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Canada's Premier Gaming Industry Magazine

Vol. 4 No. 5

October 2009

Time to bet on Procurement Inside: Slot Machines and VLTs Rolling the Dice on New Employees

PM 40063056

The Future of Casino Security

Calgary, Alberta, April 26-28, 2010 - www.canadiangamingsummit.com 09180_CanadianGaming_October_09.indd 1

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October 2009

Volume 4 Number 5

Publisher

Paul Murphy

paulm@mediaedge.ca 416-512-8186 ext. 264

Editor

Lucie Grys

lucieg@mediaedge.ca

Advertising Sales

Paul Murphy

paulm@mediaedge.ca

Senior Designer

Annette Carlucci

annettec@mediaedge.ca

Designer

Ian Clarke

ianc@mediaedge.ca

Production Manager

Rachel Selbie

rachels@mediaedge.ca

Circulation Manager Circulation Inquiries

Cindy Youman

contents

kevinb@mediaedge.ca

wrutsey@canadiangaming.ca

6

Message from the CGA

10

14 Gaming Trends: Slot machines and VLTS remain the backbone of the industry 17

Vice President, Public Affairs Paul Burns

chuckn@mediaedge.ca

pburns@canadiangaming.ca

Executive Profile:

Greg Ahenakew

18 FACILITY PROFILE: The Casino de Mont Tremblant 20

operator profile:

22

MARKETING:

Onex Corporation

Vice President, Strategic Development Chuck Nervick

COVER STORY:

Time to Bet on Procurement

Proudly owned and published by:

President & CEO Bill Rutsey

Editor’s Note

8 Gaming News Roundup

customerservice@mediaedge.ca

President Kevin Brown

5

Make it a game

27 FEATURE: G2E gives suppliers a big chance to show off

24 SECURITY:

Canadian Gaming Business is published five times a year as a joint venture between MediaEdge Communications and The Canadian Gaming Association

The future of casino security

28 HUMAN RESOURCES: Rolling the dice on new employees

For advertising information, Contact Paul Murphy 416-512-8186 ext. 264 paulm@mediaedge.ca

31

For editorial information, Contact Lucie Grys 416-512-8186 ext.301 lucieg@mediaedge.ca

COMPANY PROFILE: Scientific Games

32 FEATURE: Responsible gaming in action

Copyright 2009 Canada Post Canadian Publications Mail Publications Mail Agreement No. 40063056 ISSN 1911-2378

34

CHARITABLE GAMING:

Online bingo

Guest editorials or columns do not necessarily reflect the opinion of Canadian Gaming Business magazine's advisory board or staff. No part of this issue may be reproduced by any mechanical, photographic or electronic process without written permission by the publisher. Subscription rates: Canada $46.30 per year, $82.60 two years. All rates are payable in Canadian Funds only. Postmaster send address changes to: Canadian Gaming Business Magazine 5255 Yonge Street Suite 1000, Toronto, Ontario M2N 6P4

Canada's Premier Gaming Industry Magazine

Vol. 4 No. 5

October 2009

Time to bet on Procurement Inside: Slot Machines and VLTs Rolling the Dice on New Employees

PM 40063056

The Future of Casino Security

Volume 4 No. 5 on the cover Lottery and gaming operations spend only a small proportion of their operations’ costs with suppliers, getting the right goods and services at the right place and the right time, and on the right terms is very important to their success.

Calgary, Alberta, April 26-28, 2010 - www.canadiangamingsummit.com

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editor'snote

Editorial Advisory Board Howard Blank, Vice President Media & Entertainment / Marketing & Promotions Great Canadian Gaming Corporation Lynn Cassidy, Executive Director Ontario Charitable Gaming Association Robin Drummond, Vice President Spielo Paula Dyke, Director, Public Affairs and Corporate Communications Atlantic Lottery Corporation Nick Eaves, President and Chief Operating Officer Woodbine Entertainment Group Art Frank, President Niagara Casinos Brian Fraser, Marketing Manager IGT Canada Jordan Gnat, President & Chief Executive Officer Boardwalk Gaming Muriel Grimble, Executive Director Gaming Products & Services Alberta Gaming & Liquor Commission Lyle Hall, Managing Director HLT Advisory Inc. Zane Hansen, President & Chief Executive Officer Saskatchewan Indian Gaming Authority Ron Kelly, Executive Vice President Arrow Games Michael Lipton, Q.C., Past President, International Masters of Gaming Law and Partner, Dickinson Wright LLP Eric Luke Eric R. Luke and Associates Alan Lyman, Senior Regional Director Scientific Games Margaret McGee, Vice-President of Business Innovation Nova Scotia Gaming Corporation Richard Paris, Security Director, Niagara Casinos

MediaEdge and Canadian Gaming Business at G2E In a country where gaming brings in an estimated $15 billion a year, connecting and sharing information is not only a smart business move – it can also help to grow the Canadian gaming market. Canada may be considered an afterthought to our American friends south of the border, but if this magazine proves anything, it shows suppliers, buyers, executives and industry experts that Canada is a great opportunity for investment and expansion. In this issue, we’ve got just about every angle of the gaming sector covered. We take a close look at how reviewing your procurement practices and policies and implementing changes can help improve the success of your business. When it comes to gaming trends, we take a look inside the hot topic of slot machines and video lottery terminals or VLTs. Experts and gaming leaders offer their impression of both systems and why some consider them to be a strong backbone of the gaming industry. For those in the area of human resources, we examine hiring procedures and how to attract the best candidates to your company. Gone is the old myth that a simple interview is all you needed to make a decision on a potential employee.

In the realm of security, we’ll enter the world of CSI and see how hightech systems are being integrated into the casino environment. Closed circuit television surveillance, license plate and facial recognition software is exploding – although a lot more research is needed. In every issue, we feature insightful profiles. In this issue, G r e g A h e n a k e w, C E O o f t h e Indigenous Gaming Regulators (IGR) is featured. The newly opened Casino de Mont Tremblant and its innovate design elements is covered, Scientific Games is profiled and Onex Corporation’s acquisition of The Tropicana Hotel and Casino in Las Vegas is too. The Association of Gaming Equipment Manufacturers talks about showcasing your products during G2E and we have an impressive article about how the Nova Scotia Gaming Corporation is implementing the Informed Player Choice System to help players make smart gaming decisions. If you are planning on attending G2E, keep an eye out for our booth and please, stop by and say hello. All the best, Lucie Grys

E-mails to the Editor Policy Canadian Gaming Business welcomes e-mails to the editor. E-mails should include the name of the sender, business or professional affiliation, and city and province of the sender’s office or home. A phone number should be included for contact purposes; the phone number will not be published. We reserve the right to edit e-mails for purposes of brevity and clarity. Please email lucieg@mediaedge.ca

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messagefromCGA

“Encourage responsible gaming – and clear thinking” By Bill Rutsey, President and CEO of the Canadian Gaming Association

We now seem to be locked in one of those public debates on both coasts over gaming that often generates more heat than light. The issue du jour is the decision of the British Columbia Lottery Corporation (BCLC) and Atlantic Lottery Corporation (ALC) to include new games and give customers greater latitude to set their own limits on their websites. In both jurisdictions, the reasons for making these changes are sound and on the basis of good public policy that both protects the well-being of citizens and offers players more choice. Media reaction on both coasts suggests something else – namely, that higher betting limits expose families and individuals to gaming addiction, financial loss, and personal tragedy. While it is correct to point out that a small minority of people is vulnerable to gambling addiction, we all know that it is absolutely incorrect to suggest that these increased limits will create more problems. First of all, limitless online gaming has been and continues to be available to everyone in Canada and around the world. It therefore seems absurd in the extreme to suggest that the changes instituted by BCLC and ALC are exposing anyone to anything new. More importantly, research shows that the proportion of problem gamblers stabilizes at around one percent of the population regardless of time, sample size or methodology of measurement. This was the firm

conclusion in an exhaustive study Problem Gaming Prevalence Research: A Critical Overview (Wiebe and Volberg, December 2007) - which reviewed more than 100 studies of problem gambling prevalence conducted across Canada and around the world over the past 20 years. ALC and B CLC have changed their online gaming rules in the face of offshore gaming sites that are now attracting billions of dollars in gaming revenues globally, on an annual basis. In fact, it is estimated that Canadians are currently spending more than one billion dollars annually on online gaming sites – and approximately $87 million in B.C. alone. Clearly, this is a rapidly growing worldwide industry, and the impacts are only beginning to be understood. We do know this much, however – that Canadian online gamers are increasingly trusting their money to websites that are not subject to Canadian regulatory oversight, have no limits, and offer little to no help to problem gamblers. We also know that organizations like BCLC and ALC operate (appropriately) in the intense spotlight of ongoing public scrutiny - with policies, systems and support to deal with issue of problem gambling. Indeed, Canada’s gaming industry contributes more than $100 million annually to the promotion of responsible gaming – which makes this nation the world leader in this area. In this overall context, the new gaming limits in British Columbia and

Atlantic Canada will benefit gamers and society in general. For one thing, players will now have the option of spending their online dollars within their own province to the benefit of its citizens. Secondly, the changes give players more choice. Experts say that fostering player responsibility – one key goal of corporations like BCLC and ALC – is more effective than placing mandatory restrictions on all players. It should be remembered, as well, that the vast majority of Canadians who gamble say they do for fun, not money. Playing is a consumer choice – and right now that choice is taking the benefits of playing outside the province in everincreasing numbers. In light of these facts, the argument for getting government lottery corporations out of the gaming business entirely seems particularly threadbare. Instead, the public interest lies in responsible, well-managed lottery corporations that take their role seriously enough to compete for market share, while protecting consumers at the same time. Thousands of years of human history suggest, quite forcefully, that people will gamble because they like to gamble. Our shared goal, most recently demonstrated by BCLC and ALC, is to provide gaming options for people that are safe, fun, regulated and responsible. That’s good public policy.

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gamingnewsroundup Niagara Casinos Names New Chief Financial Officer Kevin Wilson, CA, CA·IFA, CPA (Illinois), joins Fallsview Casino Resort and Casino Niagara from Ernst and Young LLP’s Fraud Investigations and Dispute Services Group. While with Ernst and Young, one of Wilson’s key responsibilities was assisting government regulators with investigative and riskassessment practices related to Ontario’s gaming industry. He also assisted gaming clients in a number of other jurisdictions. Prior to his time at Ernst and Young, Wilson served as the Director, Audit and Gaming Compliance and Deputy Registrar with the Alcohol and Gaming Commission of Ontario, where he oversaw the performance of all compliance, audit, risk-assessment, internal control, security and surveillance functions for Ontario’s gaming industry. At Niagara Casinos, Wilson will oversee the company’s Accounting, Payroll, Cage & Coin, Operations Analysis and Purchasing departments representing more than 500 casino Associates. “There aren’t many people as qualified to take over the CFO’s office at a major Ontario resort casino as Kevin is,” said Art Frank, President, Niagara Casinos. “He has been living the financial and regulatory aspects of Ontario’s casino industry for as long as there’s been an Ontario casino industry. We’re extremely pleased to welcome him to Niagara Casinos.” CAA/AAA and Wine Spectator Honour Fallsview Casino Both the hotel and the steak-andseafood restaurant 17 Noir at Fallsview Casino Resort have once again earned the coveted Canadian Automobile Association/American Automobile Association Four-Diamond Award, but they have some new company at the resort this year. Ponte Vecchio, Fallsview Casino’s new Italian restaurant, achieved a Four Diamond rating on its very first inspection. 17 Noir also earned Wine Spectator m a g a z i n e ’ s ‘ B e s t o f ’ Aw a r d o f

Excellence, recognizing the uncompromising quality of Fallsview Casino’s extraordinary wine cellar. The award honours superior presentation, vintage depth, vertical offerings of top wines, excellent breadth across many wineproducing regions and the appropriateness of the wines in relation to menu offerings. Fallsview Casino’s cellar houses approximately 6,500 bottles representing 700 different labels. “ O b v i o u s l y, w e ’ r e t h r i l l e d t o receive such high marks in two of the hospitality industry’s premier ranking programs,” said Greg Medulun, Director of Communications. “These awards validate our high standards as an organization and the extraordinary talent and dedication of our Hotel and Food & Beverage teams. Our people are among the best in the business and it shows.” Ainsworth now Licensed for Field Trial in Ontario Ainsworth Game Technology has been granted approval to field trial i t s highly successful Ambassador SL product line in Ontario. Caesars Windsor, Casino Rama and Niagara Fallsview Casino will all be the first to install the highly successful GamePlus™ Play 50Line™ game range. Throughout 2009, Ainsworth met with the Ontario Slot Initiative Committee, regional slot managers and CEO’s, and was thrilled with the anticipation surrounding the release of GamePlus™ in Canada. OSIC’s Chairman and Vice President of Gaming Operations at Caesars Windsor, Glen Sawhill said, “We are extremely excited at the opportunity to install Ainsworth’s new games in Ontario. Caesars Windsor wants to be the first venue in Canada to install the Ambassador™ and after closely reviewing the latest GamePlus™ product range during the Canadian Gaming Summit at Caesars Windsor, the OSIC is very confident Ainsworth will be successful here in Canada.” Ainsworth is also licensed in British Colombia and is submitted in other Canadian provinces including Alberta and Manitoba.

In Memory Wendy Thompson Canadian Gaming Business was saddened to hear of the loss of Wendy Thompson this past September. Wendy was active in her community as a formidable fundraiser, a board member and as a CEO in the Charitable Bingo Industry at Planet Bingo. She was a frequent participant in numerous international panels and forums as well as being a guest speaker at business and gaming industry conferences throughout North America. She served on a Minister's Advisory Committee; was a member of the Coalition of Self Managed Operations (COSMO), was an Executive Committee member of the British Columbia Bingo Council (BCBC), was a member of the Bingo Advisory Committee for the BC Lottery Corporation and winner of the Display of Excellence Award from the Canadian Gaming Summit and Exhibition in 2000. More recently, in 2008, Wendy was awarded the Canadian Gaming Association Volunteerism and Community Service Award. She was a tireless advocate of charities and the important role that charities play within the framework of the industry. Never shy to present or stand up for her cause, you could hold a different position to Wendy, yet you were still able to converse without her holding a grudge against you. This takes a level of professionalism and mutual respect, which is often missing when individuals have serious points of difference. We n d y m a d e a n i n v a l u a b l e contribution to the industry in British Columbia and across the country returning millionsof dollars each year to the non-profit members who benefited from Planet Bingo – and who in turn, supported valuable and much needed services and programs in the community. Wendy has left a rich legacy. She made a difference, she was a trailblazer, remained passionate about the industry she loved and through her contribution she greatly assisted in changing the face of charitable gaming in her home province and country.

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2009 Canadian GaminG Summit SponSorS PLATINUM

GOLD

SILVER

BRONZE

GOLF TOURNAMENT

SUMMIT SOIRテ右

FINANCE & MARKETS

INNOVATION IN GAMING

Association of

Gaming Equipment Manufacturers

ADVERTISING AGENCY

09180_CanadianGaming_October_09.indd 9

CEO TOWN HALL

EXHIBITION RECEPTION

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coverstory

Time to Bet on Procurement

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coverstory

By Nicholas Seiersen

While lottery and gaming operations only spend a small proportion of their operations’ costs with suppliers, getting the right goods and services at the right place and the right time, and on the right terms is very important to their success. Supply Chain managers can be great facilitators, or they can be gatekeepers; in fact, they must be both. Gaming businesses work under stringent regulations that add significant administrative complexity on their operations and vendors, which can reduce the field of companies willing to supply the industry. Successful gaming organizations help vendors navigate these hurdles with howto guides, help lines, etc. Some go as far as to pay the registration fee to encourage a competitive landscape. Nonetheless, the background checks required by the regulator can be burdensome and, of course, there is the traditional litany of procurement challenges that all organizations deal with. The two most prevalent being: • A lack of clarity of responsibility/ownership of individual process steps in the Procure-to-Pay overall process can lead to process rework and delays; both users and procurement staff feel the other party is either not doing their own job, or second guessing the other person’s job. This frustration can lead to users failing to appreciate and benefit from the full value that procurement staff can offer, if only they had asked them to help. So, they forego the rigor and predictability of the outcome of a good procurement process, the experience of what works and what does not, how to get the best deal from the market, how to handle the suppliers’ usual tactics, how to defuse the incumbent’s advantage, and how to quantify a “value sell.” They also fail to tap the knowledge of contract and commercial law, the understanding of typical process risks, the insight of how long it will take, and what has to be done before the deal closes. Users sometimes circumvent the procurement organization

and engage directly with suppliers to develop specifications, terms, and other specifics. When it comes to negotiating an agreement, there often remains limited competitive leverage. • Under-investment in enabling technologies (eProcurement), results in data entry errors, and low productivity. Procurement can become known as a clerical pool of administrators who spend their time checking, asking unnecessary questions, and policing rote compliance. Because procurement resources are tied up in tactical/administrative tasks, they are chronically understaffed and cannot provide higher value services, such as commodity analysis and providing insight into competing suppliers and their value propositions; they are not always able to contribute strategically. The organization may fail to leverage its spend across the organization, establish formal supplier performance and relationship management disciplines, and is not able to manage poor supplier performance or leverage strategic supplier capabilities. Good procurement practices may seem selfevident to many, but, in such a mature discipline, it helps to have a roadmap to assess those that apply to your organization, and how and when you wish to implement them. We use a Capability Maturity Model to help our clients (see insert). Don’t Strangle Your Suppliers Right Now The recent surge in supply base fragility and a drop-off in business with the economic downturn haven’t helped organizations feel sure that they are getting the best value for their purchasing dollar. Deals were sealed when the economy was buoyant, Canadian Gaming Business  |  11

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coverstory but the competitive dynamic has changed. Cash-rich gaming companies may be able to broker early payment terms quite easily, but unilaterally extending payment terms may be counterproductive in the long run. Apart from expediting weak business failures, it may leave a lasting legacy of bad blood. Revisiting core contractual items is a lot more difficult than changing payment terms. Bullying vendors into price concessions can further harm the relationship, and you may no longer be their “customer of choice.” Since the business users are redoubling creative efforts to make the gaming experience unique and exciting, that means a lot of fast innovation. Innovation is core to attracting patrons; you cannot afford to have your suppliers offer their best ideas to your competitors first. With the economy beginning to show signs of recovery, it’s time to undertake some fundamental infrastructure work to be ready when business does pick up. Automate the Mundane eProcurement software has been able to assume many of the onerous monitoring tasks imposed by the regulator for quite some time. Your preferred products can be set up on an online catalogue that your users pick from when preparing requisitions. The preferred vendor and the applicable terms and conditions are embedded in the catalogue, so the requisition is ready to go to the vendor as soon as it has been appropriately approved online by the user’s management. The order is transmitted automatically to the vendor, and the system can monitor contract, site, and vendor total spend thresholds per the regulators’ requirements. Restricted items can be shown only to those users that have authority to requisition them. Pricing compliance is automatic. Precise item usage history is built for future procurement analysis. These systems also set the stage for electronic trading—system-to-system and for system-generated vendor performance reporting (fill rates, on-time, invoicing discrepancies, etc.). Many organizations are also using eSourcing—online bids that can be as mundane as automating the RFx they send out by paper today to whiteknuckle reverse auctions, where suppliers bid prices down online until the lowest price gets the business. For many procurement organizations, it has been difficult to justify the costs of these systems, and IT has been focused on critical back-office finance systems or

customer facing gaming management systems. Software as a Service (SaaS) eProcurement offerings available today can be a viable solution as a stop-gap, or even a viable long-term solution. As you build your online catalogue and onboard your suppliers, the links and data can be easily ported into the eProcurement module of your corporate ERP. Embrace Standards Like building standards that meet your graphic design and corporate identity standards, like standard terms and conditions so you don’t have to renegotiate every deal’s T&Cs, like platform integration standards of your slot terminals into your gaming management systems, standards drive consistency, predictability, and set the stage for robust continuous improvement initiatives such as Lean . While the rigor of compliance to standards can be tedious, the enduring benefits from consistent application can become a solid platform for any business to build on. When you adopt standards that are common across your industry, it makes business easier, and thus more attractive, for everyone. Embrace the Entire Supply Chain More and more organizations are putting procurement and distribution together so they can manage the complete supplier relationship. Gaming facility rejuvenation projects often involve a slew of new slots, frequently from several vendors. Rather than let them arrive when the various suppliers choose to send them, in small shipments, so that you have to store them, stage them, and hold them until the floor is ready to receive them, why not organize a milk-run pickup from the vendors who happen to manufacture in the same region. A full truck shipment costs a lot less, arrives when you expect it, and if you happen to be crossing a border, you will clear customs only once. You must plan the equipment readiness and for pickup at the vendors, and ensure you obtain adequate price concession to cover the freight and transportation risk that you assume, but there is enough cost removed from the relationship for there to be benefits for everyone. With increased focus on sustainable business practices, full life-cycle management is another avenue of opportunity. Multi-site Casino operations may have prestige sites that get the latest equipment. Lower volume or pricepoint locations can still show excellent

results using equipment that may no longer be suitable at the high-volume and prestige locations. A Supply Chain organization can help inventory and redeploy assets, a discipline that front-of-house location managers have little appetite for. When assets of all kinds no longer serve their intended purpose in a given location, there is opportunity to redeploy or to dispose of responsibly. Electronic waste is one of the fastest growing categories of landfill, highly toxic and slow to break down. Electronic waste reclamation is a profitable business, so it makes good business sense to do it. Supply Chain managers are happy to take on this mundane distraction for your front line staff. Bring More to the Table Too many procurement (or supply chain) organizations see their legitimacy as guardians of the corporation’s hard-earned money. The successful ones see themselves as partners to the business and do whatever it takes to help them achieve their goals, while still operating within the rules. They invest their time in market research and supplier relationship management so that the next procurements make the best use of the knowledge of who provides what, and how to get the best value from the supply base. They also know where they can really help with this insight, and when they are simply shadowing a user who has to know this intimately as part of the job. Food and beverage purchasing is a good example of how both can co-exist within the same category. Many gaming players have consolidated their food service buy across their network of sites, and they have a single delivery of everything the kitchen needs. Except for the most important— most procurement organizations have left the “centre of the plate” to the discretion of the chef, recognizing that the quality and specification of the meat and fish that are frequently the showpiece of the meal are intimately linked to the dining experience the chef is trying to create for his patrons. That does not mean that procurement cannot bring useful advice on the terms of trade with the “centre of plate” suppliers, and it certainly does not mean that tried and true supplier management disciplines cannot be used here too. These are tough times for everyone, and procurement is at the fulcrum between overworked staff and beleaguered suppliers. It is important to have a clear view of what you do for the company and for the users of the goods and services you procure, while plotting a course of continuous improvement

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coverstory Sample Procurement Capability Maturity Roadmap Core Discipline

Basic

Category

Domain

Strategic alignment

Corporate strategic alignment

Maturity level Functional Integrated

Value Focused

Internal practices Supplier criteria Sustainability Strategic Drivers

Environmental Ethical Economic Internal practices

Innovation

External Measurement Procurement policies

Policies and procedures

General Processes Transaction Management Planning and forecasting Contract Management

Supplier Management Supplier performance management Commodity strategies Core Processes Market research Strategic sourcing Spend analytics Pricing / evaluation strategy Financial control Risk Management Governance Exception management Tax liability management Skills Integration People

Management Career planning Measurement Back end systems and integration

Technology Sourcing tools

Supporting Infrastructure

Structure Organizational structure

Business alignment Category management Financial Process

Departmental metrics Service Supplier

and increasing Capability Maturity. This is a rare opportunity to stand up and show the organization how you can shine, and procurement has rarely had such obvious legitimacy to lead the transformation.

A Sample CMM The table above shows what a CMM might look like. The green spheres show where they plan to be with their 5-year plan.

Nicholas Seiersen is a Senior Manager with the Advisory Services practice of KPMG, based in Toronto, Canada. He can be reached at 416-777-8391 or nseiersen@kpmg.ca.

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gamingtrends

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gamingtrends

Slot Machines and VLTs Remain Backbone of Industry By Lisa Kopochinski

Slot machines are nothing new. While many think they only date back to the legalization of gambling in Las Vegas in the 1930s, the truth is that the one-armed bandit has its roots in California from more than a century ago. Invented in 1895 by Charles Fey of San Francisco, the first mechanical slot machine was called the Liberty Bell and featured three reels. Diamond, spade and heart symbols were painted around each reel, plus the image of—what else?—the cracked Liberty Bell. If one was lucky enough to get three Liberty Bells in a row, they were awarded the biggest payoff available—fifty cents or 10 nickels. While slot machines and payoffs have changed dramatically, so has their popularity, which only continues to soar across Canada. The same can be said for video lottery terminals (VLTs). While there is little, if any, distinction between these two types of electronic gaming devices (EGDs), the difference lies in how they are distributed. Slot machines are only found in casinos, racetracks and community gaming centres (CGCs), while VLTs are located in restaurants and bars. All machines are owned and operated by the government. It’s a contentious issue in several provinces, because of the belief by some that VLTs may be too convenient and lead to gambling addictions. “Concerns have been raised over the issue of accessibility. Then people take it further and say the machines are designed to be addictive. It rages on,” says one gaming industry expert who asked not to be named. “Machines in casinos don’t face the same level of opposition because they are in a big building that says ‘casino’ on the front of

it, so people walking in know exactly what they are getting,” he explains. What cannot be debated is their popularity and the income they generate. In 2008, there were 56,300 slot machines in all Canadian casinos, and for racetracks and CGCs in BC, Alberta, Ontario and Prince Edward Island. This figure represents an increase of about 5,000 slots machines from the year before. “The average size of facilities is about 500 machines,” says Robert Scarpelli, managing director at HLT Advisory Inc. in Toronto, which provides specialized consulting and support services to the Canadian and international hospitality, leisure and tourism industries including gaming, lodging, travel/tourism, recreation, sport, entertainment and public assembly venues. The consulting firm has been compiling data for 15 years. “We maintain a database, and as new information becomes available, we adjust the database. We’re like Stats Canada.”

In 2008, there was 36,300 VLTs, which is about 300 fewer than 2007. In terms of dollars, in 2008, $6.5 billion was the total gaming win for slot machines, up from $6 billion the year before. VLT figures were impressive too, with a total game win of $2.93 billion, down from $3 billion in 2007. “VLTs have been contracting,” says Scarpelli. “For the eight provinces that have VLTs, Alberta, Saskatchewan and Manitoba numbers have stayed the same. Quebec and the Maritime provinces have reduced their number of machines. For most provinces that have VLT programs, they were developed prior to casinos and they were handled totally differently. VLT policy and casino policy are separate.” Both BC and Ontario have opted not to have VLTs, a decision made for political reasons, says the gaming industry source. “Ontario has slots in 19 racetracks. And BC has established community gaming centres, many which were bingo halls that had electronic bingo equipment put in and then added slot machines. So more gaming destinations are being created.”

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gamingtrends

In Saskatchewan, VLTs remain especially popular. “In Saskatchewan, there are approximately 4,000 VLTs located in about 650 locations throughout the province,” says Paul Newton, senior vice president, strategy and business development for Saskatchewan Indian Gaming Authority (SIGA), which does not operate VLTs. “In contrast, there are 2,865 slot machines located in eight different casinos. In terms of consumer spending, casinobased slot machines generate more net revenue even with fewer machines. The comparison gets more complicated if you measure popularity in terms of net income where VLTs generate over twice as much net income as casinos. Players, of course, don’t care about any of this, as they spend their money on products and services they value.” At SIGA, Newton adds that a majority of customers have also played VLTs in the past month. “We don’t see a clear delineation between the two product categories so we focus on constantly changing our product mix, including using short-term participation games, to refresh our floors.” In addition, SIGA utilizes its player’s club program to build a closer relationship with players and augment the gaming entertainment experience with ancillary products and live entertainment to provide what it believes is a better value proposition for consumers. While some operators see little difference between slot machine players and VLT players, the gaming industry source says, “VLT business is very different and very separate from the casino business. For example, there are VLT lounges in some hotels in Manitoba with 20 or 30 machines.” He says it makes sense to have VLTs in less busy areas as it is a way to offer gaming in certain places. “VLT networks are operated by the provincial agencies, where some of the casinos are privately owned or agency run, depending on the province. It’s a mish mash of ownership structures. The whole stigmatization of the VLT is strange.” He adds that some people view VLTs as contentious because they see government as the protector, and government is involved with gambling. “And this conflicts with that. [However], the government has delivered the product in a very responsible manner and made hosts of changes over the years to improve the product in terms of educating the players.” Calling electronic gaming machines the backbone of the industry, Newton says, “In Saskatchewan we have always had a very dynamic gaming landscape that offers consumers a variety of gaming choices. For a province with a population just slightly over a million people, we have 6,865 slots or VLTs. That exceeds the number of devices in Toronto or Vancouver, both of which have much larger population bases.” Despite this penetration rate, he adds that Saskatchewan’s business continues to grow reflecting the popularity of the product with customers. In SIGA casinos for 2008, slot machines generated $217 million of the total gross revenue of $243 million, representing about 90 percent. “As Canadian gaming operators, the landscape is always changing either in terms of the amount of monopolistic control government exercises or in the variety of gaming choices consumers have. It continues to be a dynamic and exciting industry to be a part of.” Lisa Kopochinski is a freelance writer and can be reached at liskaop@sbcglobal.net

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executiveprofile

Greg Ahenakew By Lisa Kopochinski

Greg Ahenakew’s love of learning, travel and different cultures makes him a perfect fit as CEO of the Indigenous Gaming Regulators (IGR), a position he came to six years ago just as the gaming industry was growing and evolving in Saskatchewan. “It was a time of a lot of change in the gaming industry; the operational side with the Saskatchewan Liquor and Gaming Authority (SLGA) and the Saskatchewan Government, as well as the challenge of trying to reach an agreement with SLGA. But dealing with people and outside organizations is something I enjoy.” Prior to becoming IGR’s CEO, Ahenakew was a vice chief with the Federation of Saskatchewan Indian Nations, the province’s political organization. While the segue from this position to IGR was not necessarily an obvious one, it’s a step he is very happy he took. “I had limited experience in the gaming industry and it was a very steep and sharp learning scale. I enjoy learning. And of course in this industry you are always learning.” A member of the Ahtahkakoop First Nation, which is a Treaty 6 First Nation, Ahenakew grew up in Prince Albert, Saskatchewan. After high school, he attended Rauland Academy in Norway and earned a diploma in Norwegian language, culture and art. “Actually it was my mom’s idea,” he recalled. “She met a woman from Norway who said the school was looking for someone of Native ancestry to attend. It was an opportunity to travel, meet new people and experience a different country,

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language and culture. It’s instilled in me a lifelong love of travelling.” After returning from Norway, he attended the University of Saskatchewan and studied history and law. He then attended the Saskatchewan Indian Institute of Technology and received two diplomas in business administration and accountancy. After many years of working at all levels of First Nations government, Ahenakew has a thorough understanding of federal, provincial and First Nations governments, politics and culture. In 2002, he and five other very dedicated individuals were presented with the Queen’s Golden Jubilee Award for their work in helping First Nations communities. “It was an honor and something I certainly didn’t expect in my role as vice chief of the Federation of Saskatchewan Indian Nations. We were part of a group that works hard to advance the First Nations cause.” As CEO of IGR—which has a mandate to licence and regulate on-reserve charitable lottery schemes for First Nations— Ahenakew oversees its operation and administration, and meets and networks with many industry professionals, both First Nation and operators and with government. There is also the opportunity for IGR to replace SLGA as the regulator

in First Nations casinos, of which there are six in the province. “This is very exciting. It means there’s a lot of First Nations people working in these casinos. It’s a very well-run organization. There is a lot of money that goes out to the First Nations as a result of gaming. We have an agreement with the province regarding the licensing of all charitable gaming in First Nations communities as well as SIGA table games. We have a phased process. We’ve completed phase one and are now awaiting the SLGA to begin negotiations of phase II, which is the registration of First Nations gaming employees. Phase III is the registration of gaming suppliers.” In his limited spare time, this father of four enjoys spending time at home and golfing when he gets a chance. And although he has no major trips planned at this time, mainly due to time commitments, he would like to visit South America or the South Pacific. And if that weren’t enough, he’s also enrolled in a master’s program in business administration through the University of Regina. “It’s a going to be a long journey,” he says, but no doubt one that he will enjoy.

10/23/09 1:17:35 PM


facilityprofile

Open for Business

The Casino de Mont Tremblant Quebec’s new casino atop Mont-Tremblant joins casinos in Montreal, Lac-Leamy and Charlevoix and is Quebec’s first new casino since 1996. Construction started in 2007 and the casino opened this past June to take advantage of the summer tourism season. The casino was designed to cater to the resort, convention and vacation clientele who make Mont-Tremblant an international tourist destination. It sits at the top of Versant Soleil, nestled in the mountain’s natural environment. The exterior of the casino has a sloping roof reminiscent of a chalet and the casino operators and their partners hope it will encourage further development of Mont-Tremblant’s tourist offerings. “We are convinced that our project will be a formative one for the region and the local economy, and that it will complement the already established tourism offering in the best possible way,” says General Manager Daniel Bissonnette. “The casino was built to make sure that it integrates with the mountain in perfect harmony,” says Mary-Claude Rivet, Assistant Manager of Corporate Media Relations at Loto-Quebec. The casino is LEED certified, which means that Canada’s Green Building Council has recognized its status as an environmentally sustainable building. “There was special attention paid in construction that it would correspond to LEED certification based on certain criteria,” says Rivet. “It’s built like a chalet. It doesn’t look like a traditional casino. We use natural materials like wood, rocks, leather and suede.” Other green features include rainwater recovery to be used in the building’s irrigation and Albedo ground cover to reflect light, which has the effect of reducing heat islands and lowering energy consumption. The volatile organic compounds used in

construction such as paint and carpets are made of low-emission materials. The Casino de Mont Tremblant, situated near Mont-Tremblant’s other tourist and vacation spots, has unique access compared to other casinos. In addition to its shuttle bus service that connects it to Tremblant’s pedestrian village, it is “ski-in, ski-out,” says Rivet, so patrons can access it in the middle of skiing sessions. It can also be reached via a free gondola service that connects it to Versant South, on the other side of the mountain. The gaming floor boasts “400 slot machines as well as 25 croupier operated gaming tables, among them 5 reserved for Texas Hold’em Poker,” says Rivet. It has a staff of about 225. “We also have a large area specific for high rollers that we invite to visit this special place. This section, around 13% of the gaming floor, is proportionally bigger than other casinos.” This is because of the casino’s unique location and feel. In terms of amenities, the

casino has a sit-down restaurant serving mostly finger-food with a 125-person capacity bar, and two private salons. “We are trying to complete the restaurant offerings in the area where there are many restaurants and hotels. We are mainly a casino,” says Rivet. The interior of the building has lots of windows for natural light and a modern design corresponding with the building’s natural materials. The interior is also permanently appointed with a selection of works from LotoQuebec’s art collection. Looking to the future, Rivet says that customer reaction has been very good, corresponding to Loto-Quebec’s expectations. “The Casino de MontTremblant is unique in the heart of the mountain,” says Rivet. “There are a few condos in walking distance. We’re confident that within the next few years the success of the casino will be a start up for other tourist attractions.” Sam White is a Toronto-based freelance writer.

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operatorprofile

Onex Acquires Control of The

Tropicana Las Vegas Hotel and Casino

By Lucie Grys

The Tropicana Hotel grand opening on April 4, 1957 marked the beginning of a new era in first class resort living. From the moment of groundbreaking, the plush desert resort became the unchallenged "Tiffany of the Strip," a metaphor first used by the Saturday Evening Post to describe the atmosphere of serene elegance conspicuously present throughout the hotel.

Last year, Toronto-based Onex Corporation established a gaming partnership with Alex Yemenidjian to pursue new gaming opportunities including the acquisition and control of The Tropicana, one of Las Vegas’ most legendary properties.

Onex is one of North America’s oldest and most successful private equity firms managing investment platforms focused on real estate and credit securities. In total, the company manages approximately US$10 billion, generates annual revenues of $37 billion, has $44 billion in assets and employs 225,000 people worldwide. This past July, Onex Corporation, together with Yemenidjian, acquired a majority equity stake in the Tropicana Las Vegas Hotel and Casino following the property’s emergence from bankruptcy protection on July 1, 2009. The Tropicana Las Vegas is positioned on 34 acres at one of the busiest intersections in the world and is one of the oldest and best-known casinos in North America. With over 1850 guestrooms, a 61,000 square foot casino, numerous restaurants, and 850-seat

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operatorprofile showroom and five-acre tropical pool area, renovation plans are extensive. Onex began accumulating the senior secured debt of Tropicana Las Vegas in 2008 and ultimately acquired more than 50 per cent of the security. In May 2009, the plan of reorganization was confirmed and subsequent to Alex Yemenidjian’s gaming license approval on June 18, 2009, Onex had satisfied all conditions for the plan of reorganization to become effective. Subject to approval by the Nevada Gaming Commission, Onex also expects to receive its gaming license in Nevada. The Tropicana Las Vegas emerges from bankruptcy with no debt, over US$10 million of cash, and commitments from Onex and certain other equity holders to invest at least US$75 million of capital to upgrade the property. Ye m e n i d j i a n h a s a l o n g a n d successful career in the gaming and entertainment sector and served as Chairman of the Board and CEO of Metro-Goldwyn-Mayer Inc. from April 1999 to April 2005, and

was a d i r e c t o r f r o m N o v e m b e r 1997 to April 2005. He also served as President of MGM MIR AGE (formerly MGM Grand, Inc.) from July 1995 through December 1999. He served as a director of MGM MIRAGE from 1990 to 2005 and also acted in other capacities during this period, including as Chief Operating Officer from June 1995 until April 1999 and Chief Financial Officer from May 1994 to January 1998. While at MGM MIR AGE, Yemenidjian was involved with the design and development of MGM Grand (Las Vegas), New York - New York, and MGM Grand (Detroit). He was an executive of Tracinda Corporation, the majority owner of both Metro-Goldwyn-Mayer Inc. and MGM MIRAGE, from January 1990 to January 1997 and from February 1999 to April 1999. As the appointed Chairman and Chief Executive Officer of Tropicana Las Vegas, Yemenidjian notes, “With 25 years of active ownership experience, significant resources and business acumen, Onex is the ideal partner to

transform the Tropicana Las Vegas.” He continues, “I am delighted to have the opportunity to partner with Onex on returning such a storied property to its former glory.” Tim Duncanson, Managing Director at Onex, notes, “We’re very excited about partnering with Alex to rejuvenate the Tropicana Las Vegas. We believe this casino resort has tremendous potential and, with Alex’s extraordinary talents, will become a strong competitor on the Las Vegas Strip.” Plans for a full renovation of the property are underway and include overhauling the resort’s guestrooms, outfitting a new casino floor featuring all of the most in-demand slot machines and table games, creating an array of exciting dining experiences and enhanced hotel amenities including the pool and spa facilities. Additionally, Onex and Yemenidjian plan to reinvigorate the Tropicana Las Vegas with new entertainment, convention and banquet activity as well as a new nightclub. The renovation of the property is expected to be finished in 2010.

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marketing

Make it a Game By David Bellerive

Want people to love your marketing? Make it a game. No joke. We all love games. We have since we were kids. They’re fun, rewarding and they make us happy. You probably already use games in your promotions to entice patrons, but games can also be a useful and powerful tool in your everyday communications. If you have a message you want people to learn or understand, make it a game and invite them to play. After all, isn’t the ultimate goal of your casino to make the players happy? With a game, that happens by default. As in all things, consider the player ’s experience when you’re building a coupon offer, a newsletter or even an email. Use a game to tell your message. You’ll give the player satisfaction and deliver an effective message. Let me use a couple of examples to show you how this can work. Every casino would love to see players return more often. It’s usually why we create promotions. Well, a promotion is one form of a game, but can we make coming in for a visit a game? Base your game on your goal. The goal is how a player wins the game.

You want players to visit more often, than that’s how they win the game. Give them a prize for coming three times this month. Challenge them too. If they visit three times, give them a small prize. They visit five times they get a medium prize. If they visit 10 times, they get a jumbo prize! (Hey, haven’t carnies been doing this for years to get us to play more!) If you have a sophisticated player tracking system, you can make the game more sophisticated. Create a musical chairs game, if a player plays at three different machines, they win a prize, they win a bigger prize for five different machines and an even bigger prize for playing 10 different machines. Here’s a more challenging problem. You want to let people know you’ve changed your menu. You want them

to know there’s a special fish dish on Friday. What’s the goal? Teach your players about the new fish dish. We l l , w h a t ’ s t h e b e n e f i t t o t h e player? Fish will make them smarter. Right away you have something to build a game around. Create 20 trivia questions that get progressively harder – like on the show Who Wants To Be A Millionaire?, except your questions relate to your menu. Why are they called Eggs Benedict? What has fewer calories, an egg or a piece of toast? If they answer the first five right, they get a free coffee at your restaurant. Answer 10 right and it’s a free dessert, 15 wins an appetizer and all 20 wins the full meal! I’m sure you can use your creativity to think of many great games. Just remember, make it fun and rewarding for them. If it’s fun for your players it really will get them much more interested in your message. The game you create should be fun. It doesn’t have to make life better, but it does give the player some satisfaction while they are engaged in your message. The two things you need to remember to create a successful game. Remember the end goal is to make the player happy. Imagine your message as a game or a game to deliver the message. David Bellerive is VP Creative Services and Media at Phoenix Group.

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10/23/09 1:17:57 PM PM 10/6/08 4:23:13


security

The Future of Casino Security By Andrew Coppolino

It is perhaps fitting that one of the world’s largest casino facilities—Casino Estoril in Lisbon, Portugal—was at least part of the inspiration for Ian Fleming’s Casino Royale and its central character James Bond. Ever since the book’s publication in 1953, casinos and “eye-in-the-sky” monitoring and sur veillance have been uniquely intertwined. Canadian Gaming Business recently consulted several industry experts in order to uncover what new technologies and surveillance modalities are coming into play, or are on the horizon. Intelligent analytic systems, says James Moore, vicepresident, iView Systems, are evolving quickly. That includes applications such as license-plate recognition and facial recognition systems and others that watch events and activities in and around the gaming establishment. But add to that how these systems are being integrated, by virtue of applications like iView’s iTrak Incident Reporting & Risk Management System that utilizes the latest software technology to facilitate rapid integration with related systems, and you are getting into some complex territory. “Traditionally, we have had disparate systems A, B, C, and D—video, access control, player tracking systems, for instance—reporting at casinos and other security properties and bringing that information together in one logical and reportable format is one of the biggest challenges.” Convergence, adds Moore, collects all the data and makes it more readily accessible for the property, both outside and inside. For iView Systems, the security approach is what might be described as a macrocosmic/microcosmic dynamic.

He refers to “layering,” starting with the external environment then moving into a secondary layer with technology such as facial recognition before focusing even more finely on a tertiary layer at the player/card level. “Increasingly, these levels permit us to track from a security or other perspective individuals coming into the property, on the property, and working with the property,” Moore said. The long arm of the weakened economy has had its reach into the industry, and iView’s systems are, and will continue to be, an answer to the circumstances, he estimates. “People are trying to do more with less and do it more covertly with the technology. There are fewer staff in the command-control environment monitoring more systems, so by integrating and converging these systems into a single desk-top environment it is easier for them to learn the system and deal with the events that occur. There’s more overlay within the systems that informs the security officer of what they should be doing.” At Honeywell Video Systems, Marek Robinson, director of sales, says their cameras are specially designed for the casino industry while their control software like MAXPRO(R) VMS system and IDM (integrated data management) ties together all the transactional systems on the property as a “data engine.” The convergence theme has a slight twist as Robinson sees it in an evolution from analog to digital systems, something that is perhaps a recurring theme in virtually any business sector, and, by extension, larger society itself. But it poses unique challenges for security and surveillance in the casino setting.

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security

“You have to be able to manage that migration path, and it’s not as simple as just going digital,” Robinson noted. “There’s a lot of technology out there that allows you to do that but without taking into consideration the existing analog. “What Honeywell is doing is taking a brick-by-brick approach and allowing customers to be Internet protocol (IP)-ready now while taking advantage of their existing infrastructure. That means our customers can deploy a hybrid system that uses the hundreds or thousands of analog cameras that they have while creating a digital system.” Honeywell’s software manages multiple, disparate systems across the property and allows them to appear as one system, according to Robinson. He also suggests stepping out of the casino industry specifically to see that the “buzz” in the CCTV industry is IP and IP cameras—and with them an important issue. “Any time you have an IP situation you have latency. That may not be a big issue elsewhere, but in the casino industry and surveillance applications it is. You have real-time operators following people in real time, and you have to be able to manage the existing analog matrixes. That is where we see a huge opportunity for allowing our customers to use newer technology,” Robinson said. Robinson also sees more and more customers using megapixel cameras in specific areas, which allows increased flexibility in camera mounting and zoom-in to get the detail you need. The casino environment in many cases is not one designed for surveillance and security applications—the venues are player experience-oriented with high ceilings, wide-open spaces, and unusually designed lighting and architectural amenities. “This forces you to put a camera in an unusual location and one not ideal from a traditional security perspective without interfering with the players’ experience. Megapixel cameras allow you to mount the device much further away but give very clear detail and information from a person, or cards and chips.” Facial recognition technology, according to Mike Callaghan, account manager, GE Security Canada, is still not hitting the mark, so we likely will see changes and evolutions continuing in this surveillance modality. “I see demonstration after demonstration of different products and the false positives are still too high. Some casinos are deploying it, but I’m not sure the success rate is that significant and that may be in smaller casinos where there is a smaller, recurring customer base for the database to draw from.” Among the latest developments are video analytics for suspicious behaviour patterns, including employees who are, according to Callaghan, habitual in the way they perform their day-to-day duties. Until, that is, they start to do something outside the boundaries of the rules. “It’s a given that your behaviour pattern will change for a number of reasons, none the least of which is the adrenaline that your body begins to produce. To get rid of that you have to do different things such as being more animated or slowing down—something will change in your behaviour pattern. “The analytic studies are looking at behaviour and mining that data. The systems aren’t intelligent enough to say

precisely what is different, but operators watching hundreds of cameras can be alerted to someone suddenly acting in a different way like walking differently between tables.” To that end, GE’s website notes that their VisioWave IVP is a high-end intelligent video platform that integrates software and hardware into a comprehensive surveillance system “designed to protect people, property and critical infrastructure.” Digital-based equipment and megapixel cameras reign supreme, the big sticker prices notwithstanding, he says. “Analog is pretty much gone, with new technology able to cover a much wider area of floor space and upon incident being able to zoom in to get a snapshot in prime without degradation in resolution in expanding those pictures.” Callaghan notes that the particular venue’s gaming jurisdiction will still determine somewhat how many cameras need to be dedicated to particular parts of the floor. Otherwise, systems scrutinizing vascular networks deep in the human palm are more and more likely to appear on the scene especially as they are more accurate than superficial fingerprints. “I haven’t seen them yet in casinos, but vascular scans aren’t impeded by dirt and so on,” notes Callaghan. “Facial recognition,” he adds, “is still the big one on the horizon, and there will be a break-through at some point though I haven’t seen anything that is quite there yet.” Speaking to us from the United Kingdom, Steve Wright, casino business development manager with IndigoVision, envisions one of the biggest changes in casino security

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security and surveillance in many years—the introduction of high definition cameras into surveillance systems in casinos. Increasing, Wright finds “a huge amount of interest� from casinos in engaging IndigoVision technology. Longerterm cost-effectiveness comes into play, he said. “Where previously a casino had to employ three cameras to cover a single table, with a high definition camera they can do it with one. It’s much easier to zoom and stop and start and replay with one single video stream.� The problem is a fairly basic one right now: you can’t stream HD video through an existing analog video switcher: “ninety-nine percent of casinos base their systems on analog switches. And they all want HD cameras, but switching over is expensive and can be logistically difficult.� IndigoVision provides fully digital systems with no analog matrix, no VCR, and no DVR. For instance, M Resort Spa and Casino on the Las Vegas strip is the only North American venue using the IndigoVision Virtual Matrix throughout, notes Wright, providing HD on every channel instantly. Convergence is an interest too, he agrees, with a lot of requirement for interfacing security systems into pointof-sale systems. “Every time a cash register operator voids an entry, for example, an alarm sounds in the surveillance control room and a video that covers that cash register can be thrown up on the screen automatically.� With IndigoVision’s systems interfacing into third-party

systems, Wright says that there is a desire among casinos to bring the entire facility’s operations under the umbrella of the surveillance department. As for facial recognition, Wright sees “a disparity between what people want facial recognition to do and what is actually achieved. Everyone imagines that facialrec software identifies known cheats and individuals as they enter the casino. Very few systems run on live video; they work on recorded video,� he noted. That means single stream video (often already pointing the wrong way down onto the top of someone’s head anyway) is pushed through a facial recognition software and it will be hours or days later that it produces a list of possible persons-of-interest. It’s a slow, clumsy process: “How,� Wright asks, “does learning a known card-counter was in your casino three days ago help you?� Changes are in the matrix and on the digital horizon; yet, simultaneously, there is still lots of research and development work for “Q Division� to undertake when it comes to evolving Bond-like surveillance systems in casinos and gaming establishments. Andrew Coppolino, andrew@andrewcoppolino.com, is a Kitchener, Ontario based writer.

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feature

G2E Gives Suppliers a Big Chance To Show Off By Marcus Prater

It’s just about that time of year again, with that monster of a trade show, the Global Gaming Expo (G2E), fast approaching and all of the gaming supplier companies scrambling to get ready. For the member companies of the Association of Gaming Equipment Manufacturers (AGEM), the business interruption of diverting resources to get ready for G2E is accepted with the understanding it is to be offset by the increased business flowing from the new products and technology on display at the Las Vegas Convention Center. The mid-November time frame also signals the unofficial end of a product development cycle that essentially began when last year ’s G2E ended. For AGEM companies, anchored by the big slot machine makers, this cycle involves nearly every department in their respective organizations and ultimately produces a dazzling array of new machines, games and gadgets that get rolled out as the next big thing at G2E. Our industry is often labeled as behind the times when it comes to bringing new technologies to the market because of the time it takes to push things through various regulatory channels. What is deemed approved in, say, Canada gets a second look in Mississippi and a third look in Nevada and a fourth look in New Jersey and on and on. By the time something is approved in all jurisdictions, years have passed. And so while critics of our structure point out the gaming industry seriously lags behind other technology industries, that does not mean we are laggards when it comes to technology. On the contrary, actually, as those who have attended G2E over the years can attest. The level of innovation on display every year is remarkable – these aren’t your father’s slot machines any more, if you

Our industry is often labeled as behind the times when it comes to bringing new technologies to the market because of the time it takes to push things through various regulatory channels. hadn’t noticed. But all of this innovation is not matched by speed to market, and that really is where gaming differs from other industries. With more competition than ever among machine makers and peripheral manufacturers, plus a wide assortment of companies trying to cash in on gaming’s growth, there’s more good stuff getting shoved into the regulatory approval pipeline than ever before. It all comes out eventually, but it may take longer than some would prefer. The end result, of course, is more entertainment for casino players and presumably more revenue for operators. And then there is the back-end technology you can’t always touch and feel, but the efficiencies created by it save money for operators and ultimately add to their bottom line. Canadian casinos, particularly the large resort locations, have always been at the forefront of embracing new technology and can claim some of the freshest slot floors of any market based on new machines, progressive offerings and attractive new titles. The one downside to all of this innovation on display at G2E is the challenge a buyer has of trying to absorb

everything laid out in hundreds of booths across thousands of square meters of space, all in less than the 20 hours the exhibit floor is open. How does a slot executive from, say, Montreal wander through the Las Vegas Convention Center for three days and head home with a clear picture of his buying preferences? I would say that’s impossible to attain, but I suspect every attendee has their own formula for turning their trip to Las Vegas into a worthwhile business event. It all adds up to the biggest gaming gathering on the planet – 30,000 or so of your closest friends. They’re not all there to just buy, and in fact the presence of regulators, financiers, politicians, reporters, investors and other assorted movers and shakers have only added to the importance of attending G2E. For our AGEM members and suppliers from all over the world, this huge and diverse audience is exactly who they’ve been working to please as they’ve toiled away over the past 12 months. Marcus Prater is executive director of the Association of Gaming Equipment Manufacturers (AGEM). He may be reached by email at AGEM.org@ cox.net or by phone at (702) 812-6932. The association’s Web site is www.AGEM.org Canadian Gaming Business  |  27

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humanresources

Rolling the Dice on New Employees-

By Kyle Salem

In the casino world, employee turnover is a never-ending nightmare. With staff turnover rates frequently approaching 80%, according to Martin R. Baird, Chief Executive Officer of Robinson & Associates, a customer service and employee satisfaction organization, the cost of human capital might be the largest expense casinos endure. While some organizations resign themselves to the fact that poor staff retention is unavoidable, others have taken a more proactive approach. In this article, I will discuss two gaming organizations working hard to reduce staff turnover and increase employee engagement. They utilize pre-employment assessments to gain a deeper understanding of their candidates – and increase their odds of a successful hire. Ontario Lottery and Gaming Among the largest human resources teams in the Canadian Gaming industry, Ontario Lottery and Gaming (OLG) has been a pioneer in hiring and retaining their best people. But even this innovative group must adjust with the times, and currently they are implementing some very forward thinking ideas. According to Maria Graham, Executive Director of Human Resources Gaming at OLG, they used to believe that if a candidate had 3-5 years of customer service experience, they would surely succeed. In fact many casino executives look at resumes, see customer service experience and figure the candidate is a must hire. However, Graham notes, “it’s not so much the experience people have, it’s if they have the right personality to perform on the job.” Today, OLG is moving away from hiring people based on skills and experience, and instead focusing on better understanding candidates’ personality and attitudes.

This has long been a consideration for their senior level positions, but now they are implementing this approach when hiring throughout the organization, including for floor supervisors in their casinos. “Making the right hiring decisions on these staff is critical. You can be the most wonderful GM, but if you have poor supervisors it won’t work,” stresses Graham. In fact, Graham herself cited numerous studies in this very magazine in July 2006, stating that immediate supervisors have a “significant influence on the employee’s attitude, approach, behaviour and engagement.” And indeed, having the right temperament for the job is critical to being successful, engaged and performing at one’s peak. To help understand their candidates’ temperament, OLG uses psychometric testing provided by human resources consulting firm, The McQuaig Institute, and have since 2000. Shortlisted candidates complete a fifteen minute on-line assessment which Graham states “helps support or challenge our gut instincts whether we have made the right decision.” Relying simply on interviewing candidates is an insufficient way to truly understand personality. A recent Michigan State University study confirms this belief, noting that while 90% of all hiring decisions are made based on interviews, they are only 14% accurate. Why? Because as proficient as interviewers can be, candidates today are just as well prepared for questioning, and have stock answers at the tip of their tongues.

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humanresources

“Relying simply on interviewing candidates is an insufficient way to truly understand a personality.” Despite recent changes made at OLG, evaluating potential employees will remain front and centre. “The old adage is that employee behaviour drives customer behaviour, and customer behaviour drives business performance,” says Graham. And if OLG’s efforts to hire and develop great people succeed, their bottom line performance will surely be a winner as well. Saskatchewan Gaming Corporation Unlike OLG, who have brought their focus on personality and attitude from the top down, the Saskatchewan Gaming Corporation (SGC) is going from the bottom up. This was decided after conducting an internal study and finding that their high turnover can be most significantly reduced by focusing on floor level staff. Doing so is expected to generate a major cost savings for the organization, including less time and money spent hiring and training new employees, lower advertising costs and more.

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“Dependability, reliability and integrity,” are the three buzzwords repeated by Michelle Pasker, Human Resources Consultant at SGC, and an Organizational Development specialist, for defining their ideal candidates’ virtues. They feel that focusing on these traits will result in better hiring decisions, higher retention rates, and a more productive and engaged staff. To this end, SGC also decided to incorporate candidate assessments. They wanted one that would be easy for managers to understand, easy for candidates to complete, and of course reliable and valid. At the same time, they wanted a tool that could be expanded and used at the corporate level down the road, once they were ready to push the resource upward. The Food and Beverage area was selected to sample assessments because of their high turnover rates and the fact Pasker previously held this portfolio. “It is a very entry level position,” Pasker said of the Food and Beverage positions. “Candidates basically need a Grade 10

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The old adage is that employee behaviour drives customer behaviour, and customer behaviour drives business performance. (education), though they have to be 19 years of age to work here. For a lot of them it is their first job.” Moreover, with their Food and Beverage area being so fast paced, their need for a quick and reliable tool made for the perfect proving ground. To sample psychometric tools, SGC first created an ideal candidate profile, than assessed a number of candidates, hiring three. One was a strong match for the position compared to the benchmark created, a second was a potential match, and the third did not match at all. Over the next few months Pasker observed the progress of the three individuals, and was amazed at how prophetic the assessments were. For the candidate that did not match the job, not only is attendance poor, but they are “struggling to motivate him, exactly what was predicted,” said Pasker. Conversely, “the candidate who was a strong match is just excelling.” In fact for this candidate, Pasker expects to monitor his growth and give him more advanced work. Of course, this is a task she is more than willing to embrace as it should lead to having an outstanding, promotable, longterm employee. Beyond hiring, coaching and developing staff can be extremely time-consuming. Managers need to learn quickly what to monitor in their new employees, and how to help them focus on their strengths while nipping problems in the bud. With a 90-day probation period and a unionized environment, SGC sees this as the window for managers to separate the wheat from the chaff. At the end of the day, according to Pasker, “you are going to have much less turnover, better retention, and better customer service.” Whether your staffing problems lie on the floor or within upper management, using employment assessment tools will provide an excellent barometer in determining how well your candidate fits the job, and if they are likely to succeed. As Pasker says, “if we can reduce our turnover and better develop our future leaders, it’s going to be huge.” Kyle Salem is a Senior Consultant with The McQuaig Institute®, offering pre-employment assessment tools which help more than 1,200 clients worldwide, including many casinos, measurably reduce turnover and increase staff productivity and engagement. Kyle can be reached at 1.800.387.5455 or ksalem@mcquaig.com.

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companyprofile

Scientific Games: A Profile Scientific Games Corporation is a diversified global gaming company headquartered in New York City, with major production and operational facilities in North America, South America, Europe, Asia, and Australia. Additional facilities are located in North America and around the world based on current customer contracts.   Scientific Games has a worldwide staff of approximately 4,500, with the global scale, skill and scope to execute today’s highly complex implementation projects efficiently, professionally and responsibly. The company has customers in more than 60 countries on six continents. As a global company with a worldwide footprint, Scientific Games is committed to sustainable best practices.  A dedicated internal team continually seeks ways to reduce waste, use energy more efficiently, and operate more sustainably. Scientific Games is a much different gaming company today than in 1973 when it gained worldwide recognition and earned a reputation for innovation for its pioneering efforts that led to the launch of the first secure instant lottery ticket, ushering in a new era for the modern lottery industry. Today, the company offers a comprehensive, sophisticated and integrated array of products and services, which include:

• Instant ticket printing, systems and services • Lottery gaming systems • Licensed branded games • Operations services to lotteries ��� Central Monitor and Control Systems • Server-based systems and gaming machines • Amusement-With-Prize (AWP) and Skill-With-Prize (SWP) betting terminals • Sports betting solutions • Wagering technology services to pari-mutuel operators Scientific Games is a leading provider of video control and monitoring systems. The company’s video gaming systems support approximately 88,000 gaming machines, more than 8,500 bars, restaurants, video lottery retailers, pokies and racinos in eleven jurisdictions worldwide. A trusted, respected brand name across the gaming spectrum throughout Canada, Scientific Games: Is the current and original provider of the video gaming system for Société Des Lottery Video Du Quebec (SLVQ), a division of Loto-Québec; this system handles over a billion dollars in revenue annually • Is the printer of record for the Atlantic Lottery Corp. and Loto-Québec; • Supplies the state-of-the-art online lottery central system, terminals and self-service ticket checkers for Atlantic Lottery; Supplies the world’s most advanced clerk-operated lottery terminals and self-service ticket checkers for Ontario Lottery and Gaming Corp.; • Is the online lottery central system provider for the Western Canada Lottery Corp. • Provides licensed property games to all five Canadian Lottery jurisdictions; • Supplies the state-of-the-art totalizator central system,

teller-operated terminals and self-service wagering devices for Great Canadian Gaming Corp., owner of Flamboro and Georgian Downs in Ontario, and Hastings Park, Sandown, Fraser Downs and BC TAB in British Columbia, as well as a major racino operator.   • Provides services to a number of racetracks in Ontario as well as the Ontario Teletheatre Network and Northern Teletheatre Network.

UNPARALLELED EXPERIENCE Scientific Games’ experience in building video control and monitoring systems spans a quarter of century. The company implemented the first online video lottery project in partnership with the state of Illinois 25 years ago. In 1989, Scientific Games implemented and operated the first statewide video lottery in South Dakota. For the two decades since, Scientific Games has continued to evolve its systems. Today, its fourth-generation, GLI-compliant AEGIS-Video™ system sets the standard for performance in video lottery central control and monitoring. UNIQUELY ADAPTABLE A unique attribute of Scientific Games’ video gaming systems is their ability to adapt to a variety of venue configurations, ranging from multiple retail locations with a few gaming machines on dial-up communications to large racinos with thousands of gaming machines with online communications. Of Scientific Games’ eleven video gaming systems installed, these two jurisdictions are at the forefront of video gaming operations and now among the most profitable in North America: • The West Virginia Lottery, which includes 1,750 retail locations and 20,000 gaming machines statewide, including four of the largest racinos in the world – the largest being Charles Town Racecourse with over 7,000 gaming machines connecting games from fourteen (14) manufacturers, utilizing four (4) different protocols. • The Delaware Lottery, which includes three of the most sophisticated and certainly most profitable racinos in the history of video gaming. • Scientific Games’ robust, state-of-the-art Video Control and Monitoring Systems are tested, proven, GSA-ready and can be customized to accommodate a lottery’s unique needs and wants, when that lottery is ready to move forward into the future. • Scientific Games realizes the keys to proper control and regulation include the ability to: • Verify gaming machine configurations • Ensure that only approved games are available; • See real-time events from the gaming machines; and • To shut down operations of a single gaming machine or an entire venue from the central computer system. Scientific Games’ AEGIS-Video system provides all of this capability and much more. Wherever you want to go, we can take you there. Canadian Gaming Business  |  31

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feature

Responsible Gambling In Action: Nova Scotia Launches Informed Player Choice System By Janice Landry

John Xidos says he’s been in the gaming industry since the “early 80’s, when Pac Man and Space Invaders were around the arcade.” While those classics are considered retro, the project he’s currently involved in, with The Nova Scotia Gaming Corporation (NSGC) is cutting edge and considered a world first in responsible gambling. It’s called the Informed Player Choice System (IPCS) and it was developed by the NSGC with Xido’s Techlink Entertainment, based out of Sydney, Nova Scotia. It is a suite of real-time, interactive player tools that are accessible through all video lottery terminals (VLTs) in Nova Scotia. Players access this system by using a card that looks like any other plastic card you have right now in your wallet or purse. The player places their Informed Player Choice Card into a VLT, much like you would at a banking machine. The system uses a touch monitor and is quite user-friendly; it’s very much like registering at a hospital or depositing a cheque at the bank. You follow the prompts on the screen and simply touch the one you choose to complete the desired action. The writing and symbols are easy to read. Xidos says he has tried to make it as user-friendly as possible, to make it as appealing, and not a turn-off, for those gamblers who are not “techno-saavy.” You need a PIN number, which is the first step in accessing the tools, and, according to Xidos, takes under a minute. He explains, during my mini demonstration at the NSGC Halifax office, that it requires you to either swipe your driver’s license, or have an attendant at the VLT site manually help you, if you don’t have one, or, perhaps prefer not to use your driver’s ID. Once you register, you are then able to access any of the machine’s five player information tools: “My Account” displays a balance sheet summarizing the amount the player has spent for any day, week, month or year. “Money Limit” allows the person to set a ceiling on spending for those same time frames. The third information tool is called “Live Action,” which shows in-progress play, including the amount put into the machine and the amount cashed out. The fourth element is “Play Limit,” which allows players to control the time they can play in a day, week, month and year. The fifth and last tool allows players to

immediately stop play, says Xidos, “The Province wanted a ‘cooling down’ button, so, if a player lost all his money he could actually lock himself out immediately for 24, 48 or 72 hours.” Giving players everything they need to make informed decisions is key, according to Marie Mullally, CEO of NSGC, “At the end of the day, many experts say it’s up to the player to decide what their behaviour or actions will be. We believe that concept or that philosophy very much. What we also believe is that we have a very important responsibility to provide players with the tools, the information, so that when they make that decision, which is theirs, they can make an informed decision. And, the experts say that when they players are armed with the tools and information, that will help them make an informed gaming decision; it will help to facilitate and maintain responsible gaming behaviour.” A pilot study in Windsor/Mount Uniacke, NS, tested the features during a two-year research phase between 2005 and 2007. The research concluded that the features helped certain categories of players spend less, exercise more control and make more informed decisions. According to Xidos, one feature stood out that players accessed most, “the big one, the one that was used over 52% of the time during the trial in Windsor, is “Money Played.” And, it shows you how much money you actually put in for the day/week/month/year.” Now that the pilot has long concluded, the next milestone and phase for the IPCS is a field test in Sydney, which started in July, with about 30 retailers and 240 VLTs, explains Mullally,” The IPCS is a very complex information system, and, typically what you’d find with this type of system development is a very comprehensive ‘live’ testing requirement to ensure that any technical issues are resolved before rolling out the system province wide,” Mullally goes on, “...the primary purpose is to identify any technological

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feature problems, fix them, so that when we move to a province-wide roll out to approximately 400 sites, involving 2,800 VLTs, we know the system is going to operate effectively, consistently and reliably.” The field test is going to take about three months to complete; by the end of September NSGC will know what, if any, modifications are needed before the province-wide rollout, which is slated for the remainder of 2009 through 2010. So far, Mullally says, the field test is going well. “What I do know from the first week of the field test, that the players, the take-up rate was very good and that they were actually using it, and, interestingly, the players were very comfortable using it. There was a fair amount of perception, for example, that players would find it difficult to use a card, or reluctant to use a card, and I think that stems from the continued issue of a concern of privacy; the fact that a government-operated business now would appear to have access to information, when, in fact, that is not correct. There’s no personal information retained on the system. Personal information is used to create a ‘unique identifier,’ but, once that’s been done, there’s no way to indentify that it’s John Smith at 123 First Road as the player.” Protecting player information is a priority in the anonymous, prevention-based system that research, according to the NSGC, has shown mostly benefits the ‘No’ or ‘Low Risk’ players. They are considered the primary target of the IPCS system. An NSGC backgrounder states that “some portion of the moderate risk player group may also benefit from the features if they have the will to change any play characteristics that are harmful and indicative of a problem.” CEO Mullally explains, “It means over time, you can potentially reduce the future incidences of problem gambling. Is it going to help the existing problem gambler? No. Because the existing problem gambler, like any addict, is at the point that some kind of realization is going to be needed by the person to want to change their behaviour – then they’re going to need some kind of treatment and recovery program in which to deal with the addiction.” This system will be a ‘reality check’ for many players, according to Xidos, “This is almost like your VISA card. You get the statement at the end of the month. You remember the big screen TV, but you kind of forgot about the suit and tie.” But, this social responsibility wake-up call doesn’t come by ‘snail mail,’ it’s there for the player in an instant swipe of the card. “The real-time interactive aspect of the system is what makes it truly powerful”, says Mullally. And, as the IPCS testing phase continues, Xidos is making sure all his I’s are dotted and T’s crossed because, as a world-first, the eyes of the gaming world are watching, “I started with myself in my home basement. We now have 80 employees. We’ll have 100 by Christmas. We will have 300 in the next two to three years, and, we are now in discussions with 14 jurisdictions on deploying this technology: Australia, New Zealand, Greece, Cyprus, the Caribbean.” Its potential enormity for responsible gaming is summed up by NSGC’s Mullally, “When I put it in the realm of all the things that we have done, it’s definitely a very significant undertaking. It is certainly one of the top five initiatives that we have pursued on the responsible gaming front, and, it is something that has taken enormous resources for both NSGC but also our video lottery operator Atlantic Lottery Corporation. And clearly, it’s a cornerstone piece of Techlink’s business. So, everyone has a very high vested interest ensuring that this system is implemented well; that it achieves the benefits that we believe it will achieve for this province.”

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charitablegaming

Online Bingo for Bingo Halls and Charities in North America by scott WhIte

Unlike what appears to be happening in the land-based environment, bingo is surging as an Internet game in most countries. Pay-for-play bingo is now offered by some of the largest brands in the world in the United Kingdom, Sweden, Spain, Denmark and more recently in Canada. Countries such as Italy and France, and a number of Canadian provinces, and even the United States are now assessing the merits of Internet gaming. In 2008, in excess of $1 billion was wagered by players in Internet bingo halls. Last year alone, in the United Kingdom, the number of Internet bingo players doubled. It is not just pay-for play bingo that is exploding - all kinds of free-play and now subscription-based bingo offerings are emerging as bingo-focused social networking portals. Yahoo!, Pogo, GabDab, Gamelogic, Parlay and others now offer Internet bingo technology solutions. These managed solutions are used to successfully generate revenue and/ or create brand recognition and customer loyalty through community-driven portals which reward players with non-cash rewards or small cash prizes. These freeplay and subscription based marketing strategies are being used or considered by traditional gaming operators, charities, First Nations groups and mainstream marketing and promotions firms. It is now a fact that the largest bingo halls in the world are Internet bingo halls. This is no coincidence. Our customers, some of whom operate land-based bingo clubs as well as Internet bingo halls, tell us that their players prefer Internet bingo. This is because players prefer the interactive, community experience and they enjoy establishing their online personas, where they offer access to their pictures, family histories, biographies, likes and dislikes. This exchange of information is simply

unheard of within traditional land-based bingo communities. So why is Internet bingo so popular? From the player’s perspective, there are no costly and time-consuming car trips to the bingo hall and there are no smoking bans. Internet players are able to couple the thrill associated with playing in a seemingly endless variety of competitive bingo games, with the exploding phenomena of social networking. From the operator’s perspective, there is minimal cost associated with launching a free-play or subscriptionbase bingo site. Operators are able to easily extend their existing websites and link them into existing Internet bingo game infrastructure, which is fully managed for them. There is immediate, recognizable, enhanced customer value in using such an offering, allowing the 24/7 promotion of land-based bingo hall or charity specials, jackpots, lotteries or sweepstakes. The promotion of upcoming events effectively adds a direct marketing channel to the customer or donor, allowing for frequent and multiple opt-in customer touch opportunities. In the coming months, we expect to see substantially more free-play and

subscription-based Internet bingo solutions adopted by gaming companies, traditional bingo halls and charities. We are also seeing unprecedented interest in Internet bingo from promotional firms who may use Internet bingo to enhance customer loyalty. These technologies can be used successfully to re-capture old players and acquire new ones. Since only 40 percent of Internet bingo players currently play at bingo halls, to acquire an Internet player, gives a hall operator access to a new customer. Internet bingo is still at its very early stages of development. As Internet gaming regulates in North America, Internet bingo will become mainstream just as it has in the United Kingdom and Europe. Given the current regulatory environment in North America, traditional bingo operators and charities should consider using Internet bingo as a marketing and promotions tool. Internet bingo complements existing marketing channels. It should not be seen as a threat. Scott White is the CEO of Parlay Entertainment Inc., a Canadian corporation and the world’s leading developer and licensor of Internet and TV bingo solutions. Parlay was the first company in the world to develop and deploy a commercial Internet bingo product.

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Canadian Gaming Business October 2009