Compliance Lessons from TikTok: A Blueprint for the Sports Gambling Industry
Throughout the years, TikTok has faced intense scrutiny over the security and privacy of its platform. This pressure has driven the company to implement significant measures to safeguard user data and enhance its cybersecurity protocols. While the pressure was building, TikTok relied on internal teams to monitor and secure its platform, rubber-stamped with the classic “just trust us.” Policymakers in Washington were less than pleased, citing missing checks and balances so inherent in other industries.
In June, TikTok U.S. Data Security Inc. (USDS) announced a new partnership with HaystackID and OnDefend, marking a pivotal step in their journey to fortify the app against potential threats.
This collaboration with independent cybersecurity firms is directly a result of the relentless regulatory pressure TikTok has faced. Transparency and validation by a third party have proven to be steps in the right direction to ease the pressure and quiet the shouting, for now.
Enter U.S. sports betting…
Ask most sports betting platforms what their biggest business model headache is, and some variation of “compliance” or “regulation” will be their answer. As these conversations increase, companies are allocating budgets for compliance rubber-stamped with the classic “just trust us.” Sound familiar? These internal teams are tasked with immense responsibility.
Fines, suspensions, revoked licenses, and, of course, Wall Street analysis are all potential outcomes of this line item for compliance. It can be thankless for these internal teams to not run their employer afoul of regulators because compliance IS the standard. But that makes the job no easier or free from inherent risks like conflicts of interest.
By examining TikTok’s response to regulatory pressure, the sports gambling industry can learn the importance of third-party validation, which it has done well in certain areas already. Implementing external evaluators who can independently verify compliance and security measures can significantly enhance the industry’s credibility and safety. It can lower the volume from Washington. It can also lower compliance costs for companies fighting for profitability.
The power of regulatory pressure has led to the creation of robust guardrails and regulations, ensuring a more secure and trustworthy platform for TikTok’s U.S. users. This approach could serve as a model for other industries, particularly the sports gambling industry, which also faces significant scrutiny over blurred lines. Similar pressure is building, which can help the sector establish necessary guardrails to protect consumers and ensure the industry’s long-term credibility and safety.
Click here to read this week’s SCALER.
Click here to read last week’s blog post: “CHAOS”: Consolidation Of North America’s Gaming Market
