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Cover SPECIAL EDITION GLOBAL GAMING EXPO (G2E)
PAST, PRESENT AND FUTURE MEET IN LAS VEGAS The first time in a casino is unforgettable. Lights, emotion, adrenaline, entertainment, stories. Whatever the company, the reason or the expectation, it is a moment that will remain forever in our memory. It is not a transferable experience. You have to live it. That is the magic. Las Vegas is the place where those feelings feel most strongly. History reflects that. There were many films that were made about that emblematic city in the state of Nevada, but none can crystallize what is lived live and direct.
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It is a large investment industry, which generates genuine work and income for different countries. It’s fun, yes, but also with responsibility. Companies and governments must be twinned to walk a safe and prosperous road. Consequently, the scenario for each edition of Global Gaming Expo (G2E) is emblematic and perfect. In the end, entering the casino is the end point of the product that is created for absolute satisfaction. That experience is a virtuous circle where I work a universal industry. But innovation is here to stay. The game business is strengthened for each existing business unit. The forms of entertainment of all time come together with the most modern to form the foundations of a new era. This special edition of CASINO Magazine includes such traditional sectors as casinos, lotteries and racetracks, as well as modernity exemplified in online betting and eSports. Also, advances in cybersecurity, regulations and blockchain technology. The digital era and the role of women also with fundamental axes of this publication. The testimonies of the main references of the industry are also very important to understand the present of the business. Merkur, Novomatic, Ainsworth, Aruze and DRGT are the word of the companies, also the projection of organizing companies such as Clarion and Sigma. For 19 years, CASINO Magazine has been living the industry every day. Pride and happiness fill our hearts. Thanks are endless for the entire industry. We invite you to read this special edition from beginning to end. Our dedication is expressed as the first time.
Kind regards, Print
Servicios Gráficos JMD S.R.L. Av. José Gálvez 1549 - Lince Jr. Francisco Lazo 1533 - Lince © Reproduction in whole or in part is prohibited without the authorization of the publishing company. The signed articles are from responsibility of its authors, as well as the advertising designs of the contracting companies. Made the legal deposit in the National Library of Peru 2006 - 5723
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contents 06
October
Casinos: Fiscal year on the rise in Nevada
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Artificial Intelligence: A growing trend
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Merkur Gaming Americas: Charles Hiten
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Novomatic: Harald Neumann
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Clarion Gaming: Kate Chambers
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Sigma: Eman Pulis
eSports: The new frontier
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The shift to the online world
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About casinos
FISCAL YEAR ON THE RISE IN NEVADA Since June 2018, it was the first year without Nevada having the exclusive use of sports betting. The state casinos were the first five months of 2019 without winning. In May, New Jersey sportsbooks exceeded Las Vegas revenue. The balance closed equally positive.
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he gaming industry is constantly changing. In the United States specifically, the PASPA derogation not only opened a new business unit in each state across the country, but also expanded the sports betting scenario beyond Nevada. How would that openness influence the income of “the gaming capital of the world�?
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How would that impact affect the movement of Las Vegas casinos? In May 2018, New Jersey was the first state to operate. Delaware, Mississippi, New Mexico, Pennsylvania, Rhode Island and West Virginia were added to the list over the months. Between June and August, sports betting in Nevada accumulated
$ 286,548,295, $ 244,638,554 and $ 247,622,790, respectively. Those numbers generated some instability, but it was nothing more than a parenthesis in the regularity of that market. From September to December the figures rose to $ 571,034,483, $ 528,568,873, $ 581,070,664 and $ 561,859,873. In addition, the parallel
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with June 2019 was also reassuring (see “The Best June Ever”). As for the total numbers of 2018, the Las Vegas Strip continued as a leader in the revenue ranking with $ 6.59B (+ 2% from 2017), ahead of Atlantic City (NJ; $ 2.51B), Chicagoland (IL / IN; $ 1.95B) and BaltimoreWashington D.C. (MD / WV; $ 1.88B), while Downtown Las Vegas finished 17th with $ 649.9M. In 2018, total statewide commercial casino gaming revenue was $11.92 billion (+ 3%). As in previous years, the Las Vegas Strip continued to account for over half of all gaming revenue in Nevada. Excluding the Strip, total statewide casino gaming revenue was $5.33 billion (+ 4.3 %). It was Nevada’s fourth consecutive year of growth and the state’s highest revenue total since 2007. According to the State Gaming Regulatory Agencies, Commercial Casino Gaming Consumer Spend (GGR) in Nevada went from $ 11,571,113,000 in 2017 to $ 11,917,370,000 in 2018 (+ 2.99%), while Commercial Casino Direct Gaming Tax Revenue decreased from $ 867,187,745 to $ 850,617,016 (–1.91%) . Meanwhile, Oxford Economics points out that Nevada still works more than half of the 800 thousand direct jobs generated by the gaming industry, which translates into revenues of around $ 19 billion (includes salaries, tips, benefits and
Downtown Las Vegas, a world icon.
In June 2018, handle on sports betting was $ 286,548,295, when New Jersey was already operating and the rest of the states were on their own regulation. Last June, $ 322,077,670, an all-time record for the month. other labor income). Likewise, Nevada Gaming Control Board revealed $ 850.6M for casino tax revenue in 2018 throughout the 217 commercial casinos, where there are 140,587 machines of the 160,677 operating in the state (1,129 in tribal casinos and 18,961 in Non-Casino locations).
Nevada casinos are still the heart of entertainment.
DOWN UNTIL MAY The first five months of gaming in Nevada were slow. The most important fact during that period was that in May New Jersey passed Nevada to become the top state in monthly sports betting for the first time. It was $ 318.9 million in handle and $ 15.5 million in revenue against $ 317.3 million and $ 11.6 million. That was the lowest collection so far this year about sports betting in Nevada. But the five consecutive months in decline cannot be explained solely from that fact, since, in effect, the highest sports betting handle was recorded in March since PASPA was repealed: $ 596,752,294, with $ 32,523,000 in revenue. According to the figures released by the Nevada Gaming Control Board, the casinos in Nevada won approximately $982 million from gamblers in May. The report released by the gaming control board also reveals that the state collected $61.3 million in percentage fee taxes based on May figures. The tax collected was down 9.8% when comOCTOBER 2019
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The gaming industry shines on the Las Vegas Strip.
pared with the tax collected for the same period, the previous year. The other lowest number so far this year was Convention attendance declined 6.1% to 529,500, thanks to a shallower mix of small and midsized meetings and conferences. The decline in convention attendance contributed to a modest dip in visitor volume, which was down 0.2% to 3,542 million. For the first four months of 2019, visitor volume is up 0.5% to 13,894 million. Gaming win (the total won by casinos against players for slot machines, table games and race and sports pools) in May was another important fact among the different businesses in Nevada casinos. While sportsbooks continued to win at a record pace (+ 32.7% in volume), Clark County’s victory declined 2% to $ 808.6 million, the Strip fell 3.5% to $ 481.9 million, South Lake Tahoe’s victory fell 12.5% to $ 13.1 million, and North Lake Tahoe lost 16.1% to $ 1.3 million. Downtown Las Vegas win was up 2.1% to $61.8 million.
“THE BEST JUNE EVER” In June 2018, handle on sports betting was $ 286,548,295, when New Jersey was already operating and the rest of the states were on their own regulation. Last June, $ 322,077,670, an all-time record for the month. It was the second worst number of that business so far this year, behind the figures 8
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for May. Either way, all the gaming indicators in the state of Nevada soared. In Nevada, the game is the main contributor to the state coffers, only surpassed by the sales tax. For June 2019, Nevada raised 455 million in gambling revenue, representing a year-on-year increase of 15.9%.
For the 2018-19 fiscal year, Nevada casinos raked in $11.9 billion, marking a 0.8% increase from last year, meaning total gambling win has increased four consecutive years and in eight of the last nine fiscal years. “June 2019, represented the best month of June ever”, said Michael Lawton, chief analyst for the Nevada Gaming Control Board. According to Lawton the jump in June’s revenue was due to baccarat where casino winnings of nearly $158 million were up $84 million, or more than 114%, from June 2018. The increase in winnings at Baccarat also represents the highest
hold percentages in state history. Slots also helped to boost gaming revenue in Vegas. Slot machine revenue was up by 3.9% to $6.4 billion on the Strip. The Las Vegas Strip’s total slot handle increased by 7.7% year-on-year. The board said statewide, win in June was up 11.6% to $1.041 billion, a record for the month. Clark County was up 14.6% to $906.7 million and the Strip with the second-highest percentage increase in the state for the month climbed 17.7% to $616.6 million (without Baccarat, just +2.8% for the month). The market with the highest percentage increase was downtown Las Vegas, which was up 18.6% to $52.2 million for the month. Citywide occupancy (from 90.6% to 91.7%; +1.1%), auto traffic (125,508 128,774; +2.6%) and gaming revenue at Clark County ($791 million - $906.7 million; +14.6%) not only were numbers that rose from June 2018 to June 2019, but also the highest statistic for that item in the year.
FISCAL YEAR UP For the 2018-19 fiscal year, Nevada casinos raked in $11.9 billion, marking a 0.8% increase from last year, meaning total gambling win has increased four consecutive years and in eight of the last nine fiscal years. Of the 16 markets the Nevada Gaming Control tracks, 11 were up year over year. The largest gain was in Wendover on Nevada’s northeastern border at 6.2%, followed by downtown Las Vegas at 5.9%. North Lake Tahoe suffered the biggest decline, down 2% in fiscal 2019. Statewide slot win increased 3.5% to $7.8 billion, but Game and Table win fell 3.9% to $4.1 billion. A decline in Washoe County to $855.3 million ended that area’s streak of six consecutive FY increases. Carson Valley finished the year at $110.8 million, up 2.3% — its fifth consecutive yearly increase after three consecutive decreases. South Shore was down 1.8% to $222.7 million for the fiscal year. Finally, Churchill was down just over $21 million.
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Sports Betting
A GROWING BUSINESS In a 6-3 decision, the Supreme Court ruled that the PASPA was unconstitutional because it infringed upon states’ rights. As a result, states are free to decide whether they want to pass legislation to legalize sports betting. Eight states took the first step in 2018.
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he Professional and Amateur Sports Protection Act (PASPA) was authorized by Congress in 1992. The law was also known for a long time as Bradley Act, precisely by its main promoter, Senator Bill Bradley, who prior to his political activity was a professional basketball player in the NBA.“Athletics – from the high school level on up – could easily be corrupted when huge sums are on the
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line”, Bradley argued from his experience during one of the sessions. Prior to that, the Senate Judiciary Subcommittee on Patents, Copyrights and Trademarks conducted public hearings on the issue in 1991. That subcommittee concluded that “sports gambling is a national problem and the harms it inflicts are felt beyond the borders of those States that sanction it”. However, despite the previous assertion that bet-
ting on sports was a national problem, four states retained the right to accept wagers. Oregon, Delaware and Montana were allowed to host sportsbooks (only pool betting was permitted). In Nevada, full sports betting (i.e. single wagers, not only lottery pools) were allowed. But those exceptions were not the only objections to PASPA. According to the American Gaming Association (AGA), at that time more than $150 bil-
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lion is wagered illegally in this country. The AGA also estimates that 97 percent of the American betting market is underground, siphoning hundreds of millions of dollars in potential tax revenue away to offshore bookmakers. This is how the Supreme Court decision of May 18th 2018 to overturn PASPA was a transformative moment for the gaming industry. It created a new, legal sector that is driving tremendous growth. In the first year alone, legal sports betting revenue in the United States increased by nearly $170 million due to the more than $3 billion in bets placed in the legal market.
THE FACT IN NUMBERS In 2018, the act was challenged and overturned by the US Supreme Court. The ruling paved the way for new, legal sportsbooks regulated by the states. New Jersey was first to offer regulated online sports. The sports betting culture in that state grew so rapidly that by last May the turnover in that business unit exceeded that of Nevada. New Jersey harvested $ 318.9 million in handle (the total in bets taken) and $ 15.5 million in revenue (what sportsbooks earn after payouts), besting Nevada’s $ 317.3 million in handle and $ 11.6 million in revenue. At Pennsylvania, handle reached a new record during the leanest part of the calendar, with 40% of action coming from online/mobile bettors. It was $46.3 million in handle for those Pennsylvania sportsbooks in June, yielding $3.1 million in revenue. Nine states have active sports betting books, most recently Arkansas, which began offering sports betting July 1. Other states taking sports bets are Delaware, Mississippi, New Mexico (tribal casinos only), Rhode Island, and West Virginia. Sports betting also is legal in seven other states—Illinois, Indiana, Iowa, Montana, New York, Oregon, and Tennessee—as well as the District of Columbia, but those jurisdictions aren’t taking bets yet. Eight states are currently considering legalizing sports betting, according to the American Gaming Association.
The expansion helped boost total industry-wide revenue from legal and regulated sports betting to approximately $430.2 million in 2018, up nearly 65% from $261.3 million in 2017, according to the American Gaming Association’s annual “State of the States” survey of the nation’s commercial casino industry.
“In the first year alone, legal sports betting revenue in the United States increased by nearly $170 million due to the more than $3 billion in bets placed in the legal market.” That reflects just the six months following the demise of PASPA. This legal activity has generated more than $65 million so far in tax revenue at the state and local level. Of course, states do run the risk of overtaxing the newly legalized business model. For instance, states like Delaware and Rhode Island tax winnings at 50% rate. So far this year, according to Legal Sports Betting’s most recent calculations, more than $4.4 billion
in handle and nearly $259 million in revenue has been generated. Since PASPA was repealed, every licensed sportsbook (that has been subject to monthly reports from their states) have accumulated, for a total handle of over $8 billion, according to Legal Sports Betting. Sportsbooks in that time have kept more than $500 million, before contributing over $60 million in taxes to their respective states and cities.
STATE BY STATE NEVADA Nevada sportsbooks brought in a record revenue haul of approximately $301 million in 2018 (+21% from 2017), despite Nevada losing its monopoly last year as the only state with legal, single-game sports wagering. For the calculations until May ($104.6 million), the projection for 2019 is similar, even with the competition of the new states involved in sports betting. The seven other states that offered sports betting in 2018 combined for $129.6 million in revenue. DELAWARE The new sportsbooks (three racinos) brought in $10.2 million in revenue in just over six months of operation in
Since 2018, sports betting is a decision of the states.
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collected $2.5 million in revenue from a total handle of $17.6 million. During the first five months of 2019, $ 17 million was accumulated in revenue. RHODE ISLAND In June, the legislature passed a bill authorizing the state lottery to offer and operate sports betting at both commercial casinos. In November became the eighth state, and the first in New England, to offer legal sports wagers. Meanwhile, in their first five weeks of operation, Rhode Island’s sportsbooks generated just over $1 million in revenue from a total handle of $13.8 million.
Some sportsbooks are available 24 hours a day.
2018. In the first five months of 2019, revenues were $ 4.1 million.
generating about $6.6 million in their first four months of operation.
NEW JERSEY In the last six months of 2018 sportsbook operators (include new nine brick and mortar facilities and eight online sportsbooks) collected $94.2 million in revenue on $1.25 billion in handle. Meanwhile, in the first half of 2019 the state accumulated $110 millions in renevue.
PENNSYLVANIA Following the Supreme Court’s landmark, the PGCB approved a set of sports betting regulations, and the state’s first sportsbook opened in November. By the end of the year, three sportsbooks had opened within Pennsylvania casinos. In the first month and a half of legal sports wagering following the mid-November launch, state casinos
MISSISSIPPI Became the fourth state to offer single game sports betting on August 1, 2018. Revenue from the newly authorized added a total of $15.2 million in revenue in five months of operation. By the end of the year, 23 of 28 commercial casinos had opened sportsbooks. WEST VIRGINIA The state legislature, anticipating a favorable ruling by the Supreme Court, passed a bill in March 2018 legalizing sports betting. Hollywood Casino at Charles Town opened the state’s first sportsbook in September followed by the launch of an online betting platform in December. New revenue from sportsbooks helped close the revenue gap, 12
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NEW MEXICO In October, New Mexico became the sixth state to offer legal sports wagering at one of its casinos. The Pueblo of Santa Ana opened a sportsbook at the Santa Ana Star Casino near Albuquerque. Separately, the New Mexico Lottery prepared to launch a limited form of sports wagering. New Mexico didn’t have to legalize sports betting, as its tribal venues are able to offer the pastime by virtue of their pre-existing Class III compacts now that PASPA is gone. Currently, sports betting is only available at two tribal casinos. Revenue numbers are not available, but the state roughly gets 9.3% of NM tribal earnings as part of their “revenue sharing” model.
Nevada still leads the way in sports betting in the United States.
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A growing trend
WHAT BENEFITS DOES ARTIFICIAL INTELLIGENCE OFFER TO CASINOS? Automation models are increasingly requested by different industries that prioritize the qualities they offer in terms of cost, time and productivity.
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echnology is an essential tool in the world of casinos. Without technology they could not organize their daily operation in all areas, even many games would not work. The labor world is undergoing major modifications because of technological advances, robots and the incorporation of artificial intelligence. In many
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other fields, robots have already replaced people in their jobs. Thus, automation models are increasingly requested by different industries that prioritize the qualities they offer in terms of cost, time and productivity. Technology evolves by leaps and bounds, and there are already several prototypes of robots
capable of imitating certain human behaviors perfectly. The jobs that will be most affected by the rise of the robots are those with automatic tasks, such as those related to customer service (in restaurants, shops or cafes), those of administration, those of an economic nature (banker or accountant)
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or those in the construction sector. A concrete example of this is the robotization of dealers in casinos. One of the first to address this trend was the company Paradise Entertainment which, a few years ago, was encouraged to take a step towards the future of casino robotics and developed a dealer robot. For this, he created his first “employee” called Min. Paradise. The company said it is more efficient than a human being. Although acquiring it would not be economical, in the long run it is expected that by not paying salaries the investment will be recovered and thus the robot will end up being more profitable than traditional labor. Chun Jay, Chairman and Managing Director at Paradise Entertainment, said: “Human-like robotic dealers could cut labor costs and open up new markets for casino operators, and that while their function is currently limited to dealing cards, planned enhancements could have the robotic dealers recognising customer’s faces and speaking to them in multiple languages.” According to a report from the Bank of England, robots will end up occupying 15 million jobs in the United Kingdom over the next 20 years, and according to a World Economic Forum report, it is estimated that, by 2020, 5.1 million people worldwide will be replaced in their workplace by robots.
The dealer robot called Min. Paradise.
“Technology evolves by leaps and bounds, and there are already several prototypes of robots capable of imitating certain human behaviors perfectly.” “Robot dealers are more efficient at dealing cards as they typically distribute 30% more than a human in any giv-
en period. We are working on making this robot dealers more lifelike, which can include scanners which enable the machines to recognize the cards that have been dealt, while more advanced models will incorporate face-recognition capabilities so customers such as high rollers get a more personalized service”, the Chairman added. However, human supervision will always be necessary for all such “workers”, which can be damaged without prior notice at any time. Therefore, the key to adapt to these new times may be to reinvent trades. All those related to creativity and that require greater complexity will continue to belong to human beings for at least the next few years, if it is not that an artificial intelligence more similar to the human is developed.
ARTIFICIAL INTELLIGENCE IN ONLINE GAMING
Robot production is increasing.
Another sector that is adapting to the use of artificial intelligence is that of online casinos, focusing on two specific areas: security and the development of game software that manage to analyze user habits and adapt to them. In the betting industry, information is crucial. Betting companies devote a good amount of time and money to the collection and analysis of a large amount of data. The industry is strongly linked to OCTOBER 2019
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the odds. Consequently, it is highly profitable for casino software developers to be aware of their customers' needs to know or predict their habits or preferences. That computers are more likely to provide accurate data than any human being is a fact. Consequently, the use of AI software is the perfect solution to help analyze consumer habits and predict which products may be of interest in the future. It also has many other benefits for the gaming industry, including the creation of probabilities.
“The use of AI software is the perfect solution to help analyze consumer habits and predict which products may be of interest in the future.” Operators can provide their players with more realistic odds through the use of artificial intelligence. On the other hand, AI can also be used by players to be smarter than the system and take home victories, especially in card games such as poker. On the other hand, casino operators look for solutions to help croupiers prevent errors and manage games more efficiently. An example is Casino Automation Technology (CAT), developed by Dallmeier, which uses a combination of video technology and artificial intelligence. The tool uses artificial intelligence and camera technology for more proactive casino operation. For croupiers, it works as a virtual assistant that monitors the transactions of the games in real time. In addition, it automates manual tasks improving the pace of the game. For example, AI systems recognize suspicious winning patterns, warn of errors and automatically confirm openings and closures. It also enables operators to run performance analyzes and dealer ratings. 16
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THE LIBRATUS CASE In 2017, Libratus, an artificial intelligence system created at Carnegie Mellon University in the United States, won a poker competition in which it faced four professional players. The challenge, called “Brain against artificial intelligence: raising the ante”, took place over 20 days at the Pittsburgh Rivers Casino. At 10 days of the tournament it accumulated 677,000 dollars of profits. Even though that the first days was mixing gains and losses in equal parts. However, little by little, the system began to learn from its rivals and there it was the key element. Libratus algorithms run continuously on a supercomputer, so the supercomputer maintains the production of improved strategies every day. The first thing the system developers did was to give it a theoretical basis. They programmed a basic understanding of game theory that leads to optimal solutions. With this the robot could take advantage of the first moments of the game to have leverage over players who still did not have the robot read. In total, 120 thousand hands were played (a very high number to try to neutralize the luck factor). Libratus beat professional players Jason Les, Dong Kim, Daniel McAulay and Jimmy Chou, one by one. Its creators, Professor Tuomas Sandholm and his student Noam Brown, were decisive in the reasons for the victory of the program: “Libratus’ ability to reason strategically based on imperfect information has surpassed that of professional players.” This is not the first time in history that such competitions have taken place, many years ago, a chess challenge had already been made between Gary Kasparov and IBM’s Deep Blue, an occasion that was considered as the first time in history that a supercomputer beat the world champion in normal tournament conditions, with a control time just like in official chess competitions. However, for artificial intelligence, poker is a more complex game than chess. What makes it so elusive is, fundamentally, his imperfect or incomplete information. Poker players do not see the cards of their rivals, so they do not have all the necessary information to make decisions. Thus, poker is not a mathematical game, but of skill. In addition to the calculation, other factors such as luck, body language and psychology enter the scene. “Instead of simply looking for an optimal sequence of actions, an artificial intelligence, in an imperfect information game, must determine how to balance its actions appropriately, so that its rival can never discover too much data about the private information that the machine has,” explained Sandholm and Brown. This milestone achieved by artificial intelligence could have implications in any field where information is incomplete. Military strategy, business decision making or even medical treatments could benefit from artificial intelligence programs similar to Libratus.
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A growing market
ESPORTS: THE NEW FRONTIER 2019 has become the year of consolidation for electronic games. If eSports had already conquered the real world, now they are conquering the sports betting world.
e
Sports or electronic sports are a subsection of the sports market. In eSports, people play in tournaments, which are played on video games. eSports tournaments can be of single combat or multiplayer video games, mainly played between professional players. The eSports games generally fall into four types of genres: fighting, first-person shooter, real-time strategy and multiple online battle arena.
They have gained significant popularity owing to the growing number of audiences through game streaming platforms including YouTube and Twitch. Also, the growing number of professional players in the area has started making its value equivalent to any other sporting event. Electronic sports are also being considered by the Olympic committee and Asian Games Federation to be included as a part of the Olympics and Asian Games.
Poised to become a real social phenomenon, eSports is an emerging market whose current limited revenue is growing fast, and could reach â‚Ź3 billion by 2021, or 4% of the video game market, according to a report by IDATE. This figure is forecast to climb to â‚Ź10.5 billion in 2030, thanks to an average annual growth rate of 37.6%. Meanwhile, eSports audience figures are set to skyrocket from the current 240 million to 410 million by 2021. OCTOBER 2019
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According to MarketsandMarkets, the eSports industry is expected to reach USD 2,174.8 million by 2023 from USD 926.3 million by 2018, at a CAGR of 18.61% between 2018 and 2023. Growing popularity and acceptance of electronic sports has catapulted the revenue generation in the form of merchandising and corporate sponsorships aside from traditional revenue streams like broadcasting rights of the event and tickets to the event. eSports is a potential market for the global gaming industry and it is experiencing a steady growth that is mainly driven by cloud gaming and mobile gaming. In the same period, the gaming industry is expected to be
National Hockey League. They estimate the total online population is over 3.65 billion people globally, to go along with 2.2 billion gamers, but eSports viewers represent just 5% of the online population, which suggests that there should be plenty more runway for audience growth. By 2022, they estimate the eSports audience will reach 276 million, similar in size to the NFL today. Goldman Sachs estimates that, in 2017, eSports generated USD 655 million in annual revenue, including 38% from sponsorships, 14% from media rights, and 9% from ticket revenue. But by 2022, they expect media rights to reach 40% of total eSports revenue,
eSports is also being considered by the Olympic committee and Asian Games Federation to be included as a part of the Olympics and Asian Games. more interactive and streaming based. The countries that generate a major portion of the revenue in gaming industry include China, Japan, US, Germany, South Korea, France, Canada, and UK. Apart from game streaming platforms including Twitch and YouTube, digital broadcasters and media companies have started competing for gaining eSports broadcasting rights. This can lead to eSports market witnessing a huge audience during the forecast period and can also lead to a higher average revenue per fan (ARPF). Most of the revenue is expected to be generated from North America and China. Based on revenue model, the global eSports market is segmented into advertisement, sponsorship, media rights, and others. Others include game publisher fees and revenue generated from the sales of ticket and merchandise. Advertisement and sponsorship accounted for the major part of the revenue generated by the eSports market in 2018. In 2018, Goldman Sachs estimates that the global monthly audience for electronic sports reached 167 million people, based on data from NewZoo, larger than that of Major League Baseball and the 18
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comparable to the average of the four major Western sports leagues today, as massive audiences and associated revenue for established online video platforms like Twitch, YouTube, Douyu, and Huya will be able to support a growing pool of media rights fees paid to top publishers for their content. As media rights and sponsorship continue to grow, along with the formalization of pro sports leagues, they expect total eSports mon-
etization will reach USD 3 billion by 2022. Over the last three years, electronic sports has attracted interest from outside its microcosm from various industry groups whose core business is related to video games to varying degrees: TV and media, communication groups, major consumer brands and casinos. This interest has arisen from the rather sudden realisation that the phenomenon is hugely popular with many gamer generations, especially millennials and “digital natives�. According to Newzoo, they account for at least 50% of the audience of the main eSports titles (League of Legends, Counter Strike, Dota 2, Overwatch and Hearthstone). Video games are part of the culture of this generation. Millennials have adopted them as a regular recreational activity and have adapted the playing of video games to create a new kind of sports competition. eSports are now followed by an increasing number of these young consumers, whose recreational activities related to viewing entertainment are much different from older generations. Advertisers can therefore engage with millennials through eSports events. Moreover, they provide ways of understanding the behaviour of a segment of this generation that has grown up with the Internet and considers digital as the norm. A number of metrics gleaned from electronic sports have caught the interest and even amazed various stakehold-
Video game competitions attract thousands of live viewers and millions online.
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Stadiums are usually filled in esports competitions.
ers in the digital and media economies. In 2016 the total prize winnings awarded to eSports tournament winners worldwide was USD 93.6 million, compared with USD 65.8 million in 2015, a growth rate of 42.3%. The game Dota 2 is responsible for nearly USD 95 million in prizes handed out to eSports participants since its release, including USD 37 million in 2016 alone. In 2011, the team Fnatic won the League of Legends World Championship and took home USD 50,000. The peak viewership on the web was 210,000 persons. In 2016 the winning team (SK Telecom T1) pocketed USD 2.68 million, the peak concurrent viewership was nearly 15 million and it was followed by 43 million unique viewers. In 2014 the Olympic Stadium in Seoul in South Korea hosted 40,000 people for the League of Legends World Grand Finals. There were more than 18,000 at the Staples Center in Los Angeles for the 2016 edition. About 260 million people follow electronic sports online, twice as many as in 2014. The vast majority are males (85%). More than 60% of this audience is in the 13-24 age group.
GAMBLING ON ESPORTS 2019 has become the year of consolidation for electronic games. If eSports had already conquered the real
world, now they are conquering the sports betting world. Betting on eSports is a relatively new form of online betting (mostly) that has experienced exponential growth over the past three years. With several pioneer eSports franchises seeing the light of day, the eSports betting industries and eSports have reached new heights and it seems they will continue to grow in the near future.
Goldman Sachs estimates that, in 2017, eSports generated USD 655 million in annual revenue. Bets on the game Counter Strike (CS:GO) are among the most popular franchises at the moment, but the competition is very tough and that could change at any given time. New games are coming, especially the “battle royale” genre including Fortnite and PlayerUnknown’s Battlegrounds (PUBG). The “MOBA” games have not yet lost their charm, so it is seen that League of Legends (LoL) and Dota 2 can still accumulate high numbers.
Currently, there are 4 major games that online betting houses offer betting odds, these are League of Legends, Starcraft 2, CS:GO and Dota 2. In addition, there are some bookmakers that offer bets on leagues and tournaments of Hearthstone, Overwatch, Smite, Heroes of the Storm (HOTS), World of Tanks (WoT), EA FIFA Fútbol and PUBG. Making a bet on electronic sports is quite simple, in fact, it is the same as common online sports betting. You can browse through sports betting sites and take a look at the games and leagues of tournaments that offer betting odds. To place a bet with one of the betting sites, you need to register before you can place the first bet. After registering, you must choose one of the available payment options to make the first deposit. You can get a good overview about which betting sites offer each user’s favorite payment type by looking at the overview of the bookmaker. Betting on eSports does not differ from betting on other sports such as football and tennis. Sports bookmakers offering betting markets for sporting events must have a valid game license for the country or region in which they offer bets. Generally, information on the gaming license of the different bookmakers can be found on the website of each OCTOBER 2019
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bookmaker. Since the legal regulations for betting differ from one country to another, it is advisable to consult the legal regulations of each country or region. Technically, in most states of the United States it is not legal to bet on eSports. These are only legal in some regions such as Nevada, New Jersey and Delaware. The countries where eSports bets are legal (or actually legalized) are Spain, Taiwan, Australia, Japan, the United Kingdom, Korea, New Zealand and Macao. A country has to legalize both online bets and sports bets so that eSports bets are considered legal. The legality of electronic sports bets is a constantly changing topic. Some countries where it is not legal now could legalize it in the future.
THE ESPORTS GAMBLING MARKET IN NUMBERS As the popularity of games grew, more money was poured into the industry, which created more opportunities for betting and gambling to rise. And as with any popular sport, the mainstream exposure has caused the money to follow. Bettors and gamblers are setting up shop to try to reap the rewards of this new economy. The market for eSports betting is larger and spans a broader range of products than many assume. While betting on eSports matches is popular, it’s only one part of the product mix that sits at the locus of eSports and gambling. This is unsurprising considering the amount of money on the line in the top
electronic sports tournaments. Even though sports (and eSports) betting is illegal in most states, global wagering surrounding major eSports titles was estimated at USD 5.5 billion in 2016 and is projected to approach USD 13 billion by 2020, according to a report by Narus and Eilers & Krejcik Gaming. For reference, global soccer wagers were estimated at between USD 49 billion and USD 70 billion dollars, including both legal and illegal wagers, as indicated a report by the BBC. According to research done by NJGames.org, the total amount bet on eSports competitions is expected to hit USD 12.9 billion by 2020. Compared to the USD 5.5 billion bet on eSports in 2016, that number would mark a 134 percent increase in just four years. To put that USD 12.9 billion figure in perspective, the total
Professional esports teams training.
The current esports competitions distribute millionaire prizes.
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handle for sportsbooks in Nevada on all sports was about USD 4.8 billion in 2017. According to Eilers & Krejcik Gaming, as one of the fastest growing categories in online gambling, eSports betting is on pace to reach up to USD 8 billion USD in total wagers this year, equating to USD 560 million in revenue at an industry average margin of 7%. Growth estimates point to more than USD 16 billion in annual wagers in coming years. More casinos are expected to embrace electronic sports sooner rather than later: 82 percent of commercial casino stakeholders believe that regional casinos should explore hosting eSports events, according to the report by Narus and Eilers & Krejcik Gaming. Both the Luxor and Aria casinos in Las Vegas launched eSport studios in early 2018.
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Merkur Gaming Americas
THERE IS NO ‘I’ IN TEAM Charles Hiten, CEO of Merkur Gaming Americas, spoke about about the company’s plans and hopes for the upcoming G2E in Las Vegas.
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he CEO of Merkur Gaming Americas, Charles Hiten, is no newcomer to the pages of Revista Casino but who is the man behind the business card? In the course of asking about company’s plans and hopes for the upcoming G2E in Las Vegas we were pleased to find out a little more about what makes this career executive tick and how he directs his teams throughout the Americas. We started by enquiring as to how Merkur’s plans for G2E are shaping up. Charles Hiten: “The process of show planning and organization takes a great deal of time and effort. To bring all the various strands together requires almost military precision to ensure that, as the show opens, everything is ready for our team to greet visitors. I think that every exhibitor, at every show, looks around on build up day and secretly thinks ‘this will never be ready on time’. But, as if by a miracle, it always is ready, on time and in good order. We have the great fortune that we have such a fantastic exhibitions team who do a great job to ensure that our commercial team is best equipped to successfully present our latest offerings.” He continued: “A while ago my trusted colleague David Orrick came up with a simple recipe for successful trade shows by using the letter P three times: ‘People, Products and Places’. I always remembered that and, for G2E specifically, I know that we have the People (our great team of industry professionals) we definitely have the Products (it will be our pleasure to present many exciting and brand new innovations this year) and we, as always at G2E, have the highest expectations
for customers, business partners and visitors from Places across the Americas, Europe and far beyond.” We next asked Mr. Hiten to expand on the People and Places that he mentioned.
“People are our greatest asset. Our team is the backbone of our ever-growing success. Merkur Gaming has local teams strategically placed throughout the region in order to best serve our valued customers.” “People are our greatest asset. It’s clichéd, but there is no ‘I’ in team, and our team is the backbone of our ever-growing success. Merkur Gaming
Americas has local teams strategically placed throughout the region in order to best serve our valued customers. This is a great opportunity for me to pay tribute to their efforts. Our Americas ‘hub’ is in Deerfield Beach, Florida, and we have recently moved into a new, purpose built, premises there. We are expanding and Aquiles Mila de la Roca recently added his experience to the team as Business Development Executive expanding our business in Florida, the cruise ship, and Caribbean markets through his array of trusted relationships. Also newly joining us is Santiago Salvestrini who takes on the role of Marketing Director, Latin America. Recently relocated from Chile to Florida, Santiago has worked for several world-leading brands and has extensive gaming operations experience. Additionally, Merkur Gaming has four subsidiaries in Latin America. We have offices in Argentina, Colombia,
Charles Hiten: “Our Team is the backbone of our ever-growing success.”
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The linked progressive Jackpot Treasure Link, complete with its five brand new games, makes for a thrilling package of gaming entertainment.
Mexico and Peru and each and every one adds enormous value to our presence and our brand recognition across the region. I am supported by our general managers in each country, all gaming industry luminaries in their own right. In Peru, Tomás Mieles holds the dual role of GM and sales director for Latin America. Tomás has been instrumental in firmly establishing Merkur Gaming in Peru, and ably supports and guides our commercial efforts throughout the region. Together with Ronald Diaz, Tomás Mieles is also driving our expansion into Chile. Ronnie Ferreira has achieved enormous success in Mexico and continues to enhance Merkur Gaming’s position as a top-level supplier in this highly competitive market. The current market conditions in Argentina remain challenging but we continue to make steady progress, and our ongoing expansion into the neighbouring Uruguay and Paraguay markets made by Alejandro Saraintaris is a reason for celebration. Thanks to the dedication and professionalism of Juan Guillermo Diaz and our team in Colombia the Merkur Sun shines proudly as a leading brand in Colombian gaming. We have the specific objective of growing floor share, across all markets in Latin America in 2019 and beyond, 24
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“We are confident that Rapid Thunder will receive great interest, also, Treasure Link, our brand new Linked Progressive Jackpot product comprising five game titles, will be making its world debut at G2E.”
and we are focused on expanding the product portfolio offering to ensure that Merkur Gaming Americas continues to go from strength to strength.” And what new products can we expect to see from Merkur at G2E? “You have already seen at first hand the fantastic reception given to Rapid Thunder at the Peru Gaming Show earlier this year. This will be its first presentation at G2E and we are confident that Rapid Thunder will receive great interest on our booth. Treasure Link, our brand new Linked Progressive Jackpot product comprising five unique game titles, will be making its world debut at G2E. Alongside Treasure Link and Rapid Thunder we will also be introducing several exciting new products, all purpose built with player engagement and interaction in mind. This is something that is really exciting and it will form the centerpiece of our product display in Las Vegas. There is more, much more, to see from Merkur Gaming at G2E and it is my pleasure to invite everyone to stop by our booth, #3353, to sample our newest innovations there. Getting back to the 3P’s: we will have the best People, the top Products all in one Place at G2E. I can’t wait for the upcoming three thrilling show days that are ahead! See you there.”
Charles Hiten: “We are confident that Rapid Thunder will receive great visitor interest at G2E.”
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On the top five markets
THE STATUS OF ONLINE GAMBLING REGULATION IN LATIN AMERICA Reports indicate that the Latin American online betting market will be worth more than USD 2 billion by the end of this year. That’s more than three times as much as Southeast Asia, which is experiencing a huge gambling boom in its own right.
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ith the invention of the Internet, online casinos, lotteries and games have appeared and are available to almost everyone. According to a report developed by Verified Market Research, the global online gambling and betting market was valued at USD 49.63 billion in 2018 and is projected to reach USD 114.38 billion by 2026, growing at a CAGR of 10.94% from 2019 to 2026. As in the whole world, in the Latin American region the online betting mar26
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ket is experiencing significant growth. The progression of online bookmakers is increasing and in certain population groups there is an important breeding ground: it is fundamentally young people who are more encouraged to play games of chance or make sports bets through the Internet. Latin America has experienced in recent years a spectacular consolidation of the economy in different countries. While it is true that there are still regions that expe-
rience some instability, most countries in the region are very stable and prosperous at the economic level. This has aroused the interest of large online betting houses in the region, as they see that there are more and more people who have the necessary capital to place bets online. Reports indicate that the Latin American online betting market will be worth more than USD 2 billion by the end of this year. That’s more than three times as much as Southeast Asia, which is experi-
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encing a huge gambling boom in its own right. The rise in mobile gambling in the region is growing particularly fast. The good data shown by the sector indicate that trends in English-speaking countries are being followed, in which there is much more tradition in the field of sports betting. The different countries of Latin America are seeing these days as large companies open their online betting platforms. Until just a few years ago, the big players in the sector in Latin America could not be seen, however, nowadays you can find platforms of the big brands in the field of online betting. This is interesting, considering just about 30% of people in the region have smartphones. Online gambling in Latin America makes up about 4% of the entire world’s gaming revenue. Things are definitely looking good for gaming software providers in Latin America. Most analysts feel that within the next 10 years, this market could begin competing with the European online gaming market. The majority of Internet gaming operators focus on Brazil and Mexico. Overall, tourism in Latin America is up, and more companies are beginning to focus on smaller nations such as Panama, Colombia, and Argentina. The growth of this type of bets is also causing some governments in the region have decided to take action on the matter and regulate the sector, which, far from being something negative, is positive and assumes that the sector is also reaching certain maturity in Latin America.
Jair Bolsonaro, president of Brazil.
Andrés López Obrador, president of Mexico.
taxes, how to pay or what declarations need to be done for authorities. But the big step is that it is not a crime anymore. In terms of tax collection, if they approve a more comprehensive model, with casino (integrated or not to a resort area), bingo, poker, sports bet and everything else, some people say it could reach R$ 20 billion,” said Witoldo Hendrich Júnior, Founding Partner at IPS Online Brasil.
Newton Cardoso Jr., spoke about the legalization of games in Brazil. The president assured him that he is in favor of regulating the activity, especially in tourist casinos. However, Bolsonaro stated that the legalization of the games should be carried out by each state and that they should create their own rules for the supervision and control of the games. A report by GamblingCompliance estimates that Brazil’s land-based and online sports market to be worth approx USD 1.04 billion by year five under a base case scenario. Under a bull case, they estimate the market to be worth roughly USD 1.56 billion. Online wagering is expected to account for 60 or 70 percent of the overall market. The signing of the new law initiated a two year window that the ministry has to establish regulations, although there is an option for an additional two years if necessary. In late February 2019, the ministry stated that it is evaluating two licensing models to implement sports betting, with the hope of making a decision during the second half of 2019. The decision will come down to whether it will award a fixed number of concession contracts, which will likely require a tender process, or establish an open licensing regime similar to most European markets. Online sports betting operators will be permitted to retain a maximum of 8 percent of total stakes, with the remain-
“The Latin American online betting market will be worth more than USD 2 billion by the end of this year.”
BRAZIL With a population of more than 200 million people, Brazil’s potential market is one of the largest in the world. The “sleeping giant” of the global gaming industry is finally stirring now, after the enactment of Law 13.756/2018, which legalises online and land-based fixedodds sports betting, in December 2018. However, the sports-betting provisions of the legislation only make up five pages of a 46-page lottery law, leaving many key details to be determined by implementing regulations from the Ministry of Finance. “It is not regulated yet. We have no clear view about who is going to collect
According to the Congress, the legalization of gambling, especially of the casinos integrated to resorts, would generate more than 300 thousand jobs for the Brazilian economy. GamblingCompliance estimates on a report that the liberation of this type of activity would attract more than R$ 50 billion (USD 13.65 billion) per year in investments and approximately R$ 20 billion (USD 5.45 billion) with tax collection. During a meeting in late August, the president of Brazil, Jair Bolsonaro and the president of the Tourism Commission of the Lower House of Congress,
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nies to present themselves with a local company through Transitional Unions (UT), meanwhile, LOTBA allows them to enter without an Argentine partner.
COLOMBIA
Authorities of the Provincial Institute for Lotteries and Casinos.
der being distributed to prize payouts (89 percent minimum), public services (2 percent) and sports entities (1 percent). The law does not specify any upfront licensing costs, suggesting that these too will be left up to the implementing regulations. However, it does establish a monthly regulatory fee (of approximately USD 15,000 to USD 500,000) based on the amount of prize money paid out by an operator.
ARGENTINA Currently, eight of the country’s 23 provinces allow online gambling, with the province and federal capital city of Buenos Aires both set to join the regulated market after enacting laws in December 2018. The Provincial Institute for Lotteries and Casinos (IPLyC) will be tasked with regulating online gaming in the province, while the Buenos Aires Lottery Authority (LOTBA) will regulate in the city. The two have already adopted regulations and ratified an accord that will allow for collaboration regarding inforcement, AML compliance and responsable gambling. Both jurisdictions are aiming to be operational by the end of 2019. Terms, number of licenses, guarantees and opening to foreign companies. In these four points the main discrepan-
cies in both regions are noted. In the province it has already been confirmed that there are fourteen companies that will compete for the seven gaming licenses that will be granted. Once the IPLyC grants the licenses, the companies will be able to start operating immediately, but they will have 90 days to pass the second technical certification. In the city, Sebastián Vivot, Manager of Modernization and Information Technology at LOTBA, informed that the calling is about to take place in the next months. Another big difference is the limit of licenses in play: LOTBA will give an unlimited amount against the seven that the IPLyC will grant. In the city, private operators must pay 25% of their net billing, in taxes and fees. Permits will be granted for five years, extendable for another five. The private operator may charge no more than 20% of the amount wagered as commission (first, what will be used for the prize pool will be deducted). Companies may advertise, but for this they must submit a plan to LOTBA, which will have to be approved. Both markets will be inspected by their regulatory body. Each jurisdiction will establish the tests and certifications to be required. IPLyC required compa-
“The liberation of this type of activity would bring approximately R$ 20 billion (USD 5.45 billion) in tax collection.”
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Gaming authority Coljuegos began accepting applications for online gambling concessions in 2016. During 2018, the country had ten active operators offering games, 1.9 million registered player accounts and collected CO$ 37 billion (approx USD 12 million) from taxes and fees that are allocated to the country’s health system, according to a report by GamblingCompliance. Colombia now has 17 operators that have been granted concession contracts and various provisions of its regulations for online gambling were amended pursuant to a decree published in early January. Among other details, the amended rules clarify that concession-holders may not offer bets on lottery or numbers draws, Colombian or international stock indexes, or on the price of virtual currencies. In response to industry comments, Coljuegos stated that although livedealer and virtual sports were not included in the amendments, the agency “continues to study new possibilities for growing the gambling market in Colombia in a responsible manner.” As of June 2019, Coljuegos collected resources amounting to 320 billion Colombian pesos, which will allow 610 billion to be exceeded at the end of the year. According to the president of the entity, Juan B. Pérez Hidalgo, this collection for exploitation rights of the monopoly of games of chance allows to show a growth compared to the same period of 2018 of 13%, having collected in the first half of 2018 a total of more than 278 billion. “We highlight the collection of localized games (casinos or bingos), which represent the largest for exploitation rights of national chance games, which for the first half of 2019 corresponded to more than 186 billion, representing a growth 9% compared to the first half of 2018. Similarly, it is important to highlight the behavior of online games, which showed the highest growth from one term to the other, with a collection from
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January to June of 2019 of more than 29 billion (63% growth compared to the first half of 2018),” said Pérez Hidalgo.
PERU
The bills remain pending and are understood to be independent of the ongoing efforts of the regulator. “Congress is working on the unification of the three projects. The idea is for the Committee on Foreign Trade and Tourism to draw up an opinion and present its own proposal. If this materialized, we would completely agree. Separately, each initiative has strengths and some problems. We only question one point,” said San Román. A tax burden of 12%, that the pages work under the .pe domain and that companies guarantee the payment of prizes, fines and taxes are the main requirements of the entity. In Peru, sports betting and online gambling activities are being developed without there being a regulation that establishes clear rules of the game. “One of the projects states that only sports betting venues can be opened in the slot rooms and casino. If so, we would hardly have 16 retail stores nationwide. That is not the idea. We cannot put restrictions. We believe in free market policy: let them come, let them enter, and let the competition begin,” stated the executive.
In the country, sports betting, physical and online, are allowed, although not regulated. In the next months, a legal proposal to regulate online casino gaming and sports betting is expected to be introduced in the national Congress by the gaming regulator, the General Directorate on Casino Games and Slot Machines (DGJCMT), which sits within the Ministry of Tourism. According to Manuel San Roman, General Manager at DGJCMT, the country is for some game modalities a gray market in which about 3 billion Peruvian soles per year are gambled, almost 895 million dollars. During big sports competitions, this figure increases exponentially: 4 billion soles, more than 1,193 million dollars, were bet on the 2018 FIFA World Cup. A presentation published by the DGJCMT in September 2018 indicated that the proposal will include ISP blocking and an advertising ban for unlicensed operators. Two additional bills have already been introduced in Peru’s Congress in September 2018: one to regulate a wide range of online casino games and sports betting, and another limited to sportsbooks at land-based casinos and online.
Licensed land-based casinos are permitted to operate online gaming and
Juan B. Pérez Hidalgo, president of Coljuegos.
Manuel San Roman, General Manager at DGJCMT.
MEXICO
sports betting, although there are no specific regulations. After being passed by the lower house of Congress, legislation has been pending in the Senate since 2014 to update the legal framework for online gaming. The bill would also create a new regulator for the gaming sector. In March 2019, the National Regeneration Movement (Morena), the major political party in Mexico’s Congress, announced it was working on significant fiscal and regulatory changes to the country’s gaming market, which could indicate a new initiative to implement more robust online gaming regulations. Morena thinks that there are adjustments to make to the Games and Raffles Law, specifically what it has to do with the taxes of bookmakers and casinos, both physical and virtual. In Mexico, the Special Tax on Production and Services (IEPS) for casinos is 20%. Morena has already announced that there will be a special regime for online casinos, given the increasing popularity of such sites. Through a press release, the political party said that Mexico is the third place in the development of the industry throughout Latin America, just below Argentina and Chile. Being so popular, the initiative considers that games with bets and raffles have not been properly taxed. It is estimated that the betting market in Mexico has an approximate value of 1.1 million dollars and the profits per vertical are distributed as follows: Casino 35%, Poker 12%, Bingo 14%, Sports 36% and Fantasy 3%. In addition, its growth goes hand in hand thanks to the increase in the use of smartphones and it is projected that by 2020, 50% of users will access these platforms through their phone, according to Statista. However, it is unclear where Andrés Manuel López Obrador, Mexico’s new president, stands on gaming issues. Nevertheless, the prospect of a more defined regulatory framework for online gaming would turn Mexico into an even more appealing jurisdiction for international investors looking to enter the región, according to GamblingCompliance. OCTOBER 2018
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BetPlay: SUCCESSFUL OPERATION IN COLOMBIA The company’s manager maintains that the time elapsed has been a learning period, and now they plan to exceed two billion pesos in sales.
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orredor Empresarial became the second company to obtain a license to operate in Colombia, under the BetPlay brand, and to date it has more than one million registered users on its platform.
Corredor Empresarial launched BetPlay a while ago. What is the reach at the moment? Corredor Empresarial that includes the main betting entrepreneurs in Colombia, developed based on the experience of its members. This has allowed us to be at the forefront in the sector nationwide and have an important participation. Two years ago we dabbled with a sports betting product: BetPlay, which obtained the second license in the country. We have had an important evolution, an exponential growth, so much that today the sales are assimilated to those of the Super Astro, which has more than eight years in the market. In this management period we have learned from our entire network, which are more than 24,000 points in the country.
What is your contribution to the Colombian market? We have important alliances, such as sponsorship of the National Football Federation. In addition, we have star representatives, such as soccer players, sports commentators and artists that allow us to be BetPlay ambassadors. For two years it has been possible to have more than one million registered on our platform, with more than 30% of active players monthly. Likewise, we expect our sales this year to exceed two billion pesos in bets. 30
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GermĂĄn Segura, BetPlay Manager. What does it mean for you to run a company like BetPlay? I have 15 years of experience in the gaming industry, and because of the work I do, I can say that I am a casino professional by profession. I was around 11 years working in game rooms, I have participated in the world of chance and now in sports betting, which are leading me to an attractive sector, where I can work with different products. I want to contribute and enrich BetPlay to be the number 1 company in Colombia. Despite the challenges, problems
and risks, I believe that the results that have been achieved are important.
What is your horizon for the sector in five years? So far there are 17 legal online operators in the country. I think next year eight more operators will enter, however some will start to stay on the road. We see that many rooms have begun to close, so I consider that the incoming company has to make a long-term commitment, since there are two operators positioned with 80% of the market.
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INTERVIEW
Novomatic
OUR PORTFOLIO CONTINUOUSLY CREATES WELCOME OPPORTUNITIES Harald Neumann, CEO of Novomatic, delves into its management and the different points of expansion of the company, while establishing the present as a time to focus on “effective internal structures and increase synergies between companies.
Harald Neumann, CEO of Novomatic.
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ovomatic is one of the most important companies in the world. Harald Neumann is one of the brightest minds in the gaming industry. His position as CEO establishes a very great responsibility, as well as an authorized voice on the universal stage. His leadership is in the facts. His words carry the force of success. 32
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Officially, this month marks a new anniversary for you as CEO of NOVOMATIC. What were the most important challenges you should have faced? First of all I admit that am proud to be CEO of one of the main international producers and operators of gaming technology, which employs more than
23.000 staff worldwide, the Group has locations in more than 50 countries and exports high-tech electronic gaming equipment and solutions to more than 70 countries. Today we are fully active in all segments of the gaming industry and thus offer a diversified Omni-channel product portfolio to our partners and clients around the world.
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There have been numerous highlights in my career so far, but one of the highest points as well as challenging, has definitely been the acquisition of Ainsworth. We have now not only achieved another milestone in our corporate history of success, as this acquisition considerably strengthens our market position in Australia and Asia, as well as North America. The NOVOMATIC Group has recently grown strongly, primarily through strategic acquisitions. Today we have about 300 subsidiaries. Having grown so much over the last years, we will now focusing more on effective internal structures and on increasing synergies between companies.
PASPA was a very important event for the gaming industry in the United States. How was the business unit of your company adapted to that circumstance? This repeal has paved the way for NOVOMATIC and NOVOMATIC Americas to be a big beneficiary. We took great satisfaction in the Supreme Court’s decision and moved quickly to leverage our global sports betting expertise. We also added significant expertise to our global sports betting team with Felipe Ludeña, formerly of Codere, looking to lead the development of our international sports betting business. We are aggressively pursuing a North American expansion strategy while at the same time expanding our position in Europe. Since this is the first time for sports betting expansion in North America, we continue to work closely with the NOVOMATIC Americas team and industry experts to meet the incredible demand. Currently, we have our kiosks in the Rivers Casinos, SugarHouse Casinos, Resorts AC and Parx Casinos. Each of these organizations has come back for subsequent orders and we are working with many large casino brands to provide turnkey solutions for self-service sports betting. We just went live at Rivers in Schenectady, NY – the first sports betting terminals in New York.
Our advantage is our international experience and impressive track record of success across the globe. We have thoughtfully pursued strategic relationships to grow our business and beyond our relationships with Kambi, Sportsradar and Playtech globally, we have sent the message to operators that we can work with their teams and their choice in software providers to get them into action quickly.
specific content and we are committed to placing 2,000+ machines in Class III, VGT and sports betting segments in 2020. The new regulation creates new opportunities and the large-scale changes in the U.S. are a priority. We are opening new offices in Puerto Rico to support a potential market of over 20,000 units and have entered the Canadian market with a plan to grow our footprint there strategically.
Regarding sports betting in the United States: what was the impact on gambling in casinos in that country?
Greentube landed in Colombia. NOVOMATIC and Ainsworth are two registered trademarks in Latin America. What can you tell us about the influence and projects of the company for the future in LatAm?
Each state is moving aggressively to legalize sports betting as quickly as possible. With New Hampshire moving as the most recent state with approval, the U.S. is expanding swiftly. The primary focus is that legalized sports betting offers a secure, convenient, regulated sports betting environment. With each jurisdiction choosing to decline integrity fees and data mandates, it allows us to expand rapidly with a beneficial playing field for gamblers in a safe setting. The repeal of PAPSA brings jobs and economic opportunities to all gaming markets. As an example, Illinois and the VGT market have been waiting for the chance to grow gaming and create increased tax revenue that previously only a few states were able to enjoy. We are well -positioned to take advantage of that change with our U.S. headquarters based in Mount Prospect, Illinois.
The success of the company's TSGs in the United States, as well as the VGT market and especially the Class III games. How was the expansion model defined for such a result? Expansion of the NOVOMATIC portfolio continuously creates welcome opportunities. For the U.S. market, we have opened a dedicated game development studio in our U.S. headquarters in Mount Prospect, Illinois, to develop market-
Latin America is currently front and centre of our plans for the global expansion of Greentube, our interactive division. NOVOMATIC already has a strong presence in Colombia’s land-based market, which recently helped secure a successful deal between Greentube and leading operator Wplay. We are confident that this partnership with one of the largest operators in the country will serve as a catalyst for the NOVOMATIC family, complementing our existing relationships with BetPlay and Rush Street. Argentina is also a major focus as incoming legislation promises to unlock the online gaming market in the region of Buenos Aires and we are primed to be a strong supplier in the B2B arena in the country. In Mexico, we have recently begun to roll out our B2B supply with positive feedback from our partners. Elsewhere, we’re closely monitoring regulatory developments in Peru, Chile and Brazil, which all have the potential to be real powerhouses in Latin America, providing the path to a developed regulatory framework is a smooth one. Given our experience in land-based, online and social, I’m confident we will be in a very strong position to help local operators hit the ground running as soon as legislation is in place. OCTOBER 2019
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Many companies have launched in the segment
THE SHIFT TO THE ONLINE WORLD
The most important companies in the entertainment and gaming industry have taken note of the online gambling phenomenon and have not wanted to be left behind.
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he growing demand of users on the Internet, the fanaticism of gambling worldwide and the exciting idea of trying to get lucky and getting money have resulted in an explosion and an exponential increase in users who place bets on virtual platforms. Online gaming and sports betting contributed heavily to a double-digit percentage increase in gaming revenue for the Atlantic City’s nine casinos in August of this year. Online gaming revenue was USD 41.1 million in the month, the first time the amenity has topped the 40 million-mark in a month since Internet betting was legalized in 2013. According to Coherent Market Insights, global online gambling and betting market was valued at USD 46.9 billion in 2017 and is projected to exhibit a CAGR of 11.4% over the 2018 – 2026 period. According to Our World in Data, estimated number of Internet users worldwide reached 3.4 billion in 2016.
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Also, improved security for online transaction will increase digital transactions, worldwide. It will also motivate companies to offer better, faster and cost-effective ways to transfer money. Many banks across the globe did not allow users to use their account or card for gambling. For offering best service to gamblers, many payment methods such as NETeller, PayPal casino, visa casino, zimpler, and skrill casino are used at casinos or used for online betting. The latest report on online gaming in Spain, presented by the Directorate General for Game Management (DGOJ), indicates that revenues from online gaming companies in the second quarter of 2019 have increased by almost 7%, compared
to the same quarter of 2018. Likewise, the monthly average of active accounts continues to rise (it already stands at 860 thousand) and the average of new accounts each month is 236,000. The most important companies in the entertainment and gaming industry have taken note of this phenomenon and have not wanted to be left behind, which is why many of these companies (including operators with a long
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history in the market) have decided to launch in the online casino segment. One of the first examples is the case of Wynn Resorts. The company will partner with Scientific Games to support the launch of Wynn Resorts’ unique digital sports betting and iGaming applications in the U.S. The operator intends to initially launch in New Jersey and utilize several products and services of the technology provider including: a sports betting and iGaming system; a managed sports trading service and Scientific Games’ marketleading content aggregation system that is home to more than 2,000 digital Online casino apps for smartphones. games such as 88 Fortunes, Raging eye on, since it has all the opportuniRhino, Zeus and more. Also, the Hard Rock Hotel & Casino ties to grow in a significantly way over Atlantic City, which opened in June last the next few years and thus become a fertile field in year, has entered which to invest. the market of online “According to B e t 3 6 5 casinos. Thanks to made its ofthis, Hard Rock is Coherent Market Insights, ficial launch in the sixth company global online gambling and Mexico in July that has the license and presented to open an online betting market was valued gambling portal at USD 46.9 billion in 2017 its Bet365.mx page, which has within New Jersey and is projected to exhibit as its local partlegally. ner the cable TV The launch of a CAGR of 11.4% over giant TV Azteca. the Hard Rock With the official online casino is a 2018 to 2026.” approval of the movement of great importance for a company that keeps Directorate General of Games and Rafgrowing internationally. The rise of on- fles of the country, the company said that line casinos shows that they are a sec- Mexican gamblers began playing almost tor in which it is important to keep an immediately. In order to make foot in A lot of gamblers still plays via PC.
Mexican lands, the platform associated with Ganador Azteca, a subsidiary of the multimedia conglomerate. Last year, Churchill Downs Incorporated (CDI) announced its entry into real money online gaming and sports betting markets. With the help of SBTech, the company provided their costumers with an iGaming platform, consisting of the consumer website and mobile apps. The strategic partnership was intended to allow CDI to enter New Jersey and Pennsylvania, which have already approved iGaming and sports betting. In addition, it will enable CDI to enter Mississippi for sports wagering. However, the movement towards the digital plane has been going on for some time. In 2010, Astra Games, a daughter company of Austrian-based gambling company Novomatic, bought a 70% controlling share in Greentube Internet Entertainment Solutions. Since then, the company’s product portfolio has increased on a yearly basis and now includes bingo and casino games amongst others. Greentube’s gaming portfolio includes classic slots, live dealer gaming, table games, AWPs (amusement with prize), reloaded slots, sever based gaming, social casino gaming, bingo and more. November 2014 saw the company launch its interactive Bell-Fruit Casino offering. Using HTML5 technology it is optimised for the latest multimedia devices, smart phones and tablets and delivers an array of favourite game titles drawn from the British pub and arcade sectors. OCTOBER 2019
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INTERVIEW
With the launch of Mustang Money
AINSWORTH HAS EXPANDED ITS TRADITIONAL CASINO GAME BUSINESS The casino is available live on MustangMoney.mx, and can be played in the regulated online gaming market of Mexico.
A
new phenomenon is allowing that people do not have to leave their homes to enjoy the entertainment experience that only a casino can offer: online casinos. The possibility of playing through the Internet and from wherever there is a connection is a very tempting offer. The comforts provided to the users are the key to its success. Thousands of players enjoy games while chatting on their phone or doing some activity on their tablet. Miguel Cuadros, President for Latin America at Ainsworth Game Technology, explains how the company’s online casino has evolved almost a year after its launch.
How and when was Mustang Money’s idea born?
Miguel Cuadros, President for Latin America at Ainsworth Game Technology. 36
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The idea was born in 2016 when we were trying to maximize our exposure in the Mexican market. As we’d already developed a strong landbased operation, we felt the online space provided significant opportunities for further growth. We formed a strategic alliance with The Logrand Entertainment Group and launched Mustang Money. Ainsworth launched its first online casino under its most iconic and recognized brand in the Latin American market. The casino is available live at MustangMoney.mx and can be played in the regulated gaming market in Mexico. Ainsworth has even further expanded its presence in the online market with its recent entry
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into the Mexican market as an operator with MustangMoney.mx at a crucial moment where the virtual game segment is expanding in the region in an accelerated manner. In recent years, Ainsworth has expanded its traditional casino gaming business by adding social game content and online games as part of its product portfolio, as well. Today, in addition to operating an online casino, Ainsworth supports its casino partners and customers with one of the most complete gaming libraries in the industry in both online and physical casino markets.
What are the main features of the product? The Mustang Money casino offers a comprehensive line of Ainsworth slots, sports betting, table games, video bingo, keno and video poker. As expected, Ainsworth offers the most expansive line of slots games available online as the platform’s main product. On the slot vertical, on top of offering the wide variety of Ainsworth games, Mustang Money display a vast array of top online slots and table games by various online games manufacturers like Microgaming. The robust platform offers a state of the art and user-friendly platform comprised by the the most comprehensive sports betting tools powered by industries leaders like BtoBet and Sportradar, allowing gamers to bet on a mix of the top sports tournaments and major leagues around the world. Bingo is another vertical that provides a satisfying experience in Mustang Money. You can find the latest video bingo games on an easy-to-access platform. Complemented by an excellent contact center and a team of professionals trained to provide classic Ainsworth above and beyond service to its customers, Mustang Money proves to be a must-have gambling application on your devices.
Are Ainsworth games expanding on other platforms too? How was the reception of the public? Under its Mustang Money RGS brand, Ainsworth has positioned itself as a content provider in the market by making its broad portfolio of online games available. More than 300 games are available online for platform operators in regulated online casino markets.
Mustang is available in all applications. What was the millennials reaction with the product? Mustang is available on all mobile devices and has its own Mustang Money application. The reaction has been overwhelming. Six months out from Mustang’s launch the platform has met the company’s expectations for growth. Since a large percentage of customers are millennials, Ainsworth games have proven to be a heavy favorite with this customer segment.
Online gaming advances day after day in the gaming industry. What is Ainsworth’s position in that scenario? Ainsworth recognizes the range of opportunities to increase their presence in the growing online market, so we are in the process of expanding to other markets. Based on the success we have seen in Mexico, we are evaluating the opportunity to enter the most attractive markets in the industry as operators as well.
What is the company’s next challenge in relation to Mustang? The next challenges for Mustang Money are to increase our product offering in the online market to ensure the continued growth of our platform. This will pave a solid and safe path for an online division that grows by leaps and bounds. We believe that online games on the Mustang Money platform exhibit the diverse product line and the unique features that symbolize Ainsworth, generating high productivity rates in each of the different regions of Latin America where our presence is established.
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INTERVIEW
Aruze Gaming
UNIQUE TERMINALS AND GAMES THAT ARE IMMEDIATELY ENGAGING Their Wheel of Prosperity family of games is currently leading the market with 3 games in the top 25, with 4 other games on the same top 25 list. is currently leading the market with 3 games in the top 25, with 4 other games on the same top 25 list.
Which are the main demands of the casinos operators in the US? Unique terminals and games that are immediately engaging, stand out visually, and have “legs” (longevity). Our Wheels Go Round Bull product meets all of these demands and performance has demonstrated this.
What products are you exhibiting in G2E Las Vegas 2019?
Michael Snyder, Vice President and General Manager of Latin America and the Caribbean at Aruze Gaming.
M
ichael Snyder, Vice President and General Manager of Latin America and the Caribbean at Aruze Gaming, speaks about how the presence of the company's products has evolved in the casino floors of the United States and talks about the company's presence in Latin America.
What analysis do you make of the current US market? It’s a very exciting and challenging market where we are seeing some cool hardware like our provocatively designed Muso cabinets and extended LED signage. On the game side, we are seeing endless creativity, and the bar continues to be raised higher. Our Wheel of Prosperity family of games 38
OCTOBER 2019
Customers are going to be compelled to stop and play! We are exhibiting our industry recognized, highperforming line of Muso cabinets in multiple variations, our innovative new Roll to Win Craps that has finally hit the market after much anticipation, our highly performing Lucky Roulette, and a few innovative surprises.
How has the presence of the company's products increased in the US casino floors? Both the Muso Curve-43 and the award-winning Muso Triple-27 have several titles that continue to make the industry lists of high performing games. Our Cube-X Vertical 80 has also had several titles make these lists. This outstanding performance has naturally led to an increased presence on casino floors.
What are the goals of the company for the end of 2019? Aruze has made great product progress so far in 2019 and expects to continue to build on that success with
chart-topping product. In addition we have made a big push to support the Latin American market and has built an improved presence in the Caribbean, Mexico, Panama, Colombia, Argentina, Uruguay, Peru, and Paraguay. We expect to continue this push into other remaining Latin American markets.
Which Aruze games are most engaging for Latin American players? We are finding that our popular games in other market segments throughout the world are also popular within Latin America. We are seeing exceptional success with all of our ‘Wheels Go Round’ and ‘Fu Lai Cai Lai’ games series. These titles and game play seem to connect with and engage players.
What has been the performance of the recent partnership between Aruze Gaming and Techno Gaming for the markets of Argentina and Uruguay? We are very pleased with our exclusive distributor Techno Gaming for Argentina and Uruguay. Techno has done a phenomenal job for us and the success is continuing. Techno was first to place our premier product, Muso Curve and Muso Triple 27, in Latin America. The excellent performance of this product has caused many customers to already place additional machine orders. It is a very good indicator of future success when customers come back for more. We know that a big part of that success is from the great work Techno Gaming has done on Aruze’s behalf.
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DRGT
UNDERSTANDING AND ENGAGING PLAYERS
Robust technology that meets players’ demands continues to drive global expansion. The company’s progress in Latin America, the Caribbean and Mexico, in addition to the G2E show, on the horizon of quality.
D
R Gaming Technologys (DRGT) design mantra is simple: ‘Put the Player First!’, and it’s their unwavering commitment to this mantra that has seen the Company remain the world’s fastest growing independent gaming systems and jackpot supplier. With an ever-expanding global footprint that now extends to over 50 countries and in excess of 60,000 gaming devices, the Company is eyeing G2E Las Vegas as yet another opportunity to showcase its technology solutions to particularly its Latin American, Caribbean and Mexican customer base. Since opening its office in Lima 7 years ago, it’s penetration in the region now extends to Colombia, Paraguay, The Dominican Republic and Uruguay, amongst others. During this time, they have managed to roll-out their systems and jackpot technology to in excess of 15,000 (fifteen thousand) devices. This number excludes their Mexico-based business, that opened just under 2 years ago; that too is making significant local inroads. Visitors to G2E 2019 can again look forward to being presented with arguably the world’s largest selection of jackpot configuration options, as well as the Companies core casino management system. This now extends to a recently updated Tables-specific management solution that affords Tables Managers the same functionality that until recently was the exclusive domain of Slots Managers: real-time reporting and player tracking, and the seamless integration of Tables game play data into their accounting, cage and report40
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ing modules. They’re also now able to offer double player loyalty points to players of their BlackJack11’s and Poker21’s side-bet jackpot games, both of which will also be on display at G2E. Reports ultimately are the definitive output of any system, and it is with these easy to extract and digest DRGT™ reports that gaming operators are able to tailor rewards and special offers, and then utilize the Company’s much publicized and on show drScreen customer engagement and interface technology to share them. DR Gaming Technology will again be exhibiting from booth 4405 at G2E 2019.
ABOUT DR GAMING TECHNOLOGY Established in 2005 by CEO Jurgen De Munck and CTO Michiel van Dam,
DR Gaming Technology (DRGT) is the world’s fastest growing independent gaming systems supplier. Its state-of-the-art systems are developed using the latest technology, resulting in the unique ability to operate without a server, in so doing greatly simplifying system installation and implementation, and ensuring customers total management control over their entire operation/s. At present the Company’s modular, flexible and cost-effective system and jackpot solutions operate across over 50 different countries, and on in excess of 60,000 gaming devices, boasting some of the most powerful functionality in the world. In addition to its Head Quarters in Belgium, DRGT also has offices in Austria, Malta, Peru, Mexico, Colombia, Uruguay, Paraguay, and South Africa.
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OCTOBER 2019
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INTERVIEW
Clarion Gaming
“THE KEY IS LISTENING TO THEIR CUSTOMERS AND WORKING WITH THEM” Those were the initial points to rekindle a brand that not only fortified the concept of Ice London, but also its arrival with the same strength to Ice Africa and Ice North America, added to a future in partnership with SIGMA for Manila 2020.
I
n 2010, when Kate Chambers joined as CEO of Clarion Gaming, the ICE brand was at a tipping point. Her mentality was to go further, either from the books of the “old school” of organization or from the London skyline.
Clarion is characterized by making a difference in the organization of events. Under what pillars is the company guided?
Kate Chambers, CEO of Clarion Gaming. 42
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When I joined Clarion in 2010 the gaming portfolio really consisted of just one major, well known event, ICE Totally Gaming – which has subsequently transitioned to become ICE London. The ICE brand was at a difficult stage in its development and to a certain extent it had lost its way. The market didn’t hate ICE, it was worse than that – it was indifferent to it and had ceased to care about the event. The job I was given was to reignite the love and to rebuild its standing and reputation in the international market. We began the rehabilitation of ICE by adopting a brand-led development strategy and an understanding that everything we did had to be in partnership with our customers and our broader stakeholder community. What this approach involves in practice is listening to the industry and identifying ways in which we can meet its needs and requirements providing it’s within a sensible
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The second edition of ICE Africa is a reality.
commercial framework. It also means being prepared to rip up the rule book on occasions and defy conventional old school ‘exhibition thinking’. All successful businesses develop and grow by listening to their customers and working with them, which is what we always strive to do. If you deliver what your customers ask you to do you effectively and professionally there’s not too much room to go wrong. When brands cease to listen and consequently lose the trust of their stakeholders, they put their future in jeopardy. These pillars have underpinned the development not just of the ICE brand, which as well as ICE London now also comprises ICE Africa, ICE North America and ICE Asia, but also across our entire portfolio.
As CEO of an internationally recognized company, how do you think the role of women in the industry has evolved in recent years? Certainly there are more women holding senior roles in the business than when I joined the gaming sector, which is clearly a very positive development. Businesses need to reflect broader society and those that fail to do so will not attract the brightest personalities with fantastic emotional intelligence that we all want to recruit. As society progresses individuals will not be attracted simply to the employ-
er paying the highest salary. Instead they will want to work in an environment that reflects their philosophy on life and which can match their aspirations. Part of the duty of employers will be to provide pathways for women to progress and to hold C-Level positions at the very top of organisations.
You are currently developing WomenDiverse for Africa. What do you expect to achieve with this project? Around what theme will it be developed? Shining a light on Diverse Women within the gaming industry,’ is the theme of this year’s Women in Gaming initiative which is being sponsored by the South Africa-based Zamani Holdings, the parent company under which Ithuba, the SA National Lottery Operator functions. The campaign is running throughout August which is designated Women’s Month which commemorates the 20,000+ women who marched on 9 August 1956 in protest against the extension of Pass Laws. Clarion Gaming is promoting the role of women within the industry via the #womendiverse social media campaign alongside a series of empowering interviews with women associated with this year’s edition of ICE Africa, including: Christina ThakorRankin, Co-Founder, All-in-Diversity; Amne Suedi, Principal, Shikana Law Group – Tanzania; and, Qhinaphi
Sitsila, General Manager, Casino Association Of South Africa. The women that we are featuring come from all sectors of the industry and the nations that ICE Africa supports including Nigeria, Ghana, South Africa and Kenya – to name just a few. The exclusive Women In Gaming breakfast which is taking place on the second day of ICE Africa, will provide the perfect opportunity for delegates and attendees to meet some of the inspirational women that have participated in the campaign, to network and to talk all things Women In Gaming. There will also be a series of educational and learning opportunities covering a broad spectrum of topical issues, including how diversity affects businesses, drawing on the lived experiences of influential women in gaming.
An alliance with SiGMA was recently announced to organize an event in the Philippines. Why did you opt for this market? What goals have been set for the next fair? The b2b event will cater for both the land based gambling sector as well as the iGaming sector, with online suppliers, operators, affiliates, regulators and blockchain businesses all being housed under one roof at the SMX Convention Centre which is situated in the heart of Manila. The opportunities for growth in Asia are increasing exponentially year on year, and we believe that the time is right to cement new and existing relationships between the gambling industries in both East and West. To combine the expertise of Clarion courtesy of the world famous ICE brand and SiGMA ensures both the land-based and iGaming sectors will find synergy in Manila in 2020. This is an exciting time as we extend the reach of the ICE brand following the launch of ICE Africa in 2018 and ICE North America in May 2019.
What else is Clarion Gaming preparing for the industry? To echo an earlier point, our role is to work with the industry – so the question could be repositioned to ask what is it the industry wants us to look at next? OCTOBER 2019
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Times
WOMEN LEAD THE CHANGE Sandra Douglass Morgan was hired as Chairwoman in the Nevada Gaming Control Board, Rosa Solis-Rainey was appointed to the Nevada Gaming Commission, Sara Slane shines in the field of relationships, and Christie Eickelman is the new president of Global Gaming Women, among other stories of a present with leadership.
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t is a fact: the role of women in society is absolutely essential. From birth to everyday education, their word is the fundamental concept of all ideas. It was since the creation of the world, but even more so in the new millennium. It no longer only happens in the raising of children, the formation of the home, the domestic care or the participation in the decisions of a family. Currently, the intelligence and ability of women moved to leadership positions. 44
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The gaming industry is no exception. Women, through labor, preparation, training and common sense, have gained very visible places in the business. It is true that it is a partial context, since, as in broad traits of the labor market, women are a minority in the control of organizations and companies. But there are some examples that mark that the change of perspective not only does justice, but also that the change is finally here to stay.
NEVADA GAMING CONTROL BOARD In January 2018, Becky Harris became the first woman to occupy the main chair of the Nevada Gaming Control Board. By capacity, then “chairman” became “chairwoman” in the most powerful board that oversees gambling in the most profitable state. They were not easy times for the job. Harris, a former state senator, was appointed to the position in January by Gov. Brian Sandoval, five
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days before Las Vegas was hit by its own bombshell #MeToo moment, when casino owner Steve Wynn was accused of sexual assault and harassment by former employees. She finished the term of A.G. Burnett, who resigned in December. That decision was not a fortuitous event. The political change made Harris only last one year in that position. In January of this year, a new Governor in the state, Steve Sisolak, made that leadership change its name, but not gender: Sandra Douglass Morgan. Morgan previously served as the North Las Vegas city attorney, and was also the first AfricanAmerican attorney in the iconic US state. Eventually, she left that high-powered position to work as the director of external fairs for technology giant AT&T. The capacity developed by the aforementioned Harris made Social media users were quick to react to the developments, with many Facebook commenters criticizing Governor Sisolak for not keeping Harris on in the role. Many felt that she performed very well, particularly when it came to the Wynn scandal. However, it should come as no surprise that a Democratic governor would want a Democratic chairwoman in one of Nevada’s most important regulatory companies. “I want to thank Becky Harris for her service during her time as chair,” said Gov. Sisolak. “And to recognize the incredible milestone her tenure marked as the first woman chair of the Board as well as her commitment to combatting sexual harassment and discrimination in Nevada’s gaming industry”. Anyway, from those same opinions, Douglass Morgan’s career and ability was never criticized. The dynamics did not arise from “woman against woman”. Finally, the recognition of one woman towards the succession of another woman was an act considered of maturity by the general opinion. But this was not the only advancement of women within the most important meeting in the state with greater relevance in the gaming industry in the United States. Since April, the Nevada Gaming Commission (NGC) has just gained its newest member. Rosa SolisRainey appointed to the panel, becoming its fourth member.
Christie Eickelman, new President of Global Gaming Women.
“Rosa is a highly experienced litiga- evant show in the industry, the agenda tor who has been involved in some of has at least one panel on specialists in the state’s most complex legal issues the field. There is a person who not only over the past 18 years,” Sisolak said as inspires by his knowledge and ability, but part of her appointment. “I am confident also was very important in the link beshe’ll make an outstanding addition to tween business and politics. the Nevada Gaming Commission and The Forty Under 40 Awards is the support its misSports Business Journal’s sion of keepannual celebration of the In January 2018, best young talent in sports ing Nevada the gold stanbusiness. Last February, Becky Harris became dard in gamSara Slane is joined in the ing regulation”. the first woman to 20th Forty Under 40 class Solis-Rainey sports league, team, occupy the main chair by is a managing technology and industry partner at Mor- of the Nevada Gaming executives, all of whom ris Law Group, are being recognized for Control Board. where she’s excellence and innovation been since in their careers. Sara Slane 2006. She also spent nearly 12 years was the Vice President of Public Affairs at Boyd Gaming Corp, where she dealt for the American Gaming Association. with compliance, audits, and serviced on Prior to taking a position with the largest committees handling those issues, pre- lobbying group on behalf of the gambling paring her well for this new role. She also industry, Slane was an executive with was a member of the charter class at MGM. Slane is credited with helping to University of Nevada, Las Vegas’ (UNLV) write legislation for states who wanted to William S. Boyd School of Law. legalize sports gambling. She even testified against a call by some professional sports leagues to have Congress create SARA SLANE KEEP MOVING Sports betting in the United States a regulatory federal framework to govare under the lights of the gaming indus- ern sports betting. This testimony was try. Before the opening of the business made before the House Subcommittee for each of the states, the advice of the on Crime, Terrorism, Homeland Security, companies is as important as the deep- and Investigations. According to Slane, ening of the system. Thus, for each rel- the addition of such a regulatory meaOCTOBER 2019
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Jan Jones Blackhurst, first female mayor of Las Vegas.
Sandra Douglass Morgan, Chairwoman of Nevada Gaming Control Board.
sure would make it much harder for legal sportsbooks in the country to compete with the rogue, unlicensed and unregulated offshore operators. The American Gambling Association with Slane as executive helped states to draft legislation that could pass legislatures and the industry is set to boom in the next few years. It is estimated that as many as 25 states will pass legislation legalizing sports gambling in the next five years. Since the illegal gambling market is estimated to be over $175 billion a year, it is hoped that women will continue to lead the progress towards additional gambling revenue in the states. If women can continue to move into executive and government positions, it is safe to say gambling will not just be a man’s game anymore. Last July, the National Hockey League (NHL) has tapped Sara Slane to advise the professional league on all things sports betting. “Our new partnership with Slane Advisory is another example of our commitment to working collaboratively with the sports betting industry and developing a best-in-class approach to partnerships,” said NHL Chief Business Officer Keith Wachtel.
ing Women (GGW) named Christie Eickelman its new President of its Board of Directors. Eickelman is Vice President of Global Marketing at Gaming Laboratories International (GLI) and will serve as GGW’s Board President for a two-year term. It is a constantly growing organization, which is represented by all women in the business on a daily basis. The new appointment was praised by all, without distinction. Eickelman was one of the founding members on the Global Gaming Women Board. Previously she served as Vice President & co-chair of the Events Committee. She said as President her primary goal will be to ensure the financial future of the organization. “Global Gaming Women has a strong mission statement, and our guiding principles of courage, in-
GLOBAL GAMING WOMEN PRESIDENT: CHRISTIE EICKELMAN There are women who do not need a business card in the gaming industry. Respect and admiration are the harvest of their careers. Last August, Global Gam46
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Becky Harris, former Chairwoman of Nevada Gaming Control Board.
tegrity, and leadership continue to inspire our Board and the women we serve. We are grateful to the many companies and individuals who back GGW, and as we broaden our donor structure, we will ensure we will have the resources necessary to support the development of women at all levels throughout the industry,” Eickelman said. She clearly represents the conception of the current woman, in addition to a professional not only dedicated to her work, but also to the contribution in the communities. She is a member of the Andson Foundation Board and on the Executive Leadership Committee of the American Heart Association-Go Red for Women Luncheon of Southern Nevada. Recently the Oklahoma Indian Gaming Association honored her contributions to the Indian Gaming Industry with the 2019 OIGA Modern Day Warrior Award. Eickelman has been blazing a trail for women to follow in the gaming industry since 1992, first serving as Marketing Manager for Sodak Gaming Inc. and at Wolf Gaming LLC as Vice President of Marketing and Public Relations. She joined GLI in 1999 as Marketing Manager, shaping GLI’s brand in North America. In 2001, she was promoted to Director of Marketing and Development, overseeing the North American development team in their daily responsibilities. In June 2007, she was promoted to Senior Director of Worldwide Marketing, and in September 2012, she was promoted to Vice President.
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FIRST TWO NATIVE AMERICAN WOMAN TO SERVE IN CONGRESS The first week of the year was not another week in the history of the Indian Country. It was the declaration of the first two Native American women in the Nation’s history to serve in Congress. Their names are Debra Haaland (NM-1, Laguna Pueblo) and Sharice Davids (KS-3, Ho-Chunk Nation). The swearing-in events concluded with a special reception at National Indian Gaming Association’s DC office honoring Representatives Haaland and Davids. A statement from the association noted: “Most Tribal Leaders stated that Indian Country stands ready to do the work necessary to protect our treaty rights and sovereignty. They also expressed the need for a continued partnership with the Administration and Congress, ending the day on an optimistic note with several Congressional visitors stating their intention to advance Indian Country’s key issues this legislative term.” The evening concluded with a celebratory reception for the two Congresswomen and native veterans at the Hyatt Regency, hosted by over 20 tribes and tribal organizations, including NIGA. Among those present was New York Senator Chuck Schumer who is currently pressing for federal oversight of sports betting.
SITUATION AND PROJECTS Increasingly, many women are finding leadership positions within the casino industry. For example, some of the major casino companies in the United States have practices that encourage the hiring of women executives. Examples of casinos who hire women include MGM, Caesar’s, Station Casinos, and Wynn. The women on the board of directors, as well as female executives have asked the casinos have added maternity and paternity leave, as well as rooms for breastfeeding mothers. Female casino executives say they still have a way to go. The most iconic example is Jan Jones Blackhurst. Last September, Caesars Entertainment Corp announced that its long-time Executive Vice President, Public Policy & Corporate Responsibil-
Sara Slane, Founder of Slane Advisory.
ity, Blackhurst, has joined the Board of Directors. Blackhurst, best known as the first female mayor of Las Vegas between 1991 and 1999, replaces Richard Schifter who resigned his position. The move will see the 70-year-old step down from her Executive VP role from 1 October 2019 after 20 years with the company, in which time she oversaw a range of Corporate Social Responsibility programs including diversity in the workforce. In April 2018, Wynn Resorts appointed three women to its board of directors, following the resignation of former CEO Steve Wynn, who stepped down amid allegations of sexual misconduct. New members are Wendy Webb, CEO of Kestrel Advisors who was an executive for 20 years at The Walt Disney Company (DIS), a “three-time CEO” Betsy Atkins, and also Dee Dee Myers, a public relations executive for Warner Brothers Entertainment who was White House press secretary during the Clinton administration. Myers also wrote a book in 2009 called “Why Women Should Rule the World.” Social networks not only accelerated the course of humanity in terms of communication, information and dissemination of events, but also became a global marquee for social transformations. In fact, in terms of gender equality, what in the United States became #MeToo, was replicated throughout the world under similar goals in different matters.
Likewise, a large part of the proposals regarding equality are expressed in different web pages. To address this lack of female executives, there are initiatives around the world aimed at closing the women’s leadership gap. For example, 2020 Women on Boards (www.2020wob.com) strives to have 20% female board representation by 2020 while the Thirty Percent Coalition (www.30percentcoalition.org) is committed to women holding 30% of all corporate board seats. Some countries, such as France, Germany, Norway, and Spain have implemented quotas requiring a certain percentage of women serve on boards. Some U.S. companies are proactively increasing their representation of women in management. Caesars Entertainment implemented a “50-50 by 2025” initiative, a commitment to 50-50 gender balance in executive leadership by 2025. In the past, gambling has been a game for men. In fact, many women were barred from gambling establishments for decades in the 17th, 18th, and 19th centuries. While women began to infiltrate the industry in the 19th century, it was an industry dominated by men. However, times have changed, and increasingly, women are making moves into the gambling industry. Not only are women moving into the gambling industry leadership positions, but women are also governing regulatory agencies as well. That change is a movement led by women. OCTOBER 2019
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The show has widened its scope
SIGMA GROUP IS EMBRACING A SECOND HOME IN ASIA In 2020, the company will launch two new shows in the Philippines: SiGMA Manila and the Manila A.I. and Blockchain Summit.
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iGMA has never been a company to rest on its laurels. Whilst still true to its well-watered roots in Malta, the company’s operational success in local quarters means the show has widened its scope to include broader avenues of experience. With attendance figures on the rise, 2017 marked an interest in exploring markets outside of Malta, but it was 2018 that saw the company take the plunge and become a world-class event. SiGMA’s solid and trusted brand was the call to action for an elite selection of delegates, policy makers and thought leaders eager to shape the future of the iGaming sector. Through participation in quality conference debates to packing our expo floors, the SiGMA platform offers plenty of food for thought for those with big appetites in this fast-changing scene. Ultimately, however, it is the strong support and interest from international quarters that has helped SiGMA Group make its mark in new niches of opportunity as it dons a more international mantle as the World’s iGaming Village. Its ambitions have since led it east – in 2020 SiGMA Group is embracing a second home in Asia where it will launch 2 new shows in Manila: SiGMA Manila and the Manila A.I. and Blockchain Summit. As Asia leads the way, the Philippines is experiencing a boom in emerging technology - as a result the two summits have set their sights on the thriving iGaming, A.I.,
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Eman Pulis, Founder and CEO of SiGMA Group.
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The crowded floors of SiGMA 2018.
and Blockchain sectors. Capitalising on the natural synergy between these spheres, SiGMA Group is strengthening trade ties with the jurisdictions in the region to facilitate fresh business opportunities for European companies. United under one roof, the shows will run from the 8th to 9th June 2020 at the SMX Convention Centre, Manila. Aside from taking on a supportive role for European companies looking to forge closer relations with their Asian counterparts, the launch of SiGMA Manila 2020 promises to bring a myriad of benefits to the hotspot, with the introduction of a number of international online gambling clients to the Asia region exerting a strong economic impact on the area. Eman Pulis, Founder and CEO of SiGMA Group, commented: “We’re going to help put the spotlight on the Philippines, embracing the best of the iGaming community, with the hope that these companies that we bring there will end up setting up offices and getting a licence in the Philippines. We do not just want to react to what’s going on out there, but we want to take an active, leading role in not only bringing the Asian and European community together but also building long lasting commercial opportunities.” In collaboration with the Philippine Consulate for Malta, SiGMA Group also
hopes to strengthen trade ties, bringing fresh opportunities for business to European affiliates, operators and suppliers. In 2019 all roads still lead to SiGMA’s November summit. Its pursuit of quality over the last 5 years has ensured its prominence as an annual staple on the European iGaming calendar and the 2019 show is set to be its biggest yet. This year they expect to welcome over 12 thousand attendees from more than 80 countries, bringing them premier opportunities for networking, the chance to strike deals with some of the biggest brands in the industry, engage leading suppliers, and secure support from the
affiliates that matter. With 200 top-notch speakers and 400 sponsors and exhibitors this is a conversation engaging all the right kind of people. In addition to its commitment to excellence and quality, the summit owes much to the constant support from the Maltese government and regulatory bodies such as the Malta Gaming Authority. Firm regulatory foundations have allowed the iGaming industry to flourish in Malta, making the island a hot spot for companies looking for a businessfriendly location to develop their interests and showcase their products. No longer a cold-shoulder month, the trio of shows under the SiGMA Group brand in November offers companies compelling reasons to visit Malta. From back-to-back summits focusing on medical cannabis and emerging tech at the beginning of the month to the 6th edition of SiGMA which will run from the 27th to the 29th of November in Malta, there’s plenty for the industry faithful to sink their teeth into. Now including a plethora of companies from the convergent technologies of A.I. and blockchain as well, this year’s SiGMA show will reflect and solidify newly forged relationships between these emerging sectors and the more established iGaming industry, securing a global engagement in next-level business opportunities for the international iGaming sector in 2020 and beyond.
Startup Pitch presentation.
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Cyber threats increase
CYBERSECURITY BECAME A BUSINESS ISSUE
Cybercrime continues to torment companies globally and cost an estimated USD 600 billion worldwide in 2018.
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ver the years, companies have become targets of cyber attacks and are increasingly vulnerable, due to the development of new technologies that expose their vulnerable information. Cybersecurity has endeavored to protect the data stored in computer systems and in any way prevent unauthorized use. Currently, the financial and gaming sector are undergoing major transformations caused by constant technological innovations, migrating to Internet-based business models and the mobile ecosystem to improve the customer experience. Digitization with the incorporation of innovations such as Big Data, Analytics, Artificial Intelligence (AI), Blockchain and the conduct of online and mobile banking operations has shown great benefits for institutions and customers. 50
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However, this represents a threat to sensitive information of users and entities, and new cybersecurity challenges. These sectors have become the perfect target for cybercriminals due to the large amount of customer data and financial assets. In recent years, cyber attacks have increased, affecting a large number of institutions. These attacks have allowed information theft through access to workstations or mobile devices, impersonation of digital identities and electronic fraud. “The increase in mobile applications represents new risks for users who are looking for comfort and who are not always aware of the threats that affect their devices. To address cybersecurity risks, a business approach must migrate to a more comprehensive and evolutionary perspective that allows it to face any advanced threat. The ap-
proach must be to create and consolidate a team focused on cybersecurity to protect the user, which is the weakest link in the chain,” says Eli Faskha, CEO at Safe Solutions. The threat of cybercrime continues to grow, as evidenced by a recent wave of attacks on financial institutions in Mexico, Chile, Peru, India and the United States, and there is no reason to believe that this is diminishing. Organizations have no choice but to invest intelligently in technology and personnel to stop this “pandemic”. This threat continues to torment companies globally and cost an estimated USD 600 billion worldwide in 2018. In the current times, the vision of cybersecurity should not only be on the board of directors, but also accompany the business development plan, have a presence in all areas of the company and provide a strategy to respond to possible attacks. As far as the industry is concerned, one of the main measures adopted is to create multidisciplinary teams where areas of OT (Operational Technology), IT, security and, as appropriate, the different referents involved in the business. Security events multiply, regardless of the industry, attack vectors, objectives and methodologies change. Many are programmed in order to persist in different environments, avoid their early detection by increasing their effectiveness and act in situations where the operation of the business is critical. There is no magic formula to immunize, but the way forward is clear: teach how to prevent, gain visibility in the environments where the business
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is developed, minimize potential attack surfaces, train to control the impact and be ready to respond in the shortest possible time. Kaspersky data reveals that in the last twelve months their technologies blocked 45 infection attempts in Latin America every second. The main threats are infections that occur with 64-bit Windows piracy and adware that invades user privacy with invasive ads while browsing. The company’s security analysts listed the countries with the most attack attempts in Latin America: the list is headed by Brazil, followed by Mexico, and both are among the 20 countries most affected by malware worldwide (7 and 11, respectively). The company also notes that one third of malware attacks that exploit vulnerabilities in the region use holes in the SMB communication protocol that is used, for example, in computer-server communication, network printers and others. The most curious thing about malware attacks that exploit SMB is that 2 out of 3 of them use the same vulnerability that was exploited by the WannaCry ransomware. For Fabio Assolini, Senior Security Analyst at Kaspersky, this shows that the impact of these attacks, by paralyzing activity in hospitals or public transport services and companies, was not enough for users to become aware of the importance of updating their systems and programs constantly. The cybersecurity landscape is becoming increasingly important in the IT areas of companies. Despite all the lessons left by the corporate sector regarding vulnerability and data protection, cybercrime is on the rise, 1,300 million events of this nature are detected daily by CenturyLink. This is how each of the public and private companies must be informed and take the necessary actions to protect themselves against this practice.
The gaming sector has become the perfect target for cybercriminals.
In that sense, Felipe Gómez, Director of Data Center, Cloud and Security at CenturyLink, said: “Colombia is part of the top 5 in Latin America with more malicious traffic, this position is due to the fact that the country is acting reactively and is more protected in relation to others in the region in terms of IT security and infrastructure. Protection becomes indispensable, the more layers of security the network has, the more stability the information will have. The fourth industrial revolution is at the technological level and it is for this reason that most organizations must be at the forefront with an experienced service.” Likewise, Gomez made reference to the fact that costs are growing, criminals are entering and there is more and more vulnerable information for organizations, managers must see the fragility of their information and act. For his part, Fredy Bautista, Expert in Criminalistics and Informatics, said: “It is important to analyze the figures of this problem, since it is estimated that by 2022 the global cost that cyber attacks will have for the legal economy can be of 8 billion dollars. Similarly, social networks and cryptocurrencies have facilitated the attacks, more than 755% has been the increase of new ransomware families that are malicious
“This threat continues to torment companies globally and cost an estimated USD 600 billion worldwide in 2018.”
codes used to hijack information assets. 1.5 million dollars are of phishing attacks. In the last 4 years the losses amount to 7.45 billion frauds in Colombia.” Bautista stressed that “the problem of cybersecurity is what companies face on a daily basis, technologies such as Blockchain are good, but they are a great opportunity for attacks to enter. Raising awareness in companies regarding the protection of information is the key to change in the computer culture.” Andrés Cajamarca, Manager of System Engineering at Fortinet, said: “Companies and people must shield the information, understand how to react to cybercrime, every day there are vulnerabilities, a scenario that is not protected tends to fall into the reputational loss of the same businesses, for that reason the digitalization of business brings important challenges in terms of connectivity and infrastructure, many companies must give value to such important elements as information security.” Currently, having a cybersecurity area with tools to centralize the company’s information or intangible assets has become increasingly necessary. The key is to support organizations to implement prudence in their security model through Big Data tools, which include analytical capabilities, and machine learning to efficiently detect threats and/or vulnerabilities that can impact the organization. Orchestration and automation is essential after continuously collecting OCTOBER 2019
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By 2019, hackers are focusing on the information that is stored in the cloud.
large amounts of data for the detection of technical vulnerabilities in the systems and likewise, the test results must be integrated into the infrastructure, scanning in web applications and intelligence sources that help to understand and manage the security weaknesses of an infrastructure. The generation of knowledge has been promoted as a basis for decisionmaking, through the management of KPIs, such as the average detection time and the average response time, generated efficient vulnerability closure strategies and prudence has been used as main virtue in the field of cybersecurity. The fragility of some artificial intelligence technologies will become a growing concern in 2019. Cyberterrorists will not only attack AI systems, but they will also use techniques from this same system to improve their own criminal activities. Automated systems powered by AI could probe networks and systems in search of undiscovered vulnerabilities that could be exploited. By 2019, hackers are focusing on the information that is stored in the cloud and it is expected that the business services that are hosted there will be the most affected. Attacks on critical infrastructures will grow, which is why the protection and visibility systems for these types of platforms must increase. In addition to that, there will be an increase in botnets, networks of com52
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promised systems that hackers use to make different types of attacks, such as: phishing campaigns, massive propagation of advanced malware and denial attacks distributed at the enterprise level, among others. In the third quarter of 2018, more than 250 botnet networks were identified worldwide, a figure that remains constant between quarters. The use of artificial intelligence for virus creation will be a trend. Manufacturers or companies must have a stronger architecture, as they will encounter more intelligent viruses. Viruses will have a self-learning mechanism in their environment, which will allow them to evade unprotected systems. It is recommended to prepare new defense strategies in Artificial Intelligence. Likewise, AI could also be used to make phishing and other social engineering attacks even more sophisticated, creating extremely realistic videos and audios or well-designed emails designed to deceive specific people. AI also has a positive side. For personal use, AI and other technologies are likely to start helping people better protect their own digital security and privacy. Over time, such security-based AI could also help people better understand the risks involved when they deliver personal information, in exchange for the use of an application or other additional benefit. During 2018, in the business sector, there were numerous examples
of data commitments in transit. The Magecart attack group stole credit card data and other confidential consumer information in e-commerce pages, incorporating malicious scripts directly into specific websites. Such forms hijacking attacks have recently impacted global companies. In another attack targeting business data in transit, VPNFilter malware also infected a variety of routers and storage devices connected to the network, which allowed it to steal credentials, alter traffic, decrypt data and serve as a launch point for other activities malicious inside victim organizations. There will be exponential growth to attack cryptocurrencies, encrypting this type of technology through more developed malwares, such as the CryptoJacking family, which aims to undermine and extract cryptocurrencies. At the beginning, it was not a situation as worrisome as it is today, since there are attacks by this family that threaten the defense of the systems, weakening them and creating back positions that would allow exploiting other types of vulnerabilities. It is not surprising that, in 2019, cybersecurity engineers are among the most sought after technology professionals. The reason is that it has become increasingly difficult for companies to find qualified candidates to form cybersecurity teams prepared to avoid threats, as cybercriminals improve their methods and increase the intensity and damage caused by their attacks. A study of (ISC) ² indicates that there is a shortage of almost three million cybersecurity specialists worldwide, and more than 630,000 of these positions are in the Americas region, including Brazil. Currently, cybersecurity is a critical factor for business success and, therefore, organizations are greatly increasing efforts to have trained professionals in this sector. Many companies are adopting training solutions in their own work and certifications to train employees who are already part of their teams, a way to meet existing demand and ensure a safer environment.
REPORT
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Exploring Latin America in Las Vegas
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atin American markets have been ensure they put in place measures that ed in an increasingly crowded and comopening up to legalised betting will encourage the best opportunities petitive sports betting industry. One of the factors that makes sports betting unique even before the repeal of PASPA whilst mitigating associated hazards. It is also about ensuring the regula- in LatAm is the fact that retail sports betlast year and is a region where the love for sports is strong. It’s not just the major tions and legislation as a whole suit the ting continues to rise. This means, at the US sports like baseball that are of inter- region, and this should reflect at the con- moment, customers still enjoy going to a est there, football and tennis also reign tinent, country, state and city level. Ope- shop to place a bet. Similar could have amongst fans. Operators should therefo- rators, equally, need to ensure they get been said in the US, with the traditional re not disregard this region as an area of this right too. For them, it is largely about dominance of betting in casinos, especiaunderstanding the customers within the lly in Las Vegas, and as states continue significant potential in the Americas. to opt for retail betting in their legislation. In regards to regulation, several region they are operating or targeting. Despite this, the figures for online countries, like Colombia and Brazil, and mobile betting have proven exare setting a good example. Braceedingly more popular in some stazil recently finalised a draft online tes where it has been legalised. and land-based sports betting bill The technological-driven nature following public consultation. This of US sports could be the mitigating is a significant step forward for the factor here. But it does suggest to country and region as it will potenthose bookmakers operating in Latially allow for an unlimited number of tAm that they would be wise to look operators to go live with legal sports ahead at growing trends, especially betting there. in terms of technology, too. There’s This is opportune as we are conno reason why they can’t leverage tinuing to witness a growing trend in off the impending growth of online sports betting as it becomes more and mobile betting as a potential popular around the world. Advanceway to help Latin Americans engaments in technology, and therefore ge in sports betting in the future. an increasing desire amongst fans For now, it’s wise to also pay atand gamers to get closer and more tention to the particular sports that involved in the action, are partly the prove popular from country to coureason for this. ntry in Latin America and reflect this A legalised betting market, with Lorenzo Caci, Director Business depending on where and which users its licenses and overseeing processes, Development and Strategic Partnerships. you want to target. Again, while there is more likely to help stamp out black When it comes to a successful is a common thread, like many markets market activity than any other option. And this is evident from the countries, like the sportsbook, the ones that prosper are worldwide, the popularity of certain sports US and those in LatAm, who are conti- those that have an offering that suit their will differ somewhat in various areas. With almost two decades in the indusnuing to explore regulations. Like many in end users the best and provide an expeestablished markets know, legalised bet- rience that will appeal. This is as much try, Sportradar has the expertise across ting is not just advantageous because of about the type of betting options on offer the world to be able to help operators with this type of information. All products and the commercial benefits it can provide, but as it is about the type of sports on offer. Looking at LatAm, whilst there is a services within our 360-degree betting just as much for integrity purposes too. The challenge, when it comes to new common thread across the region when offering can be completely tailored too so markets, is in getting the regulations and it comes to betting and sports, operators that bookmakers, no matter how large or legislation right for their region. And this need to understand the niche, local level small, can build and manage sportsbooks is about the industry banding together, too if they want to gain a point of differen- that will successfully create an engaging including governments, operators, indus- tiation. And this is a great way for even the and entertaining experience for a range of try experts and the sports themselves, to smallest and newest operators to succe- audiences, both old and new. OCTOBER 2019
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The technology was originated in 1991
BLOCKCHAIN, THE NATURAL EVOLUTION OF THE INTERNET Blockchain, cryptocurrencies, bitcoin, are widely used terms among those who work daily with technology and who are already familiar with its use, however, for the common people, they are still a mystery.
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ithout a doubt, the Internet marked a milestone in the history of mankind, marking the beginning of the information age. Thanks to the Internet, many scientific and technological advances have been achieved, more than at any other time in history. However, the network has certain failures that have meant million54
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aire losses for companies around the world. Blockchain technology originated in 1991 when Stuart Haber and W. Scott Stornetta described the first work on a chain of cryptographically insured blocks. It achieved notoriety in 2008 due to Bitcoin and, according to MarketWatch, by 2022 an annual growth of 51 percent is projected in several
markets, such as that of financial institutions.The integrity of the network should not be an isolated issue, but a shared responsibility for the benefit of all. This leads to the Blockchain as the natural evolution of the Internet, which not only improves the efficiency in the transmission of information, but also corrects its key deficiencies.
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Blockchain, cryptocurrencies, bitcoin, are widely used terms among those who work daily with technology and who are already familiar with its use, however, for the common people, they are still a mystery and it is not very clear how one can enter this world and how safe it is. When talking about blockchain, it’s the technology that emerges alongside Bitcoin with an increasingly wide spectrum of possibilities. It was born as a secondary actor in the Bitcoin revolution, since it is the technology or the information coding system that is behind the virtual currency transactions and sustains its entire structure. It also has its own potential and allows a large number of applications, beyond financial transactions, such as public administration, the Internet of Things or the generation of “smart contracts”. It is a technology that allows the transfer of digital data with a very sophisticated coding and in a completely safe way. However, this transfer does not require a centralized intermediary to certify the information, but is “distributed” or shared between many different parties and can be updated based on the consensus of the majority of the participants, the blockchain contains an accurate and verifiable record of each transaction generated. Internet insecurity translates into losses for business, destabilization for governments and risks for users in their assets. In terms of privacy and security, Blockchain-based solutions put an end to data risks, as they are based on distributed computing and the use of powerful encryption algorithms, making Blockchain the safest technology on the planet. People can manage their identity online at their own convenience. Although there may be a collection of data, it will be anonymous, making the information of users and companies fully protected. The supervision of governments or the intrusion of certain companies will not be possible, unlike what happens today.
Blockchain allows a large number of applications, beyond financial transactions.
Despite the widespread perception that the Blockchain is overvalued, it can be expected that more companies and governments will implement this technology over the course of this year and as companies and their technology providers achieve a valuable experience, the success rate of these implementations will also increase significantly. It is likely to see
where people, devices, and everything connected to the Internet can interact with confidence without a third party. Protecting rights immutably, creating a true shared economy without intermediaries, reducing the high cost of transferring money and allowing citizens to monetize their data are some of the paradigms that will change with the Blockchain. While AI is driving individual computers to perform increasingly complex computational and cognitive tasks with autonomy, blockchain allows groups of computers to pool resources to perform heavy computing tasks and make decisions by consensus. Although these technologies are making or are willing to revolutionize a variety of different industries individually, there are still certain challenges that must be passed through each technology to achieve mass adoption. The combination of AI and blockchain can eliminate individual deficiencies and accelerate the adoption of these technologies to revolutionize entire industries. Among the first industries to adopt blockchain, the financial services industry is leading the blockchain revolution. Blockchain applications in the financial
“This technology achieved notoriety in 2008 due to Bitcoin and, according to MarketWatch, by 2022 an annual growth of 51 percent is projected in several markets, such as that of financial institutions.” the technology applied by companies as part of a larger process optimization, rather than more radical ways. These business implementations will be supported by the emerging blockchain as service platforms and as proof of rapid business prototyping. Blockchain is the digital pulse of trust that is beginning to revolutionize all business models, since its technology based on the highest cryptography and consensus provides immutable trust from end to end in a decentralized manner. This huge technological enabler allows societies to have digital sovereignty, trust, security and transparency, generating a radical change in their rules of coexistence
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Blockchain allows the transfer of digital data with a very sophisticated coding and in a completely safe way.
services industry are already beginning to move beyond the proof of concept stage, which is more advanced than most other industries. Financial trade and investments can be informed and automated using machine learning algorithms that can be trained to monitor market sentiments. Transactions can be enabled using blockchain to guarantee fast transactions and money can be transferred in real time. This automated, secure and transparent process can revolutionize financial services and banking, by completely eliminating human intervention in financial markets. Security and simplicity to use the Blockchain are the factors that make it an ideal technology. There are studies that predict a saving of more than 20 billion dollars in spending cuts with the implementation of blockchain. The fact that banking is already the sector that is investing most in startups focused on developments in this field is not trivial. Blockchain could enhance the digitalization of banking, improving the service it offers to customers and increasing its efficiency. Despite the threat that it might pose to the sector, the bank relies on the potential that Blockchain could provide in syndicated loans, compensation, reporting obligations, international payments or compliance standards, that is, in all those transactional tasks that require a high number of intermediaries. 56
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Blockchain is a real revolution in the field of digital security. Users will enjoy greater protection of their identity since the robust encryption of the blockchain would make user-password-based credentials a thing of the past. This technology can provide the best security of the systems in the face of a multitude of threats, especially in
but the basic idea is simple. In the case of cryptocurrencies it could be thought of as the accounting book where each of the transactions is recorded. Each block stores a number of valid records or transactions, information regarding that block, its link with the previous block and the next block through the hash of each block (a unique code that would be like the block’s fingerprint). Each block has a specific and immovable place within the chain. The entire chain is stored in each node of the network that makes up the Blockchain, so an exact copy of the chain is stored in all network participants. As new records are created, they are first verified and validated by the nodes of the network and then added to a new block that links to the chain. Being a distributed technology, each node in the network stores an exact copy of the chain, information availability is guaranteed at all times. In case an attacker wanted to cause a denial of service, he needs to cancel all the nodes of the network, since it is enough that at least one is operational so
“Blockchain is the digital pulse of trust that is beginning to revolutionize all business models, since its technology based on the highest cryptography and consensus provides immutable trust from end to end.� those cases that present the greatest number of attacks. The incorruptibility and transparency are the main weapons to manage a solid cybersecurity, since it ensures the integrity of the data and allows the traceability of the modifications that occur in a system. An estimate by Winter Green Research predicts that the value of the Blockchain market will increase from USD 708 million in 2017, to more than USD 60 billion in 2024. Blockchain could boost trade in more USD 1 billion in the next 10 years.
HOW DOES BLOCKCHAIN WORK? The operation of this technology can be complex to understand if you deepen the internal details of its implementation,
that the information is available. If an attacker wanted to modify the information in the blockchain, he should modify the entire chain in at least 51% of the nodes. In summary, Blockchain technology allows to store information that can never be lost, modified or deleted. In addition, each node in the network uses certificates and digital signatures to verify the information and validate the transactions and data stored in the Blockchain, which ensures the authenticity of said information. Blockchain allows to verify, validate, track and store all kinds of information, from digital certificates, democratic voting systems, logistics and messaging services, smart contracts and, of course, money and financial transactions, becoming a very useful tool in all industries.
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Horse racing
A GREAT INDUSTRY THAT GROWS WITH HEROES
In 2018, for the fourth consecutive year, total wagering on U.S. races increased year over year and topped $ 11 billion for the first time since 2010. That was the year Justify was crowned in the Triple Crown. While purses for owners and breeders continue to rise, this year is declining in terms of betting.
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n the world of horse racing, the investment of owners and breeders is expressed through foals. This equation causes the activity to continue working year after year. Without breeder there is no horse. Without horse there is neither owner nor races. Meanwhile, it is still discussed throughout the world if more foals, with the consequence of more horses per competition and more races per day, increase the collection by bets. Although 58
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the birth of a racehorse can compete at least two years after its gestation, the birth rate expresses the production of an industry, while bets symbolize the interest in sport by punters and spectators in a specific moment Owners and breeders chase the purses of the competitions to feed back the circle. Racetracks benefit from bets to increase purses. Without purses there would be no interest in breeders and owners to invest in the
industry. That is where bets play a very important role for the activity. In 1990, in North America (including the United States, Canada and Puerto Rico) there were 44,143 registered foals according to the Jockey Club. The decline in that number extended to 2002, with 35,978 foals, when it stabilized until 2009. In 2002, nearly $ 16 billion was bet on thoroughbreds compared to just under $ 12 billion in 2018, when approximately 21500 foals were registered.
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In a first glance, the theory that more horses and more races benefit from the counting by bets is correct. However, a deeper look at what happened in 2018 forces us to rethink that theory.
2018 With the exception of 2015, from 2006 to 2018 there was a decrease in the number of foals in the United States. Meanwhile, for the balance of 2018, for the fourth consecutive year, total wagering on U.S. races increased year over year and topped $ 11 billion for the first time since 2010. In the comparison between 2018 and the previous year, the number of racing days among all the racetracks (4,432 of 4,573) fell by 3.08%, -2.77% the number of races (279,774 of 290,745), and -1.03% the average of the horses by competition. All other indicators were on the rise. Racing’s indicators for 2018 showed wagering on U.S. races improved 3.3% to $11,265,519,563. It marks the fourth straight year pari-mutuel wagering has improved and is the largest single-season gain since the 4.4% improvement in 2000. Meanwhile, U.S. purses improved 3.52% to $1,117,727,943. It’s the first time U.S. purses have improved year over year since 2012. The increases in wagering and purses is even more impressive considering 2018 saw a contraction in race days. That means wagering per race day was up 6.58% to $2,541,859 and purses per race day spiked 6.81% to $252,195. So, in the first full year after the National Thoroughbred Racing Association successfully completed a campaign to have the U.S. Treasury and Internal Revenue Service change its rules on reporting and withholding of large pari-mutuel winnings, wagering on U.S. races saw its largest single-season growth in 18 years.
THE TRIPLE CROWN The Triple Crown of the United States is the most demanding and consecratory event in the world of horse racing. The physical demand is established in its structure of three competences in the term of five weeks, on three different
Churchill Downs, the home of the Kentucky Derby.
racetracks and distances. It is reserved for three-year-old horses. In 1978, Affirmed became the eleventh capable of conquering those three legs.
This year’s wagering record includes $4.1 million of handle wagered in Japan with this being the first year the Kentucky Derby has ever been offered for wagering in the country. Since then, a kind of “curse” began. Fans from all over the world urged for a new hero, but year after year the frustration grew. Until in 2015 American Pharoah arrived, which in addition to becoming the twelfth on that list, was responsible for increasing the fever of horse racing. Not much was expected for No. 13. In 2018, Justify was the main actor of glory. The Triple Crown begins in the famous Kentucky Derby-G1, also known as “the two most wonderful minutes in the sport.” Despite record rainfall for Kentucky Derby Day, racing’s biggest day again enjoyed record handle, up 8% from 2017 to $ 225.7 million. That
new standard came one day after Kentucky Oaks Day upped its wagering record to $ 55.8 million, shattering the $ 49 million mark from 2016. Justify made sure that the remaining two competitions were a success. The Stronach Group and the Maryland Jockey Club announced that total handle on 143rd Preakness Stakes-G1 was $93,655,128. The handle, as well as the crowd of 134,487, was the third-largest in Preakness history. Belmont StakesG1 (the other leg) Day card generated all-sources handle of $137,954,895, the second-highest one-day handle in NYRA history behind Belmont Stakes Day in 2014. With attendance of 90,327, on-track handle was $16,159,584. All-sources handle for the three-day Belmont Stakes Racing Festival was $168,975,295. All-sources wagering on the 150th Belmont Stakes itself, carded as Race 11 of 13, was $72,702,815 with on-track handle totaling $6,884,907.
OTHER GLOBAL FACTS OF 2018 Horse racing in the United States has two other international events. The Pegasus World Cup Invitational was born in 2017 through the Stronach Group. Each horse must pay a million dollars to compete. With 12 horses on the track, the inaugural version was the horse race with the best prize in the world. Twelve months later, the purse was even higher, with 16 million dollars, OCTOBER 2019
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was 70,423 and the two-day attendance total was 112,672, the third highest in Breeders’ Cup history.
NOT ONLY JUSTIFY
Justify, hero of the Triple Crown of 2018, was a key to the rise of the indicators.
but by 2019 it dropped to 9 million - the same day the Pegasus Turf, on the turf, was added by 7 million. The second edition of the Pegasus World Cup card saw Gulfstream Park enjoy a 4.3% bump in handle to $41,983,881. Was the largest handle in Gulfstream’s 79-year history excluding Breeders’ Cup Days. The day of worldclass Thoroughbred racing and entertainment was attended by 16,400. In the United States, each racing season ends with just one finish line: the Breeders ’Cup World Championships. It’s the two-day, 14-race, year-end culmination that every horse, jockey, trainer and owner across the globe has in their sights. he Breeders’ Cup kicks off with Future Stars Friday, comprised of five juvenile races featuring horse racing’s brightest rising stars. Championship Saturday is one of the richest days in racing awarding over $ 22 million in purses and awards over 9 races, culminating in the defining event of the international racing season, the $ 6 Million Breeders’ Cup Classic. The Breeders’ Cup attracts competition from around the globe including the top talent from 6 continents and over 16 countries, crowning true world champions in the 14 divisions that comprise the championship event. Of the 221 horses pre-entered in 2018, a record 51 hors60
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es were from overseas. The host racecourse is itinerant. Although throughout the history the scenario was repeated for two consecutive years in several cases, the philosophy of the event is integrating to all the tracks of the United States.
With no Triple Crown on the line in 2019, Thoroughbred handle in North America dropped 7.2% versus June of 2018, the steepest year-overyear decline of any month yet this year. Total handle for the two-day event of was $157,445,841, the fifth highest since Breeders’ Cup adopted a two-day format in 2007. Total handle on Saturday’s nine Breeders’ Cup races was $96,018,060, a 4% decrease from the $99,833,643 bet on the nine Breeders’ Cup races in 2017. Common-pool handle on Saturday’s 12-race Breeders’ Cup card was $105,229,197.Saturday’s attendance
The Triple Crown is a phenomenon by itself. By history, the Kentucky Derby-G1 is a guaranteed success event, in addition to its gravitation in the state of Kentucky, “the world capital of the racehorse.” Meanwhile, for the next two races, in Pimlico (Maryland) and Belmont Park (New York), respectively, the possibility of having a new hero increases the numbers to the sky. In 2019 there was no horse for history. So, average numbers. Wagering from all sources on the 2019 Kentucky Derby set an all-time record with $165.5 million bet on the American Classic. That represented a 10% increase over last year’s Derby record handle of $149.9 million. Wagering from all-sources on the Kentucky Derby Day program totaled $250.9 million, an 11% increase over the 2018 total and previous record of $225.7 million. This year’s wagering record includes $4.1 million of handle wagered in Japan with this being the first year the Kentucky Derby has ever been offered for wagering in the country. Attendance of 150,729 decreased 4% compared to last year, as the threat of an all-day rain forecast kept many fans away. TwinSpires, the country’s leading online and mobile betting platform and the official betting partner of the Kentucky Derby, recorded $48.4 million in handle on Churchill Downs races for the Kentucky Derby Day program. That was a 20% increase over last year, and the Derby race itself drew $30.2 million online at TwinSpires, an increase of 23% over 2018. Perhaps the debate that followed the disqualification of Maximum Security from victory in the Kentucky Derby brought more interest to the Preakness Stakes as bettors turned up in force, wagering a record $99,852,653 on the 14race card, up 2.8% from the record set in 2017 at $97,168,658 (also a 14-race card). The 144th running of the Preakness Stakes set an all-time total handle record Saturday of $99,852,653 - the previous mark of $97,168,658 set in 2017 -. Attendance was 131,256.
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Three weeks later, Sir Winston’s victory in the 151st running of the Belmont Stakes (G1) generated all-sources handle of $102,163,280, a NYRA (New York Racing Association) record for a non-Triple Crown year. The 2019 all-sources handle figure is an increase of 9.1 percent over 2017, the most recent year without a Triple Crown on the line, and an increase of 2.8 percent over the previous record for a non-Triple Crown year set in 2016. On-track handle for the 13-race Belmont Stakes Day card, which included eight Grade 1 races among 10 total stakes, was $11,852,506. All-sources handle on the Belmont Stakes was $53,237,527 and for the three-day Belmont Stakes Racing Festival, which featured 18 stakes and 33 races in total from Thursday through Saturday, June 6-8, was $131,858,886. Like Kentucky Derby, for the second time in its history, the 2019 Belmont Stakes offered separate pool wagering in Japan. The total for this non-commingled pool, which is not included in the allsources number, was $4,362,972.
FIRST HALF OF 2019: IN DECLINE Although the indicators did not suffer large variations between the comparison of the Triple Crown races of 2018 and 2019, the current season is on the decline in betting. In fact, the first international event of the season (Pegasus World Cup Invitational) was the lowest in revenue since it was founded. There was a very important factor: the rain, which not only prevented many spectators from attending Gulfstream Park, but also overshadowed the nature of the event when many races were passed from the grass to the sand track, which modified the original condition. With three of the day’s 12 races switched from the turf course to the main track and a total of 25 scratches, total wagering checked in at $37,786,967, the lowest handle of the three editions of the Pegasus. That figure represented a 10% drop from the 2018 handle of $41,983,881. The inaugural Pegasus Day attracted total wagering of $40,217,924. The on-track handle of $4.123 million was
YTD 2019 vs. YTD 2018 Indicator
YTD 2019
YTD 2018
% Change
Wagering on U.S. Races
$5,675,700,07
$5,864,821,854
-3.22%
U.S. Purses
$543,979,337
$515,570,620
+5.51%
U.S. Race Days
2.104
2.081
+1.11%
U.S. Races
17.457
17.396
+0.35%
U.S. Starts
130.239
132.746
-1.89%
Average Field Size
7.46
7.63
-2.23%
Average Wagering Per Race Day
$2,697,576
$2,818,271
-4.28%
Average Purses Per Race Day
$ 258.55
$ 247.75
+4.36%
2nd QTR 2019 vs. 2nd QTR 2018 Indicator
2nd QTR 2019
2nd QTR 2018
% Change
Wagering on U.S. Races
$3,140,726,476
$3,238,194,342
-3.01%
U.S. Purses
$316,859,797
$290,247,705
+9.17%
U.S. Race Days
1.26
1.233
+2.19%
U.S. Races
10.167
10.098
+0.68%
U.S. Starts
73.409
74.926
-2.02%
Average Field Size
7.22
7.42
-2.69%
Average Wagering Per Race Day
$2,492,640
$2,626,273
-5.09%
Average Purses Per Race Day
$ 251.48
$ 235.40
+6.83%
only marginally less than the 2018 figure of $4.131 million. With no Triple Crown on the line in 2019, Thoroughbred handle in North America dropped 7.2% versus June of 2018, the steepest year-over-year decline of any month yet this year. While Belmont ranked first among all tracks with $280 million in handle, that also represented a $53 million plunge compared to 2018, down 16%. With Belmont Stakes down approximately $35.7 million, that accounts for 10.7% of the decline, meaning the rest of Belmont’s racing in June was down more than $17 million, or 5%. Field size shrunk from 7.7 last year to 6.8 this year, perhaps contributing to those numbers. Churchill Downs’ (Kentucky Derby’s home) handle increased $13 million, going from about $75 million to $88 million, good for a 17% year over year rise even with 10 less races. However, field size grew significantly from 7.6 in 2018 to 8.6 this year. It was $ 1,287,396,296 in May 2019 against $ 1,269,247,166 in May 2018 (1.4%), but in no way could it save the second quarter of the year. The analysis of the second quarter of 2019 forces us to rethink about the equation about what are the factors that encourage both the prosperity of the racehorse industry and the appeal to fans and gamblers. At the beginning of this report it was pointed out that fewer racehorses are being bred at present than in any other year of this millennium. Also, that in 2018 there were fewer races with fewer horses on the track and that the betting revenue was the highest in recent times. Equally, that the appearance of a great hero for the Triple Crown helps in the dissemination and attraction for fans and punters, but there are exceptions, such as this year’s Preakness Stakes. The increase in purses without any doubt collaborate with the activity of breeders and owners, but the investment of those supports the quality of the horses on the track, although it is not directly related (in a short time) to bets. Heroes generate a contagion effect. It is no accident that during and after a great star (Justify in 2018) success is assured. OCTOBER 2019
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REPORT
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