Issuu

Canada's Premier Gaming Industry Magazine

Vol. 1 No. 5

April 2007

What's New in Security and Surveillance

Inside:

Surveys of Canadian Opinions on Gaming Server-Based Gaming Success with Internet Lotteries April 25-27, 2007 - please visit www.canadiangamingsummit.com for details

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April 2007

Volume 1 Number 5

contents

Chuck Nervick

Editor’s Note

Message from CGA

Gaming News Roundup

Publisher

chuckn@mediaedge.ca 416-512-8186 ext. 227

Editor

Fred Faust ffjr@swbell.net

Advertising Sales

Philip Soltys philips@mediaedge.ca

Senior Designer

Annette Carlucci

Designer

Ian Clarke

Production Manager

Denise Macharacek

The Gateway deal shows confidence in the market, Casino Windsor makes an aggressive marketing move, Internet gambling operators and payment processors bail out of Canada, and other gaming news.

annettec@mediaedge.ca ianc@mediaedge.ca

canadians love to play A new survey of attitudes about gaming.

denisem@mediaedge.ca

Circulation Manager

Julie Shreve julies@mediaedge.ca

success with internet lotteries Atlantic and British Columbia Lotteries find that online sales work.

Proudly owned and published by:

President Kevin Brown

President & CEO Bill Rutsey

kevinb@mediaedge.ca

wrutsey@canadiangaming.ca

Vice President, Strategic Development Chuck Nervick

Vice President, Public Affairs Paul Burns

chuckn@mediaedge.ca

pburns@canadiangaming.ca

gaming personality – jane holmes, woodbine entertainment

every time you give, you put yourself at risk Charitable donations require some thought, and planning.

facility focus – casino de charlevoix in quebec

server-based gaming This technology is still in the test mode, and still promising great things.

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

For advertising information, Contact Chuck Nervick 416-512-8186 ext. 227

CHEF SPOTLIGHT – Raymond Taylor, Casino Windsor

ombudsman blasts olg's lottery program

new forms of gaming find acceptance Decima says Canadians are beginning to support Internet and mobile gaming.

chuckn@mediaedge.ca

For editorial information, Contact Fred Faust 866-216-0860 ext. 271 fredf@mediaedge.ca

Copyright 2007 Canada Post Canadian Publications Mail Sales Product Agreement No. 40063056 ISSN 1911-2378 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 $44.94 per year, $80.79 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

Criticism from Ontario’s Ombudsman may lead to new regulation of the lottery.

booking entertainment, for the drop Artists’ agents and entertainment buyers discuss live casino entertainment.

what's new in security and surveillance We look at new technology and new approaches to keeping casinos safe.

lottery and gaming corporation highlights The latest news from the Atlantic provinces, Nova Scotia, Quebec and Ontario.

Volume 1 No. 5

Canada's Premier Gaming Industry Magazine

Vol. 1 No. 5

April 2007

What's New in Security and Surveillance

Inside:

Surveys of Canadian Opinions on Gaming Server-Based Gaming

Official Publication of the Canadian Gaming Summit

Success with Internet Lotteries April 25-27, 2007 - please visit www.canadiangamingsummit.com for details Canadian Gaming magazine April 21 1

4/16/07 12:38:40 PM

On the Cover Security and surveillance gets more sophisticated, with new hardware and a new mode of analysis. Canadian Gaming Business |

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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, Senior Director Spielo, GTECH Nick Eaves, Vice-President 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 Brad Johnson, Vice President Marketing Aristocrat Technologies Inc. Ron Kelly, Executive Vice President Arrow Games Michael Lipton, Q.C., President, International Masters of Gaming Law and Partner, Elkind & Lipton LLP Eric Luke Eric R. Luke and Associates Alan Lyman, Senior Regional Director Scientific Games Margaret McGee, Vice-President of Prevention Programming and Public Affairs Nova Scotia Gaming Corporation Jovica Perovic, Director Casino Product Development & Facilities British Columbia Lottery Corporation Michael Randall, Vice President Corporate Responsibility & Communications Atlantic Lottery Corporation George Sweny, Senior Vice President Lotteries OLG Monique Wilberg, Chief Operating Officer Gateway Casinos

E-mails to the Editor

Opinion Surveys, Server-Based Gaming, and Security and Surveillance Probably no industry is as sensitive to public opinion as ours, and for good reason. In Canada, as in most democracies, the parameters of whatever gaming is permitted are ultimately determined by public acceptance. That’s why this issue contains reports on the results of two recent opinion surveys on the topic of gaming. In Canadians Love to Play (page 14), you will see the highlights of the second year of the National Gaming Monitor, a third-party study sponsored by the Canadian Gaming Association. And in New Forms of Gaming Find Acceptance (page 37), Kurt Eby summarizes a Decima report that shows that Canadians are warming to the idea of using the Internet and wireless devices for sports betting, casino-type games, and lottery sales – but interestingly, not for poker. Decima Research is a highly respected Canadian firm that surveys consumer attitudes, and we will be featuring its reports from time to time. For a related story, Success with Internet Lotteries (page 18), Aaron Todd reports on the experience that two provincial lottery corporations have had with Internet sales. On a more technical subject, I write about Server-Based Gaming (page 30). This technology has been threatening to

revolutionize the slot floor for several years now. It’s still not ready for prime time, but it is evolving and improving as tests continue in the States. The first test in Canada could begin by the end of this year. We also examine the technical side of another key aspect of casino management in What’s New in Security and Surveillance (page 46). Al Warson examines some of the latest products and procedures for this special section. Many companies don’t put enough thought into their charitable donations, as Mary E. Donahue explains in Every Time You Give, You Put Yourself at Risk (page 24). Paul Burns at the CGA and the folks at MediaEdge have been working hard on the conference program for the Canadian Gaming Summit, April 25-27 in Toronto. From the preliminary schedule I’ve seen, this will be packed with informative and stimulating sessions. But then I have to say that, because I’m moderating one! Hope to see you in Toronto.

Clarification In the Lottery and Gaming Corporation H i g h l i g h t s i n o u r Fe b r u a r y i s s u e , Saskatchewan Gaming Corp. stated that Casino Regina was the first in Canada to put downloadable slot games on its

gaming floor. However, SGC issued a clarification, saying that Casino Regina was the first in Canada to put downloadable-ready slots on the gaming floor. The downloadable feature is not currently being used.

Fred Faust Editor fredf@mediaedge.ca 866-216-0860 ext. 271

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.

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Conventional Wisdom … By Bill Rutsey, President and CEO

The eminent Canadian-born economist and statesman John Kenneth Galbraith once wrote that “conventional wisdom ultimately serves to protect us from the painful job of thinking.” We in the gaming industry are all too well aware of the power of conventional wisdom – how it clouds the portrayal of our industry and creates many of the perceptual challenges that we face. Unfortunately, these well-entrenched and unexamined beliefs, notwithstanding their fundamental untruths, come to be accepted as received truths. These include that gambling is highly addictive, that only those with a problem play, that the social costs of gaming are hidden or negate the overwhelmingly positive economic impacts, and that industry is not making a significant contribution to address problem gambling. For us to move the discussion beyond this “conventional wisdom” requires that fact be separated out from fiction – i.e. that the public be presented with the unadorned facts about gaming rather than simple emotional rhetoric. This simple need for solid research was a fundamental reason why, around this time last year, the Canadian Gaming Association initiated Canada’s first National Gaming Monitor, a cross-country survey of the public’s attitudes and opinions on the subject of gaming. Just as we are going to press, we received the results of year two, and as you might expect, the results revealed some telling contradictions. For starters, let’s take a look at what people do. The vast majority of Canadians enjoy gambling as a form of entertainment. When asked why they play, most Canadians simply reply -- “because it’s fun.” The vast majority of Canadians also play responsibly. The research indicates that eight in ten people who play set a budget and stick to it. In stark contrast, let’s examine perceptions, mostly driven by media, about people with problems. Canadians mistakenly believe that the rate of problem gambling in our country hovers close to 30 per cent – 60 times the actual rate, depending upon the measure chosen. Talk about a whopper of a fiction! Consistently, and most recently by the Canadian Partnership for Responsible Gambling’s Canadian Gaming Digest 2004-2005, third-party research reports that problem gambling rates across the country range from one-half of one per cent to 1.5 per cent.

That’s not to say that this is not a very real and serious concern for the people and their families who are dealing with the issue. It is. These people need support and treatment to tackle their individual problems head-on, and as an industry we must continue to work with all our stakeholders to provide them with the necessary resources. But we need to ensure that the facts prevail and the issue is addressed in a rational and consistent manner. The research also reveals that many Canadians are surprised to learn, and in fact by a more than two-to-one ratio don’t believe, that we spend more than any other nation in the world to address problem gambling. Why? It would appear to be because of the power of conventional wisdom, which holds the opposite to be the case – that we don’t spend enough. What underpins this belief and where is the public getting this information? Not surprisingly, in the absence of having good quality research, most people get their information from the media. Recently, this has led to the birth of yet more conventional wisdom – that lotteries are untrustworthy in the wake of essentially mathematic calculations of a possible “epidemic” of fraudulent insider wins. For many Canadians who may never have thought about it before, this now has the ring of a received truth. A closer examination, however, reveals that the statistical basis for arguing an increased rate of insider wins is far from clear, and that some of the proposed remedies may be worse than the perceived problem. As the matter in Ontario has now been turned over to the Ontario Provincial Police for further investigation, we all await the outcome of this review. What the public rightly expects, and what lotteries deliver, are secure and fair games with redemptions rigorously monitored to ensure that winnings are paid out only to legitimate purchasers. Just as important – the public also deserves to be able to make wellinformed, rational judgments about this subject, or any other gaming matter, based on accurate and transparent facts. This is our challenge – to continue to work to provide this information to the public, and to dispel the many prevalent fictions. Galbraith may be right, that conventional wisdom may spare us the pain of thoughtful analysis, but in the end another equally conventional wisdom prevails – “no pain, no gain.”

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gamingnewsroundup Confidence in Canadian gaming market The widely publicized agreement for the purchase of Gateway Casinos Income Fund – which operates seven casinos in British Columbia and Alberta – by an Australian joint venture demonstrates confidence in the Canadian gaming market, according to David McFadgen, an analyst at Cormark Securities in Toronto. The $1.37 billion deal, which includes two related but privately held companies, was announced April 3. “It shows that these are valuable assets and there’s interest from foreigners in our market, because a lot of them view the market as undeveloped, or immature, so they see a lot of growth available in the Canadian market,” McFadgen told Canadian Gaming Business. In a research note, he said the offer was fair and advised clients to accept it. Robert Winslow of Wellington West Capital Markets in Toronto also called the price fair in his research note, although he added that the multiple was a bit below a recent offer for Station Casinos, a Las Vegas operator of “locals” facilities. Investors will receive a premium of 26 per cent over the Fund’s closing price just before the announcement, and there seemed little doubt that the deal will get the required two-thirds vote of unit holders. Dave Gadhia, CEO of Gateway, told a conference call of analysts that the deal should close by the end of the second quarter or the beginning of the third quarter. Gaming regulators in British Columbia and Alberta must approve the transaction, and Gadhia said there had already been preliminary discussions with them. The buyer is New World Gaming Partners, a 50/50 joint venture of two large Australian companies, Publishing and Broadcasting Ltd. – whose holdings include the Crown Casino in Melbourne – and Macquarie Group, an investment bank that does business worldwide. Although both partners are publicly traded, New World is private. That means much less information about the seven casinos will be publicly available after the deal closes. That’s true of other pending transactions in the gaming industry, such as the private takeover of Station Casinos and Harrah’s Entertainment. Gadhia said the sale has no effect on the longrunning strike at the company’s Palace Casino in Edmonton. Workers there went on strike Sept.

9 and rejected Gateway’s contract offer in early February. No talks are scheduled. Gateway started in 1992, when Raymond McLean and some partners bought two tiny casinos, one in Vancouver and one in New Westminster, B.C. McLean was retired from the construction business and active as a venture capitalist. Gadhia said he and Monique Wilberg, chief operating officer of Gateway, were minority partners and the key management team at the beginning. The company gradually expanded and went public with six of the casinos late in 2002. Although New World has not “locked up” the Gateway management, Gadhia said “their clear indication is that they want to retain us, and it is our intention to stay on.”

arena, on paper products used in the club and on staff uniforms. The deal also includes the Windsor name in TV and radio ads, and on the Pistons post-game TV show, the Casino Windsor Wrap. Of course when the casino is re-branded next year as Caesars Windsor, the club name will change. No financial details about the deal were disclosed. “This was a marketing opportunity that simply could not be refused,” said Holly Ward, Casino Windsor’s communications director. Separately, the casino has wasted no time in preparing for the June 5 start of its participation in the Harrah’s Total Rewards loyalty program. From early January through March 15, customers who signed up for the program were eligible for a drawing for $25,000. The signup tables were busy, even on slow days for the casino.

Aggressive move across the river Casino Windsor has made a bold marketing move onto the home turf of its Detroit competitors by signing a five-year naming rights agreement for a members-only club at The Palace of Auburn Hills. The Palace is the major entertainment venue for metro Detroit. It’s where the Detroit Pistons of the NBA play their home games, and it’s the site of numerous concerts. Formerly known as the Cingular Club, the Casino Windsor Club has 13,000 square feet that include a private entrance, lounge with couches, private restrooms, a cigar bar, a coat check and great views of whatever is going on. The Casino Windsor Club name is used on all signage in the

Heading for the virtual exits Internet gambling may have a grey existence in Canada, but it historically has been a sort of benign grey where many individuals and companies flourished in the industry, either directly or in support roles such as software development, marketing or payment processing. Now, however, some major players can’t seem to leave the country fast enough. The biggest surprise came March 26, when Neteller – the online payment service that does most of its business with online gambling sites and their customers – said it would stop processing online gambling-related transactions

VIPs at the grand opening of the Casino Windsor Club at The Palace included (fourth from left) Tom Wilson, CEO of the Palace, and (on Wilson’s left) Kevin Laforet, CEO of Casino Windsor. Canadian Gaming Business |

gamingnewsroundup for Canadian residents, effective April 9. Neteller will continue to handle non-gambling transactions for Canadians. The company, which was founded by Canadians in Calgary and is now based on the Isle of Man, said it did not anticipate further staff reductions at its Calgary call centre. Neteller made the same announcement about Turkey, but said business there was not material, that only the Canadian cut-off of gambling transactions would negatively affect its financial results for the year. The company was not very specific about the reason for its retreat from the two countries, stating that it continually assesses “the risk profile” of the markets it serves. Back in February, FirePay – a competitor to Neteller – stopped accepting online gambling transactions from Canadians. FirePay is a UK subsidiary of Optimal Group, a Montreal company. Even before Neteller’s announcement, according to Interactive Gaming News, VIP, an online sports book based in Curacao, stopped taking Canadian customers. So did an online casino group called English Harbour, which is based on Antigua and was founded by Canadians. IGN also reported that Virgin Games, a United Kingdom company that’s part of the Virgin business empire, would leave the Canadian market on April 13. Its hand may have been forced by the decision of its software supplier, WagerWorks, to also cease business in Canada on that date. Journalists who cover the Internet gambling industry wonder why the atmosphere has suddenly gotten chilly here. Nothing has changed overtly, other than the passage of Bill 152 late last year in Ontario. That law prohibits certain types of advertising in the province for gambling websites, but wasn’t expected to have much impact. IGN suggested that WagerWorks, which was purchased by International Game Technology in 2005, may have left Canada because IGT was concerned about relationships with regulators here. Javad Heydary, of the Heydary Hamilton law firm in Toronto, believes the exodus of the other firms “is a direct result of what’s happening in the U.S.” He was referring to the U.S. enactment in October of the Unlawful Internet Gambling Enforcement Act, and 10 | April 2007

to the American arrests of several foreign citizens who were, or who had been in the past, involved in Internet gambling or related activities, including the Canadian founders of Neteller in January. “The effect is twofold,” Heydary said, “in the sense that some of these companies were carrying out their operations in Canada because of the close proximity to the U.S. That was the positive factor. On the negative side, with all the enforcement activities going on by U.S. authorities these days, I think some of the people involved just feel a bit more comfortable if they put a bit of distance between themselves and the U.S.” A third element, he added, is the move by the UK to license and regulate the online gambling industry. “My prediction is that if we don’t get the same initiative here [to regulate the industry], you’re going to see more of the industry players moving to the UK itself, or to jurisdictions that are closer physically to the UK or have economic ties with it, like the Isle of Man.” Heydary told the Gaming in Canada conference in Toronto in February that he’s noticed a change in attitude among Canadian banks in dealing with credit card customers who lose substantial money gambling online. “The approach used to be,” he said, “that banks were more open to a settlement, based on some sort of a compromise. Now since the new legislation came into play in the U.S., the feeling we are getting is that banks are not really interested in settling a lot of these cases. I strongly speculate the reason is that they do not want to be portrayed by U.S. authorities as in any way contravening the U.S. legislation.”

Poker news Most racinos in North America offer only electronic machines, not table games. But the Charlottetown Driving Park Entertainment Centre on Prince Edward Island began dealing live poker March 19. The facility has four tables, devoted exclusively to Texas Hold ’Em. A spokesman for Atlantic Lottery Corp., which operates the racino, said poker is proving popular, with waiting lists for the tables on weekends. “This has had a positive impact on overall business,” the spokesman said, “by drawing a new demographic, a younger

demographic.” He said there were no plans to add other table games. The introduction of poker brought a quick and favourable response from the Charlottetown Guardian. In a March 24 editorial, the newspaper noted that the racino has lost money, and said ALC should be permitted to try other table games there if it thinks there’s a market for them. On the other side of the country, meanwhile, British Columbia Lottery Corp. is organizing a poker tournament that will involve some serious money. The Johnny Chan Poker Classic runs May 6-13 at River Rock Casino Resort in Richmond, B.C. Buy-ins range from $500 to $2,500. BCLC estimates that 2,300 players will enter, creating a prize pool of $2.8 million. Chan, who has won the World Series of Poker twice, will be participating. Satellite games, which allow players to win entry to tournament events, are being held at participating casinos. BCLC said this will be the largest poker tournament ever held in the province. In Saskatchewan, Casino Regina’s 11th annual Station Poker Classic had a total prize pool of $602,400. The four-day event in March attracted more than 940 players from Canada and the U.S., with the top prize of $56,279 won by a local player. The casino holds two other multi-day tournaments this year, in July and November.

Konami vs. CBC? The tempest whipped up by CBC-TV’s The National report on Feb. 26 – suggesting that some slots made by Konami Gaming contained a “subliminal message” of a jackpot, and that that would somehow encourage the player to keep playing – has died down. The day after the broadcast, Konami said in a press release that it would “pursue legal action.” But earlier this month, Steve Sutherland, executive vice president and chief operating officer, declined to say whether in fact Konami has filed a lawsuit over the report. He told Canadian Gaming Business that Konami had reviewed its entire game library and found that this invalid jackpot display, which lasted one-fifth of a second during the start-up of the game, only occurred on four game titles that date back to 2001-2002, only three of which were still in use in North

gamingnewsroundup America. Because these games were well past the normal life cycle of a slot game, Konami offered operators a choice of waiting for a game fix or receiving an immediate, free conversion kit to upgrade the machines to newer games. These kits usually sell for about $2,000 each, Sutherland said, so operators who wanted to replace the three old games got a good deal. Apparently, only three jurisdictions took action over this alleged problem. British Columbia Lottery Corp. shut the games down for less than a day, Sutherland said, until officials could talk to Konami and to Gaming Laboratories International, the testing lab used by BCLC. Ontario Lottery and Gaming turned off 87 machines containing the three games for about two weeks, until it either upgraded them or applied the game fix. And Indiana shut down about two dozen games, Sutherland said, for a few days, until the state’s casinos installed the conversion kits. Konami said the CBC reporter neglected to include information from the company

agreed that subliminal messaging is, in the words of one, “an urban myth.” Benedetti wrote that the myth began in 1957, when an advertising expert claimed that he had increased concession sales in a movie theatre in New Jersey by flashing the words “Eat Popcorn” and “Drink Coke” every five seconds on a movie screen. Five years later, according to Benedetti, the ad man admitted that he made up the story to help his business.

Promotions at Woodbine Nick Eaves has been elected to the board of directors of Woodbine Entertainment Group, and appointed president and chief operating officer. A 12-year veteran of Woodbine’s management, Eaves’ previous title was senior vice-president. In his new role, he reports directly to David Willmot, chairman and CEO. Woodbine also elected Clay Horner vice-chairman of the board, a new position. Horner is an outside director who has spent six or seven years on the board. He’s a lawyer

It’s owned and operated by the Pueblo Tribe of Sandia. iTrak replaces paper-based systems for security and surveillance departments. With the Lost and Found module, the company said, “an operator can review lost reports and found items while managing their return or disposal with complete ID and signature capture options.” The Gaming module is a standardized system for performing audits of procedural and policy violations in gaming departments, and reporting the results. ESI Entertainment Systems, of Burnaby, B.C., announced the renewal of a service agreement between its subsidiary, ESI Integrity, and the Canadian Pari-Mutuel Agency (CPMA) to support the ESI Integrity Continuous Monitoring System. This technology, which CPMA adopted five years ago, provides realtime monitoring and reporting of wagering at all Canadian racetracks, off-track betting venues and account wagering facilities. The renewal gives CPMA an annual option of maintaining the ESI service until 2010.

It’s getting weird

Nick Eaves

that showed that the games in question were among the poorest performers in its library, thus disproving the theory underlying the story. “Overall, this has been a positive experience,” Sutherland said. “It gave us a chance to strengthen relationships” with operators and regulators. “As an industry, we have to be very aware of what’s going on out there from the anti-gaming sectors, and we need as much teamwork as we can get.” In an interesting coda to this episode, Paul Benedetti interviewed several psychologists for a piece in the Globe and Mail on March 24. They 12 | April 2007

in the Toronto office of Osler, Hoskin & Harcourt, where he specializes in mergers and acquisitions.

Contracts iView Systems, of Oakville, Ont., said that Sandia Resort and Casino has purchased its iTrak Incident Reporting and Risk Management System, as well as its Lost and Found and Gaming modules. Sandia, which has 110,000 square feet of gaming space with more than 1,700 slots, is in Albuquerque, New Mexico.

It’s no secret that U.S. authorities have grown increasingly aggressive in their efforts to combat Internet gambling. Now, according to stories April 4 from Reuters and the [London] Times Online, the FBI is investigating gambling activity at Second Life, the online world where several million people adopt virtual personalities and carry on virtual business and social activities. Both stories reported that Second Life has hundreds of casinos offering poker, blackjack and slot machines. The players use virtual money, Linden dollars, to place bets, just as they use Linden dollars for buying virtual real estate and virtual clothes. Some major companies, including Reuters itself, have a presence on Second Life. An executive of Linden Labs, which owns Second Life, was quoted by Reuters: “It’s not always clear to us whether a 3-D simulation of a casino is the same thing as a casino, legally speaking, and it’s not clear to the law enforcement authorities we have asked.” The Ti m e s O n l i n e s t o r y s a i d t h e FBI agents who visited the Second Life casinos were “presumably adopting virtual personas.”

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A A

BY THE CANADIAN GAMING ASSOCIATION

s n s a i n d a a n i a C d Cana

14 | April 2007

A A

y a l y P a o t l P to

The second annual National Gaming Monitor has just been completed, providing a national survey of attitudes towards gambling. One thousand Canadian households were surveyed by PMG Consulting of Waterloo, Ont., regarding their views, attitudes and awareness level of gaming and related issues. A study of this magnitude provides a statistical level of confidence of +/- 3.1 per cent at the 95 per cent level – in other words the study accurately reflects the views of most Canadians. In keeping with its mandate of bringing facts about gaming to the general public, the Canadian Gaming Association sponsors this major study of what Canadians think about gaming, how many of them gamble and how they gamble. “Given that gaming is Canada’s largest entertainment industry segment, we know that Canadians love to participate, but it’s important to have an objective third party conduct scientific research beyond that simple and irrefutable fact – to dig down and determine who, how and why” said Bill Rutsey, president of the CGA. Not only do Canadians view gambling as entertaining, they love to participate in gaming of all forms. For example, more than three quarters of Canadians surveyed have purchased a lottery ticket at some point and more than one-third have played the slots or gambled in a casino.

Participation in gambling activities Ever Participate Lottery Ticket Slots Casino Bingo Poker Horse Race VLT Pro Line Internet Poker Sports Other Internet Wagering 0%

10%

20%

30%

40%

50%

60%

70%

80%

Percentage

Gambling as a form of entertainment Percentage 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Strongly agree

Somewhat agree

Neutral

Somewhat disagree

Strongly disagree

Strongly agree

Somewhat agree

Neutral

Somewhat disagree

Strongly disagree

Gambling is fun

Acceptable form of entertainment

Canadians are responsible gamblers 2007

Percentage

2006

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Always

Often

Sometimes

Rarely

Pre-determined amount of money

Never

Always

Often

Sometimes

Rarely

Many Canadians see gambling as simply another entertaiment choice or option – whether lotteries, bingo, horse racing or casino-style gaming. When asked, most Canadians said they play because it is fun. The study also confirms our findings from a year ago – that when they gamble, Canadians are very responsible in terms of how they manage their gaming budget. “If there is one statistic that stands out for me”, noted Paul Burns, CGA’s vicepresident of public affairs, “it’s that eight in ten players have a budget in mind when they participate and the overwhelming majority, stick to it.” This year’s study also confirmed the troubling fact that the public has serious misunderstandings about problem gaming, including the extent of the problem and the industry’s response, and that these misunderstandings are primarily media driven. While the study clearly indicates that the overwhelming majority of gamblers are responsible, it also finds that the majority of Canadians see problem gaming as a serious social issue 15 to 66 times larger than it actually is. While independent research (most recently – Canadian Gambling Digest 20042005) consistently records problem gambling rates across Canada as being between half of one per cent to 1.5 per cent, Canadians mistakenly believe that roughly one-third of participants are problem gamblers.

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Canadian Gaming Business | 15

How people become aware of problem gambling Percentage

2006

2007

40% 35% 30% 25% 20% 15% 10% 5% 0% Personal experience

Read an article in a newspaper

Saw a television show

Other

Know someone who has had experience

Saw an ad

People who believe problem gambling is a serious social issue 2006

2007

Percentage 40% 35% 30% 25% 20% 15% 10% 5% 0% Strongly agree

Somewhat agree

Strongly disagree

Somewhat disagree

Neutral

The percentage of people who believe most who gamble have a gambling problem Percentage

2007

2006

35%

30% 25%

20% 15% 10%

5% 0% 0% – 5%

6% – 10%

11% – 25%

26% – 50%

51% – 75%

76% – 99%

100% 2007 mean = 34% 2006 mean = 33%

Communicating the message

Percentage 70%

Percentage

“It clearly tells me that as an industry we have to develop a national, orchestrated, integrated communications campaign to let Canadians know that while problem gaming is a serious social problem, the incidence level is nowhere near the public’s perception of the problem. We also need as an industry to let Canadians know that as a nation, we lead the way in putting dollars towards problem gaming”, Burns noted. The study also confirmed that few Canadians are aware of the commitment the gaming industry makes to addressing problem gaming. When asked, few believe that Canada (and Ontario alone) spends more than any other jurisdiction in the world to address problem gambling and less than half believe that people are between three to five times more likely to develop a drinking problem than they are to develop a gambling problem. Rutsey added, “Clearly there is a lack of awareness and the current strategy isn’t working. We need to speak with one voice to both players and non-players alike. Canadians do not know the extent of the investment the industry makes to address problem gaming. We need to educate Canadians on the real incidence level and the $90 plus million investment by the Canadian industry to address the problem. As an industry we understand the issue and have invested more than anywhere else in the world to address the problem.” The full research study will be presented in Toronto at the Canadian Gaming Summit in late April. The study highlights will be available on the association’s website www. canadiangaming.ca

60%

70%

50%

60%

40%

30%

50%

20%

40%

10%

30%

Believe

20%

Don’t Believe

2007

10%

Don’t know

Believe

Don’t Believe

Don’t know

2006

Canada spends more than any other country in the world to address problem gambling. People are between three to five times more likely to develop a drinking problem than they are to develop a gambling problem.

0% Believe

Don’t Believe

2007

Don’t know

Believe

Don’t Believe 2006

Don’t know

Success with Internet Lotteries Two provincial lotteries are in their third year of doing business online, and both expect continued growth for this channel. By Aaron Todd When officials at the British Columbia Lottery Corp. (BCLC) saw how pay-at-the-pump technology at gas stations was changing consumer behaviour, they started to worry. Many of their customers bought their lotto tickets on impulse while in a gas station. If they no longer had to go inside to pay for their gas, they would no longer be subject to that impulse. “Retailing is changing for us, and unfortunately our lottery products aren’t in the new retail locations, like Starbucks, pay at the pump, or Costco,” said Rhonda Garvey, the director of e-gaming business for BCLC. “We’re making efforts to move into those areas, but we’re not there yet.” BCLC, however, has been able to reach its customers right in their homes since it launched its online site – PlayNow – in October 2004. “It really was about making our products accessible to our players where they are, and with the trends changing, it just made business sense,” Garvey said. BCLC estimates that it will see $13 million in online revenue for its 2006-07 18 | April 2007

fiscal year, or roughly 1.3 per cent of total sales. While that may seem like a small piece of the pie, that figure is sure to rise next year. And BCLC isn’t alone, certainly globally, or even in Canada. Atlantic Lottery Corp. (ALC, which operates the lottery for the governments of Nova Scotia, New Brunswick, N e w f o u n d l a n d a n d L a b r a d o r, a n d Prince Edward Island) was the first provincial lottery in Canada to go online. It started PlayShere in August 2004, offering its regular lottery games online as well as sports betting games ProLine and Over/Under. For the fiscal year ending March 31, 2006, PlaySphere’s sales of lottery products were $2.59 million, or 0.4 per cent of ALC’s total lottery sales. PlaySphere’s share of ALC’s sports betting revenue was higher: the $568,426 represented 2.25 per cent of the total for sports betting. [See related story: New Forms of Gaming Find Acceptance, on page 37.]

Starting slowly Both ALC and BCLC pointed to a cautious approach as a key part of their early development of online play. “By 1999, our Web site was getting more traffic,” said Lara Wood, director of e-gaming for the ALC. “At a point in the early 2000’s, we really started to see that our consumer base was doing all sorts of other things online. And we were starting to get customer feedback directly to us that they wanted the ability (to buy lottery online).” While ALC started its online offering with well-established lotto games and sports betting, BCLC opted to offer only sports betting at the beginning. Both took slow, measured steps in the beginning because they realized how important first impressions can be for customers. Even the smallest mistake can leave the consumer with a negative perception. PlaySphere, for example, had one simple typo in its sports betting menu, leaving the ‘s’ out of New Orleans at its launch, and it didn’t take long for customers to notice.

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“We had customers calling, ‘Why is that typed wrong and when are you going to fix it?’ ” Wood recalled. “It’s not a game integrity issue, but it really makes people go, ‘Hmm, why didn’t you fix that?’ We just don’t want anybody to have the opportunity to say ‘Oh, is anything else wrong?’ ” The key for both lotteries was to build consumer confidence that the online offering was merely an extension of the brand that they had grown to trust. “We think that we’ve entered this marketplace in a very socially responsible way,” Garvey said. “Some people might say ‘You could have gone faster,’ but we feel we’ve gone at the right pace.”

The logistics of play To buy lottery products online from ALC or BCLC, players must be at least 19 years old and be a resident of the Atlantic provinces or British Columbia, respectively. On an online form, players must give the lottery corporation their name, date of birth, mailing address and e-mail address. A thirdparty provider then verifies this information before the player is approved. Both lotteries report approximately a 75 per cent pass-through rate, meaning that about one in four players are rejected during the initial registration process. Legitimate players who are rejected can register manually by faxing documents and calling the lottery’s customer service lines. Of those players who fail the initial registration process, only about 5-10 per cent go through the manual registration process. “Those people who actually get unblocked, it’s usually because they’ve moved and their information hasn’t caught up [with the third-party vendor],” Garvey said. “But if someone is underage and we’ve blocked them, they’re not likely to call.” Both lotteries also require players to be within the jurisdiction of the lottery while purchasing products online, but they go about it in very different ways. BCLC blocks players whose IP addresses do not originate in British Columbia. “We’ve had some feedback about that,” Garvey said. “People would like to access [while traveling outside the province], but we believe it’s the right thing to do, to verify that people are in BC in order to play.” 20 | April 2007

ALC, on the other hand, found IP address verification to be an unreliable source of information about a player’s location. When an online account is first established, the lottery uses a third-party verifier. After that, the lottery relies on the player’s agreement to abide by PlaySphere’s terms and conditions, which stipulate that play only be conducted while the player is physically in Atlantic Canada. “[IP verification was] impacting too many legitimate users,” Wood said. “Our policy is that you have to be a resident and you have to be here in Atlantic Canada when you’re purchasing, and when we deal with customers we’re very strong about that.” Players can fund their accounts either through electronic fund transfers from their bank or with a credit card. The ALC also offers Web Cash, which players can purchase at retail locations and redeem online without providing their financial information on the PlaySphere website. Once an account is funded, a player may purchase any of a variety of lottery products, but both lotteries impose deposit limits – $99 a week at ALC and $120 a week at BCLC. Both lotteries also allow players to set a lower limit if they so choose. “When you sign up, you have to set your own [limit],” ALC’s Wood said. “You can change it, and if you want to put it down, it’s instant. But if you want to put it up there’s a week delay. That’s just part of our responsible gaming suite of features.” At both lotteries, online prizes less than $10,000 are put directly into a player’s online account, while prizes of $10,000 or more require players to visit a branch office to fill out some paperwork.

The games they play . . . and who plays The most popular online games for both sites are lotto games. Both lotteries see online and retail sales jump when jackpots grow, both have loyal customers who buy their tickets online every week, and both have had some big winners. PlayNow has had a Lotto 649 winner who claimed a $3.85 million jackpot, while PlaySphere’s top online prize to date was $129,000 for a second-place Lotto 649 ticket. Along with all the games offered at retail locations, both PlayNow and PlaySphere offer interactive games that provide an entertainment factor for the player. All the interactive game outcomes are

predetermined, so they are quite similar to a scratch-and-win ticket, but it takes a little more work to find out the outcome. Whether it’s a twist on a classic video game in PlayNow’s “Brick Buster,” or a Texas Hold ’Em simulation on PlaySphere, no skill is required to win the interactive games. The interactive games are newer and not as popular as the traditional offerings. “The attraction to the channel right now is lotto games; they are the big brands,” Garvey said. “When players visit the site, they then see interactive games and they try them, and that’s where we get the bulk of our play, because we just haven’t spent the effort to go out and market them.” Online users tend to skew younger than retail customers, with most online players ranging in age from 25-44. They come from every corner of the lotteries’ jurisdictions. “Obviously we see quite a few members from urban areas, but that population is also much larger,” Wood says. “We have people scattered from every small village where there’s Internet access.”

The future of Internet lottery Internet lottery in Canada will continue to grow. The only question is how much, and how quickly. “We believe that the traditional momand-pop stores and our corporate accounts will continue to be the bulk of our revenue,” Garvey said. “But as we see more consumers adopting the Internet and enjoying the convenience of it, we’ll probably see some growth. It will be always be a combination of Internet sales and retail sales.” Branching out into Internet lottery, while increasing convenience to the consumer, also brings with it a new role. Direct contact with the consumer used to be relegated to the retail agents selling lottery products. Now, doing business online, the lottery corporations have that direct contact with the customer. “It is very different being that direct to the customer,” Wood said. “A typo or a glitch can mean so much more to an Internet user, because you’re trying to build that trust relationship and they need to feel the integrity and they need to see it everywhere on the site.” Aaron Todd is a gaming industry reporter based in suburban Boston for Casino City Times, www.casinocitytimes.com.

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gamingpersonality

Jane By Anakana Schofield

Holmes Vice-president of corporate affairs, Woodbine Entertainment It was certainly not nostalgia that pulled Jane Holmes towards the horse racing industry and her current position at Woodbine Entertainment. Holmes, 50, grew up on a farm 24 kilometres outside of Sarnia, Ont., with a pet horse. “My only memories are of being bucked off,” she laughs. Ahead of her time in many respects, Holmes graduated from the University of Waterloo with a Bachelor of Environmental Studies (with honours in Geography). She intended to save the

PEOPLE SAY, "HOW DID YOU EVER GET FROM THERE TO HERE?" – JANE HOLMES environment, except no one cared much about the environment at that time. After 13 years in the gaming industry, Holmes describes her career as varied and diverse: “People say, ‘How did you ever get from there to here?’ ” She starting working in the late 1980s with a planning and architectural firm. “That’s probably where I got my grounding in terms of the real work world,” she said. “It was very hands on.” Work on feasibility studies provided valuable experience in long-term visioning and planning. She credits a female senior planner as a mentor who taught her the fundamentals of writing business plans and planning reports. Her next stop was the Liquor Control Board of Ontario as a corporate strategic planner. In the early 1990s, Holmes worked on a team that 22 | April 2007

developed a national strategy to comply with a ruling from the General Agreement on Tariffs and Trade that said Canada improperly gave preferential treatment to its domestic alcohol industry. She also led negotiations to solve the problem of interprovincial preferences over alcohol. “Because of that work, I got put on the horse racing file,” Holmes said. A few months later she moved to work directly for the industry as the founding executive director of the Ontario Horse Racing Industry Association (OHRIA). There were risks: OHRIA was a new association in an industry that was known for being fractious.

But Holmes could not resist a new opportunity and a new challenge. “Everybody told me OHRIA would never work,” she recalled. Not only did it work, but Holmes led the organization with great gusto and a convincing strategic plan. When she read Ontario’s spring budget of 1996, she learned that OHRIA had achieved its initial goals: a reduction in the tax on pari-mutuel wagering, and approval for video lottery terminals at some of the province’s racetracks. Her next two years were spent negotiating the arrangements under which tracks would get the VLTs – which were later turned into slots – because not all racetracks were going to get them, and the original revenue-sharing plan was not financially viable. “In 1998 we signed the deal with the government that set out that the horse racing industry would get 20 per cent of the slot revenue. It was a huge milestone,” Holmes said. After her work on the implementation of the slots agreement and a responsible gaming program, Holmes felt she’d “gone as far as I can go here” and began considering work outside of horse racing. Then David Willmot, CEO of Woodbine, stepped in, insisted that she couldn’t leave the industry, and offered her a job, which she started in January 2003. At Woodbine, Holmes’ principal responsibilities are government relations and regulatory matters, along with corporate communications, corporate donations and working with local community groups. “I am always working on something new,” she said. “If there wasn’t a challenge, then I wouldn’t be as interested.” She calls Woodbine a progressive employer, and intends to remain there to see the completion of its “major strategic initiative to develop our under-utilized land into a top destination site in Toronto.” Casinos may have the advantage of non-stop action, but many racetracks have the benefit of vast, well-located acreage. Holmes describes Woodbine’s ambitious plans for its grounds – which will be developed in partnership with the Cordish Company of the U.S. – as an entertainment and retail district, rather than a mere complex. It’s a good thing that Holmes thrives on challenges, because she works in an industry that is highly regulated, both federally and provincially. That means that transitions in government can prove delicate. She has plenty to say about the offshore competitors who are unlicensed and unregulated in Canada: “Our biggest challenge is not being able to play on a level playing field. We are still regulated like a monopoly and we’re no longer a monopoly. “That’s very difficult because the infrastructure for horse racing is very expensive. We can’t compete with the unlicensed offshore companies that actually take bets on our product, and none of the revenue comes back to Woodbine or to the horse people.” On regulation, she’s adamant: “Our Criminal Code has to be amended. Either they have to enforce what’s on the books and amend it to make it enforceable, or they need to open it up and regulate it so we can compete on the same basis.” Holmes is candid about her experience as a female executive in a male-dominated industry: “I’d never met chauvinism like I have here in the horse racing industry.” However she’s keen to stress that her problems with chauvinist attitudes were at OHRIA, not at Woodbine.

we are still regulated like a monopoly and we're no longer a monopoly – jane holmes For the future, she foresees a tremendous amount of technological change and the industry becoming more global. The agricultural aspect of horse racing is something that Holmes actively celebrates. “It is an economic driver for rural Ontario,” she said. “Woodbine houses 2300 horses in our backstretch and another 750 at Mohawk [Woodbine’s other track, 55 kilometres west of Toronto], so we run large farms. We all feel the responsibility of sustaining as best we can our operations, which help support the agricultural industry. “One of the great things about horse racing is most of the people involved in it have such a passion for the industry and that’s why they are here.” The industry should count Jane Holmes as one of the most passionate among them. Rama_Can_Gaming_Ad

4/11/07

9:18 AM

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Anakana Schofield is a freelance writer based in Vancouver.

Canadian Gaming Business | 23

Every Time You Give, You Put Yourself at Risk By Mary E. Donohue

Not too long ago, a major U.S. bank – you would know it if I divulged its name – instituted a charitable matching program with its employees. The bank thought giving one dollar to a charity for every dollar its employees gave was a good way to display its community-mindedness, both internally and externally. Soon after instituting its program, the bank’s donations quickly rose to $25,000 to one particular charity. The bank executive in charge of the program figured it was time to pay a site visit to the fortunate not-for-profit. It turned out that the charity the bank had been so generously supporting was a religious cult. Welcome to the real world of charitable giving. Few in the corporate world seem to appreciate that every dollar donated to charity can potentially put an organization at risk. Traditional philanthropy is monetary giving based on guilt or a desire to “do the right thing.” The problem is, what is the right thing? Businesses today face new challenges when making charitable donations. With the emergence of left- and right-wing advocacy groups and their ability to communicate to millions of people and members of government, the charitable stakes have been raised. Companies that donate money inefficiently create opportunities for external inquiry. Any interested third party with the right information and an Internet connection can harm, even destroy, a company’s reputation, and possibly profits, in a matter of days. Does this mean you should put a stop to your philanthropic practices? Not at all. It does mean, however, that you should create a governance system that is based on the tenets of good investing. Like smart investing, if the risk is too great or the decision too impulsive, your philanthropy could be putting your company at risk. 24 | April 2007

I recently had a friend ask for me for advice on an all too common scenario. Her CEO had just donated $50,000 to a completely off-brand cause that he supported. He requested that a news release be written and I suggested she ask him how he was going to defend this decision to shareholders, should it make news. As suspected, his reasoning was that he wanted to help out a friend who happened to be the charity’s executive director. Had this company had a clearly articulated governance policy, this situation could have been avoided, sparing everyone, including the CEO, any unnecessary public embarrassment. A vital rule of thumb to remember with contemporary philanthropy is that if you can’t defend a donation to shareholders, it’s not a donation your company should be making. Another thing you need to keep in mind is the need to create a well-balanced community investment portfolio. This will determine your donations as they relate to the business verticals within your corporation. Consider dedicating 50 per cent of your community investment to strategic giving, or giving that benefits the community and your corporation. Thirty per cent should be dedicated to sales-related giving, defined as giving that directly affects your ability to do business. The remainder should be dedicated to the corner-office crowd, charitable giving by C-Class executives to organizations, not because their friend is the executive director

of the particular group in question, but because it benefits an executive’s ability to network and/or sell. I was involved in a new long-term study just completed at Molson Canada that demonstrated that community investment, instead of corporate philanthropy, allows a company to defend its community gifts. Efficient philanthropy based on research, rather than feelings, friendships or marketing desires is therefore the way in which a company should be looking at its donations. Because philanthropy is one of the few areas of business that is not guided by regulation or through process, it has until now been driven by feelings, and unfortunately, largely mismanaged. Modern-day philanthropists and great marketers alike understand that giving has changed and that it is a right, not an obligation. Similarly, receiving is a privilege. With rights go responsibilities and with community investment comes greater responsibility – especially from corporations. Unless, that is of course, you want to join a cult. Mary Donohue is a former columnist at the National Post. She is the president of Donohue Mansfield and is currently working on her doctorate in leadership and philanthropy. She will speak at the Canadian Gaming Summit in Toronto in April. Donohue Mansfield, a Toronto research and training firm focusing on strategic philanthropy, recently performed an audit of several CGA members to better align their giving strategy with sales.

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Charlevoix By Lisa Kopochinski

Many say that the success of a business is due to its location. Nothing could be truer for the Casino de Charlevoix, nestled in the heart of a region renowned for its hospitality and beautiful landscape. This world-class casino resort, located 90 minutes east of Quebec City on the cliffs of Pointe-au-Pic, next to the St. Lawrence River and Laurentian Mountains, offers it all: gaming, fine food, and great recreation. The Casino de Charlevoix sits next to the Manoir Richilieu, a beautiful historic structure built in 1899 with 250 rooms to accommodate passengers from luxurious cruise ships. Tragedy struck in September 1928 when the hotel burned to the ground, but it took just nine months to rebuild it. Fast forward to 1994: The Casino de Charlevoix was built at a cost of $14.6 million and connected by an underground passage to the Manoir Richelieu. Four years later, the hotel was sold to a new consortium comprised of Loto-Québec, Canadian Pacific Hotels and Resorts (now Fairmont Hotels and Resorts), and the Fonds de Solidarité de la Fédération des Travailleurs du Québec, which spent more than $140 million renovating the hotel and expanding the casino. Occupying 70,000 square feet, with a capacity of 1,700, the casino offers 956 gaming stations, including more than 825 slot machines and 20 gaming tables. The hotel has a health and spa centre, new pools, 22,000 square feet of meeting space, a 27-hole golf course and a fine dining restaurant, Le Charlevoix, which is a recipient of the CAA/AAA Four Diamond Award. “The time-honoured heritage hotel now has 405 rooms and suites offering spectacular views of the St. Lawrence,” said Marilyne Desrochers, senior media relations officer for Loto-Québec. In fact, the Fairmont Le Manoir Richelieu has been ranked among the 75 North American resorts preferred by readers of Condé Nast Traveler magazine.

The Casino de Charlevoix is one of three gaming houses operated jointly by one of LotoQuébec’s subsidiaries (Société des casinos du Québec). The other two facilities are the Casino du Lac-Leamy in Gatineau and Casino de Montréal. While the consortium owns the hotel, Loto-Québec owns the casino building and the gaming equipment, and runs the day-today operations. The slot machines, like those at Loto-Québec’s other casinos, are certified by the Ministry of Public Security’s laboratory of forensic sciences and forensic pathology before being put into service. Loto-Québec says it is leading the way in implementing effective initiatives to combat excessive gaming. During fiscal year 200405, it allocated more than $26 million toward preventive measures. Outdoor activities abound at this resort. In winter, guests can enjoy a sleigh ride in the charming nearby town of La Malbaie, or ride through the forests on dogsled or snowmobile on one of the many trails. In summer, they can hike along the river bank, or go sea kayaking, whale watching or white-water rafting in the Parc des Hautes-Gorges-de-la-Rivière-Malbaie, a UNESCO biosphere reserve. For golf enthusiasts, the resort completed construction in 2004 of 27 new and challenging holes on dramatically different elevations. Little wonder that a few years ago, the Fairmont Le Manoir Richielieu’s golf club was designated “Golf Resort of the Year” by Canada’s Golf Ranking magazine. Since the region has long been known for its rich produce, it’s only natural that this be showcased in the restaurants. The resort’s three restaurants offer a wide selection, leading with regional gourmet cuisine

at Le Charlevoix (60 seats), where diners can enjoy their meal in a unique setting featuring period furniture and original artwork, while taking in a panoramic view. For casual fare, there’s the Bistro Le Bellerive (200 seats) and the Saint-Laurent (also 200 seats), a buffet that offers choice grill, fresh fish and salads. The hotel features musical duets in the lobby bar in summer and on weekends in the winter. “La Timonerie Bar, which seats 100, is known for its great live blues, jazz and pop music. Bands and singers from all over Quebec entertain audiences here on weekends,” said the casino’s Patrice Lavoie. Since opening in 1994, Casino de Charlevoix has become a serious economic engine for the region. The annual revenue for the casino was $47.6 million in the fiscal year ending March 31, 2006. With 400 employees and a $17 million payroll, the casino spends $5 million a year on purchases of products and services and draws 1.2 million visitors, who generate an estimated $40 million in tourism benefits. Lisa Kopochinski is a freelance writer based in Sacramento, California. Canadian Gaming Business | 27

Server-Based

Gaming

30 | April 2007

Despite all the early hype, this technology is still at the stage of small-scale testing. It continues to evolve, and the industry still expects great things, but a major rollout is two or thee years away. By Fred Faust For several years, server-based gaming (SBG) has been touted as the Next Big Thing to hit the casino floor. Slot manufacturers, and their cheerleaders on Wall Street, have been hoping that this new technology would lead to what they call an “accelerated replacement cycle,” meaning that scores of thousands of slots in North America would be replaced before their time is due. This happened with Ticket-In/Ticket-Out (TITO) technology. It started slowly in the mid-1990s, but by early in this decade, most new casinos opened with their entire slot floors using TITO. Today, most major casinos in North America have replaced their coin or token-only machines with TITO games. In August 2005, a top engineer at International Game Technology was quoted in the New York Times saying the roll-out of SBG “should be complete by 2007.” Just a year ago, the slots director at Treasure Island in Las Vegas – which was one of the early test sites for SBG, linking 16 machines to a server – told another Times reporter that his SBG system should be in place by the end of 2006 or the beginning of 2007. Industry officials and financial analysts today are much more cautious, calling SBG a “work in progress” and predicting a longer time frame for a major rollout. Manufacturers agree that large-scale implementation of this technology won’t occur until 2009 or 2010. The tests seem to go on forever: Treasure Island is still testing; Barona – a large Native American casino near San Diego, California – began testing about the same time as Treasure Island and is still at it; Ameristar Casino in suburban St. Louis, Missouri, began testing 50 server-based slots in June 2006 and is still testing. Other trials are underway at MGM Grand in Detroit and at Pechanga, another Native American resort in southern California.

The technology and its potential SB G is often used interchangeably with “downloadable gaming,” although

downloadable gaming is really a subset of SBG. As Jamal Azzam, Aristocrat’s product manager for downloadable and server-based gaming, puts it, “downloadable is a stepping stone toward an SB solution.” What’s involved is linking what traditionally were stand-alone slots to a central server. This can be done in a “thick client” or “thin client” arrangement. With a thin client, the individual machines that players play become dumb terminals. The game software, game graphics, random number generator, denominations, pay tables – everything that the machine needs to operate – reside on the server. If a thin-client device is disconnected from the server, it can’t operate because it has nearly no intelligence or logic of its own. “That’s not where we are today,” explained James Maida, CEO of Gaming Laboratories International, the major testing lab for North American jurisdictions. The tests being conducted today are on thick-client systems. James Maida, “There are parts of the Gaming Laboratories game and game software International in the terminal and there are parts of the game and game software in the back office,” he said. “There are still chips, there’s still intelligence in the machine. But the way the data gets there is you don’t have to open the machine any longer. You can actually send information up to the machine, just like you can take a server and send information to somebody’s desktop at their office.” That capability alone is one of the initial appeals of SBG for casino operators. Using a server in their back office, they can verify the electronic “signature” on a machine’s chip, to make sure the chip hasn’t been tampered with. They can send new games to the machines on the floor, new pay tables and new graphics. Operators could verify or change their entire

slot floor, or a portion of it, in minutes. The potential cost savings, compared to manually opening each machine, are astronomical. In addition, many jurisdictions require that a regulatory agent be present when a machine is opened and chips are changed. That adds to the time and expense of traditional procedures. Gaming Industry Observer has described SBG as a yield management tool. Just as hotels and airlines constantly adjust their prices to minimize the number of empty beds or empty seats, slot managers could readily adjust their game offerings and even prices (in the form of pay tables, to the degree that regulators and competition permit). Any slot manager would love to be able to replace a game that’s no longer popular with a few clicks of a mouse, rather than buying and selling games and physically hauling machines in and out. One of SBG’s most fervent supporters among regulators is Clarence Greeno, gaming enforcement manager of the Missouri Gaming Commission. He’s been in the thick of the test, along with engineers from GLI and IGT, whose SBG system at Ameristar is being upgraded. “What we have learned,” Greeno said, “is quite honestly what we learn when any new technology is brought into the environment, that there are going to be system shortfalls that need to be worked through; nothing insurmountable, nothing that affects the integrity of gaming, nor patron play. There have been some minor inconveniences. We work through those, and the knowledge grows for everyone with these beta tests.” Under Missouri’s rules for SGB, a gaming agent still has to be present to seal the chips when a machine is first brought online. At the server end, an agent must be present for new games to be loaded onto the server’s library. “The regulator controls the ability to load new games into that library,” Greeno said. “Once they’re in the library, they are approved programs, and the casino has the ability to download – or to push – those programs to Canadian Gaming Business | 31

the gaming devices on the floor as they see fit.” The state requires the server to verify all chip signatures at least once a day, and if any machines fail, the server shuts them down. The Missouri commission has posted an electronic games specialist to the Ameristar Casino, and that person has access to the server room at all times. The specialist also can access the server remotely from the commission’s office at the casino. Although it hasn’t done so yet, Greeno said there’s no reason that the specialist couldn’t access Ameristar’s server remotely from the commission’s headquarters in the state capitol. And by extension, if all of Missouri’s casinos adopt SBG, the specialist might one day be able to access all the servers without leaving headquarters. “The possibilities that client server systems present to the industry and to the regulator are amazing,” Greeno told Canadian Gaming Business.

Possibilities for the player Sometimes lost in the discussions of what SBG can do for operators and their regulators are the possibilities for players. In November at G2E, the big industry trade show in Las Vegas, IGT demonstrated how a player’s card inserted into an SB game could trigger a menu of choices unique to that player. Based on his/her playing history, the menu could offer the games and denominations that that player prefers. It could display point totals for the casino’s rewards program, and let the player redeem points right at the machine rather than going to a players’ club booth. Special jackpots could be offered to certain players, say those from a selected tour group. Instant tournaments could be run, in which players could participate without leaving the machine they’re playing. Even personalized progressives could be developed, where players are offered higher payouts when they’ve been playing for a certain period of time or at certain dollar levels. SBG also brings the capability of dispensing perquisites during game play, such as offering discounted or free tickets to a concert, or a comped meal, to the player while he/she is sitting at the machine. “This will take customer service to a new level,” said Ed Rogich, vice president of marketing for IGT. “Our vision 32 | April 2007

has expanded considerably from the initial discussion of this as an operational tool to a much broader interactive network.” Rob Bone, vice-president of marketing for WMS Gaming, believes there has been too much emphasis on yield management and floor management, and not enough emphasis on what SBG can do for the players. “With server-based, there will be some efficiencies and cost savings, but it’s really how do you grow the top line? How do you get players to play more and to be more loyal to their favourite game? What is the added revenue opportunity?” Bone said. “SBG can be utilized to create first-of-their-kind experiences.” An early example, Bone said, is WMS’ Monopoly Big Event, which is a “community gaming product” that is in the field now, with about 1,200 units. This is the equivalent of SBG on a small scale, with banks of six to eight games linked to a common server, which enables players to go into shared bonus rounds. Bally Technologies also emphasizes the entertainment potential of the new technology. In a brochure for Bally Live, its brand name for SBG hardware and software, the company says, “Simply put, it’s got to be more fun. Improving casino operations is a desirable goal when developing any technology, but Bally believes our primary objective is enhancing the player experience.”

What’s taking so long? The Observer has suggested that slot floors could become smaller, yet still more profitable, when SBG is fully implemented. If certain games are more popular on weekends than on weekdays, for example, managers could change

the games back and forth accordingly. And if players sitting at any machine can select almost any game and denomination they want, they won’t need to roam the floor searching for their favourites. The banks of machines that are often idle may become a thing of the past. The Observer noted recently that the number of slot machines on the Las Vegas Strip has already declined, by 6 per cent, in the five-year period ending June 2006. For the same period, however, daily win per machine increased by 52.5 per cent, to more than $169. With so much potential, why hasn’t SBG grown beyond a few machines at a handful of test sites? “Development will happen over a long period of time, in small steps,” Rogich said. “You will be writing about updates to this technology for some time to come. The big change is we’ve seen it go from capabilities of downloading games and doing configuration of the casino floor to being a much more interactive serviceoriented proposition for the player.” Also, there are many forces involved in developing this technology. In addition to the slot and system manufacturers, there are their customers, the casino operators. Some of them are always early adopters, and some prefer to wait. And while SBG has something to offer regulators, it brings new challenges for them. Like any technology, SBG also creates plenty of work for the testing labs. Some jurisdictions, such as Nevada, Ontario and Quebec, runs their own testing labs. Missouri and the Barona tribe, and most provinces in Canada, use GLI. Pechanga, where Aristocrat has been running tests on 10 games since October, uses BMM. “This is much more difficult testing than we used to do,” GLI’s Maida said. “With the level of specialization required, it’s very technologically advanced.” A lab needs protocol engineers and system engineers to work on SBG; its task has progressed far beyond the simple testing of an EPROM chip in each slot machine. Maida doesn’t have anything to do with how SBG systems will be priced, but he said that will certainly affect the takeup. “How they price this is

just as important as the technology,” he said. “That’s an issue that’s always asked at every trade show.” Another factor that has slowed SBG is the development of a common industry technical standard. The Gaming Standards Association – an international trade organization whose members include all of the major slot manufacturers, labs, the world’s two largest casino operators and two provincial lottery corporations (OLG and BCLC) – has completed 90 to 95 per cent of its work on G2S, a spokesman said. G2S is an open standard for communication between gaming devices and gaming systems. There are still some questions about what types of games can be linked to a server. The current tests apparently involve only video slots. Experts say there is no reason that video poker cannot be part of SBG, but no one cites an example of tests with video poker. Mechanical reel games are another

slots to make them part of an SBG system. The only manufacturer who claims to have done this is Cyberview Technology, which is based in London, England, and has been working on SBG for more than 10 years. Cyberview has 8,000 linked terminals installed in UK bookmaking shops, according to its CEO, Seamus McGill. These are slim-line terminals that have a small footprint. He said the company will launch a larger terminal for SBG in North America this year, one that is more suitable for casinos. Cyberview was the first company to have its SB technology certified for use in North America by GLI. For an operator in Latin America, Cyberview has retrofitted 3,000 old video slots to make them work with a server system. “These were sitting in a warehouse and would have been sold for scrap,” McGill said. “I could visualize some of the VLT environments in Canada where they’re heavily invested in hardware. If we could get these provinces to look at

intellectual property purchased from Cyberview. Monopoly Big Event has the first version of WAGE-NET. Bone said the full version will be submitted to North American regulators in the next 30 to 60 days, with field trials to follow. Aristocrat’s Azzam said both the company and the tribe are happy with the results of the test at Pechanga. Other tests are planned this year in North America, he said. A spokesman for Bally said its Bally Live Rewards, one of the products in its Bally Live SBG line, will begin a field test in June or July at Harrah’s Rincon in San Diego. McGill said Cyberview has three “lab tests” underway in North America, and is in the final stages of certification in New Jersey and Pennsylvania. Ameristar said another 50 machines will be added soon to its test in Missouri. IGT’s Rogich said the tests involving his company’s system at Ameristar, Barona, Treasure Island and MGM Grand in Detroit are still “basically in their very primary phases, where they’re beginning to set the stage for more services to come.” The tests are focused on basic connectivity between the system and the machine, he said, and basic functionality. “I don’t think there’s any quantum leap that says ‘Okay, we’re done.’ This is going to be ongoing,” Rogich added. While no large-scale rollout is imminent, some operators are preparing for that day, he said. “As opportunities arise, for example if casinos are expanding and operators can upgrade their wiring in anticipation of a higher speed network, they’re doing so.” Rogich recalled that operators began cautiously with Ticket-In/Ticket-Out. But at some point, he said, the timing was right and it made sense for a new casino to open with only TITO games. That will happen with SBG, he predicted, noting that major new Las Vegas resorts are scheduled to open in 2009-2010.

our goal is to broaden the horizon on content, and get more people delivering content to the gaming industry – seamus mcgill, cyberview story. Manufacturers say that new games cannot be downloaded to a reel slot, that the only way to change these games is at the machine itself. However, WMS has developed something called “transmissive reels gaming.” The company hopes to get regulatory approval this summer for its first transmissive reel games. The technology, Bone said, “provides mechanical spinning reels with a transmissive overlay that gives us a 3-D graphics display that allows for animations around and on top of the reels themselves.” Perhaps more important, reel games outfitted in this manner could be linked to a server, he said.

Retrofitting, third-party game content, and more testing But even the transmissive reels gaming will probably not be possible as a retrofit, Bone conceded. In fact, there seem to be only minimal possibilities for retrofitting older 34 | April 2007

our solution to upgrade the hardware they’ve got with new SB technology, we could also supply them with content, or work in conjunction with them on content.” The savings would be substantial, he added. “Our plan on content,” McGill said, “is to work on a publishing model. We will get third-party developers to develop content for us, in addition to doing some of our own. Our goal is to broaden the horizon on content, and get more people delivering content to the gaming industry.” This will be a trend with SBG, GLI’s Maida said. “Many suppliers are now talking about third-party software developers, where out-of-house software programmers are actually making games for the supplier. This has not been huge in the industry before.” WMS has an SBG product called WAGE-NET, which is based in part on

First in Canada? Saskatchewan Gaming Corp. recently

announced that the first “downloadable-ready” games in Canada have been installed at Casino Regina – 23 machines from IGT’s Trimline series. Elliott Daradich, SGC’s director of slot development, is eager to test an SBG system. “I’d really like to get a test going in 2007,” he said. “I want to make sure Saskatchewan Liquor and Gaming Authority [SGC’s regulator] is onside. We want to be first, but we want to be careful as well.” The main reason for Daradich’s interest in SBG is game configuration integrity. “Rather than rely on a casino technician to tell me that they’ve configured a game as specified,” he said, “I can actually do the download from my desktop and ensure that the correct bill validator program is enabled, the correct jackpot levels are done, as well as the online verification. “We have video slots now that take upwards of 20 minutes to verify on the gaming floor. With a downloadable, we can verify game sets all from one central point. The regulator can be provided with additional assurances as well through these electronic verifications.” The ability to easily change game content with SBG is not a priority for Daradich.

“Even though the shelf life of games has shortened over the years,” he said, “I don’t believe it’s to the point where we need to change games from day to day. That’s a nice thing to have, but for me it’s more about the game integrity, efficiently managing the game mix and the standardization of games on the floor. “We will do that eventually, but the landscape is still somewhat blurry with respect to the intellectual property of game content. Will we be allowed to purchase content outright, or lease it? The economics will dictate how often and when we change game content.” Neither does Daradich have any plans to employ SBG to quickly adjust payout percentages. “Our business model is based on long-term, large-sample mathematics,” he said. “Changing the percentage up and down over the short term really isn’t going to result in a stable business model.” Daradich is fully aware that SBG is a technology that’s still evolving. He said he’s seen significant changes just in the last year.

Advice to regulators Greeno said the Missouri Gaming Commission spent 18 months preparing

for the test at Ameristar. “We made trips to Reno [IGT’s headquarters in Nevada],” he said. “We put our standards and our internal controls together, working to feel comfortable with the technology and its readiness for the marketplace.” Asked what advice he would give to fellow regulators about SBG, Greeno said, “Be open to new technology, be willing to be a trailblazer.” While he’s enthusiastic, and agrees that this will be the biggest thing since TITO, he concedes that “there are some minimal risks.” “It depends on how the regulatory body is constructed,” he said. “Does it have the personnel and expertise to look at new technology and to be the first kid on the block with a new toy and work with the industry and the manufacturers to get all the bugs out of it? Or is it better for your jurisdiction to let someone else work the bugs out of it, from a regulatory standpoint, and then jump onto the bandwagon when the technology is at a level that you as a regulator feel more comfortable with? “I don’t think this is something that any jurisdiction would allow to be brought in and then just ignore.”

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New Forms of Gaming

Find Acceptance

Canadians show growing support for using the Internet or wireless devices for wagering on casino games and sports events, and purchasing lottery tickets. By Kurt Eby

The rapid expansion of casinos and electronic gaming devices (EGDs) has fueled the growth of Canada’s $14-billion legal gambling industry. While that figure represents an impressive 100 per cent increase over the past decade, not all aspects of the sector are enjoying the same growth rate. Revenue from traditional lottery games in particular reached a plateau, and in some cases declined, during that time – a trend that worries many Canadian lottery corporations. In the face of these stagnant revenues, casino moratoriums, studies pointing to the high social costs of EGDs, and significant competition from offshore online gambling

houses, provincial governments are looking for new ways to generate revenue growth; gaming on the Internet and mobile devices present two viable options. Two lottery jurisdictions, Atlantic Canada and British Columbia, have made Canada’s first forays into online lotteries. These regulated initiatives are not only an attempt to combat unregulated gaming, but also cater to an increasing receptiveness for gaming on flourishing communications technologies. [See related story: Success with Internet Lotteries, on page 18.] A recent study conducted by Decima Research shows that there is a growing acceptance for placing wagers on casino-type games and Canadian Gaming Business | 37

Decima 2007 National Gambling Report: Acceptability of New Forms of Gambling - Canada Betting on sports through an online wagering site

32%

Playing casino type games for money through a mobile phone or wireless device

30%

Purchasing lottery tickets through a mobile phone or wireless device

26%

Playing interactive lottery games for money on an Internet site

26%

Playing casino type games for money in-flight or during train travel

26%

Playing casino type games for money through an in-home interactive TV channel

Playing Poker for money on the Internet

21%

17%

Percent agreeing that these activities are acceptable forms of gambling

sporting events – and for purchasing lottery tickets – on Internet sites via a home computer or wireless device. In fact, slightly more than one-quarter of Canadians think playing interactive lottery games for money on an Internet site is an acceptable form of gaming. Our research indicates that males – more so than females, and close to half of those between 18 and 35 years of age – agree these activities are acceptable. What’s more, these growing acceptance levels should be of even greater interest to lottery corporations when coupled with the state of Internet penetration in Canada. Canada ranks first among the G8 group of countries for broadband penetration with around 92 per cent of the population having access to broadband Internet, according to Industry Canada and CRTC data. In terms of subscriptions, more than 64 per cent of Canadian households subscribe to the Internet, with around 80 per cent of those having highspeed connections. Alberta, British Columbia and Ontario lead the way with more than 60 per cent of those living in areas of broadband availability having a subscription. On the mobile handset side, rising acceptance levels to gaming are perhaps more surprising, but just as noteworthy. More than a quarter of Canadians think purchasing lottery tickets through a mobile phone or wireless device is acceptable, and the national acceptability rate for playing casino-type games for money through a mobile phone or wireless device is 30 per cent. As with the Internet, these growing acceptance levels are in line with the increasing penetration of the potential gaming platform. While we don’t fare as well on the world stage in terms of wireless penetration – 58 per cent here compared to about 75 per cent in the US – more than 1.6 million additional Canadians subscribed to a wireless phone service in 2006, pushing our subscriber base above 18 million. When broken into age demographics, wireless as a gaming platform becomes an even more intriguing option. Our research shows 50 per cent of Canadians between 18 and 34 years of age agree that playing casino-type games for money through a mobile phone or wireless device is acceptable, and 40 per cent of Canadians in this age demographic feel this is an acceptable way to purchase lottery tickets. This demographic also leads Canada in mobile penetration, with more than 70 per cent subscribing to a wireless service.

Not the same for all provinces, or for all forms of gambling However, these acceptance levels are not consistent across the entire country or for all forms of gambling. For instance, Quebecers are half 38 | April 2007

as likely as other Canadians to think playing casino-type games on a wireless device is acceptable. They also tend to be the least likely to think venturing outside the traditional gaming norm and into the Internet and wireless world is acceptable. While lottery spending per capita in Quebec is among the highest in Canada, the province also has some of the lowest penetration rates for Internet and wireless services. Also, although the boom in poker on the Internet and television has continued, this has not translated into a large acceptance among Canadians for playing poker for money on the Internet. Fewer than two in 10 felt this was an acceptable activity. Placing bets on sporting events through an online wagering site was considered acceptable by more Canadians than playing poker for money on the Internet. The data seems to show that players, especially the younger generation, prefer games that offer more than just the basic win-or-lose experience that lotteries provide. They are looking for more of a play experience that involves challenge, entertainment, escape, and emotional involvement. While some provinces have jumped on the Internet bandwagon, others have been more reluctant because of government priorities or the pending backlash from problem gambling groups and those opposed to expanding gaming across Canada. The great appeal of Internet gambling to problem gamblers is also a concern for those regulating gambling activities in Canada. Decima 2007 National Gambling Report: Acceptability of New Forms of Gambling - Age Differences 52% Betting on sports through an online wagering site

31% 15% 50%

Playing casino type games for money through a mobile phone or wireless device

28% 12% 40%

Purchasing lottery tickets through a mobile phone or wireless device

25% 14% 42%

Playing interactive lottery games for money on an Internet site

24% 13% 38%

Playing casino type games for money in-flight or during train travel

Playing casino type games for money through an in-home interactive TV channel

26% 14% 31% 21% 10% 28%

Playing Poker for money on the Internet

15%

55 plus 35-54 18-34

8% Percent agreeing that these activities are acceptable forms of gambling

Governments will have to tread lightly in these areas, especially in jurisdictions where sentiments towards gambling expansion are closely related to how constituents feel about government performance in regulating gambling and the perceived seriousness of gambling addiction in their province. However, pressure to regulate Internet gambling and capture revenue that currently flows to the private sector and/or out of the country may finally lead more lottery corporations to bring online and mobile gaming options to the mass market. Kurt Eby is editor of Gaming Market Insights, published by Decima Research. This article is based on a study conducted by Decima Research’s Tourism, Recreation, Gaming & Leisure practice. For more information contact Richard Leigh-Bennett: rleighbennett@decima.com. The Decima National Gambling Report is a unique syndicated consumer research study that explores behaviour and attitudes towards the issues that surround policy decisions related to gambling. The study involves surveying 3,500 Canadians during January of each year. The data is weighted by gender and age distributions to reflect the Canadian population.

Ch e f Sp o t l i g h t

gamingnewsroundup

Raymond Taylor Casino Windsor By Andrew Coppolino

With catering, banquets, and five restaurant kitchens to manage, Casino Windsor’s Executive Chef Raymond Taylor takes a “divide and conquer” approach in order to satisfy the varied tastes of the casino’s clientele. Taylor will get significant help when a trademark licensing agreement brings the renowned Caesars brand to Casino Windsor in early 2008. A $400 million renovation and expansion — including a 22-storey hotel and a 5,000-seat entertainment complex — is underway that will result in a worldclass facility. Caché, Casino Windsor’s fine-dining restaurant, has already conquered that standard by collecting a CAA/AAA Four Diamond award for the first time in November 2006. Caché’s black marble staircase, teak-panelled walls, and intimate seating are the backdrop for Taylor’s menu, which includes salmon married to tomato galangal broth, lamb matched with Chinese five-spice, and Japanese enoki mushroom and asparagus salad paired with classic hollandaise sauce. It is French technique with an eastern touch. Taylor, 44, adds to the cultural diversity himself. Hailing from Scarborough, England, the Yorkshireman arrived in Canada 18 years ago and calls Windsor home. He brought with him culinary training from London’s

Westminster College and cooking experience from Claridge’s, the luxury hotel in Mayfair, current home to television celebrity-chef Gordon Ramsay’s eponymous restaurant. Casino Windsor’s Market Buffet prepares an average of 2,500 meals daily, but without traditional cafeteria-type service. The buffet has seating for over 600 guests and features minikitchens with a la minute cooking — “chefs on parade,” according to Taylor. “We’ve changed the whole concept of the buffet to one of fresh cooked-to-order,” he said. Saturday night is reserved for a seafood buffet while jazz is added to the Sunday brunch. The Legends Sports Bar also features cookedto-order meals as well as 36 LCD televisions and three unique seating areas to accommodate 170 “fans,” all of whom will enjoy a “stadiumstyle” menu including nachos, chili ballpark franks, and “slap shot” chicken sandwiches in a sleek modern décor with leather club chairs and rich upholstery. “You get a bit of everything with Legends sampler platters. It is casual food but with a unique presentation. We’re doing things a little bit different from a regular sports bar,” Taylor noted. Late in 2006, Casino Windsor debuted its Artist Cafe, a restaurant where palette meets the palate. The room is open 24 hours a day and serves 1,800 to 2,200 meals. Taylor characterizes the cafe as a casual bistro offering everything from flat-bread pizzas to lamb chops with rosemary jus and funky Parisian “Left Bank” sandwiches. The walls of the cafe feature a “gallery” of creations by local artists and reproductions of the masters. The new Neros steakhouse — inspired by Neros at Caesars Palace — will specialize in dryaged prime beef along with chops and seafood.

Imagine, Taylor said, an immense “lollipopcut” rib-eye steak — and imagine it served in the classic style of decades ago. “Part of the concept is retro tableside service,” he said. “Caesar salads and chateaubriand, for instance. It’s a showcase, a bit of entertainment that brings the chef to the forefront and provides great value for the customer.” Cooking both at smaller boutique hotels and larger operations such as Victoria’s Fairmount Empress and Toronto’s Westin Harbour Castle Hotel has given Taylor what he calls broad experience that has “been gradually paced” over a quarter century. His years of casino kitchen experience include helping to open Casino Rama and working at Atlantis Paradise Island, Bahamas. “I’m seeing the food element of the gaming business growing immensely, and the quality is getting better and better,” Taylor, who leads a kitchen staff of 262, said. “We want to offer our customers really great quality and be an excellent partner to the casino.” With new concepts and designs imminent at Casino Windsor, the excitement in Taylor’s voice is palpable: “We’re stepping up to the challenges. With the Caesars brand coming, we want to make each of our restaurants unique, individual venues. “Our goal is to attract as many people as possible to our restaurants and we will do that by continuously creating new dishes and recharging the restaurants. We keep pushing the boundaries toward the highest quality and to being consistently good at what we do.”

Andrew Coppolino, andrew@tablescraps.ca., is a freelance writer based in Kitchener, Ont. Canadian Gaming Business | 41

Ombudsman Blasts OLG’s Lottery Program By Christine J. Mingie On Oct. 26, 2006, Ontario’s Ombudsman, André Marin, launched an investigation into the integrity of Ontario’s lottery program run by the Ontario Lottery and Gaming Corp. (OLG). The investigation followed a story aired on CBC-TV’s the fifth estate that detailed the disturbing frequency with which insiders were winning the lottery.

Ombudsman’s findings The Ombudsman’s report, titled A Game of Trust and released on March 26, was highly critical of the OLG. It revealed that the OLG had been aware for years of the potential for fraud and theft by its lottery retailers, yet failed to take swift, necessary and proactive steps to cure the problem. The Ombudsman found that insiders had won significant lottery prizes over the years -- of the roughly $2.6 billion in major prizes won from 1999 to 2006, about $100 million had been won by insiders and the OLG paid out those winnings despite “very questionable circumstances.” The report blasted the OLG for being “hopelessly conflicted” when it came to dealing with retailer windfalls and customer complaints and for turning a blind eye to the problem. “Instead of investigating what went wrong, as a good public servant would, it reacted like a business facing a public relations nightmare,” Marin said, adding that the OLG “should have apologized, not turtled.”

lotteries by an outside body. The Alcohol and Gaming Commission of Ontario (AGCO) regulates gaming in the province, but not the OLG’s lotteries. If this recommendation is implemented, the regulatory body overseeing the lotteries will be required to: V c onduct background investigations on over 10,000 lottery retailers and if they are found suitable, register each retailer as a supplier to the OLG. This will involve significant initial and annual investigation and registration fees that will be passed on to the retailers; V regulate registered lottery retailers on an ongoing basis; and V investigate complaints against lottery retailers and adjudicate suspicious prize claims.

Key recommendations

Corporate Cultural Change According to the report, the OLG’s greatest stumbling block is its own culture. The report recommends a number of steps to bring about a significant cultural change. This will not be an easy task. Changes will have to be made at the upper management level and the effectiveness of any change will depend on the extent to which the OLG inculcates new standards into its corporate culture and places real importance on adherence to those standards. The Ombudsman has recommended that the OLG publish a statement confirming its commitment to meeting its duty of care to Ontarians by taking steps to ensure the integrity and honesty of lottery retailers and to establish a compliance plan.

Regulatory Body to Oversee Lotteries The Ombudsman made 23 recommendations directed at restoring trust and confidence in the lottery system. By far the most dramatic, but necessary, recommendation is the regulation of the OLG’s

Insiders, Complaints and Record-Keeping Other recommendations in the report include: V adopting a zero-tolerance policy towards retailer dishonesty;

42 | April 2007

V requiring retailers to identify themselves when

redeeming tickets; V c hanging the method of interviewing

winners; V separating the sales and lottery compliance functions; V k eeping detailed records of complaints involving retailers; and V recording and analyzing statistical information on insiders winning prizes. The day the report was released, both the Ontario government and the OLG said all 23 recommendations would be implemented.

The next steps The government’s first step in the implementation plan will be to decide if the AGCO assumes regulatory control for the lottery program. This seems likely because the AGCO has the infrastructure already in place and David Caplan, Ontario’s minister responsible for the OLG, said he favours a new regulatory framework run by the AGCO. The time frame for implementing the recommendations is still an open question. The OLG will implement several of the recommendations by June 30, 2007, and, at that time, will announce the schedule for implementing the remainder. In a surprise move, just three days before the Ombudsman’s report was released, the OLG’s CEO, Duncan Brown, resigned after three years at the helm. It seems the OLG will indeed be very busy over the next few months – not only implementing the recommendations but searching for a new CEO as well. Christine J. Mingie is a lawyer with Lang Michener LLP in Vancouver. She advises on gaming regulatory and compliance matters for a large public gaming company.

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By Fred Faust One of the more atypical seminars at G2E, the huge Las Vegas gaming conference in November, was titled “Book for the Drop: Secrets of Casino Talent Buying.” Not only did the topic stand out among all the seminars devoted to casino marketing, slot technology, security, regulatory issues and the like, but the format was unusual. The audience was filled with artists’ agents and entertainment buyers from U.S. casinos. The colourful Billy Brill, CEO of Billy Alan Productions in Los Angeles, moderated the session, and called freely on these experts

Hospitality

in the audience, even more than he called on fellow panellists. Brill asked everyone to share what works for them in casino entertainment. The result was a freewheeling discussion that yielded perhaps no secrets, but frequent consensus on successful acts and successful approaches. “We’re in the VIP business, we’re not in the entertainment business,” Brill said in his introduction. “We have one job only: Book for the drop. We’re not concert promoters. We’re not Live Nation, we’re not Bill Graham.

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We have to fill the restaurants, we have to have great ‘coin-in.’ “You can research today, rather than guess. First you look at Pollstar Celebrity Acts and find out the last five casinos the act has played. You call each of them, you ask, ‘How did X do?’ Next question, ‘What was he like as a VIP?’ Then you ask about ticket prices and sales. Get a Pollstar report. Then you call the casinos back and ask how X did for the drop. No one’s ever going to give exact numbers, but they’ll saw X was ‘fantastic’ or whatever. Then you can present facts to your GM. “I’m sure we’ve all had nightmares with VIPs when we book. Recently we had Merle Haggard play somewhere and he wouldn’t come out of his bus. When you book acts, it’s very important how they treat their VIPs. Jay Leno is great with VIPs, he takes pictures, signs his book. Collin Raye [who was in the audience and sang a song at the end of the session] makes sure to talk to VIPs and then will do a regular meet ‘n’ greet with the others, and pose for photos. “You have to make it a very special experience for the casino.” One of the panellists, David A. Swift, vicepresident of business development for House of Blues in San Diego, Calif., said his contracts include a meet ‘n’ greet for VIPs. Swift said

Toni Braxton was good at the meet ‘n’ greets. “As they get more used to it [doing the meet ‘n’ greets], it’s becoming easier to do,” Swift said. “But there’s no secret, the artist decides.” Brill agreed that, contracts notwithstanding, the meet ‘n’ greets may not happen. “Sometimes people don’t feel well, they do the show and leave,” he said. “It happens all the time.” Many concurred that Kenny Rogers and B.B. King were gracious about meeting casino VIPs. One member of the audience said that he booked Tony Orlando, who drew enthusiastic audiences, produced good drops and “meet ‘n’ greet as good as it gets.” The only specific complaint – aside from Brill’s comment about Haggard -- came from Ivan Karpen, of Spirit Mountain Casino in Grand Ronde, Oregon, who said, “Neil Sedaka’s meet ‘n’ greet was a royal pain.” As for the drop, Brill said Air Supply does well. Others mentioned Crystal Gale in this category. One panellist, Steve Lassiter of the APA talent agency in Nashville, said Tanya Tucker was both “a great draw and a great drop.” Someone in the audience said Martina McBride’s show produced a 20 per cent increase in drop. “How many acts can do a 20 per cent drop?” Brill exclaimed in response. “There are

thousands of acts you could book and not get a 20 per cent drop. Sometimes everyone tries to book for the younger crowd, but the kids come in and go out [and do not stay to gamble]. The older classic rock and country acts that have been around for five or 10 or 15 or 20 songs, they really bring something special to the casino. Something you need.” There was agreement that “comics have a following, more than some people realize,” as one participant put it. Several people mentioned Lewis Black, Ron White and Jeff Foxworthy as highly successful casino performers. An events coordinator said Larry the Cable Guy sold 5,000 tickets at Turning Stone Casino in New York. Brill noted that comics don’t entail anywhere near the production costs of rock acts. Linda Crain of Las Vegas voiced a note of dissension to the session’s theme. “I don’t believe in booking for the drop,” she said. “You book for the [casino] brand.” Brill conceded Crain’s point. “A lot of what we do is acquisition marketing,” he said. “For marketing, you’ve got to look at the bigger picture than what’s going to be the short-term drop that night.”

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What’s New in Security and Surveillance By Albert Warson

Slowly but surely, casinos are making the conversion to digital cameras and recorders. Now Internet Protocol cameras advance the technology further, and the growing field of video analytics helps to alert security and surveillance staff to problems.

46 | April 2007

Everyone knows surveillance systems are discreetly tucked away, pervasively covering Canadian casinos inside and outside. But only the security staff have watched the sophisticated progress from little more than monitors of closed-circuit TV to marvels of the highest-tech integration and powers of investigation – V How the systems are programmed to spot not only certain people who are unwelcome for a variety of reasons, but also people who need to be greeted warmly and even pampered. V How they identify people by facial characteristics, or focus on others whose physical movements are noticeably different from the crowd and bear watching. V How cameras can isolate and lock on to objects in a crowded casino, objects that weren’t in the picture before, and trail them visually, or locate them if they are left unattended for a few seconds. V How cameras not only pan, tilt and zoom in on “events” as casino security calls them (not to be confused with boxing matches or poker tournaments), but record them at precisely noted times – on film, if it’s an analog system, or better yet, on a computer hard drive. “Everything is going digital and recorded on hard drives, so we’ve started to integrate multiple systems,” said Scott Bartlett, CEO of Southwest Surveillance Systems in Las Vegas, which has an office in Niagara Falls, Ont., to serve its Canadian clients. “Ten to 15 years ago if the casino was trying to catch a bartender stealing, a camera would zoom in on a cash register to see [hopefully] how money was slipped to a patron. Today, it’s integrated, so that the amount rung up also turns up on the video.” In the unlikely event someone robs a cage, that event can be reviewed on a digital system in minutes, compared to an analog VCR tape, which could take several days to pinpoint. Images are also captured at a much higher resolution than on analog.

“They [purchasing departments] say they can buy a camera for half the price we quote them, but then we say the cheaper camera doesn’t have the same resolution or performance level. Technology is developing so fast, that even we [in the security industry] struggle to keep up with it. The average casino doesn’t know what the technology is or can do. Their decisions are based on past experiences, and it’s a different world now,” he said. While American Dynamics, Las Vegas, a unit of Tyco International, has much greater casino market penetration across Canada than most of its competitors, it too faces the challenge of getting “digital solutions into the casinos. Our strong suit is the integration between our digital recording solution and our analog matrix switching solution, which allows operators to use a very simple interface to be able to review incidents in very short period of time, and access stored video for review”, said Larry Wanvig, American Dynamics’ national gaming sales manager. “They don’t have to search video tapes or rewind them and they can see the date and time, down to seconds.” The company also provides an Internet Protocol (IP) product, which routs voice conversations over the Internet as part of a digital video management system. Prices of IP cameras, which can stream right into a digital recording system, with higher resolution and capacity for information, are also expected to come down over time. When asked what casinos might, broadly speaking, spend on surveillance systems these days, Wanvig said $3 million for an 800-camera installation, or even $5 million for a larger version, including fees for licensed integrators who put all the parts together for installers, and possibly also some thirdparty products. These requirements can vary from one governmental gaming regulator to another.

Most casinos still use analog While everyone agrees digital is superior to analog systems, Bartlett figures less than 10 percent of the casinos in North America have gone digital thus far. He expects that to change because like any new technology, over time the price has declined to the point where it is more affordable. “Affordable” in a casino context may sound odd, considering the vast amounts of cash that flow through them, particularly in view of the numbers of often ingenious people who may try to steal some of it. Bartlett explained that casinos often “commoditize” everything, that their purchasing departments always think the lowest-cost solution is the best solution.

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Integration of all the electronic parts is a development which has been gathering momentum. Some of iView Systems’ surveillance incident management software products, for example, are an “integrated suite of security and surveillance software platforms,” which Michelle Austin, who handles the company’s marketing communications, said are bundled on a single platform. iView also sells an “instant reporting system,” which routs information to casino staff or executives who need to see it, possibly on an urgent basis. “There is a daily log with entries highlighted in different colours depending on the urgency, which has everything I need to see for my job,” she said. Austin said iView’s products are used in 75 per cent of the casinos in Canada. Within the past year the company introduced a visitor photo pass-management system based on facial recognition software to weed out people who have been banned from casino(s) for various reasons, or who have self-excluded themselves and weakened in their resolve. She said the company’s products are so customized that if iView doesn’t have what a potential customer wants, it will create it within three months. iView, based in Oakville, Ont., with a satellite office in Las Vegas, is one of the few Canadian companies in the casino surveillance field. Some of the larger ones in the United States are subsidiaries of European corporate parents who have been in the security business for generations. Gunnebo Canada, for example, is a unit of Gunnebo in Sweden. Larry Legault, project manager of electronic security in Gunnebo’s Toronto office, said clients in Saskatchewan and Alberta have come to appreciate the way digital cameras achieve more crisp images in casinos where light levels vary from the back lighting of extremely bright slot machines to dark carpets, and many other shades and reflection levels in between. “A lot of the cameras are going IP, part of a trend to Intranet networks in casinos. They used to be connected to a VCR, but now they’re connected to a Digital Video Recorder (DVR), so security personnel can log into that DVR and look at any camera connected to it,” Legault said. However, he acknowledged that it is a difficult decision to switch from an analog to a fully digital system, considering all the

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hundreds and even thousands of cameras in a casino which then have to be replaced. Legault described the growing popularity of digital/IP cameras, with their better quality images and greater capacity for storing information, as among the industry’s leading innovations last year. And this year? “Probably a higher degree of pixels,” he said. “One megapixel cameras have become eight megapixel cameras. The information on a picture is becoming smaller so it’s clearer and contains more information.”

Digital video stands up in court Regardless of the size, the digital images can be introduced in court as part of a prosecutor’s case. Digital video is more effective in that situation than VCR tape, because watermarks invisible to the naked eye, much like those on paper currency, prove that it is an original image and not one that has been altered in any way. Digital cameras are becoming so popular that Dave Herrington, key account manager for the gaming market for Honeywell Video Systems in Toronto, said the company “doesn’t sell VCR products any more. VCRs are a thing of the past and some casinos are having a hard time finding spare parts for them.” Digital is superior, he explained, because it “allows continuous recording without having to touch the device or change tapes. The recording is at a very high frame rate, about 30 frames a second, with very high resolution.” Digital also allows a casino to do more in-depth investigation. The mix of fixed and pan and tilt cameras covering table games, slot machines and cashier windows allows surveillance operators to instantly review a recording to confirm what they actually saw, Herrington said. Or they watch it live, and casino staff don’t have to spend time changing [VCR] tapes. That allows them to spend more time on actual surveillance, he said. Although digital images aren’t stored on tape, there comes a time when the hard drives need to be purged of unimportant or irrelevant images. Herrington said that time is typically every seven days, although it is often stretched to 14 or even 30 days. The system is designed for the amount of storage a customer needs, he explained, although a regulatory agency usually mandates a minimum storage time for the images. While digital is widely hailed for its various technological attributes, Mike Reynolds isn’t convinced the manufacturers have produced

a system that is ideally suited to the casino market. Reynolds is the product manager for the security systems group at Panasonic Canada in Toronto, which has equipment installed in casinos in Manitoba, Ontario and Quebec. “What is needed is real-time recording on a per camera basis, and while we’re trying to find one we’re mixing and matching cameras, recorders and display panels,” he said. It seems the company has solved that problem. Reynolds said Panasonic is releasing a real-time camera unit with 16 channels, and its success in the market will depend on the stage of casinos’ equipment replacement programs. The new camera solves the problem of variations in casino lighting levels, so that, for example, a surveillance operator would be able to get good images of someone walking by a slot machine. Reynolds agrees that one of the new developments this year will be a move to digital recorders and an IP-based system. “Casinos want to check a person’s identification, see the money changing hands and the cards at a table,” he said. “The advantage of the IP is definitely the picture quality.” Over the next five to 10 years, he said, IP will replace everything and casinos will build their internal video networks so that instead of running video cables to the video recorders, they will run a video network from digital camera imaging to digital recording to digital playback. There

isn’t the same loss as with a signal conversion from analog to digital and back to analog. Casino operators who want to upgrade aging surveillance systems retroactively can often do it by simply adding a specific microprocessor chip to existing equipment. “Management software is often the biggest item in any transition, but you have to make sure you have the tools to manage both new and old systems,” Reynolds said.

New field of video analytics A growing software specialty is called “video analytics,” which detects suspicious movements or activities on casino cameras, uses a computer to assess the need for further investigation and will accordingly raise an alarm. This is regarded in the industry as an important asset in the overall surveillance mix. Bartlett said video analytics also allows surveillance operators to watch for other things, that the computer is programmed to look for “totally different body movements, looking from side to side, the wearing of hats and sunglasses to cover faces, and other things that would flag people for them. It’s much easier to watch 100 alarm events a day [triggered by the analytics software] than to watch 3,000 cameras. Analytics can also tell whether someone is cheating at cards.” John Katnic, vice-president and COO of Synectic Systems of Santa Barbara, California,

One of the products from iView Systems is a Personnel Profile, which readily provides photos and access to data about employees.

Canadian Gaming Business | 49

Sur veillance operators using an analytics system from Honeywell can call up photos and details such as the date, time and "severtity" of selected "events".

also extolled the virtues of video analytics. Even with 200 cameras spread throughout a parking structure, he said, operators can’t watch every floor in every garage at the same time. “Analytic programs can tell the difference if someone is standing there for longer than 15 seconds. Maybe they’ve

had a heart attack, or are being robbed, or someone is breaking into a car, and the programs send an alarm to an operator. “Analytics can also count people coming in and out through the doors, or look at license plates for cheats, or wanted terrorists, or people who slip or fall at the

top of escalators for insurance reasons. Once casinos have all gone analytical, we will see analytic programs proliferate. Operators will be much more efficient. It will alert them to things they might want to look at, rather than randomly trying to catch someone doing something wrong,” Katnic said. For example, one of the features can detect blackjack players “tapping a bet,” where a cheater will remove or add another chip, depending on how the hand is progressing, without anyone noticing it. “You need a clear enough video to see how many chips are on the table. The human eye can see 20 to 22 frames a second. A surveillance system’s record is 30 frames a second, and the video can be played back at one frame per second,” he said. “Companies who can provide hybrid analog/digital transitional solutions will be very

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popular with casinos. The biggest thing right now is integrating video with other events and tying multiple systems together,” Katnic said. In the meantime, casinos are investing large sums in buying drives to store all the videos. There are better technologies coming out to get and store good pictures “without having to buy two buildings worth of hard drives”, he said. Biometrica Systems in Las Vegas is involved in the facial recognition business. Or, as James Pepin, vice-president of sales and marketing, puts it, “providing advanced identity solutions to the casino industry to help reduce the likelihood of unnecessary financial losses due to gaming cheaters, advantage players, team organizations, thieves and former employees. Our identity solutions are also being used to improve identity verification for VIPs, problem gamblers, self-excluded patrons and barred patrons in an effort to improve overall casino operations.” It is catching on. At the end of 1999 the company had three casino surveillance and security department customers for its facial

Image from Biometrica's face-recognition database

recognition software. Today there are 175, Pepin said. How does it work? If a suspicious looking person is reported to security, a camera zooms in on the face, the software compares it to faces stored in the data bank, which may number in the thousands, and the comparison either comes up with a person who shouldn’t be there, or nothing. “We can also send an image of a person to all the casinos in a network, so we can

protect one another that way,” Pepin said. Biometrica’s software has other applications, including authentication of a driver’s license, passport, military i.d., etc., in about four seconds. It can track, store, analyze and report information related to events, incidents and routine tasks the company said.

Albert Warson is a freelance writer based in Toronto.

Canadian Gaming Business | 51

Lottery and Gaming Corporation Highlights The following summaries of news and activities were submitted by the provincial lottery and gaming corporations. Look for reports from other provinces in the June issue.

Atlantic Lottery Corp. On March 14, ALC released information that statistically confirms that retailers claimed more prizes than would be expected in the sixyear period from Jan. 1, 2001, to Dec. 31, 2006. The internal review, which was statistically verified by Dr. Jacques Allard, Maritime Statistical Analysis Inc., shows that retailer owners win more often that the general public, and based on their selfreported spending and playing habits, they won 10 times more often than the statistical probabilities indicated they should have during the period in question. During the six years between Jan. 1, 2001, and Dec. 31, 2006, there were 44 wins by retailers and 25 wins by retail employees out of a total of 1,293 wins of $25,000 or more. “While ALC continues to believe that the majority of our retailers are honest and professional in their interactions with players and that they work hard to uphold the same level of integrity that ALC brings to its operations, we needed to ensure that our processes were sound, and that our decisions were based on a complete analysis of all the information,” stated Mike Randall, ALC’s vice-president of social responsibility and communications. As a result, ALC has announced a series of measures that have been completed or are underway which strengthen its player protection and verification procedures. Included in those measures are a number of items that directly involve players and what they can do to protect their play, including educating players on the proper ways to validate tickets. As well, ALC has implemented a series of technical improvements including lottery terminals that make a different sound to differentiate between winning and non-winning tickets and the availability of self-validation devices (ticket checkers) which display the amount won. Other measures include: V ALC will add customer-facing screens on lottery terminals which will show the amount won as the ticket is being checked by the retailer. These will be in place by the end of June. V We are examining the possibility of establishing a retailer risk assessment panel to identify opportunities to increase protection for players. V We are updating our enterprise risk-management assessment for key areas of our business beginning in March. V We have almost completed a complete redesign of our winners’ 52 | April 2007

database to ensure real time cross-referencing of winners and retailers. Our current system has not allowed this function – requiring manual cross-references. “It is important for a corporation like Atlantic Lottery, which is owned by the residents of the four Atlantic Provinces, to remain transparent and accountable,” Randall said. “We are committed to ensuring our corporate integrity by reviewing our operations with due diligence, so that we can continually reaffirm what works well and what needs to be updated or changed. This is a business best practice, and one to which ALC will continue to adhere.”

Nova Scotia Gaming Corp. Support4Sport: A Community Program by NSGC NSGC, with its ticket lottery operator Atlantic Lottery Corporation (ALC), launched a new program in August 2006 to enhance amateur sport. Support4Sport is a suite of ticket lottery products where 100 per cent of profits go to sport in Nova Scotia. It will raise at least $2 million a year, which represents a 50 per cent increase in current annual provincial sport funding. The first ticket launched was a Commonwealth Games-themed Crossword ticket. In May 2007, NSGC will be launching the full series of lottery tickets and an advertising campaign promoting the Support 4 Sport program. RFP for the World’s First Informed Player Choice System for Video Lottery Terminals In February 2007, NSGC announced it is proceeding with a Request for Proposal (RFP) asking technology suppliers in the gaming sector to create an Informed Player Choice System for Video Lottery Terminals (VLTs) in the Province. The announcement came after two years of research on the impact of adding interactive responsible gaming features to VLTs. The pilot testing of these features was a key commitment in the Government’s first Gaming Strategy, A Better Balance (April 2005). Three external, independent reports concluded that players liked the responsible gaming features and used them to make more informed decisions. Key research findings from the comprehensive report included: V 7 1 per cent of all regular players tried the features (Account Summary, Live Action, Money Limits, Play Limits, 48-Hour Cool Down).

V Half of all regular VLT players continued

using the features on a regular basis – which is considered to be a high adoption rate. V Players who used the features played longer but spent less because they made better decisions about when to stop. V The most positive impacts were on players at the lower end of the risk scale, which researchers believe is the right target audience for effective prevention. The decision to move forward with the RFP is based on the recommendations of all three researchers to try to find a way to roll out the features across the province. The RFP process is being led by NSGC’s operator, ALC, and is expected to take approximately six months. If the process finds an effective and viable solution, the next step would be to add the technology to all VLTs in Nova Scotia. The three RGD research reports are available at www.nsgc.ca.

Loto-Québec Loto-Québec’s 10 Buildings Certified Go Green All of Loto-Québec’s buildings now hold Go

Green certification from the Québec section of the Building Owners and Managers Association (BOMA). This accreditation is awarded to building owners and managers who implement excellent environmental protection practices within their properties. Loto-Québec’s real estate holdings consist of 10 buildings, including its three casinos (Montréal, Charlevoix and Lac-Leamy in Gatineau) and two hotels (the Fairmont Le Manoir Richelieu in Charlevoix and Hilton Lac-Leamy in Gatineau. New Operating Hours at the Casino du Lac-Leamy Since April 6, 2007, the Casino du Lac-Leamy in Gatineau has been offering its clientele a new weekend schedule. From 9 a.m. on Friday through 4 a.m. on Monday, patrons have uninterrupted access to gaming areas and certain restaurants. As for the rest of the week, the casino is open from 9 a.m. to 4 a.m. Monday through Thursday. Seducing the Senses at the Casino de Montréal’s Nuances Restaurant The proud recipient of the CAA-AAA’s

Five Diamond rating each year dating back to 2000, the Nuances restaurant has been offering its clientele a brand-new ambiance since March 20. Under the theme of “Seducing the senses,” the passion and creativity of a team of talented artists have graced the celebrated dining room with a chic and refined new décor in which its culinary masters and master sommeliers work their magic to create one of the finest gourmet dining experiences in Montréal… a veritable feast for the senses! New Head of the Société des loteries vidéo du Québec Since this past February, a new Managing Director has been overseeing the activities of the Société des loteries vidéo du Québec. An attorney by training, Carole Drolet brings 25 years of professional experience to her new position, most notably in general business and franchise management. Over the course of her distinguished career, she has occupied a number of senior-level management posts in various organizations within the real estate, sales and product distribution sectors.

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Her wealth of marketing experience will definitely serve as a major asset in the effective management of Loto-Québec’s video lottery network. New Online Lottery Loto-Québec has just added a brand new game to its portfolio of online lotteries — Jour de paye. Offered weekly and featuring a grand prize of a $2,000 annuity paid out every two weeks for life or a lump sum payment of $675,000, the new online game represents a grand premiere for the lottery corporation. Three Changes to Simplify Ticket Verification For the past few months, lottery enthusiasts have been enjoying the benefits of certain modifications aimed at facilitating ticket verification: V T he game terminal now emits two different tone sequences depending on the amount of the prize won. V Ticket validation results appear for a longer period of time on the terminal’s customer display — 10 seconds instead of the previous five seconds. V A series of pictograms are now printed on online tickets — status pictograms (validation, cancellation, etc.) and instructional pictograms indicating actions to be taken by the retailer. Nuances restaurant at Casino de Montréal

Loto-Québec Les dix immeubles de Loto-Québec certifiés Visez vert Tous les immeubles de Loto-Québec détiennent maintenant la certification Visez vert attribuée par la section québécoise de la Building Owners and Managers Association (BOMA). Cette attestation est accordée aux propriétaires et aux gestionnaires d’immeubles qui mettent en place des pratiques d’excellence assurant la protection de l’environnement. Le parc immobilier de Loto-Québec comprend dix immeubles, dont trois casinos (Montréal, Charlevoix et Lac-Leamy à Gatineau) et deux hôtels, soit le Fairmont Le Manoir Richelieu (Charlevoix) et le Hilton Lac-Leamy (Gatineau). Nouvel horaire au Casino du Lac-Leamy à Gatineau Depuis le 6 avril, le Casino du Lac-Leamy offre un nouvel horaire week-end à sa clientèle. À compter du vendredi 9 h, les clients ont accès sans interruption à l’aire de jeux et à certains restaurants, et ce, jusqu’au lundi 4 h du matin. Du lundi au jeudi, le casino est ouvert de 9 h à 4 h du matin. Fallsview Casino Resort is Ontario’s premier casino destination with over 3,000 slots and 150 table games, fine dining, big name entertainment and a luxurious hotel. The action is non-stop!

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L'éveil des sens au restaurant Nuances du Casino de Montréal Récipiendaire de la cote Cinq Diamants, décernée par la CAA-AAA depuis l’an 2000, le restaurant Nuances offre, depuis le 20 mars dernier, une toute nouvelle ambiance. Axée sur l’éveil des sens, l’inspiration d’artistes passionnés a donné lieu à un décor chic et épuré dans lequel créateurs culinaires et sommeliers explorent sans cesse les arômes et les parfums pour composer une cuisine inventive et raffinée. À voir, à goûter, à sentir...

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Nouvelle directrice à la société des loteries vidéo du Québec (SLVQ) Depuis février, la SLVQ compte une nouvelle directrice générale. Avocate de formation, Mme Carole Drolet possède plus de 25 années d’expérience, notamment en gestion générale d’entreprises et de réseaux de franchises. Au cours de sa carrière, elle a travaillé à titre de gestionnaire de haut niveau dans différentes entreprises du domaine de l’immobilier et celui de la vente et de la distribution de produits. Son expérience en matière de commercialisation sera assurément un atout dans la gestion du réseau des appareils de loterie vidéo. La nouvelle loterie sur terminal jour de paye Loto-Québec vient d’ajouter Jour de paye à son portefeuille de loteries sur terminal. Un produit hebdomadaire dont le gros lot consiste en une rente à vie de 2 000 $ versée à toutes les deux semaines ou en un montant forfaitaire de 675 000 $. Une première à Loto-Québec! Trois modifications pour plus de convivialité Depuis quelques mois, Loto-Québec a mis en place des mesures pour faciliter la vérification des billets de loterie : V Le terminal de jeu émet deux tonalités différentes selon l’importance du gain. V L es résultats de la validation d’un billet s’affichent plus longtemps sur l’afficheur-client du terminal, soit pendant 10 secondes au lieu de 5. V Une série de pictogrammes est imprimée sur les billets de loterie sur terminal. Ces représentations graphiques se divisent en deux catégories : les pictogrammes d’état (validation, annulation, etc.) et les pictogrammes de directives, qui indiquent les actions que doit poser le détaillant.

OLG (Ontario Lottery and Gaming) Corporate Problem Gambling Prevention Month During the month of March, OLG helped to promote Within Limits: Problem Gambling Prevention Month, an important initiative of the Responsible Gambling Council (RGC). As an agency funded by the Ministry of Health and Promotion, RGC’s goal is to increase awareness surrounding the risks and prevention of problem gambling. OLG supports the program through the involvement of its gaming facilities, as well as selected lottery retailers and Bingo Centres across Ontario. OLG updates 7-point Trust and Security Action Plan On March 14, OLG updated its 7-Point Trust and Security Action Plan – a package of new and expanded lottery security measures featuring technological and human measures. The main component is the rollout of ticket checkers, a device enabling consumers to electronically check their tickets to see if they’ve won, and immediately determine the value of their prize. To date, more than 4,000 ticket checkers have been installed, with all outlets to be equipped by the end of April. Additional points that ensure a higher standard of security for the lottery player in Ontario include enhanced prize validation procedures, improvements to customer-facing lottery information display screens, a public awareness campaign, and a detailed investigation of the prize claim whenever a retailer claims a prize of $10,000 or more. Canadian Gaming Business | 57

Gaming Casino Windsor Public Information Sessions In February, public information sessions provided Windsor residents with an update on the progress of Casino Windsor. The second gaming floor is expected to be completed in April, while Neros Steakhouse which will seat more than 1,800 is expected to open in June 2007, and development continues on the 27-storey hotel, amphitheatre and redesign of the gaming floor. The site will open as a Caesars Windsor in spring 2008. Anniversaries for OLG Slots at Racetracks OLG Slots at Ajax Downs, the 17th slot facility operated and managed by OLG, celebrated its first anniversary. The facility houses more than 250 slot machines and

has attracted more than one million visitors since it opened on Feb. 28, 2006. OLG Slots at Woodbine R acetrack celebrated its seventh anniversary on March 27. The facility houses more than 1,900 slot machines and has attracted more than 30.2 million visitors.

Lotteries Age Verification Program at Lottery Retailers In March, OLG partnered with the Ontario Convenience Store Association (OCSA) to provide a new technological tool which enhances age-control measures at lottery retailers. OLG’s Age Verification Program enables lottery retailers to electronically verify a customer’s age by swiping an Ontario’s driver’s license through the lottery terminal.

The OCSA announced its “We Expect I.D. – 25 and Under ” which includes OLG’s new program. Retailers will be requested to ask customers who appear 25 years of age or under to produce photo identification when purchasing age restricted products, such as lottery tickets, tobacco products and adult merchandise. e-Bingo In February, the Ontario Ministry of Infrastructure and Renewal announced the expansion of the Bingo Revitalization Program to include new markets. Beginning with Windsor, OLG will examine the revenue impact on different markets such as border locations, vicinity to OLG gaming locations and markets with multiple bingo operations.

Index to Advertising Pages Company

Web site

AC Coin & Slot www.ac-coin.com Accro Furniture Industries Agilysys, Inc. www.agilysys.com Aristocrat www.aristocratgaming.com Arrow Games www.arrowgames.com Battlefield Graphics www.battlefieldgraphics.com Bluberi www.bluberi.com Casino Rama www.casinorama.com Casino Windsor www.casinowindsor.com CIBC World Markets www.cibcwm.com Falls Management www.fallsviewcasinoresort.com GameTronix Systems www.gametronix.com Gaming Partners International www.gpigaming.com Gary Platt Manufacturing www.garyplatt.com Gasser Chair Company www.gassergaming.com Hcareers www.hcareers.ca HLT Advisory www.hlta.ca IGT Canada www.igt.com InfoGenisis www.infogenesis.com iView Systems www.iviewsystems.com Konami Gaming www.konami.com Las Vegas Gaming Inc. www.lvgi.com MacKay Wong www.mackaywong.com MLC Training Centre www.mlc.mb.ca Nova Scotia Gaming Corporation www.nsgc.ca Progressive Gaming www.progressivegaming.net Scientific Games www.scientificgames.com Southwest Surveillance Systems Canada www.southwestsys.com Strategic Gaming Innovations www.stratgamin.com TCSJohnHUXLEY www.tcsjohnhuxley.com WMS Gaming www.wms.com 58 | April 2007

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