Casino & Gaming International: Issue 10 by Casino & Gaming International

2008 ISSUE 1

WELCOME

COLOURFUL PARTICIPANTS IN THE REAL WORLD Publishing Director Jamie Kean Email: jamie.kean@casinoandgaming.net Editor Stephen Lawton Email: stephen.lawton@casinoandgaming.net Publishing Services Manager Louisa Bull Email: louisa.bull@casinoandgaming.net Distribution Manager Tracie Birch Email: tracie.birch@casinoandgaming.net Business Development Manager Stuart Jameson Email: stuart.jameson@casinoandgaming.net Advertising Mike McGlynn, Sales Director Email: mike.mcglynn@casinoandgaming.net Ray Blunt, Sales Manager Email: ray.blunt@casinoandgaming.net Daniel Lewis, Sales Executive Email: daniel.lewis@casinoandgaming.net

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Woodland Place, Hurricane Way Wickford Business Park, Wickford Essex SS11 8YB. United Kingdom Telephone: +44 (0)1268 766 515 Facsimile: +44 (0)1268 766 516 Annual Subscription (4 issues): £107 UK £117 Europe & Middle East £127 USA & Canada £137 Rest of the World Please make cheques payable to ‘CGI’ and send to: Casino & Gaming International, Subscriptions Dept., Woodland Place, Hurricane Way, Wickford Business Park, Wickford, Essex SS11 8YB. United Kingdom. Photography © 2008 Casino & Gaming International Limited and it’s licensors. All rights reserved. © 2008 Casino & Gaming International Limited (except where otherwise stated). All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written permission of Casino & Gaming International Limited. ISBN 190200335 7 www.casinoandgaming.net

here is a coincidence of thinking between the well established casino mantra that the human centredness of the land-based environment is paramount and Michael Hallén’s point that the online player is a multifaceted and “in actuality, an active, colourful, interactive participant in the real world”, whom we all observe to be part of everyday life. The casino view that human interaction is critical has been reinforced as integrated resorts have expanded into non-gambling areas. The ever creative flow of online, interactive and mobile technology, however, has tended to be deemed a greater potential risk to players, although the growing mainstream appeal also suggests an acceptability that encourages interest beyond gambling. This still involves obviously physical devices, fixed or mobile. But the technology deployed is ceasing to be recognisably a hard technology as it begins to connect more subtly, yet directly, to the human senses. Minimising overt physicality through touch and sound refinements, for instance, is a glimpse of the major multi-media, multi-sensory experience currently in the making. Gaming technology is now sufficiently sophisticated to begin to bypass the physicality of its delivery by tuning into the human impulse, drawing in human involvement with longevity in mind. It becomes central to game development and as the technical barriers are pushed so the real and virtual environment is drawn closer together. A sea change is emerging in cultural, multi-lingual accessibility with implications for greater acceptance combined with constantly enriching capabilities. As a consequence, remote operators have, to a significant degree, come to recognise that credibility, reputation and brand identity, are partly dependent on commitment to being socially responsible. Since technology tends to retain a lead over legislation, such an approach has become a corporate requirement. And with certain market leaders having taken the self-regulatory initiative by devising and advocating terms of reference for industry-player conduct, the remote gambling industry is establishing a unique depth of oversight, thereby confounding, if not silencing, its harshest critics. Sound commercial logic underpins this concern which ought ultimately to provide a solid basis for any government deciding on the most effective measures to implement – and the most practical means for minimising the negative effects of gambling, or “maximising opportunities” while “minimising harm” according to Mark Griffiths. Many jurisdictions do, in any case, maintain strong regulatory regimes that benefit from business involvement and serious participation in setting out how to tackle problem gambling behaviours. If one thing has been clarified it is that the US UIGEA, acknowledged as partial, discriminatory, inconsistent and confusing, is nevertheless an object lesson in how not to handle the global advance of non-terrestrial gambling. Roger Withers believed “many saw a crisis, we looked for the best opportunities”, and it was vital for industry that companies did seek greener pastures rather swiftly after UIGEA implementation, but it is also the fact that the impact bolstered the resolve to pressure for cross-border liberalisation while seeking to raise regulatory issues across jurisdictions. While it may be that every PC, laptop and mobile is a potential casino that is becoming as prevalent as the air we breathe, by taking the bull by the horns, adopting the ethics, values and mechanisms required to undertake detection, prevention and treatment of anyone becoming adversely affected by gambling, organisations like the RGA, eCOGRA and GamCare, working with industry leaders, have set out optimal practical standards to ensure genuine confidence in the online gaming sector. After Barcelona, there is every reason to believe the painstakingly considered codes of practise will fall on fertile ground, especially as they so comprehensively aim to provide an in-depth industry-based commitment for the future. CGI

Stephen Lawton is editor of Casino & Gaming International Casino & Gaming International ■ 3

CONTENTS

FEATURES 11

INNOVATE, MIGRATE AND INTEGRATE: PUSHING THE GAMING FRONTIER INTERVIEW WITH MOR WEIZER AND ROGER WITHERS

KEEP YOUR BACK-END COVERED

REASONS TO BE CHEERFUL

THE UNCOMMON TOUCH: INNOVATING THE GLOBAL MULTISENSORY EXPERIENCE INTERVIEW WITH SCOTT HAGERMOSER

BY MICHAEL HALLÉN

BY ROGER RAATGEVER

PREDICTION AND REALITY: MOVING BEYOND THE BARRIERS INTERVIEW WITH MATTI ZINDER

WHERE IT ALL STARTED

PERFECTING SCALABILITY, INTEGRATION AND DATA RETENTION AT ALL LEVELS INTERVIEW WITH KONRAD HECHTBAUER

BY VINCENT BEZZINA

Casino & Gaming International ■ 5

CONTENTS

107

FEATURES 67

JUST BEFORE THE DAWN: WHY GOVERNMENTS SHOULD COOPT, NOT COERCE, I-GAMING BY MARTIN OWENS, Jr

STATE OF PLAY: STILL NO CHANGE IN PROSPECT

JUST HOW GOOD AN OPPORTUNITY IS THE UK FOR THE ONLINE GAMBLING INDUSTRY? BY JULIAN HARRIS AND JOHN HAGAN

ACADEMY TRAINING: PROFESSIONALISM, CONFIDENTIALITY AND EXPERIENCE INTERVIEW WITH CHRISTEL SOMMERVOLD

COHESIVE APPROACH TO RESPONSIBLE ONLINE GAMBLING ESSENTIAL BY ANDREW BEVERIDGE

BY JOE KELLY

101 PREVENTION, EDUCATION AND INDUSTRY PARTICIPATION IN PROBLEM GAMBLING BEHAVIOUR BY MALCOLM BRUCE 107 RESPONSIBLE GAMING AND BEST PRACTICE: HOW CAN ACADEMICS HELP? BY MARK GRIFFITHS AND RICHARD WOOD

Casino & Gaming International ■ 7

GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

INNOVATE, MIGRATE AND INTEGRATE: PUSHING THE GAMING FRONTIER INTERVIEW WITH MOR WEIZER AND ROGER WITHERS

The corporate impact of gaming software providers is becoming increasingly central to emerging markets. The expected high quality functionality, interactive and convergent potential of innovation from supplier to operator fundamental to capital growth, is creating ever more inventive gaming experiences for players. And we are on the edge of explosive growth in Asia.

GI: Why did Playtech consider it was the right time to chart a new direction in online gaming?

MW: The founders saw an opportunity to develop new online gaming solutions at a point when gaming on the Internet was well underway. When we entered the market in 1999 Playtech began licensing online gaming software to operators throughout the World. From that moment, as the business grew and we built our core strength with integrated facilities, we were able to create unique products allowing operators to rapidly optimise their performance managing the software we supplied. Especially important too is the fact that Playtech facilitates the migration of operators’ other software solutions to our platforms. Of course, such a process has quite an impact on the operation, so we created a framework that allows us to streamline each migration. Since we first initiated this we have migrated 25 leading licensed software providers – the latest being Bet365. RW: The industry was pretty well established by the time we launched but our approach was fundamentally different: we have remained a supplier only and have not been in competition with our own customers. I’m sure some of the smaller online software providers are suppliers only but many are also operators – we are not an operator. CGI: At the point of the launch in 1999 you must have developed a particular concept and technology given the weaknesses of online gaming at the time? Casino & Gaming International ■ 11

GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

>> WE INVEST HEAVILY IN THE PRODUCT PIPELINE, GENERATING IDEAS FOR THE CREATION OF COMPLETELY FRESH GAMES, QUITE APART FROM THE DEVELOPMENT OF EXISTING PRODUCTS. OF COURSE, THIS MEANS PRODUCTS SUPPORT THE FUTURE GROWTH OF LICENSEES AND WITH ALL OF THAT THERE IS A CONSTANT NEED FOR ADDITIONAL TOOLS TO SUPPORT FURTHER MARKET PENETRATION >>

MW: The key factor underlying our success when it comes to technology is innovation: providing exclusive games with unique ideas that, for players’ experience, have a much better look and feel. Together with this are all the key tools, backend/front-end, gaming applications and platforms that provide a single point of reference for operators. But it is the technology-related framework for migration, as I mentioned, that is central. RW: As Mor says, the issue is innovation. The market is forever changing. Within the various elements of online gaming – be it online casinos, poker or slots – there is a need to reflect local circumstances in new games according to the interests of different national cultures. In many ways this is similar to what is occurring in the land-based world where, if you go into a large-scale casino, you’ll find brand new slot machines, new themes, different table games catering to different ethnic groups – we are no different in this respect.

12 ■ Casino & Gaming International

From our point of view it is not a question of changing to keep up, we must seek change to keep ahead. If you think of your own software on your desktop – it is obviously forever changing. Again, one of the key issues is migration. Along comes Microsoft with Vista. You need to change from Windows XP to the new Vista operating system and you want that process to be as seamless as possible. So you need the new functionality of the new software, but you don’t want any of the hassle that goes with it. That’s a key part of the development and why there are so many of our people working in so many centres Worldwide. Then add the different cultural and ethnic areas that need to be penetrated: We are already in the Far East where we aim to increase our reach and we have new development centres in India, Philippines, Estonia and Bulgaria. In each case skills are targeted to specific areas so we are not attempting to develop everything in a one-size-fits-all concept. In Bulgaria,

GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

for instance, Bingo is the key. That’s why 80 percent of our people are involved in R&D. MW: We invest heavily in the product pipeline, generating ideas for the creation of completely fresh games, quite apart from the development of existing products. Of course, this means products support the future growth of licensees and with all of that there is a constant need for additional tools to support further market penetration. RW: One of the key attributes is liquidity where the player volume, number of tables and suitable stakes are fundamental. So if somebody comes online to play poker on our iPoker Network, they will find many tables and different staking levels to join in at. If they are playing progressive slots, which is equivalent to a wide area of progressives in somewhere like Las Vegas, they are playing with very high and frequent prizes being offered. Whenever there is a win – and we paid out $2.7m on the progressive Gold Rally jackpot recently – that jackpot is refilled almost immediately. CGI: Today we are seeing a greater degree of interactive, online and mobile cross-over with landbased casinos. What is Playtech’s stake in this?

RW: Videobet, of course, is a terrestrial, land-based product where the games stem from our online offering. The landbased casino operator can offer his players the continuous experience of playing online elsewhere while also offering the land-based environment to play the very same games. Now that is being extended with server-based gaming. We are operating in many parts of the World where free access to the Internet is uncommon, so we have been supplying the same stand-alone versions of our products to meet those particular conditions. The cross-over trend will clearly grow and there is in fact a gradual blurring of all gambling lines. In the end our job is to provide our clients with the tools enabling them to maximise the offer to their consumers while creating very few hurdles for them to jump over. People need to feel at ease with the games, that they are familiar and can be played in as many locations as possible. MW: We are driven first and foremost by the requirements of our licensees and meeting that challenge allows us to maintain a leading position in the gaming market. Playtech supplies software that meets the rapidly changing, dynamic needs of new entrants to the online gaming industry. A good example of this development is the Gold Rally game which

>> BULGARIA IS ANOTHER AREA WERE WE HAVE BEEN ABLE TO TAKE ON BOARD HIGHLY QUALIFIED SOFTWARE ENGINEERS, DEVELOPERS AND PROGRAMMERS – AND THERE IS AFTER ALL A COMMON LANGUAGE IN THE IT WORLD – AND TO GET THEM TO APPLY THEIR SKILL SET ON OUR PRODUCTS AIDED BY OUR MANAGEMENT EXPERTISE. BULGARIA IS A GREAT EXAMPLE FOR US OF HOW YOU CAN, IN VERY SHORT ORDER, SET UP A VERY PRODUCTIVE DEVELOPMENT CENTRE >> Casino & Gaming International ■ 13

GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

represents cross-over integration from Internet and video to mobile devices. That is a cross-platform offering that has the fastest jackpot replenishment rate. CGI: How do you see the mobile market at this time? MW: Growth is not yet significant enough, although we are observing how that will develop. And the signs are there: for instance, it has been suggested that most new mobile devices are expected to support Java applications by 2009. The expected changes will allow us to enter the mobile gaming industry in a similar manner to the way the Internet evolved. Mobile devices are now very common; most display in high definition colour; and the screens are larger. CGI: Has the US UIGEA Internet gambling legislation affected Playtech in any way and is that something that caused you to focus more particularly in Asia and Europe? RW: Well, that’s history. Playtech always had a big focus on Asia and Europe and I think that we were ahead of our competitors in that respect. With the acquisition of Tribeca, the heavily European focused poker network, we simply drew a veil over the US and looked forward, as we usually do. The US is simply not in our market at this time. MW: As Roger says, we took measures to advance our position. Firstly, through the Tribeca acquisition; secondly, by supplying our licensees with whatever was necessary, as they pulled out of the US, to penetrate the European market more effectively. As they had to concentrate more fully on Europe, we helped provide the tools for that new level of operation. The difference in culture, language and currency meant that we had to provide our licensees with software in various languages in order to support their growth. We managed that in a very short period of time showing the importance of our concentration on R&D. While many saw a crisis, we looked for the best opportunities and acquired Tribeca. We have migrated well known established names in the industry from Tribeca, which had

developed a poker network similar to Playtech’s. Eight licensees have been migrated to our iPoker Network, more than doubling our player liquidity. That includes Victor Chandler, Paddy Power, Blue Square and Sporting Index, among others, resulting in Playtech becoming the largest independent poker network in the World. CGI: Do you regard Playtech software provision to the China Mahjong Association as a prime example of the way forward in the region? RW: Well, we all know the importance of Mahjong in China and Asia generally and there are a whole host of Asia-only games which are important in that market place. We are leaders in Live Gaming where players in the Far East have a preference for non RNG games. They like to see their games and to be dealt live, whether that happens to be roulette, baccarat or blackjack, and baccarat is the favourite currently. Our software combines the live gaming experience with a live dealer and players can see that on a part of their screen at the same time they are playing the game on their computer in exactly the same way as others are. We also have a team in India specifically designing sophisticated multi-player Mahjong for the Far Eastern market. CGI: Given that this creates greater interactive possibilities and acts as a simulation of the casino experience, do you expect this connection to grow in Europe and Asia? RW: Yes, I do. At the moment most of the Live Gaming opportunities are established in the Far East but we are already seeing a demand coming through for them in other parts of the World. CGI: Do you think European and Asian casino operators themselves are likely to become more involved in the online side through this development? RW: Well, we understand the importance of this and rest assured we are working in that area! MW: Just to elaborate a bit about Asia: we made a strategic decision two-and-a-half years ago to diversify geographically, which enabled us to create a state-of-the-art software provider presence to the online gaming industry through licensees focused on Asia. We have just revamped our Live Gaming solution with the much improved video streaming, and with LCDs placed behind the dealer running CNN it is clear the gaming is really a live stream that players are seeing. And besides Live Gaming and Mahjong already mentioned, there is P2P which is under development. A pilot with a potential licensee is currently in progress. CGI: Are you satisfied with the problem gambling detection mechanisms built into your technology and is that aspect of gambling of concern to you? RW: We feel very strongly about responsible gambling and we ensure our licensees receive all the tools possible to encourage them to have more than adequate ‘know your customer’ mechanisms. Our back office systems are also capable of detecting potential problem gambling behaviour.

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GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

Responsible gambling and our sense of social responsibility is a key element for Playtech. CGI: Your latest ‘campaign’ with bingo may well take you to the next level. What is the story here? MW: After building our casino game and poker network the aim now is to develop bingo through our dedicated team in Bulgaria. We have revamped our downloadable version and on the back of that we developed further the Flash version which is very popular throughout Europe. We realised that in order to penetrate Europe we had to have Flash in addition to the download upgrade, which has allowed us to gain additional existing licensees to adopt the bingo product and we expect to increase our market share in the next few quarters. RW: Bulgaria is another area were we have been able to take on board highly qualified software engineers, developers and programmers – and there is after all a common language in the IT world – and to get them to apply their skill set on our products aided by our management expertise. Bulgaria is a great example for us of how you can, in very short order, set up a very productive development centre. CGI: And because of the way you work in Europe you don’t fall foul of cross-border issues… RW: Although we are not an operator, we do have rules about our licensees not operating in environments in which we ourselves are developing so that there is no issue with regulation. In the UK our licensees are licensed to operate in the UK under a very different set of circumstances, but we don’t have developers in the UK. CGI: Innovation, migration and licensing seem to sum up the nature of Playtech and what the industry is primarily about. MW: If you ask Bill Gates what the skill set of Microsoft is he would probably come up with the same answer. CGI: With the constant stream of innovation and new devices do you think there is a global limit to revenues approaching or is it effectively endless? MW: In terms of global online gambling earnings one shouldn’t overdo this otherwise we end up saying the entire World’s GNP in five years time is going to be based on gambling! We are very positive about the growth potential: there are many new jurisdictions of millions of people becoming Internet linked, who are IT savvy and have aspirations to be involved. Responsible gaming is fun, so it is no great surprise that people in emerging markets of the World want to be part of this, although there is a long way to go yet. CGI: Machine testing through GLI is well known but what is the basis of Playtech’s testing regime? RW: We have a very similar position to the way GLI tests RNG and slot machines to ensure they meet with jurisdictional requirements, if you consider Alderney’s

approach. The island has a testing requirement where software has to be submitted to their testing units. Around the World responsible jurisdictions will tend to accept that testing at one of them – licensing of the software – will reflect across others. MW: With such a highly regulated jurisdiction as Alderney, we are required to be tested by independent testing facilities such as TST high tech labs. The facilities test all aspects of our products – including uploads, upgrades and RNG - on a continuous basis and most of our licensees are having their specific sites tested by these independent units. CGI: The impression is that taking on board social responsibility in gambling and recognition of jurisdictional regulation is something that strengthens company brands… RW: Our brand and reputation, whether it is with the clients, with their players, regulators, governments around the World, is everything to us. CGI: So have you reached a point of starting out on a new road or is it a case of building block by block? RW: We have cash, ambition and targets assisting our developmental capability; client and product reach. As one of the largest companies on AIM our stock is now valued at 50 percent above what it was at IPO. We are an ambitious company and our unique team is certainly not content to stay the size we are. We may be the largest poker network in the World, but as we see in the Far East, there are millions more who want to play. CGI

MOR WEIZER AND ROGER WITHERS Mor was appointed as the Group’s Chief Executive Officer in May 2007. Prior to this he was the CEO of one of the Group’s subsidiaries, Techplay Marketing Ltd, which required him to oversee the Group’s licensee relationship management, product management for new licensees and the Group’s marketing activities. Before joining the Playtech Group, Mor worked for Oracle and PricewaterhouseCoopers. Roger brings to Playtech the benefit of 30 years’ experience in the leisure and gaming sector. He held a number of senior positions in Ladbrokes before joining Bass, where his roles included Managing Director Coral and Executive Chairman Bass Leisure South Africa. Since retiring from Bass in 1998, he has held several nonexecutive directorships including Chairman of Littlewoods Leisure, Arena Leisure, Sportech and FireOne. Roger lives in rural Buckinghamshire and enjoys shooting, skiing, powerwalking and foreign travel.

Casino & Gaming International ■ 15

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KEEP YOUR BACKEND COVERED BY MICHAEL HALLÉN

We thrive on our human relationships and we all, to one degree or another, have the potential to be a player among players who are nevertheless a part of the everyday fabric of life. And that is the point: a gambling ethos that has attractive longevity as a social activity and is capable of being realistically managed. So what are the commercial and social signs to look for and what is needed to meet the interest?

rase that outdated mental image you may have of the online gambler – sitting at a desk in a secluded, albeit Internet-enabled, shack in some secluded hideaway – glued to his computer, mindlessly playing hand upon hand of online single-player blackjack against the bot. There may be an isolated few online gamblers that fit the bill, but these are not the demographic serious operators are trying to reach. The online player is, in actuality, an active, colourful, interactive participant in the real world – that world we see nearly every day while we walk to and from the parking lot to our workstations. We are all potential online gambling customers, so take yourself as an example. You may enjoy the occasional spin on a slot machine or a hand of poker with a few friends, but do you permanently fit into any one of the static player profiles your marketing team has devised? Your age and gender may not change from day to day, but your gaming tastes do. Each player is a multifaceted person with likes and dislikes that change continuously. Your online gaming operation must allow the player to exercise these varying tastes and satisfy his or her curiosity and the desire to try something new from time to time.

A HOW-TO CHECKLIST Offering new games at the lightening-fast pace required to keep your players interested enough to return regularly is difficult, to say the least. A powerful, flexible back-end management system is necessary if you want to fill your store front with a large, variable and marketable selection of games – a prerequisite for success. Here’s how to keep your back-end covered: ■ You need to base your operation on a game system with Casino & Gaming International ■ 19

GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

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an open architecture so that you can easily add new game applications and scrap others that are not performing up to par. You must be able to stay in central command of your operation, no matter how many different games you offer. You require easy access to game statistics and profitability reports to know in which gaming direction you should be heading and how you should best market each of your games and your operation as a whole. Access to comprehensive statistics also provides a means of monitoring customer behaviour patterns in an effort to run a responsible gaming establishment. The specification of limits and self-exclusion programmes will become increasingly important as more state-run gaming companies and national lotteries expand onto the Internet and governments seek standards to regulate online gambling. You require the ability to integrate new games from multiple independent developers into your system to both accelerate your access to variety and to increase your bargaining power as a client as game developers compete for your business. You require the ability to configure and alter your existing games to provide new game variations on old favourites. You need a global marketing team, one that you can recruit from your desktop by running an efficient affiliate programme.

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Perhaps most importantly, you must give your players convenient access to your entire gaming selection. Don’t complicate things for your players (and yourself) by making each customer register to open and keep track of multiple wagering accounts; one for your sports book, one for your online casino, one for your poker room, etc. A single registration to yield a single account should suffice. One account to rule them all!

ENTERTAINMENT IS MORE THAN GAMES Even with easy access to a multitude of games, your players have such an extreme need for novelty and dynamic interaction, that even beyond the games, you must be able to offer them the ultimate in interactive entertainment: other human beings. Many operators have been guided by the equation: entertainment = games; in other words, the greater the number of quality games you offer, the greater the value of your operation in terms of entertainment and the greater your chances of obtaining customers and achieving success. True. A variety of games certainly does add entertainment value to your operation, but the equation is not completely balanced. Entertainment is more than games. A variable is missing. That variable is social interaction.

NOT JUST FANTASY Consider the popularity of massively multiplayer online roleplaying games (MMORPGs). More than 15 million people across the globe rely on these games for entertainment.

>> WHAT I SEE IN THE CRYSTAL ROULETTE BALL I KEEP ON MY DESK IS CONTINUED GROWTH IN ONLINE GAMBLING INDUSTRY AND MORE COOPERATION BETWEEN BIG-NAME GAMING COMPANIES AND MEDIA GIANTS TO BRING A WORLD OF CUSTOMERS TOGETHER TO INTERACT SOCIALLY AND ENJOY GAMES THAT ARE OFFERED MORE FOR THEIR ENTERTAINMENT VALUE THAN FOR THEIR VALUE IN TERMS OF INDIVIDUAL WAGERS >> 20 ■ Casino & Gaming International

GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

People regularly depart for the virtual realms inhabited by orcs and fire-breathing dragons in games like World of Warcraft because they give the player the ability to interact with real people. Players even go so far as to arrange themselves into guilds or clans to cooperate and enjoy sharing the game experience in the quest to develop their fantasy characters and win. Researchers have found that players’ enjoyment of a game is directly related to the social organisation of that game. We are likely to see more large networks forming around peer-to-peer games in the online gambling arena. Great numbers of people congregate in online networks to share the gaming experience. Networks have proved tremendously successful for online games such as poker and bingo. When companies band together, they achieve the critical mass of players necessary to support social interaction and a community feel. They also have the common resources required to provide ample game variety and the attractive prizes players want. One major trend in MMORPGs is toward more playerdriven gameplay, in which players themselves take the initiative to arrange multiplayer events such as battles between guilds. Similarly, we will see more player-driven activity in the online gambling sphere. In the International Poker Network (IPN), for example, online poker players are no longer required to wait around for a poker tournament to begin at a time scheduled by the operator. Players can spontaneously organise single-table and multi-table tournaments themselves – so-called sit’n’go tournaments – to engage others who also have the leisure time and desire to compete at any given time. We will also see an increased integration of the Internet gaming sector and other entertainment sectors. In April, Yahoo! UK, one of the world’s most recognised online brands with one of the largest customer databases, added online poker to its burgeoning selection of games by becoming a

member of the IPN. The majority of companies with leading online brands are considering the addition of online gaming in some form, and big names in Internet entertainment are expected to be responsible for much of the future growth within the global e-gaming market.

FACING NEW CHALLENGES Global networks offer many advantages, but a couple tricky challenges as well. The network must be able to effectively serve customers from many different nations who use different currencies and languages. With the United States out of play after the passage of the Unlawful Internet Gambling Enforcement Act, the diverse European market is presently the most important for future growth in the Internet gaming sector. However, the euro will only get you so far. The network operator must offer players the ability to conduct transactions in local currencies. In addition, live customer service in native languages must be provided to garner trust in the operation. Customer trust is important to the success of all businesses, but even more so in e-commerce. The ability to offer large, cross-game progressive jackpots is a strong network attraction. However, for full effect, those jackpots should be able to grow with game purchases made in multiple currencies, and the current total offered in a progressive jackpot should be marketed to players in their own easily-recognisable currencies. The general trend is toward glocalisation; making each customer player feel at home with familiar games he can enjoy in his native language and national currency. The second challenge a network faces is to allow its members to reap the advantages of working together and sharing a large pool of customers, yet still allow them to stand apart by developing their unique brands and manoeuvring to satisfy their individual business goals. We will see more networks offering flexible membership models that give each member sufficient wiggle room to create a unique market

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>> WE ARE ALL POTENTIAL ONLINE GAMBLING CUSTOMERS, SO TAKE YOURSELF AS AN EXAMPLE. YOU MAY ENJOY THE OCCASIONAL SPIN ON A SLOT MACHINE OR A HAND OF POKER WITH A FEW FRIENDS, BUT DO YOU PERMANENTLY FIT INTO ANY ONE OF THE STATIC PLAYER PROFILES YOUR MARKETING TEAM HAS DEVISED? YOUR AGE AND GENDER MAY NOT CHANGE FROM DAY TO DAY, BUT YOUR GAMING TASTES DO. EACH PLAYER IS A MULTIFACETED PERSON WITH LIKES AND DISLIKES THAT CHANGE CONTINUOUSLY. YOUR ONLINE GAMING OPERATION MUST ALLOW THE PLAYER TO EXERCISE THESE VARYING TASTES AND SATISFY HIS OR HER CURIOSITY AND THE DESIRE TO TRY SOMETHING NEW FROM TIME TO TIME >> niche and to branch out if the member’s goal is to eventually run a stand-alone operation.

CHANGING MARKETS According to research conducted by the UK Department of Culture, Media and Sport, UK gamblers comprise a major share – about one third – of the 3.3 million online gamblers in the important European e-gaming market. Reaching those gamblers presents a problem for many online gaming operators. A provision in the UK Gambling Act 2005 came into effect on September 1 this year. The provision bans offshore gambling sites regulated by countries outside of the European Economic Area (EEA) from advertising their services within the UK through any media. Sites licensed and regulated by jurisdictions within the EEA thus have a considerable advantage for the time being. Although the focus is presently on Europe, the emerging Latin American market is certainly not to be neglected. Despite the strong influence of the Catholic Church, Latin America has a huge, gaming-enthusiastic population. Although Latin America is culturally diverse, a little Spanish and Portuguese will get you a long way. The telecommunications infrastructure and broadband penetration is on the rise. Although credit card penetration and banking markets are still limited throughout the region, the movement of currency should become easier as the gaming market evolves and becomes a more obvious target for businesses looking to expand.

PROPHETIC VISIONS As we enter the New Year, future predictions are always fun to make. What I see in the crystal roulette ball I keep on my desk is continued growth in the online gambling industry and more cooperation between big-name gaming companies and media giants to bring a world of customers together to interact socially and enjoy games that are offered more for their entertainment value than for their value in terms of individual wagers. Getting customers to stick around longer and forge an active community, rather than to bet the shirts off their backs, will become the ultimate goal. I can see that instant-play games, thanks to their simplicity, will help bring e-gaming to a broader audience, while downloadable software will remain popular thanks to a faster, smoother installation process and new technologies bringing the user experience to an exciting, new level. I predict that each customer will use only a single account that he carries with him like the wallet in his pocket as he moves from game to game within an operation. I can also see the development of exciting, innovative and branded games that put a creative spin on the traditional fruit-themed slot machine. As operations become more multi-everything to reach a global audience, business administration and compliance with regulatory standards will prove increasingly challenging. Just remember to keep your back-end covered at all times. CGI MICHAEL HALLÉN Michael Hallén is president and chief executive officer of Boss Media, a leading supplier of online gaming software and solutions to both private and state-operated gaming corporations. Before bringing his extensive experience in software and international operations to Boss Media in July 2007, Hallén served as president and CEO of IFS – an international supplier of business systems to clients within the hightech, defence and heavy industry sectors – where he succeeded in turning the company around toward profitability.

22 ■ Casino & Gaming International

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GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

REASONS TO BE CHEERFUL BY ROGER RAATGEVER

Online adversity in the US has spurred the gaming industry on to grasp the nettle with a strengthening focus on organic growth and core products. That is lifting the industry into new markets encouraging new innovation challenges and encouraging the benefits of glocalisation – and that is set to expand through 2008.

hose that know me can vouch for the fact that I am never normally one to brag, so forgive me if I start this article by bringing up the fact that I was right about a couple of things when I wrote in these pages almost exactly a year ago. Among other phrases contained in my piece On with the Game [CGI, Issue 1, 2007] were the words, “we are set for renewal” and “UIGEA will have a galvanizing effect”. I don’t know whether I was just whistling in the wind, but it is a fact that the UIGEA fallout has made the industry work harder in 2007. As I write a number of City commentators are claiming the poker bubble has well and truly burst – not totally unexpected since we lost our biggest market twelve months ago, but I believe we have not only set the stage for a resurgence and fresh growth, but for many of us, we are already well on the road there. This cannot be said of many other industries that have lost a major market overnight. But it is a tribute to the depth and quality of the industry’s response to it. With a focus on organic growth and a renewed emphasis on core products, the industry turned. One of the big benefits is that all the major players (operator and software) have continued to innovate at a pace that allows them to bring customers with them and attract customers from emerging markets. There has also been an increased emphasis on retention post -UIGEA. Inextricably linked with this is the final flowering of three, long anticipated developments. What has been called ‘Glocalisation’ – the ability to think globally and act locally, licensing – taking our place in the entertainment mix and technologies – such as multiplayer casino. Taking each of these in turn:

GLOCALISATION We live in an era of globalisation, but that does not mean that Casino & Gaming International ■ 27

GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

>> AS HAS BEEN WIDELY NOTED, LICENSING IS TAKING US INTO THE ENTERTAINMENT MAINSTREAM, MAKING US MORE ATTRACTIVE TO BIGGER AUDIENCES. BUT, MORE THAN THIS, THE COMPETITIVENESS OF LICENSING DEALS IS ALSO NOW PUSHING INNOVATION IN THE INDUSTRY BY ATTRACTING DEVELOPERS WHO MIGHT OTHERWISE HAVE GONE INTO COMPUTER GAMES >>

our products can – or should – be ‘one size fits all’. This explains why the industry was slow to grasp, if not slow to spot, the Asian and other emerging market opportunities and why the post-UIGEA revival has been so rapid. Gambling has cultural nuances that a pair of jeans does not and although we knew this, only in the last year have we really started to get our act together over it. Glocalisation was paid a great deal of lip service before, but this year the industry has had to work at it. We are not alone in having put in place a full language support network. We now offer games in 19 languages, together with multicurrency integration. By also opening offices in South America, Manila and Singapore, Microgaming is utilising local expertise and providing on-the-ground support in these important emerging markets – a series of human cultural antennas. In addition, we have continued to create ‘Language Champions’ with our operators in the relevant markets to ensure quality of delivery. Watch this space for similar developments in new countries and on new continents this year and next. In industry terms, the creation of an iGaming village at G2E Asia next year is a signal that we are at a new crossroads of international growth, notwithstanding Macau’s overhauling of Vegas as the leading worldwide gambling destination during the course of the year.

28 ■ Casino & Gaming International

Outside of Asia, we still have broadband penetration rising across Europe and as I have mentioned, we are even now looking to the likes of South America – an as yet almost totally untapped proposition. Microgaming has recently signed its first operator here and has several other partnerships in the pipeline.

LICENSING As has been widely noted, licensing is taking us into the entertainment mainstream, making us more attractive to bigger audiences. But, more than this, the competitiveness of licensing deals is also now pushing innovation in the industry by attracting developers who might otherwise have gone into computer games. Everyone has realised that it is not good enough with the investment in these properties to produce anything but the very best. This is why those companies that are at the forefront of our industry – both in terms of size and vision, are likeliest to land the best deals and be able to invest in the resulting games development. For us this has been a breakthrough year, where long negotiations and patient developer work have brought The Osbournes and one of Eidos’ best-selling console game series, Hitman, to players worldwide. Both are cutting edge video slot games – The Osbournes featuring Ozzy, Sharon, Kelly and Jack and Hitman, featuring Agent 47, a ruthless

GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

>> GLOCALISATION WAS PAID A GREAT DEAL OF LIP SERVICE BEFORE, BUT THIS YEAR THE INDUSTRY HAS HAD TO WORK AT IT. WE ARE NOT ALONE IN HAVING PUT IN PLACE A FULL LANGUAGE SUPPORT NETWORK. WE NOW OFFER GAMES IN 19 LANGUAGES, TOGETHER WITH MULTICURRENCY INTEGRATION. BY ALSO OPENING OFFICES IN SOUTH AMERICA, MANILA AND SINGAPORE, MICROGAMING IS UTILISING LOCAL EXPERTISE AND PROVIDING ON-THE-GROUND SUPPORT IN THESE IMPORTANT EMERGING MARKETS – A SERIES OF HUMAN CULTURAL ANTENNAS >>

assassin (who hit the big screen in November). We would expect further licensing deals to be at the centre of our growth and retention strategies and move completely centre stage in 2008 and beyond. The cumulative effect of this has been to make gaming ever more involving and entertaining, although that could not have happened without technical advances.

TECHNICAL We at Microgaming have developed technologies that not only enhance the playing experience, but in some cases evolve it to new levels. In casino, we launched Multiplayer Viper (MPV), which takes a traditional single player slot game and transforms it into one that many people can play at once – effectively slot tournaments. A development of this nature has the potential to create the biggest casino gaming communities and jackpots ever seen. In poker, we start 2008 with the news that we are to release our most comprehensive and intuitive poker software to date. Taking our cues from what else is happening online – in particular the social networking boom, we now offer players tools to build and manage their own ‘social poker networks’ and buddy lists and have even taken things a step further, to allow them to create their own avatars – a la Second Life. Finally, the long-heralded promise of 3G finally began to emerge in 2007 (another thing I touched on a year ago). We have updated our mobile gaming platform, including our innovative wireless play-for-fun and real casino systems. GameWire™ - real-money mobile casino system, SpinFone™ - networked play-for-prize mobile gaming system and SpinLite™- play-for-fun casino style games are all distributed on behalf of Microgaming through Spin3. Spin3 has again been named ‘Best Mobile Gambling Company’ – the second year running, at the Mobile Entertainment Awards 2007.

REASONS TO BE CHEERFUL Microgaming can be rightly proud of the leading role it has played in industry self-regulation over the years, but particularly this year. Even as we made huge strides in leading technical developments in the industry, we always had an eye on the fact that we needed to regulate ourselves effectively and be seen to be doing so. So one of the things I’m most proud of is the fact that Microgaming has run a series of roundtables this year for the industry where we have brought together key people to discuss industry issues and solutions. An event held during

ICEi 2007 focused on responsible gambling. Not only did this bring together leading figures from our industry to discuss what more we might be able to do, but we were fortunate enough to have the Portman Group – the self regulatory body for the UK drinks industry in attendance to pass on valuable insight as to how they went about the creation of the very successful, industry-wide Drink Aware campaign. Our session directly led to the creation of an International Code of Conduct, which launched in Barcelona in October. The code, drafted by eCOGRA (eCommerce Online Gaming Regulation and Assurance) – of which Microgaming was a founding member – together with the Remote Gaming Association and leading charity GamCare, covers measures to protect players, customer communication, advertising and promotions, as well as staff training. While many jurisdictions already provide for a comprehensive set of standards in these areas, GamCare, eCOGRA and the RGA hope the code will be adopted as the uniform minimum standards that will provide clarity for players and operators from across the globe. Detailing 30 key points, the code took several months to draft and is based on the RGA’s social responsibility code. It was formally agreed by the key associations at a meeting in London in September. The timing of the launch was set to not only coincide with one of the industry’s biggest gatherings, but to also follow the launch of the UK Gambling Commission’s white list, which goes some way to protect UK players in terms of advertising. For all of these reasons it is a happier New Year than last and I predict that we as an industry will be in a better position still this time next year. CGI

ROGER RAATGEVER Roger, a trained accountant is one of the online gambling industry’s longest serving CEOs. Having joined Isle of Man based Microgaming over a decade ago; Roger has been instrumental in steering the company’s growth from just three employees to over 60, cementing its position as the world’s largest software provider.

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UGS HAS A GREAT SELECTION OF NEW TREATS FOR ATEI CIRSA, one of the world leaders in the gaming and leisure sector, is present in every industry segment, from the design and manufacture of gaming machines through the operation of bingo halls, route operations, casinos and lotteries. Within Cirsa, the B2B Division provides gaming machines to the Operational Divisions of the Corporation and also sells them to external clients. One of B2B Divisionâ&#x20AC;&#x2122;s brands is Unidesa Gaming & Systems (UGS), which is focused on casinos slots, electronic bingos, gaming machine control systems and bingo hall interconnection systems. UGS was founded in 1983 and today has become one of the mainstays of the corporation, focusing its activity on design, manufacturing, sales and services for casino and slot systems all over the world. UGS offers casino operators all the high quality solutions they may ever need with the technical service support to back them. UGSâ&#x20AC;&#x2122;s focus is on striking back in its natural and original markets like Latin America. The strategy of the company goes through a change of positioning and mentality, basically reinforcing the analysis of players and operators preferences and needs, added to the competitors strength and weakness in each of the worked markets. As a result of this new philosophy, a series of games have been developed with redesigned maths for each different family of games. Some of them have already been placed in a few markets some months ago, and at the same time other games have been tested, showing very good results in both cases. Finally, a new group of games will be presented next January at the ATEI Show in London. With models like Chaman, Bad Bad Kitty, Wonderful 50s, My Money Humps and all the immediate launches (which include a global solution, different games with their own multiprogressive jackpot), UGS is going to start striking back. UGS will not only present videoslots in ATEI, but also its novelties in others areas. UGS is going to show the effectiveness, reliability and integrity of its systems. The results speak for themselves, as we currently have interconnection systems installed or in production over the length and breadth of Spain. These include the SuperToc Lottery in Catalonia (awarded by public tender in 2005), Red Madrid, and Red de Bingos Andaluces. Also worth mentioning is the gaming machine control system, approved for and used in projects such as RETE in Italy, with machine control systems for 12,000 machines in 9,000 sites. UGS also relies heavily on the latest generation technology, as shown by its continued collaboration with Videobet, a world leader in server supported gaming, on a Server Based Gaming project. UGS believes that this type of system represents a cutting edge technology that is going to produce an enormous change in the Industry. To sum up Unidesa Gaming and Systems has star products and a great future potential, allowing CIRSA B2B Division to provide operators with a solid and reliable product range, and consequently, an increase in profitability, will be evident at the next ATEI Show. Visit Unidesa Gaming and Systems in the stand number 3300.

GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

THE UNCOMMON TOUCH: INNOVATING THE GLOBAL MULTISENSORY EXPERIENCE INTERVIEW WITH SCOTT HAGERMOSER

Technology is moving toward replicating what the human senses can experience in an increasingly simulated and interactive form. Our receptivity to this rapid march of innovation makes access to an expanding range of gaming possibilities ever greater worldwide. There is a sense that at every stage there is always something new just around the corner and that demands transitioning capability and rapid product-to-market capability.

GI: How did 3M Touch Systems first build its reputation in the gaming market?

SH: Well, that goes back to the early ‘90s and the era of the multi-game where you had one cabinet with multiple video slot games that could be added to. And from there it was a natural progression to add touch interaction with on-screen buttons. From that point, going down the touch path, we had the preferred all-glass, highly durable ClearTek™ capacitive solution. The other solutions in the market place at that time were resistive touch technology which didn’t hold up to the wear and tear of the casino environment. We did a lot of work with forward-thinking gaming companies at the time and that has obviously expanded over the years. Now, everyone is utilising touch technology for their games. So we were standard setting and continue to be so. CGI: Given that 3M is a recognised global brand today, 3M Touch presumably always had worldwide reach in mind? SH: That’s actually critical to our success. Even before becoming part of 3M, when we were MicroTouch Systems, we had a global organisation. Consequently, one of the aspects of the message to our customers has been this: We can work with designers and display integrators however far apart they are in the world and a large number, of course, are based in Asia. It’s our own 3M Touch Systems employees who are working with such customers in Korea, China and Taiwan; in Europe and the United States. So we can be supporting our customers on a 24 hour basis, rather than flying in a corporate representative or working through a Casino & Gaming International ■ 33

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regional distributor, which is the way other touch companies have gone.

CGI: What do you consider your strongest gaming markets to be at present?

CGI: That speeds up the process of getting to market...

SH: The globe! We are privileged to count among our customers all the major gaming OEMs in the world, whether European, US or Australia based – and their products go everywhere. As you travel the world it is interesting to see just how widespread that all becomes, whether it is going into Macau, into Japan or Vegas on The Strip.

SH: It definitely does. Naturally, when everything is going well everything works fine, but when a customer is in trouble – whether having difficulty meeting deadlines or there is a manufacturing detail to address – then it can be handled very, very quickly. Again, it is our own people handling this so they can go straight into our databases and determine what the issue is and what corrective action may be required, or recommend a solution necessary to adopt. Simply put, to be very Johnny-on-the-spot for the customer.

CGI: Following where the concentration of gaming development occurs is a given, so Macau must be a major draw for you? SH: We are certainly seeing a large increase and growing

>> THIS IS JUST THE BEGINNING OF THE NEXT LEAP IN GAMING TOUCH TECHNOLOGY AND WITH 3M’S MICROTOUCH™ CAPACITIVE TOUCHSENSE® SYSTEM, IT IS STILL VERY, VERY EARLY DAYS FOR TACTILE FEEDBACK. WE ARE TALKING TO MANUFACTURERS ABOUT THEIR MAIN GAMING SCREENS. IT IS ALSO NATURAL, OBVIOUSLY, FOR THIS TECHNOLOGY TO GO ONTO VIDEO-BASED BUTTON PANEL REPLACEMENTS. AS THE DESTINATION RESORTS ARE CREATED, PARTICULARLY IN ASIA, IT MAY WELL BE NECESSARY TO FOLLOW THE TREND OF MULTILINGUAL GAMES. THAT IS EASIER TO ACCOMPLISH NOW WITH THE MOVE TO DIGITAL TECHNOLOGY. A BUTTON PANEL WITH FULL SENSORY EFFECT (SIGHT, SOUND, AND TACTILE) IS SOMETHING THAT IS GOING TO BECOME THE STANDARD SO THAT AS OEMS BEGIN TO ROLL OUT THEIR NEW GAMES, THEY WILL AUTOMATICALLY ADD THIS DIMENSION TO THEIR GAME CONSTRUCTION BECAUSE IT WILL BE EXPECTED AND REQUIRED >> 34 ■ Casino & Gaming International

GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

>> THERE’S A REAL GROUND LEVEL TRAINING EFFORT WITH SLOT TECHNICIANS THROUGH SEVERAL ORGANISATIONS THAT WE PARTICIPATE IN. ALSO, WE ARE HOLDING MORE FREQUENT DISCUSSIONS WITH CASINO AND SLOT MANAGERS TO MAINTAIN AN UP-TODATE UNDERSTANDING OF THE FLOOR ISSUES AS THEY EMERGE. WE HAVE, AFTER ALL, A VAST ARRAY OF TECHNOLOGY THAT WE CAN BRING TO BEAR IN SUPPORT OF OUR CASINO CUSTOMERS >>

interest in slot machines there. Initially, those casinos opened up with very small slot machine installed bases – table games being and remaining primary. But every month there’s an increasing number of slot machines placed in Macau’s properties, both because of new construction and because the various resorts are expanding their installed base of slot machines. They see an increased need for them as people become more gambling savvy and, of course, as more and more travellers from other parts of the world go to Macau to gamble. So we are very interested to watch the growth of that market and we expect that to continue as the Las Vegas destination gambling resort theme catches on. With Macau it is not just gambling anymore, it is much more resort oriented with restaurants and hospitality, more so now than was originally envisioned I think. CGI: Large concentrated centres, ProjectCityCenter being a foremost example as far as Las Vegas is concerned, would seem commercially ideal for big take up of your product… SH: Clearly, as destination casino-resorts are created they are intent on attracting more than just the local market. At the local level they may be more table game oriented, but as the resorts are trying to appeal to an increasingly broader spectrum of customers, you will see ever more slot machines installed. CGI: Technologies tend increasingly to have shorter periods of calm before the next leap. I imagine we are going through one of those leaps now with much to come… SH: This is just the beginning of the next leap in gaming touch technology and with 3M’s MicroTouch™ Capacitive TouchSense® System, it is still very, very early days for tactile feedback. We are talking to manufacturers about their main gaming screens. It is also natural, obviously, for this technology to go onto video-based button panel replacements. As the destination resorts are created, particularly in Asia, it may well be necessary to follow the trend of multilingual games. That is easier to accomplish now with the move to digital technology. A button panel with full sensory effect (sight, sound, and tactile) is something that is going to become the standard so that as OEMs begin to roll out their new games, they will automatically add this dimension to their game construction because it will be expected and required.

CGI: Do you find that some properties are more receptive than others to the newer technologies? SH: Generally, OEMs are building cabinets and games and then shipping them worldwide. As new properties are opened up, especially those in the top tier, the call will invariably go out that they want nothing but the newest and the best for that property. Of course, not every property is of that sort. There are a lot of other properties where there is a need to fill the floor with good money-making machines and tactile touch games can help do that. CGI: Yes, it is clear that you can handle the tactile touch upgrade of existing slot games. However, it seems that most casinos – and obviously the new properties – would surely want the very latest systems rather than anything transitional? SH: Certainly for a good percentage of the gaming floor, I think that’s probably true. Again, for the major properties it depends on how much of the floor is given over to the OEMs presence and what their overall corporate arrangements are. We do see that the newer properties naturally tend toward the latest technologies and we are working with the OEMs on that basis, but we are also marketing into the casinos to ensure that slot managers are actually aware that this tactile touch upgrade is available, that they should be asking their gaming vendors for this. CGI: Is there much of a cost difference between a tactile touch upgrade and new system installs? SH: On a cost comparison basis it is probably about the same. Certainly, if a game software designer knows that that capability is available in the machine, he’ll design in features that optimise the technology. For those retrofit opportunities, layering tactile touch zones on top of existing games could be the answer. There will be, depending on what company the game is from, a greater or lesser amount of flexibility, advantage and value that this particular technology brings. We think the best solution is certainly from an OEM designing it in from the get go and accommodating or making their software interact through sophisticated sound and touch; the combination of what you hear and feel. All of that going together will make a much better experience than trying to do it after market. Although, having said that, customers have also told us that there is quite a bit of excitement that can be generated with existing software by simply layering tactile touch zones on top of it. Casino & Gaming International ■ 35

GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

CGI: Is there an effect from the lag in the changeover to the newer server-based gaming? SH: I think that people who already have games on their floor are looking at their budgets and wondering how, while they wait for server-based gaming to kick in at full speed, the games can be kept fresh and exciting with some additional features. We are in the midst of a replacement cycle right now which is probably proving to be a little bit elongated. CGI: Thinking of ‘immersive’, ‘tactile touch’ and ‘multisensory’ systems, why do you consider this effect to be a major breakthrough for the gaming experience today? SH: Well, a lot of different technologies have been tried to enhance the experience of customers operating traditional slots and the gaming industry has adopted touch very well. It has brought more excitement to the game, certainly in bonus rounds, and acts as a natural extension of the customers’ involvement through what they can actually feel, such as with the multi-sensory WMS ‘Top Gun’ game which has sounds generated through the chair creating a direct impact on the player. That feel tends to attract younger players, something a lot of floor managers are focussing on now. We see this as adding another element to the game and perhaps a draw to longer term players. CGI: Feedback and monitoring of the technologies used by casinos is a key aspect of judging customer interest for future developments. How do you see this? SH: There’s a real ground level training effort with slot technicians through several organisations that we participate in. Also, we are holding more frequent discussions with casino and slot managers to maintain an up-to-date understanding of the floor issues as they emerge. We have, after all, a vast array of technology that we can bring to bear in support of our casino customers. It may also be the case that we can improve what we are providing to OEMs because they have to service it as well.

risk assessments of moving forward with a company such as ours, and 3M does have a well-established reputation in the market place. CGI: There is a greater degree of interactivity with the advancing technologies deployed today and the link between land-based casinos and online is getting stronger. How do you see this? SH: As we move toward downloadable games that is certainly a step closer to an Internet-level of gaming. Clearly, the regulatory restrictions are significantly different in respect to Internet gaming. The question of how honest online gaming is certainly causes me to pause, whereas in a more regulated casino environment you have a much better and more tangible understanding of what is involved. CGI: This is out on the horizon somewhere but can you imagine yourself producing, say, a holographic device for the ultimate in immersive gaming experiences?! SH: We are some years away from something like that! But still, there are a lot of interesting new technologies in the market, a range of which are reviewed by us to see what can best be utilised in a gaming environment. It is an exciting time particularly as we move into more server-based gaming, and with TicketIn/TicketOut, there is no longer any cash in the slot machines: the whole mechanical structure, the look and the feel, the ergonomics of the machine and the fact it doesn’t have to be a big upright object any more – and it’s all going to be digital. You could have a situation where there are 20 people around a table taking up the same floor space in a potentially more communal type of environment. It means there can be a totally different paradigm of what a game looks like several years from now. CGI

SCOTT HAGERMOSER CGI: What has been the biggest deployment of touch screens? SH: There’s no single case I can think of. Because of the level of business we do with OEMs the vast majority of slot machines that go into any property will have our touch screens on them. That’s been true historically and we remain quite fortunate in that regard. So, you simply look for any one property with the most machines and you have your answer! CGI: Bearing in mind differing game types according to location, do you have differing levels of market access for your products? SH: Given that the gaming companies we do business with are the cream of the crop – something we are fortunate to have – gaming customers in other parts of the world tend to view that as a good enough recommendation. Companies all do their own evaluations from an engineering perspective and 36 ■ Casino & Gaming International

Scott Hagermoser is the Worldwide Gaming Business Manager for 3M Touch Systems, a wholly-owned subsidiary of the 3M Company (St. Paul, MN), focusing on touch solutions for casino gaming and entertainment applications. Prior to this role, Scott led Touch Systems’ new business development efforts for emerging touch technologies and was responsible for the ClearTek II capacitive product family, 3M’s flagship touch product. Before joining 3M, Scott was the Director of Business Development for MicroTouch Systems (Methuen, MA), holding various positions including product management for the MicroTouch resistive touch screen and monitor product lines. Prior to MicroTouch, Scott held positions at several information technology start-up companies. Scott graduated from Babson College (Wellesley, MA) with concentrations in Finance and Economics.

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PREDICTION AND REALITY: MOVING BEYOND THE BARRIERS INTERVIEW WITH MATTI ZINDER

A huge amount of knowledge and experience has been amassed over the last four years placing long haul mobile gambling operators in pole position for the stronger signs of growth detected for 2008. With deepening content enrichment, growing multi-functionality, network standardisation solutions in prospect and growing popular use, the mobile gambling industry is set for more intensive technological change.

GI: For the last four years it has been said dramatic growth in mobile gaming is expected but that has proved elusive, but what has been achieved in that time?

MZ: Quite a bit, although I think there was an underestimation of the barriers this industry was facing. Many people were associating the ubiquitous use of handsets with the experience that many people remember from the Internet. They were, in effect, saying: surely, the two have to work together? In essence that is true and there is a basis for a lot of optimism, but the technical and business barriers in the mobile space turned out to be much more significant than they are on the Internet. Having observed the growth in the online sector and gaining an understanding of the mobile space over recent years – and we were one of the pioneers in this industry – many lessons have been learned and a lot of the obstacles have since been overcome. We have reached a point now where a mobile explosion is within reach. Quite a few of our customers, in fact, are already seeing significant growth and I think we are seeing the beginnings of a very, very strong upward curve. Many of the barriers have to do with consumer acceptance, where many people still don’t believe they can gamble on their cell phones. When we try to market it, it is still a very sci-fi prospect for some. Even so, more and more people are becoming accustomed to utilising their phones as something that is beyond a communication tool. There is much more download activity, content function, photos, communities, bloggs, on the phone and that tends to increase trust in applications downloaded via the cell phone. Casino & Gaming International ■ 41

GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

We were, however, a little bit too early to predict this use of content on cell phones, but as the traditional interactive content market grows, mobile gambling content will grow too. Also, there are a lot of technology issues concerning settings. For instance, we realised that many people had issues setting their phones in order to be able to receive and interact with content on the mobile Internet. Again, that is not a concern on a PC. You click on Internet Explorer, usually, and away you go. On the mobile phone you have to make sure your settings are correct and that there are no download or application constraints. For mobile gambling use it’s a bit like the early days of AOL dial-up; it’s at that level. So, in terms of user experience, confidence and technology barriers, there has been a huge amount of knowledge gained. We are now at a point where we know what the optimal configuration is and what the hurdles are that need to be overcome. That is why we can be very confident that 2008 is going to be a strong year for mobile gambling.

MZ: I don’t think you can say there are one or two specific silver bullets. It was really a combination of many small advances that were made: a breakthrough in automatic phone settings; or enabling users with one click to configure their phones for any network in the World on any type of phone. Then there were usability issues we identified: game selection and user menus that we created and reconfiguration of GUI; integration of digital payment methods; the basic ability to accommodate over 800 different handset types – all of that simply required a lot of time to absorb and respond to before extensive phone coverage could be achieved. These are the main developments in an evolving process and, again, it took us a long time to gain the necessary experience and knowledge. CGI: And there is not likely to be a dot.com boom or bust situation with this process?

MZ: I say that every year! But I do think the difference is that in 2007 we could actually see the numbers and they are very, very encouraging and continuing to grow – better than we expected.

MZ: There is going to be a limit to the amount of industry players because no one is going to be able to work in this market unless they have the mileage of experience – hard earned lessons that are not applicable across the board from one developer to another. In respect of a dot.com boom comparison, those who were the peak entry team to the mobile gambling market from the outset and have taken the time, effort and money to learn the lessons – they will be successful.

CGI: In a way the adjustment is also a bit like the effect of the first mobile phones coming onto the market…

CGI: At the beginning of 2006 you suggested that there would be a different kind of mobile growth ahead. What has been the trend over the past year?

MZ: It is…

MZ: We are seeing a lot of interest from land-based operations aiming to extend their activities into the mobile space. That has been a very, very interesting development in particular markets and I believe it is one that will continue on into the future.

CGI: As each year passes, of course, that has been the prediction…

CGI: What would you say were the key products or drivers over these past years that have brought us to where we are?

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CGI: Industry is often impatient for markets to develop and maybe in the light of the online concerns with the US UIGEA law, does that suggest there is a concern to remain cautious or, on the other hand, push the boundaries? MZ: There’s no question about staying within legal boundaries – nothing illegal. The bottom line is that there is a very significant business opportunity here, even though it has been four years in the making. Consequently, this would be an optimal time to enter the mobile market. In fact, it is nearing a point where taking advantage of that growth is going to be difficult by the end of 2008 in my view because it will be much more crowded. My suggestion would be to look very, very closely at the legal situation in whatever jurisdiction an operator is interested in if making a move in the early part of 2008. CGI: Different jurisdictions operate varying degrees of regulation have a concern for the effects of anytime, anywhere mobile gambling availability. Is this an issue for you? MZ: It’s transparent from our perspective because our system caters for any type of control that is required by the operator whatever the jurisdiction. In that sense the system is, so to speak, jurisdiction agnostic. CGI: It does appear that interactivity is the longer term key to sustaining mobile gambling customer interest. How do you see that evolving? MZ: That is very important and is actually one of the most critical success factors and probably will be so in any kind of interactive casino situation. Getting customers through the door is one thing, but to keep them interested, excited and continuing to provide them with entertaining experiences, that is quite another. That is where the real benefit is from an operational perspective. I will go on maintaining that position because there constantly needs to be an interaction with the client and that is a critical factor for success. CGI: At the 3GSM conference you spoke about the connection between a virtual Vegas and a mobile Macau. What is the reality of that? MZ: From the experience I have gained over the past few months it seems there is very significant interest in developing the connection between land- and mobile-based gaming – an area that we are exploring. Obviously, the operators are very cautious and taking care not to put their land-based casino operations at risk but, at the same time, there is a lot of interest in looking into how the mobile platform can be used to extend the players’ experience through the actual physical connection. That is where the market is headed and where we were at the end of 2007. CGI: Nevada has accepted hand held devices in casinos… MZ: That’s Wifi based and actually we see that as an interesting development that we are looking at very closely, but at this point in time we are focused on developments outside of the US.

CGI: How important for Spin3 has entering the Asian market been? MZ: That is extremely important for us and we are already beginning to see some results despite localisation, handset and game selection challenges, including difficulties relating to operating systems and carriers. This market is where most of the growth will be. CGI: That includes India? MZ: It does. CGI: How does Spin3 draw on Spiral Solution’s core business? MZ: That is very important because Spin3 is the tip of the iceberg. In order to provide a robust and effective mobile solution, you need much more than a client-server Javabased game, you need to have the tracking, business intelligence, risk management and CRM – all the things that comprise a suite of applications enabling an effective eCommerce and eGaming back-end which is absolutely critical to the success of this business and that is what we benefit from as a division of Spiral Solutions. There is also a benchmark to compare it with because Spiral Solutions is active in the online space. Therefore, we have an idea of what to expect when we compare the value, numbers and various other types of networks. We can definitely see that mobile players have a value that is on a par with or higher than online players and that is encouraging. CGI: The other part of that equation is the Microgaming partnership, a company whose pedigree is well known. How would you say Microgaming promotes and adds value to Spin3? MZ: The partnership works very well and in many cases it has helped us to bolster our image as a trustworthy and credible provider of systems… CGI: And monitoring standards in such a partnership is an important factor… MZ: Everything we do is monitored by eCOGRA and that is important to maintaining that credibility and trust. CGI: With betting conversion to mobile gaming formats, do you see that as a mainstream development creating fewer distinctions between betting and gaming? MZ: Absolutely, this is already happening with Ladbrokes and we are leveraging their capabilities both with WAP betting and in their shops. CGI: But does mobile gambling risk drawing the online customer away or is there a crossover occurring? MZ: At this point there are two distinct client sets and no direct connection between online gambling and the mobile space, but as the online market matures and becomes more Casino & Gaming International ■ 43

GLOBAL GAMING: ONLINE, INTERACTIVE & MOBILE

tech savvy to make the move into the mobile space that will probably begin to happen in the near future.

types, do you see a standardisation of networks occurring anytime soon?

CGI: With the proliferation of mobile game types driving competition there is a need for ever more innovative features. In your estimation what are the main ingredients for a winning format?

MZ: One of the things we are very interested in concerns applications that don’t run on downloaded components but rather on web-driven applications such as Flashlight. That would immediately reduce compatibility problems because it would have a ‘build-once-and-play-everywhere’ capability. Unfortunately, the Flashlight take up hasn’t been as significant as we expected…

MZ: Ease of use, functionality. Buttons need to be clear and easy to understand. The game needs to be clean, simple and very quick to play. We look at the overall flow from the moment the player downloads and is engaged with the game right through to registration, purchasing and player support: everything at that level must be extremely streamlined. The gaming and graphics obviously need to be rich and exciting; fun to use and attractive and it needs to make the player want to come back and play some more. CGI: Having said that it is difficult to see how you can replicate the detail and range of online with mobile formats… MZ: You can actually recreate that as most mobile screens today are very high quality. Even though it is a small package you can still get that critical definition and clarity. CGI: OnCash may be treading new ground in landbased casinos, but how is this working out and where is it proving to be most popular? MZ: A lot of interest is coming from South East Asia and this product is allowing us to overcome barriers of confidence and trust: when a player places a £50 note that is the limit of the players’ exposure. On top of that the player is in touch with a physical person that can be seen and that significantly increases the level of confidence, breaking down the barrier of acceptance of the game. We see that as a major factor. CGI: Is this being readily taken up by casinos? MZ: Yes, in some cases, but it depends a lot on the locality and on the willingness of people to try new things. Obviously this is a commercially sensitive area but I can see that in some areas there is a very, very strong take up. CGI: How strong is your representation in the Mobile Entertainment Forum and GSM? MZ: On the mobile entertainment side we are well represented, having won two consecutive awards in 2006 and 2007 as the best gambling company in the overall spectrum of providers of content in the mobile entertainment sector. In fact, without taking too much credit, our involvement was one of the reasons gambling was introduced into the entertainment awards structure. At the 2006 3GSM award for best ‘Made for Mobile’ game we were runner-up to a Korean company that made a ‘stone skipping’ application, but in such a world premier event that did make waves for us. CGI: Although there are a vast number of handset 44 ■ Casino & Gaming International

CGI: Why is that? MZ: There may be some licensing difficulties, but again, it is another one of those issues that relate to the complexity of the mobile content business. It makes it that much more complicated, but once there is general acceptance of Flashlight that will definitely make a positive difference. CGI: Will interactivity lead to greater mobile use? MZ: That is still in the realm of speculation at this point. It is probably going to take a few more years and at the earliest it will not be until sometime later this year before we can even seriously assess that at all. Although we are keeping an eye on the possibilities, our primary focus at the moment is specifically on mobile content and the migration from landbased operations – that’s the current interest. CGI MATTI ZINDER Matti Zinder is the founder and CEO of Spiral Solutions Ltd., a full-service interactive marketing, advertising and technology development firm established in 1999. Foreseeing the direction where interactive gaming was headed, in 2003 he established Spin3, a division of Spiral Solutions, which to date is credited with developing and rolling out one of the leading mobile gaming solutions worldwide. Spin3 has been nominated as the Best ‘Made for Mobile’ Game system at the Mobile Entertainment Forum 2005 and at the World 3GSM conference 2006. In 2005, three leading full-service UK mobile casinos were launched using Spin3’s proprietary platform and technology, and earlier this year, he was named one of the 50 most important individuals in mobile content worldwide by a respected and leading wireless industry publication. Matti has become a leading voice and authority in the area of mobile gaming, and has served as a keynote speaker at many international wireless industry symposiums and conferences, including the Mobile Entertainment Forum, Mobile Gambling Forum, MEM Asia and the Mobile Gambling Summit Asia. Prior to founding Spiral Solutions, Matti served as the Director of Marketing/East Asia at Elbit Defense Systems, a global defence electronics company and as Vice President of Marketing at eSafe Technologies/Aladdin, a NASDAQ listed company. He holds degrees in Chinese and Far Eastern studies and Business Administration from the Hebrew University in Jerusalem. Matti Zinder is proficient in a number of languages, including Mandarin Chinese, Hebrew and Arabic.

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ALL THE BOXES TICKED Domicilium were delighted to be one of four finalists in the 2007 Datacentre Industry Leaders Awards. The competition was extremely stiff with some of the best known names in the Europe being represented. The evening in London in early December 2007 was attended by 500 members of the Industry. The event was opened by Right Honourable Iain Duncan Smith who spoke about a number of the key issues facing the Datacentre industry. From operating a number of smaller datacentre facilities on the Isle of Man and as a global IT solutions provider to organisations in the finance and gambling sectors, the decision for Domicilium to develop another hosting facility was a logical one. Domicilium developed a larger facility of 21,000 square feet, welcoming the first client in December of 2006. At the end of 2007 planning for stage two of the expansion accounting for another 100,000 square feet began. The expansion programme is founded on two main areas of opportunity. The first opportunity is based on the suitability of the Isle of Man as a location for data facilities. The island is one hour’s flight from the City of London Airport but since it may represent a remote location for skilled sub-contractors, key suppliers have trained local sub-contractors to a level necessary to provide 24/7 support. Increasingly, the island is subject to due diligence activity as organisations traditionally based within the M25 become concerned about power problems and the implications of the Olympics, the shortage of suitable space and the threats that are attendant on high-profile Central Business District locations. The Isle of Man generates 180 MW of electricity through three power stations of which it uses a fraction, selling on the surplus to the UK. There are few of the physical threats found in large mainland cities and a stable Government that is committed to the island’s prosperity. The island also offers a fully fibred-up communications infrastructure including two SDH rings and multi-terabyte capacity. The opportunity presented by location needs have only been realised by the development of a clear strategy for formulating, communicating and deploying a set of services to meet market needs. Domicilium’s proposition, based on extensive industry consultation and segmentation is very simple – to offer the market what it currently requires additional to the core requirements of resilience and security and, perhaps more critically what it will require over the next ten years rather than offering a more traditional ‘one size fits all’ approach. Therefore, the first stage of the project has broadly divided the available space into two sections, a hosted area and a modular datacentre area with the capability of adapting space in either section as demand dictates. This means clients are able to specify exactly the level and configuration of services that they require from a fully managed service all the way to the basic provision of space, power and cooling. The need for flexibility and attention to future growth that Domicilium believes to be missing in the market at the moment can be catered for by facilities designed and built on the principle of modularity. Large hosting areas can be subdivided into smaller dedicated hosting rooms each with its own provision for security, power, UPS and cooling. Such sub-divisions have already been incorporated through the use of spare outlets on the facility’s distribution boards. The modularity of design enables also updated equipment to be introduced more easily as load densities grow. Flexibility of service levels is represented by the range of clients from those who completely outsource all aspects of their IT infrastructure to those who manage their own equipment within the facility. The success of the new facility can best be judged by the fact that further expansion is already underway. It has enabled Domicilium to develop markets beyond its original base in offshore finance and gaming, among both mature organisations wishing to invest more substantially in IT facilities and start-up companies looking for lower levels of initial investment.

MALTA: PAYMENT SOLUTIONS VIEWPOINT

WHERE IT ALL STARTED BY VINCENT BEZZINA

Internet card processing is fraught with concerns for the security of payment transactions and the online gaming industry, especially at risk, is on the verge of benefiting from stronger evolving technologies providing tools that offer the means to tackle fraud detection and protection; and produce simpler user-friendly verifiable processes, including traceability and reconciliation functionality.

he Internet is such an integral part of our lives these days that it’s hard to imagine life without it, yet much of what we call the Internet has happened in less than a decade. At first the Internet was seen as just another communication channel – first there was radio, then TV came along and now we have the Internet. Sure enough the first successful entrepreneurs on the Internet made their money through advertising. Even today, one of the stars of the Internet world – Google – makes its money based on this model. Yet very little of the business that takes place on the Internet these days is based on an advertising model; instead goods and services are bought and sold requiring the transfer of money to seal the deal. Without this business activity taking place directly on the Internet, it would itself be little more than a vast catalogue of brochures, technical and academic data. The solution for financial transactions over the Internet is credit cards and debit cards but ask any person who has made a payment over the Internet and you’ll think they were talking about taking a bungee jump. The situation was much worse for merchants wanting to accept transactions online – the general requirements included the ability to perform triple backward somersaults while holding a glass of Martini. Here was a payment solution that was practically instantaneous, worked 24/7, was automatically multi-currency and already familiar to users. What followed afterwards was like a remake of the movie Zulu Dawn. The problem with Internet payments turned out to be a lot about the problems with the payment industry itself as much as with the Internet. For years, Visa and MasterCard, to mention but two of the usual suspects, adopted a complacent,

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talk-to-the-hand policy; the hand in this case was the banks that issued the cards or gave acquiring services to merchants. Back in 1999 it was still common to get your card number printed on your receipt at the point of sale and ATM machines did the same each time you withdrew money. So, was there no fraud prior to 1999? Hardly, but the Internet brought anonymity and convenience, and it turns out that when no one is looking morality values get flexible. To top it all off, take away the reassuring smiles and general body language of normal face to face interaction and for many people, paranoia sets in, adding to pressures online merchants had to deal with. So what was the ‘hand’ doing while all this was happening? The banks effectively had one remedy to deal with fraud – make sure that someone else paid for it. In the meantime, online fraud became a thriving well-organised industry. Then the online gaming industry took off and a new chapter was added to the story. Here was a way to actually turn stolen credit cards to cash. Online gaming operators effectively could be used in lieu of a bank – fraudsters would pay money in by card then request a withdrawal – except the withdrawal could only be sent to a bank account controlled by the fraudster. A side industry soon developed fueled by the profits that could be made – Identity Theft. Opening a bank account, setting up an account with a betting operator – all this required an identity.

PRESENT DAY Now fast forward to 2008 and the situation is very much changed. Dare I say – we have never had it so good! In 1999 I started the “Endeavour Payment Gateway” a Payment Solution Provider approved under the Payment Card Industry Security Standards. Endeavour has been at the pioneering edge of payment technology over the last nine years and today operates through a network of eight banks. The changes to the payment industry have been many and we are now starting to see the benefits. Let’s look at some of these changes.

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3DSECURE The solution to fraud and chargebacks has been in the making for a number of years and is called 3DSecure; it encompasses schemes operated by the major card brands. Visa calls its scheme ‘Verified by Visa’, while MasterCard calls its scheme ‘Secure Code’. 3DSecure works by allowing a card holder to identify himself directly to his own bank; it harnesses the Internet to allow real time collaboration between the bank that issues the card, the bank that collects payments for an online business and the card holder himself. A payment gateway is involved that orchestrates this collaboration seamlessly and transparently. For a business accepting payments online, 3DSecure is a dream come true. Payments are accepted online without the risk of chargeback. Businesses can grow their online operations without costly verifications and losses to fraud. For a card holder, if his card is still not participating in 3DSecure he will not notice any difference when he makes a payment, even if the online business is using 3DSecure. Should his card be enrolled, however, after he submits his credit card number and general details he will find himself automatically redirected to a web page operated by his bank. Here he will see a personalised message registered on enrollment as a security measure to assure him he arrived at his bank’s website. He will then identify himself through a password and on completion will be redirected back to the original website to finish off the payment process. The whole process is completed in less than 30 seconds. The cardholder need not worry about having his card number stolen – without his password the payment would be rejected and the password is shared only with his own bank and no one else. The Endeavour Payment Gateway has been offering the finely tuned Verified by Visa and Secure Code for quite sometime.

NEW PAYMENT PARADIGM With 3DSecure the payment paradigm has changed. The client must now participate in the processing of his card and payment gateways can no longer be used as a background

MALTA: PAYMENT SOLUTIONS VIEWPOINT

process to take money from a client at the discretion of the merchant.

PAYOUTS On the same footing as 3DSecure itself, the ability to send winnings back to a credit card has been probably the most important development for the online gaming industry. This is available for Visa, with MasterCard expected to also allow payouts eventually. Earlier we mentioned how the betting industry was targeted by fraudsters because stolen credit cards could be cashed out under the pretext of a withdrawal. With the ability to send money back to a credit card, even in excess of what was deposited, this vulnerability has been closed off, at least for Visa.

FRAUD DETECTION At the same time, fraud detection continues to play an important if redefined role. Before 3DSecure a lot of third party fraud detection systems were on offer; some of these were more fraudulent then the fraud they supposedly detected, generally they were costly and overall not very effective. The main problem with these third-party solutions was that they where at the wrong place and at the wrong time to stop the fraud. Now we are seeing fraud detection being deployed at the acquiring banks; since the acquiring bank is seeing all the transactions happening on the cards it issued it alone is in a unique position to apply effective fraud screening. Payment gateways still carry out a lot of fraud screening and in addition can deal with a whole section of screening techniques that are specific to the Internet and which are beyond the scope and competence of the banks. Within the Endeavour Payment Gateway, the fraud detection system is called Phalanx. Phalanx employs a range of sophisticated techniques to profile, cross-reference and detect fraudulent transactions, suspicious activities/profiles and source of transactions. The sophistication of some of these techniques has only been achieved through sustained research and development carried out for so many years in the industry. Over the last decade we have seen the deregulation of the gaming industry - moving away from state run monopolies towards a free market model, albeit licensed and regulated to enforce responsible gaming and protection of players. The results have been spectacular; the growth phenomenal. The flip side of the coin is that the market place is crowded and the competition intense. Bonuses, better odds and free rolls can only work for so long; indeed many operators that based their strategy on this approach have run out of money and ceased operating. The focus has shifted from a strategy based on freebies to a strategy of customer service/satisfaction and maximising turnover in particular by not losing payments.

NOT LOSING TRANSACTIONS It turns out that your payment gateway can have a big impact

on your customer service and with the advent of 3DSecure, the payment process cannot be relegated to a background process hidden away from the customer – but rather one in which the payment interface plays a central role. Endeavour has made a major investment in 3DSecure, the focus of which has been to: ■ Enable smooth operation of a 3DSecure Payment ■ Assist clients who are confused or wary of a new payment process. ■ Recover lost business by bringing back the client and completing the payment process. Careful monitoring and detailed analysis of transactions shows that these efforts have been successful. The clients that interrupt the payment process when confronted by 3DSecure for the first time do come back, finish the payment and do not have a problem again.

REJECTED TRANSACTIONS Some transactions will always get rejected. Understanding why transactions are rejected is quite a science in itself – the reasons are varied and complicated. However many transactions can be recovered. The Endeavour gateway now offers information that helps recover lost transactions. Often times this information is appreciated as much by the client as the merchant. Consider a player getting pretty frustrated with a website because his deposits are rejected. If the merchant is able to tell the client that the card was used too many times that day and would work the following day that merchant would get the extra business plus a happy customer.

CUSTOMER SATISFACTION Gateways play a role in the interaction with the customer and therefore can play an important part in ensuring customer satisfaction. The number one concern for a customer sending card details over the Internet is clarity and peace of mind. For example, on the Endeavour Payment Gateway, customers can receive the confirmation email in their native language, an important feature for the European Market. Even ensuring the email is delivered is a major issue, when a gateway is sending thousands of emails per minute; it looks very much like a spammer. Ensuring delivery of emails at this scale of operation becomes a science.

RECONCILATION AND MERCHANT TOOLS Invariably clients will have questions about their payments – and the tools offered by the payment gateway to the merchants to deal quickly and efficiently with these queries forms an important part of the customer satisfaction arsenal. A much neglected area is the ability of the merchants to carry out reconciliation and make sure that all payments are reconciled. Buggy software often times at the bank, and sometimes within the merchant’s website, can lead to lost payments, double payments or transactions unpaid by the bank to the merchant. Caught in time, most credit card issues

>> SECURITY CAN NEVER BE SACRIFICED FOR EXPEDIENCY; INSTEAD THE PAYMENT GATEWAY NEEDS TO MEASURE UP TO THE TASK, REDUCING COMPLEX PROBLEMS TO SIMPLE SOLUTIONS ANY MERCHANT CAN WORK WITH >> Casino & Gaming International ■ 53

MALTA: PAYMENT SOLUTIONS VIEWPOINT

are easily dealt with – in fact, the traceability of credit card payments is a big advantage for merchants and cardholders alike – but disputes within the card industry carry a time limit within which they must be resolved. Detecting where the reconciliation problem is can be next to impossible without proper tools. Again, banks are generally poorly equipped to deal with reconciliation issues and simply pass the responsibility to the merchant. Recognising the importance of reconciliation, Endeavour has introduced reconciliation modules with most of the banks it works with, greatly facilitating this tedious but essential task.

LIMITING THE BURDEN ON MERCHANTS The Internet is based on technology and technology is complex and rapidly evolving. Back in 1999 anyone with a knack at web design could fancy himself a web expert. Things have come a long way since then and the level of complexity involved is no place for amateurs. The security implications alone are mind boggling. Any form on your website can be a vector of attack. Servers have to survive denial of service attacks, intrusion attacks and everything else in between. Every flaw is exploited within hours of being made public. Browsers themselves are compromised or misunderstood. Follow through these simple examples:

PCI compliant Payment Solution Provider (PSP), then that merchant will be responsible for any fines resulting from the hacking of the PSP. The merchants are expected to act responsibly. Storing of credit card information is rarely a case of responsible behaviour and as we have seen even the largest organisations with presumably qualified personnel can be hacked. Quite simply, these organisations are acting outside the scope of their core competencies. Endeavour has worked closely with its merchants to understand why credit cards may need to be stored. Within gaming, a number of reasons come up, some of which are: ■ Payouts ■ Detecting if registered card details have changed ■ Refunds and Cancellations ■ Fraud Detection Endeavour has found ways to ensure that the merchants are able to carry out all their requirements without having to store card details. Security can never be sacrificed for expediency; instead the payment gateway needs to measure up to the task, reducing complex problems to simple solutions any merchant can work with.

UNDERSTANDING THE GAMING INDUSTRY A client accesses your website and is viewing a webpage. He then hits a button and moves to another page on your website. The data arriving on the second page is coming from the first page with the addition of any extra data that the client may have entered.

The risks with online payments for a sportsbook are different to the risks for a casino and both are different to a poker network. Endeavour is very involved in the gaming industry and has turned this experience to a profit for its merchants.

OVER THE HORIZON The above statement is already wrong! The data is actually coming from the browser of the client running on the client’s computer. If the browser itself is compromised, the data received from the first page to the second page can undergo substantial modifications.

A second scenario, a client downloads a secure page. The browser shows the padlock sign and everything looks in order. The client fills his card details and hits the send button, knowing that his data will be protected with SSL encryption while in transit between his computer and the website. The above statement is again wrong! The padlock shows that that data for the form itself was downloaded over SSL. The actual post itself can quite easily be happening over a normal unsecured connection. Having said all this, merchants need not be IT experts. Indeed, many successful merchants are very knowledgeable of their respective markets but with scant knowledge of technology. It is the role of the payment gateway to carry as much of the security burden as possible – allowing the merchants to focus on their business – namely getting the clients up to the payment page and providing the customer service there after. The truth of the matter is that some payment gateways themselves are poorly prepared to be an online business themselves. The Payment Card Industry Security (PCI) standard was introduced to deal with these situations. The Endeavour payment gateway has been compliant with this standard from the very early years when it was introduced. If a merchant uses a payment gateway that is not an approved 54 ■ Casino & Gaming International

What does the future hold for the card industry? The Euro zone has made the EU a more homogenous and therefore a more attractive market place. The Single European Payment Area (SEPA) will lower the costs for bank transfers and will open access to the multitude of debit cards in Europe, which right now can only be accessed through local banks. The gaming industry is very susceptible to the payments sector; anyone doubting this fact has only to look at the approach the US took to stop remote gaming. For the European market at least, there is reason to be optimistic. CGI

VINCENT BEZZINA Vincent Bezzina is the CEO and founder of Endeavour IBS. He has over 20 years experience in information technology and has been involved in online credit card processing for the last decade through the operation of the Endeavour Payment Gateway. Within the gaming industry, Vincent has played an active role in helping gaming operations setup in Malta. Vincent has also undertaken work for the Lotteries and Gaming Authorities, helping setup standards for reporting and responsible gaming.

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CASINO SECURITY & SURVEILLANCE

PERFECTING SCALABILITY, INTEGRATION AND DATA RETENTION AT ALL LEVELS INTERVIEW WITH KONRAD HECHTBAUER

Casino security is clearly moving towards large-scale projects and the Venetian Macao is the most prominent. On day one 70,000 visitors rushed in within the first six hours. The CCTV system commenced operations that day. More than 3,500 channels were installed and an expansion up to 5,000 channels is planned. Also the Sands, Venetian and surrounding hotel facilities are scheduled to be integrated into one interconnected network controlled from one main control room. That will turn the project into the world’s largest casino surveillance system with fully digital matrix. This raises the question of how such large-scale projects can actually be handled and what needs to be considered when choosing a video surveillance system for casino applications.

GI: Generally, what needs to be taken into account during the planning and installation of a video surveillance solution?

KH: In order to successfully implement a CCTV project it is essential to clarify a few issues beforehand. Such as: what does the individual customer require from his surveillance system? What conditions are set in terms of infrastructure and network, and how can the solution be integrated into already existing systems? Only by receiving competent and appropriate advice right from the beginning, the customer can rest assured that he the solutions offered will eventually match expectations. The quality of the products is just as crucial. The on-site installation of the system should be monitored by experienced staff to make sure that the recording devices will be operated appropriately. For example, the recording devices should be operated in airconditioned, dust-free rooms. Subsequently, the customer’s technicians as well the operators should be thoroughly trained. CGI: That sounds like a highly complex and diverse assignment. How many specialists are needed to get things up and running? KH: Ideally the customer appeals to only one competent reference person, no matter if the issue relates to cameras, recording, network, interfaces with third-party systems or the management. This makes it easier for the customer and also ensures that a comprehensive approach to solution is found, covering all important aspects. Last but not least, a perfectly integrated system obviously provides higher picture quality and better functionality than individual components from different manufactures. Casino & Gaming International ■ 59

CASINO SECURITY & SURVEILLANCE

CGI: You just mentioned some important components of a video surveillance system. Is any CCTV camera in fact suited for casino applications? KH: Cameras form the first element of the system and should therefore be chosen particularly carefully. For the logic is simple: even the best recorder can only record highquality images if the camera provides a good signal. Which means that one should only use cameras that are able to deliver high-contrast and colour-true images even in difficult casino conditions. Unfortunately, conventional standard CCTV cameras are usually overcharged with the lighting conditions in a casino. That is why Dallmeier has used its over twenty years of experience to produce its own cameras, using the latest Pixim DPS technology as the basis for the in-house development of the Cam_inPIX® technology. With this innovative camera technology it is now possible to solve familiar problems of the video surveillance technology that have previously been deemed unsolvable with the use of conventional technology.

The most extreme lighting conditions, such as backlighting or images that are constantly changing due to environmental influences, can be mastered even in extreme situations using the Cam_inPIX® technology. Dallmeier even upped the ante: the cameras were adjusted to the special requirements of casinos. This was the beginning of the Dallmeier CasinoCam®, a special camera that, thanks to specifically developed software, is able to provide quick and optimal adjustment to the different scenarios in a casino. Besides, the technology aesthetic is just as important for casinos. It is important that the CCTV system seamlessly integrates into the interior design: The cameras should blend in with their environment and not stand out like an afterthought. Finally, that provides for a more pleasant atmosphere because guests and visitors don’t feel like being watched all the time. CGI: What are the important factors when it comes to image recording?

>> WE HAVE PLANNED AND REALISED THE BIGGEST REAL-TIME IP SYSTEMS IN CASINOS WORLDWIDE AND ARE KNOWN AS AN OUTSTANDING PIONEER IN THE SECURITY INDUSTRY. JUST A FEW STATISTICS TO BRING HOME THE SIZE OF THE SANDS CASINO: WE ARE TALKING HERE ABOUT 3,000 DALLMEIER ENCODERS. SO WITH A TOTAL STORAGE CAPACITY OF 1.2 PETABYTES WE HAVE BROKEN THROUGH THE MAGICAL SOUND BARRIER OF THE PETABYTE. THAT, BY THE WAY, IS A FIGURE WITH 15 ZEROS! >> 60 ■ Casino & Gaming International

CASINO SECURITY & SURVEILLANCE

KH: Over and over again you hear discussions about various approaches. For instance: whether or not central data storage is better than decentralised storage. When talking of a CCTV/IP system, we must not forget the main reason for installing a surveillance system, which is to ensure reliable recording. In order to provide maximum failure safety two points should be kept in mind. Firstly, the individual availability of all components, depends on the quality of the products and secondly, the availability of the complete system. Around the world we have planned and installed the largest realtime/IP systems in casinos. Our many years of experience show that a highly-available storage directly at the encoder is the best solution. Because then storage is networkindependent and therefore remains intact even in the case of disturbances or a complete network failure. Since commissioning of the system at the Sands Casino, not a single loss of data has been reported. CGI: The term “Five Nines” often comes up in that context. What does it actually mean? KH: In the IT world the availability of a system is measured in “Duration of uptime during the total time” and expressed as a percentage. A 7x24-system with 99 percent availability can malfunction 3.6 days a year, a 99.99 percent available system can do so only 52 minutes and a 99.999 percent (five nines) available system only five minutes. Owing to a sophisticated technology and intelligent structure Dallmeier video systems achieve an availability of 99.99994 percent, which is even better than the Five Nines advertised throughout the IT world. CGI: Are the costs for a high-availability system not going to be very high? KH: Despite high availability, Dallmeier systems are not more expensive than conventional casino solutions with far lower availability rates. The opposite is true: they offer further cost benefits, which are achieved through high saving of space, energy-efficient operation or minimal downtime thanks to redundancies and hot-plug functionality. So there is no reason for customers to go with anything less than 99.99994 percent failure safety. CGI: What about the network for surveillance systems in casinos? KH: The network forms the centrepiece of a CCTV/IPsystem, as it takes up an important interface between the operator and the system. Modern networks offer sufficient reserves for all important operations in a casino. With appropriate redundancies the highest availability of neuralgic locations can be achieved and the whole network can easily be monitored thanks to elaborate management operations. When configured adequately, shortages such as an overloaded network can be detected at an early stage and eliminated. Modern casinos are fully networked. All important operations such as access control systems, cash management, gambling table surveillance, alarm systems, audio-/video transmission or complete management of a casino are carried out via IP. With adequate planning CCTV can be seamlessly integrated into the network.

Of course, in doing so, one has to ensure that the bandwidth requirements are not too high. Ideally, the network bandwidth is only used when it is actually needed, which is to say for the work of the operator and for management purposes, but not for recording. Furthermore, Dallmeier works closely with leading manufacturers of the network industry and is thus familiar with new developments and technologies ahead of everyone else. The best basis to provide optimal advice! CGI: You mentioned that Dallmeier has planned and realised the largest real-time/IP systems around the world. Aren’t such large-scale projects difficult to manage and how can that be done? KH: A complex and high-quality video surveillance system can only be controlled reasonably and operated efficiently with a sophisticated video management system. Because only a professional management system can ensure that the enormous quantities of data created nowadays by the recording of surveillance scenarios can also be handled by users. In choosing the appropriate hardware and software for the video management centre, the customer should especially pay attention to user-friendliness, flexibility and scalability. Then even the administration of bigger systems is largely automated thanks to ingenious features and tools. Interfaces for third-party hard- and software are also important. Good video management software should be able to not only control all products of its manufacturer, but also components by other manufacturers. This is especially important in case an existing surveillance system is being expanded. Mostly, the customer will not immediately use the whole system but migrate step by step. In that case the management software needs to be highly flexible and offer many interfaces for third-party components. Moreover, it has to be able to control other systems such as access controls or fire detection systems. In short: no matter how complex the underlying system is, its control using the video management software should be very easy. For only then, the operator will be able to control the complete system. CGI: You talked about expanding an existing system, but hybrid solutions seem to be the most advantageous solutions in those cases. Is that so? KH: That is what many assume but I have to disagree. As opposed to a hybrid solution a sole IP-solution has many advantages, especially with regard to failure safety, flexibility and costs. The failure probability is much lower with a sole IP-solution than with a hybrid solution. Moreover, with hybrid solutions a total loss of large segments is possible. The flexibility with pure IP solutions is much higher and costs are far lower because, with an analogue matrix, a larger cabling and installation expenditure is necessary. Hybrid Casino & Gaming International ■ 61

CASINO SECURITY & SURVEILLANCE

>> OUR MANY YEARS OF EXPERIENCE SHOW THAT A HIGHLY-AVAILABLE STORAGE DIRECTLY AT THE ENCODER IS THE BEST SOLUTION. BECAUSE THEN STORAGE IS NETWORK-INDEPENDENT AND THEREFORE REMAINS INTACT EVEN IN THE CASE OF DISTURBANCES OR A COMPLETE NETWORK FAILURE. SINCE COMMISSIONING OF THE SYSTEM AT THE SANDS CASINO, NOT A SINGLE LOSS OF DATA HAS BEEN REPORTED >>

KH: The Dallmeier digital IP matrix is designed so that cascading of the system is not subject to restrictions. Also, it is no problem to work across sites so that existing localities can be interconnected at a later date and controlled via one main central control station. This can provide a potential increase to well over 10,000 channels! CGI: Has Dallmeier specialised on mega projects?

solutions do not provide as much flexibility with spread out installations. Also, there are no hidden costs for system expansions like there are with an analogue matrix. When installing digital image memories, for instance, the digital matrix is already available, making an additional analogue component unnecessary. CGI: Assuming the customer has chosen an appropriate surveillance system, doesn’t the technology change every couple of years? KH: Even if the customer has found an appropriate system, technological changes should not be a problem. What is important is that the system is flexible and scalable and thus providing optimal investment protection for years to come. All Dallmeier systems are of modular design. The high flexibility of this concept makes extensions simple and straightforward. Whether it is hard- or software components, it does not matter, the modular design keeps the system open to new technologies and possibilities at any time – for example, if the client wants to integrate IP cameras into the system. In the case of an expansion it is not necessary to change the entire hardware because add-on modules can easily be added. Additional memory can also be connected without difficulty. By contrast, with conventional NAS storage systems complete system units like servers including storage systems need to be changed in the case of an expansion, as technologies have developed further over the years and are thus no longer compatible. Thanks to the flexible structure of the Dallmeier solution, however, it is possible to secure the investment for several years to come. CGI: But there are certainly limiting factors in the expansion of large-scale projects?

KH: As I said before, we have planned and realised the biggest real-time IP systems in casinos worldwide and are known as an outstanding pioneer in the security industry. Just a few statistics to bring home the size of the Sands Casino: we are talking here about 3,000 Dallmeier encoders. So with a total storage capacity of 1.2 Petabytes we have broken through the magical sound barrier of the petabyte. That, by the way, is a figure with 15 zeros! That’s the kind of scale we are working in here. However, we do not confine ourselves to just doing mega projects. The solutions which have proved themselves on a large scale, we also use in small scale projects. Because what functions on a large scale, also functions on a small scale – but not necessarily the other way round. CGI: What are Dallmeier’s plans for the future? KH: As a technology leader and total solutions producer we offer the complete range of CCTV and IP/IT security systems. And the basic principle we apply is to always make the latest technology safe and reliable, to provide the user with top quality and maximum user benefits in order to achieve our number one aim – a satisfied customer. CGI Note: Konrad Hechtbauer was interviewed just after Dallmeier the surveillance system was installed in the Venetian.

KONRAD HECHTBAUER Konrad Hechtbauer is an electrical engineering technician and Director, Project- & Application-Development with Regensburg-based CCTV/IP specialist Dallmeier. He has been working for Dallmeier for eight years and was most recently in charge of the planning, projection and commissioning of the Venetian mega project.

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JPM INTERNATIONAL: 36 YEARS OF INTERNATIONAL GAMING AND SUCCESSFUL INTERACTIVE GAMING INITIATIVES To spend almost four decades at the forefront of any given industry is a feat that many businesses could only aspire to, yet this is something that JPM have achieved. Since its inception in 1972, JPM has consistently delivered an exemplary gaming experience across multiple AWP, SWP, video products and online platforms. The company mission is to ensure that innovation and the desire to deliver an outstanding customer experience are at the heart of every new game or platform in development.

Today, many more households have access to interactive gaming platforms than ever before. Digital TV is set to reach 80 million European households by the end of 2007. Satellite will remain the prominent digital platform in 2007, accounting for 41 per cent of the European digital TV market (Source: Datamonitor). This is obviously not a market to ignore.

Having started life as a small business purchasing used slot machines and converting them into new titles, JPM experienced substantial growth during the early 70s when several of the company’s successful licenses such as Reel Crazy, Casino Crazy, Silver Ghost and Red Arrow were launched. Many of these titles are considered to be amongst some of the most successful in the amusement and gaming industry’s history. Even during challenging times in the gaming markets history – through the sale to Sega in 1996 and a management buyout in 2004 - the company’s dedication to delivering exciting new platforms has remained paramount.

Developing SWP offerings based on popular branded licenses is a very successful route to entry. Sky and Granada have already secured substantial revenue by developing key Intellectual Properties and franchises into interactive games. Granada’s ‘Coronation Street Pub Quiz’ was a hugely successful game built around a widely recognised brand. The game’s combination of challenging questions and instantly recognisable format helped support its popularity.

Looking to the opportunities in 2008, JPM will enhance the momentum gained throughout the last year and continue to bring a full range of new products to market ahead of the ATEI show in late January. The company is focussing its efforts on the burgeoning UK casino market with new titles already onsite with key customers. The first of these titles, Black Jack Switch, is a table game designed specifically for the UK casino market. Presented in JPM’s widely acclaimed Prestige cabinet the game is a ‘pay to play’ slot game designed on the highly successful casino table game of Blackjack Switch. The titles in the Tornado compendium games are: ■ Prophet ■ Cash Dive ■ It Came From Outer Space ■ Black Jack Switch ■ Poker ■ Roulette The Tornado compendium offers an entertaining mix of 3 slot and 3 table game formats. Aside from traditional gaming markets, emerging sectors such as interactive skill gaming markets offer betting businesses substantial opportunities for profit. This market is already outperforming many traditional offline market sectors.

So how do you make the most of this opportunity? The answer is simple: pick the right partners and the right content.

Looking forward, JPM expects this market to be driven by other popular franchises such as Catchphrase – a remake of the 1980s quiz show. When coupled with JPM’s Gameology gaming platform, which offers the same experience of pay-per-play gaming over numerous platforms brand owners can ensure widespread and secure distribution of its franchise across numerous platforms simultaneously. Interactive television and casual gaming websites are just the beginning. With mobile broadband handsets slowly beginning to dominate the market, brand owners have another platform through which to offer ‘anytime, anywhere’ content. Interactive gaming is fast becoming a mass market form of entertainment. Coupled with the growing number of brand owners securing additional revenue streams by combining popular franchises with SWP games we expect interactive platforms to dominate the casual gaming market for many years to come. In conclusion, the future is bright for JPM in all aspects of our product portfolio from traditional Arcade machines through to the new Video slots and table games and culminating in the exciting world of Interactive Skill Gaming. We will continue to evaluate new and emerging markets and recognise that both existing and new partnerships are key to our continued business growth within all gaming markets. Should you wish to discuss any aspect of your gaming business with us, then a warm welcome will be given to all on stand G600 at the forthcoming ATEI in January 2008 in London, or contact us via our web site www.jpm.co.uk.

US iGAMING PERSPECTIVE

JUST BEFORE THE DAWN: WHY GOVERNMENTS SHOULD COOPT, NOT COERCE, I-GAMING BY MARTIN OWENS, Jr

Internet gambling, which started at zero in 1995, is predicted to gross close to $25 billion dollars by 2010, in spite of everything the powers-that-be on three continents have been able to throw at it.20 Detection and enforcement against it are difficult even now. With the advent of new concepts such as the distributed Web (web 2.0), they look increasingly impossible. Every laptop is already a potential casino, and when gaming turns in earnest to mobile phones, it will find a platform which has already achieved worldwide market penetration. It is time to recognise there’s no beating ‘em. I-gaming will continue to grow, even as the disconnect between law and technology increases. Experience will prove, however, that the operators would be happy to join with governments, trading transparency and fees for legitimacy.

t first glance, it would seem that Internet and interactive gambling is on the ropes today. The United States Government not only passed the UIGEA, but renounced the WTO treaty clauses that might allow foreign Igambling operators access to the American public, even granting extra trading concessions to the EU, Japan and Canada to pay for that position. Germany’s federal states are uniting to ban I-gaming in defiance of EU Commission rulings, while online gambling executives are snared in airports on French Euro-warrants,1 and brought in for questioning in Tel Aviv2 and Shanghai.3 It is fascinating that the French, Germans, Israelis and Chinese have finally all come to an agreement with the Bush administration on something. But ironically, the opposition to gambling online and off has never rested on weaker foundations.

THE AMERICAN GAMBLING RENAISSANCE Suppressing gambling, online or off, is assumed to have a moral and religious basis. But closer examination reveals that there is no verse in the Bible which forbids wagers or games of chance - to the contrary, there are seventy instances of casting lots in the Old Testament and seven in the New.4 This ambivalence carried over to Colonial America. Gambling might have been anathema to the Pilgrims, but the Jamestown colony was financed by Great Virginia Lottery of 1612.5 In fact lotteries funded much of early America’s infrastructure – in the absence of a central banking system there were few other ways to accumulate capital quickly.6 Because gambling, useful or not, was also thought to be a social nuisance verging on crime, the Tenth Amendment to the US Constitution put it under the police power of the states, not the Federal government. American gambling’s Casino & Gaming International ■ 67

US iGAMING PERSPECTIVE

>> THERE COULD BE AN EFFECTIVE VOICE FOR THE INDUSTRY, AND A FOCUS FOR LEGAL REFORM AND REGULATION FOR INTERNET GAMBLING. UNIFORM CODES OF ETHICS AND CONDUCT FOR ADVERTISING AND THE OPERATION OF GAMING SITES COULD BE PROMULGATED, ALONG WITH STANDARDS FOR RELIABLE SOFTWARE AND PLAYING PLATFORMS AND RESPONSIBLE GAMBLING PROGRAMMES TO IDENTIFY AND HELP PLAYERS WHO DEVELOP PROBLEM BEHAVIOUR. THE FIRST STEP HAS ALREADY BEEN TAKEN: MANY OF THE MORE REPUTABLE ONLINE GAMBLING OPERATORS, VENDORS, AND SERVICE PROVIDERS CAN BE FOUND AS MEMBERS OF SUCH ADVOCACY GROUPS >>

fortunes rose and fell with the social tides of the 19th and 20th centuries. The states tended to allow gambling as an alternative to taxes when revenue was tight, and persecute it when seized by moral spasms. Lotteries fell into disrepute through scandals and the evangelistic Great Awakening of the 1830’s, but gambling flourished in the riverboats and saloons of the South and the Wild West. Lotteries revived after the Civil War but became illegal again when the nationally-played Louisiana Lottery was outlawed for corruption in the 1890’s. Meanwhile, Victorian morality combined with the closing of the frontier to close down gambling joints all over the country. By 1910 there were only two race tracks in the whole country.7 US betting revived after the World Wars, mostly through licensed pari-mutuel programs at horse tracks and the rise of Las Vegas. But the watershed event, the “third wave” of gambling, began in 1964 when New Hampshire became the first state in 70 years to authorise a lottery. This led to a

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domino effect as other states embraced gambling too – and not just lotteries, but gambling of all kinds. Casinos came to Atlantic City, New Orleans and Indian reservations across the country. Even straight-laced Iowa allowed riverboat gambling. Today 48 of the 50 States license some form of gambling. And the big difference this time is the state governments are not merely allowing gambling, but promoting it as a policy.

ENTER THE INTERNET The rise of the Internet was a completely unexpected wild card. Bookies began using the Web to takes bets about 1995. Based in low-tax jurisdictions offshore and burdened with none of the overhead of typical brick-and-mortar resort casinos, I-gambling quickly became a thriving proposition. By 2000 it had become a billion dollar industry, largely American in its origins but global in its applications. Governments had a hard time responding, especially in

US iGAMING PERSPECTIVE

America. Of course they disapproved of any gambling they weren’t taxing, but policing it was next to impossible. Extending state jurisdiction outside state borders can be tricky. Did the I-gambling business submit to US national or state jurisdiction by taking a US customer? To this day there is no US law or case that explains where and how this supposedly takes place. And American gambling laws are sadly out of date. Only eight states even mention the Internet in their gaming statutes; 16, in fact, lack a definition of what is and is not “gambling” in the first place.8 And Federal anti-gambling laws, even the new UIGEA, mostly depend on an underlying violation of state law to trigger them. The EU countries are in a similar situation. The Treaty of Rome clearly upholds the right to sell services across member borders, and gambling is a service. But private operators such as Ladbrokes and Betwin have been routinely barred, sued, even detained on criminal charges for attempting it. Countries which were normally leading Eurocitizens Germany, France, Italy - actively defy EU Commission pronouncements that the gambling markets should be opened. As with the US, allegations that the authorities are protecting the public morals ring hollow when the same authorities reap billions from monopolies selling gambling to the same public.

THE LIMITS OF COERCION On both sides of the Atlantic, national governments have reacted to the contradiction by attempting coercion, rather than cooperation. The US Department of Justice has gone so far as to announce that it does not recognise Congressional or state legislative measures which liberalise gambling laws and permit I-gaming, which it considers “a colossal criminal enterprise”.9 Incredibly, this includes the interactive and Internet assisted horse bets licensed in 29 states.10 France vies with the USA in strong-arm tactics. To shore up 19th century monopolies on lotteries (1836) and horse racing (1891)11, French authorities have detained or “invited to discussions” executives from Unibet (October, 2007)12, Group Partouche (March, 2007)13 888.com (February, 2007)14 and Bwin (September 2006).15 In July 2007, France’s online horse betting monopoly PMU lost a bid ban the Maltese company Zeturf from the French market,16 after years of similar suits against other bookmakers.17 But while the well publicised indictments, in these and other countries, are full of blood-curdling terminology such as “money laundering” (as in the case of Neteller) and “aiding and abetting”, seldom if ever are these prosecutions driven to a head with actual criminal trials. Mostly the authorities relent after a mea culpa and a de facto fine,18 likely because the legal basis for the charges might not withstand a court challenge. In fact, in cases such as Gambelli,19 they haven’t. If the aim of these campaigns of intimidation is to protect the public, moreover, they are failing. Precisely because governments have promoted their own gambling programmes for decades, the appetite for gambling has never been higher. Gambling is not merely legal, it has become normal. No longer a back-alley vice, it has become a lively and progressive part of the global entertainment industry. Allegations that our I-gaming is wholesome while theirs is immoral simply do not pass the straight-face test anymore. And particularly when the businesses in question are not fly-by-night cheating rings, but registered and reliable

corporations, the heavy handed use of administrative power (in default of a coherent legal position) does more harm than good. For such measures do not eliminate Internet gambling, but serve only to drive out its most law abiding and responsible element. Instead of publicly held entities answering to boards of directors, and licensed by national governments, the market devolves to “wise guy” operators, who have little regard for responsible gaming or consumer protection – and no interest at all in paying taxes. Application of the mailed fist, therefore, has not extended national jurisdiction over I-gaming, nor increased revenues. To the contrary, it reduces both.

TOWARD A COOPERATIVE MODEL The intense emotions that have arisen around I-gaming are scarcely justified by even the worst flaws of the industry itself. Rather, the combination of gambling and the Internet offers a rare opportunity to vent frustrations and fears which have been piled up elsewhere – by the accelerating pace of digital change, the paradigm shift to a global economy, and resentment of “top-down” decisions by increasingly remote central authorities. The fact remains, however, that I-gaming will not disappear. It will continue to grow, even as the disconnect between law and technology increases. Internet gambling, which started at zero in 1995, is predicted to gross close to $25 billion dollars by 2010, in spite of everything the powersthat-be on three continents have been able to throw at it.20 Detection and enforcement against it are difficult even now. With the advent of new concepts such as the distributed Web (web 2.0), they look increasingly impossible. Every laptop is already a potential casino, and when gaming turns in earnest to mobile phones, it will find a platform which has already achieved worldwide market penetration. And where is the government with the power or the resources to continuously monitor every pocket and briefcase? When we turn away from coercion and suppression, which don’t work and never will, we see the possibilities of cooperation. There are, in fact, several working examples to choose from: Cross-border gambling? It’s been smoothly operating in the US for decades. Lottery pools routinely cross state lines with programmes like Powerball and MegaMillions. Horse bets go one better and jump national boundaries as well. Depending on the Simulcast connection or online service package, Americans can bet out, on races in Canada, Asia, Europe, Australia, and South Africa. In both systems, the varying needs of the respective jurisdictions they serve are being met. The money flows undisturbed through prearranged channels, with due regard for differing gambling laws, tax structures, and even legal systems. The example of ICANN and domain names merits examination as well. ICANN, (Internet Corporation for Assigned names and Numbers)21 is a private nonprofit group which received the task of allotting URL addresses worldwide from the US Department of Commerce in 1998. The elected Board of ICANN, it supporting groups and membership also help to formulate policy for the growth and maintenance of the Net worldwide.22 Although there continue to be calls for ICANN to hand this function over to a UN-based organisation,23 ICANN remains the best solution. And this is another model that might apply to Internet and interactive gaming. Casino & Gaming International ■ 69

US iGAMING PERSPECTIVE

Since governments have come up against the limitations of their direct police power in relation to online gaming, why not try the other approach and legitimise a neutral party to administer the territory? If one or more responsible I-gaming nonprofit advocates such as the Interactive Gaming Council24 and eCOGRA (eCommerce and Online Gaming Regulation and Assurance)25 were to be given the same function over Internet gambling as ICANN exercises over URLs this would be an important step toward Internet gambling that is responsible, safe, and organised under a rational regime. There could be an effective voice for the industry, and a focus for legal reform and regulation for Internet gambling. Uniform codes of ethics and conduct for advertising and the operation of gaming sites could be promulgated, along with standards for reliable software and playing platforms and responsible gambling programmes to identify and help players who develop problem behaviour. The first step has already been taken: many of the more reputable online gambling operators, vendors, and service providers can be found as members of such advocacy groups. A final option would be to add an Internet gambling policy to the “bundle” of policies and principles agreed to by regional and trade organisations. Recent disputes in the EU and the WTO over national policy, however, point to the difficulties of building simultaneous multilateral entities of this kind at one stroke. Large working systems, it seems, began as small working systems, just as OTB and simulcast began as small-scale bilateral exchanges and then expanded into national and then global connectivity. It may be possible to modify and use existing small-scale or bilateral trade agreements for this purpose. But it is important that some mechanism for stability and legal approval be put in place, and soon. Right now, no one knows for sure what is legal about online and interactive gaming, and what is not; or where; or when. Governmental attempts to eliminate I-gaming have failed, not least because the moral certainties about the evils of gambling have been undercut by the governments themselves. Since the world’s appetite for I-gambling will only increase, along with the difficulty of controlling the technology, it is time to recognise there’s no beating ‘em. Experience will prove, however, that the operators would be happy to join with governments, trading transparency and fees for legitimacy. The alternative, to simply allow the current impasse to continue, will benefit no one who is honest. Attempting to outlaw I-gaming’s future will only serve to place it in the hands of outlaws. CGI 1

3 4

See, e.g. Chris Krafcik “Unibet’s Nylander Detained on French Warrant” Interactive Gaming News 23rd October 2007 at http://www.igamingnews.com See, e.g. “Victor Chandler’s CEO Apprehended in Israel” Nambling Notes 11th January 2007, Interactive Gaming News at http://www.igamingnews.com See, e.g.” Two Betex Senior Staff Detained in China.” 18th April 2007, Interactive Gaming News at http://www.igamingnews.com See, e,g. http://www.answers2prayer.org/bible_ questions/Answers/ decision/lots.html. Interestingly the scriptures also prescribe that sin be forgiven seventy times seven ( cf.Matthew 18:21-22) J. Ezell, Fortune’s Merry Wheel: The Lottery in America 30-32, 177, 204405 (1960) (hereinafter “Ezell”). Cited in Rose and Owens INTERNET GAMING LAW (Liebert 2005) Henry Chafetz, Play the Devil: A History of Gambling in the United States from 1492 to 1955 c. IV (1960). Cited in Rose and Owens INTERNET GAMING LAW (Liebert 2005)

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I Nelson Rose, Gambling and the Law (1986), p 3. Arkansas, California, Delaware, Florida, Maryland, Massachusetts, Michigan, Minnesota,, Mississippi, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Vermont and West Virginia. Also the District of Columbia. See “ US Charges Two Founders of Payment Services Company with Laundering Billions of Dollars of Internet Gambling Proceeds” press release, US Attorney’s Office, Southern District of New York, January 16, 2007. Available at http://www.usdoj.gov/usao/nys/pressreleases/ January07/Neteller%20Arrests%20PR.pdf Arkansas, Arizona, California, Colorado, Delaware, Florida, Indiana, Illinois, Iowa,Kentucky, Kansas, Louisiana, Massachusetts, Maryland, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Pennsylvania, Texas, Virginia, Washington, West Virginia, and Wyoming. See http://www.youbet.com, , http://www.tvg.com and http://www.xpressbet.com/ See, e.g.Thibault Verbiest,” France” I nternet Gambling Report, eighth edition, p 409 (River City Group 2005). Those covering games of chance were revamped in 1983. See FN 1 See, e.g. Emily Swoboda “Groupe Partouche to Appeal Ruling” Interactive Gaming News 20th March 2007 at http://www.igamingnews.com See e.g.” French Authorities Want to Question Former 888.com CEO” GPWA forum, 27th February 2007 at http://www.gpwa.net/forum/ See, e.g. Chris Krafchik, “French Authorities Nab Bwin Execs” Interactive Gaming News 15th September 2006, at http://www.igamingnews.com See, e.g. Thibault Verbiest “Breakdown of the Zeturf/ PMU Ruling” Interactive Gaming News 12th July 2007, at http://www.igamingnews.com See, e.g. Kevin Smith “French Monopoly Latest to Threaten Foreign Operators” Interactive Gaming News 25th March 2005 at http://www.igamingnews.com See, e.g. “Party, 888 Could Face $1.02 Billion Payout to US Justice Department”Interactive Gaming News 13th August 2007 at http://www.igamingnews.com ECJ Case C-243/01 Criminal Proceedings against Piergiorgio Gambelli and Others, Judgement of the Court, 6th November 2003. Available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX: 62001J0243:EN:HTML This estimate is by Christiansen Capital Advisers; available at http://www.cca-i.com/Primary%20Navigation/Online%20Data%20Store/ internet_gambling_data.htm/ See www.icann.org See ICANN@LARGE at http://members.icann.org/history.html#MITF (archive only); see also NAIS report: ICANN, Legitimacy, and the Public Voice: Making Global Participation and Representation Work 31st August 2001 available at http://www.naisproject.org/report/final/ See, e.g. Michael Astor, “US Internet Control Discussed in Brazil” Associated Press online, 12th November 2007 at http://ap.google.com/article/ALeqM5i97f7uYBNZeMce5rt3uSBMDT8L UgD8SSDBA81 See www.igcouncil.org See www.ecogra.org. The eCogra page also features a list of approved sites and portals, as well as a dispute resolution service for players who have a disagreement with one of the approved operators.

MARTIN OWENS, Jr Martin Owens, Jr is a California attorney specialising in the law of Internet and interactive gaming, and related issues, serving clients worldwide since 1998. He co-authored Internet Gaming Law with Professor Nelson Rose, America’s senior authority on gambling law (Mary Ann Liebert Publishers 2005), as well numerous other articles. He currently serves on the Editorial board of Gaming Law Review magazine. Comments and inquiries welcome at mowens@trade-attorney.com.

US, WTO & INTERNET GAMBLING POLICY

STATE OF PLAY: STILL NO CHANGE IN PROSPECT BY JOE KELLY

One would hope that the World Trade Organisation dispute will result in the dismissal of charges against Carruthers or Kaplan, or in otherwise encouraging US lawmakers to regulate and not prohibit interactive gambling. Chances of success unfortunately are about the same as the return of the Jacobite pretender to the throne of the United Kingdom.

n 21st December 2007, the long awaited WTO/GATS (General Agreement on Trade in Services) decision of the arbitrators effectively ended four years of complicated litigation between Antigua and the United States. The complexity of the matter was compounded by claims from jurisdictions such as the EU, Australia, Canada, Japan, Costa Rica, India, and Macau, that they deserved compensation or trade concessions when the United States withdrew gambling on 4th May 2007 as a service covered under the GATS. At the time of this writing, the US has resolved the matter with the EU, Australia, Canada, and Japan. The matter involved complicated jurisdictional and other issues. The initial decision of the Panel was a tremendous victory for Antigua, and it had some states, such as Utah, infuriated when the WTO/GATS Panel had concluded Utah and three other state gambling laws violated the GATS. On appeal, the Appellate Body Report (20th April 2005) granted Antigua a much narrower victory, viz., that only the United States interactive wagering horseracing laws violated GATS. The US could have become compliant with the WTO either by allowing foreign interactive horserace wagering access to the United States market or by prohibiting all interstate interactive horseracing, but neither choice was feasible. It would be a virtual impossibility for the United States to allow foreign access to the horseracing market because the US Justice Department consistently insisted that US interactive interstate horseracing was prohibited by US law. It would also be almost impossible for Congress to prohibit interstate, interactive horseracing via legislation such as the Unlawful Internet Gambling Enforcement Act (enacted October 2006) because of the power of the horseracing lobby in Washington, DC. After various arbitration reports, the final decision on 21st

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Antigua

December 2007, concluded that as a result of damages from the interactive horserace wagering exclusion (Report 3.184), Antigua should receive an award of $21 million p.a., which was less than Antigua requested ($3.44 billion) and more than the US suggested ($500,000). Antigua was informed that it could “suspend obligations” under the Trade Related Aspects of Intellectual Property Rights, which concerns copyright, patents, and other intellectual property (Report 5.6, 6.1). It is uncertain how Antigua can enforce these intellectual property measures, and how much each suspension of obligations would be valued.

THE UNLAWFUL INTERNET GAMBLING ENFORCEMENT ACT OF 2006 (UIGEA) The Unlawful Internet Gambling Enforcement Act (UIGEA) was passed suddenly on 13th October 2006, in a procedure reminiscent of Kafka, when the bill was attached to the Safe Port Act. Scholars disagree as to whether UIGEA has criminalized anything that was not already illegal. For example, Behnam Dayanim, “Internet Gambling Under Siege,” Gaming Law Review (11)(5), 536 (Oct. 2007), concludes that UIGEA has significantly expanded criminal liability while I. Nelson Rose, “Congress Makes Sausages,” Gaming Law Review (11)(1), 1 (Feb. 2007), reached the opposite conclusion. It is undisputed that the UIGEA has increased penalties for operators who accept illegal gambling transactions and that the main target of UIGEA was the payment processors for prohibited online gambling operators. Pursuant to UIGEA, the Department of the Treasury and the Federal Reserve System were to enact regulations to minimise payment processing to online gambling operators. On 1st October 2007, the agencies introduced proposed regulations. It is interesting that the proposed regulations did not propose, as did Italy, a “List of Unlawful Internet Gambling Businesses” 74 ■ Casino & Gaming International

(pp. 24-27) that would either be confidential or open to the public. The agencies concluded the entities on the list could easily change names “with relative ease and speed” and also it is unclear which “activities are lawful and which are unlawful.” Thus, the likely costs outweigh any potential benefit (p. 27). Instead, they drafted different proposed standards for Automatic Clearing House (ACH), check collection systems, wire transfer systems, card systems (debit, credit, etc.), and money transmitting businesses. Public comment was allowed until 12th December 2007, and the agencies had received 126 comments which are part of the public record. One interesting submission was a 24-page critique of the proposed regulations by Alston & Bird LLP, which stated the proposed regulations:

(4) … would create conflicting obligations in a variety of commercial banking relationships both domestically and internationally, as well as threaten to increase the costs to the United States arising from the WTO’s finding that the U.S. application of its domestic Internet Gambling laws to foreign operators violated U.S. trade commitments. The final regulations should be issued by mid-June 2008. Shortly after enactment of the UIGEA, its constitutionality was challenged. The Interactive Media Entertainment and Gaming Association (IMEGA) on 5th June 2007, filed a lawsuit (Interactive Media Entertainment and Gaming Association, Inc., v. Attorney General of the United States, et al., Case No. 3:07cv02625) in New Jersey Federal Court requesting the court restrain the Justice Department from enforcing the UIGEA. The complaint alleges, inter alia, interference with constitutionally protected expressive association, rights of privacy, and commercial speech. A major portion of the complaint (par. 79-93) revolved around the WTO dispute and whether the US was in violation of

US, WTO & INTERNET GAMBLING POLICY

international law. Oral argument has been completed and the decision is imminent. In the 110th Congress (2007-2008) four bills have been introduced that would create an objective study or amend the UIGEA to legalise or regulate an aspect of Internet gambling. During the first year of the 110th Congress, hearings were held on interactive gambling on 8th July and 14th November 2007. ■

The Internet Gambling Regulation and Enforcement Act (HR 2046) was introduced by Cong. Barney Frank (D. Mass.) on 26th April 2007. This bill would regulate and license Internet gambling operators who demonstrated suitability and solvency. It also would allow states to opt out of regulation. The House Financial Services Committee held a hearing on 8th June 2007, where various experts testified primarily in its support. Frank stated at the hearing:

What the WTO found us guilty of was blatant hypocrisy and violating the fundamental principle of the WTO, namely that you cannot give yourself economic rights that you then deny to other countries. ■

■

The Skill Game Protection Act (HR 2610) was introduced by Cong. Robert Wexler (D. Fl.) on 7th June 2007. It would exclude from liability poker, chess, bridge, and other games where skill predominates over chance as long as the player bets against other players. The Internet Gambling Regulation and Tax Enforcement

■

Act of 2007 (HR 2607) was introduced on 7th June 2007, by Cong. Jim McDermott (D. Wa.) It would impose a two percent tax on all player funds deposited in the account of an operator licensed pursuant to Cong. Frank’s bill. Chances of passage of the above bills during the second year of the 110th Congress are virtually nonexistent. This is partially because the American Gaming Association is very wary of any federal tax or any federal control of any aspect of gaming. The Internet Gambling Study Act (HR 2140) was introduced by Cong. Shelley Berkley (D. Nev.) on 3th May 2007. This bill, which has about 68 co-sponsors compared to 45 for the Frank bill, would establish a comprehensive study of Internet gambling by the National Research Council of the National Academy of Sciences. It is a condition precedent to any future US regulation that the study concluded that Internet gambling regulation would be able to exclude minors and keep out organised crime.

Interestingly, the WTO litigation was a factor in a letter to Congressional leaders by 45 out of 50 state attorneys general in opposing the Frank bill.

[T]he opt-outs may prove illusory. They will likely be challenged before the World Trade Organisation. The World Trade Organisation has already shown itself to be hostile to U.S. restrictions on Internet gambling. If it strikes down state opt-outs as unduly restrictive of trade, the way will be open to the greatest expansion of legalised gambling in American

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history and near total preemption of State laws restricting Internet gambling [National Association of Attorneys General, letters to Congressional leaders, 30th Nov. 2007].

HEARING ON INTERNET GAMBLING LAW ENFORCEMENT On 14th November 2007, Cong. John Conyers, a supporter of Internet gambling regulation, chaired a lengthy hearing on Internet gambling law enforcement. Testifying in favor of regulation were Cong. Berkley, Cong. Wexler, a Poker Players Alliance representative, and a representative from Aristotle Inc., a provider of online verification services. Testifying in opposition were Cong. Goodlatte, the US Attorney for the Eastern District of Missouri, a US Treasury Department representative, and a representative of the anti-gambling Family Research Council. Perhaps the most important testimony was that of Prof. Joseph Weiler of New York University School of Law. Weiler stated that despite a WTO decision ruling on the illegality of the US remote gambling policy,

the Executive Branch has persisted in indicting and prosecuting individuals and corporations whose activities should have been protected by the binding international obligations…. Furthermore, rather than bring itself into compliance, the United States has now engaged in a process of withdrawing its commitments. America is a world leader in all areas. It leads by example. In this case the example which the Executive Branch is giving is detrimental to the reputation of the United States as champion of the rule of law, and is detrimental to long term American commercial interests and American Prosperity. In particular, it is an invitation to other countries to prosecute American citizens and even imprison them, despite international treaties which declare the activities of such individuals legal, using the conduct of the United States in this area as an example. Further, it is an invitation to other countries who have given commitment in the service area which benefit American businesses, to withdraw such commitments rather than honor them, when activities of American businesses protected by such commitments are not to their liking [Weiler written testimony, 14th Nov. 2007, at 2-3]. Surprisingly, the GATS litigation has been a factor in certain US litigation and might negatively impact criminal and civil action by prosecutors. Much of the anti-gambling prosecution has been brought by the United States Attorney for the Eastern District of Missouri, especially concerning BetonSports .

BETONSPORTS Dave Carruthers, formerly of BetonSports, is still under house arrest in Missouri as a result of criminal charges. His attorney filed customary motions to dismiss all charges against him. On 25th Apr 2007, the Magistrate, sua sponte, suggested that further briefing “may be in order” concerning the alleged violation by the United States of the World Trade Organisation (WTO) treaty. In denying his lawyer’s motion to dismiss criminal charges against him on 15th May 2007, the federal magistrate kept open the possibility that the action might still be in violation of the World Trade Organisation. 76 ■ Casino & Gaming International

Another BetonSports defendant, Gary Kaplan, has also moved to dismiss criminal charges by the prosecutor in the Eastern District of Missouri by claiming the WTO legislation should “foreclose this prosecution” (US v. Kaplan, Case No. 4:06cr00337CEJ, 13th Aug. 2007). Much of the international law argument centered around an 1804 decision and the “Charming Betsy principle” (Murray v. The Schooner Charming Betsy, 6 US (2 Cranch) 64, 118 (1804)). Among the signatories to this document was the Harvard Law Professor Alan Dershowitz.

MICROSOFT, GOOGLE, YAHOO Perhaps the most publicized recent US action concerning interactive gambling is the $31.5 million settlement on 19th December 2007, by the United States Attorney for the Eastern District of Missouri with Microsoft, Google, and Yahoo. The US Attorney had charged all three companies with violating the Wire Act and other laws when they accepted advertising of online “sports bookmaking and casino-type gambling activities.” These prosecutions had nothing to do with the UIGEA since all three had stopped accepting advertisements at least three years before the publicized settlements. In the settlements all defendants did not admit any liability and agreed to pay $7.5 million (Yahoo $3.5 million to the government), $21 million Microsoft ($4.5 million to the government), and $3 million Google to the government. There is pending class action civil litigation in California where plaintiffs are seeking hundreds of millions of dollars against Yahoo, Google, and others. A trial is expected to begin in February 2008.

CONCLUSION One would hope that the World Trade Organisation dispute will result in the dismissal of charges against Carruthers or Kaplan, or in otherwise encouraging US lawmakers to regulate and not prohibit interactive gambling. Chances of success unfortunately are about the same as the return of the Jacobite pretender to the throne of the United Kingdom. CGI JOE KELLY Joseph M. Kelly, Ph.D., J.D., is a consultant with Catania Consulting Group and a Professor of Business Law at SUNY College at Buffalo. He is licensed to practice law in Illinois, Nevada, and Wisconsin. He is also coeditor of Gaming Law Review. Dr. Kelly has been a speaker on gaming topics throughout the world, including Europe, India, Australia, Costa Rica and South Africa. He has written extensively on British, German, Native American, West Indian, and Internet gambling law. His law review publications have been cited as authority by federal district, appellate courts, state appellate and supreme courts, e.g., Confederated Tribes v. Johnson, 958 P.2d 260 (Wash. 1998). Dr. Kelly’s article on Internet gambling law has been cited in the chapters on Internet gambling by The Gambling Review Report, which was presented to Parliament by the Secretary of State of Culture Media and Sport in July 2001. He coauthored Antigua’s interactive gambling regulations and had been a consultant for Antigua in Washington D.C.

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With this innovative new service not only will you attract new customers to your premises but keep your regulars on site for longer, who in the past may have left your pubs/arcades/casinos for the nearest betting office. With betting slips from other companies, where you didn’t receive any commissions or fees, they returned just to watch the matches. Now your customers don’t have to leave and you make money because when they stay and bet, you receive up to 65 % of the betting profit . The Cashpoint ‘sports betting’ system is a remarkable solution for operators and gives a clear competitive advantage over other sites without it, providing an obvious win-win relationship with customers. We are looking for people who have the drive, desire and ambition to operate a top quality sports betting environment. What are the benefits? ■ License to operate your own betting office ■ Legal advice and support ■ Guaranteed commission ■ Live betting ■ Marketing support ■ Real time Live Score feeds ■ Choice of quick and easy to use TIPOMATs (selfservice-terminals) or a complete sports-betting-office ■ Competitive odds on a huge range of world wide sports events ■ Bonus system ■ Cashless payment system ■ Subsidised financing

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UK REGULATION

JUST HOW GOOD AN OPPORTUNITY IS THE UK FOR THE ONLINE GAMBLING INDUSTRY? BY JULIAN HARRIS AND JOHN HAGAN

The realistic potential for the UK to become a world leading online gambling jurisdiction, optimistically declared by the Government in 2002, has suffered numerous contradictory developments ever since. Sifting through the lost opportunities and remaining possibilities, how should the remote gambling industry view the present circumstances?

ome might think that the truth is a question that can be answered, not only succinctly, but possibly very rudely. That is perhaps tempting, but it would surely be wise to establish the criteria first of what are the important factors to consider? The Gambling Act 2005 came into force in the UK on 1st September, creating for the first time the opportunity to licence all forms of online or remote gambling. At the time this long heralded legislation was first discussed, it was welcomed by the industry and cursed by other European Governments anxious to protect their longstanding monopolies. However, the Government’s proposal document claimed this:

“There is every reason to believe that Britain can establish a reputation for itself as a world leader in the field of online gambling, just as it has with other types of gambling”. That was in 2002. Certainly, the old regime in relation to remote gambling in the UK was outdated, restricted and contrary. For historical reasons relating to the ability since 1963 to offer telephone betting, it was possible to licence and operate remote betting in the UK, and to advertise it, but overseas betting operations could not advertise in the UK. Conversely, and ironically, remote gaming could be provided from other jurisdictions into the UK, and overseas casinos could advertise in the UK, whereas terrestrial casinos licensed in the UK could not, save for some limited exceptions. Clearly something had to be done. The ban on overseas betting operators advertising in the UK goes back as far as the Finance Act of 1951, continued in Casino & Gaming International ■ 81

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the Betting, Gaming and Duties Act 1981 with the purported aim of protecting British bookmakers from foreign competition. I say purported because plainly the real reason was the protection of revenue. This was the subject of the well known Victor Chandler case, and was the reason for the major British bookmaking companies relocating their remote operations back into the UK, following the agreement reached with the Government that a gross profit tax regime would be introduced, which it was in 2001. Gross profit tax was fixed at 15 percent. The requirement to be licensed in the UK in order to be able to advertise in the UK has now gone for non-UK operators licensed in the European economic area, Gibraltar and the White List territories. Importantly, those include some significant, reputable jurisdictions, such as – and I carefully set them out in alphabetical order – Alderney, Gibraltar, the Isle of Man and Malta. Much has been made in the past of the alleged “kudos” of being licensed in the UK, and having some statement on the website that the site is regulated by the UK Gambling Commission. There are a number of factors which operators, both those from overseas considering relocation, and those presently based in the UK, will want to weigh in the balance. Of the jurisdictions that I have mentioned, Alderney, Gibraltar, the Isle of Man and Malta, I think we can safely assume that all of them offer: ■ modern hosting facilities and reliable communications; ■ payment processing and banking facilities; ■ reasonably convenient locations; ■ skilled work forces, though these are less important where there is no requirement to have staff based on the jurisdiction, such as Alderney; ■ the ability to target other European jurisdictions; ■ high regard by the investment community. But the two most important factors will be costs and tax. The cost of physical relocation, outgoings such as property, wages and hosting - all slash profits, but the key is tax and fees. This is where the UK has tripped up: well, in fact, not so much tripped as thrown itself lemming like off the edge of a cliff. There was much speculation about the Chancellor’s rates of duty for remote gambling providers, many suggesting

82 ■ Casino & Gaming International

that it would be as low as two or three percent in order to encourage operators to come to the UK. The announcement in the 2007 Budget that the rate would be 15 percent made the UK about as popular to remote gambling operators as Northern Rock is to savers. UK costs, both as to fees and taxes, are high:

FEES ■ ■ ■

Remote casino operating licence – application fee from £28,988 to £38,047 and annual fee from £12,733 to £66,341 depending on turnover; Remote betting operating licence – application fee from £988 to £16,471 and annual fee from £12,733 to £66,341 depending on turnover; Personal management licences £330 per person and personal functional licences £165 per person.

TAXES ■ ■ ■

Remote Gaming tax at 15 percent; Corporation tax 30 percent (19 percent for small companies) VAT @ 17.5 percent.

Bearing in mind that in addition to these there are employers’ national insurance contributions on salaries and the fact that the majority of the VAT paid on supplies cannot be recovered. In short, the tax burden can amount to more than 50 percent. In Alderney, by contrast, there are no gaming taxes, no corporation tax and no VAT. Although the licence fee is substantial at £70,000, it is a fixed cost, making this an attractive jurisdiction for many of the most substantial operators. The Isle of Man, Gibraltar and Malta have different structures, so that there are comparisons to be done, possibly making different jurisdictions appropriate for different types of business, when considering alternative jurisdictions from a purely financial perspective. Different though they may be, what is very clear is the far greater cost of being in the UK. Much of our work consists of advising on these comparisons and choice of jurisdiction. Not surprisingly we have recently moved a number of operators from the UK to these jurisdictions.

UK REGULATION

>> THE REQUIREMENT TO BE LICENSED IN THE UK IN ORDER TO BE ABLE TO ADVERTISE IN THE UK HAS NOW GONE FOR NON-UK OPERATORS LICENSED IN THE EUROPEAN ECONOMIC AREA, GIBRALTAR AND THE WHITE LIST TERRITORIES. IMPORTANTLY, THOSE INCLUDE SOME SIGNIFICANT, REPUTABLE JURISDICTIONS, SUCH AS – AND I CAREFULLY SET THEM OUT IN ALPHABETICAL ORDER – ALDERNEY, GIBRALTAR, THE ISLE OF MAN AND MALTA >>

That makes the kudos of being established in the UK very expensive indeed. If you can eliminate tax at up to 50 percent from a business’s bottom line by the simple expedient of obtaining your licence in, or relocating it from the UK to Alderney, Gibraltar, the Isle of Man or Malta – well, why wouldn’t you? For that level of benefit, the arguments for being licensed or remaining in the UK would have to be very persuasive indeed. So what is the upside? Well, there is that word “kudos” again. Some commentators said that operators will consider that they have a substantial advantage by being in the UK over those who are regulated by the authorities of an offshore tax haven, where the words offshore tax haven are passed over a well curled lip. None of the jurisdictions I have mentioned here fall into that category. The point is not whether the jurisdiction charges less or indeed no tax, but whether it is regulated to a standard that ensures players get paid and a licensee’s reputation will not be sullied by scandals involving less scrupulous operators. Again those considerations do not apply to the jurisdictions mentioned here and, of course, the regulatory systems of Alderney and the Isle of Man have been specifically approved by the UK Government by virtue of the fact that they have been included in the White List. As to the remaining two, Malta is an EU State in its own right and Gibraltar is a long established jurisdiction now regulated by Phil Brear, former Director of Operations at the UK Gambling Commission, so there need be no doubt as to the bona fides of any of these jurisdictions so far as the standard of regulation is concerned. It is therefore difficult, if not impossible, to see how a “made in Britain” stamp is going to give a business the edge over competitors. In fact a more cynical man than I might suggest that the types of business who regard that stamp as essential are the very types that the UK Gambling Commission would not licence. So can the UK claim that the regulatory system will offer some other particular advantage, apart from reputation, over the other jurisdictions? We were promised “a modern and flexible light touch system of regulation” by the Gambling Commission. Evidence so far suggests that regulation by the Commission is very far from being a light touch. It would be unfair to be too judgemental at this early stage, but, importantly, it seems that the UK system is unlikely to be as flexible and responsive to change as some of the other available jurisdictions. Given these factors and the fact that a licence in any of the other four jurisdictions gives an equal, and in some cases better, rights of advertisement in the UK, it seems to me that Clive Hawkswood admirably and correctly summed up the position when he said:

By being greedy, the Government has lost the opportunity to participate in the growth of remote gambling.

Our members are not deterred by the increased level and cost of regulation that will be associated with having a British remote gambling licence, but the tax regime that has been announced is completely unrealistic. Given the overall tax burden it is very hard to see how any remote gaming operation could be profitable in the UK. The UK will not share in the growth of the fastest growing sector of the international gambling industry. The British Government has missed a real opportunity to lead the way in terms of international regulatory standards.”

ACADEMIC ISSUES? The UK is therefore probably not the place to be for the overwhelming majority of online gambling operators. There may be special reasons why a small number of operators would wish to apply for a UK licence. Some operators in the interactive television market may have no alternative but to do so, they will have key remote gambling equipment situated in the jurisdiction. Some small scale operators may wish to test their business model in the UK to keep start up costs to a minimum. After all, if in the early days you are not making any substantial profits it does not matter whether the rate of remote gaming duty is 2 percent or 15 percent. Or it may be that companies with significant land-based interests in the UK would wish to apply for a UK licence for disaster recovery purposes. And that I’m afraid about sums it up: if you have experienced a disaster, come to the UK. It is a very sad state of affairs given the UK’s Government’s original aspirations. Until the last year or so, Britain still had the potential to establish a reputation for itself, if not as a world leader in the field of online gambling, then at least as a jurisdiction worthy of serious consideration, able to attract its fair share of licensees and to lead the way on the regulation of online gambling in EU Member States. There was a momentum and a natural opportunity for operators to relocate to Great Britain. I fear that the UK has lost all credibility in the online gambling community for the foreseeable future. To date, only 14 applications have been made for remote casino operating licences, and those licensees will have to negotiate compliance with a heavy weight and complex system of regulation: the application procedure, the relevant technical standards, the testing strategy, the licence conditions and codes of practice and the Commission’s compliance and enforcement policy, are onerous. Anyone considering revisiting their decision not to relocate to Great Britain, should look carefully at those documents before Casino & Gaming International ■ 83

UK REGULATION

doing anything rash. We act for clients in all gambling sectors and have had extensive dealings with the Gambling Commission, no-one should expect the light touch and flexible regulation which can be found in other reputable jurisdictions.

The same is not true of jurisdictions such as Kahnawake and Antigua which have applied for White Listing status, are awaiting a decision and for the time being are still considered “foreign”.

ADVERTISING IN THE UK

CODES

There is, however, one area where I believe the UK Government has basically got it right, and that is advertising. The new advertising regime under the Gambling Act 2005, which came into force on 1st September 2007, will provide far more freedom to gambling operators to advertise, consistent with gambling’s new status as a mainstream leisure activity, as long as the advertisements are socially responsible and comply with certain gambling-specific rules. This liberalisation of the advertising regime will play an important role in increasing awareness of online gambling, and will be instrumental in the future success of the industry in Great Britain, or more accurately the future success of UK operators based offshore and targeting the UK market. As I will explain, the new regime is far from perfect. The new rules are highly subjective and there are limitations such as the watershed in respect of television advertising. But, as they say in America, this is a “high class problem”. Online gambling operators in many jurisdictions wish they were debating the nature of television advertising of gambling, rather than whether the advertising or even whether the gambling itself is lawful. For obvious reasons, advertising and an understanding of the legal parameters, is a crucial area and it is difficult to do it justice in the space I have available. I have therefore identified seven things that operators need to know about the new gambling regime and will elaborate briefly on each of these areas.

The second thing to know about the new gambling advertising regime in the UK is that it effectively consists of four Codes. There is the BCAP Code which relates to broadcast advertising, the CAP Code which relates to non broadcast advertising, a voluntary industry code which applies to all kinds of advertising and the Gambling Commission’s Codes of Practice relating to marketing generally.

“FOREIGN GAMBLING” The most important thing you need to know about the new regime is that you do not need to be licensed in the UK. Anyone licensed in a European economic area state such as Malta or a White Listed jurisdiction such as Alderney or the Isle of Man or Gibraltar in respect of which specific provision is made in the Act, may advertise in the UK. In fact, for reasons which are inexplicable unless you have been following the UK gambling law reform process, there are actually advantages from an advertising perspective to be licensed offshore rather than in the UK itself.

BCAP/CAP CODES These codes are designed to allow gambling to be advertised as a responsible leisure or entertainment activity and to reflect the Government’s intention that “reduction of harm should take precedence over the maximisation of innovation, consumer choice and economic gain”. What I think this means is that if there is any doubt as to whether your advertising will cause harm, it will not be allowed, no matter how effective, clever or funny it is. The rules are heavily focused on social responsibility and the protection of children and the vulnerable and provide that gambling advertising should not, for example, suggest that gambling can be a solution to financial concerns, enhance personal qualities or link gambling to seduction, sexual success or enhanced attractiveness. These rules are all very commendable and no reputable operator will take issue with the underlying principles. However, they are widely drafted and extremely subjective in nature. Particularly in the early days of the new regime, this will give rise to difficult issues of interpretation. The alternative approach, namely to introduce more detailed and prescriptive rules, would be likely to lead to a less flexible and more restrictive regime. The regulators with ultimate responsibility for these Codes - OFCOM and the ASA – have a proven track record in applying such broad principles in relation to advertising generally and I am optimistic that the new regime will strike a good balance between commercial interests and social responsibility. What will happen if your broadcast or print advertising breaches these Codes? Breach of CAP Code in respect of print advertising may result in the denial of media space to

>> ON ADVERTISING, I BELIEVE THAT THE NEW GAMBLING ADVERTISING REGIME STRIKES THE RIGHT BALANCE BETWEEN COMMERCIAL INTERESTS AND SOCIAL RESPONSIBILITY AND I AM OPTIMISTIC THAT THE ADVERTISING REGULATORS WILL ADOPT A COMMERCIAL AND SENSIBLE APPROACH. THE REAL CONSENSUS BETWEEN ALL OF THE LEADING TRADE ASSOCIATIONS WITHIN THE GAMBLING SECTOR IN DEVELOPING A VOLUNTARY INDUSTRY CODE SHOWS A STRONG DETERMINATION TO MAKE THE NEW REGIME WORK AND RECOGNITION OF ITS IMPORTANCE IN THE ONGOING SUCCESS OF THE ONLINE GAMBLING INDUSTRY, ALBEIT PRIMARILY BASED OFFSHORE >> 84 ■ Casino & Gaming International

UK REGULATION

advertisers and adverse publicity, both of which are likely to be damaging to most online gambling companies whether they are based onshore or offshore. Breach of the BCAP Code in respect of broadcast advertising may result in sanctions against the broadcasters which means that broadcasters are going to be very careful about the advertising which they accept from online gambling operators and are very unlikely to air advertisements which are even borderline, never mind in breach of the BCAP Code. ■

SECTION 328 GA 2005 - ADVERTISING REGULATIONS If you are a UK licensee, in the event of a serious or recurring breach of the Codes, you also face the possibility of regulatory action by the Gambling Commission which may consist of an unlimited fine or even the withdrawal of your operating licence. Offshore operators on the other hand run the rather more remote risk of the Gambling Commission bringing any concerns to the attention of the regulator in the home jurisdiction and that regulator taking action pursuant to its own system of regulation. The UK Government does have the power to make regulations controlling the advertising of gambling and to make contravention of those regulations a criminal offence. For the time being, the Government is happy to leave responsibility for this area in the hands of the advertising regulators and the industry.

DISPLAY OF LICENSED STATUS There is no requirement in the Codes for gambling advertisers to state in their advertising where they are licensed. There is no reason for such a requirement. After all, advertising will only be allowed by operators based on jurisdictions where the regulation of gambling is at an acceptable level. I will leave you to form your own view as to whether it is an advantage that you will not have to tell UK customers that you are licensed in Alderney, Malta or perhaps Antigua.

INDUSTRY CODE In July, when Gordon Brown swept to power, the new Culture Secretary, James Purnell, announced that the Government was reviewing all aspects of the Gambling Act 2005 including the rules on advertising. In August, in a not unrelated development, all of the leading gambling trade organisations signed up to a voluntary industry code for socially responsible advertising. It is designed to supplement the BCAP and CAP Codes in a very limited number of related areas and I would highlight the following: ■ Educational messaging – CAP and BCAP conducted extensive research in this area, mainly centred on the effectiveness of different forms of warnings and messages in other sectors including drugs, tobacco, alcohol, film content and high fat foods and concluded that educational messaging such as “know your limit, play within it” was unnecessary and could have the opposite effect to the one intended. However, the industry, under pressure from the Government, decided to err on the side of caution and agreed to display the “gambleaware” website address on all advertising where it is feasible, practical, and necessary to do so. ■ Watershed – new gambling products should not be

advertised on television before the commonly accepted watershed time of 9.00 p.m. This will not apply to bingo which is already allowed to advertise on television and has done so without raising any concerns. The exception to this rule is the advertising of sports betting around televised sporting events so online betting operators based in Gibraltar will be able to advertise during the racing on a Saturday afternoon but online casino operators will not be able to advertise during the James Bond movie on a Bank Holiday afternoon. Sports sponsorship – gambling operators will not allow their logos or other promotional material to appear on any commercial merchandising which is designed for use by children. This includes children’s sports shirts, but only applies to sponsorship agreements which were signed after 1st September 2007.

The industry code is not legally binding on offshore or UK operators but the trade associations have said that they will look to the Gambling Commission to assist it in encouraging compliance by UK licensees and, again, to bring concerns in respect of offshore operators to the attention of their home regulators.

BETTING AND GAMING DUTIES ACT 1981 The new Act repeals section 9 of the Betting and Gaming Duties Act 1981 and it is therefore now lawful to advertise offshore betting in the UK. This may appear generous of the UK Government, but I suspect that they were advised that section 9 was probably a breach of EC law. So there will be many offshore betting operators seeking to take advantage of this relaxation.

INDUCEMENTS Operators will be delighted to hear that the kinds of inducements which were prohibited under the old regime will now be lawful. Online casino operators will be able to offer incentives such as the matching of deposits or free money for new players upon registration. The Commission acknowledged that it needed to balance operators’ legitimate use of inducements to differentiate themselves from competitors and to attract customers against the risk that inducements may contribute to problem gambling. Further, to prevent normal marketing in the remote sphere would put operators regulated in the UK at a commercial disadvantage to those regulated elsewhere. No research has yet demonstrated that inducements contribute to problem gambling, although commonsense suggests that there may be a potential connection and the Commission was minded to allow operators the ordinary commercial freedom to offer customers incentives to gamble, provided that there appeared to be no serious risk that those inducements were frustrating the licensing objectives, for example by encouraging loss chasing. They devised a formula designed to distinguish innocuous inducements from the potentially harmful. Incentives must not be dependent on the customer gambling. For example, the incentives must not be dependent on the customer gambling for a predetermined length of time or with a predetermined frequency. It would not therefore, for example, be permissible to offer to match a deposit on the condition that a player spent three hours on your website or that he gambled on the website six times in Casino & Gaming International ■ 85

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the next month. A requirement to spend a minimum amount within a short period would also be considered to be socially responsible and prohibited. Again, strictly speaking these provisions relating to marketing do not apply to offshore operators and only apply to UK licensees. The reality is, however, that broadcasters and publishers will not accept advertising which is not UK compliant and, in the longer term, if two tiers of advertising were to develop, one for UK operators and one for offshore operators, the Government may feel that it has no alternative but to issue regulations in this area. In conclusion on advertising, I believe that the new gambling advertising regime strikes the right balance between commercial interests and social responsibility and I am optimistic that the advertising regulators will adopt a commercial and sensible approach. The real consensus between all of the leading trade associations within the gambling sector in developing a voluntary industry code shows a strong determination to make the new regime work and recognition of its importance in the ongoing success of the online gambling industry, albeit primarily based offshore.

INTERNATIONAL RESPONSIBLE GAMBLING CODE OF PRACTICE The remote gambling association, eCOGRA and GamCare launched an international responsible gambling code of practice which also contains provisions on advertising which I hope as many operators as possible will sign up to. It is of wider application than just the UK market and does not introduce anymore onerous obligations and I have already outlined under the other codes.

LOCATION OF EQUIPMENT IN THE UK In simple terms, if at least one piece of your remote gambling equipment is situated in Great Britain, you will require a UK remote gambling operating licence otherwise you will be committing a criminal offence. The definition is so widely drafted and open to varying interpretations, particularly in the light of the complexity of remote gambling operating systems. It is fairly clear that if you locate a random number generator or your disaster recovery system in Great Britain that you will require a UK licence and that just because your ability to accept bets from UK residents relies upon mobile phone networks or ISPs that this will not give rise to a requirement to apply for a operating licence. It is a huge grey area in the middle that is the problem. The only guidance which we have on the interpretation of section 36 is set out in a Gambling Commission Guidance Note published in January of this year. If you have put an IT expert and a gambling lawyer in the room, they might just together be able to understand where the lines is to be drawn, but they might have difficulty persuading anyone else in the organisation to join them for that particular meeting. The guidance does however further demonstrate the confused state of UK Government policy in respect of offshore gambling operators. On the one hand, the UK has created an unattractive commercial environment for online gambling operators, and on the other hand, the Commission has adopted a fairly liberal interpretation of section 36 and said that it does not see any difficulty with, for example, remote casino operators, storing customer details and management information in the UK and undertaking card processing and 86 ■ Casino & Gaming International

identity verification services in the UK. Again, this provides a further disincentive to offshore operators to relocate to the UK. Finally, I should mention that the controversial “all in/all out” provisions of the Gambling Act 2005 did not survive until the implementation of the Act and it is no longer a requirement of the Act that if you have any remote gambling equipment in Great Britain, you must have all your remote gambling equipment in Great Britain, but I’m afraid that this falls into the too little, too late category in terms of attracting operators to the UK. CGI

JULIAN HARRIS & JOHN HAGAN Recognised as a leading expert in national and international gambling and licensing law, Julian Harris is highly regarded by both operators and regulators throughout the world. He and John Hagan are the founder partners of Harris Hagan, the first UK law firm specialising in legal services to the gambling and leisure industries. He, John and other members of the firm have been at the forefront of those advising UK and international operators alike on the opportunities presented by the UK Government’s major reform of gambling law. With over 20 years experience of gambling law Julian has advised some of the world’s largest gaming and entertainment industry corporations. He and his team have also advised trade associations, including the British Casino Association and the Casino Operators’ Association of the UK. Julian came to specialise in this area representing the Gaming Board for Great Britain (the UK regulator) for five years early in his career. Julian is an experienced advocate, a respected and sought after conference speaker and the author of numerous articles and papers for gaming and legal publications and in the national press. He is recommended in all sides to the legal profession, and has been described by Chambers Guide as “astute” and “never misses a trick”. Julian is a Trustee of the International Association of Gaming Attorneys. Partner and founder with Julian Harris of the first ever niche gambling and leisure law firm in the UK, located in the City of London, John qualified in 1993 and specialises exclusively in gambling law. The firm represents many of the world’s largest gambling and leisure operators, as well as UK operators in all areas of land based and remote gambling. The firm is frequently instructed by other leading City and overseas law firms to provide specialist gambling and leisure expertise in relation to substantial transactions. John is an experience advocate, a frequent and respected conference speaker and a regular contributor of articles to national and international gaming publications.

I-GAMING RECRUITMENT

ACADEMY TRAINING: PROFESSIONALISM, CONFIDENTIALITY AND EXPERIENCE INTERVIEW WITH CHRISTEL SOMMERVOLD

Ensuring personnel placement and development fits like a glove into differing corporate environments requires consistent attention to the rapid shifts in how gaming and gambling is currently evolving. Costs and quality; experience and innovation; tuning into new sector demands on professional staffing â&#x20AC;&#x201C; this and much more are key factors that add up to tailoring recruitment in the i-gaming industry.

GI: What is the idea behind the iGaming Academy?

CS: In the grand scheme of things, the online gaming and gambling sector is still very young and until relatively recently, was growing at such a tremendous rate that wastage and costs could often be ignored in the pursuit of acquiring new customers. However, now the sector is starting to move closer to consolidation, the reduction of costs especially are becoming more and more important. Companies operating in the sector want to ensure that they get the best value out of their assets and, of course, that includes their staff. iGaming operators are also placing more emphasis on keeping those customers that they have acquired and making sure that they get the best value out of them. This, allied with the fact that customers are better educated and becoming more discerning when it comes to where they spend their money, means that gaming companies are attempting to ensure that they are able to offer the best gaming experience, whether it be through quality of software, bonuses or staff knowledge and training. CGI: How did the iGaming Academy come into being and how will it provide benefits to Pentasia and its clients? CS: Our sister company Pentasia International iGaming Recruitment, has been operating within the sector for over six years and the team have seen a lot of trends and movements within the market come and go. However, in recent years they found that there have been a consistently growing number of Casino & Gaming International â&#x2013; 89

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>> RECENT LEGISLATIVE ISSUES ACROSS THE SECTOR HAVE ALSO EXACERBATED THE IMPORTANCE OF CONFIDENTIALITY IN THE MINDS OF OUR CLIENTS AND THIS REQUIRES US TO CONSTANTLY STRESS OUR PROFESSIONALISM AND THE FACT THAT CONFIDENTIALITY IS PARAMOUNT. WE HAVE ALSO INCLUDED STRICT CONFIDENTIALITY CLAUSES WITHIN OUR TERMS OF BUSINESS AND SERVICE LEVEL AGREEMENTS TO ENSURE THAT ANY WORRIES OUR CLIENTS MAY HAVE ARE ASSUAGED >> enquiries from their clients regarding companies that could provide training services. After looking into the issue further it was realised that the call for bespoke training services extended across the sector as a whole. However, while many companies offered training to the sector no one was able to provide courses that took into account the unique needs that the sector possessed. Pentasia was deemed to be best placed to put its clients in touch with these services so the decision was made to launch the iGaming Academy. CGI: Why do you think the gaming industry needs an Academy at this time, there are training services already in existence after all? CS: The iGaming sector is unique and existing generic training providers lack the insight and the services to cater to its needs. Our clients love the fact that all of our courses are tailor made to fit their specific requirements. Our Customer Service Training Courses, for example, take into consideration all the elements that make an iGaming Customer Support Agent’s working day different from those in other call-centres. One can also look at the concept of Product Knowledge in the same way. We are constantly looking to identify new trends within the sector and identifying new courses to cater for them as and when the need arises. One such example is

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our brand new bingo chat moderator course, which to my knowledge is not offered by traditional training providers. That said, we do also provide generic training modules such as Team-building, Negotiation and Effective Leadership, but as always these are tailored to the iGaming industry’s unique needs and wants. CGI: What have been your main obstacles to overcome since the iGA was established? CS: Within any competitive industry there is always a certain level of paranoia and the iGaming sector is no exception, particularly as its rapid growth has meant that many industry figures know each other personally and have worked together at one point or another in the past. Recent legislative issues across the sector have also exacerbated the importance of confidentiality in the minds of our clients and this requires us to constantly stress our professionalism and the fact that confidentiality is paramount. We have also included strict confidentiality clauses within our terms of business and service level agreements to ensure that any worries our clients may have are assuaged. One other obstacle we have encountered is where clients have felt that as soon as they invest in this exercise their competitors will do the same and their initial advantage will soon be lost. We feel that this should be completely turned on its head as this is precisely the reason why training is so

I-GAMING RECRUITMENT

important, as our clients need to constantly find ways of increasing their competitive advantage. Plus, as we always remind our clients, each of our courses is specifically tailored to the environment and the needs of the client company and accurately reflects their brand value and identity. No two programmes are the same and to this day, in fact, no two have even been slightly similar. CGI: Are you well equipped to accommodate cultural and linguistic differences across the sector? CS: Yes, very much so. In addition to our presence in Malta we are moving into 2008 with iGA representatives stationed in, and catering for, Scandinavia, the UK & Ireland, Israel and across the German-speaking regions. We have trainers who speak English, German, French, Italian, Spanish, Norwegian, Danish, Swedish and Maltese and are already commencing our entry plans into the South East Asian region. CGI: With the iGaming industry still young and evolving, what organisational development deficiencies (HR, CS and CRM, for instance) are there that iGA is able to address? CS: The importance of training cannot be over-emphasised since it affects the whole company. This does not stop at staff and their management, but ultimately affects the customer experience, which is the essence of CRM. One client, for example, said our customer service programme (one week) showed an immediate effect on the time taken for customer queries to be dealt with. Rather than let difficult issues drag on or leave then to the next shift, newly trained staff now resolved e-mails from clients immediately providing their customers with the best customer experience possible. On a wider level, by employing well trained and motivated staff, companies are able free up management time by allowing them to move away from dealing with endless staff enquiries and troubleshooting and focus on more strategic areas of the business such as product development and customer offering and support. Training also has important motivational benefits for the company as it shows that it places an importance upon its employees and is happy to invest in them. Plus, it is well known that an Individual’s loyalty to his or her employers is often much higher when properly trained and given room to develop professionally.

In fact, Pentasia has found among individuals looking to move on from their present employers that one of the most common reasons for doing so is the fact they felt unappreciated and that there was no ‘plan’ or ‘purpose’ in place for them. Everybody has a need to grow and learn in one form or another to increase their prospects for the future and a company that provides this for its employees will be appreciated more than one that does not. Lastly, one other benefit of training that should never be underplayed is that we often see teams cooperating and working better with each over after having spent time together outside the office socialising in a different way. CGI: Why would an iGaming operator decide to outsource the activities iGA offer, when they can, in fact, do it in-house? CS: Outsourcing is a big decision that is quite complex. What corporations are realising today is that training and training management are not their core competencies and that they cannot do this at the level of quality and value that they need. Therefore, they have somebody else do it all for them. Outsourcing the back end of training – administration, transactional activities, training design and development, for example – occurs when training managers believe an outside vendor can provide the service better and more cheaply, leaving internal staff to focus on meaningful training issues. Big operators often have their own training manager and or training team, however they too can benefit from fresh perspectives and using courses we offer that would be impractical for them to develop from scratch on their own. Cost-cutting may not be the only reason to outsource, but it’s certainly a major factor. Outsourcing training and organisational development converts fixed costs into variable costs, releases capital for investment elsewhere in your business, and allows you to avoid large expenditures in the early stages of your business. Outsourcing can also make your firm more attractive to investors, since you’re able to pump more capital directly into revenue-producing activities. CGI: What are your views on CSR & Responsible Gaming? CS: Attitudes towards gambling have always been mixed. Gambling has been outlawed in states and countries across the globe throughout time for a variety of religious and ethical reasons. Recent events in America show that concern

>> THE IGAMING SECTOR IS UNIQUE AND EXISTING GENERIC TRAINING PROVIDERS LACK THE INSIGHT AND THE SERVICES TO CATER TO ITS NEEDS. OUR CLIENTS LOVE THE FACT THAT ALL OF OUR COURSES ARE TAILOR MADE TO FIT THEIR SPECIFIC REQUIREMENTS. OUR CUSTOMER SERVICE TRAINING COURSES, FOR EXAMPLE, TAKE INTO CONSIDERATION ALL THE ELEMENTS THAT MAKE AN IGAMING CUSTOMER SUPPORT AGENT’S WORKING DAY DIFFERENT FROM THOSE IN OTHER CALLCENTRES >> Casino & Gaming International ■ 91

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over gambling still continues. Yet online gaming proves more popular every year and the industry is growing at an extraordinary rate. Likewise, an increasing number of people become addicted to gambling yearly. But who should take responsibility for addicted gambling, and where does this leave the industry? The effects of problem gambling are wider reaching than just financial loss. An addicted gambler has no control over their gambling behaviour and so it affects all areas everyday life. The addicted gambler can not stop gambling, and often ends up in debt or resorting to crime to fund his habit. This begins a cycle of depositing and chasing losses which further aggravates the situation and relationships and responsibilities break down. The latest eCOGRA report states that the people most likely to become addicted to gambling are players who gamble for the excitement or to cope with stress or trauma. This begins the cycle of desperation and low self esteem and gambling becomes a coping mechanism which helps escape the difficulties of everyday life. Addicted gamblers rarely play to improve finances; this would require an element of control. They play to win back control over their life. The very nature of online gambling has caused the worries to deepen. Online gaming means greater accessibility, which creates a big problem for addicted gamblers. Land based casinos blacklist members with addiction problems as standard, but this is only just being addressed online and at a cost; the information is available to members only. The implications of making gambling more accessible via the Internet are huge. The increased risk of secrecy means the addiction can go undetected. GamCare states that there are at least 300,000 addicted gamblers in the UK alone. And these are not just men. Many more women are gambling as it can easily fit around the demands of family life. Approximately 40 percent of online gamblers are women, and the latest eCOGRA survey states that 54 percent of women make up the casino members. Ultimately, the person that is gambling is responsible for their actions, but with gambling addiction classified as a disease there needs to be a level of prevention and support in place. A modern trend towards social responsibility is seeing a shift in the way politics and provision are involved. In short, the seriousness of the situation is beginning to be realised. The iGaming Academy is very happy to now work with GamCare and to be able to offer iGaming Operators responsible gaming training in Malta. However, this is only the start as the iGaming Academy moves into those jurisdictions Pentasia already services. CGI: In todayâ&#x20AC;&#x2122;s iGaming market, is there any one particular department or function that needs training in particular. CS: Yes, Call centres. The call centre is the most pressured of environments, as each new query throws up a new challenge. Additional pressures are placed upon long term employees who spend their time constantly supporting and coaching new staff who are not guaranteed to stay. Add to this the expectation of providing customer services 24 hours a day, seven days a week, with major holidays such as Christmas considered a normal working day. 92 â&#x2013; Casino & Gaming International

The amalgam of these pressures and conditions lead to highly de-motivated individuals and if employees are unhappy in their work this will come across to the customer. Company standards will slip with low morale and no matter how many policies are put into place, unless staff attitudes are changed, the standards will continue to worsen. Many of the problems within the gaming call centre stem from a feeling of being undervalued. Call centre staff often complain of being the last to know about recent changes and the reasons behind them. This prevents employees from being able to carry out their job properly and encourages low self esteem. The hierarchical company structure and the monotony of call centre work inevitably breed low opinion of the call centre position itself. If the call centre is treated without respect, it comes as no surprise that the employees in this area lose sight of the importance of their role. Once this happens, the relationship between the call centre and other departments break down, and the effects are obvious. The call centre needs to be able to provide the member with information on all aspects of its gaming provision, from deposit and withdrawals, to latest promotions and technical problems. Departments are created to enable people to specialise in each specific area, and filter this knowledge as required. If this is not happening, the customer is not receiving the service that is promised and deserved. A shake-up in the understanding of the functionality of the call centre is required within the online gaming industry. Employers need to take responsibility for their call centre employees and this means looking at the role of executive management and down. This will allow redress for dated attitudes towards this vital department, which is where members and the company meet. Without improvements in this area, employee attitudes will not be changed and so the nature of provision will not improve. Once important issues are addressed the level of customer service that is required for success in the ever-changing gaming industry will be achievable. And we strongly feel we can assist this. CGI CHRISTEL SOMMERVOLD After completing a degree in Business Administration at Strathclyde University, Scotland and working in senior sales positions at Radisson SAS in Dublin and Oslo Christel moved to Vienna to pursue an MA in Marketing with US-based, Webster University. In Vienna Christel participated in the development and delivery of executive training programmes. From her base there she trained in areas such as Sales & Marketing, HR & Professional Development and CSR & Corporate Communication. With over 1000 hours of training she has educated European business professionals in Vienna, Sofia, Scandinavian countries and Malta. After working with her own company, Value Communication, Christel moved to Malta to join iGaming Academy in 2006. Christel is often used as a speaker and writer on iGaming related subjects.

Global Network Local Service Pentasia.com Meet us at ICE2008, Stand 5430 As iGamingâ&#x20AC;&#x2122;s only truly focussed recruitment consultancy, Pentasia is recognised globally as the sectorâ&#x20AC;&#x2122;s trusted introducer and intermediary between employers looking for talent and individuals seeking opportunities. Since its inception in 2001, Pentasia has built an unrivalled network of contacts and, with an international network of offices

in key jurisdictions, only Pentasia can offer its customers a truly global network with a local service. So, whether you are an existing organisation looking to access the best talent pool, a new entrant looking to build a team of professionals, or an individual looking to make the next step in your career, only Pentasia can offer you a world of opportunity.

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SOCIAL RESPONSIBILITY

COHESIVE APPROACH TO RESPONSIBLE ONLINE GAMBLING ESSENTIAL BY ANDREW BEVERIDGE

Despite relatively low levels of problem gambling online there are social, ethical and political imperatives that make a cohesive industry approach to this key topic desirable....and momentum is building with a new initiative from leading player protection and trade associations.

ust on a year ago, the online gambling software developer Microgaming hosted an informal round table discussion on responsible online gambling at a London hotel, inviting player protection bodies, representative associations and major industry businesses to participate. Microgaming’s CEO Roger Raatgever was the driving force behind the initiative, undoubtedly motivated by the ethical, social and political considerations surrounding the subject and its potential impact on the industry going forward. The strong positive response to the invitation, and the subsequent full-house attendance, confirmed that other industry leaders - including our organisation eCOGRA - shared his view on the critical importance of a cohesive and effective approach to responsible gambling. Most of the reputable companies and organisations represented, including eCOGRA, had already put in place individual anti-problem gambling measures and codes of practice for identifying and handling potential or actual victims of gambling addiction, drawing on the growing body of public knowledge on the subject, and improved screening and diagnostic technologies. Many had already instituted professional staff training and refresher programs, too. Nevertheless, there was agreement that a more conhesive approach would be beneficial. The national problem gambling charity in the UK, GamCare was asked to spearhead an initiative aimed at developing a universal code of good practice, and GamCare Head of Online Services Andrew Poole, aided by representatives from the UK’s Remote Gambling Association (RGA) and eCOGRA started working on the project. By October of this year, a draft of the code was presented to the media and the industry at the annual European

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Interactive Gaming and Expo gathering in Barcelona. It has since found support from key organisations representing most of the major businesses in the online gambling industry such as the Remote Gambling Association, the Interactive Gaming Council (IGC), eCOGRA, European Gaming and Betting Association (EGBA) and of course GamCare. The primary goal of this code of conduct is to protect players and promote responsible gambling by introducing minimum standards and practical measures throughout the online gambling industry - a cohesive approach to establish a uniform international standard. The code covers 30 key points which cover underage gambling, customer communication, staff training, advertising and promotions as well as player protection measures. Andrew Poole has appealed to jurisdictions and businesses alike to accept the code, saying: “GamCare hopes that the adoption of this code will better enable the gambling

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public to make informed decisions with regards to their remote gambling participation, secure in the knowledge that operators are required by condition of license to protect the welfare and enjoyment of their customers.” Clive Hawkswood, Chief Executive of the RGA, also commented: “The promotion of responsible gambling and the adoption of appropriate safeguards are fundamental to the long term success of the online gambling industry. As the industry develops it will inevitably come to be regulated in more jurisdictions. In those places and others where regulation is already being developed I would commend this code to them. It is based on the best industry experience and practice and, more importantly, the expertise of GamCare.” Clearly, then the main purpose of this initiative is to promote high standards of social responsibility within the gaming and betting industry, by giving operators and regulators the tools and guidance to do this in a consistent

SOCIAL RESPONSIBILITY

and professional manner. Other gambling related subjects such as fraud, money laundering or security of online payment are thus not covered in this article. The I-Gaming Code not only sets out general principles on responsible gambling, but provides practical measures for meeting standards which are often ahead of most national legislations, making the document a persuasive authority for the future. The code is divided into five main sections, which are (1) underage gambling, (2) player protection measures, (3) customer communication, (4) staff training and (5) advertising / promotion.

1. UNDERAGE GAMBLING The Code lays down security measures to prevent access to online gaming and betting services by underage players, with the filtering method consisting of age verification and recommendations for strengthening the effectiveness and reliability of this technique. Operators are further encouraged to apply checks and controls, such as KYC (know your customer) consumer information regimes, the display of age warning signs on entry and at the registration stage and the introduction of clear policies for promptly dealing with underage players seeking entry, or subsequently discovered. Collaboration with other business databases is encouraged in order to provide the most thorough screening possible. Verification intervals during which neither the customer nor the operator can benefit from any gambling activity that takes place are also recommended, together with guides on payment methods which may be used by minors, such as prepaid cards.

2. PLAYER PROTECTION MEASURES Specific operational measures are recommended when it comes to player protection. For example, specific web-pages on player protection and responsible gambling should be added to gambling websites - accessible from any screen where gambling action occurs. These pages should comprise a warning that gambling could be harmful if not controlled and kept in moderation; advice on responsible gaming and a link to sources of help; a link to an accepted and simple self-diagnostic process to determine risk potential; a list of player protection measures that are available on the site how to access same and details or a link to the site’s responsible gambling policy. All downloaded gaming software should contain a clear reminder to the players on the importance of responsible gambling and a link to the responsible gambling page. The Code emphasises the importance of player selfexclusion facilities, recommending that operators ensure that Internet users who gamble on their websites are aware of the

option to self-exclude for a minimum period of six months. The actions to be undertaken with regard to self-excluded players are also itemised. Players must be given the tools to help them gamble responsibly, specifically the ability to constantly monitor their spending, set deposit limits and fully access their account history. Pages on the website where free play or ‘practice’ games are available must carry the same level of player protection as real money games. These pages should therefore provide links to age restriction, responsible gambling and player protection information. And the pay-out percentage for a particular game type in free play mode should be the same as that for the real money game. The more obvious necessity for certifying and monitoring game fairness, rules and results is also stressed.

3. CUSTOMER COMMUNICATION Communication with players should carry a responsible gambling message and information enabling players with a dispute to access a channel where this can be addressed at an appropriate level and without difficulty. Uncomplicated access to responsible gambling and support pages is a key requirement.

4. STAFF TRAINING Frontline customer services which deal directly with players should receive appropriate training and refreshers on social responsibility, empowering them to identify suspicious patterns or behaviour and to provide assistance and help if indicated.

5. ADVERTISING AND PROMOTION One of the important aspects of the Code deals with general and gambling specific principles which should be applied to add a responsible gambling element to promotional and advertising activities by operators. These relate to the marketing message content, the gambling industry’s reputation, image and value, protection of minors and ethics surrounding promotional emailing. It is worth mentioning here that an industry that has demonstrated a genuinely responsible approach to online gambling stands a better chance of future success in the key American market even though it is presently difficult to access due to political interference. The lopsided and hopelessly prejudiced war against online gambling being waged by United States enforcement officials and certain clearly biased American politicians has focused attention as never before on the need for practical and enforced responsible gambling measures by operators. The industry’s opponents seem to have settled on unsubstantiated allegations of underage and addictive gambling as favoured avenues of attack on the industry in

>> THE LOPSIDED AND HOPELESSLY PREJUDICED WAR AGAINST ONLINE GAMBLING BEING WAGED BY UNITED STATES ENFORCEMENT OFFICIALS AND CERTAIN CLEARLY BIASED AMERICAN POLITICIANS HAS FOCUSED ATTENTION AS NEVER BEFORE ON THE NEED FOR PRACTICAL AND ENFORCED RESPONSIBLE GAMBLING MEASURES BY OPERATORS >> Casino & Gaming International ■ 97

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their quest to stop the further development of the business in the United States despite calls by major online companies and associations in the United States to regulate and tax rather than take the prohibitionary route. Whatever the rights and wrongs of the strangely unbalanced official approach to online gambling in America, the fact remains that the over-riding moral obligation to exclude underage and problem gamblers felt by most major Internet casino and poker companies has been seriously boosted by the need to counter the false perceptions being created by the industry’s detractors. For online casino and poker room operators that means the continued and diligent application of genuine responsible gambling programmes, at the same time ensuring that the rapidly evolving exclusionary technologies and training content are understood and considered. The online gambling industry is fortunate that despite continued growth in the international markets, the level of problem gambling has remained relatively low – the recent Gambling Prevalence study by the UK Gambling Commission is the latest confirmation of this trend, which was illustrated by our own independent eCOGRA survey in 2006 and that of the more recent major study carried out for the bwin online gambling group by Harvard University. Nevertheless, the social and humanitarian consequences of problem gambling, and the intense public and political interest and bad press it can evoke make this phenomenon an object of central and abiding concern. This applies to the industry in general but particularly to the operators, who bear the onus of ensuring that good responsible gambling practice is constantly maintained. The Code helps to achieve this, and support from the many and diverse members of major industry bodies like the EGBA, eCOGRA, RGA, IGC and GamCare is a significant step forward for consistency and commitment.

WHERE TO FROM HERE? Hopefully 2008 will see further commitment from stakeholders in this industry. The obvious target for further progress in achieving widespread acceptance and implementation of the Code is the regulatory sector. Work has already started on a collegiate and flexible approach that will encourage leading national online gambling licensing jurisdictions such as the UK, Malta, Gibraltar, Alderney, Antigua and others to endorse the practical and protective elements of the Code and require its implementation by Internet gambling companies falling under their authority. The International Casino Exhibition in London will see a further critical meeting in January to take this objective further forward, and will be preceded by intense behind-thescenes engagement. With a generally more open gambling industry in prospect in the 27-nation European Union, perhaps showing by example the road forward for the future, it makes sense for the GamCare initiative to continue setting the agenda and bringing interested parties on board with the unselfish aim of protecting the player and mitigating the threat and consequences of problem gambling. Any way you look at it, the new Code is a landmark development taking the industry into a more caring, playersensitive and responsible future by using practical and proven measures firmly based on experience and research-backed 98 ■ Casino & Gaming International

knowledge. With the right sort of unpartisan approach, its merits are clear and the potential for good is significant. The groundwork has been done; the challenge is now acceptance and a commitment to use the Code to provide the player protection it makes possible.

ABOUT eCOGRA eCOGRA sets online gambling standards and provides an international framework for best operational and player protection practice requirements. These are enforced through inspections and reviews, and continuous monitoring. Companies that have achieved accreditation with eCOGRA are entitled to bear the organisation’s “Safe and Fair” seal, indicating to players everywhere that all operational systems and games are continuously monitored to consistently high standards. eCOGRA’s independent directors determine which operators qualify for the seal. These directors are Bill Galston, OBE, retired Chief Inspector for the Gaming Board of Great Britain; Bill Henbrey, former head of gaming services at leading international accounting firm BDO; Frank Catania, former Assistant Attorney General and Director of New Jersey Division of Gaming Enforcement; as well as Michael Hirst, OBE, a former board member of Ladbroke Group Plc, and formerly Chairman and CEO of Hilton International. CGI

ANDREW BEVERIDGE Andrew’s online experience started in 1996 with MultiChoice, an international supplier of pay-television and interactive services. He played a major role in the start-up of MWeb, South Africa’s largest ISP, and then joined the management team of International Gaming Networks, the MultiChoice division created to develop interactive gaming technology across Internet and digital television platforms. Other responsibilities included the implementation of the SuperBet’s (South Africa’s largest sports betting operation) risk management controls and procedures, and business development for the sports betting operation. Andrew then assumed responsibility for a company called LiveBet Online (Pty) Ltd, which, together with eCompany Ltd, was then able to develop a successful online and telephone lottery and sports betting platform that has been successfully implemented at various UK, European and South African sports betting operations. Andrew qualified as a Chartered Accountant after completing articles at Coopers & Lybrand in Johannesburg. He spent six years abroad, working for major international banks in London and Hong Kong, including HSBC and ING Barings, and then completed a full-time MBA at Edinburgh University. Accreditation remains open to all software companies and their operators. For more information, go to www.ecogra.org.

SOCIAL RESPONSIBILITY

PREVENTION, EDUCATION AND INDUSTRY PARTICIPATION IN PROBLEM GAMBLING BEHAVIOUR BY MALCOLM BRUCE

Since its inception over five years ago The Responsibility in Gambling Trust has seen many developments and changes within, and affecting, the gaming industry. Not the least of which are the obligations arising from the UK Gambling Act and the implications of the findings of the recent British Prevalence Survey.

s Britain’s largest funding body for the treatment, research and education of problem gambling, the Trust has spent £6 million to date on tackling this social issue with its wide-ranging consequences for individuals, families, communities and society as a whole. Neither for nor against gambling, the focus of the Trust is on the prevention of problem gambling and upon treating the harms caused by it. Though funded mostly by voluntary contributions from the industry (similar to the Press Complaints Commission which is funded by the newspaper industry) it is completely independent and has a majority of trustees from academia, faith groups, the gambling regulator and Parliament. Established by the industry itself in 2002, The Trust now works closely with operators to encourage good customer practices and has a key role to play in keeping social responsibility centre stage in the evolution of gambling in Britain. The Trust’s broad remit and impartiality have lead to its recognition as a respected contributor to the national policy debate on gambling. Existing as a co-ordinating body sitting in the middle of a wide spectrum of stakeholders involved in problem gambling, it is uniquely positioned to convene relevant committees, promote information on responsible gambling to consumers, fund problem gambling counselling, institute independent research projects and promote comprehensive education and awareness raising programmes. And it was at the behest of one of these advisory committees – a ‘task force’ of experts and representatives from the Gambling Commission, Department of Culture, Media & Sport, Department of Health, GamCare, the industry and academics – that lead to the creation and launch of

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www.gambleaware.co.uk, the first step in a major national public awareness programme designed to minimise the harm caused by problem gambling. www.gambleaware.co.uk is a major tool in the primary prevention of problem gambling. Meeting the need for increased consumer awareness, the website is a one-stop shop for information and advice about gambling. By providing impartial and authoritative advice on all forms of gambling it helps consumers to manage their gambling, to understand how gambling works, to learn about the new player protection measures introduced under the Gambling Act and to find out where to get treatment and advice if they feel that their gambling is getting out of hand. Following the seminal approach developed by the Australian Gaming Council outlining the key components of informed choice, including the provision of relevant educational information necessary to objectively evaluate

gambling options, the task force recognised that providing information on how to gamble responsibly is a vital ingredient in ensuring that problems do not develop. The website’s interactive features, myth-busting facts, time management & budgeting tools, tips from other users and signposting links assist consumers in making informed choices and have all been welcomed by users. Since its launch in September of last year there has been a steady increase in traffic to the site, over one million hits recorded and positive feedback from users. But it is important to recognise that this is only the first step and further links and services will need to be developed to support those who may be at risk from problem gambling. As an exclusive web-based service www.gambleaware.co.uk does have limitations given the socio-demographic profile of computer and internet users. To address this shortcoming, the Trust is currently investigating the development of mobile

>> THE BRITISH GAMBLING PREVALENCE SURVEY 2007 SHOWED THAT WHILST PROBLEM GAMBLING MAY NOT HAVE INCREASED IN THE LAST EIGHT YEARS, THERE ARE A NUMBER OF IMPORTANT CHALLENGES AHEAD FOR THE INDUSTRY – ESPECIALLY IN HELPING TO ENSURE THAT THE PUBLIC IS EDUCATED ABOUT RESPONSIBLE GAMBLING AND THAT GROUPS WITH HIGHER THAN AVERAGE PREVALENCE RATES ARE SUCCESSFULLY TARGETED AND REACHED >> 102 ■ Casino & Gaming International

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phone based information service – crucial given that there is 100% market penetration of this medium within the United Kingdom. It is also vital to appreciate that not all forms of gambling problems can be addressed with one blanket approach. Different individuals will have different priorities and concerns and it is imperative that users can be directed swiftly to the type of help that is best suited for them. To build upon the website’s initial success, and to respond to additional consumer needs, it is imperative that all operators and stakeholders link to and promote the site wherever possible. The gambling industry’s own Code of Practice (published in August 2007) requires all gambling operators to include the website address in their advertising as a part of their commitment to responsible gambling. To assist operators in including the website within all advertising, some clear and concise guidelines have been developed. These can be accessed at www.gambleaware.co.uk/ brandguidelines/. Use and implementation of these guidelines will ensure that operators meet their obligations under the Code of Practice and also comply with requirements of The Gambling Act. As well as the effective and sustained promotion of responsible gambling, the Trust is concerned with addressing and combating the effects on individuals and society from problem gambling. This issue requires sensible and wellinformed input from a range of stakeholders and restraint needs to be exercised to calm down some of the hysterical rhetoric seen in the press in the past year. Problem gambling certainly is a social issue to be addressed, not least the fact that less than one percent of problem gamblers come forward to seek help. The Trust is looking at a range of ways to increase this figure and to remove the barriers of stigma and ignorance and to encourage individuals and their families to seek help. The British Gambling Prevalence Survey 2007 showed that whilst problem gambling may not have increased in the last eight years, there are a number of important challenges ahead for the industry – especially in helping to ensure that the public is educated about responsible gambling and that groups with higher than average prevalence rates are successfully targeted and reached. The majority of problem gamblers don’t seek treatment either because they don’t think they have a problem (81 percent according to the prevalence study), because they don’t know how to seek help, or because the help that is available isn’t right for them. The Trust is committed to addressing these issues and to providing relevant and swift assistance. A key priority has been the continued funding and expansion of treatment facilities and coordinating treatment provision so that the whole country has access to some sort of face-to-face treatment. In addition, the Trust has funded the creation of an internet-based counselling service to offer support to online gamblers and made sure that the telephone helpline service has the money it needs to expand as call levels increase. Unfortunately, some of the groups with a higher prevalence are the ones hardest to reach and therefore innovative and imaginative ways to access these individuals and networks need to be sought. Contact through family members, existing social groups, informal networks and communities are being explored, drawing upon evidence and best-practice experiences of projects within other countries. 104 ■ Casino & Gaming International

The Prevalence Study also identified that over 3 million people (6.5 percent of the population) show some signs of problematic gambling – that is, they are ‘at-risk’ of becoming problem gamblers. The Trust, the industry and all stakeholders need to ensure that these individuals do not become tomorrow’s problem gamblers and that they have ready access to information, advice and services before problems arise. Already working with young people across Britain by providing educational materials for schools and youth groups, the Trust is currently considering the best way forward for education and treatment projects specifically targeted at university students. This is in addition to an innovative pilot project in prisons to target inmates and research projects looking at the best approaches for working with specific minority ethnic groups. Through expert committees, advisory groups and an ongoing commitment to independent research, the Trust’s work is informed by a wealth of material – national and international. Consumer research initiatives especially, such as eCOGRA’s player survey, are vital to ensure a comprehensive picture of gambling participation in Britain and to underpin the development of new projects. To garner an international perspective, the Trust recently funded a symposium for key stakeholders – International Transformations: Preventing UK Gambling Harm, bringing together respected academics and industry representatives from across the world. With the increasing popularity of online gambling (including international visitors to www.gambleaware.co.uk) it is essential to recognise its global presence and to draw lessons in relation to policy development, prevention work, education programmes and effective treatment. International evidence suggests that new initiatives working in partnership with operators, particularly around education and training, need to be developed to enhance prevention measures. This is a critical area and further research needs to be conducted to identify effective approaches in the prevention of problem gambling and to highlight and encourage existing best customer practices within the industry. 2008 brings new considerations for the Responsibility in Gambling Trust – working with the industry to ensure that all operators meet their funding commitments and contributing to the review and consultation process currently conducted by the Gambling Commission. In the meantime, the Trust continues in its overarching strategic aim in the prevention of problem gambling and to protect children, young people and the vulnerable. CGI

MALCOLM BRUCE Malcolm Bruce is the Director of the Responsibility in Gambling Trust. He joined RIGT early in 2006 after 20 years spent in Management and Organisational Consultancy for the private and public sectors and various Charity Directorships.

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BUSINESS-ACADEMIC CONNECTION

RESPONSIBLE GAMING AND BEST PRACTICE: HOW CAN ACADEMICS HELP? BY MARK GRIFFITHS AND RICHARD WOOD

The underlying objective of a socially responsible gambling code of conduct is to maximise opportunity and minimise harm. This should also adhere to the established principle of moving forward with caution. Social responsibility should adhere to ethical principles and is becoming a regulatory requirement in an increasing number of countries. Furthermore, it is expected by many customers who want to play with companies who show a high level of integrity. This is particularly relevant to online gaming where trust in the website and the operator is essential.

esponsible gaming is about giving people the choice to play well designed games in a secure and supportive environment. The long-term sustainability of gaming is dependent upon effective responsible gaming initiatives that can help gaming to develop as a low impact mass market form of entertainment. Therefore, responsible gaming is not just an ethical or regulatory requirement, it is also good for business, and it should also be about making a profit. After all, it would be irresponsible to be in a position where a reasonable profit could not be made as this would inevitably impact upon the quality of the service offered.

WORLD GAMBLING TRENDS AND SOCIAL RESPONSIBILITY In a previous issue of Casino and Gaming International, the world gaming trends were outlined (see Griffiths, 2006). Looking at these, it can be argued that these trends are inextricably linked with the increasing emphasis on social responsibility in gambling. For instance: Gambling coming out of gambling environments: One of the largest cultural shifts in the world of gambling is that gambling activities are no longer restricted to dedicated offline gambling environments such as casinos, bingo halls, betting shops and amusement arcades. Gambling can be done in retail outlets (e.g., lottery tickets) and pubs (e.g., slot machines) as well as in the home and the workplace via remote media (e.g. Internet gambling, mobile phones). Also, gambling is evolving from an activity that was clearly defined as gambling, and often stigmatised, to an activity that is more about entertainment and less about winning money. Consequently, there is no longer such a thing as a “typical” gambler, and there is also no such thing as a “typical” game Casino & Gaming International ■ 107

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either! Gaming is merging with television, videogames, communications, travel and shopping experiences and holiday concepts. Caution should be exercised here that the same high level of social responsibility is applied across the board. A bad reputation gained for one game, or channel, can have serious consequences for the entire reputation of the company. The increased use of technology in gambling activities: Technology is continuing to provide new market opportunities not only in the shape of Internet gambling but also in the shape of more technologically advanced slot machines and video lottery terminals, interactive television gambling, and mobile phone gambling. In addition, other established gambling forms are becoming more technologically driven (e.g. bingo, keno). It is likely that some of these online remote forms of gambling provide less initial protection for vulnerable and susceptible individuals than offline gambling. The natural consequence of such a situation is that online gambling activities need more in the way of established social responsibility infrastructures. Gambling becoming a more individual activity: One of the consequences of increased use of technology has been to reduce the fundamentally social nature of some forms of gambling to an activity that can be less social (e.g. slot machine gambling, video poker, Internet gambling). Those who experience problems are more likely to be those playing on their own (e.g. those playing to escape). Gambling in a social setting could potentially provide some kind of “safety net” for over-spenders, i.e., a form of gambling where the primary orientation of gambling is for social reasons with the possibility of some fun and chance to win some money (e.g. bingo). The shift from social to asocial forms of gambling suggests that operators need to be more socially responsible in getting gamblers to gamble sensibly and within acceptable limits (i.e., staying in control). People who are gambling to escape will be asocial wherever they are as they are not gambling for the social aspects anyway. Widespread deregulation and increased opportunities to gamble: Gambling deregulation is now firmly entrenched worldwide. The general ‘rule of thumb’ is that where accessibility of gambling is increased, there is an increase not only in the number of regular gamblers but also an increase in the number of problem gamblers. However, there is evidence from around the world that if that social responsibility infrastructures are put in place before deregulation (e.g., education and prevention programmes, helplines, treatment facilities), then problem gambling can be stabilised and in some cases may even decrease.

DIMENSIONS OF SOCIAL RESPONSIBILITY Our research and dissemination of good social responsibility practices focuses upon three main dimensions. These are: (i) design, (ii) behavioural transparency, and (iii) customer support. These three areas of social responsibility are within the wider sphere of more general corporate social responsibility that can include areas such as compliance to codes of conduct, age limits to prevent underage play, and general support for social impact initiatives. Design mainly falls into two areas for the gaming industry – design of gaming venues (e.g., environmental design of venues such as casinos, betting shops) and design of games (e.g., instant win games on the Internet, lottery product portfolios). Behavioural transparency covers those 108 ■ Casino & Gaming International

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areas where the gaming industry imparts information about games to players (e.g., advertising, product purchase, staying in control), or feedback about player behaviour (e.g., behavioural monitoring). These diverse forms of information dissemination practice should be honest and imparted with integrity. Customer support relates to all those practices that either helps staff to understand player behaviour (e.g., ongoing staff training) or helps players get any help they need in relation to their playing behaviour (e.g., staff intervention and good referral services to helping agencies). The following section highlights some of the more specific areas of social responsibility practice within these three dimensions along with some salient areas within general corporate social responsibility. However, the areas discussed below are somewhat generic. Specific forms of gambling (e.g., Internet gambling) may also have additional specific social responsibility considerations.

CORPORATE SOCIAL RESPONSIBILITY Industry compliance to codes of conduct – Operators within the gaming industry should adhere not only to government regulators but also to the codes of conduct and practice formulated by their trade associations. Furthermore, all personnel should be made aware of and understand the codes. Access by minors – Children and adolescents need to be protected. In all instances, access to gambling by under-aged minors should be prohibited. Operators or their agents should prominently display the minimum age of entry and not make external premises attractive to children. There should be a sufficiently controlled and supervised point of entry to make illegal gambling difficult. This means that selfservice lottery terminals should be prohibited unless they are supervised. There should also be strict sanctions for those operators or individuals who are caught selling to minors. High street gambling should therefore be restricted to wellregulated, age-controlled, properly supervised specific gambling venues where staff understand issues relative to gambling. Support for social impact initiatives – One of the ways that the gaming industry can be effective in the area of social responsibility is to support social impact initiatives. Recognition of a socially responsible approach is mutually beneficial to the industry as well as the players. Initiatives include (i) financial support to those organisations that develop gambling treatment, training, education and research programmes, (ii) support and encouragement of such organisations (including consultation with the industry at planning, design and promotion stages), and (iii) uptake of training programmes by such organisations. Commitment to social responsibility – Operators need to develop a culture that is supported by socially responsible policies and procedures. It is in everyone’s interest to recognise that social responsibility is fundamental to the longterm development of the gaming industry. Operators should have to attain a certificate of social responsibility or some kind of external accreditation or audit before improved products or agreed deregulation can be introduced. These would be awarded after passing an external social audit. On a wider level, companies should also consider how their activities support their local community and give consideration to the social impact of their products. Casino & Gaming International ■ 109

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>> THE INDUSTRY HAS INCREASINGLY RESPONDED IN A SERIOUS MANNER TO THE ISSUE OF PROBLEM GAMBLING AND ITS SOCIAL IMPACT AND THERE IS A PUSH ON RESPONSIBLE GAMBLING THROUGHOUT THE GAMING INDUSTRY. WHATEVER THE REASONS FOR INCREASED EMPHASIS IN SOCIAL RESPONSIBILITY, THE GAMING INDUSTRY NEEDS ACCESS TO THE LATEST INNOVATIONS AND RESEARCH FINDINGS TO ENSURE THAT RESPONSIBLE GAMING INITIATIVES CONTINUE TO PROVIDE THEIR PLAYERS WITH A LOW IMPACT ENJOYABLE GAMING EXPERIENCE >> DESIGN Game and gaming environment design – Although gambling behaviour can be influenced by a person’s individual risk factors (e.g., genetic predispositions, personality factors, social environment in which the person was raised), gaming operators have responsibility for the ways in which players are attracted to play on their products (e.g., ease of accessibility in gambling, advertising to attract custom, incentive bonuses to gamble), the design of their environments in attracting people to gamble (e.g., the use of light, colour, sound and music in gambling venues), and the design of the gambling product itself (e.g., game speed, prize structure, jackpot size, and illusion of control features on a slot machine). Games should be designed to limit excessive play in environments designed for customer enhancement rather than purely about maximising shortterm profits (see Griffiths, Wood, Parke and Parke [2007] for some initiatives to help in this area).

BEHAVIOURAL TRANSPARENCY Advertising and promotion – Quite clearly it is appropriate that gaming industry needs to advertise and promote its facilities. In addition to conforming to each country’s own advertising codes of practice, the most important recommendation would be that advertisements and promotions should not appeal to vulnerable members of society (such as minors, those with severe learning difficulties and problem gamblers). Potential players should also be given all the information they are likely to need to make an informed choice (such as the chances of winning on the activity or the payout ratios). There is also an implicit assumption that all the games will be fair and designed in such a way to protect the player. Information about staying in control – Although players are clearly responsible for their own gambling, they should still be reminded of the need to exercise control. Information in the form of posters or leaflets should highlight the need to stay in control, and be prominently displayed where it will be seen by players. Product purchase – Providing help and advice to players is to be commended. However, players should under no circumstances be encouraged to (i) increase the amount of money they have decided to gamble with, (ii) enter into continuous gambling for a prolonged period of time, (iii) regamble their winnings, or (iv) chase losses. Monitoring player behaviour – The monitoring of player behaviour on remote gambling sites (e.g., Internet gambling) or via smart cards is becoming increasingly popular with 110 ■ Casino & Gaming International

gaming operators. However, such technologies should be harnessed for protective and helpful intervention rather than be used to get heavy spending players to spend even more. The money generated by problem gamblers should not be a core marketing strategy of any socially responsible operator.

CUSTOMER SUPPORT Staff training – Ongoing staff training around the area of social responsibility should be given at all levels to all those working in the gaming industry. Awareness-raising of such issues is a necessity to enable staff to deal with relevant situations. Staff should also be able to identify aspects of policy and practice relative to appropriate intervention that will contribute to minimising the harm attributable to uncontrolled gambling. Appropriate staff intervention – Intervening in the case of a suspected problem gambler is a sensitive issue. Staff need to be trained to deal with such situations and must also know what to do if they are approached by someone who needs help. Providing information and/or help for those with gambling problems – At the core of exercising a duty of care lies the principle of assisting players to address any concern about their gambling. Telephone helplines and addresses of helping agencies can be displayed on posters, leaflets, and on the back of lottery tickets or smart cards. Information should be freely available without having to ask a member of staff and should be placed in areas of high accessibility (e.g., a poster in a toilet, leaflets at the exit door). Gaming operators should also have a good referral system with local and/or national helping agencies.

THE RELATIONSHIP BETWEEN SOCIAL RESPONSIBILITY AND ACADEMIC RESEARCH We have been working in the field of responsible gambling for many years and it is a field that has expanded considerably over the last decade. However, despite this increase in interest by both academic researchers and gaming operators it is often difficult for research to be translated into practical responsible gambling applications. Partly, this is because research is largely published in academic journals and mostly read by other academics. Figure 1 highlights the traditional relationship of information dissemination between academic researchers and the industry. Not only did academics and practitioners rarely speak to the gaming industry (and vice versa) but the areas of focus were typically specific. For instance, academics and practitioners traditionally focussed on problem gamblers, and the gaming

BUSINESS-ACADEMIC CONNECTION

industry traditionally focussed on profit and traditional gamblers in one medium (mostly males in offline premises) (see Figure 1). Figure 1: Traditional dissemination relationship between academic researchers/clinicians and the gaming industry Gaming operators

Researchers & clinicians

(Emphasis on profit and traditional gamblers)

(Emphasis on problem gambling)

Responsible Gaming

Figure 2 highlights the emerging model of information dissemination between the two stakeholders. Academics and practitioners now have a wide range of interests in the area (including ‘social gambling’, marketing, interdisciplinary research). The gaming industry has also expanded their horizons and has interests in a wide variety of areas (including corporate social responsibility, multi-media platforms, brand psychology, non-male gamblers, and entertainment more generally). Figure 2: Emerging dissemination relationship between academic researchers/clinicians and the gaming industry via IRGO

Researchers and clinicians (Problem gambling, social gambling, psychology, sociology, marketing)

IRGO

Gaming operators (Profit, corporate social responsibility, mass multi-media market, brand confidence, women, non-gamblers, entertainment)

Responsible Gaming (Based on evidence-based practice)

As academic researchers we know that there is a lot of research information out there in a wide variety of outlets (e.g. psychology journals, sociology journals, criminology journals, social policy journals, economics journals, and journals specialising in gaming, gambling, addiction and

leisure, etc.). But how can a gaming operator be sure that they have access to the latest information and that the information they have has credibility? Furthermore, how can this research be translated into effective responsible gaming initiatives? On the whole, responsible gaming personnel do not have the time or resources to continually search for all the latest relevant research articles, to read them cover to cover, evaluate them, and consider how they can be practically applied. Their major concern is to implement and monitor effective strategies within their company which in itself is a full-time task. There is a need then for a service that brings this research together, evaluates its credibility, and makes practical suggestions for how it can be used. This is why we as a group of international academic responsible gaming researchers founded the International Responsible Gaming Organisation (IRGO). The inaugural conference was recently held in Stockholm, sponsored by Svenska Spel, and had over 110 delegates from 23 countries coming together to hear about some of the latest responsible gaming research findings and practises from around the world. The aim of IRGO is to: ■ Provide worldwide up-to-date research findings ■ Produce summaries of key research studies and findings ■ Suggest practical applications of research in relation to social responsibilities ■ Undertake specific literature reviews on social responsibility practices by request ■ Provide updates of responsible gaming news items ■ Provide a reference archive database of academic (and other) journal articles ■ Provide an opportunity for discussion among operators via secure intranet ■ Host an annual conference to disseminate the very latest in social responsibility initiatives from both industry and academia. To do this we have gathered together a group of expert gaming researchers and clinicians from around the world to ensure that IRGO provides the most–up-to-date world-wide evidence available. These include academics and clinicians from North America (Dr Henry Lesieur, Dr Jeff Derevensky), Australia (Dr Paul Delfabbro) and Europe (Dr Gerhard Mayer, Thomas Nilsson, Dr Jonathan Parke). Information is disseminated via the IRGO website (www.InternationalResponsible-Gaming.org) and is provided to gaming operators via a subscription service. As the global economy and the market interests guide political decision-making, the topic of social responsibility by

>> GAMBLING IS EVOLVING FROM AN ACTIVITY THAT WAS CLEARLY DEFINED AS GAMBLING, AND OFTEN STIGMATISED, TO AN ACTIVITY THAT IS MORE ABOUT ENTERTAINMENT AND LESS ABOUT WINNING MONEY. CONSEQUENTLY, THERE IS NO LONGER SUCH A THING AS A “TYPICAL” GAMBLER, AND THERE IS ALSO NO SUCH THING AS A “TYPICAL” GAME EITHER! GAMING IS MERGING WITH TELEVISION, VIDEOGAMES, COMMUNICATIONS, TRAVEL AND SHOPPING EXPERIENCES AND HOLIDAY CONCEPTS >> Casino & Gaming International ■ 111

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gambling companies has been taken up in public discussions across many different countries worldwide. Social responsibility has come to provide a natural basis for the economic activities of the gaming industry. The industry has increasingly responded in a serious manner to the issue of problem gambling and its social impact and there is a push on responsible gambling throughout the gaming industry. Whatever the reasons for increased emphasis in social responsibility, the gaming industry needs access to the latest innovations and research findings to ensure that responsible gaming initiatives continue to provide their players with a low impact enjoyable gaming experience. CGI

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REFERENCES Griffiths, M.D. (2006). Internet trend, projections and effects: What can looking at the past tell us about the future? Casino and Gaming International, 4, 37-43. Griffiths, M.D., Wood, R.T.A., Parke, J. & Parke, A. (2007). Gaming research and best practice: Gaming industry, social responsibility and academia. Casino and Gaming International, 3, 97-103.

MARK GRIFFITHS & RICHARD WOOD Dr Mark Griffiths is a Chartered Psychologist and Europe’s only Professor of Gambling Studies (Nottingham Trent University). He has won many awards for his work including the John Rosecrance Research Prize (1994), CELEJ Prize (1998), International Excellence Award For Gambling Research (2003), Joseph Lister Prize (2004), and the Lifetime Achievement Award For Contributions To The Field Of Youth Gambling (2006). He has published over 185 refereed research papers in journals, a number of books, over 35 book chapters and has over 550 other publications to his name. He has served as a member on a number of national/international committees (e.g. European Association for the Study of Gambling, Society for the Study of Gambling, Gamblers Anonymous General Services Board, National Council on Gambling etc.) and was former National Chair of Gamcare (1997-2003). He also does some freelance journalism with over 120 articles published in The Guardian, Independent, The Sun, Sunday Post, Daily Mirror, as well as Arcade and Inside Edge.

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Dr Richard Wood is a Chartered Psychologist and has been studying gaming behaviour for over 12 years, mostly at the International Gaming Research Unit (IGRU) at Nottingham Trent University where he is still an associate member. He also worked as a Post Doctoral Research Fellow at The International Centre for Youth Gambling Problems and High-Risk Behaviours at McGill University in Montreal. Dr Wood has published numerous gambling related articles, presented his findings at conferences and seminars around the world, and undertaken many responsible gaming consultations for both the gaming industry and regulatory sectors. His research focuses on both the individual causes of problem gambling, as well as the structural characteristics of games that can influence the gambling behaviour of vulnerable players (info@GamRes.org www.GamRes.org)

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