?

7) Jackpot Factory management cooperated fully with the independent investigation team, presenting verbal and documentary evidence without reserve to assist in its investigations.

I wonder what the documentary evidence was, since it had all been removed at that point?

8) Jackpot Factory management has since deployed control improvements in its systems as suggested by the investigation team, which will guard against any repetition of this unfortunate incident. Processes are now in place to ensure that any further material that may surface as a result of this campaign is dealt with on a timely basis.

If you take this at face value, this much is good to know.

9) Evidence was produced showing that the damage to business and reputation suffered by Jackpot Factory was substantial, as a consequence of public disapproval and the suspension of the Play It Safe seal...

10)Before the incident, Jackpot Factory had a solid reputation for compliance with all eCOGRA standards and requirements.

Irrelevant on all counts. A criminal's previous good conduct and economic hardship does not lessen his punishment?

The suspension of the `Play It Safe` seal is lifted, but Jackpot Factory will be subjected to increased eCOGRA monitoring to ensure compliance with the new content code of practice. This is to ensure that all remaining traces of the campaign are removed wherever this is possible. The Compliance Committee is aware of the existence of inactive search engine links, but is satisfied that these do not provide access to any offensive material. The removal of this type of link is solely under the control of the search engines.

The Committee wishes to thank all those representing players` interests for their comments during the initial complaints and throughout the investigation. It also notes that the investigation team received the full cooperation of the Jackpot Factory management and is satisfied that they have shown their determination that this should not happen again.

The goal of eCOGRA in incidents such as this is to remove the immediate cause and potential for harm as quickly as possible, and then through fair and factual investigation isolate the reasons and ensure that systems are in place to guard against any repetition. These objectives have, in the opinion of this Committee, been met.

This report contains practically no substantiatable facts, and gives every impression of a desire on the part of the "independent" committee to place Jackpot Factory in as favourable a light as possible. In the light of the facts as we know them, this is an unfortunate eventuality to say the least. One might have expected better from three "independent" directors.

Or can we conclude that Hirst, Catania and Galston, far from being "independent", had a deep vested interest in returning a favourable report and allowing Jackpot Factory back into the eCOGRA fold?

In the light of the evidence, I can see no other reasonable explanation.

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