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ISSUE 39 - 2019 Q4


Welcome... Publisher Jamie Kean jkean@cgimagazine.com Client Services Director Tracie Birch tbirch@cgimagazine.com Editorial Assistant Harry Wainwright hwainwright@cgimagazine.com Production Designer Nancy Rae nrae@cgimagazine.com Circulation Manager Natasha Harvey nharvey@cgimagazine.com Commercial Director Daniel Lewis dlewis@cgimagazine.com Account Manager Nathan Charles ncharles@cgimagazine.com

Editorial Contributors Dominic Le Garsmeur, Elise Lebourg, Bob Boyle, Christophe Grippa, Adam Polacsik, Osarugue Obayuwana, Andrea Ricci, Melanie Ellis, William Reade, Lyle Wraxall, Amy Riches, Lindsey Hallett, Robert J. Baldassarre, Lea Giosa O’Neill, Dr. Mark Griffiths

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ith the last few events of the year just around the corner, we kick off our final edition of 2019 by welcoming Dominic Le Garsmeur (SG Digital) for the first time as he takes a look at player engagement and loyalty across the iGaming sector.


Elise Lebourg, Bob Boyle and Christophe Grippa (Ernst & Young) take an in-depth look at gaming expansion and risk considerations, whilst Adam Polacsik and Osarugue Obayuwana (KPMG Malta) and Andrea Ricci (Bellerophon Overseas) address the latest taxation issues. Melanie Ellis and William Reade (Northridge Law LLP) offer thoughts on the potential pitfalls gambling operators need to be aware of when it comes to their social media marketing campaigns and we talk to Lyle Wraxall (CEO of Digital Isle of Man), who talks to us about the changing landscape of the iGaming industry and how the Isle of Man is embracing this global evolution. Amy Riches (Evolution Gaming) joins us again to share the latest developments in the live casino sector whilst Michael Carter and Lindsey Hallett (Alvarez & Marsal Financial Crimes) discuss the latest compliance issues in the U.S. We welcome Robert J. Baldassarre and Lea Giosa O’Neill for the first time as they continue our U.S. focus by taking a look at the development of electronic table games stateside and Alessandro Fried (BtoBet) shares his thoughts on where he thinks the U.S. market is heading. And finally, Dr. Mark Griffiths shares his views on the increasing use of behavioural tracking methods to understand gambling behaviour.

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ISSN 2398-4252

© 2019 Danancy Media Limited. The opinion expressed in each article is the opinion of its author and does not necessarily reflect the opinion of the publisher. Any form of reproduction of any content in this publication without the written permission of the publisher is strictly prohibited.

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Jamie Kean, Publisher

The 2020 Q1 edition (Issue 40) of CGi will be published on 1st February 2020.













Adam Polacsik & Osarugue Obayuwana, KPMG Malta

Andrea Ricci, Bellerophon Overseas





Melanie Ellis & William Reade, Northridge Law

Interview with Lyle Wraxall, Isle of Man Digital CGiMAGAZINE.COM











Amy Riches, Evolution Gaming

Michael Carter & Lindsey Hallett, Alvarez & Marsal Financial Crimes

Robert J. Baldassarre & Lea Giosa O’Neill, Fox Rothschild





Alessandro Fried, BtoBet

Dr. Mark Griffiths, Nottingham Trent University



Save the date and join IAGA June 16 – 18 at the Culloden Estate & Spa in Belfast, Norther Northern n Ir Ireland eland for the 2020 Inter International national Gaming Summit. Held in parallel with the 2020 Gaming INTERNA RNATIONAL ATI ASSOC IATION ATI ADVISORS OF GAMING A

Regulators Regula tors European European Forum (GREF) Annual Meeting, you’ll have an excellent opportunity to meet with global rregulators, egulators, operators and advisors to discuss the opportunities and challenges facing gaming. VVisit theiaga.org more betting and gaming. isit theiaga.or g for mor mor e details.





BREAkING THE CYCLE AND BUILDING LOYALTY IN iGAMING he iGaming industry is overflowing with choices for operators and players. As the iGaming landscape expands to encompass more games, more technologies, and more options for the end user, player loyalty is of the utmost importance for industry stakeholders.


Dominic Le Garsmeur VP Product of Gaming SG Digital

Players simply have more choice than ever before, with thousands of games available to them on a single operator website. Brands, proprietary and licensed alike, vie for player attention. Features like free spins, bonuses, and tournaments can garner player engagement and loyalty in the iGaming arena. But they’re development-heavy, taking time and money to build and deploy. As a result, many operators struggle to include features on their development roadmap and instead resort to offering financial incentives to players, such as free play or game credits. This creates a race to the bottom as stakeholders strive to engage players with bigger, better offers, feeding into a cycle that diminishes the ability to develop innovative features and fosters player indifference over loyalty. Understanding this cycle is crucial to creating content that transcends it. It begins with a simple need: player engagement. Operators want their users to play responsibly and explore their vast portfolios of content. The initial instinct when searching for engagement drivers is often to ask, “How can I offer my players new features that maximize their enjoyment of a given game?” The answer, though, is easier said than done. To develop, implement and deploy new features, operators need to secure time on their internal developer’s roadmap, which costs money. Stakeholders across the board also need to ensure they provide responsible CGiMAGAZINE.COM



gaming tools within games and their features, which is a development priority. Features are immensely valuable to operators and players, but they aren’t necessarily a “quick fix” solution. The search for a quick fix for player engagement can drive operators to focus on financial rewards such as free play or in-game credit to drive retention. Monetary incentives work on a small scale—they incentivize players to choose one site over another if the deal is right. However, competitors seeking the same player engagement initiatives begin to put forth similar offers, creating what is effectively a bidding war for players. The sites with the best offers will secure the most players. From the operator’s perspective, this approach makes sense at first. But promoting better offers over time increases player disloyalty. Competing incentives perpetuate this cycle as players venture to different sites in search of the best deal or promotion available. As players shop around for the best offers, it shifts their focus from exploring new content to a hunt for promotions. Operators continue perpetuating the cycle by offering yet more competitive deals. Breaking the Cycle with Wide-Reaching Features Considering the cycle outlined above, it’s crucial to find solutions that can provide engaging gameplay features with minimal development time or integration work. Operators use efficient solutions to drive such as features that make a maximum impact but require less development time. In other words, industry stakeholders seek that win-win option that reaches more players without taking up precious resources on the development side. Adding a larger gamification umbrella that works on multiple titles amps up the player experience and encourages deeper exploration of an operator’s game library. Whereas features have historically been intrinsic to a single game (or a series of games), fanning them out into a one-size-fits-all strategy works on a few levels. First, it eliminates undue stress on the development cycle and unclogs pipelines. Developing a feature for any game, as I’ve noted above, can require a massive lift across a myriad of teams. Unlocking a feature’s potential so that it covers a huge selection of titles amps up the return on investment and makes the development time worthwhile. It’s a cost-efficient way to ensure players receive the best experience on a wide variety of games— not just the most popular titles. Second, it encourages deeper engagement with an operator’s games library. When iGaming sites are competing with one another for the best deal or promotion, it’s easy for players to get lost in the shuffle, only briefly exploring the vast number of games available to them. With an overarching game layer that functions across huge swathes of a gaming portfolio, players are more likely to explore the wide array of titles in which that feature works. Instead of jumping from site to site, players enjoy trying new games. It benefits them, but it also improves the operator’s standing as their players find new titles to enjoy within the existing library rather than moving on to find a better deal elsewhere. Finally, the wide-reaching feature approach can power player



loyalty. By virtue of exploring available titles and embedding themselves in an operator’s ecosystem via a single-install feature that works on many games, players can develop a sense of loyalty and will return to the platform where they experienced such a feature. Moreover, this can transform their thinking from “I want the best offer” to “I want the best game.” If that feature works across numerous titles, they’ll come back to the same site time and again to find the games they enjoy most, all the while increasing their presence on the site through the connective tissue of a multigame innovation.

Our Take At Scientific Games, one of our most recent cycle-breaking technologies is Missions, which offers players challenges to complete that take place across multiple games. It’s a win all around, because it presents a new game layer packed with additional win opportunities outside of a base game. It’s an additive feature that appears over the top of the game interface, so it doesn’t impact the core gameplay experience, either. The biggest benefit to operators, though, is that our Missions feature requires no integration. The feature omits the needs for a lengthy development cycle that siphons time and resources from operators. Unbeholden to an internal roadmap or time constraints, Missions ignites the next level player experiences outlined above to drive more loyalty and generally improve gameplay. The kicker? It’s not just for our games. We think features like this should benefit players industry-wide, and not just those who play our games. Missions works with a wide variety of studios and games, reimagining the gaming ecosystem and powering player exploration of our partners’ game offering. It’s just one example of a widespread feature that negates the need for continued competition on the promotions side. We’ve adopted the same approach with Free Rounds 2.0. Like with Missions, we’ve taken an industry standard for attracting and retaining customers and busted it wide open to cover more than 300 games from 14 studios. Players can use their free rounds in any one of those titles, yet again encouraging that deeper exploration of available titles while building loyalty in the background. Continuing the Trend Player loyalty should remain a key driver for all industry stakeholders, whether they’re operators, developers or suppliers. And breaking the cycle of offering financial rewards at the expense of features should be top-of-mind. With Missions and Free Rounds, we’ve begun our journey to providing our partners with the best ways to build strong player relationships, and the industry is taking notice. Put players first, give them a reason to come to your site, and they’ll fuel your ongoing success. :: CGi

DOMINIC LE GARSMEUR Dominic Le Garsmeur is VP Product of Gaming for SG Digital.


GAMING IN THE DIGITAL AGE: GAMING ExPANSION AND RISk CONSIDERATIONS he expansion of online gambling and sports betting has dominated the gaming news over the past few years. With this expansion, there has been an emergence of new regulations and required controls designed to help manage risk, particularly in the US. This uptick in regulatory focus is justifiable, as online sports betting service providers are reporting up to a 12-fold increase in betting this year compared with last year.1 With the expansion of online gambling and sports betting comes increased fraud and money laundering risk. Companies that facilitate online wagers or allow online gaming are less likely to have internal controls that resemble traditional brick-and-mortar establishments. Yet these same gaming companies will undoubtedly have increased regulatory obligations. Financial Crimes Enforcement Network (FinCEN) Director Kenneth Blanco, in an address to the gaming industry, remarked that, “Sports betting, and other mobile gaming services … are no different than other products and services. FinCEN expects that your casino or card club is monitoring your sports betting programs for potentially suspicious activity. This includes offering sports betting through a mobile app.”2

Elise Lebourg


Elise Lebourg, Bob Boyle & Christophe Grippa Ernst & Young

Where the industry is today Currently, 13 states allow sports wagering, with New Jersey emerging as the leader with $300 million in betting volume in the month of May 2019, outpacing Nevada. By the end of this




<< Sports betting has increased. Betting on NFL games has increased in popularity, with more than 38 million Americans planning to bet on football games this season. >> year, bills are expected to be considered in at least 35 states to allow sports wagering, according to Gambling Compliance, an industry research and consulting firm. By 2024, the firm estimates as many as 40 states could allow sports gambling.3 The industry has also seen an increase in sports leagues partnering with sports wagering companies. For example, the National Football League (NFL) has a partnership with the Caesars Entertainment Corporation, the National Basketball Association (NBA) has a partnership with MGM Resorts and Major League Baseball (MLB) has a partnership with DraftKings. EY clients have looked to partner with companies who’ve worked in sports wagering in other jurisdictions, including the UK to prepare themselves with those who’ve been involved in a more mature market. Sports betting has increased. Betting on NFL games has increased in popularity, with more than 38 million Americans planning to bet on football games this season. According to the American Gaming Association (AGA), 6.9 million of those bets will be placed at a casino or a sportsbook, and the remaining bets will be through other forms of wagering, including online and mobile wagering.4 Online sports books and betting exchange companies offer the convenience of wagering anywhere within a geo-fenced location and may provide additional benefits to the patron including higher payouts and on-demand analytics. Certain states plan to restrict mobile wagering. For example, patrons in New Mexico and Arkansas must be physically in a casino or in other approved facilities to place online bets. Whereas other states, including Illinois, are planning a phased approach. Illinois plans to require wagers to be placed on an app or website that is associated with a brick-and-mortar operation for the first 18 months, with the playing field opening to other operators who may not already be established in Illinois after two years.5 Patrons will also be required to register and provide “know your patron” (KYP) information, before they can place bets. Understanding the risks Many traditional gaming companies, including casinos, are well-



versed with FinCEN requirements to establish an effective AntiMoney Laundering (AML) compliance program; however, there are new challenges that arise with online and mobile functionality. One specific challenge is the increased risk in KYP, because of the absence of face-to-face interaction that facilitates ID verification. Fast and accurate ID verification before allowing patrons to wager or game online significantly reduces the risk of money laundering. Proxy and messenger betting also increase the risk of money laundering because of the lack of face-to-face interaction. Identifying the ultimate beneficiary of the wager is challenging when the bet is not made physically, where the person making the wager can be observed. For brick-and-mortar casinos, it is common for surveillance and employees in the front-of-the-house to identify when a patron is using an agent or a proxy to transact for them, since the exchange of money or chips may be seen. In the UK, according to the Gambling Commission, online gaming operators have a period of 72 hours to carry out age verification (AV) checks (with dispensation applied if a consumer is using a credit card), during which time it is possible for a consumer to register an account and deposit funds for gambling. While this requirement is a first step to customer identification and risk mitigation against other issues, such as underage gambling, this 72-hour period presents an opportunity for individuals to gamble prior to AV checks. The Gaming Commission acknowledges this, and as part of their own internal review, they recommended that the 72-hour window be removed. As online gaming operators in the US develop their own compliance programs, they should consider live registration requirements and full ID verification prior to allowing wagering. In addition to the KYP risks present in online gaming, there are other red flags to consider that may signal potential money laundering activity, many of which present themselves during the opening of an account. For example, a patron may provide mismatched information, such as an email domain, telephone number or postcode from different countries or states. The patron may also be identified on international sanctions lists. There are additional red flags to be aware of when a patron makes deposits in and withdrawals from their player account.


For example, if a patron deposits a large amount of funds into their account with minimal play before requesting withdrawal, this may be indicative of a traditional minimal gaming scheme to layer funds. Outside of AML risks, there are also fraud and legal risks that must be considered. The risk of identity theft is heightened because fraudsters can use the relative anonymity in the digital environment to use stolen identity and bank account information to wager. Additionally, companies must address risks associated with underage patrons and self-exclusion patrons who are attempting to reinstate their accounts or create a new one to continue gaming. Using third-party identity verification tools that have access to international databases of stolen or false identities may help to flag suspicious accounts during registration before any wagering or gaming takes place. While a patron’s identity may be verified, online providers also need to account for potential play outside the allowed geographic area, IP spoofing or other methods to bypass the geo-fencing restrictions. Preparing to address risks in an emerging industry Culture of compliance FinCEN, the IRS and the U.S. Department of Justice (DOJ) have reiterated the importance of a strong culture of compliance for casinos and sportsbooks. Companies are encouraged to break down traditional communication and information siloes and include all relevant departments in their compliance committees. Principles for encouraging a strong culture of compliance include: • Allocating sufficient budget for compliance • Allocating appropriate resources to AML compliance • Ability for compliance personnel to make decisions regarding risk to the organization • Developing a system of internal controls, policies and procedures, training and independent testing proportional to money laundering and terrorist financing risks • Ensuring senior leadership and board engagement with AML compliance efforts by providing periodic updates on regulatory developments, changes to the program, resourcing and audit findings by regulators and other independent compliance reviews Automated ID validation for KYP checks Verifying a patron’s identity prior to allowing gaming or wagering should be considered a foundational step in an AML program and an industry-leading practice. The UK Gaming Commission recommends that gaming companies should require ID submission and validation prior to play. Physical ID, whether presented in-person or through a picture submitted by a third-party validation service can be obtained and used to

conduct screening against sanctions, Politically Exposed Persons (PEP) and other exclusion lists. Many third-party validation services also allow gaming providers to set red flag thresholds to triage new customers; customers who do not alert any red flags associated to fraud may be fast-tracked for approval, while customers who alert for suspicious behaviors can be sent for manual review by the compliance department. Fraud analysis An investigation team can identify and investigate fraud to mitigate fraud risk. For example, an investigative team would want to use all available information and examine home address, phone number, last name and date of birth for any potential similarities to investigate duplicative accounts. Deposit and withdrawal policies may also limit the risk of fraud or money laundering. For example, when a patron deposits funds electronically, consideration should be given to require their occupation and other information to understand their source of funds and wealth. Patron details such as name and address should be pre-populated with the information used to set up the account. Name and address information may be locked from editing to reduce the risk of unknown parties funding gambling activity, or potential card fraud. To limit the risk of rapid suspicious movement of funds, daily deposits should be reviewed for potential transaction velocity red flags. Velocity should also be considered for withdrawal activity. Players should be limited to minimal withdrawal volumes within a 24-hour period to limit the risk of structuring transactions. Withdrawals generally should only be made to a verified bank account on file, in the player’s name. To verify a bank account, players should be required to provide additional documentation such as a bank statement or voided check. Integration with databases to use all available information While many companies may have a wealth of automated systems, they may not be utilizing or cross-analyzing all information that is available. The IRS, for example, has partnered with Palantir to leverage their Gotham platform to provide “the capability for seamless research and analysis in one unified environment.”7 While gaming operators do not need a super computer to track transactions and customer ID information, they should be considering the integration of public and other third-party databases. Automated screening of incoming wire transfers reduces risk without interrupting the transaction if cleared. Transaction monitoring rules should be customizable based on risk categories that exist across the patron base. FinCEN’s Kenneth Blanco noted in an address to the gaming community that the top trends in traditional casino filings related to minimal gaming with large transactions of more than $5,000.8 Minimal gaming schemes can occur through online gaming platforms; however, CGiMAGAZINE.COM



setting withdrawal limits based on either quantity of withdrawals a day or through a daily withdrawal amount allowance that is based on time, wagering and winning values serve as strong control options. Suspicious Activity Reports (SARs) should also include cyberrelated information. It is important for online gaming compliance departments to coordinate with their IT department to better understand how to capture information such as IP address, geo-location and other identifiers regarding who and where players might be. Per FinCEN, institutions â&#x20AC;&#x153;should include available Internet Protocol (IP) addresses and accompanying timestamps associated with fraudulent wire transfers being reported, even if a cyber-event was not involved in the suspicious activity.â&#x20AC;?9 Managing continued digital expansion The increasing popularity of online gaming and sports wagering brings with it new and challenging fraud and money laundering risks and schemes. Companies can better equip themselves by fostering a strong culture of compliance to lead a suitably staffed and trained fraud team, implementing automated KYP checks and integrating all available databases with the proper fraud analytics to position themselves to successfully identify, thwart and report suspicious activity. As the ease of wagering increases, so too will the number of criminal players looking to fraudulently game the system. :: CGi The views reflected in this article are the views of the author and contributors and do not necessarily reflect the views of the global EY organization or its member firms. REFERENCES 1

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ELISE LEBOURG, BOB BOYLE & CHRISTOPHER GRIPPA Elise Lebourg is a manager at Ernst & Young LLP in Dallas and is part of the EY Forensic & Integrity Services practice (EY Forensics). Elise works with clients on anti-money laundering (AML) matters, pre-acquisition anti-fraud due diligence, whistleblower and other internal investigations. Specifically, Elise focuses on regulations affecting the gaming and other financial industries concentrating on AML compliance program assessments globally. Elise has a breadth of experience with AML engagements in the United States, Canada and Asia such as conducting program reviews for both compliance and internal audit functions, implementation of policies and procedures, transaction remediation reviews, federally mandated lookback reviews and enhanced due diligence. Elise is a Certified Public Accountant (CPA) and Certified AntiMoney Laundering Specialist (CAMS). Bob Boyle is a senior manager at Ernst & Young LLP in New York and is part of the EY Forensic & Integrity Services practice (EY Forensics). He has more than 10 years of proven experience assisting clients globally with assurance and advisory services. Bob focuses on compliance matters such as anti-money laundering (AML), anti-fraud and other financial crime matters. Bob has conducted financial crimes compliance projects with gaming clients in North America, Asia and Europe. He has worked with traditional brick-and-mortar operations as well as operators with online gaming and sports wagering products and services. Bob has extensive experience leading AML engagements such as conducting risk assessments, program reviews, addressing the accuracy and completeness of regulatory reporting, implementing policies and procedures and the training of employees. Bob is a Certified Public Accountant (CPA) and Certified Anti-Money Laundering Specialist (CAMS). Christopher Grippa is a partner with Ernst & Young LLP and part of the EY Forensic & Integrity Services practice (EY Forensics) who experienced in advising clients on complex matters involving compliance, investigations and disputes. For more than a decade, he has been working with attorneys and management to provide accounting and financial guidance to organizations across the globe. Recently, Chris led numerous forensic accounting investigations and compliance assessments, including engagements related to the Foreign Corrupt Practices Act (FCPA), anti-money laundering (AML), financial statement misrepresentations and employee misappropriation. He has experience working with management and attorneys reporting to government regulators. Chris is a Certified Public Accountant (CPA), Certified Anti-Money Laundering Specialist (CAMS) and a Certified Fraud Examiner (CFE).


BEPS 2.0 - TAxATION OF DIGITALISED BUSINESSES? he OECD’s BEPS 2.0 initiative has the potential to change the global tax landscape significantly by changing how profits are allocated between jurisdictions (known as Pillar One) and introducing a new globally coordinated regime for a minimum tax and anti-base erosion measures (known as Pillar Two). There is no shortage of challenges and opportunities facing today’s online and digital businesses and their tax functions, whereas the latest initiative could present a new set of pressures.

Adam Polacsik


Adam Polacsik & Osarugue Obayuwana KPMG Malta

The Past and the Present In 2015, the Organisation for Economic Co-operation and Development (OECD) issued its final report on its Base Erosion and Profit Shifting (BEPS) project. While the initial objective of the first Action 1 Report was to address the tax challenges of the digital economy, the OECD has recently gone a step further to propose new rules to tighten the noose, which are currently at public consultation stage. The OECD’s latest initiative will affect online and digital multinationals more than any other BEPS proposals in the last decade. The work in this area is currently partitioned into two pillars: Pillar One dealing with the allocation of taxing rights and profits, proposing new ways to apportion income between taxing jurisdictions, and Pillar Two tackling, as a ‘backstop’ imposing a minimum tax and denial of deductions or imposition of withholding taxes on payments made to ‘low tax’ entities. On 9 October 2019, the OECD Secretariat released a new proposal under Pillar One.



Osarugue Obayuwana


The Proposed New Rules Under the proposed new rules, profits of multinational enterprises would be allocated based on digital presence in a jurisdiction. Accordingly corporate income taxes could be levied on a company in a particular jurisdiction, notwithstanding the absence of a physical business connection with such jurisdiction. Highly digitalised businesses, including companies in the igaming industry that prevalently conduct their activities online, may therefore expect to incur additional tax obligations in multiple jurisdictions where their customers are located, based on the newly proposed digital presence concept. Unilateral Implementation of the New Tax Rules has begun Certain jurisdictions have already taken unilateral steps (among which are several EU member states such as France, Italy, Hungary, Spain, United Kingdom and non-EU countries such as India etc.) by creating additional frameworks for the taxation of highly digitalised businesses models. Such steps are at different levels of implementation in these jurisdictions. While some have passed through local parliaments and have fully come into effect (even retroactively in certain cases), some are still in the pipelines. For instance, in France, the French Digital Services Tax (DST) law has already come into effect, given that it was signed and published to be retroactively applicable as from 1 January 2019. Under the French DST, a 3% tax applies on gross revenues deriving from i) the provision of a digital interface (i.e. intermediation services); and ii) targeted advertising and transmission of data collected about users for advertising purposes. The tax applies only to companies exceeding in the previous taxable year the following thresholds: i) €750M in worldwide revenue and ii) €25M in taxable services supplied in France; the two thresholds are cumulative conditions and are to be calculated at the consolidated group level. Italy has introduced a DST of 3% on gross revenue derived from i) advertising on a digital interface, ii) multilateral digital interface that allows users to buy/sell goods and services, iii) the transmission of user data generated from using a digital interface. The DST applies to both resident and non-resident



companies with total group revenue of €750M and total revenue from digital services supplied in Italy of at least €5.5M. It has been announced that Italy’s DST will take effect from 1 January 2020. In Spain, the government proposed a budget bill for 2019, which included a 3% digital tax that would apply to companies with more than €750M of annual global revenue and €3M in annual revenue in Spain from certain digital business models. Companies that are primarily engaged in online advertising services, selling of online advertising (space) and selling of data are affected. In the United Kingdom, a draft DST legislation has been published stating that with effect from April 2020, the government will introduce a new 2% tax on the revenues of search engines, social media platforms and online marketplaces which derive value from UK users. These businesses will be liable to the DST when the group’s worldwide revenues from these digital activities are more than £500M and more than £25M of these revenues are derived from UK users. The DST will be payable and reportable on an annual basis. Italy • New tax introduced by the Budget Law 2019 approved in Dec 2018. • 3% tax levied on: revenues generated from certain digital services (scope broadly in line with EU proposal) rendered to Italian B2B and B2C customers by companies whose total worldwide revenues > EUR 750 million and revenues from digital services realized in Italy > EUR 5.5 million • Implementing decree? Spain • Approved by the government on January 18, 2019 3% tax on online advertising services, brokering services, and the sale of user data Following the EU Commission's proposal, incl. thresholds and scope. France • Draft Law published in March 2019 • The tax will be levied at a rate of 3% on revenues generated from certain digital services (targeted online advertising, sale of user data for advertising purposes, and intermediation activities by platforms) by companies whose total worldwide revenues > EUR 750 million and revenues generated in France > EUR 25 million deductible for corporate income tax purposes •

The bill passed the National Assembly April 9, 2019 and by the Senate May 21, 2019, and will apply retroactively as of Jan 1, 2019.


United Kingdom • 2% on in-scope revenues, targeted at revenue streams linked to UK users derived from in-scope business models • Draft bill April 2019 • In-scope business models: Search engines Social media platforms Online marketplaces • Effective in January 2020, with the first tax bill due in April 2020. What to Expect Compared to the current system, the proposed changes will ‒ broadly speaking ‒ re-allocate profits and taxable proceeds from “residence” or “source” countries to “destination” countries, being the countries where customers are located. As with any change, the OECD proposal will result in winners and losers. But which countries are the likely winners and which are not? In an igaming context, taxing rights would be affirmed for countries where players are located, notwithstanding the absence of physical presence in the jurisdiction. Therefore, it can be expected that profits which have previously been attributed to activities such as head office activities, R&D, and to brands and technology, will now be attributed to ‘sales’ activities in jurisdictions where players are present, at least in part. As a corollary to these new rules, the practical concerns that can be envisaged include: l Potential additional taxation in multiple jurisdictions, with heightened risk of double or multiple taxation; l Increased incidence of multilateral tax disputes which existing double tax treaties are not necessarily equipped to address. Significant costs to dispute resolution can also be reasonably expected; l Increased tax compliance obligations to satisfy the new compliance demands; l Increased need for adequate transfer pricing and profit allocations analyses. Although the proposal is still a draft and many implementation aspects still need to be defined, including the level of routine profit and the share of surplus profit to be reallocated, we can get a glimpse of the future by considering that: l Countries with large B2C sectors will be affected more than countries with large B2B sectors; l Countries with strong high-end/high-value consumer product sectors are more likely to be affected than countries with low-margin industries; l Exporting countries are more likely to lose while importing countries are more likely to win. Grey Areas: Who is Safe from the Reach of the Proposed New Rules? The OECD Secretariat acknowledges that the published proposal represents an architectural framework on which to build, and

that it requires significant work before it will be usable. Nevertheless, pending the day when the OECD might be able to hammer out many details of the proposal, the recent draft and enacted unilateral DST measures by some jurisdictions as mentioned above already undermine tax certainty. Without consensus within a relatively short timeframe, it appears likely that more countries will adopt unilateral alternatives, making it increasingly difficult to navigate the global tax landscape. Recognising this challenge, the French government announced that the DST will be repealed as soon as an international agreement is reached and companies will be refunded the difference between the French DST paid, and the yet-to-beagreed-upon international digital tax. It is yet to be seen whether the other countries will follow suit. It is important to note that the new proposal does not apply to all companies, nor does it ring-fence the digital economy subjecting the highly digitalised businesses to a separate regime. Several implementation aspects of the proposal are still to be defined, including the exact sectors to which it will apply, whether it will affect all multinational corporations (MNCs) or only those with revenues in excess of €750 million, noting that some clarifying rules and carve-outs will likely be needed. Preparing for the Future Given the present uncertainty in the international tax terrain, MNCs have recognised the need to take proactive steps by commencing discussions with their tax advisors to mitigate the potential impact of the incoming rules. It is therefore essential that MNCs in the services industry – such as groups in the igaming sector whose business models are, by necessity, driven by digitalised business models – assess their readiness for BEPS 2.0, ensuring that the latest developments do not catch their businesses unaware. Contact Information Juanita Brockdorff is a Partner, Adam Polacsik is a Manager and Osarugue Obayuwana is an Assistant Manager in the International Tax group in KPMG Malta. Applicability of the information to specific situations should be determined through consultation with your tax adviser. This article represents the views of the authors only, and does not necessarily represent the views or professional advice of KPMG. :: CGi

ADAM POLACSIk & OSARUGUE OBAYUWANA Adam Polacsik is a Manager and Osarugue Obayuwana is an Assistant Manager in the International Tax group in KPMG Malta. Applicability of the information to specific situations should be determined through consultation with your tax adviser. This article represents the views of the authors only, and does not necessarily represent the views or professional advice of KPMG.




CROSS-BORDER ExPANSION FOR THE EUROPEAN REMOTE GAMBLING INDUSTRY: THE LABYRINTH OF INTERNATIONAL TAxATION t was less than 30 years ago that prof. I. Nelson Rose theorized the cyclical nature of the gambling industry. In his view, legalized gaming has life starting with governments in need of money and looking at casinos as sources of new fiscal revenues and ending with people crying at deregulation and at the harmful effects that wagering traditionally spills on vulnerable individuals. Some recurring patterns, which took place throughout history, seem to prove that thesis. From the age of the Roman Empire, that saw the introduction of some of the most ancient laws governing - and restricting - the exercise of gambling among the population, to the modern days’ clampdown on gaming venues on the part of policymakers in several European countries, where legalized gambling used to flourish in the last decade.


Andrea Ricci Counsel Bellerophon Overseas

What European operators can do to react to the rising barriers they are currently encountering in some of their traditional markets and uphold remarkable performances on their financial statements? Indeed, geographical diversification might turn out to be the right answer for three main reasons: • The global market for gambling services is experiencing a good momentum, in part because many countries, particularly in Latin America and Asia, are transitioning to a liberal policy in favor of legalized gaming (e.g., Japan). • Some emerging economies are unregulated jurisdictions




when gambling is concerned and could easily represent appealing arenas for mid-sized European operators, that cannot compete in restricted tender procedures (as, for instance, those in the SAR of Macau); Thanks to recent technological improvements, remote gaming platforms can provide players with captivating experiences at competitive costs. Thus, the exploitation of iGaming in a cross-border environment, whenever feasible, could ensure efficiency, especially for the flexibility in the placement of the necessary IT equipment and for the ease in the obtention of a dedicated interactive gambling license.

Since cross-border expansion is a challenging process for most of the medium-scale undertakings, an important topic they must become familiar with is taxation. In most jurisdictions where gambling is allowed as a private economic activity, it is usually concerned by a quagmire of direct and indirect taxes. The most critical levies that have a hit on profits of gambling companies are corporate income tax and gaming privilege taxes. As far as corporate income tax is concerned, while it is quite straightforward to conclude that land-based casinos are entirely subject to any charges levied in the foreign jurisdiction where business is carried on, the taxation concerning remote operations is not so easy to grasp and, primarily, depends on some legal features characterising the countries involved: •


Taxation in the country where the company is effectively managed: In line with a long tradition embedded in the history of OECD’s double tax treaties, the land of residence of the taxpayer has full taxing rights. That has a profound impact on European companies. After the implementation of ATAD I (1st January 2019), which mandatorily introduced across the whole EU the so-called controlled foreign company tax regime, foreign subsidiaries, established in low-tax jurisdictions, have to be treated as disregarded entities for fiscal purposes. Some exemptions exist for small businesses (for instance in Luxembourg), but the sole fact that an iGaming undertaking is exercised through a company incorporated in an exotic tax-heaven does not shelter it from corporate income taxes imposed in Europe. Therefore, unless the business is carried on by a subsidiary operating in a country with an average level of taxation, residence jurisdictions in the EU will be able to impose their taxes on profits of foreign source. Taxation in the country where the IT equipment is located: The country where the IT equipment is located, according to the OECD Model Double Tax Agreement, is awarded the right to tax income produced by foreigners only insofar they have a fixed presence there in the form of a permanent establishment (i.e., a fixed physical place where business is


conducted) or a subsidiary. Given that iGaming remote platforms are just a combination of software and data, the only fact that can give rise to a permanent establishment is the possession, through ownership or lease contracts, of the server on which the gambling platform runs. By contrast, hosting agreements concluded with external service providers do not configure a permanent establishment. Many countries issuing interactive gambling licenses also require foreign enterprises to hold an office within their territory to ensure that operators comply with their regulations. In such circumstances, the existence of a permanent establishment needs to be evaluated on a caseby-case basis as it depends on the nature of the activities performed within the licensing jurisdiction. Generally, a permanent establishment is not deemed to exist whenever the office at the disposal of the foreign company is just used for the exercise of activities which are ancillary with respect to the main business (i.e., it is only a representative office). Taxation in the country where consumers reside: If the country of residence of the patrons is part to an OECD-style double tax agreement with the state of residence of the iGaming enterprise, the former is not entitled to subject international operators' profits to its own corporate income tax. As gambling services are provided remotely, no physical presence in this jurisdiction will typically be maintained by the iGaming enterprise. Therefore, no taxing rights are attributed to the jurisdiction of residence of the consumers under the current OECD framework.

Besides corporate income taxes, the legalized gambling industry is also concerned, in various cases, by special duties (usually referred to, in technical jargon, as “gaming privilege taxes”) specifically designed to impact gaming businesses and to channel some of their revenues to State budgets. Well-known examples of such levies are found in Malta (gaming tax), Nevada (license fee), Italy (unitary tax on gaming yield), the UK (remote gaming duty). Before examining how those taxes interact with existing international tax law instruments, it is appropriate to briefly summarise their constitutive elements, such as trigger event, tax base, and rate: •

Maltese Gaming Tax (see Gaming Tax Regulations, 2018): Trigger event: The provision of gaming services to persons who are within the Maltese territory at the time the services are rendered. Tax base: Gaming revenue, intended as “the aggregate stakes and wagers, inclusive of any bonus or other player incentives which are comprised within any stake or wager, less an amount to be determined by summing up the aggregate player winnings to the aggregate of any bonus or other player incentives



which are comprised within the amount of aggregate stakes and wagers”. Tax rate: 5 %

Nevada License Fee (see Nevada Revised Statutes – NRS 463.770): Trigger event: Earning of revenues arising from the operation of the gaming business (NRS 463.370) Tax base: Gross revenue recorded by the licensee on a monthly basis and defined as “(...) the total of all: a) cash received as winnings; b) cash received in payment for credit extended by a licensee to a patron for purposes of gaming; (...) less the total of all cash paid out as losses to patrons, those amounts paid to fund periodic payments and any other items made deductible as losses (…)” (NRS 463.0161). Tax rate: 3,50% on the gross revenue of the licensee not exceeding USD 50.000 per calendar month; 4,50% on the gross revenue of the licensee above USD 50.000 but not exceeding USD 134.000 per calendar month; 6,75% on the gross revenue of the licensee above USD 134.000 per calendar month.

Italian Unitary Tax on Gaming Yield (see Legislative Decree n. 504 of 23rd December 1998, as recast): Trigger event: Acceptance of stakes within the Italian territory. Tax base: The amount of wagers which is not returned to patrons, less certain items of expense such as fixed government fees. Tax rate: 25% Trigger event: Participation of a person, who usually lives in the UK, to remote gaming. Tax base: Gross gambling profits, defined as the difference between aggregate receipts from UK persons and the amount paid out in winnings to UK persons. Tax rate: 21%

Although no supranational guidance is upon nations to deliver any global harmonization among gaming privilege taxes, interestingly the four above-said levies share one main common hallmark, which is that they are construed with the view to target domestic revenues achieved by iGaming undertakings, rather than their local and transnational income. This fact is vested with certain importance in international tax law. If gaming privilege taxes cannot be regarded as similar in nature to corporate income tax, because for instance they are calculated as a fraction of local revenues instead of worldwide profits, then they will not be covered by the provisions of double tax treaties and, in particular, by the principle that business

income is to be taxed solely in the country where a company has either its place of management, its legal seat or a permanent establishment. In analogous matters, OECD found in its “Tax Challenges Arising from Digitalisation –Interim Report 2018” that India’s Equalisation Levy and Italy’s Levy on Digital Transaction, which both tax payments made by residents of India or Italy in connection with marketing services purchased over the internet from foreign suppliers (hence, gross domestic revenues recorded by foreign suppliers of marketing services are subject to taxation in India or Italy in those cases) “should fall outside the scope of double tax treaties” and that, as a result, “may generate situations of double taxation for foreign enterprises already liable to corporate taxes in their country of residence”. Therefore, it might be reasonably concluded that gaming privilege taxes, unlike corporate income taxes, are excluded from the protections enshrined in OECD-based bilateral fiscal conventions. So, to avoid risky and expensive litigation with foreign tax authorities, it is advisable to conduct proper due diligence around the tax system of the countries where the players of the iGaming platform live. :: CGi

ANDREA RICCI Andrea Ricci is a professional accountant who serves as counsel at Caribbean-based consultancy firm Bellerophon Overseas Ltd. Throughout his experience in Italy and Luxembourg, Andrea covered a full breadth of tax matters, including, inter alia, international private equity and Real Estate deals. He has also acted as a fiduciary agent for companies operating in tightly regulated industries and contributed to the design of their financial reporting systems.



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SOCIAL MEDIA FOR GAMBLING OPERATORS ith increasing restrictions on TV advertising, social media may need to become the focus for gambling operators as the modern way to advertise. However, operators will need to tread carefully as the Advertising Standards Authority (“ASA”) and the UK Code of non-broadcast Advertising and Direct & Promotional Marketing (“CAP”) have established regulatory guidelines for gambling advertisements on social media.


Melanie Ellis

This article will guide you through some of the many pitfalls a gambling operator should be aware of when advertising to customers in Great Britain through social media.

Melanie Ellis & William Reade Northridge Law LLP

Target audience Of particular concern with social media is its use by young people and, as such, it is important to ensure that adverts are not targeting young people under 18. CAP’s placement restrictions apply to marketing communications such as social media; thus, when selecting media in which to advertise, operators must understand the likely audience that their adverts will target. Operators should ensure that they take the necessary steps to exclude under-age groups from their intended audience when possible. One such restriction for operators to keep in mind is the “25% Rule” from the ASA gambling advertising guidelines, which states that gambling advertising must not appear in media “where children or young people make up a significant proportion – more than 25% - of the audience”. The Gambling Commission’s Licence Conditions and Codes of Practice (“LCCP”) and the Industry Code for Socially CGiMAGAZINE.COM



Responsible Advertising (“Industry Code”) have also aimed to tackle issues concerning youth and gambling. The LCCP recently introduced new age and identity verification rules that ensure that all remote gambling customers are age verified before they can deposit money, gamble, or access free-to-play versions of gambling games on operators’ sites. Additionally, the Industry Code added safeguards for consumer-facing marketing content that operators must use on their social media channels such as YouTube and Twitter. Do the rules apply? While the Gambling Act 2005 gives a wide definition of advertising (including anything done to encourage someone to participate in gambling or to increase the use of facilities for gambling) and could be said to include everything on a gambling operator’s social media channels, the CAP Code does not cast quite such a wide net. The ASA’s remit does not extend to everything published on a gambling operator’s social media channels, but it will cover any message which is directly connected to the gambling product being offered. This can be interpreted quite widely by the ASA and, in relation to betting operators, has extended to any comment on an event on which the operator accepts bets. In 2015, William Hill and Bet365 both found themselves on the wrong side of this line when tweets referring to the Masters golf tournament and the gender of the royal baby (William Hill) and the golfer Jordan Spieth (Bet365) were ruled against by the ASA. In two tweets by William Hill, images of teddy bears were used in connection with speculation about the gender of the Duke and Duchess of Cambridge’s second baby and, although they did not directly refer to bets offered on that topic, were found to be in breach of the CAP Code because the images were likely to be of particular appeal to children. William Hill’s tweet about the Masters featured an image of a child jumping in the air while holding a golf club and was challenged on the basis that an advert for gambling should not feature anyone under the age of 18. Similarly, Bet365’s tweet about Jordan Spieth was challenged because, under the CAP Code, gambling adverts should not feature anyone aged under 25 playing a significant role. In neither case did the advert refer to a betting market on the event or player in question, however, the adverts were intended to promote the betting brand and commented on sporting events on which bets were taken. The fact that the adverts also featured direct links to the webpages on which bets were taken was mentioned by the ASA in the Bet365 ruling; but this should not be considered a determining factor. Retweets and shares A gambling operator could be forgiven for thinking that only its own messages on social media would be covered by the CAP Code. However, even retweets, shares of third-party posts, publicly visible responses or “likes” can be captured; all of which is considered user-generated content. All messages on social media need to be compliant with the CAP



Code, including retweets. This is particularly so when content is “adopted and incorporated” into the operator’s marketing communication. Some things to be wary of retweeting include tweets featuring cartoon characters or anyone aged under 25 (for example in an image or GIF) and anything likely to cause widespread offence or likely to mislead customers. In 2012 and 2013, Aston Manor Brewery and 192.com were on the wrong end of incorporating user-generated content. Aston incorporated content from users on its social media outlets and, while it was not intended to act as advertising material, because the incorporated content was posted on their social media channels, Aston was found to have breached the CAP Code due to the fact that the content appealed particularly to young people (under 18) and was “irresponsible”. 192.com, through a series of tweets and retweets over the span of a week, were found to have “incorporated and adopted” material on social media which stated that it was the most popular online directory, a claim which was not substantiated. Each retweet was considered a marketing communication in and of itself. Furthermore, for purposes of incorporating or adopting usergenerated content, the ASA stated that this analysis could also apply to commenting or simply liking a user’s post. The UK Codes additionally state that where user-generated contents are within remit, operators need to ensure that their content is responsible and is not likely to be harmful, offensive or mislead people. Operators should pay special attention to the “misleading” wording, as the ASA has referred specifically to the use of misleading “free” bet and bonus offers in gambling adverts. Influencers The use of celebrities and social media influencers is a prominent advertising method to engage target audiences, as they promote a sense of trust amongst the public, but this is another area where operators need to be sure they adhere to the guidelines. In these marketing ventures, celebrities and other thirdparties should be treated in same way as the operator’s advertising “affiliates”, especially where the influencer is rewarded by the operator for new customers they attract through their marketing efforts. In such arrangements, the responsibility lies with the operator to ensure that those who advertise on their behalf comply with the CAP Code and gambling-specific guidelines, as well as with the LCCP and Industry Code. Under the LCCP, gambling operators are responsible for the actions of third-parties with whom they contract; thus, operators must ensure that the terms on which they contract with these third-parties include: (i) that the third-parties conduct themselves as if they were bound by the same conditions and codes of practices, (ii) obligations on thirdparties to provide such information as may be reasonably required in order to enable operators to comply with information reporting and other obligations to the Commission,


and (iii) the ability of the operator to terminate the contract with the third-party if said third-party is in breach of contract or has otherwise acted inconsistently with the licensing objectives – including a breach of relevant advertising codes of practice. If these affiliates commit a breach of the above conditions, the operator would be wise to terminate the agreement and ensure that the adverts in breach of the agreement are removed from all social media channels. If an operator seeks to feature a celebrity or influencer in an advert, they must ensure that the individual is aged 25 or over and that they look at least 25 years of age. Anyone who is or appears to be under 25 is explicitly prohibited by the CAP Code from appearing in gambling communications and marketing materials. This was an issue for Bet365 – as mentioned above – when they used Jordan Spieth in a gambling advert but would also apply to any celebrity or social media influencer paid to promote a gambling brand. The CAP Code additionally requires that marketing communications published by influencers are obviously identifiable as such. While some forms of advertising are easily identifiable (e.g. banner ads), social media channels are sometimes less clear in representing that a commercial relationship is linked to the advertised product. Accordingly, operators should be sure to include additional disclosure to ensure that affiliate content is clearly shown to be a marketing communication, for example by requiring in their agreement with the influencer that they use the word “Ad” in the title of their post. The 25% rule mentioned above can also come into play when operators are identifying influencers to promote their brand and/or product. Operators are advised to consider the demographic of their affiliates’ followers, as the CAP and ASA guidance prohibits the targeting of groups who are likely to be under the age of 18. Operators should analyse audience data (when possible) to ensure that potential influencer’s subscriber base is not likely to comprise of 25% of more of young people under the age of 18. A prime example of issues relating to the youth demographic and betting is illustrated by the FUT Galaxy case. The two business partners of the company – both well-known YouTubers - were fined a combined £250,000+ after pleading guilty to offences including advertising unlawful gambling, promoting a lottery and inviting children to gamble in relation to their role in promoting FUT Galaxy. The website allowed users to place bets using FIFA’s in-game currency, which could then be converted into real money outside the game. Despite knowing that a significant amount of the users of FUT Galaxy and their YouTube channels subscribers were youths under 18 years old, the partners encouraged the use of the site and participation in illegal gambling. Whilst the fact that the gambling in question was unlicensed and therefore illegal was the main basis for the prosecution, the fact that under 18s were being encouraged to gamble was a significant aggravating factor. The Gambling Commission described it as one of the most serious cases they have ever prosecuted.

Giveaways and competitions Operators should also ensure that promotional giveaways and competitions comply with the social media regulations set out by the ASA and CAP Code, as these promotions could amount to gambling. Consequently, operators should check that they are not offering a game of chance or lottery unless those types of promotions are explicitly covered by their licence (similar to a sports betting operator needing a casino licence to offer spot prizes based on the spin of a roulette wheel). Conclusion While there are many potential risks in the advertising of gambling on social media, if operators adhere to the various codes of practice, they should avoid any complications related to the issues set out above. As social media influence increases and becomes a more prominent force in advertising, gambling operators will need to adapt to the changing market and ensuing regulatory developments to ensure they remain compliant. :: CGi

MELANIE ELLIS & WILLIAM READE Melanie Ellis is a partner at Northridge Law LLP, with 13 years’ experience as a gambling regulatory lawyer. Melanie advises on all aspects of gambling law including licence applications, compliance, advertising, licence reviews and changes of control. She has acted for a wide range of gambling operators including major online and land-based bookmakers and casinos, B2B game and software suppliers and start-ups. She also frequently advises operators of prize competitions and social gaming products. Melanie has a particular interest in the use of new technology for gambling products and novel product ideas. William is licensed American lawyer in Texas currently undergoing his Masters in International Sports Law at ISDE – Madrid. As part of his program, he is currently a Legal Intern at Northridge Law LLP in order to gain international experience in various sectors of Sports Law including gambling.



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yle Wraxall, CEO of Digital Isle of Man, gives his thoughts on the changing landscape of the eGaming industry and how the Isle of Man is embracing this global evolution.

CGI: It sounds as though you expect significant changes, but we’ve experienced change before haven’t we?

Interview with Lyle Wraxall Chief Executive Isle of Man Digital

LW: Absolutely! Those of us with experience in the sector remember the late 90s well and what a different animal the gaming world was. Back then, it was much easier to start a business; licensing was completely different, there were less barriers to entry and launching a new product was so much simpler. New ideas were being concocted as the scope for variety was so vast and the novelty of online gaming was fresh. Albeit not as fast-paced as the world we know today and limited by the global connectivity by comparison, new customers, markets and jurisdictions sprung up around the world as leading lights within the sector, including the Isle of Man. That’s true, but do you believe these will be the biggest changes in recent memory? Perhaps not the biggest change in terms of pointing to a definitive single factor or moment, but the sector is certainly maturing and subtly changing, and we need to evolve with it. I always point to mobile betting as an example of a momentous change. You have to bear in mind that mobile betting is still not even 10 years old, believe it or not! Although it’s now so embedded in this space and everyday culture, it was launched CGiMAGAZINE.COM



just before the 2010 FIFA World Cup. Roughly responsible for $68.5 billion of global revenue, I think you could reasonably argue this was a significant event in our industry. However, what we’re seeing around the world, and therefore on the Isle of Man, are large but understated changes. Factors like business drivers, harnessing technology, diversification into new areas and changing expectations towards jurisdictions and regulators are all evolving.


You’ve listed four factors so let’s tackle each of them. What do you mean by the term ‘business drivers’?

perceptions of growth. Initially, when new businesses were setting up, business drivers were measured by number of staff, revenue streams and market share. However, recent history has underlined the shift towards scalability, consolidation of companies positions in the industry and a huge increase in mergers and acquisitions, and I don’t doubt that we’ll see more of these in the future. In fact, all sectors tend to follow this path as they develop and as businesses devise new strategies and ‘protect their turf’ so to speak, they look to streamline their processes, reduce overhead costs, diversify into new areas of growth and become global powerhouses.

What I’m referring to is the changing goal of businesses within the sector. As we’ve mentioned, the sector has, and continues to mature and companies are reflecting this in their goals and

We all know how fast-paced the sector is – especially in


And what about harnessing technology?


comparison to law, education and manufacturing. Something that will never change. Harnessing this technology is going to play a huge part in the future and businesses, governments and regulators that adapt to this best will drive the sector for the foreseeable future. Thinking about big data, AI and blockchain alone, the capacity for innovation, improved efficiency and data security is endless. Whilst it is unclear how all of these and countless other new technologies will be best utilised in the future, businesses need the freedom to invest, test, and experiment and jurisdictions need to reflect that. How can jurisdictions support that? I think different governments will interpret this in different ways and support it as best they can. From an Isle of Man perspective, we are aiming to create an environment that makes trialling technology, managing regulation and communicating clearly with businesses as easy as possible. Fortunately, our world class data centres, connectivity, and ability to legislate quickly with our agile government gives the Island a strong starting position. We also have tangible examples with Blockchain Isle Man, launched in February this year, underlining our commitment to embracing innovation. Designed to help regulators and businesses communicate via our team of expert consultants, companies are successfully navigating regulation quickly and efficiently and we’ve seen token-based enterprises emerge already. If you factor in the large number of shared working spaces readily available for business and the resulting ecosystem of digitally-minded business people, I think we are building a strong proposition. And is this linked to the diversification within the sector you hinted at? Without doubt the two are linked, but traditional businesses models still have a room for implementing new technology, even if it’s a case of streamlining or protecting employee data for example. However, what I was suggesting was the new opportunities provided by diversification within the gaming sphere itself. Like the explosion of mobile betting, this innovation and new technology provides the perfect platform for new strands of eGaming activity. Perhaps the best example, in terms of making headway and creating a global buzz, is esports. The way it has captured new customers and opened new markets will only lead to further investment, growth and creativity around how to make it better. It will also continue to evolve as an industry with players surrounding themselves with psychologists, support staff, and becoming more professional, creating jobs in the process. I certainly expect esports to develop into a larger part of the eGaming picture and think other jurisdictions will agree. That being said, I’m confident the Isle of Man’s reputation as a highly regulated and safe destination will attract players and businesses from around the world and mean that we play a part in shaping the future of this industry.

You also referenced changing expectations; can you expand on that? Of course! What I mean is that businesses, whether they’re start-ups, or as mentioned above, those seeking to consolidate their position, are demanding different things from governments and regulators compared to 10 years ago. Whilst supporting them when they first land and guaranteeing regulatory security remains crucial, more often than not, established companies are craving governments, policies and regulatory bodies that clearly communicate any changes and provide a stable business environment that can best support their changing goals. This involves combining each of the facets we’ve already discussed and establishing strong relationships with companies. Whether it’s regularly speaking and listening to industry experts, adapting and tailoring regulation to better facilitate new strategies or establishing an environment where risk-taking is encouraged, businesses around the world are seeking assurance on this. Again, around the world there will be different ideas around how best to support that, but in the Isle of Man, we are investing heavily in the sector and strategic partners. These partners will be tasked with creating the perfect business platform; to solve issues quickly, identify changes that need to be made and as a result, save businesses time and money. Are you confident that the Isle of Man provides all of this and can navigate these changes? Yes! I feel that we have a very strong proposition and always say that the most exciting part of my job is explaining what we can offer to firms around the world. The continued interest in our software supplier licence and the increasing number of applications to Blockchain Isle of Man suggest we are making good progress. The legacy we’ve built in the eGaming sector as home to Stars Group, Microgaming and Continent 8 combined with our desire to support new technologies emphasise our commitment to embrace the evolving nature of the sector. We will continue to work hard and make sure our regulators are aligned with developments in technology and provide new legislation that will promote growth where possible. I hope to continue building our proposition and understand that innovation and technology could very quickly change the picture. But our investment in new trends and desire to diversify the sector mean we are well-prepared for the future. :: CGi

LYLE WRAxALL Lyle Wraxall is the Chief Executive of the Digital Isle of Man Executive Agency




HOW ‘LIVE CASINO REDEFINED’ IS PAYING OFF n 2019 we have worked on pioneering a whole new game category in the Live Casino space: Live Game Shows. However, it’s well understood that new game development is a risky business, with a very high percentage of new games failing to deliver an adequate return on the sums invested. So how successful, exactly, has Evolution’s gamble on game shows been for its own business and for its licensees?


Amy Riches Head of Marketing Evolution Gamig

Throughout this year, we’ve talked a great deal about our recent game development focus at Evolution. Over the past year or two this focus has been very much on putting entertainment at the heart of our new games. We constantly review the market and ask ourselves what games are our operators’ players looking for. With the advent of Dream Catcher, we took a risk in launching a game that otherwise wasn’t available in the Live Casino space and that at its core was a fundamentally different game to the traditional Live Casino games out there. We wanted bubbly, charismatic game hosts that players could enjoy watching even if they weren’t playing along themselves. We wanted a studio that had the look-and-feel of a TV set, which relayed the immersive, engaging game experience over the camera to the players playing along at home. It became a runaway success – players love the game, they share each other’s enjoyment and they return time and time again to enjoy the added thrill of the multipliers that can bring super-sized payouts. Following that, the addition of Lightning Roulette knocked all our company records out of the park and we saw an even greater player following for this game. In-house, we had loved CGiMAGAZINE.COM



<< Entertainment, we felt instinctively, was the name of the game. Indeed, we said many times that we now see our competition for players’ attention and time as companies such as Netix, YouTube, Electronic Arts et al. >> both games from the start but what was becoming more and more apparent was that this new style of entertainment was a welcome addition to the games line-up, for both traditional table game players and those who didn’t normally play table games alike. 2017 and 2018 had proven that there was a need and a following for this new kind of game, so we really ramped up our product development and expanded our offering in 2019. To this end, we created a whole new game category, Game Shows, comprising titles such as MONOPOLY Live, Deal or No Deal Live, Dream Catcher, Lightning Roulette, Lightning Dice, Football Studio and Side Bet City. Entertainment, we felt instinctively, was the name of the game. Indeed, we said many times that we now see our competition for players’ attention and time as companies such as Netflix, YouTube, Electronic Arts et al. In parallel with this focus on innovative and entertaining game show style games, we continued to diversify our games offering and our development track. At Evolution we have never tended to play it safe in the area of product development. That way, we believe, lies tedium for players and an ever-decreasing return for all concerned. We always keep innovation at our core and we look outside our usual realm of traditional casino games to offer players that next big thing they are looking to play. As our Chief Product Officer, Todd Haushalter explained to CGi readers a few months ago, before money is pumped into actually creating a specific new game, the big idea — and the fine detail too — has to pass a very rigorous Evolution test. A great game, Todd believes, needs to have some (or preferably all) of 12 different elements in place — and all of those elements need to be in perfect harmony with each other. Naturally, we are not going to broadcast to our competitors what those 12 elements are. The point is, innovation at Evolution isn’t just about wild and crazy ideas. There’s a science to the early stages of new game development and evaluation, though that science can never be 100% exact; a sizeable portion of the process is still about factors such as experience and gut feel.



So, with all of that background in mind, 2019 really was a breakout year for Evolution with the launch of so many new games in our Game Shows category, as we offered players an abundance of new titles. We saw with each subsequent release that our new Games Shows such as Lightning Roulette and MONOPOLY Live had blown away all previous in-house records year after year. Our unique MONOPOLY Live online game show (created via sublicense from Scientific Games in partnership with Hasbro, Inc) has broken all company records, attracting huge unique players counts since its launch in April 2019. One of the most interesting things about MONOPOLY Live is that it has appealed to wide sector of players who had never played Live Casino before. Equally impressive is the fact that this success in attracting new players to MONOPOLY Live has not cannibalised play on our Dream Catcher money wheel, the game on which MONOPOLY Live is partly based. Quite the contrary, in fact, as Dream Catcher has seen player numbers increase in that same period since MONOPOLY Live’s launch in April. Of those first-time Live Casino players drawn to play MONOPOLY Live, it is illuminating to see that a good proportion of them went on to explore and play our other Live Casino games. And not only games in the Game Shows category. We can see a healthy spread of players playing other traditional Live Casino games such as Live Roulette and Live Blackjack. Remember, these are players who hitherto have not been attracted to Live Casino. So, MONOPOLY Live is doing exactly what we planned and envisaged it would do: it is attracting a new kind of player in a new age of Live Casino. At the same time it is a truly fantastic game in its own right. As Todd, boldly pointed out in that previous interview with CGi: “Players are done with simple games that have not changed much in the last 100 years. The gambling alone is not entertaining enough for every type of player. For ages everyone thought that table games, and by extension Live Casino, had to be serious like a fine restaurant and that playful things should be avoided. Countless people said we were wasting our time doing Dream Catcher, and then it became the biggest game in


Live Casino, until Lightning Roulette came along. It’s a new era of gaming and yes, our roadmap is full of game show style games that people who have never played a table game would love to play.” Overall, our Lightning Roulette, Dream Catcher and MONOPOLY Live games are the top three games for these firsttime players. Interestingly, all of these titles are in our new Game Shows category and you would have to describe all three of them as fun and lively games with the focus on an entertaining, engaging gaming experience. Another common component of these new games is multipliers, something that is very, very popular with slots players. Lightning Roulette’s success is absolutely off the scale — players love the additional extra thrilling opportunities to win as a result of the RNG-based multiplier elements of the live game. Of course, when new games are this effective at attracting hundreds of thousands of new players in their first few months, that means we have to up our game operationally too. And that’s exactly what we have done. We are accelerating all the time. Every day we are serving hundreds of thousands of players, and with the capacity to support tens of thousands of players simultaneously without any hiccups. In all of our Game Show games, the live game hosts provide entertainment for the players and the game designs are unique and fresh. This is opening up a new and immersive world of gaming for all types of players to experience. There’s also the new element amongst the players of shared victories and enjoying each other’s successes. MONOPOLY Live provides a great example of this. When players move into the 3D augmented reality bonus round they are all commenting on what they hope hits in the bonus round and you can really feel their excitement. Perhaps surprisingly, Evolution is the only company working in this new Game Shows category. We have carved out this segment as we saw a need to deliver something extra to players that they couldn’t get from traditional table games. We really went out on a limb, as they say — no-one had done it before and we couldn’t be sure that it would be a guaranteed success. What it all comes back to is the desire to innovate and push boundaries. None of that would be possible without the best and brightest minds working out how to do it — and by that I mean people in multiple teams and departments at Evolution, not just in game development. No-one has tried to approach things on this scale before or tried to run such complex games and environments 24/7. Traditional Game Shows are aired on television for a relatively short amount of time per episode for a limited series run with breaks in between. These Live Game Shows are streaming 24/7 from Day 1 and from that moment onwards have to withstand constant action, whether that’s a bluescreen background being on continuously to the flapper on the Dream Catcher wheel having to work from then on without a hitch, game round after game round. We are constantly finding ways to invent the rulebook (and everything else in fact!) from scratch because so

much of it simply hasn’t been done before. Thankfully, we have amazing in-house teams who develop these games and work out how they will be delivered. The excitement that accompanies the creation of these new games can be felt; there is true passion in the teams, which is what helps us to deliver above and beyond what we could have imagined or hoped for at the project kick-offs. We vowed that we would redefine Live Casino and push the boundaries of what our operators and their players could expect from traditional Live Casino. As can be seen, we are now a long, long way down the road to achieving that goal. 2019 saw the most extensive and ambitious programme of new product launches in Evolution’s history. 2020 will, in some respects, be a consolidation of that, but we are intent on expanding our Game Shows category further and offering players even more choice, entertainment and fun. Of course, we will not neglect our core games offering. As we’ve said before, we continually strive to bring players engaging games that, once played, they will fall in love with. Success breeds success, and we are all hungry for more. :: CGi

AMY RICHES Amy Riches is Head of Marketing at Evolution Gaming, a role that sees her involved across corporate and product marketing for Evolution’s world-leading Live Casino services.



Specialists in Gambling and Leisure Law



Harris Hagan 6 Snow Hill London EC1A 2AY +44 (0)20 7002 7636 info@harrishagan.com www.harrishagan.com


‘kICkING THE TIRES’ ON GAMING COMPLIANCE PROGRAMS he gaming industry is expanding and gaming companies are growing their businesses in new markets with new players through a growing number of betting and entertainment products. Having peaked at almost $42 billion in 2018, the US gaming industry has not yet observed the regulatory tail that may follow in this rapidly evolving environment. Understanding the new compliance risks presented by changing business components is essential to avoiding the repercussions that often result in regulatory enforcement, monetary penalties, business interruption, and reputational downgrade. These new compliance risks span money laundering, fraud, corruption, cybersecurity, and data privacy and security, to name only a few. Regularly testing compliance functions for gaps in controls, data, change management, processes, and outcomes is likely to enable further, less-impeded growth and serve as a market differentiator for gaming companies who get compliance right.

Michael Carter


Michael Carter & Lindsey Hallett Alvarez & Marsal Financial Crimes

In April 2019, the Department of Justice specified its perspective through its “Evaluation of Corporate Compliance Programs” guidance, that outlines questions companies must ask themselves: “Has the company reviewed and audited its compliance program in the area relating to the misconduct? More generally, what testing of controls, collection and analysis of compliance data, and interviews of employees and third parties does the company undertake? How are the results reported and action items tracked?” For gaming companies, potential misconduct and compliance risks present themselves when new variables (players, employees, products, services, technology, and



Lindsey Hallett


jurisdictions) enter the picture in mass or rapid fashion; exactly what the gaming, sports betting, and casino industry is experiencing in 2019.

The Big Picture Although based in regulatory guidance, every compliance program is different, so there is no one-size-fits-all approach to testing and validating the effectiveness of controls. Controls are derived from risk assessments which are unique to each company and require planned, regular testing to ensure the results are matching up to desired risk mitigation goals. When testing and validating the effectiveness of compliance program functions, it is important to keep in mind the following overarching concepts: • Ensuring what is documented in policies, procedures, and risk assessments matches the description and functions of the program controls; • Documenting the regulatory basis for each control and related changes and updates; • Assessing if the program functions are meeting the intent of the compliance requirements as outlined in regulations and law; • Determining if the performance expectations are documented and current; • Assessing whether performance outcomes are sustainable based on current resources; and • Understanding the available data, and if that data confirms or denies compliance performance measures. Starting with Data Bad data in, bad decisions out. It is extremely difficult to make risk decisions at operational and strategic levels if the information and data are compromised throughout the data lifecycle. Data testing provides compliance leaders the opportunity to assess the completeness and accuracy of data inputs, specifically regarding player information and



recordkeeping, gaming activity and behavior patterns, and completeness of reports. In August, FinCEN Director Kenneth Blanco highlighted increases in Minimal Gaming with Large Transactions and Chip Walking activity in recent Suspicious Activity Reports. Quality end-to-end data process flows are vital to identifying and reporting this type of activity and understanding the trends that may warrant updates to controls to reduce unusual or suspicious activity. Robust KYC information profiles, consistently collected, accessed, and updated, can help in developing linkage between players involved in suspicious activity. Considerations in testing and validating compliance data include: • Reviewing completeness and accuracy of data inputs and outputs (performance metrics, rules, and information quality); • Checking if data is formatted consistently from source to output, and is robust enough to enable meaningful analysis; • Assessing the interoperability of data among IT systems, through business units, and across geographies; • Ensuring that data flows and processes are documented accurately; • Ensuring data is stored, protected, and segregated in accordance with regulations, policies, and procedures. This includes “Red Teaming” to test against security, manipulation, and penetration risks from a cybersecurity perspective, as well as ensuring data is being used in accordance with local customer data privacy requirements; • Understanding remote and online remittance data, including risks associated with masking or circumventing IP restrictions (especially for mobile gaming); and • Testing if the analysis derived from data is accurate, meaningful, and applicable to executive management’s compliance guidance. In May 2018, FinCEN issued Enforcement Action Number 201802 which included data-related Anti-Money Laundering failures of a card club, specifically highlighting the lack of use of automated data “systems to aid in assuring compliance.” In this case, instituting even a basic level of data testing, in combination with transaction monitoring controls, may have enabled the casino to identify “multiple transactions at or just below $10,000” and be able to demonstrate examinations and reasonable dispositions of suspicious transactions. Data may not be the “end-all and be-all” of compliance, but it certainly touches every component of a quality program. More recently, there has been a class action lawsuit within the Ontario Superior Court of Justice related to the stolen data of customers, employees, and suppliers via a casinoentertainment company and the Ontario Lottery and Gaming Corporation. While the matter is ongoing, it certainly hints at how liable or negligent gaming entities may be perceived without proper data protections and robust testing.

Adequate Resources Compliance programs can ultimately be broken down into functions of people, processes, and technology. As with any endeavor, getting the people component right possesses a unique complexity and approach that requires deliberate


planning, attention, and supervision. Compliance staffing often serves as a primary cost center, though the people making up that cost center may also be viewed as the primary compliance resource. Again, the casino and gaming industry is expanding so rapidly that the normal requisite industry-specific experience sometimes has to be substituted for robust training and compatible cross-industry expertise. This unique situation also warrants special attention to testing the efficacy of compliance staffing while simultaneously enabling them to carry out smart, risk-mitigating measures. With regards to establishing the effectiveness of the investment in compliance personnel, review considerations include: • Ensuring the size of compliance staff is commensurate with company size and activity, and is upwardly scalable as operations grow; • Onboarding and training compliance professionals with appropriate experience and enabling cross-functional overlap of expertise (for example: table games and slots, sports book, bingo, and cage operations); • Dedicating appropriate resources, time, and money to training teams across the organization in addressing the variety of compliance risks; • Appropriately focusing compliance staff on high-risk operations and functions; and • Ensuring that compliance officers are adequately enabled to address control risks and effectiveness concerns.

Transaction and Player Monitoring Depending on the type of risk being addressed, monitoring can be very nuanced and a real challenge from a testing standpoint. Common approaches for validating detection systems include “Above/Below the Line” and statistical rule effectiveness tests. For customer screening, fuzzy logic and key term components of transaction and player attributes warrant regular updates and reviews to capture changes to detection avoidance typologies. Testing systems for effectiveness in capturing behavioral patterns may help identify, in part: • Structured redemptions; • High-value chip transfers; • Chip walking; • Chip manipulation, including RFID-defeat activities; • Slot ticket-in, ticket-out schemes; • Player collusion, including betting multiple or both sides of a table game, sportsbook wager, or fantasy contest; • Unusual player interaction with employees; • Using a casino cage for banking activities; and • Other fraudulent or illegal activity. No matter the focus of the testing, it is important to consider the differences and potential gaps between automated and manual systems, the timeliness of alerts, incorporation of investigation outcomes into the monitoring system, crossborder transaction and player risk, and testing a system’s




resilience against unstructured, faulty, or manipulated data. It makes sense to periodically check that monitoring standards and production results match the Key Performance Indicators and are nested with the organization’s risk assessments. Additionally, testing should address the documented process for changing monitoring standards, rules, and procedures.

Benchmarking If compliance can be considered both an art and science, benchmarking probably leans more towards an art form. Comparing compliance functions to “best” or common practices is a handy tool to identify pitfalls across the compliance landscape. Conducting an internal comparison of performance indicators between functions can be helpful in identifying both what is working elsewhere within the same company, as well as redundant activities that could enable the reallocation of resources. When relying on external benchmarking approaches, key questions to ask are: • Is expert judgment being relied on as a basis for compliance practice reasoning? If so, does that judgement still apply based on the operating environment, the risk assessment, and internal operations? • Is there a plan to address residual risk, or risks of a system failure when mirroring outside compliance approaches? • Who is defining “best practices?” • How long is this benchmark system valid in its current state? Are there any known or planned changes to strategy, environment, resources, personnel, or risks that would limit the applicability or effectiveness of the program function? • Are all policies and procedures relating to this benchmark up to date and stored in accordance with company procedures? Has all reasoning behind the compliance decisions based off benchmarks been documented? • Are the compliance benchmarks achievable and aligned with business strategy, player experience goals, and the budget?

Other Internal and External Considerations Other compliance gaps may present themselves when control functions don’t quite fit neatly into a particular bucket. Common components of high-functioning programs that may be overlooked include: • Balancing customer/player experience with regulatory and legal requirements; • Employee screening and monitoring; • Third-party screening and monitoring; • Level of ownership, responsibility and authority, of key compliance functions; and • Gaps in communication among and between departments, especially for marketing and entertainment business units as they relate to compliance.

Triggers to Test So, when should you conduct testing and validation exercises? The best answer is “always,” but that really just means you should always be monitoring compliance risk. In the spirit of applying feasible, defensible concepts to effective compliance programs, there are a few event-oriented triggers to track that may warrant a review for controls effectiveness:



• • • • • • • • •

Changes in risk appetite or strategy by senior management; Significant changes to the residual risk derived from the risk assessment; Updates to regulatory guidance; Trend changes in customer/player profiles, geographic concentrations, or activity; New product offerings; Entering new markets; Expansion of pilot compliance initiatives; Changes in technology; and Identification of severe or multiple compliance failures.

In short, the scope and frequency of independent testing and validation must be commensurate with risks confronting the businesses… from a periodic and an event-based approach.

Final Thought Ultimately, conducting effective, planned testing and validation activities allows senior management, board members, and compliance staff to answer: “Does our compliance program work?” In defining what “work” means in the gaming industry, it can be helpful to keep in mind the potential pitfalls that run throughout compliance risk assessments, planning, implementation, and operations: • Testing the wrong functions, data, or at the wrong risk level; • Incomplete testing which leads to making incorrect conclusions about compliance effectiveness; • Interpreting testing and validation outcomes incorrectly… “painting targets around the arrows”; • Key controls derived from the risk assessment have not been comprehensively addressed in the testing and validation plan; and • Significant assumptions or reasoning behind management operations, guidance, or policy and procedure remain unconfirmed. :: CGi

MICHAEL CARTER & LINDSEY HALLETT Michael Carter is a Senior Director with Alvarez & Marsal Financial Crimes and Investigations in Washington D.C. He specializes in Anti-Money Laundering, Counter-Terrorism Financing, sanctions, fraud, bribery and corruption. Mr. Carter brings more than 15 years of experience providing organizations with advisory, performance improvement, and operational and organizational leadership. Lindsey Hallett is an Operations Manager with Alvarez & Marsal Financial Crimes and Investigations in Washington D.C. She specializes in providing operational support to clients, and possesses extensive knowledge of global compliance operations related to diversified financials, high-growth businesses, and emerging industries.


THE DEVELOPMENT OF ELECTRONIC TABLE GAMES IN THE UNITED STATES MARkET lectronic table games (“ETGs”) first appeared in Asian casinos around 2000, but have since spread to other parts of the world. The two primary types of ETGs are stadium and stand-alone, which are either fully automated or incorporate a live dealer. Stadium ETGs may have as many as 200 seats connected to one or more types of games, while a stand-alone ETG has five to ten seats tied to a single game type. Robert J. Baldassarre


Robert J. Baldassarre & Lea Giosa O’Neill Fox Rothschild

Many casinos across Europe and in the Asia-Pacific dedicate as much as 15 to 20 percent of their casino floors to ETGs, but the number in the United States is significantly less, about 0.5 percent in 2017. However, current trends and performance of ETGs have led some in the industry to envision 10 to 15 percent of every casino floor in North and South America sustaining some form of ETGs. Suppliers agree that North America has and will continue to experience a surge in ETG sales in the near future; therefore, it is vital to understand how regulatory authorities treat EGTs across various jurisdictions. Emergence of ETGs in Macau Stadium-style ETGs first became popular in Asian casinos, particularly in Macau, where the Gaming Inspection and Coordination Bureau (the “DICJ”) limits table supply expansion to 3% per year. In response to this supply cap, casino operators in Macau installed vast stadium style ETG areas. While ETGs are not exempt from the cap, they allow for a much more favorable player ratio. According to data from Union Gaming Research Macau Ltd., under the current cap, the DICJ CGiMAGAZINE.COM



allows between 50 and 60 ETG seats as equivalent to one traditional gaming table inside Macau casinos. The DICJ classifies fully automated ETG terminals the same as a single slot machine, regardless of the amount of seats it may have. The DICJ has discretion to determine if a gaming machine that imitates a game traditionally played as a table game should qualify as one or the other. If the DICJ qualifies a terminal-based electronic table game as a gaming machine, each terminal is equivalent to one gaming machine when calculating a casino concessionaire's annual premium. ETGs in Macau have proven to be successful. According to research conducted in 2015, the ETGs that Macanese regulators counted as a table against the cap delivered better revenue and profits than a traditional live table. A perceived shortage of live table games allows casinos to raise minimum bets, and offer EGT terminals as an alternative for smaller betters. Further, EGT terminals appeal to players who seek fast-paced multigame action or the anonymity of terminals. Recent ETG Installations in America In July 2017, the Sands Casino Resort Bethlehem in Pennsylvania opened one of the nation’s largest live electronic table games stadiums, featuring 150 ETG cabinets and four live dealing tables connected to the game terminals. Recently, Resorts World Casino New York City (“RWNY”) expanded its ETG offering to nearly 1,000 seats at the property. The addition included adding 43 play stations to RWNY’s Diamond Stadium, which is part of a new gaming area on the casino floor, The Podium. Also, this past summer Greyhound Casino & Tavern became the first casino in New Hampshire to offer electronic, stadiumstyle games. In Connecticut, Foxwoods Resort Casino expanded its ETG offering to 85 seats at the property. Reasons for Increase in ETGs A number of factors may contribute to the rise in ETGs in US casinos. For example, some casinos install ETGs to add a table presence in jurisdictions where live table games are prohibited, while other casinos that have live tables use dealer-less ETGs to cut costs and offer games with lower minimum bets. Further, ETGs appeal to new players, including the coveted millennial demographic, who seek something different on the casino floor or who prefer a less intimidating environment than traditional live tables. Tax Implications of ETGs The effective tax rate on slot machines in Pennsylvania is approximately 54%, depending on the gaming facility; however, the tax on table games is just 16%.[5] Pennsylvania defines an “electronic gaming table” as a gaming table and not a slot machine, but distinguishes it from a “fully automated electronic gaming table,” which is playable or operable as a table game without the assistance or participation of a dealer and taxed at 35%.[6] Thus, a dealer assisted ETG installation in Pennsylvania,



such as a stadium ETG offering, would only be taxed at a table games rate of 16%. Like Pennsylvania, several other states maintain separate tax rates for slot machines (or video lottery terminals) and table games, including Delaware, Maine, Maryland, New York, Rhode Island, and West Virginia. In Delaware, “table games” include games played in a video lottery facility with any electromechanical or electronic device or machine, excluding video lottery machines, keno and Internet lottery. Delaware’s racinos must pay an effective tax rate between 57% and 58% on gross gaming revenue from electronic gaming devices and a 20% effective tax rate on gross table game revenue. In Maine, an “electronic facsimile” is a game played in an electronic or electromechanical format that replicates a table game by incorporating all of the characteristics of the game. Such games are classified as table games, not slot machines. A casino that also has a racetrack is taxed at a rate of 39% of net slot machine income and 1% of gross slot machine income, while a casino that does not have a racetrack is taxed at a rate of 46% of net slot machine income. Regardless of the existence of a racetrack, casinos are taxed at a rate of 16% of net table game income. Maryland defines a “dealer controlled electronic table game” as a table game or table game equipment that: (i) requires a live dealer to operate it; (ii) utilizes electronics as part of the games operation to collect and store game outcome, accounting and other significant event data; and (iii) permits wagering to be conducted electronically at a table game that is operated by a dealer. Video lottery facilities in Maryland pay a 20% tax on the proceeds of table games. Tax rates on the proceeds of video lottery terminals vary by the location of the facility, but are generally between 40% and 61%. In Rhode Island, a “table game,” or “table gaming,” means a type of casino gaming in which table games are played for cash or chips, using cards, dice, or equipment and conducted by one or more live persons. Tax rates in Rhode Island are subject to the provisions of the master contracts between the state and its two casino operators. Casino operators retain approximately 26% to 29% of their video lottery terminal revenue, exclusive of an additional allowance for certain marketing expenses, while the state retains approximately 60% once expenses are accounted for. Meanwhile, table game revenue is taxed at a rate of either 17% or 19%. New York defines a “dealer-controlled electronic table game” as a table game operated by a live dealer that uses electronics as part of the game’s operation in connection with the collection and storage of game outcome, accounting and significant-event data. Further, regulations require fully automated electronic table games to have software or hardware installed that distinguishes them from a slot machine. Depending on the location of the casino, the tax rate on gross gaming revenue from slot machines is between 37% and 45%, compared to a uniform rate of 10% of gross gaming revenue from all other sources (i.e. table games).


8, 2019, available at https://uk.practicallaw.thomsonreuters.com/3-634-



7. Id.

8. See Macau Electronic Live Multigame Terminals More Lucrative Than

Mass Tables, Report Says, Forbes, Muhammad Cohen, June 30, 2015.

9. See Interblock Surpasses 950 Electronic Table Gaming Units Installed

at Resorts World New York, GlobeNewswire, June 13, 2019, available at https://www.globenewswire.com/news-

release/2019/06/13/1868667/0/en/Interblock-Surpasses-950-Electronic -Table-Gaming-Units-Installed-at-Resorts-World-New-York.html. 10. Id.

11. See Greyhound Casino adds Stadium Gaming, Seacoastonline.com, June






Lea Giosa O’Neill


12. See Foxwoods Resort Casino Installs Third Interblock Stadium, GlobeNewswire,








In West Virginia, table games mean any game played with cards, dice or any mechanical, electromechanical or electronic device or machine for money, credit or any representative of value, including multiplayer electronic table games, machines and devices. Video lottery revenue is taxed at 53.5%, while table game revenue is taxed at 35%. Conclusion ETGs, which help casinos maximize profit and attract a wider range of gamers, may represent the future of casino gambling. Recent ETG installations throughout the U.S. market suggests that casinos are realizing value from such games. While ETGs in Macau offer a unique way to counter the imposed table game limit, ETGs in the U.S. provide casinos with a way to cater to a younger demographic of gamers by offering high-tech games on the casino floor in a less intimidating environment than traditional table games. Further, ETGs decrease labor costs and offer an interesting tax incentive for casinos operating in jurisdictions that maintain separate tax rates for slot machines (or video lottery terminals) and table games. :: CGi References

1. See Electrical Charge in Electronic Table Games, Casino Journal, Joan









2. See Pit Party, Global Gaming Business Magazine, Frank Legato, July 25, 2017, available at https://ggbmagazine.com/article/pit-party/.

3. See Macau Electronic Live Multigame Terminals More Lucrative Than

Mass Tables, Report Says, Forbes, Muhammad Cohen, June 30, 2015.

4. Id.

5. Id.

6. See Gaming in Macau: Overview, Thompson Reuters Practical Law UK, Rui Pinto Proenca and Carlos Eduardo Coelho, MdME, accessed October


13. See 29 Del.C. § 4803(cc).

14. See State of the States 2019: The AGA Survey of the Commercial Casino Industry, The American Gaming Association (2018) at 25.

15. See 8 M.R.S.A. § 1001(13-A.). 16. Id.

17. See 16-633 C.M.R. ch. 7 § 2; 3.

18. See 16-633 C.M.R. ch. 7 § 4.

19. See COMAR

20. See Md.Code, State Gov’t. § 9-1A-27(d).

21. See The AGA Survey of the Commercial Casino Industry at 55.

22. See R.I. Gen. Laws § 42-61.2-1(28).

23. See The AGA Survey of the Commercial Casino Industry at 103.

24. Id.

25. See 9 NYCRR § 5321.1(a).

ROBERT J. BALDASSARRE & LEA GIOSA O’NEILL Robert represents and advises clients in corporate and gaming law matters. His experience includes representation of casino licensees before domestic gaming regulatory agencies, including the New Jersey Casino Control Commission and the Pennsylvania Gaming Control Board. Lea was previously a summer associate at Fox. Prior to joining the firm, she worked as a legal extern in the Large Business & International Division of the IRS Office of Chief Counsel and as a legal intern for the Atlantic County Prosecutor's Office in the Major Crimes and Special Litigation units. Lea also interned at a personal injury law firm in Philadelphia.




GETTING IT RIGHT IN THE USA hilst regulation at a federal level for the US is still a long way down the road, PASPA has effectively paved the way for operators to set their eyes on a market â&#x20AC;&#x201C; that up until recently has been largely underground â&#x20AC;&#x201C; and which is estimated to be worth hundreds of millions of dollars. However, challenges are still prevalent, mainly in the form of regulatory aspects and lack of market knowledge. The context of each stateâ&#x20AC;&#x2122;s local gambling industry is a factor that has to be taken into account. Up until everything is pointing in the direction that states, where the presence of the local casinos plays a major role, are keen not to regulate online or mobile betting.


Alessandro Fried CEO BtoBet

UX problematics Nonetheless whether it is retail-only or mobile, the key to future growth and differentiation is having a proven platform at the core; one that not only provides operators with flexible and innovative sports betting solutions, but also one that boasts of a player management system across all channels, and which can easily enable the cost effective acquisition of players, and which uses real-time data to trigger automated and personalized customer communication. It is a fact that most US operators lack experience in the fields of sports and online betting. Yet they are clearly aware of what the the players expect in terms of user experience, with the players themselves accustomed to a very advanced UX in the entertainment industry and which they expect to be replicated in the betting industry. And for an industry that ironically has advanced technology at its core, this could be problematic since there is a general CGiMAGAZINE.COM



<< Many of the platform providers deliver not only the platform with their technology, but also the UX as they envision it. >> consensus that the iGaming industry itself is still lagging behind other entertainment sectors (see Amazon and Netflix) in terms of delivering a highly tailored and customizable experience. It is on this fundamental element that the industry needs to truly work hard in order to avoid a repeat of the same saturated UX that characterizes the European market. And how has this come about? Many of the platform providers deliver not only the platform with their technology, but also the UX as they envision it. This creates a scenario where platform providers are delivering and transferring the same experience to their customers, with nothing that distinguishes one brand from the other in terms of UX. Each of their customers then get the same betting experience, so the operator is not delivering its own experience. This is fundamentally the wrong approach to undertake, with operators being transformed in betting franchises with the same UX at their core that comes part and parcel with the technology provided by service providers. One has to keep in mind that the freedom involved in building the UX is not restricted to just the front-end design, but the holistic approach of player acquisition and retention, even as regards registration, the log-in process, the deposits, and cash-out amongst other things. Many argue that a bet is always a bet, and the risk is always the same, just as the odds are always odds. However, the way you present this and the way you engage your players makes all the difference. The way you deliver the UX and the way you engage your target players must be totally unique, distinct, and reflects the operatorâ&#x20AC;&#x2122;s own vision. This engagement also enables service providers and operators alike to gauge the demand for new features and to develop the right products for key demographics. This is the level of freedom that service providers must ascertain to deliver, especially in such a technologically advanced market as the US, and this is what through our products we are already delivering to our partners. Only a handful of Tier 1 operators are nowadays in a position to burden the heavy technical resourced to create their own in-house legacy technology. However, even owning your technology and putting resources to build the right UX for your target players can be somehow problematic, especially in terms of scalability to other markets. In fact, they can get a little stuck when they want to move into other countries because they have a problem



in adapting their technology. And this kind of situation is manifesting itself in the US. Letting the US buzz subside The PASPA repeal has brought about a frenzied fight for first mover advantage in May of last year. There is a rush, but there's no product at the moment and we could assist some quite unsuccessful stories. A lot of the earliest adopters will either fail or take just a small part of the business because they will adopt the European experience in the US. When this buzz dies down, operators will be more knowledgeable about what tools they need to be successful in this market which is more advanced than its European counterpart in terms of the user experience, and the way technologies transfer this UX. It is completely different from other jurisdictions in terms of entertainment and the betting experience itself. Nonetheless there is no doubt whatsoever that the US will be a hugely competitive environment in which to work. And this environment will in turn propagate innovation, which can only be a good thing for the players. The US is at the start of a sports betting journey and we know the obstacles that lie ahead. But the promise of the market, as enticing as it is, shouldnâ&#x20AC;&#x2122;t overshadow the degree to which those who wish to prosper there will need to have done their homework. :: CGi

ALESSANDRO FRIED Alessandro Fried is BtoBetâ&#x20AC;&#x2122;s Chairman after being CEO for 2 years. He is widely recognized as a visionary in the igaming sector and is frequently invited to speak at national and international igaming forums. He designed, developed and launched many successful products on the international market, and also obtained the first European license in remote gaming from Malta Gaming Authority (MGA). He pursues the strategy in BtoBet of setting the new standards for the iGaming industry, refusing to settle for quick fixes or half measures, striving to anticipate the future needs of our global audience, anticipating and meeting global industry needs.



ver the past two decades, researchers have

increasingly used online methods to gather their

data, rather than traditional offline research approaches (Wood & Griffiths, 2007; Griffiths,

2010). Psychological research that can be done online

includes experimental, self-report, and/or observational

research. However, one of the newer forms of online

methodologies is the use of online tracking data, a method

which I first wrote about in Casino and Gaming International ten years ago (i.e., Griffiths, 2009).

Every company selling online products or services has direct access to every click and keystroke that their customers provide

when they are on their website. For instance, the online retailer

Dr. Mark Griffiths Professor of Behavioural Addiction, International Gaming Research Unit Nottingham Trent University

Amazon tracks everything a consumer does on their website

including what the consumer buys, what the consumer looks

at, how long the consumer looks at products, etc. and uses the

information to compile customer profiles and make

personalized recommendations as to what the consumer can

buy next.

In the gambling world, behavioural tracking data either

from online data, loyalty cards and/or player cards can tell the

gaming operator exactly how gamblers are spending their time

and money in any given transaction (i.e., which games their

customers are gambling on, for how long, how much money they are spending, what games are profitable, etc.). Using the

latest sophisticated software, online gaming companies can CGiMAGAZINE.COM



<< Research using actual gambling data began when one team of researchers affiliated with Harvard University were given access to a large behavioural tracking data set of over 47,000 online gamblers by the Austrian gaming company bwin. >> tailor its service to the customer’s known interests. When first

playing on gambling websites, players supply lots of information

including name, address, telephone number, date of birth, and

gender. Gambling operators know more about the gambler’s

playing behaviour than the gamblers, themselves. They are able

to send the gambler bonuses, redemption vouchers, and other

incentives. These are done to enhance customer experience

looking at basic sociodemographic information within specific

forms of gambling such as online casino gambling (e.g., Broda,

LaPlante, Nelson, LaBrie, Bosworth & Shaffer, 2008; LaBrie,

Kaplan, LaPlante, Nelson & Shaffer, 2008).

Behavioural tracking data have also been used in other

innovative ways. Studies have used tracking data to

but have been argued by some to be potentially exploitative

demonstrate that what money individuals say they have spent

I argued that behavioural tracking data could potentially be

all studies showing that the more someone gambles, the less

(Griffiths & Wood, 2008a). However, over a decade years ago,

gambling is different from their actual gambling behaviour with

used to help identify problem gamblers rather than exploit

reliable they are about estimating what they have financially

purposes (Griffiths, 2009; Griffiths & Wood, 2008b; Griffiths,

2014; Wohl, Davis & Hollingshead, 2017). More recently, we

them, and to use behavioural tracking data for research Wood, Parke & Parke, 2007; Griffiths & Whitty, 2010).

Examples of behavioural tracking methods in gambling


There have been several different approaches to collecting data

spent gambling (Auer & Griffiths, 2017a; Braverman et al., used online tracking data to test classic psychological theory in

the form of ‘cognitive dissonance’ – the psychological stress

experienced by an individual who holds two or more

contradictory beliefs, ideas, or values (Auer & Griffiths, 2017b).

We argued that providing personalized feedback about the

from and about gamblers. This has traditionally included self-

amount of money that gamblers had actually spent may – in

experiments (in the laboratory or in gambling venues), and

mismatch between what gamblers actually spent and what they

report methods (e.g., surveys, focus groups, interviews),

participant and/or non-participant observation. More recently,

a number of research teams in the gambling studies field have

been given direct access to gambling data collected by gaming

companies from their commercial online gambling sites. These

types of data (i.e., behavioural tracking data) are providing

some cases – result in cognitive dissonance due to the thought they had spent.

Using a participant sample drawn from Norwegian

gamblers that had played at the Norsk Tipping online gambling

website (N=11,829), players were told that they could retrieve

personalized information about the amount of money they had

insights into gamblers’ behaviour that is helping to better

lost over the previous six-month period. Out of the 11,829

long periods of time.

whether they thought the amount they lost gambling was (i)

of researchers affiliated with Harvard University were given

than expected. We hypothesized that players who claimed that

understand how such people act and behave online and over

Research using actual gambling data began when one team

access to a large behavioural tracking data set of over 47,000

online gamblers by the Austrian gaming company bwin. This led to many papers examining the actual behaviour of online


gamblers based on these behavioural tracking data mainly


players, 4,045 players accessed this information and were asked

more than expected, (ii) about as much as expected, or (iii) less

the amount of money lost gambling was more than they had

expected were more likely to experience a state of cognitive

dissonance and would attempt to reduce their subsequent


gambling expenditure more than other players who claimed

tools (e.g., limit-setting tools, pop-up messages, personalized

Overall, the results contradicted the hypothesis because players

gambling operators facilitate their players to gamble in a more

that the amount of money lost was as much as they expected.

without any cognitive dissonance decreased their gambling

feedback, temporary self-exclusions) are a way that online

responsible manner (Harris & Griffiths, 2017). However, very

expenditure more than players experiencing cognitive

few of these tools have been evaluated empirically in real

data supported the hypothesis because specific playing

evaluate whether the setting of voluntary time and money

algorithm explained the paradoxical overall result.

gambling (Auer & Griffiths, 2013). Data were collected from a

dissonance. However, a more detailed analysis of the tracking

patterns of six different types of gambler using a learning tree Another useful thing about tracking data is that it can be

used to identify the geographical location of where the gambler

is. My colleagues and I have used these data in innovative ways

gambling environments. We used behavioural tracking data to

limits helped players who spent the most time and money

representative random sample of 100,000 online players who gambled on the Austrian win2day gambling website during a

three-month test period. This sample included 5,000 registered

to study contextual factors concerning gambling behaviour. For

gamblers who chose to set themselves limits while playing on

compared the relationship between gambling behaviour in

setting had a specific and statistically significant effect on high

instance, using data from Norsk Tipping player cards, we

alcohol-serving venues (ASVs) and non-alcohol serving venues

(NASVs) (Leino et al., 2017). The aim of the study was to

win2day. The results of this study showed that voluntary limit intensity gamblers (i.e., voluntary limit setting significantly

reduced the amount of time and money gambled amongst the

examine individual gambling. Our sample comprised 1452

most gambling intense players).

individual differences in gambling behaviour (number of days,

data to investigate the effects of responsible gambling tools (in

observations of 726 individuals (25.2% female). We examined

In a very recent study (Auer et al., 2019), we used tracking

sessions, bets made, stake, time spent, money lost, and average

this instance, voluntary limit setting) on customer loyalty. We

individuals gambled regularly in NASVs and occasionally in ASVs.

who had gambled at least once with online gambling operator

bet size) of gamblers in ASVs and NASVs. We found that Compared to NASVs, in-session gambling behaviour was more

variable in ASVs. In-session analysis showed that gamblers

staked less money in ASVs than in NASVs but lost more money

in ASVs than in NASVs. Based on the findings, we argued that

some gamblers appear to be more willing to take more risk in

ASVs compared to NASVs.

In another study using Norsk Tipping player card data, we

examined gambling behavior in venues based on the number

of gambling terminals in the venue (i.e., venues with one

terminal; 2–5 terminals; 6–10 terminals; 11–16 terminals). We

were given access to an anonymised dataset of 175,818 players Kindred. Because we could track a gambler’s behaviour over

time, we found that the percentage of active players in the first quarter of 2017 was significantly higher in the group of players

who had set voluntary money limits in the first quarter of 2016

compared to players that did not (suggesting players that set

voluntary spending limits are more loyal to the gambling

operator compared to those who do not).

We also investigated the effect of a pop-up message that

appeared after 1,000 consecutive online slot machine games

had been played by individuals during a single online gambling

examined 153,379 sessions from 93,034 gamblers. We found

session (i.e., “You have now played 1,000 slot games. Do you

terminals (54.5%) and lowest in venues with 11–16 terminals

2014). The study analysed 800,000 gambling sessions (400,000

that gambling frequency was highest in venues with 2–5

(1.6%). Compared to venues with one terminal, venues with two or more terminals were associated with gamblers placing

more bets, and spending more time and money per session.

However, gamblers had higher losses in venues with one

terminal compared to venues with 2–5 terminals (although no

differences in net outcome were found between venues with

one terminal and those with 6–10 and 11–16 terminals. Overall,

our study demonstrated that in the natural gambling

environment, gambling behaviour appears to be reinforced in

venues with multiple terminals.

Evaluation of responsible gambling tools using tracking data

Another innovative use of behavioural tracking is using the data to evaluate the efficacy of responsible gambling tools. These

want to continue? [YES/NO]”) (Auer, Malischnig & Griffiths, sessions before the pop-up had been introduced and 400,000

after the pop-up had been introduced comprising around

50,000 online gamblers). The study found that the pop-up

message had a limited effect on players (less than 1% of the

gamblers who played 1,000 games consecutively ceased playing after viewing the pop-up message).

In a follow-up study, we argued that the original pop-up

message was very basic and that re-designing the message

using normative feedback and self-appraisal feedback may

increase the efficacy of gamblers ceasing play (Auer & Griffiths,

2015a). We designed a new enhanced pop-up message which

read: “We would like to inform you, that you have just played

1,000 slot games. Only a few people play more than 1,000 slot games. The chance of winning does not increase with the CGiMAGAZINE.COM



duration of the session. Taking a break often helps, and you can

choose the duration of the break”. In this study we examined

1.6 million playing sessions comprising two conditions (i.e.,

simple pop-up message [800,000 slot machine sessions] versus

an enhanced pop-up message [800,000 slot machine sessions])

with approximately 70,000 online gamblers. The study found

that the message with enhanced content more than doubled

behaviour in general because online gamblers typically gamble

on more than one site as well as gambling offline too (Wardle,

et al, 2011). Despite the large samples sizes, behavioural

tracking data always comes from unrepresentative samples

(i.e., the players that use one particular internet gambling site).

the number of players who ceased playing (1.39% who received

Furthermore, behavioural tracking data does not account for

simple pop-up). However, as in our previous study, the

gambling account, and the data tell us nothing about why

the enhanced pop-up compared to 0.67% who received the

enhanced pop-up only influenced a small number of gamblers

to cease playing after a long continuous playing session.

In a study of the efficacy of personalised feedback (Auer &

Griffiths, 2016), we examined whether the use of three types

of information (i.e., personalized feedback, normative

feedback, and/or a recommendation) could enable players to

gamble more responsibly. A total of 17,452 players were

randomly selected from 69,631 players who had gambled on at

least one game for money. Gambling activity among the control

the fact that more than one person can use a particular people gamble (whereas self-report data can provide greater insight into motivation to gamble).

When it comes to studying online gambling behaviour,

behavioural tracking methodologies offer a number of

advantages for researchers. However, it should also be noted that there are a number of disadvantages of using tracking data

only when compared to other more traditional research

methods (i.e., surveys), and that no single methodology is

better than another in the collection of data concerning online

group (who received no personalized feedback, normative

gamblers. :: CGi

other groups that received information of some kind


feedback or no recommendation) was also compared with five

(personalized feedback, normative feedback and/or a

recommendation). Compared to the control group, all groups

that received some kind of messaging significantly reduced

their gambling behaviour. The results supported the hypothesis that personalized behavioural feedback can enable behavioural

change in gambling.

In another study, we investigated whether the receiving of

Auer, M. & Griffiths, M. D. (2013). Voluntary limit setting and player

choice in most intense online gamblers: An empirical study of gambling

behaviour. Journal of Gambling Studies, 29, 647-660.

Auer, M. & Griffiths, M. D. (2015a). Testing normative and




appraisal feedback in an online slot-machine pop-up message in a setting.






personalized feedback about exceeding 80% of a personally set


behaviour compared to those gamblers that did not receive

Auer, M. & Griffiths, M. D. (2015b). The use of personalized behavioral

monetary personal limit had an effect on subsequent playing

personalized feedback (Auer et al., 2018). Utilizing a dataset of

54,002 Norsk Tipping players, a total of 7,884 players (14.5%)

received at least once piece of feedback that they had

exceeded 80% of their personal global monthly loss limit between January and March 2017. Using a matched pairs

design, our study found that those gamblers receiving

personalized feedback in relation to limit-setting showed

significant reductions in the amount of money the

subsequently gambled. Conclusions

feedback for problematic online gamblers: An empirical study. Frontiers

in Psychology, 6, 1406. doi: 10.3389/fpsyg.2015.01406.

Auer, M. & Griffiths, M. D. (2016). Personalized behavioral feedback for

online gamblers: A real world empirical study. Frontiers in Psychology,

7, 1875. doi: 10.3389/fpsyg.2016.01875.

Auer, M. & Griffiths, M. D. (2017a). Self-reported losses versus actual

losses in online gambling: An empirical study. Journal of Gambling

Studies, 33, 795-806.

Behavioural tracking data has many advantages such as

Auer, M. & Griffiths, M. D. (2017b). Cognitive dissonance, personalized

behaviour on a particular online gambling website (whereas

objective tracking data and subjective self-report. International Journal

providing a totally objective record of an individual’s gambling

feedback, and online gambling behavior: An exploratory study using

gamblers in self-report studies may be prone to social

of Mental Health and Addiction, 16, 631-641.

usually comprise very large sample sizes whereas self-report

Auer, M., Hopfgartner, N. & Griffiths, M.D. (2018). The effect of loss-

desirability and memory recall biases). Furthermore, such data studies typically have much smaller sample sizes. However,


behavioural tracking data only comprise data from only one

gambling site and tells us nothing about the person’s gambling


limit reminders on gambling behavior: A real world study of Norwegian


gamblers. Journal of Behavioral Addictions, 7(4), 1056-1067. Auer, M., Hopfgartner, N. & Griffiths, M.D. (2019). An empirical study

of the effect of voluntary limit setting on gamblers’ loyalty using

behavioral tracking data. International Journal of Mental Health and Addiction, Epub ahead of print. https://doi.org/10.1007/s11469-019-

academia. Casino and Gaming International, 3, 97-103. Harris, A., & Griffiths, M. D. (2017). A critical review of the harm-

minimisation tools available for electronic gambling. Journal of Gambling Studies, 33, 187-221.


LaBrie, R. A., Kaplan, S., LaPlante, D. A., Nelson, S. E., & Shaffer, H. J.

Auer, M., Malischnig, D. & Griffiths, M. D. (2014). Is ‘pop-up’ messaging

Internet casino gambling. European Journal of Public Health, 18(4),

in online slot machine gambling effective? An empirical research note.

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(2008). Inside the virtual casino: A prospective longitudinal study of 410-416.

Leino, T., Sagoe, D., Griffiths, M.D., Mentzoni, R.A., Pallesen, S., &

Braverman, J., LaPlante, D. A., Nelson, S. E., Shaffer, H. J. (2013). Using

Molde, H. (2017). Gambling behavior in alcohol-serving and non-

Internet gamblers. Psychology of Addictive Behaviors, 27, 868–877.

using account records. Addiction Research and Theory, 25, 201-207.

Braverman, J., Tom, M. A., & Shaffer, H. J. (2014). Accuracy of self-

Sagoe, D., Pallesen, S., Griffiths, M.D., Mentzoni, R.A. & Leino, T. (2018).

Assessment, 26, 865–877.

individual's gambling behaviour? An empirical real world study.

crossgame behavioral markers for early identification of high-risk

reported versus actual online-gambling wins and losses. Psychological

Broda, A., LaPlante, D. A., Nelson, S. E., LaBrie, R. A., Bosworth, L. B. &

alcohol-serving venues: A study of electronic gaming machine players

Does the number of gambling terminals in a venue influence an Frontiers in Psychology, 9, 158.

Shaffer, H. J. (2008). Virtual harm reduction efforts for internet

Wardle, H., Sproston, K., Orford, J., Erens, B., Griffiths, M.D.,

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gambling: Effects of deposit limits on actual Internet sports gambling

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collection for gambling and gaming addictions. International Journal of

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Griffiths, M. D. & Auer, M. (2011). Approaches to understanding online

Constantine, R. & Pigott, S. (2007). The British Gambling Prevalence

Wohl, M. J. A., Davis, C. G., & Hollingshead, S. J. (2017). How much have

you won or lost? Personalized behavioral feedback about gambling

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internet gambling research: Ethical and methodological issues.

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research and best practice: Gaming industry, social responsibility and

DR. MARK GRIFFItHs Dr. Mark Griffiths is Distinguished Professor of Behavioural Addiction at Nottingham Trent University, and Director of the International Gaming Research Unit. He is internationally known for his work into gambling and gaming addictions. He has published over 750 refereed research papers, five books, 150+ book chapters and over 1500 other articles. He has won 19 national/international awards for his work including the US National Council on Problem Gambling Lifetime Research Award (2013).




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Casino & Gaming International: Issue 39  

Casino & Gaming International: Issue 39