Canadian Gaming Business July 2006

Canada's Premier Gaming Industry Magazine

Vol. 1 No. 1

E R È I M E E R U P ISS A new Magazine for Canadian Gaming Professionals Inside: Live entertainment at Canadian casinos Expert advice on reducing employee turnover Lottery and gaming CEO ‘Town Hall’

Official Publication of the Canadian Gaming Summit

July 2006

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EDITOR’S NOTE Fred Faust welcomes readers to our first issue.

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MESSAGE FROM CGA President and CEO Bill Rutsey reviews the Canadian Gaming Association’s first year.

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contents

GAMING NEWS ROUNDUP Ingenio and Bally alliance, OLG re-branding, and other news from the world of gaming.

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LOTTERY AND GAMING CEO ‘TOWN HALL’ Six leaders, together for the first time on one stage, discuss the issues of the day.

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THE 2006 CANADIAN GAMING SUMMIT Personal reflections on this year’s Summit in Vancouver.

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LIVE! FROM YOUR LOCAL CASINO! Canadian casinos use live entertainment to draw new visitors and generate awareness.

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REDUCING EMPLOYEE TURNOVER Three experts in management and training address this perennial problem.

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NEW TECHNOLOGY A look at 14 companies whose innovative products serve Canada’s gaming industry

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VOLUME

1 NO.1

LOTTERY AND GAMING CORPORATION HIGHLIGHTS The provincial lottery and gaming corporations tell us what’s new in their jurisdictions.

R MIE PRIESSUE

A new Magazine for Canadian Gaming Professionals

ON THE COVER Welcome to the première issue of Canadian Gaming Business Magazine

Inside: Live entertainment at Canadian casinos Expert advice on reducing employee turnover Lottery and gaming CEO ‘Town Hall’

Official Publication of the Canadian Gaming Summit & Exhibition

Canadian Gaming Business | 3

editor'snote

Canadian Gaming Business Volume 1 Number 1 Publisher

Chuck Nervick chuckn@mediaedge.ca

Editor

Fred Faust ffjr@swbell.net

Advertising Sales

Patrice Hall patriceh@mediaedge.ca

Senior Designer

Annette Carlucci annettec@mediaedge.ca

Designer

Ian Clarke ianc@mediaedge.ca

Circulation Manager

CASINOS COUNT ON US!

Selina Rahaman selinar@mediaedge.ca

Proudly owned and Published By:

Welcome

EXPERIENCE • QUALITY • SERVICE • SELECTION 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

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 chuckn@mediaedge.ca

For editorial information, Contact Fred Faust 613-531-0086

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Copyright 2006 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

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C U M M I N S CUMMINS-ALLISON INC.

6725 Millcreek Drive, Unit 2, Mississauga, Ontario, L5N 5V3 Tel: (905) 814-6184 • 1-800-499-6191 • Fax: (905) 814-6182 Vancouver • Calgary • Montreal • Ottawa • Halifax www.cumminsallison.ca

GAMING IN CANADA may be a young industry, but its rapid growth means that it’s time for the industry here to have its own publication.

That’s the basic premise, and promise, of Canadian Gaming Business. This is the gaming-industry trade magazine where Canada is the main focus, not a footnote or a paragraph in someone’s around-the-world highlights.

At April’s Canadian Gaming Summit, I was impressed by the size and breadth of our industry, the enthusiasm of its participants, and the commitment to do even more to ensure that gaming is managed in a socially responsible manner.

I also couldn’t help but note the interest in those thorny issues related to sports betting and Internet gambling – what Bill Rutsey of the Canadian Gaming Association referred to at the closing session of the Summit as “the two elephants in the room.”

I’m excited to have an opportunity to play a small role in the Canadian gaming industry.

I’m proud that this country is the world leader in responsible gaming efforts, and yet the industry’s top officials keep exhorting each other to do more in this area.

Professionally, it’s thrilling to be involved in the birth of a new publication. Not many journalists get such an opportunity.

So welcome to our first issue. Like any such endeavour, we will experience our growing pains and we will improve over time. I believe we’re off to a great start, but this will not be a static publication.

Our owners – the CGA and MediaEDGE Communications – are very committed to Canadian Gaming Business.

You’ll notice that we devoted considerable effort to our story on live entertainment at Canadian casinos. This is a topic that we’ll revisit often. At the Summit, Rob Scarpelli of HLT Advisory noted that 90 per cent of revenue at Canadian casinos still comes from gaming, as opposed to amenities such as food and beverage, spas or entertainment.

“We need to look at the total package if we’re going to grow,” he said. I agree. Live entertainment will be, and should be, a big component of that growth.

We want to intelligently cover all areas of gaming in Canada. To be sure, there are some gaps in coverage in this first issue. We will correct that problem in future issues.

That brings me to a request of you, the reader. I need feedback. I want your comments, positive and negative. I want your suggestions for story topics, for issues that need to be aired. We will publish letters to the editor, but I’ll also be happy to receive emails and phone calls with comments that are not intended for publication. Just be sure to indicate whether or not you want your comments published.

Fred Faust Editor ffjr@swbell.net 613-531-0086

Official Publication of the Canadian Gaming Summit & Exhibition Canadian Gaming Business | 5

messagefromCGA

Canadian Gaming Association – Our First Year

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WELCOME TO THE PREMIĂˆRE issue of Canadian Gaming Business (“CGBâ€?), the official publication of the Canadian Gaming Association (“CGAâ€?) and the Canadian Gaming Summit (the “Summitâ€?).

The CGA was created just over one year ago with the fundamental goal of creating balance in the public dialogue about gaming in Canada.

Our mandate is to create a better understanding of the gaming industry by bringing facts to the general public.

To this end CGB has been designed to deliver insight and information about Canada’s gaming industry. The story of the Canadian gaming industry needs to be told and CGB will serve as a primary vehicle to profile and highlight the contributions of the industry, as well as serve as a forum to deal with the many complex issues we all face. While there is no shortage of trade journals for the gaming industry, there is a need for a publication that focuses primarily on Canada.

Our first year at CGA has been a series of real achievements, including more than doubling our membership, establishing our head office in Toronto and acquiring the Canadian Gaming Summit in partnership with MediaEDGE Communications. Together with MediaEDGE we co-produced the largest, most successful Summit to date with over 130 exhibitors and over 1500 attendees in Vancouver – showcasing the best of Canada’s gaming industry.

Our 2007 Summit at the Toronto Metro Convention Centre on April 25, 26 & 27 will build on our Vancouver experience, capturing emerging trends and presenting state-of-the-art technology together with information and expanded education relevant to all aspects of the Canadian and global gaming markets.

In keeping with our mandate, to provide meaningful information related to gaming in Canada, we have commissioned and will continue to commission reliable, informative, industry-specific research. Our first such research study, VLT Gaming in Canada (prepared by HLT Advisory and released in March 2006), presents a clear, comprehensive picture of well-run and well-regulated programs across the country that have improved with stakeholder input. It documents the billions raised for governments and puts on the public record the indisputable fact that more money is devoted to the study and treatment of problem gambling in Canada than anywhere else in the world. We chose to start with VLT gaming because it’s the “lightning rod� and “bete-noir� for those opposed to our industry.

At the Vancouver Summit the CGA released our initial national public opinion survey of Canadians’ attitudes towards gaming, the National

BY BILL RUTSEY, PRESIDENT AND CEO

Gaming Monitor (conducted by PMG Consulting). The survey found that Canadians are responsible gamblers who self-regulate their spending and consistently play with a pre-determined limit. Most see gaming as fun and a legitimate form of entertainment. The research also revealed that there are misconceptions about gaming in Canada, in particular with respect to responsible gaming and the perception that more needs to be done to address problem gambling.

Public opinion, which has been informed primarily by media, is unaware of the significant efforts already being undertaken by the industry to ensure responsible gaming. Few Canadians are aware that the industry annually contributes more than $7 billion to governments and charities and invests about $75 million on responsible gaming awareness, treatment and research – more per capita than any other country. These survey results clearly demonstrate the need for better research and public information. (See our website, www.canadiangaming.ca, for downloadable versions of research.)

Gaming in Canada today is made up of responsible, professional organizations and individuals delivering quality entertainment for millions of people. Over the past 10 years our industry has more than doubled in revenue -- to more than $14 billion annually – served by thousands of businesses and more than 50,000 employees nationwide. This year the CGA will be commissioning a National Impact Study to quantify and benchmark our important growing industry.

Looking forward, our industry faces numerous challenges and tremendous opportunity – from the misinformation spread by those opposed to gaming, to the development of new multi-dimensional properties that integrate exciting entertainment, food and beverage and resort amenities together with gaming. Examples are under way in Western Canada.

CGA’s role is to ensure the long-term success of this invaluable asset, and we invite you to join us and be a part of an organization that speaks for the thousands of businesses and the tens of thousands of employees supported by gaming. CGA membership is open to all companies and organizations involved in Canada’s gaming industry and our new tiered membership structure is designed to reflect the diverse nature of the Canadian industry.

Enjoy this first edition of CGB. I am looking forward to working together with all of you to create a successful future for our industry in Canada and beyond.

Canadian Gaming Business | 7

gamingnewsroundup

Ingenio and Bally: “married for a very long time” Ingenio, the research and development subsidiary of Loto-Québec, has signed a “long-term strategic alliance” with Bally Technologies, a major American manufacturer of slot machines and systems for various slot accounting and casino management functions.

“I am convinced that by pooling their expertise, Ingenio and Bally will have a significant impact on casino gaming in the coming years,” Nathalie Rajotte, director general of Ingenio, said in a statement June 27 announcing the deal.

Marcus Prater, senior vice president of marketing for Bally, told Canadian Gaming Business that his company is looking to Ingenio for “help with new game content for our slot machines. Ingenio is an extremely creative group, with some great ideas.” Two people from Bally’s game and product development team – “guys that are hard to impress” – had been meeting with Ingenio staff, Prater said, and returned to the Las Vegas headquarters quite impressed.

“It’s new thinking,” he said. “It’s part of a plan by Bally to open up our game development. Whether it’s the Xbox guy developing games in his garage or Ingenio up in Canada, we’re looking for some radical thinking on how to make some of these slot games more exciting.”

Such an alliance with a government lottery corporation is unique for Bally. Prater said the company has arrangements with jurisdictions such as New York and Austria to provide machines and technology, “but we haven’t previously done a deal where the government or lottery entity actually contributes something back to us such as a game content.” New games will be particularly useful for Bally, he said, because the company uses a platform that makes it easy to convert games from Class III (standard slots) to video lottery terminals, or vice versa.

Also, Prater said, Canada happens to be an unusually good market for Bally, which estimates that it has a 25-30 per cent share of the market in standard slots here. That’s more than double its share of the U.S. market, which it estimates at 10-15 per cent.

This alliance is non-exclusive; Bally can buy games from other outside parties and Ingenio is free to sell its games elsewhere. So why bother to sign a deal?

“I think that neither side may be wanted to get completely tied into a scenario that they couldn’t expand business elsewhere,” Prater said. “The idea is to create a partnership and see how it goes, kind of a no-risk partnership. I have a feeling that Bally and Ingenio will be married for a very long time!”

For Ingenio, the alliance represents an opportunity to see concepts taken from its lab and turned into potentially lucrative slot games that may get placed in casinos worldwide. “We take their ideas and concepts,” Prater said, “but at the end of the day somebody needs to do the software coding and needs to produce the game and deliver the game.”

Terms of the deal were not disclosed, but Prater said, “It’s safe to assume that if a game is very successful, Ingenio gets a piece of that upside.”

Loto-Québec’s annual report says Ingenio is “constantly in search of new export opportunities for its products . . . .” For the fiscal year ending March 31, Ingenio reported $1.4 million of revenue, of which $1 million came from royalties from lottery organizations outside Quebec. The Atlantic, British Columbia, and Western lottery corporations use some of Ingenio’s 19 games, as do the state lotteries of New Jersey and Oregon. Last fall, Ingenio licensed the use of its patents to Gtech, an American company that supplies lotteries worldwide.

Although some of Ingenio’s products use the Internet, Prater disputed published speculation about Bally’s intentions regarding the alliance. “This deal does not signal that Bally’s trying to get into Internet gaming,” he said.

Bally, which changed its name from Alliance Gaming Corp. in March, dates back to 1932. Loto-Québec created the Ingenio subsidiary in 1998.

Ontario: OLGC is now OLG The Ontario Lottery and Gaming Corp. is in the midst of its first-ever re-branding campaign. Known as the OLGC since it was created in April 2000 by the merger of the Ontario Casino Corp. and the Ontario Lottery Corp., the Crown agency is dropping the “C” from its acronym for public use. Legal contracts may still refer to the OLGC, but in advertising and signage and on the new logo and Web site, it’s simply OLG. Alan Berdowski, chief marketing officer of the OLG, compared the new moniker to the LCBO, once called the Liquor Control Board of Ontario. “They’re strictly known now as LCBO and people would be hard-pressed to even remember what it means!” he said.

So why make the change, and why now? The problem was, Berdowski explained to Canadian Gaming Business, that consumer research showed that the public recognized the old logo as a symbol of where to buy a lottery ticket, and if OLGC meant anything at all to the public, it was in the context of the lottery, not gaming. The organization’s role in the gaming business had grown faster than public awareness of that role.

OLG is responsible for four “commercial” casinos – its term for the larger facilities such as Casino Windsor and Casino Niagara – and six “charity casinos” – its term for the smaller, regional facilities.

It also operates 17 slot parlours at racetracks, sometimes called racinos. The racetrack slots were particularly confusing to the public, Berdowski said. People didn’t know if the racetrack owned them,

Canadian Gaming Business | 9

gamingnewsroundup

or the municipality or what. But they didn’t associate them with OLGC. “Integrity is a critical aspect of the gaming industry,” he said, “and people need to know who is behind the gaming that they enjoy.”

This was also a hindrance to the organization’s efforts at promoting responsible gaming. Consumers may have seen an OLGC ad about safe gambling behaviour, but some of the impact was lost if they didn’t realize that the message was coming from the organization that ran the casinos or racetrack slots.

“Referring to the OLGC didn’t necessarily mean anything,” Berdowski said. “The majority of the population think that’s strictly the lottery company and it wasn’t effectively representing the gaming side of things.” In addition, the change makes sense in business and marketing terms. “We found that it’s quite inefficient to have over 20 unique and distinct site brands,” he said.

The first step in the public process is to change signage at the charity casinos, racetrack parlours and lottery centres. That began early in July, along with TV advertising. The commercial casinos will not see major changes in signage, because they each have strong brands, Berdowski said. For them, OLG will be used as “an endorsement, to link them together.”

OLG has also been working on internal communications, explaining the re-branding to employees and reinforcing the “three guiding values” of “respect, integrity and accountability.”

Berdowski said the campaign will incur minimal additional costs, that the project can be accomplished “within existing budgets.”

Internet gambling legislation As we went to press, the U.S. House of Representatives passed a bill to specifically ban Internet gambling.

Although the legislation passed by a large margin, it was doubtful that the Senate would act on this subject in the current session. No prohibition bill had been introduced in the Senate, and the legislative season will be shortened by the midterm elections in November.

In the Legislative Assembly of Ontario, meanwhile, hearings have not yet been scheduled on a private members’ bill introduced

10 | July 2006

by Jeff Leal, a Liberal who represents Peterborough. His Bill 60, the Consumer Protection Amendment Act (Internet Gaming Advertising), was introduced in February. It would “prohibit the advertising of website addresses of Internet gaming businesses unless the person doing the advertising believes in good faith that the Internet gaming business has been properly authorized to operate and its in fact being operated in accordance with Ontario and Canadian law.”

In early March, Bill 60 received its second reading, was approved by a voice vote and was sent to the Standing Committee on Justice Policy. The committee is now dealing with government bills, and is expected to address private members’ bills this fall.

New Edmonton casinos open this fall Century Casino, a $30 million project under construction in northeast Edmonton, will open early in November. Josef Wildling, chief operating officer, said the target date is Nov. 7.

The facility will have 300 slots and 31 table games.

Century will also have some amenities that the five existing competitors lack: a hotel, a dinner theatre and underground parking. The latter will be appreciated in cold weather, Wildling said. The hotel is tiny, with just 26 rooms. But the company hopes to add 100 rooms in a second phase. Even the small hotel, he said, will help the casino sell packages that include overnight stays and live entertainment. The dinner theatre, which seats about 300, will have live entertainment at least five nights a week.

Recruiting enough frontline employees has been difficult, Wildling said. He’s had no trouble finding managers, however, because plenty of workers at other Edmonton casinos are looking for opportunities to advance. The casino expects to have about 400 full-time equivalent employees.

Century plans to capitalize on Alberta’s booming economy by targeting high-end customers for its gambling and entertainment. This project was originally called Celebrations Casino. In January, Century Casinos Inc. bought out the Canadian investors, who held a 43.6 percent stake, and later changed the name.

Century Casinos has its headquarters in Colorado Springs, Colorado. It has a far-flung portfolio of small and mid-sized casinos, including sites in Cripple Creek, Colorado; Cape Town, South Africa; Prague, Czech Republic; and on several cruise ships.

Another casino is also expected to open just west of Edmonton this fall. It’s the River Cree Entertainment Resort, located on the Enoch Cree Nation reserve and managed by Paragon Gaming, a Las Vegas company. According to Paragon’s website, River Cree

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Canadian Gaming Business | 11

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will have 600 slots. 40 table games and a 255-room hotel. It will also feature an indoor sports complex.

Paragon specializes in partnerships with Native American and Canadian First Nation tribes. It manages the Augustine Casino in Coachella, California, which is east of Los Angeles.

LiveHive: NanoGaming ready for football season LiveHive Systems, a software developer in Waterloo, Ont., has announced that six Internet sports books have purchased the company’s “NanoGaming Solution” to offer real-time event wagering to their customers.

The sports books – BetCRIS, 5Dimes, Carib Sports, Cascade, Major Betting and Bet4Aces – plan to offer the wagering during this fall’s National Football League season.

NanoGaming is designed to allow sports books to efficiently handle inprogress wagering, complementing the traditional win or lose bets. Such wagering is aimed at fans who watch a game on TV. For example, they could bet on whether a team will make the field goal that it’s attempting, or which play will be called next, or – in baseball – whether the pitcher will strike the batter out. Many more betting opportunities are possible, rather than just predicting the outcome of the game. Obviously, the bookmaker only has a brief amount of time to post a betting line and process the bets on each specific event.

LiveHive introduced the software in February. The company said that, in addition to the major sports, it’s also well-suited for wagering on reality TV shows. This spring, a site called Survivor.com used NanoGaming to offer 25 to 30 betting opportunities on each hour-long episode of Survivor. LiveHive believes this type of wagering will appeal to more casual bettors, helping sports books to expand their customer base.

Turmoil in Calgary Parents and officials of the Calgary Catholic School District are having spirited discussions about the use of casino and bingo events as fundraisers. According to the Calgary Herald, it all

12 | July 2006

started June 20, when Bishop Fred Henry, head of the Roman Catholic Diocese of Calgary, wrote a pastoral letter criticizing the district for permitting individual school councils to decide whether to raise money in this manner. He threatened to blacklist schools that practice “immoral” fundraising.

Henry called the policy “a failure in Catholic leadership.”

But the school board refused to change its policy. The Herald reported that parent groups at 59 of 97 Catholic schools in the city raised more than $2 million last year through gambling activities.

Is betting on sports better than sex?

One of the more unusual stories to emerge from this year’s World Cup concerned an experiment by Loughborough University in England, sponsored by Betfair, the world’ dominant betting exchange. The Vancouver Sun reported that the study measured the heart rates of a group of soccer fans, some of whom placed bets on the matches and some of whom did not.

The paper quoted Loughborough Professor Ron Maughan, who studies nutrition and exercise issues: “The heart rates that we have recorded throughout the first stage of the study are in line with those experienced by an individual reaching sexual climax, and in some cases greater than that.” Of course, at that point England was still a contender for the cup.

One participant in the study won 2,000 pounds on a 100pound wager. His heart rate, according to the Sun story, averaged 133 beats per minute and peaked at 168. The American Heart Association says that during orgasm, the rate ranges from 90 to 145 beats per minute, with an average beat of 115. For the average resting heart, the rate is 70 times a minute.

Lottery and Gaming CEO ‘Town Hall’ The closing plenary of the Canadian Gaming Summit in Vancouver, on April 27, was called the Lottery

…GOOD GROWTH IS WHAT THE PUBLIC WILL ACCEPT. ...UNTIL WE DO A MUCH BETTER JOB OF INFORMING THE PUBLIC ABOUT WHO WE ARE AND WHAT WE DO AND HOW WE DO IT, WE’RE GOING TO HAVE A VERY DIFFICULT TIME GETTING AS MUCH GOOD GROWTH AS WE REASONABLY CAN. – DUNCAN BROWN

and Gaming CEO “Town Hall.” According to Bill Rutsey, president and CEO of the Canadian Gaming Association and moderator of the session, this was the first time that so many top executives of the provincial lottery and gaming corporations had gathered on one stage to discuss their industry.

Following is a transcript of that discussion, heavily edited for reasons of space. An ellipse (...) indicates either that words were not intelligible on the tape or that they have been deleted by the editor.

Rutsey: This is our closing session – the CEO Town Hall. The CEOs agreed to toss around their views on the current state of the union in Canada and a glimpse at the future. We have here today Vic Poleschuk [British Columbia Lottery Corp.], Duncan Brown [Ontario Lottery and Gaming Corp.], Marie Mullally [Nova Scotia Gaming Corp.], Marty Klyne [Saskatchewan Gaming Corp.], Winston Hodgins [Manitoba Lotteries Corp.] and Norm Peterson [Alberta Liquor and Gaming Commission].

Alain Cousineau [Loto-Québec] and Michelle Carinci [Atlantic Lottery Corp.] were unable to be here today and send their regrets…

…IDEALLY WE WANT TO MAXIMIZE OUR REVENUE BUT WE DON’T WANT THE PROBLEMS ASSOCIATED WITH IT. – MARIE MULLALLY Everyone is talking about the growth and the health of our industry and wondering where gaming is going generally and specifically. We’ve all seen the decline of the older products – pari-mutuel, bingo, traditional paper lotteries – the growth of casinos and EGDs, and broader entertainment mix, the poker explosion, the heightened public awareness around problem and responsible gambling, the global deregulation movement, tightening borders here in North America, smoking prohibitions, 14 | July 2006

and the rise of Internet and mobile gaming… So given this environment and all these changes, what does the future of gaming in Canada look like?

Poleschuk: ... I think when we look ahead, it’s a very optimistic look at the crystal ball... the whole area around competition is going to get much greater than it is today, both in terms of competing for our share of the entertainment dollar and our share of the gaming dollar. So it’s optimistic, but we’re going to have to be sharper, and better marketers, and more aggressive, looking into the future.

Mullally: ... I think we’re going to see more diversified entertainment, because we’ve got a broader demographic of people wanting different things from gaming …

Peterson: … We’re seeing, as most other jurisdictions, I believe, much growth in table game business. We’re going to see some changes in that; there’s going to be more of a technology component to table games, they’re going to be more interactive, they’re going to be more player friendly... I think the issue of social responsibility is going to become more and more critical for the gaming industry, and it’s something we absolutely have to deal with...

Rutsey: Following up on that, there has been a lot of talk here in the last couple of days about growth. What does good growth look like for the gaming industry in Canada? Norm?

Peterson: ... we need more of a customer focus and

less of an emphasis on gaming... people in the gaming business need to get their customers in, expand their time in the facility, whether that time be spent at a slot machine or a table game or sitting in the bar having a drink or having a meal in the facility – the entertainment type of focus. …In terms of good growth in the gaming business, where we’re probably looking at … over the next number of years is fewer sites in terms of VLTs...

Hodgins: … The majority of negative reaction that we get from the community and from the media tends of be around our VLT program. We are trying to manage that program in order to try and minimize that negative feedback… Our focus is going to be around amenities…

Mullally: ... ideally we want to maximize our revenue but we don’t want the problems associated with it. So as part of the overall model of pulling in that entertainment share, we’ve got to be focused on responsible gambling…

We have control of the products, we have complete access to the players, we have complete control of the environment in which those products and players are located. So what are we doing to help the players make informed choices?...

Brown: There isn’t anybody on this panel that doesn’t know how to significantly increase revenue. That’s really not the challenge. … When we talk about good growth, good growth is what the public will accept. ...until we do a much better job of informing the public about who we are and what we do and how we do it, we’re going to have a very difficult time getting as much good growth as we reasonably can.

Rutsey: … It’s been alluded to here, and throughout the conference – our industry’s become sort of an editorial piñata for slow business days. Gaming appears to be in the place that alcohol was 60 to 70 years ago: “Okay, it might be legal, but it’s kind of immoral.” Society certainly changed its views with alcohol as an accepted . . . Combined with this is the increased public focus on problem gaming and

the industry’s developments around responsible gaming and corporate social responsibility. Finally, governments are routinely criticized for actually raising money via gaming to fund required and desired programs. Given all this, what do you think it would take to have our society accept gaming in the same way as alcohol, for example.

Mullally: We always talk about the analogy or the similarities between alcohol and gaming, and many times we get on the defensive. ... We’re in a different time today than where alcohol was in the 1950s and 60s. I think public tolerance and sentiment and the role the media plays in the depiction of gambling is very significant, and it’s unique to the gambling industry, that the alcohol industry never faced...

Many people consume alcohol. It’s very normalized into the social fabric of society. … Gambling similarly needs to be seen as part of entertainment. It needs to be considered very acceptable, that it could be broadly consumed…

Poleschuk: If you use the alcohol example, and you do go back to the 50s, it certainly wasn’t mainstream and it certainly wasn’t in our social fabric. In fact it was somewhat taboo. That has come with evolution and it has come with time. ... When lotteries were introduced in Canada in the mid-70s, there was an uprising... It was just a taboo. So within 20, 25 years it’s become part of the social fabric. So it will take time, it will take hard work, but there will be normalization if we approach this correctly.

Peterson:. …It depends very much on the question when we say: “accept gambling in the same way as alcohol.” …Our surveys and research tell us that like gambling, that there is a significant segment of the population that truly does not support alcohol consumption, alcohol sales… I see a very distinct parallel between alcohol and gambling... If we don’t deal with these issues, we are going to get ourselves in a situation where ... we are going to get a public backlash.

Brown: It’s interesting, typically the discussion around Canadian Gaming Business | 15

...relax, have a drink with friends

and place your bets

WHEN LOTTERIES WERE INTRODUCED IN CANADA IN THE MID-70S, THERE WAS AN UPRISING... IT WAS JUST A TABOO. SO WITHIN 20, 25 YEARS IT’S BECOME PART OF THE SOCIAL FABRIC. –VIC POLESCHUK alcohol today is around responsible use, yet we’re still having the debate over gaming over where it should be prohibited. Somehow along the line -- we and a lot of influential decision makers -- we have not done any service in getting the information out and framing the policy debate in the way that it should be framed. Why is it that there is this hue and cry over prohibition of VLTs as opposed to responsible use of the product?...

Klyne: I think perhaps we do need to look to the alcohol industry and I say that as opposed to the tobacco industry which has denied, denied and denied that there are any health risks associated with their product. … We’ve been able to develop some variables, some predictors that we can predict problem gaming behaviour which would then allow us to interact with some of these guests and provide them with some referrals or some direction to counselors and, more important, education. Ensure that they understand the realities of the game, the house advantage and the like, and direct them for further assistance in that area. I’ll be taking orders afterwards for that software!

… While we have to look at good growth, we do have to put that guest first, in terms of wanting to be thoughtful about how we work that whole revenue opportunity, as opposed to burning it out...

Rutsey: …if there’s one thing tomorrow that you could to do to improve the image of regulated gaming in Canada, what would it be? And following that, what would you consider to be the correct balance between responsibility and growth?

Brown: One thing, I would ask everybody in the room to join the Canadian Gaming Association! … We need a strong, unified, national voice to address some of these issues with a consistent, proactive message and we need to frame the debate in the national sense… It’s not a matter of, even though we operate independently, issues don’t flow across borders. The media doesn’t work that way, and neither does public opinion…

Mullally: ... For us in Nova Scotia and perhaps in other jurisdictions, we’ve got to look at a more dedicated earmarking of revenue and promoting the usage of that revenue so that people know what the benefits are… We need

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Rutsey: The elephants in the room are sports betting and Internet gaming. Head-to-head betting, betting on the outcome of a single sports event other than a horse race, is illegal in Canada, as is Internet gaming, unless it is offered by a Crown agency. The popularity of these forms of gaming is undeniable, though. Sports betting would give border communities and tourist marketing properties a markedly better edge. International Internet gaming is forecast to reach $21.3 billion by 2010, over 40 percent of that from North America. That’s $9 billion just disappearing into the ether, the Canadian share estimated at between $500 million and more than $1 billion annually. First-world jurisdictions like the UK are moving to regulate Internet gaming and issue interactive gaming licenses. …Should Canadian lawmakers recognize the significant take-up of Canadians playing on international Internet betting sites and attempt to regulate it, prohibit it or join Internet gaming operators?

Brown: When it comes to head-to-head betting...

for the most part, the federal government is removed from the kinds of games the provinces can operate. I think there is a strong case to be made for further removing the federal government from that kind of involvement... It would then be up to the provinces to determine whether or not they wished to take advantage of that opportunity…

When it comes to the Internet, I may be at odds with my colleagues, I just don’t think the time is right for those governments to be seen promoting and endorsing casino-style Internet gaming at all. It’s frankly just too politically difficult to get engaged in.

Poleschuk: ... I think it’s going to be incumbent -- it’s going to be one of our greatest challenges within the industry -- to force a public policy issue debate around Internet gambling. The reason being is, if we don’t force a public policy debate now, then de facto there will be no choice five years from now for our shareholders, other than to move to a licensing, regulatory regime of the parties who are in that business, which de facto will put us out of that business five years from now...

Klyne: … To regulate would be very difficult, to prohibit would be practically impossible, so if we can’t beat ’em perhaps we should join ’em…

Mullally: ... At this juncture, at least in Nova Scotia and perhaps in the other jurisdictions, the governments do not yet see Internet gambling as a threat. We articulate it as a threat, we can quote some numbers, but they don’t yet see it as a threat so significant that they need to respond to it... So we have to figure out a way to communicate that information to governments…

Rutsey: I think we’ve pretty well covered the areas that we discussed previously. . . . I want to thank all of our panelists. Listening to what you all have to say, I and I’m sure everyone else in the room is struck by how well served we all are by having you in the positions that you’re all in.

MY ONE WISH IS THAT MEDIA REPORT ON THE GAMING INDUSTRY FROM AN OBJECTIVE POINT OF VIEW. –WINSTON HODGINS

The 2006 Canadian Gaming Summit Personal Reflections

BY FRED FAUST

ALTHOUGH THIS WAS my first year at the Canadian Gaming Summit, I’ve attended more gaming conferences and exhibitions than I care to count. Following are my impressions, totally subjective, of what I saw and heard at the April 25-27 Summit in Vancouver.

My participation in this year’s Summit began with the opening reception on Tuesday evening, April 25. Holding this event on the floor of the exhibit hall was a great way to mix business with pleasure, to chat informally with company representatives. It was also an opportunity to take a measure of the hall, to get a good feel for what exhibitors were showing and to plan the more focused visits that I would be making over the next two days.

Wednesday morning at the first session, host Vic Poleschuk, chief executive of the British Columbia Lottery Corp., gave a concise summary of gaming in his province and how the market is changing.

John Furlong, the leader of Vancouver’s successful bid for the 2010 Olympics, made a rousing presentation about what that event can mean for B.C. and for the country.

That led into the opening plenary, which featured a slide presentation by Lyle Hall and Robert Scarpelli of HLT Advisory in Toronto. In their industry overview, these guys provided some real meat. Their slides contained almost too much data to be digested in one sitting. Fortunately, we didn’t have to get it all then, because the slides are still available in pdf form as a link from the Summit website, http://www.canadiangamingsummit.com/program.htm. The 2006 program is listed at this URL, and links to a few of the week’s presentations are there. I urge everyone associated with our industry to study the HLT slides. Of course you won’t get the benefit of Hall and Scarpelli’s sharp commentary. But even if you’re not a statistics nut, you’ll find fascinating and provocative data on nearly every slide.

Another valuable part of the opening plenary was a presentation by Rob Grein of PMG Consulting in Waterloo, Ont., who discussed some very fresh results of a survey of Canadian attitudes towards gaming. He warned, for example, that survey respondents vastly over-estimated the extent of problem gambling and showed a low awareness of the programs that are available to help problem gamblers.

The Summit had a great line-up of concurrent workshops; 16 were scheduled, one of which had to be cancelled. When I attend a

Photo by Kevin Statham

to focus and profile the entertainment value…

How are we using poker right now, which to me is probably the most normalized form of gambling there is today in the world? How are we leveraging that popularity, that broad consumption, the high public acceptability...?

Peterson: ... One key thing is that not only do we need to be seen to be responsible ...but we actually have to do something. I know we’re not doing enough at this stage of the game. I know that some of the activities that are entered into are more window dressing than anything else. ... we need to do more and better research into what our balance is between growth in gaming and what our responsibility is in this area...

Hodgins: My one wish is that media report on the gaming industry from an objective point of view.

Our media tends to look for issues that they can sensationalize...

The theatre at River Rock was set up in banquet mode for the awards dinner.

gaming conference that has sessions devoted to worthwhile topics, such as this year’s Summit, the biggest problem I have is with the concurrent workshops. They force difficult choices on attendees. I would have happily gone to all of the workshops in Vancouver. But they were scheduled in groups of four, and I made the painful choices.

My first selection was “The Latest from the Slot Floor.”

Mickey Roemer of Bally, Sean Evans of Aristocrat and John Daley of IGT emphasized the importance of ergonomics in encouraging longer periods of play. Roemer advised operators to loosen their payouts to get more play from repeat customers.

And all three panellists talked about how younger players are more interested in table games, or multi-player electronic games that simulate table games, than in slots.

My second selection was “Sports Betting.” Chris Cameron of OLG discussed how casinos in border markets can use sports betting as a competitive edge against U.S. casinos. He said Casino Niagara has the largest sports betting site in Ontario, and gets strong American patronage. (Please see Cameron’s presentation at www.canadiangamingsummit.com/program.htm.) Representatives of Progressive Gaming gave an overview of their interesting new product called Rapid Bet Live, which facilitates in-progress wagering on sports events.

There were concurrent plenaries on Wednesday afternoon. I selected “I-Gaming – Where we are and Where we are Going.” I don’t know the numbers, but this had to be one of the best-attended Canadian Gaming Business | 19

sessions of the week. Attendees were rewarded with a stimulating discussion among prominent experts – lawyers Michael Lipton of Toronto; Tony Coles of London, England; and Lawrence Walters of Orlando, Florida; and Rick Smith, head of the Interactive Gaming Council, which is based in Vancouver. The good news is that all four presentations are available via links from the Summit website, and well worth the reading.

Of course one of Wednesday’s highlights, for me, was not listed in the program. This was the reception to announce the launch of Canadian Gaming Business. Attendance was higher than I expected, and the people who came seemed genuinely enthusiastic about our new magazine.

The workshops that I enjoyed the most both occurred Thursday morning. The first was “Internet Lotteries.” As moderator Lyle Hall noted, this a fascinating combination in itself: rapidly growing, technology-driven gambling on the Internet and one of the oldest forms of gambling, lotteries, which are declining in popularity. Maurice Richard of the Atlantic Lottery Corp., one of two lotteries in Canada that offer online games, made a point that had never occurred to me, although it should have. He said that self-service gasoline hurts lottery sales, because when customers pay at the pump rather than inside, they’re not tempted by an impulse purchase of lottery tickets. Online sales are another way to reach players, Richard said.

Hospitality

Nathalie Rajotte of Ingenio, the R&D arm of Loto-Québec, gave a thought-provoking presentation. “We’re very shy about the Internet,” she said, noting that Quebec has the lowest rate of acceptance among the provinces for Internet gambling. Yet that doesn’t stop Ingenio from using the Internet as a platform for R&D, and from experimenting with combinations of Internet and real-world activity. “The Internet is the most challenging phenomenon for our industry,” Rajotte said, “either as a threat or opportunity, or both.”

The other session on Thursday that I found rewarding was “Star Power Marketing.” A superb panel discussed the value of live entertainment at gaming properties. This workshop helped inspire and inform our feature in this issue on live entertainment at casinos (see “Live! From Your Local Casino!” which starts on page 22).

“Lottery and Gaming CEO ‘Town Hall’,” the final plenary, was a unique and very well-attended opportunity to hear most of the country’s top provincial officials discuss the industry’s issues and challenges (see highlights of that session, beginning on page 14).

The Summit wrapped up with cocktails and an awards dinner at River Rock. This was the occasion for Great Canadian Gaming to show off its flagship property – and its spectacular theatre -- to its colleagues in the industry.

Leisure

Tourism

Lyle Hall and Robert Scarpelli have been providing consulting and advisory services to the Canadian and International hospitality, leisure and tourism industries for over 15 years.

Areas of specialization: Gaming Lodging Attractions

20 | July 2006

Travel and Tourism Public Assembly Venues Recreation and Sports

HLT Advisory Inc. 384 Adelaide St. W. Suite 200 Toronto, ON M5V 1R7 (416) 924-7737 www.hlta.ca Please contact us: lylehall@hlta.ca robertscarpelli@hlta.ca

Live!

From Your Local Casino!

Canadian casinos find that live entertainment works. It attracts new visitors, builds the brand, and even governments like it.

BY ANAKANA SCHOFIELD

Entertainment Centre at Casino Rama

22 | July 2006

CANADIAN CONSUMERS NOW EXPECT an array of different activities to of certain shows. Therefore, his casino carefully selects the acts based on occur around the central ritual of a casino visit. While certain American the demographic profile of their clientele. models stretch that idea to include shopping malls and apartments -- with Deciding which acts to book the likes of Foxwoods in Connecticut resembling self-contained villages, “I know which artists will help table play, and which will complete with beguiling landscape outside the window help slot play,” Gregson told a session of the Canadian -- Canadian casinos are increasingly developing Gaming Summit in April. Asked for examples, and enhancing consumer potential beyond the Theatre at River Rock Casino Resort he cited Lionel Richie, Alisha Keys and Tony traditional gaming floor. Live entertainment Bennett for stimulating table play; and is an ever more visible and successful part country and classic rock genres for slot play. of this process.

At the same session, Blank said, “The From the perspective of casino act definitely correlates with the win.” managers, the quarterly results are all A show starring Burton Cummings the evidence they need to conclude that brought the highest slot drop in the live entertainment works. Traditional history of River Rock, he added. slot and table game players may However successful a certain act appreciate the opportunity for quality or category may prove, experts advise live entertainment experiences, while diversity. Shaw Saltzberg, senior vice new customers get an introduction president of S.I. Feldman and Associates to the casino atmosphere, in Vancouver and Toronto, said, “Booking with the likelihood of an artists from many genres allows the casino to impromptu visit to the reach a wide variety of customers who may not gaming floor. There’s also visit the facility on a regular basis.” a positive impact on food and For Blank, the quality of the overall experience -- for beverage sales and, for properties with participants on both sides of the curtain -- is the key to success. hotels, an increase in occupancy rates.

“We are now known for hosting outstanding entertainment” at River Live entertainment “creates an economic impact, personality for the property, an Rock, he said. “When an artist comes, they are only as good as the unofficial endorsement, prospecting and technicians that we put out there as well. It took us over half a year to hire PR media exposure,” said Larry Gregson, the proper people to fill the proper roles.”

River Rock certainly has an adventurous appetite for the types of vice president of marketing at Casino Rama, near Orillia, which is just north of Toronto. “It acts it hosts. Partly this is due to the flexible seating arrangement of its promotes the image brand, drives incremental venue, which can rapidly be transformed from theatre to cabaret to flat traffic and increases visitation, is used as a reward for floor. Blank listed successful examples, ranging from a Chinese cultural good customers and as a marketing tool because there event to Burton Cummings to a recent performance by Steven is always something going on.”

Casino Rama, which opened in July 1996, didn’t offer Segal. (Yes, Segal sings entertainment until the following year and finally embraced the the blues as well as Cabaret du Casino de Montréal obvious demand by opening an entertainment centre in July 2001. With flexing his biceps 5,200 seats (and the equipment for live television coverage), this is by far in Hollywood blockbusters.) the country’s largest casino entertainment venue.

“We think Howard Blank, vice president of media and entertainment at the Great Canadian Gaming Corp, was less expansive than Gregson on the role outside the of live entertainment: “I don’t know that it’s important for the casino box,” Blank industry, but it’s important for our corporation. We believe in the entire b o a s t e d , citing unique entertainment package.”

Great Canadian’s biggest entertainment venue is the theatre at the s c h e d u l e d company’s River Rock Casino Resort in suburban Vancouver. The $10 events such as an million room, which opened in September 2005, seats 1,000 in theatre appearance by the cast of the Young configuration.

Of course a key factor in getting “something going on” is the choice of and the Restless an act to grab the interest of the consumer. Gregson said Casino Rama and the hosting of the has, based on years of experience, compiled historical data on the impact Gemini awards in the fall.

Canadian Gaming Business | 23

The casinos contacted for this story, while remaining tight-lipped about actual figures, reported high rates of satisfaction with their experiences in live entertainment, with multiple sell-outs. Although the River Rock theatre is less than a year old, the casino claims to sell out 98 per cent of all its shows. Casino Rama, Niagara Fallsview and Deerfoot likewise note high success rates.

The Chrome is the showroom at the Deerfoot Inn and Casino in Calgary

Casino resorts have an advantage over traditional promoters in what they can offer the artists, because they do not rely solely on ticket sales for their revenue. That means they can afford the high fees that certain “wow factor” artists demand. From an audience perspective, casinos offer a more intimate experience with a musical artist, who in a stadium venue remains a wiggling dot in the distance.

Satisfaction with the results Casinos of Winnipeg entertainment coordinator Kelly Berehulka described the success his company has found by joining with other casinos to offer a complete tour that appeals to marquee acts far more than a singlecity engagement.

“The live entertainment world is very small, and building relationships with promoters, venues, artists and agents in tying together multiple dates at casinos across Western Canada, as well as northern U.S. casinos, has been very beneficial to our programming,” Berehulka said.

Jag Nijjar, operations manager of Gateway Casinos, said his company’s Cascades Casino in Langley, B.C., has had great success with live entertainment. “It invites additional patrons who may not normally visit,” he said, driving business for all areas of the casino. The casino advertises the events in local media, which generates more awareness for the property itself, he added.

At Deerfoot Inn and Casino in Calgary, entertainment manager Allan Dedrick agreed that live entertainment “brings in a lot of people who maybe have never been to a casino or who aren’t aware of our facility.”

Classic rock groups are the most successful at The Chrome, Deerfoot’s showroom, he said.

“We’re bringing in a lot of bands that normally aren’t coming to Calgary because there just isn’t the right venue.”

24 | July 2006

If there was once a stigma for artists playing casinos, it has dissolved. In fact playing a casino can be a tactical advantage for an act whose star value may have slipped; the casino circuit may bring a resurgence in popularity. Sometimes the raging success of a particular act surprises even the casino. Recently the 1980s band Air Supply played River Rock, prompting a huge response from Asian clientele and generating a sell-out. Unbeknownst to many Canadians, Air Supply is still going strong in Hong Kong, and is a staple at karaoke bars.

The view from a performers’ representative How do casino venues look from the viewpoint of someone who represents the talent?

Saltzberg, of S.I. Feldman and Associates, said there are positives and negatives in comparing casinos to more traditional venues for live music. On the plus side, he said, casinos are well-funded and pay reasonable fees to the performers, they usually have good technical equipment, they provide quality accommodations, and there are no surprises.

One negative is that “casinos place little value

on artist development, with low risk tolerance and no second chances,” he said.

Other challenges that Saltzberg sometimes finds with casino venues are inexperienced personnel, “cookie-cutter” marketing that is not tailored to the performer’s audience, and frequent internal staff changes. Casinos need experienced and networked talent buyers on staff, or hired as consultants, he said.

“There are many artists today who now specialize in casino venues,” Saltzberg said.

“These artists are increasingly in demand and their fees have jumped significantly in the last few years.” It’s difficult to generalize about fees, he said, but “they range from $5,000 to $100,000 per night, depending on venue size, ticket price and the casino’s will to provide customers with a ‘wow’ experience.”

He added that hosting live entertainment is a “branding exercise” that helps to position the casino as a cultural asset of the community, something that “gives back” to the people who support it.

The British Columbia Lottery Corp. does not require that the province’s 18 casinos offer live entertainment; many are in small communities that couldn’t support a theatre. But like the lottery and gaming corporations in most provinces, BCLC strongly encourages live entertainment. The government wants to show that casinos are more than slot houses, that gaming is fun and that the entertainment experience is the key. With the hosting of the 2010 Winter Olympics and with a view to encouraging BC as a destination, casinos are becoming an ever more significant provincial tourism asset.

“Casinos are truly all-around entertainment destinations,” explained Holly Spence, director of casino marketing at BCLC. “We want to showcase the beautiful casino properties that we have in BC. We can compete with Vegas properties.

We do know that people travel to gaming destinations, but they won’t come if it’s just a casino, so we need to make sure

those alternatives are there for them. We need to change the perception of what casinos are; we didn’t previously have these properties until now.”

Live casino entertainment does not have a long history in Canada. In fact, the oldest venue listed in the table that accompanies this story only dates to 1996, and some of the theatres just opened last year. But there seems little doubt that live entertainment is beginning to rank second only to food and beverage service as an amenity to the casino itself.

As Saltzberg summarized: “The casino business in Canada has slowly developed over the last 10 years and is now growing at a vastly accelerated pace. We expect the total number of concert seats at casinos in Canada to double in the next three years. Government sees the positive community impact of first-class venues and casinos see the unique marketing advantage of presenting first-class talent.”

Anakana Schofield is a freelance writer based in Vancouver.

Fred Faust contributed information for this story.

Live Entertainment Venues at Canadian Casinos Casino

Location

Date Theatre Opened

Seating*

# of Live Events in 2005

Most Successful Act

by Number of Guests in 2005

Most Successful Act by Dollar Volume in 2005

Casino Rama

Orillia, Ont.

July 2001

5,226

207

“Most are sell-outs”

NA

Niagara Fallsview

Niagara, Ont.

June 2004

1,500

50+

“Numerous sell-outs”

NA

Casino du Lac-Leamy

Gatineau, Que.

Sept. 2001

770-1,100

279

Michael Bublé

Julio Iglesias

River Rock

Richmond, B.C.

Sept. 2005

800-1,000

150

Burton Cummings, Paul Anka

Paul Anka

Casino Regina

Regina, Sask.

Nov. 2001

724

223

Michael Bublé

Michael Bublé

Casino Nova Scotia

Halifax, N.S.

May 2000

580

62

Colin James, Carrot Top, Tribute to the King, Abba Mania, Jimmy Rankin, Bruce Guthro -- all sell-outs

Carrot Top

Casino de Montréal

Montreal, Que.

Sept. 1996

504

500+**

Jean-Pierre Ferland, “From Rock to Opera II” review, Rhythm’n’Blues, Tribute to Joe Dassin, Dion family

NA

Deerfoot Inn and Casino

Calgary, Alta.

Nov. 2005

450-725

NA

NA

NA

Casinos of Winnipeg

Winnipeg, Man.

Aug. 1998

424-502

80

Doc Walker, Brent Butt, George Canyon, Matt Dusk, Paul Revere & the Raiders & many other sell-outs

NA

Cascades Casino

Langley, B.C.

June 2005

420

30

Sass Jordan

Sass Jordan

* When two numbers are given, they reflect different seating configurations. The smaller of the two numbers applies to cabaret seating; the larger number applies to theatre seating. ** Le Cabaret du Casino de Montréal runs numerous matinees.

Source: Casino representatives

CONGRATULATIONS on your new publication

Canadian Gaming Business | 25

Reducing Employee Turnover Canadian Gaming Business asked three experts in management and training to address the following topic: Casinos have a reputation for high rates of turnover among non-management employees. What would you advise casino managers who are trying to reduce turnover and build a more stable workforce?

K.C. Blonski, Director of Travel, Leisure and Retail Markets AchieveGlobal, www.achieveglobal.com Managing the tangible aspects of the casino business, from the number of deals per hour to other operational processes, is easy. The difficult part – and the area most casinos overlook – is managing people.

Unfortunately, churn represents the norm in this business, with many casinos seeing between 40 and 60 percent of their workforces turn over each year.

Yet the metrics for a good casino manager don’t center on people – they involve the amount of play managed, as well as the process and operations of the casino floor. Casinos tend not to focus on the human element once employees are out on the floor; perhaps because people frequently jump from job to job, leading employers to expect that they already have the requisite service skills.

However, if a casino wants to retain its frontline workers and create a workforce that supports its brand, the human element of the customer experience cannot be overlooked.

The greatest opportunity and profitability in the gaming industry belong to those organizations whose managers, supervisors and frontline employees can convert a strong brand message into a successful brand experience for their guests through excellent product knowledge and customer service skills.

26 | July 2006

Ultimately, the success of a casino depends upon the relationship between guests and employees. If you have a dissatisfied employee, how likely is it that the person will provide the right experience for your customers?

So how can a casino engage employees, encourage them to stay and inspire them to deliver the casino’s brand experience consistently? Frontline managers are the key. Studies show that people don’t leave organizations, they leave managers. Ill-prepared supervisors and floor managers can easily erode the motivation of the employees who report to them, and add to self-inflicted voluntary retention losses.

If a casino truly wants to differentiate itself from the competition, it starts with management leading and guiding frontline employees to deliver the results they want – proactively managing and empowering people rather than simply taking a reactive stance.

It’s the manager’s responsibility to balance both the process side of the casino and the human interactions involved with the business. Casino managers must understand the role of employee recognition, motivation and providing feedback (both affirming and constructive) in keeping employees engaged. What’s more, to keep the lines of communication open, casino managers need time to meet and share their experiences and ideas with each other.

With a proactive management approach hinged upon consistent coaching and ongoing support,

casino managers can reduce turnover and build a stable workforce that delivers the ultimate customer experience, at every interaction.

Jocelyn Bérard, Managing Director DDI Canada, www.ddiworld.com How much does it cost to replace employees?

More than any organization can afford. For an organization with 1,000 employees and 100 managers, replacement can total $2.55 million per year. Filling a non-management position costs approximately 30 percent of the employee’s salary, while replacing managers costs even more – from 50 to 100 percent of the salary. Employees leave organizations for many reasons, but two principal causes are the quality of the selection system and the quality of leadership.

SELECTION SYSTEM QUALITY No single selection solution is right for all organizations. Before making changes, organizations must determine their current levels of sophistication and use of best practices.

These practices are linked to the most effective selection systems: Determine the Success Profile Determining exactly the profile of people you need for a job is the foundation that will support and align selection processes and improve the quality of your hiring decisions. The Success Profile should include the competencies and motivations required to be successful in the job.

Competencies should be expressed in terms of behaviours such as “Effectively create a schedule that will allow the working station to be ready on time.” Motivations should be expressed in

A turnover of 20%, 1,000 employees at an average annual salary of $35,000 and a replacement cost of 30% of the annual salary amounts to $2,100,000 per year. For 100 leaders, a turnover of 15%, an average annual salary of $60,000 at a replacement cost equaling 50% of the annual salary will cost $450,000 per year. terms of what the person should like to do in order to be satisfied in the position. It could be something such as: “likes to talk with customers to analyze their needs.” Finally, the Success Profile should include the most important knowledge and experience required.

Canadian Gaming Business | 27

Behaviour-Based Interviews Interviews are useful but risky due to so many biases that can occur during the discussion. To maximize the objectivity, you must do behaviour-based interviews.

Asking candidates to provide specific examples of past behaviors will illustrate their ability to demonstrate required job knowledge, skills and abilities.

Ability Tests and Motivational Inventories Some competencies are more difficult to assess in an interview, such as analytical abilities and the capacity to learn. Validated tests are the proper tools to get at these types of competencies. What about the motivations and predicting engagement?

DDI research has found that engagement readiness -- the willingness to actively commit to one’s work and to invest time, talent and best efforts to accomplish organizational goals -- can be strongly predicted with our Employee Career Battery.

LEADERSHIP QUALITY The quality of the relationship a person has with his or her manager is the top factor driving retention according to studies done by both DDI and third party researchers. Developing leadership and interaction skills for leaders will directly impact turnover and employee engagement. The following solutions are great examples of what an organization can do to develop its leaders: • Individual Assessments -- Using objective measures, such as assessment centers and multi-rater feedback, to diagnose leaders’ individual needs for development.

• Pe r f o r m a n c e M a n a g e m e n t - Implementing a system for creating development plans, setting goals, providing feedback, coaching and progress review.

• Leader Skill Building -- Giving leaders the opportunity to develop specific skill areas that have an impact on employee retention (e.g., feedback, coaching, teamwork, building positive working relationships).

Improving your selection process

28 | July 2006

and developing your leaders will lead to significantly lower turnover. How about saving $2.55 million?

Maria Graham, Director Human Resources -- Gaming Ontario Lottery and Gaming Corporation, www.olgc.ca A certain amount of employee turnover is healthy for any organization. New people can mean new ideas and a fresh perspective. However, turnover that is excessive is costly both from a tangible and intangible perspective. There is no specific feature or program that reduces turnover, but certain measures do assist in employee retention.

Ensuring the right people are in the right jobs is a critical first step. A frontline employee in a customer service role who is not outgoing and sociable is not going to be content in a job that requires such a personality. If resources are spent prior to the employment offer, assessing candidate skill sets in correlation to job requirements, the return on investment is justified. Making hiring decisions via the interview exclusively is a risky business. Augmenting the interview with skill testing, psychometric testing, or testing from a personality or intrinsic trait perspective may not be conclusive, but can help validate that key decision to hire or not to hire.

Training is another essential step. This doesn’t mean just job shadowing. Spending the time and money to properly train an individual before they hit the gaming floor should be an operational prerequisite.

Ensuring that the required knowledge transfer and preparation has occurred and, most important, ensuring the new employee understands the purpose of the role, germinates the necessary abilities. Exit interviews with frontline employees that have been with an organization less than a year often demonstrate that the individual was not trained properly, didn’t understand job expectations and found the whole experience frustrating.

A significant but rarely examined reason for frontline employee turnover

is the impact that supervisors have on an employee’s work life. Numerous studies show that an employee’s immediate boss has significant influence on the employee’s attitude, approach, behaviour a n d e n g a g e m e n t . Pe o p l e w i t h t h e responsibility of managing other people have to know what they are doing. It’s common practice for organizations to consider an individual with impressive credentials, technical abilities and solid profession al kn owledge to b e management material. Some are, but those without proficient leadership skills cost an organization thousands of dollars in employee turnover.

Good managers openly encourage their people, recognize good performance and genuinely respect and value each individual’s contribution to the team. In short, they possess a key skill: the ability to convey to their employees that they’re making a difference. In turn, these employees feel valued and appreciated; they are willing to invest discretionary effort into their daily work and use their initiative. When each employee receives the same encouraging treatment from their supervisor, this makes for a team that is interested in making a difference and making that all important positive impression with the customer. A direct correlation exists between employee satisfaction and customer satisfaction. A Towers Perrin study showed that highly engaged employees believe they have a direct effect on customer satisfaction, evidenced by the high level of service they provide.

Employee retention is something that doesn’t carry a simple, clear-cut solution.

Money spent on wages, benefits and rewards has little impact on retention if the employees don’t cultivate an emotional connection to their work. Employees that make a concerted, consistent effort to perform their job well believe they are part of an organization that values their contribution. A loyalty ensues that is mutually rewarding for both the employer and the employee.

newtechnology Much of what we see on the modern gaming floor represents marvels

perfected over the years to catch any counterfeit bills that could turn up

of technology harnessed to the creative talents of people who can make

among the rivers of cash. Or ensure that every racetrack bet in Canada

those colourful, winking, blinking, tinkling machines almost irresistible,

and countless lottery tickets are processed properly and the winners

and fast as well. Multi-language capabilities are making electronic

get their due. Or redeem slot payouts and frequent-player coupons and

gaming devices more user-friendly, for employees as well as for players.

tickets for cash from kiosks, to save time and labour. These products don’t

Monitoring systems give managers unprecedented amounts of data. Even

generate any prizes of their own, and may be taken for granted by the

traditional table games and sports and race betting are the subjects of

player. But they make sure the trust people put in the honesty of the house

remarkable innovations.

is not breached.

There is also a less glamorous, more business-oriented side to the constant flow of products being developed, renewed and adapted

Following are some of the companies whose services and products

ANDREA BOCELLI, UP CLOSE AND PERSONAL

Fourteen-time Grammy Award winner David Foster and OLG cordially invite you to the David Foster and Friends Charity Gala – a spectacular evening of celebrity entertainment in support of Ontario families with children requiring organ transplants. Andrea Bocelli will headline this exclusive event at the Niagara Fallsview Casino Resort, November 25th, 2006. ..................................................................................................................

keep Canada’s multi-billion dollar gaming industry humming.

specifically for the gaming industry. Devices have been invented and

AC Coin & Slot

Bingo Gaming Technologies

A game just for Canada AC Coin & Slot is introducing a Canadian version of its Bankroll game, which has been one of the company’s biggest sellers since it was released in the U.S. market last year. Like the original, Bankroll Canadian Edition – complete with a maple leaf at the top – features music from the rock ’n’ roll classic “Money (That’s What I Want).” Portions of the song can be heard during game play, especially in the bonus mode.

The five-reel game has a top box that resembles a printing press with Canadian-themed “money.” The innovative bonus round begins when three Bankroll Bonus symbols appear on a played payline. Players are then prompted to press the flashing button, which starts the sheets of “money” rolling. Players can win up to 12,500 credits with a 45-coin max bet on the 9-line program, and up to 50,000 credits with a 180-coin max bet. Of course the game is designed for the low denominations that are so popular with North American players: 1 cent, 2 cents or 5 cents. But the game can be configured for any denomination.

AC Coin & Slot, based in Atlantic City, hopes to have Bankroll Canadian Edition placed soon in casinos in Ontario, Manitoba and British Columbia. This is the second game that the company has customized for Canada. The first was called The Big Game Show Bonus, a three-reeler that is only available in Ontario.

Although the company concentrates on reel spinners, it also sells popular video slots, such as Bewitched Slotto and King of the Grill, both of which are in Ontario casinos.

The company, which distributes IGT games in Atlantic City, specializes in bonus games that are built around IGT paytables. In the case of Bankroll, it’s the Double Diamond paytable.

Proprietary slot games are AC Coin & Slot’s bread and butter, but the company also makes interior signage, ergonomic slot bases and casino seating. Its handiwork can be seen in Casino Windsor and Niagara Fallsview.

Contact: Ben Plavin, product marketing manager, Ben.Plavin@ac-coin.com

BLT (for bingo lottery terminal) The widespread popularity and spread of VLTs and slots in many different locations across Canada, coupled with a growing list of places where it is illegal to smoke, has forced bingo game operators to try different marketing tactics. It was only a matter of time before someone would come up with a bingo lottery terminal designed to renew flagging interest in spending an evening at a bingo hall. Even when it’s not possible to smoke!

And that’s what Jeffrey Paches, president, Bingo Gaming Technologies Inc., Edmonton, is doing. The company has developed an electronic video bingo game, to be released for testing first in western Canada and in First Nations halls later this year, and later sold in the North American market.

“Nearly every bingo hall in North America is under-utilized [attendance is way down],” says Paches. “There is a desperate need for its revival and we will present a product we believe will play a part in that revival across North America.” The bingo industry has to do something to compete with slot machines and VLTs, and get around the ban on smoking, he says.

He calls his device a “bingo slot machine” that is totally interactive. The main difference is that it takes an average of five seconds to play a slot machine. Paches says his game is simple to learn and will take about four minutes to play.

“Players can win large amounts of money, with small wagers [$4], and also help a bingo hall financially,” he says.

They would try for a single line on the screen before and during the games.

The machine may generate more interest, but of course there is nothing it can do about total indoor smoking bans.

Contact: Jeffrey Paches, bingopro@telus.net

30 | July 2006

This exclusive charitable event will benefit The David Foster Foundation. David Foster established The Foundation in 1986 as a means to provide financial and emotional support to families with children in need of life-saving organ transplants.

YOUR PACKAGE INCLUDES: One table of eight for a gourmet dinner.

Eight seats for the incredible concert, featuring Andrea Bocelli with David Foster and a star-studded

line up of friends.

Four luxury hotel rooms on Saturday evening.

Currently there are less than 100 tables available, so early booking is highly recommended. For further event information and sponsorship opportunities, please contact Heller Productions Inc. at 416.483.8333 ext. 228 or by email at kirsten@hellerproductionsinc.com

..................................................................................................................

Visit us at www.olg.ca/davidfosterandfriendsont

..................................................................................................................

newtechnology Biometrica Systems Cutting casino losses There are game cheaters and outright thieves, and both groups steal from casinos. Then there are banned and problem gamblers and others who shouldn’t be allowed inside the front Image from face-recognition database door, certainly not near slots and gaming tables. But there are also high rollers, credit customers, VIPs and others who are more than welcome at casinos. The trick for managers is to make absolutely sure they know who they are and how to deal with them.

That’s where Biometrica Systems Inc. comes in -- most recently with its latest Visual Casino IV technology, part of its latest Surveillance Information Network package, and available since spring to about 140 casino clients in the U.S., several Caribbean islands and in Ontario.

The software is designed for casino surveillance, security, and gaming departments to shrink unnecessary losses caused by roving casino undesirables, people on watch and excluded lists, problem gamblers, and others, as well as reporting, tracking and identifying risk exposure more efficiently and managing all categories of a casino’s private databases.

Jim Pepin, the company’s vice-president, sales and marketing, describes the new version as “a combination of several modules enabling casinos to enrol fast, user-friendly databases which ultimately help them reduce unnecessary losses to undesirables by being able to recognize them. It can also be used to better identify the good guys, to provide them with the right customer service.”

One of the modules is an optional, international face-recognition software database, updated monthly, which stores about 3,500 pictures of casino undesirables.

Pepin noted one mid-sized casino client did an internal case study to determine how much the software application was actually saving and discovered it was about $536,000 a year, over the past five years. Casinos rent the system for less than $12,000 a year.

Biometrica also markets an instant ID Authenticator which detects fake ID, passport or other phoney identification within seconds. Minors have to come back when they’re old enough.

Contact: Jim Pepin, jpepin@biometrica.com

Camacc Systems The biggest pixels The latest surveillance camera technology in place at service stations, banks and stores -- capable of capturing far more detail with the highest mega-pixel-based resolution – is starting to have its first casino installations, here in Canada, where it was developed.

Dennis Law, president, Camacc Systems Inc., Victoria, B.C., says the resolution from its mega-pixel Vigil Gatekeeper software and cameras specifically designed for casinos is on average about four times higher than what a traditional digitized analog camera (a digital camera that can also be used in analog mode) would deliver. Camacc is one of Canada’s largest CCTV and access-control system integrators specializing in small to large-scale installations.

Why do they need all that detail? “The high resolution determines chip values, dollar values and markings on gaming cards, for example. By using mega-pixel technology with substantially higher resolutions we hope to capture far more detail than from traditional analog or digitized analog feeds from cameras,” Law says.

It also allows casino surveillance operators the versatility of viewing images from any one or all three of these technologies for viewing in real time or in playback, depending on the circumstances. Cameras trained on a high-limit gaming table, for example, or on cash counting or handling rooms, all warrant higher definition.

32 | July 2006

Bluberi Gaming Technologies A jewel of a lottery game Loto-Québec has asked the provincial government for permission to create four new gaming centres with VLTs at race tracks, not slots as in the Ontario “racino” model. It has gone as far as the provincial gaming authority seeking, and receiving, bids from three suppliers to provide a sophisticated system to manage the new facilities, says Jean-Pierre Roy, Loto-Québec’s director of information.

One of the bidders is Bluberi Gaming Technologies, which is pitching its Mirador Management System, to handle all the financing, accounting, marketing and other usual corporate functions. Mirador has been in use for the past six years in a few U.S. states and aboriginal casinos, but not yet in Canada.

That’s surprising, given that Bluberi is a Quebec company (Drummondville) and that gaming in the province is booming, even more so in the larger, neighbouring Ontario gaming market. More surprising, even astonishing, is that Bluberi’s Loto Diamond game at the three commercial casinos in Quebec (in Montreal, Gatineau and La Malbaie), has a capacity of 12,500 games per machine per day. That’s 521 games per hour on a 24-hour basis, and in an industry where play can be counted in seconds, that’s an awesome amount of coin-pumping action. Roy acknowledges the games are big money spinners.

Pierre-Paul Côté, Bluberi’s vice-president, communications, explains that the Loto Diamond slot machine accepts bets as small as 20 cents on lottery games, with the potential for the player to change the odds and payouts. There are 35 games in the Bluberi lineup, more than enough to satisfy the gaming appetites of casino-going Quebecers and visitors.

The Bluberi corporate name is a “new flavours” marketing ploy, which Côté says improves the company’s visual identity, its innovative spirit and strategic plan for the future of its game board, machines and systems sales.

The company was formerly known as Labtronix.

Contact: Pierre-Paul Côté, ppcote@bluberi.com “We produce our own digital system with our own team of software developers in our Victoria head office,” says Law. Clients include three Gateway Casinos sites in British Columbia. From the full shot, left, Camacc’s Aztech software can store only the portions that changed, right, to save data Vigil Gatekeeper is also storage space. going into a Paragon casino to be built near Edmonton.

With casinos that rarely if ever close and surveillance cameras turned on all the time, there are huge files of stored images. That’s no problem for Aztech, Camacc’s own in-house algorithm, which processes and saves parts of the picture. Changes often represent only 10 per cent of the main frame, which are reassembled on playback. The total numbers of pixels can be stored in the data base for image authentication, to verify that the image has not been altered.

Contact: Peter Soet, director of marketing, peter@camacc.com

BATTLEFEILD TO PLACE

newtechnology Cummins-Allison Cash “flow” and redemption With the trend in casinos to redeeming barcoded, slot-generated tickets and player point coupons for the cash equivalents, CumminsAllison’s Casino Transaction Kiosk (CTK) -developed by its U.S. parent Cummins-Allison Corp. and ready for its debut in Canada -- was bound to succeed since it was introduced less than three years ago.

It has succeeded at the Trump casinos properties in Atlantic City, N.J. The company is hoping an order from Manitoba Lotteries Corporation will lead to other sales in Canada.

These kiosks are automated, self-service units installed in high-volume areas of casinos.

They improve customer service and reduce waiting times for casino patrons because they function much like the paper version of a PIN card-activated ATM. Harry Patrinos, managing director for Canada, Cummins-Allison Inc., Toronto, says casinos are switching from cash transactions at slots -- making change with casino employees or paying out wins -- to issuing

bar-coded tickets instead. Patrons take these tickets to cashiers for redemption.

“With our kiosks people don’t have to signal for casino employees to make change for them at slot machines, but instead insert a bar-coded ticket into one of our kiosks for the money, which is more private and gets around security issues,” he says.

As a change device, the kiosk quickly and efficiently changes $5 through $100 notes into smaller denominations, and also redeems tickets or player points for cash. For more than 25 years in Canada, the company has specialized in cash processing -- cash token wrappers, currency scanners and counters, shredders, high-speed and compact coin sorters.

“Our machines have the highest capacity of any machines on the market,” claims Patrinos.

“Another advantage for the casinos is that they don’t have to fill them up as often, and customers get their tickets redeemed faster.”

Contact: Harry Patrinos, hpatrinos@ cumminsallison.ca

ESI Integrity Keeping everybody honest ESI Integrity Inc. in Burnaby, B.C., is an aptly named and fascinating enterprise. It’s the leading supplier of real-time auditing, fraud control and risk management systems to pari-mutuel organizations and government lotteries, including the British Columbia Lottery Corp., on every continent. Most recently, ESI is working on software to uncover money laundering in the gaming industry. The software is in the final stages of development and planned for release this fall.

“We provide software to maintain the integrity, trust-monitoring solutions for the gaming industry,” explains Alan Ahac, ESI’s vice- president. “Our centrepiece product is an integrity continuous-monitoring system, which independently checks to make sure all the rules are observed. It audits the processes, the payouts and all the related transactions to ensure high levels of consumer assurance.”

More specifically, the software monitors gaming transactions to check whether they observe legal, regulatory and business rules. The numbers of wagers that can be involved run into the billions every year. The software, for example, independently monitors, and in real time, every bet at every racetrack and off-track betting parlour across the country on behalf of the federal government’s Canadian Pari-Mutuel Agency in Ottawa, to catch any fraud. That implicitly supports the horse racing industry.

ESI Integrity’s software also monitors every lottery ticket transaction on behalf of the British Columbia Lottery Corp. Each transaction is monitored to make sure it’s a legitimate wager, that the amounts are correct and the right amount of cash has been paid, and that the ticket hasn’t already been cashed. Total lottery ticket sales are audited as well.

This software is clearly nothing that is done hurriedly on a programmer’s computer. “Our software has been introduced progressively over the past five years in a staged deployment,” Ahac says. “New features and capabilities are added continuously.”

Contact: Alan Ahac, aahac@esiintegrity.com 34 | July 2006

IGT Canada

Konami Gaming

MEI

When tiles go wild There is no limit to the ingenuity of imaginative casino game designers and their technical colleagues. International Game Technology (IGT), for example, released a game during the spring that is neither a slot nor does it require any skill, called Gems Wild-Tiles.

IGT designs, develops, manufactures, distributes and sells computerized gaming machines and systems products internationally.

Gems Wild-Tiles most resembles a puzzle, with its own coin-activated random movements of tiles shaped as diamonds, rubies, emeralds and other gems, which are wagered as “credits” in one to 15 tiles. Three of the same minerals falling into place in a row constitutes a winning combination, at which point they disappear.

The object is to clear the board, play the bonus rounds and then a pick and win feature.

Ryan Griffin, product manager for standard products at IGT’s corporate headquarters in Reno, Nevada, says the Gems Wild-Tiles is unique in the gaming world. “It was the number one game for customers during the first 18 weeks of testing in Nevada, with very strong coin-in levels and earnings per unit,” he says.

Griffin, who handles the North American market, says the game was approved for use in Canada in May in three western provinces and in Nova Scotia, where players have the choice of an earlier version with a 17-inch monitor mounted on IGT’s familiar Game King series with enhanced sound and video quality, or the latest Wild-Tiles dual LCD version.

It can be set up for pennies, which are bet as credits.

Griffin says the game’s greatest success is in fact in low-denomination coins; the top award is $250,000.

Players, including ones who have discovered Gems Wild-Tiles in Canada, and who would like to play a lottery game version, may not have to wait too long.

Griffin says that’s often the next step in the life of popular IGT games.

Contact: Ryan Griffin, Ryan.Griffin@igt.com

Viewing real-time, multi-lingual data What makes the Konami Casino Management System (KCMS) unique is its True-Time approach to handling and processing information, allowing casino operators to view data in real-time.

Catching counterfeit money Counterfeit money can feel and look so convincingly genuine that only a detection device even more sophisticated can intercept it. That sums up the MEI Cashflow SC8300 series Banknote Acceptor, currently in trials with Manitoba Lotteries Corporation and under consideration by Ontario Lottery and Gaming Corp.

Catching phoney bills before they get into circulation in a casino is obviously the first priority. But the speed with which bills can be released back to casino patrons so they don’t lose time at gaming is also important, says Phil Wesel, MEI’s global gaming marketing manager at its West Chester, Pa., head office. MEI systems sold more than 3.5 million bill acceptors in 2004 in a variety of different retail environments.

Cashflow SC8300 is a completely optical product, with light bars that mix six wave lengths shining across the bill path and lenses which can spot any discrepancies, including in paper and inks.

Wesel says the MEI acceptor is a few seconds faster at bill detection than a competitor’s, which can make a significant MEI’s SC Series Banknote Acceptor difference. “Some casino patrons will play as many as 1,000 games an hour on a slot machine, or 3.6 seconds per spin.

The average is closer to 6 to 8 seconds per spin, and our banknote acceptor is a second faster than the competition’s, so over two hours a patron can pick up eight or nine seconds and get back to the game,” he adds.

At blackjack tables, Wesel says, “if you put money through faster, establish credit and get to the play as rapidly as possible, there is also an economic gain for the casino.”

There was only one time when a casino client thought the MEI detector had failed, he recalls, but it turned out the scrutinized bill had been left in a pants pocket and washed. The bill was rejected, not because it was counterfeit, but because it was bleached!

Contact: Phil Wesel, phil.wesel@effem.com

It also gives players the capability of streaming video directly to their LCD screens. Konami has added new capabilities to its True-Time Entertainment Panel to broaden and capitalize on these features, such as allowing casino operators to offer both patrons and employees the added benefit of viewing all information on the LCD screen in the language of their choice.

Operators can use the True-Time Entertainment Panel to provide patrons with access to real-time services, such as paging a casino host. There is also a feature that enables players to transfer funds electronically -- such as electronic point redemption or cash through KCMS’ True-Time Advanced Incentives. All True-Time patron interface text can be displayed in the patron’s preferred language. Information such as preferred language is stored on the player’s card, so the system knows which language to use as soon as the card is inserted.

Much like the patron interface, the True-Time employee interface enables floor personnel to perform and monitor such slot machine operational functions as acknowledging jackpots, fills, monitoring soft meters and other important tasks. In the same manner as the patron interface, floor employee interface text can be displayed in the employee’s stored preferred language, because the employee’s card contains that preference.

All of these features are powered by the KCMS Network Access Mother Board, which is TCP/IP PC-based hardware installed in the slot machine. The True-Time Entertainment patron and employee interfaces can be customized and controlled by the casino operator, allowing management to better serve and entertain their patrons. KCMS is flexible, scalable, and powerful enough to efficiently manage the slot floor, while collecting data that leads to successful business decisions.

Contact: Leah Steinhardt, technical marketer, lsteinhardt@kgisystems.com

Canadian Gaming Business | 35

newtechnology

Scientific Games Racing

Rapid Bet Live at a sports book

Progressive Gaming International Real-time sports wagering Placing wagers on various live-action sports events, in real time and play-by-play, with 30 to 50 betting possibilities, sounds improbable.

But it has arrived.

Progressive Gaming International Corp. unveiled its Rapid Bet Live, a real-time sports book betting module used with PrimeLine in Nevada (where else?) in early May. Ordinarily, bets are placed before games start or possibly at halftime, but not during play.

Jeff Harms, race and sports product manager for the Las Vegasbased company, says that for example “wagers on a baseball game can be placed on which team will have the most hits. Anything and everything while a game goes on, instead of waiting two or three hours to see who won.”

He says the company is considering expansion to other states and Canadian provinces where it would be allowed under gaming codes.

Rapid Bet Live not only satisfies sports fans’ urges to bet on more than the outcome of a game, but also generates greater income for the sports book. It can be deployed where a single oddsmaker is working a network for a corporation with more than one casino.

Dino Ossello, a consultant to Progressive Gaming and an experienced professional oddsmaker who is training casino sports book staff on the product, says “the first installation at the Palms Casino in Las Vegas is bringing incremental revenue opportunities to the casino’s sports book unlike anything they’ve had before.

“Rapid Bet Live is not automated. We require an oddsmaker between every bet to handle transactions and adjustments; this allows the operator to manage how much hold and the risk that they will take on any given bet,” he says. “The module basically gives the oddsmaker 60 to 100 more betting options throughout a sporting event and allows fans and bettors to ‘stay in the game’ even when there is a blow-out or they’ve already lost their bet on the game’s outcome.”

Contact: Jeff Harms, Jeff.Harms@pgicorp.net

36 | July 2006

On the money Bettors at race tracks usually don’t place their bets until a few minutes before post time, while they ponder their chances and watch the changing odds.

Once they make a decision, they don’t want their wa gers to be BetJet delayed for even seconds by slow and inefficient terminals.

In mid-June, Scientific Games Racing (SGR) launched beta testing of its new, easy-to-use BetJet terminal series at two U.S. racetracks (before it comes to Canada). These devices feed bets into a pari-mutuel system, as fast, efficiently and reliably as possible.

They handle teller operation or bettor cash and ticket usage or full account self-service wagering.

Jennifer Conning, SGR’s vice-president marketing, says a core module serves the terminals with different applications and configurations. Its main technical pillar is the “BetJet Flip,” which allows a bettor to switch swiftly between teller and self-service machine functions. “The components also allow for a strictly account wagering-based terminal which doesn’t accept paper or cash, or issue tickets, but is used with account cards, and possibly bar codes,” she says.

The key graphical user interface, which will aid in the more efficient placing of bets, surfaces on full-colour 15-inch touch screens, ensuring consistency from terminal to terminal. Moreover, the graphics and colour can be easily changed without any software changes.

“We worked with NCR Corporation, a leader in self-service retail application, backed by intensive research, to give track [and offtrack betting parlour] operators everything they wanted in terms of tracking information, speed and ease of use,” she added. As well as meet the demands of high-volume transactions.

Some casino race books, and legal casino sports books, could deploy BetJet, she says. There is also a platform that would add certain self-service lotteries to its applications. With SGR’s experience in self-service wagering, it could be deployed for other PC-based devices as well.

Contact: Jennifer Conning, jennifer.conning@scientificgames.com

newtechnology Spielo The next generation, now WinWave, the latest high-performance (and ergonomically-friendly) video lottery terminal from Spielo, is ahead of its time and ready for such future developments as advanced game design and enhanced player tracking. It is designed with both lotteries and players’ entertainment and operators’ revenues in mind.

A second, customizable LCD screen displays game instruction, advertising or responsible gaming messages. The footprint is smaller and the fully modular terminal also easily serviced.

These new concept games can offer a more entertaining playing experience than traditional games, depending on one’s inclination. They would also present a sensible option if and when the time comes to replace existing terminals with something more novel and entertaining. WinWave terminals are not only sleek-looking, simple to

use and technologically advanced, but incorporate an extended hand rest, a recessed screen, a foot-rest and cup-holder, for greater comfort during extended play.

WinWave is a known quantity. There is no uncertainty, no suspense about how it will deliver. It has been widely accepted by players in market testing at bars and restaurants. Anyone familiar with Spielo VLTs can expect the same full-bodied features, sleek good looks and enhancements designed to attract attention.

Spielo has a similar product designed for casinos and racinos, to add to the slot floor. Called Aura, it has a powerful platform for Spielo’s library of fullyanimated games played on high-resolution, 18-inch flat-screen monitors with 16-bit digital stereo sound, and second-screen bonus capability. New software and games can be downloaded through a secure data link.

Spielo is a GTECH company, which over the past 25 years has done ground-breaking transaction processing and enterprise-wide systems integration in the online lottery business. It is also a full-service technology partner supporting the needs of all of the systems and online lottery operators worldwide.

Contact: Carol Holmes, director of marketing, Carol.holmes@gtech.com

Lottery and Gaming Corporation Highlights The following summaries of news and activities were submitted by the provincial lottery and gaming corporations. (Loto-Québec was not able to meet the deadline for this issue of Canadian Gaming Business. Its highlights will appear in the next issue.)

WinWave

TCS John Huxley A friendly high-tech roulette game You don’t have to sit at a roulette wheel with strangers in a casino, if that’s your game. Playing roulette on a touch screen table in a bar, in real time, but remotely, with up to four friends, is an alternative.

It’s coming to Canada by way of London, England, where the game was developed by TCS John Huxley.

Brad Broderick, the company’s general manager in Canada, describes the company’s new TouchTable Roulette game as “an easy-to-use, real-time, multiplayer, table-top casino product.” Linked to a live roulette wheel, the game uses plasma touch-screen technology mounted horizontally. The player interface replicates a roulette layout allowing up to four players to place bets as if they were putting chips on the table. Actual, real-time video, with a robust Linuxbased graphics and game engine, displays the roulette wheel on the screen as the ball drops into the winning pocket.

While TouchTable Roulette was developed primarily for the casino market, Broderick says “it is well placed to increase revenues by introducing social gaming to traditionally non-gaming areas of a casino. In recent field trials the shared playing experience and camaraderie that this product encourages has helped to attract a whole new demographic to the gaming floor.” The game’s styling and drink-proof playing surface is also well suited to bar and lounge environments, where it has to be sturdy and damage-resistant.

A U.K. operator tried TouchTable in its main bar area, where there was no gaming taking place. The game, Broderick says, “significantly drove incremental revenues and they are already planning to increase the number of units they have.”

More generally, the system has produced “impressive” revenues in trials and is popular with high-stakes players as well. TouchTable Roulette is being tested for compliance with British Columbia Lottery Corp. and Loto-Québec rules. Live beta testing is expected to be under way within a few months.

Tracy Cohen, global marketing director, Tracy.cohen@tcsjohnhuxley.com 38 | July 2006

British Columbia Lottery Corp.

Lottery Highlights • In May, BCLC extended its service hours for lottery sales and validations www.bclc.com/app/AboutBCLC/InformationBulletins. asp?NewsID=327.

• In February, BCLC and the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games announced their partnership with the unveiling of SportsFunder, a suite of lottery games that will produce an estimated $20 million for amateur sports in B.C. www.bclc.com/app/AboutBCLC/newsReleases.asp?NewsID=275.

Casino Highlights • On June 14, St. Eugene Mission Resort Limited Partnership (SEM) hosted a grand re-launch ceremony at Casino of the Rockies in Cranbrook. The celebration marked the April 1 transition in responsibility for casino operations from Lake City Casinos Inc. to the First Nations partnership. The SEM partnership comprises three First Nations: Ktunaxa Nation of Cranbrook, the Samson Cree Nation of Hobbema, Alberta, and the Rama Mnjikaning First Nation of Rama, Ontario.

• On June 8, BCLC announced that it is a presenting sponsor for the 2006 David Foster Star Search and the David Foster & Friends Charity Gala, with proceeds raised benefiting families with children in need of major organ transplants www.bclc.com/cm/casino/home.htm.

• On May 2, BCLC announced that all casino facilities in the province are now able to pay lottery prizes up to $9,999.98.

• In February, BCLC partnered with Cascades Casino to present Canada’s first ever Women’s Poker Classic. This three-day tournament attracted 500 players with a prize pool of $112,000 www.bclc.com/app/ DidYouWin/Winners/Home.asp?NewsID=285.

Bingo Highlights • In February, Campbell River Bingo Palace became a temporary community gaming centre with the addition of 55 slot machines.

Construction of a permanent community gaming centre is planned for fiscal 2006/07 www.bclc.com/app/AboutBCLC/InformationBulletins. asp?NewsID=276. eBusiness Highlights • PlayNow is part of BCLC’s secure website and offers interactive games, Keno, Lotto 6/49, Lotto Super 7, BC/49, Extra and Sports Action.

• In February 2006, BCLC launched its first-ever loyalty incentive on PlayNow where players earn PromoCash for playing. This loyalty program was the first time the Corporation had ever offered this type of reward to players for lottery products. PromoCash can only be used for purchases on PlayNow. Responsible Gambling Highlights • BCLC is a partner in the B.C. Partnership for Responsible Gambling, a strategic alliance that also involves the B.C. government, gaming service providers and local governments www.bcresponsiblegambling.ca/.

• The Corporation recognized the need for gaming industry employees to be trained to respond appropriately should they encounter a customer in distress and Appropriate Response Training (ART) was developed.

Since April, over 100 bingo gaming employees have received ART training and almost 3,000 casino gaming employees have participated in the program.

• In November 2005, Responsible Play Information Centres were introduced at two of B.C.’s largest casinos – River Rock Casino Resort in Richmond and Edgewater Casino in Vancouver. http://www.bclc. com/app/AboutBCLC/InformationBulletins.asp?NewsID=246.

Canadian Gaming Business | 39

Alberta Gaming and Liquor Commission This spring, AGLC -- in partnership with the Alberta Alcohol and Drug Abuse Commission (AADAC) -- launched a new responsible gambling pilot project. The two-year project features a Responsible Gambling Information Centre at the Palace Casino in Edmonton and the Deerfoot Inn and Casino in Calgary.

The goal of the pilot is to establish the centre and then test the effectiveness of on-site support and information for gamblers in casinos.

The centres provide patrons with information about the financial cost of play, house advantage and the Voluntary Self-Exclusion Program. They also serve as an entry point for patrons to receive AADAC support and services. The centres are open Tuesday to Saturday from noon to 8 p.m. and are staffed by an AADAC counsellor. The casino operators – Gateway Casinos at the Palace and Power Gaming at the Deerfoot -- have been very supportive of this project and the need to raise awareness about responsible gambling.

The pilot project will be completed in March 2008. Two evaluations will be conducted; one at the mid-point with any necessary enhancements or program changes implemented at that time, and a second evaluation upon completion.

The Alberta government is a strong supporter of problem gambling treatment and research. AADAC’s education, prevention and treatment programs for gambling as well as alcohol, tobacco and other drugs receive funding from the Alberta Lottery Fund through Alberta Health and Wellness. This year, $83 million from the Alberta Lottery Fund will be directed to AADAC’s budget.

For more information about Alberta’s Responsible Gambling Information Centres or other social responsibility initiatives, visit AGLC’s website at www.aglc.gov.ab.ca.

Saskatchewan Gaming Corp.

SGC’s goal is to provide quality casino entertainment in a safe environment of fun, excitement, and customer care. To reach this goal, the country’ssecondResponsible Gaming Information Centre (RGIC) was established on the Casino Regina gaming floor, and is celebrating its first anniversary this July.

The centre is staffed by a full-time Responsible Gaming Resource Person, who provides the casino’s guests with information on how games work. randomness, house advantage and the costs of different kinds of gaming.

The centre’s primary service is to provide education and resources to guests. There is a comfortable lounge area with leather seating, coffee, a plasma-screen TV that displays responsible gaming messages and a Gambling IQ quiz, and a variety of responsible gaming brochures and information on other entertainment options within the casino and throughout the community.

While the RGIC is not a counselling centre, it can provide help to people concerned about their own or someone else’s gambling habits.

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The Responsible Gaming Resource Person can help players explore a variety of options, such as setting time limits and truly understanding the nature of gambling, and may refer people to the Regional Health Authority’s trained problem gambling counsellors.

To further SGC’s goal of guest safety, we have developed iCare, a system of state-of-the-art computer software and comprehensive staff training. This is a unique creation that helps casinos integrate responsible gaming into day-to-day operations. iCare -- a joint venture of SGC and iView Systems -- builds on current gaming practices, such as teaching staff to identify signs of high-risk behaviour and providing players with information about the games they play. It is a tool to help casinos meet their legal and regulatory obligations to provide responsible gaming information to customers, and to protect their guests.

The training component incorporates responsible gaming as part of good customer service, making customer safety the first priority, and provides staff with the confidence to be able to identify and assist players who are exhibiting high-risk behaviours.

The iCare software uses information already gathered through casino management programs as part of the players club to monitor patterns of play, alerting trained staff to potential high-risk behaviour. Staff are then able to engage in dialogue with identified players. iCare research has shown that high-risk behaviour occurs over the long term, not days or weeks. The program enables casino staff to talk to players in a planned fashion over the long term, so that they are able to enjoy gaming in moderation for as long as they choose.

The combination of an on-site information centre, technology and training makes SGC a leader in responsible gaming practices, and we will continue to develop these to further enhance our guests’ experiences.

For more information, visit www.casinoregina.com or www. casinomoosejaw.com.

Manitoba Lotteries Corp.

MLC is responsible for the management and operation of the Casinos of Winnipeg -- Club Regent and McPhillips Street Station, the video lottery terminal network, and the sales and distribution of lottery products, bingo paper and break-open tickets.

Our Customers Staying on top of technological advances and consumer demand for new and different products and services, MLC has replaced its older slot machines with a 100 per cent ticket in/ticket out operation, and has implemented a new club card at the Casinos of Winnipeg. These improvements have enabled MLC to offer customers new products and games, enhanced promotions, and greater customer service.

To assist with this initiative, MLC is excited to welcome Carol Thorn to our team as Director, Casino Customer Service and Promotions. Joining us from Nova Scotia, Carol has 30 years’ experience in the hospitality and service sectors, having worked throughout the Maritimes and in the United States.

To further enhance McPhillips Street Station Casino, MLC is reviewing proposals for the development of a linked hotel. A private operator will develop, own and run the hotel, creating a new tourist destination and employment for local hotel and construction industries.

Our Employees MLC employees are extremely engaged in the community. Together they have created an employee-driven charitable giving program called ECHO (Employees Care by Helping Others), as a way to unite coworkers by raising funds for causes that are important to them. ECHO is a first-of-its-kind program for Manitoba Lotteries, conceived, developed and administered entirely by employees on a voluntary basis.

MLC will help ECHO achieve its goal by making matching monetary donations for each hour that employees volunteer in the community and at corporately sponsored events.

Our Community Responsible gaming programs remain a priority. Bev Mehmel, MLC’s Director of Responsible Gaming Programs and Research, along with Gerry Kolesar from the Addictions Foundation of Manitoba, recently addressed the topic of “Responsible Gaming Information Centres: Making Casino Player Information Accessible” at the 13th International Conference on Gambling and Risk Taking at Harrah’s Lake Tahoe in Stateline, Nevada, in May. Manitoba Lotteries’ winning ways continue to be recognized outside of the Corporation. The Government Finance Officers Association (GFOA) of the United States and Canada recently awarded MLC the GFOA Award of Excellence for integrating Sustainable Development into business decisions. Since January, MLC also reached the silver-level status of achievement in the Progressive Aboriginal Relations program and for the second year in a row, was awarded the GFOA Distinguished Budget Presentation Award.

OLG After several years of rapid expansion to introduce 17 slot machine facilities at horseracing tracks and five charity casinos, plus launching the massive $1 billion Niagara Fallsview Casino Resort, and continuing to grow its lottery business, OLG now faces a maturing market and increasing public scrutiny regarding responsible gaming practices. OLG’s response is a commitment to be a world-leading gaming operator while focusing on efficiency and effectiveness, and all under the guidance of its three core values of integrity, respect and accountability.

As gaming revenues grew through the expansion years, so too did attention to problem gambling. Two months after receiving government direction to not open new gaming sites and instead focus on maximizing returns from existing properties along with a stronger mandate for social responsibility, OLG launched our Responsible Gaming Code of Conduct in March, 2005.

In accordance with the Code, OLG signed memoranda of understanding with four leading gambling research and treatment organizations, opened two pilot-project Responsible Gaming Information Centres (Niagara Fallsview and Casino Windsor), launched three waves of gaming awareness advertising, and trained thousands of staff on responsible gaming practices. OLG also became the first Canadian lottery operator to broadcast child-safety Amber Alerts through its lottery terminal network and customer displays.

Gaming revenue initiatives included announcement of a $400 million redevelopment of Casino Windsor that invests heavily on

accommodations and amenities instead of more slots and tables, and a $12 million redesign and repositioning of Casino Niagara to make it a better complement to Fallsview.

An electronic bingo pilot project designed to revitalize charity gaming is currently underway at four sites and results so far are encouraging.

They have met and in some cases exceeded expectations. The Bingo Revitalization Pilot includes the introduction of e-bingo technology and upgraded facilities. The new model puts in place a destination entertainment approach which introduces renovated facilities, competitive customer care and a technology-based evolution of bingo play.

On the lottery side, in March, Ontario introduced Quest for Gold, a premium instant game with funds designated for amateur athletics. The new regional annuity-based weekly draw game Payday and the new daily Pick 4 games were launched in June 2005 and February 2006 respectively.

While continuing to develop new game concepts and enhancements to existing games, OLG also selected Rogers Communications to build a new digital network to take full advantage of the new generation of EX-M terminals to offer retailers new and improved services.

In June, OLG unveiled a new prize office at a street-level, high-traffic location in Toronto.

Atlantic Lottery Corp.

Here’s what’s new at Atlantic Lottery as this issue goes to press: • Michelle Carinci, President and CEO of the Atlantic Lottery Corporation (ALC), was inducted in to the Lottery Industry Hall of Fame at the 2006 International Lottery & Gaming Expo on July 11. Carinci is one of six inductees and the only Canadian to receive the honour this year.

Since joining ALC in 2001, Carinci has been recognized twice as one of Atlantic Canada’s Top 50 CEOs. Her leadership has also helped ALC earn recognition in Maclean’s magazine as one of Canada’s Top 100 Employers for two consecutive years. Prior to joining ALC, she held leadership positions at the Western Canada Lottery Foundation, the British Columbia Lottery Corporation and the U.S.-based GTECH Corporation. The Lottery Industry Hall of Fame was established by Public Gaming Research Institute, which supports companies involved in the lottery industry.

• Atlantic Lottery is celebrating our 30th anniversary this year with a new corporate promotion. The mass media campaign includes paid advertising in daily newspapers; broadcast ads that feature employees, retailers and players; billboards and events banners; and a dedicated website: alcwinwin.ca. ALC will also launch a scratch’n win ticket with Atlantic Canadian images and a 30th anniversary theme. Since 1976, Atlantic Lottery has awarded $4.5 billion in prizes to winners and returned $4.7 billion in profit to the four Atlantic Canadian governments.

• Atlantic Lottery recently made changes to our six-member senior management team, giving the organization greater efficiency and focus in maintaining its commitment to corporate social responsibility and meeting financial goals.

• Mike Randall recently returned to Atlantic Lottery after a six-year absence. In his new role of Vice President, Social Canadian Gaming Business | 41

Responsibility and Communications, Mike will lead the corporation’s continued evolution towards greater corporate responsibility, open and proactive communications and increased shareholder value. Mike has more than 15 years experience as one of the region’s leading public relations and strategic communications professionals. His expertise includes crisis and strategic communications, investor relations, corporate acquisitions and government and media relations.

• Atlantic Lottery generated community buzz and media headlines for the recent $25- and $30-million Lotto Super 7 jackpots with our Red Carpet Moments campaign. Tuxedoclad butlers (local actors) made appearances at gas stations and grocery stores in urban and rural areas throughout Atlantic Canada. At each grocery store, five lucky shoppers were approached by the butler who offered to unload their shopping cart, pay for the groceries (approximately $150 value) and load them into their car. Atlantic Lottery also donated an equivalent amount to local food banks. At each gas station, five unsuspecting customers were approached by the butler who offered to pump their gas, wash their windshields, and pay for the purchase ($50 each). The butlers also talked up the jackpots and gave away Lotto Super 7 tickets at all locations.

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42 | July 2006

Nova Scotia Gaming Corp.

This year has seen a whirlwind of innovative business initiatives, groundbreaking research, facility upgrades, entertainment launches, and responsible gambling programs that have put Nova Scotia in the forefront of the gambling industry.

Responsible. Progressive. Accountable. This is more than a tagline -- it is a way of life for NSGC. As the manager of Nova Scotia’s gambling industry, NSGC’s mandate is to create an industry that balances social responsibility and economic sustainability. In 2005-06, NSGC generated $174 million in profit, and supported 1,500 businesses that collectively made more than $51 million in commissions. That same year, with social responsibility in focus, NSGC directly reached more than 24,000 Nova Scotians with responsible gambling messages through more than a dozen prevention and education programs.

“NSGC’s commitment is to manage a safe and regulated industry that generates socially responsible revenue. We recognize that if we don’t find a way to be economically and socially sustainable, we won’t have a future,” says Marie Mullally, NSGC President and CEO. To ensure a sustainable future, NSGC took dramatic steps to keep players responsible. In the last year, Nova Scotia introduced changes to the video lottery environment including reducing the hours of operation, reducing the speed of play by 30 per cent, disabling the ”stop button,” and removing 1,000 VLTs. Overall, these initiatives were estimated to impact NSGC’s overall net income by $19 million, but have actually reduced net income by $21 million – a 15 per cent reduction in one year.

“We are reducing our reliance on VLTs and looking for responsible ways to grow other aspects of the gaming business, such as on-line ticket lottery, the charitable gaming sector through the pilot of Linked Bingo, and poker at Casino Nova Scotia,” says Mullally.

Wo r k i n g t o m a k e C a s i n o N o v a S c o t i a t h e p r e m i e r entertainment destination in Atlantic Canada has been a special project that culminated on June 1. With the completion of a $22 million capital improvement plan, Great Canadian Gaming Corp. and NSGC celebrated the redesign and re-launch of the two casino properties, upgraded with ticket in/ticket out, multidenominational slots, a new poker room in Halifax, two tables in Sydney, new digital surveillance systems, improved food and beverage, and a live entertainment facility at the Halifax property showcasing East Coast music. All of these add up to an entertainment experience that promises to fulfill Casino Nova Scotia’s new marketing slogan “Live the Thrill.”

With more initiatives, campaigns and programs in the works, NSGC will continue to show responsible gambling in action, implement innovative initiatives and lead Nova Scotia’s gaming industry for the benefit of all Nova Scotians.