Canadian Gaming Business Spring 2014

Canada's Premier Gaming Industry Magazine

Vol. 9 No. 1

www.CanadianGamingBusiness.com

Spring 2014

For the Love of Sport Canada’s Sports Betting Landscape

Inside: The The Art Art and and Science Science of Slot Floor of Slot Floor Optimization Optimization Executive Executive Q&A Q&A with with SaskGaming’s Twyla SaskGaming’s Twyla Meredith Meredith Security Security and and Surveillance Surveillance Strategies Strategies

PM 40063056

Mobile Mobile Gaming Gaming Apps Apps

CanadianGamingSummit.com June 23-25, 2014 Vancouver, B.C See pages 34-35

Spring 2014 Volume 9 Number 1 Publisher

Richard Swayze richards@mediaedge.ca 416.512.8186 ext. 246

contents 36

www.CanadianGamingBusiness.com

30

32

Editor Sean Moon seanm@mediaedge.ca Advertising Sales Richard Swayze richards@mediaedge.ca Senior Designer

Annette Carlucci

annettec@mediaedge.ca

Designer

Jennifer Carter

jenc@mediaedge.ca

Production Manager

Rachel Selbie

5

EDITOR'S NOTE

linat@mediaedge.ca

6

MESSAGE FROM THE CGA

Proudly owned and published by:

8

COVER STORY

14

GAMING TRENDS

17

Employee Development

rachels@mediaedge.ca

Circulation Manager

President Kevin Brown

Lina Trunina

President & CEO Bill Rutsey

kevinb@mediaedge.ca wrutsey@canadiangaming.ca

Senior Vice President Chuck Nervick

Vice President, Public Affairs Paul Burns

For the Love of Sport: Canada’s Sports Betting Landscape

The Optimized Slot Floor Advantage Mentoring: The Way to Roll

18

EXECUTIVE Q&A

chuckn@mediaedge.ca pburns@canadiangaming.ca

Twyla Meredith: President and CEO, Saskatchewan Gaming Corporation

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

20

GAMING TECHNOLOGY

24

CORPORATE PROFILE

26

Security and surveillance supplement

To advertise: For information on CGB’s print or digital advertising opportunities: Richard Swayze 416-512-8186 ext. 246 richards@mediaedge.ca Copyright 2014 Canada Post Canadian Publications Mail Publications Mail 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 $40* 1 yr, $70* 2 yrs. USA $65 yr, $120* 2 yrs. International $90* 1 yr, $160* 2 yrs. *Plus applicable taxes.

Postmaster send address changes to: Canadian Gaming Business Magazine 5255 Yonge Street Suite 1000, Toronto, Ontario M2N 6P4

Official Publication of the Canadian Gaming Summit

Mobile Gaming Apps

Gary Platt Manufacturing

Industry Roundtable: Security and Surveillance Strategies

30 Finance

Cybercrime and the Future of Gaming

32

Facility Profile

Dakota Dunes Casino: A Good Bet for a Great Experience

36 Legal

Private Equity Financing

38 MARKETING

Content Marketing: Changing Consumer Behaviour

Canadian Gaming Business | 3

Technology that inspires For nearly 60 years, JCM Global has been creating leading and award-winning transaction technologies that have evolved entire industries and inspired businesses to be better, smarter and faster. Now, there is a new generation of technology from JCM to inspire you, including even more advanced bill validation, advanced printing capabilities, real-time controls for the entire operation, and digital displays unlike anything you’ve seen before. A world of inspiring technologies, all from one company.

editor'snote

Starting Fresh in 2014 Having managed a number of other successful MediaEdge publications for the past couple of years, I was thrilled to have recently been given the opportunity to shift into the editor’s chair here at Canadian Gaming Business. In taking over the reins from former editor Matthew Bradford, I know that readers have come to expect an insightful and comprehensive look at the Canadian gaming industry in each issue. With this track record of success in mind, I am pleased to say that this tradition will continue with our first issue of 2014.

Leading off our feature-packed Spring 2014 issue is an enlightening look at Canadian sports gaming from Jason Allsopp and Paul Lauzon of Ipsos Reid. In their cover story, Canada’s Sports Betting Landscape, Allsopp and Lauzon uncover the habits, interests and behaviours of Canadian sports gamblers to reveal opportunities and trends to help gaming entities make better, more informed decisions about their players.

In his article The Optimized Slot Floor Advantage, author Craig Carothers takes an in-depth look at the art and science of data management and casino floor analytics. With slot operations comprising up to 85 per cent of casino revenue, Carothers’ analysis examines why the practice of slot floor optimization is so critical to successful casino operations.

Security and surveillance strategies are the focus of this issue’s Industry Roundtable which features insights from top security professionals from across Canada – from a discussion of how the evolution of A ML and Fintrac programs will continue to inf luence the industry, to the specific advantages that can be realized through improved security and surveillance strategies.

Other enticing columns and features in our Spring issue include KPMG’s analysis of the effects of cybercrime on the future of Canadian gaming, Christine Duhaime’s report on developments in private equity f inancing in casinos in Canada and abroad, and an expert perspective on how content marketing is changing consumer behavior from Marshall Fenn’s David Zbar.

On a final note, don’t forget to make your plans to attend the Canadian Gaming Summit as it sets sail to the Vancouver Convention Centre on June 23-25.

As always you can find the latest industry information and analysis at our website - www.canadiangamingbusiness.com.

We're always open for suggestions and comments, so please feel free to contact myself at seanm@mediaedge.ca or CGB's Publisher, Richard Swayze, at richards@mediaedge.ca.

Cheers for now

The Fully Flexible

Progressive Platform

Supernova is a powerful Floor Wide Event and Mystery Progressive platform for the Live Gaming Space that drives increased revenues.

This fully flexible platform adapts to almost any table game and allows casino operators to configure as many different prizes and jackpots as they want.

Developed to radically increase the appeal and excitement of live table games, casinos can now create floor wide jackpots across different game types that generate truly meaningful prize pools and jackpots.

ga ga 20142014

Gaming Gaming Awards Awards Winner Winner Technology/Provider Technology/Provider Supplier Supplier

For more information visit:

www.tcsjohnhuxley.com

Sean Moon Managing Editor

Canadian Gaming Business | 5

messagefromtheCGA

Looking Forward

By Bill Rutsey, President & CEO of the Canadian Gaming Association

Thinking about the upcoming Canadian Gaming Summit in Vancouver (June 23 – 25), I can’t help but look back. Now, I’m old enough to remember that Bob Dylan sang the words “don’t look back” in more than one song, that it was the title of a then groundbreaking documentary about Dylan in the 60s, and also a chart-topping hit for Boston in the late 70s.

Even so, I have to disagree with all that expert advice – you really can’t see the future in any sort of perspective without looking back.

Every year since the Canadian Gaming Association acquired the Summit in 2006, it has seen improvements in the quality of its information and education components, achieved principally through consultation. The event has been expanded, refined and improved to provide content relevant to all sectors of our industry, moving well beyond its roots as a vendor-based event. Having said that, the original Summit core components, the show floor and industry-wide networking opportunities remain essential.

We also immediately identif ied that recog nizing excellence is critical for an industry such as ours, which is why we established awards for both Industry Leadership and Outstanding Contribution and Volunteerism and Community Service, and together with Casino Rama, the First Nation Canadian Gaming Awards. I urge every one of you to take the time to identify colleagues who you consider worthy and nominate them.

From the start our goal for the Summit has been to produce an event relevant to Canada’s major players – the crown agencies charged with conducting, managing and regulating gaming, gaming property owners and operators, the charitable gaming sector, First Nations and the manufacturers and suppliers of gaming equipment, systems and services.

6 | Spring 2014

We achieved a significant milestone last year in Montreal by forming a working partnership with British Columbia Lottery Corporation, Alberta Gaming and Liquor Commission, Saskatchewan Gaming Corporation, Manitoba Lotteries Corporation, Ontario Lottery and Gaming, Loto-Quebec and Atlantic Lottery Corporation for the development and delivery of the gaming education component of the annual Canadian Gaming Summit.

This would not have been achieved without the leadership and support of the senior executives from each of the agencies, and their willingness to work together to build a national training and education program for our industry, to come together to share their knowledge, develop common practices and standards and to explore new and different thinking.

The Summit Content Development Committee, with representatives from each organization and chaired by CGA Vice President Paul Burns, is working to achieve the most content-rich and relevant gaming education component ever.

Key to the process has been the high quality of submissions to our Call for Presentations. Adding to this is the excellent work being done building the Legal and Regulatory program by its co-chairs Michael Lipton and Don Bourgeois.

I’d certainly be remiss if I didn’t mention the great networking opportunities, including the Summit Golf Classic (at Furry Creek Golf & Country Club), the Opening Reception, Delegate and Exhibitor Reception, Gala Awards Dinner and Chairman’s Reception.

Thanks to all this, the bar has been raised yet again, and this year’s Summit in Vancouver will be now, more than ever, where the Canadian Gaming Industry meets. If you don’t attend you surely will “look back” with regret for the missed opportunities.

Bring your guests the freedom to play their favourite NOVOMATIC NOVO LINE™ machines everywhere in your casino WLAN! Any of the casino‘s configured tablet PCs can be used to play in your smoking area, in a bar or a restaurant or in the comfort of a VIP lounge.

NOVOMATIC AMERICAS SALES Jens Halle • +1 754 333 8000 • jhalle@novomatic.com • www.novomatic.com

coverstory

For the Lov

8 | Spring 2014 8 | Spring

coverstory

ve of Sport The Canadian Sports Betting Landscape

By Jason Allsopp and Paul Lauzon

A hat-trick, a hole-in-one, a grand slam, a three pointer or a touchdown.

Everyone in sports is looking to play, score big and win. And that’s just as true for Canadian sport gamblers as it is for the athletes on the fields of play.

So what is the playbook for Canadian sport gamblers?

We wanted to know. In January of 2014, the Lottery and Gaming practice at Ipsos Reid turned to Canadian sport gamblers to learn more about their habits, interests, and behaviours. What we uncovered was fascinating.

First off, a bit about us and what we do. The Lottery and Gaming practice at Ipsos Reid studies Canada’s gaming and gambling population. We ask them what they are looking for in gaming entertainment, what their expectations are, how they play, how much they spend and how they rate the entire experience.

And earlier this year, we fielded a study with Canadian sport bettors to take a clear measure of the market and uncover opportunities and trends for gaming authorities to make better, more informed decisions about their players. Some of our findings will be highlighted here.

Canada and Sport Betting

There’s one thing we know without having to ask: Canadians love sport. How many of us have gathered around with friends and family for beer and wings at a Grey Cup party, were glued to the latest action from Sochi, or are waiting anxiously for the Stanley Cup to once again return north of the 49th? Countless numbers, indeed.

But one number we can tell you from the start is the percentage of those who bet. Overall, our research shows that 11 per cent of Canadians have made a wager in the past year on a sporting outcome for real money.

When we factor in the 11 per cent of Canadians who are involved in a sports pool, the seven per cent who bet on the horses, and six per cent involved in fantasy sports—all playing for and with real money, one-in-five Canadian Gaming Business | 9

coverstory

Canadians is outlaying money on sports. This involvement is far more prevalent among men who are twice as likely as women to partake in such betting activities.

So let’s take a closer look at our national relationship with professional sports.

In our survey, we asked Canadian sport bettors about their level of interest in a number of professional sports leagues and associations. Almost no surprises here, but it turns out Canadian sport bettors are most interested in hockey (NHL), followed by football (NFL and CFL) and baseball (MLB), ranking as the most popular professional sports in Canada. For all other sports, the blanket is pretty wide with many other sports capturing attention, but none coming close to those above.

By income, the NFL is popular with Canadians earning more than $80,000 per year, while PGA Golf scores well with those earning $40,000 and more. And almost proving the old axiom that golf is a game for the wealthy, interest in the PGA certainly spikes with those earning over $150,000!

But outside of the main circle, one sports association that’s getting a lot of attention is the UFC. Its growing popularity is still somewhat niche, but it does have a presence of its own and should not be overlooked as a growing favourite.

The Sport of Bettors

The research shows that when compared with non-bettors, bettors generally have a higher level of interest across almost all sports. They clearly understand and share the athlete’s thirst for competition and relish the chance to experience the ultimate thrill: victory!

Breaking that interest down further along gender lines, we do see some differences. Male bettors are more likely to follow the NFL, CFL, MLB or PGA Golf. Female bettors are more likely to follow NCA A women’s basketball and the WNBA. Regionally, it is interesting to note that the CFL is ver y popular with bettors in Canada’s three Prairie Provinces—Alberta, Saskatchewan and Manitoba. And in Quebec, they have a special love for betting on women’s tennis—of course, that has a natural fit given that every year Montreal welcomes many of the sport’s best female players for the Rogers Cup. Betting by Sport

Betting itself follows a similar pattern as interest. Indeed, it only seems natural that players would bet on sports they are interested in and know about. Also somewhat natural, the ‘Big Five’ leagues attract the most interest. In the past year, the NHL, the NFL, the CFL, MLB and the NBA all attracted high levels of betting activity, ranging from a quarter to seven in 10 respondents. All other sports ranked significantly lower. The two that score biggest, though, are the NHL (with 69 per cent betting) and the NFL (with 59 per cent betting).

Of particular interest, though, is that while hockey is quite universal with Canadian 10 | Spring 2014

sport bettors, male bettors have a keen interest in NFL, CFL and MLB matches, while female bettors are more apt to be interested in betting on women’s tennis and NCAA women’s basketball. And the data shows that if you’re in Western Canada, you can bet that there’s more on the line in any given CFL match than just the action on the field.

Show Me the Money

Sport betting is fun and entertaining, but let’s face it—it comes down to money. To play, you have to pay.

Our study revealed, that per match, the dollar amount bet on a sport is inverse to overall interest in the sport.

Essentially, the more popular the sport is, the smaller the per-event wager. On a per match basis, the more popular professional sports associations in Canada—NHL, NFL, CFL, MLB and NBA—do attract a steady amount of bets, but the per-match amount spent is modest, ranging between $25 to $50 per game. On the other hand, the top dollar bets are placed on UEFA events (averaging $105 per match) and men’s tennis (averaging $80 per match), and this is likely due to a few factors. First, less popular sports are potentially more open to profitability from bettors as the lines or odds are not as tight. And secondly, there is just much more Canadian betting action in the major North American sport associations, so Canadian bettors look to spread out their bets. It’s simply a volume and numbers game.

Place Your Bets

The days of exclusively placing a bet with a bookmaker are more or less fading away. Unless of course, your bookie’s name starts with www. By far, more Canadian sport bettors have placed a bet through a website than with a bookie.

Sport Leagues Bet On in Past Year NHL

69%

NFL

59%

CFL

29%

MLB

27%

NBA

26%

NCAA Men's Basketball

13%

PGA Golf

12%

Men's Tennis

11%

Women's Tennis UEFA Curling EPL Arena Football WNBA NCAA Women's Basketball Other

9% 6% 5% 5% 4% 4% 3% 4%

Base: Made a sports bet in the past year(n=602) B1. Which of the following spor4ng leagues have you made a bet on in the past year?

coverstory

Average Amount Bet Per Match UEFA (n=39)**

$105

Men’s Tennis (n=66)*

$80

WNBA (n=26)**

$47

Curling (n=33)**

$47

Women’s Tennis (n=57)*

$45

NBA (n=154) NCAA Women’s (n=21)** Basketball

$44 $40

EPL (n=30)**

$38

NCAA Men’s Basketball (n=77)*

$38

PGA Golf (n=71)*

$37

NFL (n=355) Arena Football (n=27)** NHL (n=413) CFL (n=174) MLB (n=163) Other (n=32)** * Small base size, interpret with cauBon. Base: Have made a bet in past year on…

$36 $33 $32 $30 $26 $37 ** Very small base size, interpret with extreme cauBon.

B3. Thinking about a typical game or match that you would bet on for the following sports/leagues, what is the average size of the wager you would make?

Internet sports betting attracts about two and a half times more activity than betting placed through a bookmaker.

Of those that do place a bet through a website, the vast majority (81 per cent) does so on a desktop or laptop computer. Only about three or four in ten will do so with a tablet device (37 per cent) or smartphone (35 per cent). Despite the ubiquitous nature of mobile devices, the findings suggest that mobile betting is in its infancy and that bettors prefer to place their bets at home before venturing out to the game or watching it at a location outside of the home.

H o w e v e r…t h o s e w e b s it e s a r e n o t n e c e s s a r i l y managed by the provincial or regional lottery authority.

Jurisdictional lottery corporations only net about 23 per cent of mentions with those who bet through a website.

That’s because many bookies DO begin with www—in fact, online bookmakers received about 48 per cent of mentions from bettors who make online bets.

Clearly, the lotteries have a lot of work to do to capture those who are making online sports bets. Other offshore websites have done a much better job of capturing the bulk of website betting. It is possible that once single-outcome sports betting is available in Canada, bettors may change their website affiliation. Once that happens there will be a lot of opportunity for Canadian lottery corporations to make progress moving forward.

But it will require both change and commitment from both parties.

The Millennial Bettor

A h, the Millennials—that always-on, tatted-up, and tuned-in generation that grew up never knowing a world without the internet or cell phones. What are their sports betting habits? Generally defined as the generation now

bet ween the ages of 18-34, our study revealed a few interesting truths about them. Because just as it is in many segments of the economy, it is most certain that getting a better understanding of how they roll will have an impact on the future of sports betting.

First up, they love basketball!

The NBA was one of their most p o pu l a r pr o fe s s i o n a l s p o r t s associations and they both follow and bet on games. But when they do bet, they’ll actually bet more money on a CFL game. They’re also much more likely than those in the Boomer set (ages 55 and over) to place bets through the Internet. But, unlike the Boomers and the Gen Xers (ages 35-54), they’re not as likely to put in a bet in the coming year. That said, they have more interest in sport betting than Boomers, they just don’t have the same financial capacity.

To Bet or Not to Bet

It is certainly important to understand behaviours that predict the future. In fact, for bettors overall, those that have bet in the past are most likely to be repeat bettors. Our survey with Canadian sport bettors revealed a high intention of likelihood to bet in the next year with those who have made a bet in the past year—as high as eight in 10!

But what about the non-bettor? Or at least those that don’t bet on sports? Many Canadians have a big interest in sports, as noted before, and many belong to a fantasy league, but not all will put money on a game. We asked why this was.

There were many answers, but the top three reasons for this were quite simple—there’s not enough interest, not enough money, and an aversion to the risk of losing.

These factors were somewhat more prevalent amongst males. And overall, those in the 55+ Boomer set were more likely to have no interest in betting on sports. But our research did show that about a quarter of non-bettors said there was a high likelihood that they would bet on sports in the next year. For those wanting to cash in on that opportunity, they have an opportunity to make a fun and attractive offer that wins over this crew.

The Final Score

So, looking for a pennant, a cup, a gold medal, a trophy or another way to win with this sector of Canadian bettors?

Well, just as in sports it is necessary to know the competitor, for those in the gaming business, it is necessary to know the betting public. They’re not your competitor, of course, but they are on top of their game.

Overall, the Canadian sport bettor is passionate about their sport of choice. They know the teams, the players and the game. And they’re more apt to turn to technology to both inform their decisions and help them place their bets.

Canadian Gaming Business | 11

coverstory

I n t o t a l , 11 p er c ent o f Canadians gamblers will bet on sports, but there are 20 per Not interested/do not like it 26% cent of Canadians who gamble Don't have money/have to watch my finances with real money based on their 17% knowledge of sports, either in Don't like to lose/waste money 15% fantasy leagues, sporting pools, It is too risky/you always lose money 9% or some other way. Frankly, Just enjoy watching not in betting 9% sports betting can no longer be Don't follow the sports closely enough (to 5% make good bets) brushed aside or overlooked— Don't know enough about betting 5% it’s an activity that thousands Too difficult to predict a winner/no opportunity 4% or access to place bets (on single games) of Canadians engage in and it’s Prefer to play the pools/pools are more fun 3% here to stay!

Poor odds/low chances of winning 3% That also means that there are Prefer to spend my money on better things 2% opportunities for Canadian lottery No time 1% corporations to attract interest and Can become addictive 1% revenues from those who currently Other 13% bet on sports through off-shore Nothing 3% websites. This may become easier if legislation is passed to allow for Don't know 3% betting on single outcomes.

Base: Follow sports, but haven’t bet in past year (n=411) Certainly, the growth of online C1. You indicated you are a fan of sports and/or par4cipate in fantasy leagues, yet you don't make any bets on the outcomes of spor4ng events/matches. What are your main reasons for not beLng on sports? fantasy leagues and web betting has changed the landscape and has helped set certain behaviours in place. But remember, people are always changing and adapting their behaviours—so mixing your understanding of your consumers within your business objectives and strategy is the first rule of winning.

Reasons for Not Betting On Sports in Past Year

As a generation raised around technology, a stereotype exists that they spend much of their time connected online. But do they really?

And how does that translate into lottery playing, casino participation, internet gaming vs social gaming?

Get an in-depth examination of Gaming, Technology and today’s Canadian Millennials with Ipsos’ Gaming Emerging Market Study 2014.

www.ipsos.ca/gaming

12 | Spring 2014

Methodology These are some of the findings of an Ipsos Reid Lottery and Gaming study conducted from January 31 to February 6, 2014. For the survey, a sample size of 1013 Canadians was interviewed online. The precision of online polls is measured using a credibility interval. In this case, the poll has a credibility interval of plus or minus 3.1 percentage points. For more information about credibility intervals, please visit the Ipsos Public Affairs section of our website at www.ipsos-na.com. The data were weighted to the sport betting population of Canada by region, gender, and age. Statistical margins of error are not applicable to online polls. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error and measurement error. Where figures do not sum to 100, this is due to the effects of rounding.

About the Authors Jason Allsopp is an Associate Vice President with Ipsos Reid’s Lottery & Gaming practice. Based in Vancouver, Jason is part of a team of research experts dedicated to serving the market research needs of lottery and gaming organizations across Canada and the United States. Jason can be contacted at jason.allsopp@ipsos.com or 778.373.5035.

Paul Lauzon is Senior Vice President and Managing Director with Ipsos Reid and head of the firm’s Lottery & Gaming practice. Based in Calgary, Paul leads the team of research experts dedicated to serving the market research needs of lottery and gaming organizations across Canada and the United States. Paul can be contacted at paul.lauzon@ipsos.com or 587.952.4871.

gamingtrends

The Optimized Slot Floor Advantage

The art and science of data management

By Craig Carothers

According to the Canadian Gaming Association, legalized gaming more than doubled in revenue between 1995 and 2010, from $6.4 billion to $15.1 billion.

Slot operations make up the bulk of that money – up to 85 per cent of casino revenue – according to some sources. It is a lucrative line of business, one that requires the attention worthy of the return it yields. This is why the practice of slot floor optimization is considered a vital component of the business.

14 | Spring 2014

gamingtrends

Slot f loor optimization is part art, part science. Managed effectively, it helps ca sinos u nderst a nd t he rel at ion sh ip b et we en m a ch i ne s and profitability. It helps managers determine the best mix of machines and how to optimize f loor space use to maximize returns. When it comes to slot f loor planning, bad decisions w ill lower ret u r ns on deployed assets and can have a direct impact on the patron experience. Ensuring the right mix of games, at the right price, aligned to customer demands and preferences can help the casino generate incremental revenue, all the while improving the customer experience.

Best Practices in Slot Floor Optimization: Data Management: Enriching your Data

The f irst step in a ny slot f loor optimization process is accessing a nd clea n ing a ll the ava ilable data. It can come from multiple sources, often in different formats, with different nomenclatures and standards associated with them. The main sources of information which support slot f loor optimization are: ac t u a l c ustomer play, c ustomer segmentation results, slot machine physical attributes, and placement data; all of these variables hold a piece of the optimized slot f loor puzzle. By properly analyzing these data points by slot machine over time, processing millions of plays on every slot on every property, looking at factors such as denomination, location, game manufacturer and game type, a casino will get a precise picture of when, where, how and why customers play the specific slots.

Admittedly, there are many different attributes associated with a slot’s success – what analytics does is take mass amounts of data to help deliver actionable, implementable insight.

A lthough big data remains, for some, an overhyped term, the reality is that the explosion of data is unlike anything we’ve seen before. Data volumes will continue to grow as more computers, sma r t phones, t ablet s, new apps a nd ser v ices,

along with an increasing number of devices outfitted with smart metres and sensors and GIS transmitters, come online. As IDC has already predicted, the big data market will grow to $16.1 billion this year.

This continued data tsunami will force casino operators to focus their efforts on the right data – the kind of data that is actionable and gives meaningful insights into customer needs and desires. Casino operators are already collecting a great deal of data, and the industry is increasingly adopting predictive analytics and datamodelling techniques to optimize everything from customer experience to the layout of the casino floor. While all this data is good for the casino business, if the data quality is bad an unnecessary level of risk is introduced into the process. This is especially true when it comes to slot f loor optimization.

Misclassification of a machine can wreak havoc on the optimization process and can have a huge impact of the bottom line, which is why the old adage “garbage in, garbage out” still applies. The challenge in any slot floor optimization initiative is ensuring the data is clean, as the results of the analysis can only be as good as the information that gets analyzed.

Once the data cleansing process is done it’s time to identify the data elements that are truly meaningful t o ex pla i n t he va r iat ion i n slot performance. It is done through an exercise called categorization.

Categorization helps to define what the future demands of a particular machine will be as well as helping u nder st a nd t he f ut u re dem a nd for a machine never before used.

Categorization is an ex ploration activ it y that forces operators to look at all data (i.e. manufacturer, slot category, game type, platform, section, machine settings, etc.) to determine what data points are truly critical in ex plaining a machine’s per for m a nce. T he end result is a list of attributes that are truly meaningful to decision making and lay the g roundwork for effective forecasting.

Canadian Gaming Business | 15

gamingtrends Backing all bets with the power of forecasting

When deciding which games to offer or replace, casinos may look at historic results and surmise reasons why games which were popular in the past will continue to be so in the future. Therein lies a missed opportunity. With mountains of invaluable customer data available, a growing number of casinos around the world are turning to advanced analytics to assist with slot f loor planning to forecast the right mix of gaming choices, denominations, and machine placements to optimize customer interest and use.

While the traditional approach to decision-making around slots was limited to reports based on one variable, looking exclusively at historical data, today’s forecasting looks at trends, seasonality, usage, location, machine drivers, game classifiers, time of day, day of week, etc., to truly understand customer preferences and factors that drive a machine’s success.

With time, as databases become richer with new game and machine attributes

the predictions get stronger, allowing for long-term gaming trends performance, and ultimately better decision making.

Now operators can forecast at every dimension: by casino, by f loor, by section, by denomination; modelling at every level within the hierarchy that is meaningful and allowing to forecast how many plays this machine will see by customer segment. This allows casinos to understand best-case scenarios, what will happen next, what will happen if a trend continues, why this is happening and what actions need to be taken.

What’s more, based on this data, operators are also able to assess machines a casino has never seen before. Analytics provide operators with a sort of “shopping list” allowing them to buy machines based on data that will ensure their success when introduced into the overall f loor mix. Data analytics allows operators to look at multiple scenarios: from moving a machine, to reconfiguring it, to replacing it all together. Each of

these decisions has a different impact on revenue and cost. Analytics can help decipher what impact the replacement of a machine will have on the overall floor performance.

Presenting information visually

Data visualization is the presentation of data in a pictorial or graphical format. Though the term may be new, the concept is not.

For centuries, people have depended on visual representations, such as charts, graphs and maps, to understand information more easily and quickly. As more and more data is collected and analyzed, decision makers at all levels will increasingly look to data visualization software to more easily find relevance among millions of variables, communicate concepts and hypotheses to others, and even predict the future.

For casinos the visualization of data is turning huge volumes of patron and machine data, from a variety of systems and locations, into meaningful information they can act on quickly. Imagine being able to physically walk onto the slot floor and point to what’s working and what’s not – that’s the power of visual analytics – it brings the data to life allowing for quicker decision making.

Conclusion

Reduce drop processing time by 50% Save time. Save space. Be more productive.

JetScan iFX® i400 Multi-Pocket Ticket and Currency Processing Solution.

Faster, Smaller and Smarter.

1,000 tickets and notes per minute, including polymer.

Call 1.888.391.8701 now or visit cumminsallison.ca/gaming2 to learn more.

16 | Spring 2014

One of the most important lessons for those looking at slot floor optimization is that it’s not a onetime process. To truly execute an effective long-term slot floor optimization strategy, a feedback loop is essential so that operators can learn from the decisions they are making and truly understand the health and wealth of all levels of the slot floor business. I often say that operators should look at the slot floor like a restaurant. The slots are like items on a restaurant menu.

Just as restaurants want to please their guests with appetizing food, so too do casinos with slots that are appealing. And just as the perfect meal requires thoughtful combination of wine and entrée pairings, so too do slot floor layouts require a proper combination of machines, games, and location. Let analytics be the master chef for your casino’s slot floor menu.

Craig Carothers is the Principal of Demand Intelligence for SAS Canada with a cross-industry focus. He has over 25 years of diversified experience integrating systems and analytical applications to optimize performance by translating data related to product usage, customers, operations, and costs into actionable insights.

employeedevelopment

Mentoring: The way to roll

By Judith Hayes and Dayna Hinkel

In the search for effective and efficient employee development programs, Canadian gaming organizations are turning to a time-honored approach – mentorship.

According to the Conference Board of Canada, mentoring is a “dynamic reciprocal relationship in a work environment between an advanced career incumbent (mentor) and a novice (mentee) aimed at promoting career development of both.”

The Conference Board has identified five business benefits to support the establishment of in-house mentoring programs. Mentoring can: • Develop a leadership pipeline • D i s p er s e le a d er s t h r ou g h t he organization • Improve employee engagement • Build organizational capacit y to address changes in the business environment • Respond to demographic challenges Our industry requires leaders to have gaming specific knowledge, coupled with revenue management and human resource management ex perience.

Finding external leadership candidates with these qualities, along with an understanding of the culture of both gaming and the individual organization, can be a challenge. Internally, gaming leaders need to be present across all business lines to support the growth of current business and prepare for future expansion.

Enhances Diversity Gaming proper ties have long understood the importance of diversity in staff ing to provide a welcoming env i ron men t f o r m u l t i c u l t u r a l customers from home and abroad.

With many newcomers to Canada seek ing work in the gaming i n du s t r y, m ent o r sh ip pr o g r a m s ensure that employees from diverse backgrounds will gain knowledge of the organizational culture and skills

needed to t a ke them into fut ure leadership roles.

M e nt o r s b e n e f it b y e x p o s i n g themselves to new perspectives by using their knowledge and experience to help others grow and develop. Mentors volunteer for the job and as a result are committed to listening, sharing experiences and supporting a mentee in reaching their gaming career goals.

Allows Flexibility Mentoring programs are flexible, and when adapted to your organization’s culture can pay big dividends. The financial investment in mentoring is low because the expertise already lies within your property. Mentoring can also be combined with organizational proje c t s a nd a l low s ment e e s t o experience company initiatives through the eyes of an experienced mentor.

For mal mentor ing prog ra ms have a st r uct ured approach in which a coordinator is responsible for implementing, monitoring and eva luat ing t he prog ra m. For m a l mentoring programs normally run from two to 12 months, allowing both the mentor and mentee time to establish a solid learning relationship.

Let’s focus on several different types of formal mentoring programs being used in gaming properties across Canada.

Highlights Skills A number of casino properties have programs where mid-level managers are paired with senior leaders to help lead the mentee into a succession-planning process. A customized learning plan developed jointly by the mentor and mentee highlights the competency or skill areas and the development activities

and resources used during the program duration. Formal meetings are held monthly to review the learning plan.

Another example is an eight-week group mentoring program offered through a mid-Canada casino. This program is designed for supervisors who mentor small groups of frontline staff in a classroom setting and is managed by a coordinator with the input of senior leaders. These leaders share their career experiences and listen to staff ideas around a set topic.

Teams problem-solve real-life casino case studies and then present their solutions to the senior leader. In the process, mentees gain skills in presentation, teamwork and managing conflict.

Facilitates Integration Many casinos offer a variety of formal mentoring activities, from an assigned buddy system to help new employees integrate in the organization, through to lunch pairings with experienced staff and new second language employees. These are designed to strengthen language skills and increase understanding of the organizational culture.

Across Canada, it is clear that gaming properties recognize the capacit ybuilding value of mentorship and although they approach the challenge in a variety of ways, there is recognition that transferring knowledge throughout the organization will better prepare our industry for the future.

Judith Hayes is Director (judith.hayes@ mbll.ca) and Dayna Hinkel is Business Manager (dayna.hinkel@mbll.ca) at the Canadian Gaming Centre of Excellence, a subsidiary of Manitoba Liquor & Lotteries.

For more information, please visit the Canadian Gaming Centre of Excellence at www.gamingcentreofexcellence.ca Canadian Gaming Business | 17

executiveq&a

Twyla

Meredith

President and CEO, Saskatchewan Gaming Corporation (SaskGaming) As the President and Chief Executive of SaskGaming, which operates Casino Regina and Casino Moose Jaw, Twyla Meredith has been at the centre of the Saskatchewan gaming industry for nearly 20 years. At the Canadian Gaming Summit in 2013, Twyla received the Industry Leadership and Outstanding Contribution Award for her accomplishments in the industry. Canadian Gaming Business recently asked her about some of the developments within the Saskatchewan gaming community.

What have been SaskGaming’s most significant achievements or developments in recent years?

SaskGaming was created as a Crown Corporation in the early 1990s to operate Casino Regina in a socially responsible manner while creating quality employment, economic benefit to the community and profit for Saskatchewan people in partnership with First Nations.

While those were lofty goals for a new industry, after 18 years, SaskGaming has exceeded these goals by generating close to $600 million in profit for the people of Saskatchewan and employing close to 1,000 employees of which over 40 per cent are aboriginal.

In addition, SaskGaming has grown over the years to open Casino Moose Jaw, add a 725-seat Show Lounge and offer a number of food and beverage outlets to become a full service entertainment corporation in addition to continuing to offer over 1,100 slot machines, 25 table games and 15 poker tables in a beautifully appointed poker room.

What are the greatest challenges facing Saskatchewan’s gaming industry? What is SaskGaming doing to address these challenges?

The greatest challenge facing Saskatchewan’s gaming industry is the maturing of the industry itself. Long gone are the early years of double digit growth. We are now facing flattening or declining revenues.

To address these challenges, SaskGaming is taking a two-pronged approach. Firstly, we are right-sizing the corporation to ref lect a management structure that is “getting back to the basics” to manage in a mature market. Secondly, we are re-focusing on our guests and finding out truly what they want in an effort to retain our existing guests and attract new guests.

18 | Spring 2014

executiveq&a

“Being a professional accountant not only provided me with the skills required to set up the administrative side of the business but also to ensure we developed a strong system of internal control that was required in a cash based and highly regulated business.”

You are a Professional Accountant by trade. How did that training prepare you for your current role?

I was hired by SaskGaming in 1995 as its first CFO prior to the opening of Casino Regina. I knew nothing ab out t he c a si no bu si ness but I quickly learned. Being a professional accountant not only provided me with the skills required to set up the administrative side of the business but also to ensure we developed a strong system of internal control that was required in a cash based and highly regulated business.

I was promoted to the President and CEO role in 2009. Once again the accountancy training and experience assisted as I transitioned into a role which primarily focuses on strategic t h i n k i n g , r isk m a n a g ement a nd leadership.

What do you believe is SaskGaming’s greatest growth opportunity and why?

A s I prev iously ment ioned, in a mature market, it will be a challenge just to maintain our current revenue levels. We plan to do this by ensuring our marketing strategies focus on retaining our ex isting guests and attracting new guests. We will ensure our guests are provided excellent customer ser v ice while they a re enjoying the latest gaming products, dining or enjoying a concert. In short, we want to re-focus on our guests and ensure we give them what they want so they keep coming back.

What has had the most significant impact on your growth as a leader in the Saskatchewan gaming industry?

I have been ver y for t unate to h ave g row n in concer t w it h t he Saskatchewan gaming industry from its birth, its infancy, its rapid double digit growth and now its maturity.

Each phase has had its management ch a l len g e s but Sa sk G a m i n g h a s always been a leader in the Canadian gaming industry and has always been well managed. This will continue into the foreseeable future.

Saskatchewan and we have recently become the f irst organization in the prov ince to receive the RG Check accreditation from the Responsible G a m b l i n g C o u n c i l . I n a d d it i o n , we have also recently adopted the i nt er n at ion a l l y re co g n i z e d G a me Sense responsible gaming prog ram developed by BCLC which has been well received by our guests.

What is your vision for SaskGaming?

Our marketing t a gline is “A lways Entertaining.” That is what this industry is all about and I think it sums up my vision for Casinos Regina and Moose Jaw. Both casinos will continue to be good corporate citizens in their communities while providing our guests with fun and unique entertainment options in beautiful facilities.

What are the most personally rewarding aspects of working with SaskGaming and why?

Without question, it’s the people. From staff and colleagues, to guests and suppliers, to other gaming professionals in Canada and around the world, gaming is a people business. I have been fortunate to have been in this industry for close to 20 years and I have had the opportunity to meet many great people over the years S a sk G a m i n g h a s a l w ay s b e en a that I now consider friends. It’s been a leader in Responsible Gaming in great ride!

There have recently been a lot of developments within SaskGaming with respect to Responsible Gambling and associated programs. What will be the biggest impact of these programs and developments for both your organization and gaming in Saskatchewan?

“SaskGaming has always been a leader in the Canadian gaming industry and has always been well managed. This will continue into the foreseeable future.”

Canadian Gaming Business | 19

gamingtechnology

Going Mobile The latest developments in mobile gaming apps

With the increasing demand for mobile-friendly gaming technology, Canadian Gaming Business reached out to mobile app and gaming providers to unveil some of the latest developments in mobile gaming apps. Here is what they had to say…

Bally Technologies

Bally Technologies continues to be the vendor of choice for many of today’s operators deploying mobile applications at t hei r c a si no s.

With more than 90 mobile customers and 12 million active users, Bally Mobile delivers a robust a nd userfriendly experience for both operators and guests.

Bally Technologies’ Mobile Platform enables casinos to inform and interact with their patrons and employees in real-time via both custom and proven mobile apps and mobile websites. Bally’s mobile solution gives operators the opportunity to attract new players, enhance their visit, and broaden both the customer bond and the revenue relationship via smart-phone or tablet.

Bally’s apps already include popular play-for-fun or wager-based casino games, show previews, room and restaurant bookings, feedback surveys, menus, interactive maps, hyper-targeted offers, social-media connection, and many other features.

It is also almost impossible these days to talk mobile without also discussing iGaming. Many customers and their players already enjoy play-for-free slot content incorporated into their apps. Bally has been working hard to ensure secure, elegant, and reliable integration of their iGaming platform and mobile solutions.

With Bally Mobile, operators are able to offer customers a wide range of top mobile gaming content from a variety of providers, while building their database, rewarding patrons, and simultaneously preparing for online gaming and mobile as those spaces continue to expand and mature.

20 | Spring 2014

When combined with Bally’s core casino systems and iGaming platform, Bally Mobile delivers a critical piece of the puzzle while connecting your entire gaming world. Perhaps most important, Bally Mobile, along with Bally’s core systems and technologies, will ensure that as an operator, you can enjoy a single and comprehensive view of your players – wherever they are − increasing their loyalty and your profitability.

For more information visit www.ballytech.com.

IGT

W hen it comes to cultivating thrilling online and mobile gaming experiences, industry giant IGT has an “any time, anywhere” mindset.

The company const antly ask s it sel f, “How c a n I G T d el i v e r t h e best, most engaging gaming experiences to our millions of players around the world?” The answer: unrivaled content on as many platforms possible.

The latest example of IGT’s best-in-class content includes online and mobile titles BATTLESHIP! and TRANSFORMERS Battle for Cybertron. Earlier this year, these widely-loved licensed titles were the first two games that IGT simultaneously released for online and mobile play.

Both hot titles are available via IGT’s rgs® (remote game server), bringing the content that players crave, directly to the console of their choice.

In BATTLESHIP!, players are invited to sail off to join an epic battle on the wide open seas. A powerful force of ships, officers, and jets is at the player’s command, ready to deliver absolute victory. Stacked 2X Wilds increase the explosive

gamingtechnology

thrills by instantly doubling multiple line wins. Two or more Bonus scatter symbols reveal lucrative scatter wins, and three or more trigger the exhilarating Victory Bonus, where players can target the f leet’s artillery at enemy ships and win up to 36 free spins, a 10X multiplier, and 50 times the total bet.

In the action-packed TR ANSFORMERS Battle for Cybertron, the excitement doesn’t end when the reels stop spinning. TRANSFORMERS Battle for Cybertron offers the popular FreeFall Symbols feature, letting players win again and again on a single spin. After any spin, Transformers characters may appear and blast away even more symbols, unleashing more cascades with Wild and Bonus-triggering symbols. With loads of Mystery features and thrilling game play, TRANSFORMERS Battle for Cybertron transports players to new heights of victory.

Fo r m o r e i n fo r m at io n o n B AT T L E SH I P! , TRANSFORMERS Battle of Cybertron and the many other exciting titles reflective of IGT’s “anytime, anywhere” mindset visit www.igt.com. mkodo/PlayNow

PlayNow, British Columbia Lottery Corporation’s online g a m i n g br a nd , l au nche d a market-leading cross-product mobile optimized experience in mid-2013 – PlayNow Mobile – that offers BCLC’s customers sportsbook and lottery products.

This new experience, developed by mobile technology specialist mkodo, working closely with the BCLC product teams, integrates directly with BCLC’s sportsbook and lottery platforms.

The mobile-optimized PlayNow brand (www.playnow. com) is designed to provide a single, easy-to-use point of access to BCLC’s product range through mobile.

“With the expansion of the smartphone and tablet market, customers now expect to be able to engage with their chosen brands via an optimized and high-quality mobile experience. mkodo is delighted to have been challenged by BCLC to create such a convenient and ‘rich’ experience for their PlayNow customer base and to deliver the first mobile-optimized site of its type in this well-regulated market,” says mkodo Managing Director Stuart Godfree.

PlayNow Mobile is available on all major smartphones and tablets. The display of the full level of product functionality is optimized for both mobile and tablet channels. PlayNow customers can register, withdraw and deposit funds, register pay methods, place bets and buy tickets.

A range of lottery ticket packages, combinations and quickpick options are available for lottery. Sportsbook customers benefit from a wide selection of bet types and combinations across a vast range of sports events and markets, including in-running betting, available to the player wherever they are in the province.

A key feature of the product range is that the PlayNow player has a single account, and uses one set of login details, whether they play on sportsbook or lottery and whether they play via desktop, laptop, tablet or mobile. The user can view all their bets and winnings in detail across devices. The product range seamlessly incorporates all the important information and processes, such as responsible gambling information, voluntary self-exclusion, player protection and player-locationverification, that are required to ensure that the services are secure and compliant with the provincial regulations.

One of the key challenges of bringing the product to market was the mobile geo-location component. What makes for an appropriate geo-location solution for mobile in a regulated market is an emerging standard. BCLC and mkodo have working closely, through the process, with the regulator to ensure the delivery of a robust, reliable and compliant solution.

“We are delighted that the roll-out of PlayNow Mobile has been so well-received and adopted by BCLC’s players and we’re very much looking forward to working on future releases and enhancements to this mobile experience.” says Godfree.

For more information, visit www.mkodo.com.

Canadian Gaming Business | 21

gamingtechnology

GTECH

With a focus on bringing innovation to iGaming, GTECH has revealed its new Poker Platform and technology driven mobile poker app created for iPads.

The Poker Platform technology was completely redesigned and rewritten to include additional poker play features to improve the player experience and offer new and valuable business tools.

GTECH’s new Poker Plat for m provides the technology for customers to offer their players the best in interactive poker games. It has the ability to manage poker games across multiple devices from desktop computers and laptops to mobile devices like tablets and smart phones. It additionally has the ability to enable players to monitor and play on multiple tables at once.

The new platform enables G T E C H ’ s customers to tailor their mobile p ok er of fer i n g to their specif ic needs and player base. It is robustto-high demand a nd is f lex ible to manage various table and tournament set-ups and stakes. It also equips customers with important business features enabling them to customize to their brand image and to integrate player information with existing player reward and/or Customer Relationship Management (CRM) systems.

ANALYTICS The Game Changer.

Eighty-five percent of casino revenue is generated from the slot floor.

Using advanced analytics to get the most out of your biggest asset is proving to be a winning bet. View our webinar on slot floor optimization to learn more.

In tandem with the new platform, GTECH introduced a mobile poker app for iPads. The new mobile poker app and New Poker Platform work together to offer an user-friendly touch interface that uses swipes, taps, and gestures, mimicking natural tablet handling and providing easy access to exciting game actions.

GTECH’s mobile poker app offers an impressive new feature: ergonomic thumb-based game play. All controls are within a thumb’s reach and allow players to comfortably play poker in the landscape position when playing on tablets. Using the controls located on the bottom left and right corners, players tap the screen and move dials with their thumbs to join tables, place bets, make play decisions, check statistics and even chat with other players.

This innovative thumb-controlled feature is unique to an interactive poker product and delivers a comfortable game play ex perience that can only be achieved through GTECH’s new Poker Platform. More innovative features are expected to be released in the coming months.

For more information visit w w w. gtech.com or www.spielo.com.

Williams Interactive

sas.com/ca/gamechanger

© 2014 SAS Institute Inc. All rights reserved. S120856US.0214

22 | Spring 2014

Williams Interactive is dedicated to keeping casino players “A lways in Play” through the premium digital distribution of their deep library of W MS Gaming casino games. The company views mobile and social gaming as key engagement channels

through which land-based casinos can benefit from the convergence of online and off line gaming. This view led to their creation of Play4Fun Network, a white-label social casino gaming platform designed with the tools and capabilities land-based casinos need build an engaged online player community under their brand Casino players already participate in social casino gaming when not visiting the land-based alternative, often with brands unaffiliated with an off line casino entity. According to WMS’ Active Gambler Profile, 72 per cent of avid gamblers play social games regularly.

Likewise, many casino players are engaged in mobile gaming through native apps, including slots, bingo, and poker games. This provides a great opportunity for casinos to provide a seamless multi-channel experience – on desktop, smart phone and tablet – that players already seek, while surrounded by the casino’s unique brand and while exposing them to the casino’s marketing messages and offers.

Play4Fu n Net work prov ides a socia l g a m i n g experience connected between the desktop portal and casino-customizable native iOS and A ndroid applications, anchored by player-favorite slot titles well known from casino f loors across North America that increase stickiness and player visits. In current deployments of the Play4Fun Network, the company is reporting impressive engagement metrics, including more than 2.5 visits per daily player, each logging more than 10 minutes and over 450 spins per session – all under the casinos’ unique brands. Combining this engagement with best-in-class marketing capabilities empowers casinos to ensure the effect social and mobile gaming has on their operation drives increased revenue from their current player base, and allows them to engage players where they want to play anytime, anywhere.

L ea r n more ab out t he Play4Fu n Net work at www.williamsinteractive.com/p4f

Looking to Advance your bottom line?

You designed the answer.

MEI has made it possible with

MEI has redefined expectations of note acceptors yet again with SC Advance. Enhancements were driven by customer requests to improve upon core measures of performance— acceptance, speed and security— and do so in a manner that is backwards compatible with the existing installed base.

By maximizing the number of street-grade notes accepted, while simultaneously increasing the security against counterfeit notes, the MEI SC Advance is a step forward on the most important measure…operator profitability.

Learn how to specify cashboxes in your property that fill up faster than ever before. Stop by booth #319 during the Canadian Gaming Summit or contact a BetRite representative at 204-489-8260 to schedule a SC Advance demonstration.

Proven performance.

Increased profits. meigroup.com MEI is ISO 9001:2000 certified. ©2014 MEI. All rights reserved.

Canadian Gaming Business | 23

corporateprofile

Gary Platt Manufacturing Taking a seat at the table of success

Since its 1997 founding in California, the managing partners of Gary Platt Manufacturing have had one goal: To provide comfortable, innovative casino seating with excellent customer service.

Named for 45-year seating veteran Gary Platt, the company's first chairman/ director of sales, the company soon became IGT's casino seating supplier. As business increased, Gary and President Bob Yabroff decided that relocating to Reno, Nevada in 1999 would improve access to major slot machine manufacturers and ultimately help grow the company.

Gary Platt has always considered casino seating as a key component to the customer's overall gaming experience.

The company says the 2000 debut of the X-tended Play Chair™, gaming's first ergonomically engineered chair, forever altered the seating landscape.

Gary Platt has grown steadily over the years to its current 90,000 square foot facility and 76 employees who produce and distribute exclusively to the gaming industry worldwide. Gary Platt's international sales representation now includes partnerships with Bet Rite in Canada, PHaT Sourcing in Australia and New Zealand, Intergames in Europe, and ACG in Central and South America and the Caribbean.

Canadian Expertise

Bet Rite Inc. is Gary Platt’s exclusive Canadian representative and distributor.

Bet Rite is a Canadian owned and operated company with over 40 years of Canadian Gaming experience focused solely on bringing world class gaming products and services to the Canadian casino market. Bet Rite has brought their past work experience in project management, interior slot signage, slot machines, table games, systems hardware, bill validators, progressive products, LCD display solutions, and more to give 24 | Spring 2014

customers a well rounded solution that most companies simply cannot. “ We a re ver y ple a s e d t o h ave established a relationship with Bet Rite to represent us in Canada,” says Skip Davis, President of Gary Platt. “They are a dedicated group of professionals building a name for themselves by bringing the best available products to the Canadian market and backing it up with superior customer service.”

In addition to Gary Platt, Bet Rite is the Canadian distributor and service provider for Interblock electronic table games, MEI bill validators, TransAct printers, 3M touch screens, Mappedin interactive solutions, Flexible EL Signs, and additional custom casino signage.

Comfort Means Profits

Bet Rite prides itself on representing best-in-class products and as the only manufacturer that focuses solely on casino gaming chairs, Gary Platt chairs incorporate superior performance design features with ergonomic design, longevity, and level of comfort resulting in more time on-device. Gary Platt is founded on the concept that a high-quality, more comfortable chair will increase players’ time on-device and as a result increase casino revenues.

Bet Rite has worked with casinos of all sizes and multiple VLT retailers across Canada to deploy Gary Platt casino seating to help these properties enhance their players gaming experience. Their most recent major deployment was providing all table and slot chairs for the new Hard Rock Vancouver.

Bet Rite is pleased to note that Gary Platt X-Tended Play Seating is exclusively used

by almost all major OEM slot vendors for leased and participation games.

This exclusive-use policy underscores the direct revenue value to operators of their unique seating design and qualit y construction. IGT, Bally, WMS, Aristocrat, Konami, Aruze, Shufflemaster, Multimedia and Cadillac Jack all select Gary Platt Seating as their preferred seating partner to complement their products.

New Innovations On the Horizon

Gar y Platt has consistently added innovative new feat ures to their existing product line as well as creating some of the most exciting interactive sound chairs in the industry. They are currently engineering the next generation of X2-Tended Play Seating planned for release later this year.

Ga r y Plat t is commit ted to collaborating with customers and designers to create custom designs to satisfy their individual needs and requirements. They recently hired a full-time ergonomic engineer who has made a name for himself in the chair industry over the last 25 years helping create cutting-edge products.

Last year was Gary Platt's best sales year and the growth is expected to continue in 2014. Replacement business from repeat customers has been strong, reflecting the company's high level of customer retention and satisfaction. They have also earned a healthy share of the new construction orders throughout North America. International sales have reached a record level, thanks in part to the strong partnerships formed with strategic distributors like Bet Rite in Canada.

securityandsurveillancesupplement

Industry Roundtable Security and Surveillance Strategies The Gaming Security Professionals of Canada (GSPC) is a non-profit organization founded in 1994 which represents the major gaming jurisdictions across the country. Its members are dedicated to ensuring that the highest standards of gaming security and integrity are maintained. Canadian Gaming Business recently asked the GSPC Board to respond to some of the current issues they face.

Gerald N Boose, Executive Director, Gaming Security Professionals of Canada (GSPC)

Richard Paris, Director, Security, Niagara Casinos

AML and Fintrac compliance programs continue to evolve.

What do you see as the strategic priorities to ensure the industry continues to be effective and compliant?

GB: A major part of the GSPC mandate is to identify and communicate best practices. Given the impor t ance of A ML and Fintrac compliance, the association created a dedicated sub-committee in 2011. The subcommittee has been very active in identifying issues, developing strategies and sharing best practices amongst the 26 |  Spring 2014

R.C. (Bob) Arlint, Executive Director Risk & Compliance, SaskGaming: Casinos Regina and Moose Jaw

Lynda Vachon, Corporate Director of Security Operations, Loto Quebec

member organizations. The result has been a more co-ordinated, effective and efficient response to the problem of money laundering and the meeting of reg ulator y requirements. The development of risk based approaches a nd ident if icat ion of suspicious transactions would be good examples.

RP: While many AML processes and Fintrac compliance procedures are common across all organizations that process financial transactions, there are unique elements within the gaming industr y. To ensure the industr y remains effective and compliant, it is

Brent Severeyns, Regional Surveillance Manager, Great Canadian Gaming Corporation

important for lottery corporations and gaming companies to continuously share information regarding best practices, operational challenges, and regulatory requirements following audit s. The GSPC A M L sub committee is one such forum for that information exchange. In addition, it is important for all reporting entities in the gaming industry (both individually and collectively) to establish close, co-operative working relationships with Fintrac. Such relationships encourage regulatory compliance by improving reporting entities’ knowledge about the

securityandsurveillancesupplement

particulars of Fintrac requirements and on the reciprocal end, enhance Fintrac’s understanding around the operational elements unique to the gaming industry.

RA: In my opinion, the key for industry effectiveness and compliance is to have standardized and tested best practices that have been thoroughly evaluated nationally by those organizations responsible for A ML Compliance.

As money laundering and terrorist f inancing continues to become a major issue on the world stage, the g a m i n g a n d f i n a n c i a l i n du s t r y will be challenged to stay current w ith future amendments to A ML leg islat ion. W it hout con sist enc y and communication through org a nizations such as GSPC and t he A M L Sub - C om m it t e e, e a ch jurisdiction will have to f ind new w a y s t o c o m b a t t h e ch a l l e n g e s being faced in the adoption of new regulations in the hopes of achieving a high level of compliance.

LV: First we have to comply with the recent changes in the law that came in effect on February 1, 2014. In doing so, we must develop a structure that will allow us to follow up on players that are AML concerns .

BS : It’s no surprise that A ML and Fintrac programs continue to evolve.

The trends worldwide suggest that tougher rules and guidelines will be the norm for some time to come.

The casino industr y in Canada is well represented by organizations like the GSPC. With its A ML SubCommittee already active this topic is front and centre in all g aming jurisdictions. As a result of the GSPC many organizations have frequently shared best practices and have kept a close eye on changes to compliance programs.

A critical component of Responsible Gaming is SelfExclusion programs. How do you expect Self Exclusion programs to evolve with growing expectations around Duty of Care?

GB: Short of all patrons being required to provide identification while gaming,

which would be a detriment to the industry, we may well be reaching a point of diminishing returns on investment. In the absence of mandatory identification in each instance, there is a limit as to how effectively you can identify a person who is determined to remain undetected even though they have agreed it is in their own best interest and made a commitment to stop gaming. Regardless, great strides have been made through advances in technology, education, training and communications and I expect that incremental progress will continue to be made with a sustained effort to help these individuals.

R P : Tech nolog ica l adva nces a nd improved access to problem gambling support ser vices have increasingly shaped the evolution of Self-Exclusion programs with a growing focus on Duty of Care expectations. In the past, casinos have struggled with enforcing Self-Exclusion programs using only a database of photos to help security and casino-floor staff identify patrons visiting the casino contrary to their SelfExclusion agreements. Today, many casinos are equipped with an assortment of high-tech and reliable systems including facial recognition, licence plate recognition, automated player card alerts, and other technologies desig ned to enhance the casino’s ability to identify patrons that enter the gaming facility while prohibited, and to expedite security response once identified. On-site access to responsible

gambling resources will also continue to shape the evolution of Self-Exclusion programs. The Responsible Gambling Council and Canadian Partnership for Responsible Gambling have partnered with several lottery corporations and casinos across the country to provide on-site resource centres, in-person and/or 24-hour telephone support, and other services that provide the public, problem gamblers, and those newly enrolling in a Self-Exclusion program w ith immediate and conf idential on-site support or professional referral to external support providers.

R A : Responsible Gaming and Self Exclusions programs have advanced considerably over the years with the creation of national bodies to provide insight and guidance surrounding best practices. Also organizations now have the opportunity to achieve national and international accreditation which places a strong emphasis on self–exclusion programs. From my perspective, I see the industry eventually moving towards a better balance between the gaming facility’s Duty of Care and the problem gambler assuming greater responsibility for their actions.

LV: We are looking to work closely with the leaders of the public health sector in the prevention and treatment of gambling to integrate and harmonize the existing services in public and private sectors, thereby avoiding duplication of services and aiming for more efficiency.

BS: Self- Exclusion programs continue to evolve. Many markets are looking at Canadian Gaming Business | 27

securityandsurveillancesupplement ways to improve managing internal programs and processes.

Technologies such as facial and licence plate recognition have shown some mixed results in providing additional safeguards for identifying those who may continue to game. One constant remains strong: Human intervention is still our best tool in identifying Self Exclusions within gaming properties. From well-trained Security and Surveillance teams to operational departments, slots, tables, cage and guest service positions, it’s everyone’s responsibility.

What specific advantages or benefits can be realized through the use of improved or advanced security and surveillance strategies?

GB: In the end, this is all about risk management. We have seen increasing recognition that security and surveillance functions are not just an operational and compliance resource, but represent a strategic resource that can have a significant impact on the mitigation of risks. In particular, the convergence of technologies has allowed for the integration and analysis of data on a real-time basis to better enable the early identification of patterns and trends requiring intervention to deal with organizational vulnerabilities.

RP: In today’s land-based casino environment, which is often framed by increased competition, shrinking margins, and various economic challenges, an advanced strategic approach for many Security and Surveillance programs entails an assessment of how to maximize service and operational efficiency while at the same time minimize risk. Centralizing surveillance rooms, implementing enhanced biometric and access control technologies, and integrating databases for more efficient data analysis are just a few examples of how a strategic approach can result in greater support for the organization’s business objectives.

RA: Considering that surveillance and many security operations are constantly faced with rapid technological change, it is imperative that these new systems have the ability for convergence into other areas of the gaming operations. Many facilities have several software systems in place that are stand alone and do not communicate with each other. With improved crossover abilities, surveillance and security systems are better able to integrate with the organizational software which allows for greater and easier access to valuable data for investigative purposes.

LV: We have to always question the value of every task being performed by the security and surveillance functions and concentrate on those tasks that will be valuable for the company in protecting customers and the bottom line.

BS: Security and Surveillance programs have evolved considerably in the last 10 years and most importantly in the last three to five years. Strong advances in departmental and business strategies have raised the bar for all involved. Old school Security and Surveillance operations are a thing of the past and like many gaming operations, expectations of performance and superior execution are high. Communication of best practices within the industry continues to ensure these departments are viewed as valued contributors to the overall operation.

Security and Surveillance programs do not generate revenue and are labour intensive. How do you ensure you are getting the best value out of your human resource investments?

GB: In general, you get what you measure and the key is to ensure you are setting the right objectives, measuring performance 28 | Spring 2014

against those objectives and recognizing success as well as working on the areas needing improvement. One area of particular note is that the uniformed security staff in land-based operations have evolved more than any other segment. There was a time when these officers were significantly underutilized and confined to the narrowest of parameters in the gaming security field. However, over the last several years we have witnessed great strides being made in terms of the setting of standards and training with regard to the safety and security aspects of their jobs, as well as recognition that with the proper training and support they can make a major contribution to customer service as one of the more visible and accessible representatives of the facility. The measurement of progress in this regard has been a strong indicator that this approach can be very effective.

RP: Although Security and Surveillance programs do not “generate revenue” in the traditional sense, they do play a key role in “protecting revenues” and reducing revenue losses in a variety of ways. Providing an environment where customers feel safe patronizing the gaming facility is one such example.

When customers do not feel safe or protected, they do not visit the facility, do not spend money and do not generate revenue.

IT Security and Surveillance programs provide a similar foundation for public safety and confidence in the world of on-line gaming. In land-based casinos, particularly those with table games, theft (internal or external), cheat tactics, and various forms of advantaged play all present significant risks for asset protection and securing revenues. Security and Surveillance programs go a long way in minimizing such risks.

Focusing on customer safety and service, incident response times, and the detection/prevention of criminal activity are just some of the ways we assess the value of our Security and Surveillance human resources.

RA: I believe that surveillance employees and the function of surveillance is not only gaming integrity and asset protection (guests, employees, money) but they are also an extension of the Internal Control or Internal Audit department. By allowing employees access to the wide range of databases and to train them in investigating financial or other irregularities, they become even more of a valuable asset to the company and their function is crucial to maintaining high standards and accountability within the organization.

LV: One example is that there is an emerging situation with people being able to use their smart phones to capture images inside the casino. This points to a need for strong policies and procedures to be implemented and transmitted through the entire organization.

We ensure that our staff receive the proper training and support to respond to this developing risk.

BS: In today’s very competitive gaming environment, many Security and Surveillance operations have been challenged to do more. Adding value to the organization is no longer an option for many. The relationship structure within gaming operations has improved considerably. One example of this is how Surveillance teams have evolved from a regulated and or compliance function to a respected support function for the rest of the casino. Many Surveillance teams support gaming operations with more than an eye for compliance. Through normal duties and processes, departments have been able to share valuable information with regard to the gaming operation as a whole. This has led to a significant shift in viewing this function from a cost department to a value-added area.

securityandsurveillancesupplement Emerging technologies have had a significant impact on the provision of Security and Surveillance services. How do you ensure operational effectiveness continues to be enhanced while ensuring the protection of privacy safeguards are in place?

GB: The transition from analog to digital technologies has essentially transformed the underlying infrastructure of security and surveillance systems over the past decade. This transition has greatly increased the capability of these systems, but at the same time highlighted the requirement for appropriate safeguards to ensure the protection of privacy. The time to address this requirement is at the design and development stage in order that they can be built in. Internally, privacy issues have become a major component in the governance of these projects. Externally, it has become common to consult and involve the offices of the Privacy Commissioner in the respective jurisdictions regarding matters of particular complexity, such as facial recognition.

RP: The protection of personal information and compliance with federal or provincial privacy legislation is a key component in Security and Surveillance systems today.

Some Security/Surveillance systems are integrated with other customer databases or systems within the gaming facility. This integration gives rise to additional challenges around privacy. Having a robust IT Security program along with a comprehensive compliance regime that places privacy protection as a key priority is an essential safeguard in the successful implementation of new technologies. Choosing credible system suppliers, ideally registered with a regulatory body and knowledgeable about privacy requirements, is another important safeguard while ensuring operational effectiveness.

RA: It is incumbent that all organizations research and test new and emerging technologies for their impact on provincial or federal privacy legislation. This applies to any department that would collect player data, surveillance information (video) AML reporting, along with Responsible Gaming player information. Legal departments within gaming organizations must play an active role in providing privacy opinions and addressing concerns prior to the purchase or implementation of such technologies.

LV: Surveillance technologies have evolved so that we now have access to a larger

spectrum of software and video quality. This has improved the quality of the response that surveillance departments can give to other sectors without being as time consuming as it used to be.

BS: The ability to balance new technologies and privacy concerns within Security and Surveillance operations is an ongoing function within many organizations. All employees within organizations should receive training on and are accountable to its policies and practices. From Compliance Plan Requirements to Privacy Policies to Code of Ethics policies, all team members must be aware. Many organizations review product and service prior to implementing new technologies with an eye on Compliance and Privacy.

ONCE YOU GO CAMACC

YOU NEVER

GO BACK! The gaming industry’s trusted leader in video security and access control.

www.camacc.com/casinogaming

Canadian Gaming Business | 29

finance

Cybercrime and the Future of Gaming Will your organization be ready?

By Louie Velocci

The gaming industry recognizes that integrity, transparency, and risk management are three key enablers of success. As the industry fundamentally changes its gaming models to provide more content online, cybercrime will present new challenges.

These challenges, however, are not unique to gaming. Recently the Canadian Securities Administrators (CSA) issued Staff Notice 11-326 to public companies and regulated entities (primarily financial institutions) in Canada, acknowledging the rise of cybercrime.

While not mandatory for Canadian gaming organizations, the CSA’s 11-326 provides interesting insight into how cybercrime is viewed by senior management and directors, the public, and within the regulatory community.

It urges all regulated organizations to consider how they can best address the 30 | Spring 2014

risks of cybercrime, by taking steps such as raising security awareness and skills in their organizations, adopting industry guidance and best practices and conducting regular third-party security tests and assessments.

More importantly, the CSA asks organizations to review and improve

their cyber risk-management practices reg ularly and disclose information about risks, incidents and controls to key stakeholders and the general public through their annual filings.

Increased expectations in the market Cybercrime is a business risk that requires a competent response. The primary focus should be to protect stakeholders’ interests and company resources. Cybercrime is unlikely to go away; going forward, key stakeholders will expect the companies they choose to interact with to disclose information on cyber risk and its impact on the product offering. Failure to address these concerns could potentially deter or alter a client’s purchasing decision process.

For instance, an online game patron will likely be concerned with the measures an organization has in place to protect credit card information, and the controls in place around game integrity.

Gaming organizations must consider how well prepared they are to protect themselves and their clients against cybercrime. Here

finance

are a few good questions to ask about cybercrime and your organization: • How frequent and effective is staff security training?

• How well positioned is the organization to tackle the ever-increasing risk of cyber threats?

• Which security frameworks does the organization follow and/or comply with? Is this enough to fight new and evolving threats?

• Do you know where critical data is stored and who has access to it?

• How often is the security tested and assessed?

• Have all identified issues or potential issues been resolved? Have the resolutions been tested?

• Have you rehearsed a cybercrime scenario as part of the crisis management preparations?

Understanding the current cybercrime readiness and any potential gaps in your organization enables it to best address these risks and demonstrate due diligence in cyber security. In developing a cyber

Untitled-9 1

security framework, consideration should be given to the following key elements: • Know the business risk – Assess the threat landscape and strike the right balance between focusing on likely channels of attack and business operations.

• Be proactive – Secure data and systems in advance; don’t wait to invest until after a breach has occurred and the damage is done.

• Gather and share intelligence – Understand the nature of and methodologies used by cyber criminals.

Use this information to make informed decisions and share it with trusted partners in the gaming industry.

• Train your team – Employees remain critical to security, both as the first line of defence and conversely as a potential major threat. Education and awareness are key to ensure enhanced cyber security controls.

• Engage expertise – Don’t rely solely on the IT department to ensure company data remains secure.

• Have a de l i b e r a t e r e s p o n s e a n d fo c u s o n t h e b u s i n e s s – B ei n g del ib er at e i s e s s ent i a l i n b o t h pr o a c t i ve i n ve s t m ent a n d reac t ive respon se. For ex a mple, develop a critical incident plan to maintain customer and shareholder confidence in the brand.

Gaming organizations interested in differentiating themselves from their peers should take notice of the support of i n it i at i ve s , i nclud i n g t he C S A 11-326, to attain a better cyber security posture in the industry. W hile there is currently no requirement to do so, self-adoption by the gaming industry of similar disclosure principles as those outlined in the CSA 11-326 would have a signif icant impact on gaming integ rit y, transparenc y and overall security.

To learn how to protect your organization from cyber security risks, contact Louie Velocci (lvelocci@ kpmg.ca), Partner, Advisory Services, KPMG and visit www.kpmg.ca for more information.

Canadian Gaming Business | 31 14-03-05 11:26 AM

facilityprofile

Dakota Dunes Casino

A Good Bet for a Great Experience

The ‘Dunes’ reference in its name comes from its location on the Whitecap Dakota First Nations reserve among the natural sand dune formations and the indigenous prairie grasses.

Expansion and growth are certainly on the horizon for the Saskatchewan I nd ia n G a m i n g Aut hor it y (SIG A) and their jewel of the prairies. W ho would have believed that a ca sino situated 2 0 minutes outside of the “City of Bridges” (Saskatoon) would have g row n so quick ly? In fact, it has become one of the largest of six First Nations ow ned and operated enter t ainment facilities in the pr o v i nc e of S a sk at che w a n . Fr om the moment you arrive, visitors are treated to a First Nations hospitality e x p er i en c e b y t h e c a si n o, w h i ch boasts a staff of over 470 employees.

32 | Spring 2014

SIGA’s Board Chair Tribal Chief Felix Thomas ref lected that, “when the Dakota Dunes Casino (DDC) opened its doors on August 10, 2007, it wa s a joint business in it iat ive for SIGA and the Saskatoon Tribal Council. This 86,50 0 square foot entertainment facilit y was quickly recognized for its aboriginal-themed design and award winning up-beat atmosphere.”

The casino offers the excitement of 575 slot machines, 18 live table games and a Touchbet roulette game featuring 10 stations. Discover the convenience of the restaurant, deli, and a fully functional multi-purpose “Tatank a Tipi” room and cuisine created by DDC’s award winning chef. This facility offers much more

than g aming as it hosts a variet y of conferences and per formances throughout the year, much to the delight of its visitors.

Endless opportunities for growth President and CEO Zane Hansen s p e a k s s t r o n g l y a b out s t r a t e g ic g row th. “Number one on the list is the Da kot a D u nes Hot el L t d.

Partnership (Whitecap First Nation) and SIGA (DDC Casino). Guests w ill be treated to a unique 4 -star proper t y w ith 159 rooms, 3,0 0 0 4,0 0 0 squ a re feet of convent ion space, spa, pool, and a f ine dining restaurant and lounge.”

The opportunities by expanding to this 100,000 square foot property a re fa nt a st ic. This dest inat ion

casino sits in a tourism corridor – with the addition of a gas station, storage facilities for buses, and other a men it ie s, v isit or s a re prov ide d w it h g r e a t n e w ‘s t a y a n d pl a y ’ opportunities.

Another huge compliment to the propert y offerings is the 18 -hole, full ser v ice, nat ura l ma ster piece (Gr a h a m C o ok C o ok e - Ca rlet on designed) golf property. The Dakota Dunes Golf links is proud host of the Dakota Dunes Open each year, and was recognized by Inside Golf Magazine as Best New Golf Course in Canada (20 06). This course is well k now n for its ever-changing beaut y a nd cha racter, w ith f lora changing regularly throughout the golf season.

Canadian Gaming Business | 33

The Summit Sails to Vancouver in 2014 Register today to attend Canada’s premier annual conference and exhibition for gaming professionals. The Summit delivers face-to-face interaction between attendees from all gaming sectors, disciplines and regions within Canada and beyond, and is the leading provider of information and education to the Canadian gaming community.

The Summit’s top-notch educational program, expansive exhibition and enjoyable social events provide an invaluable and memorable learning and networking experience. Vancouver’s breathtaking landscapes, cosmopolitan atmosphere and top-notch convention facilities will help make the 2014 Summit the most memorable ever!

The 18th Annual Canadian Gaming Summit Canadian Gaming Industry Awards Annual Awards Reception and Charity Gala Wednesday, June 25, 2014 6:00pm - 10:00pm The Canadian Gaming Summit Awards Reception and Charity Gala, since its inception 18 years ago, has honoured achievements in industry leadership. Again this year, the event will benefit a deserving local charity. Join your industry colleagues for an evening of celebration, fine food, drink and entertainment – while at the same time supporting a worthy cause. If you know someone deserving of this industry honour, visit the Summit website and click “Gaming Awards Nominations.”

Outstanding Learning Opportunities The Summit Educational Program takes place over three days from June 23-25, 2014.

The comprehensive Educational Program at the 2014 Summit offers sessions and keynote presentations covering a wide array of gaming topics presented by industry leaders. These sessions are specifically developed for gaming professionals and help to provide the skills and knowledge required to excel in today’s rapidly evolving marketplace. The program includes seminars on Charitable Gaming, Finance, Gaming Operations, Human Resources, iGaming, Legal & Regulatory, Marketing, Security & Surveillance, Sports Betting, Technology and much more!

The Canadian Gaming Summit is owned and produced by:

Valuable Networking Opportunities The Summit’s Golf Classic will be held on Monday, June 23 at Furry Creek Golf and Country Club. Considered one of the most beautifully landscaped playgrounds in the province, Furry Creek delivers an unforgettable experience with its breathtaking beauty, dramatic play and first-class facilities.

Join your colleagues at the Summit’s Opening Reception to kick off the 2014 event on the evening of Monday, June 23. Refreshments and hors d'oeuvres will be served as you mix and mingle with old friends and new acquaintances. Enjoy Vancouver hospitality and entertainment as you reconnect with those from past Summits and meet this year's new attendees.

The Canadian Gaming Industry’s Premier Exhibition The Summit’s Exhibition showcases the industry’s leading suppliers of gaming-related products and services. Everything from slot machines, to casino furnishings and table games, to cash handling and security & surveillance products are highlighted over two days on the jam-packed trade show floor. New gaming products and services are launched and showcased and delegates have the opportunity to meet one-on-one with existing and prospective suppliers.

Exhibition Floor Hours: Tuesday, June 24 Wednesday, June 25

1:00 pm to 5:00 pm 10:00 am to 2:00 pm

We Look Forward to Seeing You in Vancouver For registration, program and hotel & travel information, please visit: www.CanadianGamingSummit.com

18 Annual Event 18 Annual Event th

th

June 23-25, 2014 Vancouver Convention Centre Vancouver, British Columbia

15

Annual “Where the Canadian Gaming Industry Meets” Canadian Gaming Summit th

REGISTER TODAY!

www.CanadianGamingSummit.com

If your company is interested in exhibit or sponsorship opportunities at the Canadian Gaming Summit, please contact Richard Swayze at 866-216-0860 ext. 246 or richards@mediaedge.ca OFFICIAL PUBLICATION:

www.CanadianGamingSummit.com

legal

Private Equity Financing From Toronto to Macau: Developments in Private Equity in Casinos

By Christine Duhaime

Probably the worst kept secret in the Canadian gaming industry is that the Toronto casino is back on track with construction firms and U.S. gaming companies re-grouping for another kick at the can. One of the major gaming operators re-entering to bid for a Toronto casino is negotiating to partner with a new private equity fund with deep political ties, which it expects will make a difference this time around.

Private equit y f irms are actively involved in each of the proposals to revamp the Toronto casino bid, signaling a much greater interest in the gaming industry by private funds that was absent less than 10 years ago.

The catalyst for such deals is the increasing comfort private equity firms have with the regulatory registration process for investments in gaming facilities. At one time, the amount of personal, f inancial and relationship disclosure required by gaming regulatory agencies for a casino f inancing or acquisition was a major deterrent for private equity funds, which tend to be fiercely secretive.

Eight years ago, we did the f irst signif icant private equity f inancing involving probably the world’s most secretive private fund for a gaming company with operations in the U.S. and Canada, negotiating exemptions from onerous g aming reg istration requirements and structuring controlling entities to balance their need for privacy and the regulator’s need to ensure their suitability to be involved in gaming. We used a combination of a voting company and deemed passive investors to manage registration. Back then, it was a novel approach to gaming law in Canada. Now it’s the standard gaming structure for private equity deals.

Registration Restrictions In gaming law, registration requirements

36 | Spring 2014

legal

that are designed to preserve the integrity of the gaming industry by keeping out organized crime, unscrupulous people such as mob associates and tax dodgers, or people with past integrity or reputational issues, have also kept out private investment firms that want to keep their financial details and the identity of their investors out of the public eye.

In order to reconcile these competing interests, gaming law yers structured deals so that a handful of key decisionmakers in private equit y funds were placed in a voting entity that controlled the financed, pledged or acquired shares of the gaming entit y who were then registered with gaming authorities, while the remainder of the investors were segregated as passive investors.

Key decision-makers with private equity funds, such as the one eventually selected for the Toronto casino, must be squeaky-clean and pass a gaming suitability investigation.

It’s important to ascertain in advance that a key person at a private fund can be registered. Part of what gaming lawyers do is manage or repair integrity concerns associated with a person or an entity.

In 2009, private equity groups Apollo Management and TPG Capital were among the first to face an extensive registration process in the U.S. with their $27.8 billion acquisition of Harrah’s Entertainment. The registration process was accomplished using a similar VoteCo-passive investor registration structure. The Harrah's deal was the first to allow private equity firms to acquire 100 per cent of a Nevada gaming company.

Once the VoteCo-passive investor registration structure was successfully in place in Canada and Nevada, the ice was broken and private funds moved quickly to invest in the gaming industry worldwide.

Provides Needed Capital Since the Harrah’s deal, the increased investment in, or financing by, private funds in casinos has stabilized the gaming industr y and provided much-needed capital to continue operating and in some cases expand, such as B.C.-based Gateway Casinos controlled by Toronto’s Catalyst Capital Group.

Private equity investments in casinos and gaming are also on the rise in many other jurisdictions besides Canada.

In the U.K., CVC Capital Partners is said to be considering acquiring online

gambling company, Betfair Group PLC. Private equity houses Candover Investments OLC, Cinven Limited and Permira own Gala Coral Group Ltd., a gaming company with over 30 casinos and bookmaking and bingo operations. Permira was an initial investor in Galaxy Casino SA, and recently sold its remaining 20-percent stake after making a return of 2.6 times its investment.

Last fall, Apollo Global Management, LLC and TPG Capital LP invested $500 million for the Caesars spinoff company run by Montreal native Mitch Garber, that controls its online gambling assets.

I n D ecemb er, a n a f f i l i at e of Apollo Global Management LLC announced another gaming deal with the acquisition of American Gaming Systems, a Las Vegas maker of gaming machines, for $240 million.

Macau Casino Investment The most exciting private equity investment in gaming is the Ontario Teachers’ Pension Plan’s second investment in Louis XIII Holdings, a Macau-based casino developer which will result in the OTPP have a sevenper-cent ownership interest. Louis XIII Holdings is building a $1 billion casino, hotel and retail complex in Macau. According to securities filings in Hong Kong for the OTPP investment, the casino will be a tribute to the excesses of the opulent lifestyle of the French King Louis XIII. The OTPP is a fund established and administered in part by the Ontario government and, unless Macau’s g a mbling leg al reg ime becomes compliant with international anti-money laundering and counterterrorist financing laws, the OTPP investment in a Macau casino will be a matter of concern on many fronts when the casino opens.

That’s because casinos in Macau have well-known and signif icant financial crime risks. They operate with the help of junkets - middlemen who bring wealthy gamblers from China to Macau, lend them substantial sums of money to g amble, and collect the gambling debts when they return to China. In China, lending

funds to gamble, removing funds in excess of the currency restrictions and collecting gambling debts are all illegal activities that generate proceeds of crime. Junkets also run VIP Rooms at casinos for gamblers from China, and 75 per cent of the annual $38 billion in gambling revenues from Macau’s casinos are from VIP Rooms run by junkets.

According to Macau’s Gaming Inspection and Corruption Bureau, junket operators continue to have ties to organized crime, historically the Triads.

Under the Microscope A fe w mont h s a g o, a U. S .

Congressional Commission found that the casino industry in Macau was “fueled by junkets” tied to widespread corruption that launder billions of dollars annually from China to Macau.

In that report, government experts referred to the casino scene in Macau as a “cesspool of financial crime” that “has gone from being out of a James Bond movie to being out of The Bourne Identity.” The U.S. Senators with the Commission urged Macau to implement anti-money laundering controls and recommended that the Financial Action Task Force expedite the review of Macau ahead of other countries to force the resolution of issue of the financial crime risks on the financial system posed by Macau.

The OTPP investment in Macau is also interesting because it demonstrates that when it comes to private equity and the gaming industry, the preservation of integrity works both ways – it can involve protecting the funds’ investors from reputational and financial crime risks of entering a non-mature gaming market like Macau, as much as it can involve gaming regulators in mature gaming markets like Canada and the U.S., protecting the industry as a whole.

Christine Duhaime, BA, JD, CAMS, is a Gaming Attorney and Certified Financial Crime and Anti-Money Laundering Specialist with the law firm of Duhaime Law in Vancouver and Toronto. She can be reached at Christine@duhaimelaw.com.

Canadian Gaming Business | 37

marketing

Content Marketing Changing consumer behaviour

By David Zbar

Growing up, there was no getting around having to watch television commercials or listen to radio advertisements. Whether you were watching your favourite primetime sitcom or listening to the Top 30 countdown, the interruption was expected and part of the overall experience.

Fast forward to 2014. DVR's record your favourite show so you can fast for ward through commercials and satellite radio eliminates those pesky ads for health products or car dealers that you don't want to listen to. People now have the power to pick and choose what they want to see or listen to.

This power has greatly affected the traditional world of marketing. Brands need to be creative in how they target their audiences because the traditional methods no longer work. The online channel has seen significant growth as a result, but even here users have become more savvy and have the ability to tune messages out as they see fit.

There has been a lot of buzz about content marketing but what exactly is it?

“Content Marketing is a marketing technique of creating and distributing relevant and valuable content to attract, acquire and engage a clearly defined and understood target audience - with the objective of driving profitable customer action.” – CMI Put simply, content marketing's main purpose is to attract and retain customers by changing consumer behaviour.

This is a not a process that occurs overnight, but one that is constantly changing and evolving to meet audience expectations and needs. Traditional brand spots or radio ads might try to sell you through product placement or messaging. Content marketing creates a communication channel between the brand and the audience without the 38 | Spring 2014

hard sell. With content marketing, it is less about the product or service a nd more ab out prov id i n g you r audiences with content that allows them to make informed decisions.

The payoff for a brand occurs when all this great information is rewarded with business and customer loyalty.

The Power of Story

Content marketing is being used by big brands like Apple, Coca-Cola and P&G. Coca Cola is a leader in this area. They are leveraging content marketing to meet their business objectives though stories that make people stop, think, discuss and share.

Their goal is to grab a greater share of popular culture.

Casinos have jumped into the mix as well, using it for both acquisition and retention purposes. For example, the Palms Hotel in Las Vegas redesigned their website in a responsive design for mat to improve the customer e x p er ience. ( Re sp on si ve de si g n optimizes content for smartphones and tablets.) This is critical as mobile and tablet usage continues to increase.

The site offers different experiences and caters to a person looking at the casino property for the first time versus someone who has been there before and wants to book a room right away. This is a good example of understanding the customer journey and creating content to support their overall experience.

Key to Marketing Mix

Creating and distributing great content should be part of your overall marketing mix. We see this theory put into practice when companies develop a content marketing strateg y before launching their Facebook pa ge, LinkedIn company prof ile or Twitter handle.

From an organic search perspective Google has shown us that they reward businesses that publish consistent content using natural language. Any pay-per-click campaign requires quality content to work effectively and create conversions. Engaging content is also necessary for inbound traffic and lead generation. The key to all of this is developing a content marketing strategy that supports all of these channels.

Content m a rket i n g w ill become i nc r e a si n g l y m o r e i mp o r t a nt fo r businesses. Casino marketers need to embrace this fact and understand that good content marketing can make a person behave differently. If you can change a person's behaviour, meet their needs and provide value at every turn along their journey you have a great chance of earning their loyalty and their business.

David Zbar is the Senior Vice President, Digital at Marshall Fenn Communications,a full-service marketing communications agency specializing in casino marketing. Contact davidz@marshallfenn.com or jimk@marshall-fenn.com

Let the Games Begin – Everywhere.

Imagine your players choosing a device, going where they want and playing their games the entire time. GTECH has a complete solution of systems and games backed by a team of experts who are ready to make interactive mobile gaming a reality for you and your players.

From land-based to mobile, we are bringing gaming to life! www.gtech.com

Š 2014 GTECH. All rights reserved. All trademarks and logos noted herein are trademarks owned by, or licensed to GTECH Corporation.

Millionaire Sevens™ proves that life’s better at the top. Players will have fun climbing the tower in this classic player favorite featured on the ALPHA 2 Pro™ V22/22 Hammerhead™ cabinet. With a thrilling bonus ladder that players climb with each spin, a wide-area progressive, and three free-game wheel bonuses with U-Spin™ interaction, this game is sure to draw players to its life of luxury.

Contact your Bally Account Executive today to experience the view.

BallyTech.com ©2014 Bally Technologies.

*Near-area progressive available as