Casino & Gaming International: Issue 13 by Casino & Gaming International

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THE SILVER LINING TO CRISIS RESISTANCE Publishing Director Jamie Kean Email: jamie.kean@casinoandgaming.net Editor Stephen Lawton Email: stephen.lawton@casinoandgaming.net Publishing Services Manager Louisa Bull Email: louisa.bull@casinoandgaming.net Distribution Manager Tracie Birch Email: tracie.birch@casinoandgaming.net Business Development Manager Stuart Jameson Email: stuart.jameson@casinoandgaming.net Advertising Mike McGlynn, Sales Director Email: mike.mcglynn@casinoandgaming.net Ray Blunt, Sales Manager Email: ray.blunt@casinoandgaming.net Vitor Cabrel, Sales Executive Email: vitor.cabrel@casinoandgaming.net

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ith the cyclical downturn running its course, there has been an unsurprising spate of headlines and commentary characterising the international financial system as being akin to a casino. But in so doing, it begs the question whether gambling with trillions ought to be regarded as the ‘problem gambling’ issue of today. Arguably, a serious social responsibility matter quite unlike anything the gaming industry itself could ever devise or would encounter. Ironically, as pressure predictably mounts for more transparency and regulation, it is in the gaming industry that comparatively good order has been kept by its owners and operators, despite speculative influences. Good order is for a sound purpose: the antidote to the pall of gloom that is beginning to ripple around the world is to persistently strengthen commercial aims and objectives, translate that into stable market access, and to build operational platforms and springboards for further advance. Both land- and remote-based operators are affected through the near-term, but in different ways. The casino concept has spun out, drawing to itself a range of non-gaming segments, especially in the US. Accordingly, big corporate expansion has grown proportionately vulnerable to the vagaries of wider economic factors in common with other business sectors. The casino core is distinguishable, but there is a compounding impact on confidence. As we all know, letting that slip has serious consequences all round. However, while high profile mega-scale projects, especially in Las Vegas, are being put on hold for the time being, possible future development catalysts in the Asia-Pacific – Singapore, Philippines, Vietnam and Japan – are receiving close but cautious attention. Active longer term planning for IR construction through maturing jurisdictional engagement not only demonstrates competitive intent, it solidifies the regional gaming base, while governments gain valuable tax income. Companies with past online gaming and betting exposure in the US – ended for most by the UIGEA two years ago – have learnt a thing or two about making rapid market adjustments before the current difficulties fully materialised. Stock values of key online operators with heavy US exposure did eventually, if partially, recover despite some initial cost incurred by establishing a presence in Europe, Asia-Pacific and the Americas. A glance at the crowded expo calendar reveals just how much potential is now being tapped in these locations. It would be wrong to quip ‘business as usual’, but reinvigorating the bottom line is increasingly a question of generating ‘new business as usual’. Most gaming businesses with R&D depth remain creative, flexible and cost-effective. Emergent entrepreneurial players in eastern and central Europe and South, Central and Latin America are key burgeoning markets for operators, manufacturers and suppliers. Strategies are sharply focused on creating product lines at all levels of the nascent gaming industry. Some legal eagles are selling new services, scenting a new stream of business – the business of advising on refinancing problems or mopping up procedures for gaming companies deemed ‘on the brink’. But rather than being conquered, it is necessary to be the conqueror. Adversity concentrates the mind and overcoming the downturn underlies all efforts at projecting business growth: tighter management of resources; sharper, targeted promotion of quality product value and efficient, extensive use of publicity mediums. The only solution is to be in the right place at all times, especially now when the chips are down. Confidence – the silver lining to crisis resistance – will then surely return; but there will be nothing for it to return to without the pioneering, professional spirit leading the way from the heart of the gaming industry. CGI

Stephen Lawton is editor of Casino & Gaming International

Casino & Gaming International 1

CONTENTS

FEATURES 9

CHALLENGING TIMES BRING OUT THE PIONEERING, PROFESSIONAL SPIRIT BY FRANK J FAHRENKOPF, JR.

AFTER THE GAMES IN MACAU AND SINGAPORE, WHAT NEXT? BY RICARDO SIU

VIETNAM: CATALYST FOR REGIONAL CASINO AND TOURISM GROWTH? INTERVIEW WITH DAVID SUBOTIC

HELL AND HAZARD: GAMING ROYALS, ARISTOCRATS AND THE ESTABLISHMENT BY JULIAN HARRIS

PRINCIPLES, PRACTICE AND PERFORMANCE: A ROAD TRIP OF DISCOVERY BY JOHN BURROWS

BEING THE MERLIN OF FLAWLESS ILLUSION AND DESIRE BY PAUL HERETAKIS

DETERMINING TOTAL CUSTOMER VALUE BY LEAVING NOTHING TO CHANCE INTERVIEW WITH BRUCE BARFIELD

Casino & Gaming International 3

CONTENTS

103

FEATURES 65

STRIVING TO ACHIEVE NEW GAMING MILESTONES BY NICHOLAS XUEREB

SILENTLY RUNNING: CONFIDENCE, SAFETY AND CRYSTAL CLEAR PROTECTION BY FRANK OETJEN

COMPLIANCE AGAINST ALL RISKS – A TECHNICAL PERSPECTIVE BY SALIM L ADATIA AND NOAH TURNER

INEPT ONLINE CASINO MANAGEMENT CAN DAMAGE PROFITABILITY BY TEX REES

ADOLESCENT GAMBLING: IS INTERNET GAMBLING A PROBLEM? BY JEFFREY DEREVENSKY

103 STRATEGIES FOR DETECTING AND CONTROLLING ELECTRONIC GAMING VULNERABILITIES BY MARK GRIFFITHS 109 SUCCINCT AND ACCESSIBLE STARTING POINT ON UK GAMBLING LAW REVIEW BY JOHN HAGAN AND MELANIE ELLIS

Casino & Gaming International 5

US & GLOBAL GAMING

CHALLENGING TIMES BRING OUT THE PIONEERING, PROFESSIONAL SPIRIT

BY FRANK J FAHRENKOPF, JR.

Amid the unfolding financial crisis the gaming industry continues to demonstrate its self-assured realism; and that is certainly what is to be expected at the forthcoming Global Gaming Expo (G2E). Since the gaming industry has expanded through dining, spas, property and shows, the US downturn affects gaming revenues in a similar way to its effect on tourism and entertainment. Being global, there is also an impact in Macau. With this in mind, in order to nourish the progress our industry is making – as well as meet the challenges that test any growing industry – it is vital for all the elements of the community to come together, discuss and plan for what the future holds.

s we prepare for this year’s flagship Global Gaming Expo (G2E), which will take place in Las Vegas this month, the global gaming entertainment industry is encountering challenging times. In the US, gaming company stocks have been slammed, jobs have been lost and we’ve been under fire from critics who claim we promised we were recession–proof. At press time, the US and global economies are fraught with uncertainty, and unstable financial markets around the world have investors fearful of what lies ahead. Consumers have cut back spending in these turbulent times, which is in turn impacting our business. I have always believed, and still believe, we are recessionresistant rather than recession-proof, and I believe there is evidence that is true, even in this environment. In 2007, commercial casinos in the US had gross gaming revenues of $34.13 billion. It is unlikely we will reach that number this year, despite the fact that the actual numbers show revenues were at about the same revenue level for the first quarter of this year as compared to last, with second quarter revenues down only two percent from 2007. As I write this column, we don’t have complete third quarter numbers yet, but indications are that results could be similar, or slightly worse, than those of the second quarter. Certainly, as the overall US economy has worsened over the past few months, the gaming industry here has been impacted accordingly. US casinos are impacted by people taking shorter trips for fewer days, by cutbacks in airline service and by people spending less on luxury items or eating out at nice restaurants. The industry also has been affected by the tightening capital markets. Financing for planned development projects across a host of industries has virtually dried up for the time

Casino & Gaming International 9

US & GLOBAL GAMING

>> MY EXPERIENCE TELLS ME THAT EXPANSION IS NOT A REAL THREAT FOR MACAU OR LAS VEGAS. THE REALITY IN THE US HAS BEEN THAT THE MORE GAMING EXPANDS ELSEWHERE, THE GREATER THE INTEREST IN VISITING THE CASINOS OF LAS VEGAS. THIS APPETITE IS DUE, IN NO SMALL PART, TO THE INDUSTRY’S CLOSE CONNECTION WITH ITS PATRONS. THE GAMING INDUSTRY TAKES A BACK SEAT TO NO OTHER INDUSTRY WHEN IT COMES TO MEETING CUSTOMER DEMAND. THE LATEST PROOF OF THIS IS THE GROWING DIVERSITY OF AMENITIES CASINOS ARE OFFERING. THE TREND BEGAN IN LAS VEGAS AND IS EXPANDING ACROSS THE US. AND, OF COURSE, ASIA IS MAKING THE CHANGE MORE QUICKLY AND DRAMATICALLY THAN IN ANY OTHER REGION. >>

being, meaning companies have had to rethink their timetables for some projects. Some of the major developments in Las Vegas and in other jurisdictions are still on track; however, many have been put on hold. It is very hard to discern national revenue trends in the US gaming industry because the market forces affecting revenues are so localised. For example, when we see some states have increased their revenues month over month since last year, this can be due to new properties opening in the past year, other properties renovating or offering new amenities at their facilities, and other localised factors. Even the number of weekends in a given month can impact revenues. And, in the states that are seeing a decrease in revenues compared to last year, there also may be factors other than the economy at work, such as smoking bans that went into effect during the past year in Colorado and Illinois, increased competition from other states, or natural phenomena, such as the floods in Iowa and hurricanes on the Gulf Coast. In some ways, we also may be a victim of our success at expanding the gaming experience. During past downturns, the overwhelming amount of our industry revenues came from gambling. Today, a huge percentage of the revenue for many of our companies, particularly in Las Vegas, comes from non-gaming amenities like fine dining, shopping, spas and shows. In fact, non-gaming revenue accounted for 59 percent of total revenue on the Las Vegas Strip in fiscal year 2006. Consumers often cut spending on these types of activities during tougher economic times, meaning we are impacted much like the rest of the tourism and entertainment industries. A close look at the numbers would seem to indicate that drive-in markets are not suffering as much as others. Iowa, Louisiana, Michigan, Missouri, South Dakota and, of course, Pennsylvania, all posted single-digit gains from 2007 to 2008 for the second quarter. That’s more than half of the commercial casino states. And in those states that are experiencing drops, there is often more than one factor at work. But the reality is we are seeing an impact, and even these markets are vulnerable as the overall economy weakens. Many executives predict that this downturn will last well into next year. Troubled stock markets and the widespread slowdown of the global economy are also impacting gaming jurisdictions 10 Casino & Gaming International

beyond the US, including Macau. Gaming revenues in Macau fell 3.4 percent in September compared with figures from 2007, the first annual drop since January 2006. And stocks in Asian gaming companies and of those foreign operators doing business there also are taking a hit. The global economic situation is not solely to blame for the troubles in Macau, however, as regulatory challenges unique to the region also are impacting its tremendous growth. Recent travel visa restrictions, including limiting gamblers from China’s southernmost province to one Macau visit every three months, are serving to cool Macau’s growth. The government’s 10-year moratorium on the issuance of new casino licenses, which was enacted earlier this year, also has shaken investors. According to a survey of 23 senior gaming officials from across Asia conducted for this year’s G2E Asia Future Watch Series, a slim majority (52 percent) thinks the moratorium is unlikely to last for its full term, but even a short-term moratorium will change the way Asian gaming has grown to date. This is particularly true when coupled with another restriction put in place this year – the open-ended cap on the installation of new tables or slot machines at existing operations in Macau. Still, annual revenue numbers for Macau, while not exhibiting quite as dramatic growth as in 2007, look to be solid for 2008. It is hard to fathom how quickly Macau has grown into the leading revenue generator of the global gaming industry. There are now credible predictions that Asian casino revenue, with Macau leading the way, could surpass the gaming revenue of the entire United States by 2012. A majority of 23 senior gaming officials from across Asia surveyed for this year’s G2E Asia Future Watch Series predicted Macau will continue growing gaming revenues at its current rate for another three to five years and lead the growth in Asia that will spread to Taiwan, Japan, Thailand, Singapore and South Korea. In some ways the growth of gaming in Asia is a déjà vu experience for those of us in the United States. Déjà vu on steroids would be more accurate, but déjà vu nonetheless. For example, in the early days of Las Vegas, casino gamblers came for only a day or two, but as the industry grew, it soon found ways to make the stay longer, and with the extended stays came increased revenue. With the fantastic developments on the Cotai Strip and other casino expansion

US & GLOBAL GAMING

in Macau, there is every evidence Macau’s day-trip economy could make that same transition. Another similarity I see in Asia today and in the US of two decades ago is expansion. The financial success of Las Vegas, the rest of Nevada and Atlantic City soon led to other states legalising casino gaming. Just as is and will be the case in Asia, each of these new US gaming jurisdictions developed in its own way, subject to varying regulatory restrictions, physical limitations and economic realities. With the opening of each new jurisdiction within the US came a new wave of questions about the financial impact on Las Vegas and other existing gaming communities. That, too, will happen in Asia. Questions will be raised about saturation and loss of revenue for Macau. And the same questions are being asked about the impact the growth of Asian gaming will have on US markets. The answers of the G2E Asia Future Watch executives reflect that uncertainty, splitting about evenly on whether regional expansion will be good or bad for Macau, but indicating the growth in Asian gaming will probably be good for Las Vegas. My experience tells me that expansion is not a real threat for Macau or Las Vegas. The reality in the US has been that the more gaming expands elsewhere, the greater the interest in visiting the casinos of Las Vegas. This appetite is due, in no small part, to the industry’s close connection with its patrons. The gaming industry takes a back seat to no other industry when it comes to meeting customer demand. The latest proof of this is the growing diversity of amenities casinos are offering. The trend began in Las Vegas and is expanding across the US. And, of course, Asia is making the change more quickly and dramatically than in any other region. While operators in Macau’s booming market earn roughly 90 percent of their revenues from gaming operations, the US experience, even taking into account cultural

differences, indicates Asian gaming operators will need to diversify their revenue streams in order to contend with increased competition in the years ahead. There are differences, of course, in the way casinos in Asia will develop. The Asian experts we spoke with for the G2E Asia Future Watch survey were adamant in their belief that it will be a long time, if ever, before slot-machine revenue will exceed the revenue from table games. Other differences have come to light as we have developed our Asian trade show and conference, G2E Asia. As with any new event, particularly when it is being introduced into new regions, it is important to understand the local culture and considerations. We have worked diligently to be sensitive to the differences in the Asian approach to gaming and even to meeting. The G2E Asia conference has sought to address the issues that are of particular interest in the Asian markets, and we seem to be accomplishing that goal. More than 8,200 people attended G2E Asia 2008, an increase of more than 73 percent from our inaugural event in 2007. This year’s event attracted gaming professionals from 70 countries as diverse as Australia, China, Hungary, Israel, Japan, Macedonia, the Netherlands, New Zealand, Nigeria, Peru, South Africa, Sweden, Thailand, the United States, the United Kingdom and Venezuela. G2E Asia 2008 also featured more than 175 exhibitors, three full days of world-class educational programming as part of its newly expanded conference and several networking events that have become a hallmark of the G2E brand. I think it’s fitting that G2E Asia in particular is one of the first trade show events to make a long-term commitment in Macau. We know how important it is for Macau to grow its convention and meetings business, and I’m proud that

Casino & Gaming International 11

US & GLOBAL GAMING

gaming, the pioneering industry in the economy there, also will be a pioneer in generating buzz about Macau as a premier meetings and exhibition destination for other global industries. In order to nourish the progress our industry is making – as well as meet the challenges that test any growing industry – it is vital for all the elements of the community to come together, discuss and plan for what the future holds. We make every effort, with valuable input from the Asian gaming community, to provide that through G2E Asia, but our success is dependent on the support of everyone in the gaming industry. The show and conference are a perfect accompaniment to an industry as it grows and prospers, but, as we are seeing in the current economy, it can be even more important during challenging times. One topic featured at G2E Asia that continued to generate significant interest and legislative activity stateside is Internet gambling. In fact, despite the fact millions of people around the world enjoy using the Internet to play games of chance, a solid majority of the US Congress does not share their enthusiasm for Internet gambling. The Unlawful Internet Gambling Enforcement Act (UIGEA), which Congress passed in 2006, requires banks and credit card companies to block electronic transactions to illegal Internet gambling businesses and prohibits the use of checks to fund illegal Internet gambling accounts. It is the law of the land. The implementation of the UIGEA regulations has faced several hurdles during the 110th Congress as the financial sector has strongly opposed the proposed regulations that would govern the law due to the excessive oversight burden they place on banks and other financial institutions. There is hope for eventual legalisation of Internet gambling in the US, however. The Chairman of the House Financial Services Committee, US Rep. Barney Frank (D-

12 Casino & Gaming International

Mass) has vowed to overturn UIGEA and legalise Internet gambling, but faces and uphill battle in doing so. The AGA continues to support the Internet Gambling Study Act, which calls for a comprehensive study of Internet gambling to be conducted by the National Academy of Sciences to help determine the best way for the US to deal with the issue. There will be a new president and a new Congress in January, so perhaps they will have a fresh perspective on this issue, but the odds are against an immediate shift in policy. The regulation and legalisation of Internet gambling in the US is a long term project. Should the technology prove to be available to offer an Internet gambling framework that satisfies the concerns of bricks and mortar regulators and our industry, the AGA will lead the fight to ensure that a responsible system of legal, regulated Internet gambling is put in place in the US as soon as possible. With today’s political and economic realities in mind, the conference at G2E 2008, which will be held 18th -20th November at the Las Vegas Convention Center, will include a specific emphasis on helping attendees maximise their professional knowledge in order to best address the current economic slowdown. The 17 distinct tracks offered at the conference will focus on subjects ranging from finance to food and beverage, and from entertainment to corporate social responsibility. There also will be opportunities to hear interesting perspectives on what effects this year’s US presidential election may have on the overall economy and the business world. The conference will offer four new tracks this year: casino design, finance, racino and retail. In addition, conference attendees will have the opportunity to hear from experts on a wide range of subjects in sessions such as “The Hard Way: Lessons from Gaming’s Most Challenging Political

US & GLOBAL GAMING

Environments,” “State of the Economy: Gaming CFO Roundtable” and “Brave New World: Emerging Games and Alternative Technology.” A major new attraction at G2E 2008 will be the addition of the Casino Design conference. Casino Design will offer a full day of conference sessions focusing on topics such as sustainable design, renovation, restaurant design and more. Additionally, the G2E show floor will welcome the Casino Design pavilion, which will feature exhibitors showcasing products and services related to the fields of architecture, construction, interior design, landscape architecture, signage, land use, furniture/fixtures, décor, themed environments, golf course design, hospitality lighting and more. G2E 2008 will reflect the changing nature of the gaming entertainment industry by highlighting the growth of entertainment and retail with two new specialty areas on the trade show floor. The Entertainment Arena at G2E will showcase the broad range of technologies, products and services that help create the truly magical live performances now associated with America’s casino industry. The Retail Promenade at G2E will include myriad retail products that are now offered to casino patrons within today’s diverse casino properties. Exhibitors include franchises as well as vendors offering products from apparel, jewelry, golf, eyewear, cosmetics, sundries and branded logo merchandise to high-end specialty products and private label production and distribution. To complement these two new specialty areas on the show floor and further emphasise the importance of these non-gaming amenities within the industry, there will be dedicated conference tracks for entertainment and retail. Industry experts will share insights and trend information about these subjects and how they play a critical role in the casino resorts of today. To wrap up, I want to touch on one new and one old but very important subject. The gaming industry always has been an industry of

pioneers, and we continue to use that ingenuity and independence to lead the way in new areas. One of these new areas is the use of green technology. This spring, news reports said that, with a total of 15 major new building projects in Las Vegas currently seeking the US Green Building Council’s Leadership in Environment and Energy Design (LEED) Certification, Las Vegas could soon be home to the world’s largest concentration of environmentally friendly hotel rooms. Some of Las Vegas’ most anticipated new projects are among those seeking LEED certification. These properties are incorporating a variety of eco-friendly features, from an on-site power plant and garden roofs to super-insulated windows and low-flow showerheads. And while the upfront costs of sustainable development are greater than those associated with traditional development, going green is good for business in the long run, with developers of the Las Vegas properties likely to get back three times the extra cost of constructing environmentally friendly buildings through the efficiencies gained and tax incentives from the state of Nevada. Our industry truly is among the leaders in adopting green technology, which is no wonder given our long history of implementing responsible business practices of all stripes. You’ve seen me write in the past about the importance of responsible gaming programmes, and that’s because it is unquestionably a business imperative for our industry. As such, I’m pleased that we will be welcoming the National Center for Responsible Gaming (NCRG) to G2E again this year to help all of us in the industry learn more about this important subject. Our industry continues to take responsible gaming very seriously, and it is in all gaming professionals’ best interests to do what they can to learn about these programs and implement them at their own properties. Across the globe, gaming is facing new challenges in these uncertain times, but I am confident we will emerge stronger and more capable. We will continue to innovate and deliver the entertainment experiences that our customers expect. We will continue to serve as a vital economic component of the communities where we operate, and we will continue to lead in the areas of corporate social responsibility. These are our goals, and nowhere will you find more opportunities to harness our industry’s strengths than at G2E’s premier events. As you look to the future for your business, I encourage you to take advantage of the resources and value G2E has to offer. CGI FRANK J. FAHRENKOPF, JR. Frank J. Fahrenkopf, Jr. is President and CEO of the American Gaming Association (AGA) in Washington, D.C. In his role as chief executive of the AGA, Fahrenkopf is the national advocate for the commercial casinoentertainment industry and is responsible for positioning the association to address related regulatory, political and educational issues. A lawyer by profession, Fahrenkopf gained prominence during the 1980s, when he served as national chairman of the Republican Party during the presidency of Ronald Reagan.

Casino & Gaming International 13

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ASIA: CASINO REGULATION & GROWTH

AFTER THE GAMES IN MACAU AND SINGAPORE, WHAT NEXT? BY RICARDO SIU

As Macau has reached a high level of growth surpassing Las Vegas in a very short period of time, so the race is on – as we now see with caution in Singapore – to develop casino gaming across Asia. That is fraught with both opportunities and pitfalls, precisely because the Macau SAR has acted to limit licenses, address infrastructure and regulatory deficiencies. The lessons are there for any Asian jurisdiction following in the footsteps of Macau, and investors will clearly be weighing the issues.

n 2002 the Macau Special Administrative Region (SAR) Government ended its casino monopoly by granting three new casino licenses and subsequently approving three sub-licenses directly or indirectly, to the world’s leading casino operators: Wynn Resort, Las Vegas Sands’ Venetian, MGM and Crown. The move led to a most remarkable business turnover success. Four years later Macau’s reported gross casino revenue (GCR) had surpassed the Las Vegas Strip, thus crowning Macau as the world’s largest casino jurisdiction. Indeed, the impressive performance of Macau’s casino business is primarily a result of Chinese Government support under the ‘One Country, Two Systems’ policy, and especially through the Individual Visit Scheme (IVS) launched in the summer of 2003, which permits Mainland Chinese to visit Macau with simplified visa application and approval procedures. After four years’ rapid growth Macau’s market in the second half of 2008 is entering a consolidation stage as a consequence of the Chinese Government’s tightening of its IVS policy. With deficiencies in human resources as well as pressure on the local infrastructure, drawbacks in the regulatory system are hampering the sustainable growth of Macau’s casino industry – something that ought to be cautiously re-examined by all parties concerned. In another part of Asia, the Singapore Government’s plan to develop a world-class casino business and Integrated Resort (IR) is still underway. Singapore’s two IRs (i.e., Marina Bay Sands and Resorts World at Sentosa, Genting International), are scheduled to start business in 2010. Compared to Macau, Singapore displays a stricter attitude to the modern casino gaming. In principle, the Singapore Government’s decision to legalise it is driven by the need to diversify its traditional

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ASIA: CASINO REGULATION & GROWTH

>> ANOTHER IMPORTANT LESSON LEARNT FROM MACAU IS THAT THE FREE MARKET APPROACH MAY NOT BE AN EFFECTIVE POLICY FOR THE DEVELOPMENT OF CASINO GAMING, ESPECIALLY IN A JURISDICTION WHERE THE REGULATORY SYSTEM AND ENFORCEMENT MECHANISM IS NOT FULLY DEVELOPED. IN PRINCIPLE, THE DECISION OF THE MACAU SAR GOVERNMENT TO REPLACE THE CASINO MONOPOLY BY ISSUANCE OF THREE NEW LICENSES WAS CORRECT; HOWEVER THE GOVERNMENT FAILED TO ACT PROACTIVELY AND THE MARKET FAILED TO SELFREGULATE FOLLOWING THE APPROVAL OF ANOTHER THREE SUB-LICENSES. >>

industries while speeding up progress toward urban redevelopment. The public’s vigilance in this matter combined with the sense that Government practice is perceived as very efficient and transparent, points to Singapore establishing a uniquely comprehensive regulatory framework and business model for its casino gaming industry. That would include the formulation and enforcement of regulations on market positioning, internal control procedures and the combining of gaming and non-gaming businesses. Nevertheless, history tells us that the scale and potential growth of a casino sector is commonly in inverse proportion to the degree of public control. So whether or not Singapore can make a breakthrough is certainly an interesting factor for the world’s investors to discuss in the coming decade.

THE LESSON FROM MACAU As a city on fire in the second half of the 1990s, where various triad groups were fiercely fighting for the financial benefits associated with the casino business, Macau’s major changes since 2002 to become the world’s top casino resort centre shocked global investors by its outstanding business performance and market potential in this new millennium. Indeed, the total amount of fixed capital investment injected into the industry’s development in the past five years has been over US$10bn. Parallel to the rapid expansion of the industry’s hospitality capacity, the Chinese Government’s IVS policy added to the amazing business results reported by the industry. From 2002 to 2007, the total number of visitor arrivals increased significantly from 11.53m to 26.99m, representing a Compound Annual Growth Rate (CAGR) of 18.5 percent (over 50 times of Macau’s resident population). On the basis of such a high volume of visitor arrivals, Gross Casino Revenue (GCR) derived by Macau’s casinos also grew remarkably from USD2.78bn to USD10.38 – a CAGR of 30.1 percent. As depicted in Figure 1, the recent increase in the number of visitor arrivals to Macau is largely brought about by the Chinese Government’s implementation of the IVS policy. Consequently, visitor arrivals from Mainland China surpassed those from Hong Kong since the last quarter of 2003, and ranked as the largest single source of visitor arrivals to Macau. On average, monthly visitor arrivals from the Mainland in the first six months in 2007 had been more than 1.4 million, with around 40 percent traveling under the IVS. 18 Casino & Gaming International

Even the recent growth in the GCR of Macau’s casino business is largely attributable to the preferential policies of the Chinese Government. That has enabled significant expansion of the industry’s capacity and high standards of gaming and non-gaming facilities including service quality, all of which gives rise to the dramatic expansion of its customer base. For example, over a long period of time, monthly visitor arrivals from Hong Kong and other countries were around 400,000 to 500,000, and 200,000 respectively. Since the middle of 2006, the bases of these two sources of visitor arrivals have climbed to over 600,000 and 300,000 respectively. In other words, while public policies play an important role in determining the business performance of Macau’s casinos, capital investment and business efficiency are also indispensable elements for the ultimate success of the industry. However, despite the industry’s rapid expansion in terms of its physical scale and market size, a number of crucial supporting factors remain under-developed, which actually hinder the further development and sustainable growth of the industry. First, local infrastructure has been hitting its bottleneck. On top of complaints received from visitors and local residents on such issues as congestion and deterioration of the quality of life, new casino resorts that are attempting to develop such non-gaming businesses such as conventions and exhibitions (i.e., the MICE segment), also face significant restrictions imposed by the local infrastructure. Second, supply deficiency in both quantity and quality of gaming and related human resources from the local market also impede the business efficiency and service quality of most new and large-scale casino resorts. Although imported labour could be a possible solution to human resources deficiency issues, social and economic conflicts derived from the effect of importing labour on the local minorities (especially to the under-educated and under-productive local working population), have generated significant resistance to this option. Considering that the recent growth of Macau’s casino business has markedly benefited from special policy arrangements, fixed capacity expansion of the industry may not be supported by other related factors, therefore calling into question the sustainable growth of this industry. Consequently, as the Chinese government tightened IVS policy from the 2nd quarter of 2008, business performance was badly hit, which in turn significantly qualified the

ASIA: CASINO REGULATION & GROWTH

market’s projection of Macau’s casino success. Another important lesson learnt from Macau is that the free market approach may not be an effective policy for the development of casino gaming, especially in a jurisdiction where the regulatory system and enforcement mechanism is not fully developed. In principle, the decision of the Macau SAR Government to replace the casino monopoly by issuance of three new licenses was correct; however the government failed to act proactively and the market failed to self-regulate following the approval of another three sub-licenses. Consequently, the scale of expansion of the industry (e.g., the number of tables and slots) in 2007 seemed to be progressing much faster than the industry and the local economy could afford. In addition, competition between some major casinos in the VIP-play (gambling-room) segment also went beyond control (e.g., commission paid by some casinos to the junket operators, was bid up to 1.35 percent at the beginning of 2008). Finally, what might be called the ‘vigorous/chaotic’ cycle was brought under management only due to the Macau SAR Government’s act of ‘freezing’ the scale of the industry in April 2008, as well as by capping the commission rate at 1.25 percent. Simultaneously, the Chinese Government also tightened the IVS as a measure to ‘cool down’ the over-heated market in Macau.

THE EXPECTATION IN SINGAPORE The Singapore Government has been extremely cautious every step of the way: from planning to the official announcement of legalising the integrated resort (IR) form of casino gaming in December 2004; followed by inviting interested parties to bid for the license from late 2005 and finally awarding the license to Marina Bay Sands (MBS) in June 2006 and another license of Sentosa Island to the Genting International – Resorts World at Sentosa (RWS) in

December 2006. In principle, the approval of casino gaming was justified by the Singapore Government as a measure to strengthen the country’s capacity in the development of its tourism and MICE industries. In fact, the former was indeed expected to form only a small part of the much larger segments of the latter two. In 2004 when the Singapore Government legalised casino gaming, the total number of visitor arrivals to the country was 8.33m, where over 70 percent was from ASEAN countries and only 10 percent was from Mainland China. Taking into consideration the increasing national income in China, the resultant demand for leisure travel by the Chinese community, and the lag in tourism resources compared with its neighbouring countries (e.g., Thailand), the inclusion of casino gaming as a unique iconic design of the IRs is an effective decision. With the opening of the MBS and RWS in 2010, the total projected number of visitor arrivals could double between 2004 and 2015. In addition, an increase in visitor arrivals could reasonably be expected. For example, the RWS anticipated that by 2015 it could host 10m tourists and produce S$15bn in tourism receipts (Resorts World at Sentosa officially commences development ……, 2007). On the basis of the progress of the two IR projects in the last two years, it is evident that the scale and structure of casino gaming in Singapore would not deviate much from the initial proposal. And the changes announced so far are mostly concentrated around the expansion of tourism-related facilities. For example, Mrs. Cheong Koon Hean, CEO, Urban Redevelopment Authority of Singapore, stressed that MBS would transform Marina Bay into the “vibrant heart of Singapore” and a new vision of a “dynamic 24/7 Garden City by the Bay” (Singaporeans were invited to experience the Marina Bay Sands……, 2007). In addition to the proposal of

Figure 1 Change in the source and number of visitor arrivals (January 2000 – June 2008) Source of data: E-Publication – Tourism and Services – Visitor Arrivals.

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constructing the first Universal Studios theme park in Southeast Asia, DreamWorks Digital Animation Studios and the world’s largest oceanarium Marine Life Park, the RWS announced additional investment in six new attractions for tourism development in Singapore (Resorts World at Sentosa adds ……, 2007). Moreover, parallel to the construction of the two IRs, both the Singapore Government and the industry have launched related infrastructure construction projects and a human resources development programme to accommodate the potential changes in the local economy. For example, infrastructure construction of a new bridge is undertaken to widen the existing Sentosa Causeway (Vivo City – Brain – Sentosa Gateway) which would be an essential project to attain business efficiency when the RWS is opened in 2010. In addition, various related college and vocational training/retraining programmes have been organised for the local community as a preparation for the new opportunities and challenges. As regional competition will get increasingly fierce, it is commonly agreed that the industry’s turnover and profitability will be negatively correlated with the level of government control, but proactive planning from the government and the industry are nevertheless necessary. Given this dilemma, the experience of casino development in Singapore could provide a unique and valuable case study of its place in the world market in this new millennium.

THE DYNAMICS FOLLOWING MACAU AND SINGAPORE Following the success of Macau in restructuring its casino industry, and the Singapore Government’s key decision to legalise casino gaming, significant dynamics have been generated. Other Asian countries are being pushed to seriously consider future development and to legalise this high turnover, high profit business. For example, the

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Philippines have planned to aggressively follow the physical development models used by Macau and Singapore (i.e., the Las Vegas style casino resorts and mega resorts). In October 2008, the government-owned gaming company PAGCOR (Philippine Amusement and Gaming Corp) announces that its 150-hectare Philippine gaming city will commence construction in early 2009 (Philippines Manila Bay Casino City ……, 2008). In addition, both Taiwan and Japan Governments have entered into a series of discussions about casino legalisation as a measure to develop their tourism industries and recapture their people’s gaming expenditure that is spent overseas: “Japan would be a latecomer to a gambling boom across the region, which is looking to Las Vegas-style super casinos to entice more tourists” (Rook, 2007). Moreover, although China is the largest “importer” of casino gaming in the global market, it continues to oppose legalisation of the casino industry for the foreseeable future. The problem is that in the meantime outflows of gambling expenditure from Mainland China continue and that is sure to be a key concern to the related policies of the Chinese Government in the coming years. In principle, the impressive business performance in Macau has proved to various countries that actual and potential demand for modern casino gaming is huge; especially demand from the Chinese community (or broadly speaking, the Asian community). Nevertheless, the “vigorous/chaotic” cycle associated with the industry between 2004 and 2008 highlighted a number of crucial issues. First, development and potential scale of this industry is highly influenced by public choice and related policies. Second, effective government intervention is inevitable to secure proper structure and sustainable growth. Indeed, strategic issues over profit satisfaction versus profit maximisation should be the prior decision examined carefully by a government, and the experience of Macau and Singapore must be taken into consideration.

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of course their practices should never be considered directly replicable. CGI

REFERENCES E-Publication – Tourism and Services – Visitor Arrivals. Statistics and Census Service (DSEC). Retrieved on July 28, 2008 from http://www.dsec.gov.mo/index.asp?src=/ english/html/e_tourism.html Philippines Manila Bay Casino City Gets Go Ahead. Retrieved on October 11, 2008 from http://asia.a2zcasino.eu/asia-casino-news/philippines-manila-baycasino-city-gets-go-ahead/ Resorts World at Sentosa adds new attractions to destination. Press Release, Resort World at Sentosa (November 6, 2007). Resorts World at Sentosa officially commences development. Joint Press Release, Resort World at Sentosa (March 1, 2007). Rook, Daniel (April 15, 2007). Casino giants line up as Japan prepares to roll the dice. Retrieved on August 23, 2007 from http://uk.biz.yahoo.com/15042007/323/casino-giants-line-japan-preparesroll-dice.html Singaporeans invited to experience the Marina Bay Sands for the first time at public exhibition. Press Release, Las Vegas Sands Corp. (May 3, 2007).

SELECTED PUBLICATIONS AND WORKING PAPERS IN CASINO GAMING

GOLD RUSH, OR LOOK BEFORE YOU LEAP? It is commonly argued that given the huge demand for casino gaming in the global market, if casino gaming is legalised and the scale of economies of this industry could be achieved by means of implementing related public policies, the government would be in a much better financial position to spend more on the local community (e.g. education, medical care, infrastructure, etc) without the need to pass the financial burden (raise taxes) onto local residents. In addition, as a very profitable business, casinos commonly provide good pay and job opportunities for the local workforce. In other words, casino gaming is a persuasive measure that raises both public revenue and builds employment opportunities in a host economy. Moreover, a significant amount of capital investment injected into the development of a modernised casino sector (casino resorts), could provide related resources for an economy’s development of high value-added leisure industries, as well as urban redevelopment. Such straight-forward developments will be central to Asia’s further casino gaming expansion in the coming decades. Nevertheless, a comprehensive and effective regulatory system is a pre-requisite for development and sustainable growth of casino gaming, so most Asian countries/regions (except Singapore) may have to watch carefully before rushing to compete for these enticing prizes. In principle, even though the foundation of casino gaming is universally conventional, the scale and composition of this industry must be tailored in such a way that it fits into the particular social, historical and political setting of the host economy. It is worth noting that while Macau is Macau and Singapore is Singapore, their experiences are valuable reference points for other Asian casino jurisdictions, although

SIU, R. C. S. (2008). An institutionalist perspective on casino gaming and economic development. Ms presented in the Symposium of the Southern Economic Journal – Gambling, Prediction Markets and Public Policies, 15th16th September, 2008, at Nottingham, UK. LI, G. Q. And GU, X. H. and SIU, R. C. S. (2008). The impact of gaming expansions on economic growth: A theoretical reconsideration. Manuscript, presented in the Symposium of the Southern Economic Journal – Gambling, Prediction Markets and Public Policies, 15th -16th September, 2008, at Nottingham, UK. GU, Z and SIU R. C. S. (2008). Macau casino hotel labor force quality: An investigation based on employee self-assessment. (Revised & resubmitted to the International Journal of Contemporary Hospitality Management) GU, Z and SIU R. C. S. (2008). The Macau casino industry labor force quality – An investigation form the customer service perspective. (forthcoming: UNLV Gaming Research and Review Journal) LAI, R. N. L. and SO, R. W. and SIU, R. C. S. (2008). What does a concept attract? The case of gaming in Macau. (forthcoming: Journal of Gambling Business and Economics). SIU, R. C. S. (2007). Formal rules, informal constraints, and industrial evolution ? The case of the Junket Operator Regulation and the transition of Macau’s casino business. UNLV Gaming Research and Review Journal, 11(2), 49-62. SIU, R. C. S. (2007). Is casino gaming a productivity sector? A conceptual and cross-jurisdiction analysis. Journal of Gambling Business and Economics, 1(2), 129-146. EADINGTON W. R. and Siu, R. C. S. (2007). Between law and custom — Examining the interaction between legislative change and the evolution of Macau’s casino industry. International Gambling Studies, 7(1), 1-28. SIU, R. C. S. (2006, December). The puzzles behind the mania: Macau’s unfinished projects. Casino & Gaming International, Issue 4, 2006, 59-63. SIU, R. C. S. (2006) Evolution of Macau’s casino industry from monopoly to oligopoly – Social and economic reconsideration. Journal of Economic Issues, 40(4), 967-90. SIU, R. C. S. and CHENG, H. I. (2004). A matter of urgency: Providing a levelplaying competitive environment for Macau’s casino industry. In Journal of Macau Studies, 20, 191-205.

RICARDO SIU Ricardo Siu is currently employed as the associate professor of Economics and International Finance, and the programme coordinator of the BBA in Gaming Management, servicing the Department of Finance and Business Economics at the Faculty of Business Administration at the University of Macau. Ricardo is an internationally-known scholar in the stream of casino gaming, especially in the areas of public policies (including institution and institutional change) and evolution of casino gaming in Macau and other Asian jurisdictions. In addition, he is an invited speaker of various international gaming conferences.

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RELIABILITY, RICH EXPERIENCE AND STRONG R&D Today, who would argue that information is not a powerful medium? The fact is for gaming operators IT is of critical importance. So it is vital they are provided with the necessary data for total and real time remote control, because that results in reduced costs and greater efficiency in the processes and handling of events in casinos and slot halls. Not only does that call for sound management and expert technical support, but with timely availability of comprehensive information, it ensures the very best in decision making. The solutions offered by Advansys, a Slovenian company based in Nova Gorica, do just what casino owners and managers seek to maximise their operations. The company’s CEO, Mr. Zlatko Waiss, who is also the key figure in the development of Advansys’s main product – SlotScannerTM system, has long experience in slot management system design which contributes significantly to Advansys global growth. Slot system development started 15 years ago but the modern era began in 2003 when Mr. Waiss, together with his team of systems specialists, established a strategic alliance with the Hit Group, one of the biggest European casino operators. Changes in Slovenia’s gaming legislation, now more stringently binding on all casinos operating slot systems today, has enabled Advansys to widen its knowledge of slot floor management processes within a dynamic environment. This provided Advansys with the opportunity to capitalise upon its experiences and to create a leading modern product within a superbly regulated environment. Mr. Zlatko Waiss, CEO

Advansys has already achieved an 80 percent share of the Slovenian market which globally is one of the most advanced for slot systems giving the company strong home brand recognition. There is a sharp battle for customers in Slovenia’s extremely competitive market for high-tech slot management solutions. The guests in Slovenian casinos – mostly Italians, Austrians and Croatians – vary in their preferences and habits making for interesting patterns of gaming behaviour. The company’s mission is to successfully establish itself in the international market by developing, producing and selling IT systems for the gaming industry. “It is our company’s vision to become one of the world leaders in this segment of gaming IT systems,” said Janez Petkovek, Sales & Marketing Manager. “Since 2006 Advansys has extended right across international markets and in less than 5 years is now one of the top IT system suppliers with quality, comprehensive slot management systems. There have been installs in the Caribbean and several EU countries including Croatia, Montenegro and other Balkan countries like Bulgaria, where Advansys has established a full version of the SlotScannerTM System, connecting four Ceasars’ casino locations into a Multi-site network. The company has also successfully entered Asian markets in Macau and Hong Kong. “Advansys has a complete solution for slot management already prepared and has the means and the readiness to work individually with every customer – customising the product, adapting to local regulations, languages and processes”, underlines Petkovsek. We offer an intelligent business solution to our customers and Advansys’s innovative development team create products following the ‘cash free’ global gaming trend while closely focusing on ensuring individual players’ satisfaction. Advansys has paid great attention to the maintenance and uninterrupted operation of its current locations. To achieve this high level of service a team of skilled technicians, led by Mr. Benjamin Zeleznik, is ready at any time of the day and on any day of the year to swiftly and efficiently help customers with maintenance and service needs. In addition, Advansys has regular consultations with customers to ensure maximum support for business processes using the SlotScannerTM System, which can be upgraded according to customers’ needs and wishes. With global market competitiveness growing, it is essential to advance long term consolidation through cutting edge solutions and support services to casino operators, irrespective of whether local legislation requires stricter regulation of the casino’s business. Consequently, Advansys keeps in the front rank of the slot system development.

Advansys has been recently awarded best Casino Equipment Manufacturer in the Balkans in the category of ‘other equipment’ which included such distinguished competitors as suppliers like Progressive Gaming International and ACE of South Africa. This award is proof of the company’s dedication to and care of the customer, demonstrating our extensive understanding of the ongoing business growth in the region.

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ASIA: CASINO RESORT DEVELOPMENT

VIETNAM: CATALYST FOR REGIONAL CASINO AND TOURISM GROWTH? INTERVIEW WITH DAVID SUBOTIC

Asia is an immense region for largescale casino resort development and Vietnam is a rising competitor with the expectation that the Ho Tram Strip, as largely pristine territory, will become another hub for 300 million potential clients. That is within regional reach, quite apart from the impact of the global market. And phased construction must meet the Governmentâ&#x20AC;&#x2122;s rigorous licensing standards, which are aimed at creating a wide variety of leisure amenities and services while observing strict environmental demands.

GI: Can you describe the assessment Asian Coast Development Ltd (ACDL) made that suggested southern Vietnam is an ideal, while untested, casino resort location?

DS: There were a few things that attracted us to the potential of this project, not the least of which is the land. When we first saw the site three years ago, we fell in love with it immediately. There are so few unspoiled beaches left in the world. And we have more than 2kms of beachfront, within 100kms of a major metropolis with more than eight million people. During that same time, we also saw a rapidly developing country of more than 84 million people emerging as an increasingly popular tourist destination with an under served tourist market, particularly in the 5-star category. Tourism has continued to grow. In fact, Vietnam is within easy access for more than 300 million potential clients, a huge regional market that does not even take into account the global travel market. Considering all these factors, and the growing popularity of casino gaming in Asia, it is clear to see that Vietnam is an ideal casino resort location. And we are obviously not the only ones that feel this way, as our project was selected from dozens of applications to become the first tourism development to receive an investment certificate that includes a Las Vegasstyle gaming license. CGI: What does the license granted allow you to do? Are there any special differences from other Asian resort models? DS:The license allows us to operate Las Vegas-style casinos within the resorts that will make up the Ho Tram Strip. The Casino & Gaming International 25

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>> I THINK THE PAST FEW MONTHS HAVE SHOWN US THAT THERE IS AN INSTABILITY FACTOR THROUGHOUT THE WORLD AND THAT ASIA MAY IN FACT BE BEST POSITIONED TO WEATHER THE STORM MOVING FORWARD. WE FEEL ONE OF OUR BIGGEST STRENGTHS IN THIS REGARD IS THE FACT THAT WE ARE PLANNING A MULTI-PHASED DEVELOPMENT. STAGGERED CONSTRUCTION SCHEDULES ALSO PROVIDE US WITH THE FLEXIBILITY AND AGILITY TO DEAL WITH ANY ECONOMIC CHALLENGES PROACTIVELY. << casinos will have live table games, slots and VIP rooms, providing the complete Las Vegas experience. In terms of comparison, there are unique characteristics to every model. And in our case, I think the biggest difference might be the stringent licensing process. The Vietnamese Government didn’t just want a casino, they wanted a development that can compete on a world scale and we put together a team capable of delivering that. But let’s not forget that Macau is primarily a gambling destination catering to serious gamers and high-rollers with a penchant for one day visits. On the other hand, the Ho Tram Strip will offer a complete resort experience that will appeal to families, individuals looking for a more complete vacation experience, and businesses looking for a unique and exciting place to hold conferences and meetings. CGI: What other considerations did the government ask for before granting the license? DS: In order to be considered for an investment certificate that includes a gaming license, proposed developments had to be large scale projects of a true 5-star nature with an environmentally conscious design, and had to be planned for a designated tourist zone, such as Ba Ria-Vung Tau Province. We worked very closely with the government throughout all stages of planning the development, so we were well aware of these requirements and it was easy for us to comply as they fit in with our overall plan for the design of the Ho Tram Strip, which we always envisioned as a large 5-star development in a tourist-ready destination. CGI: What are some of the environmental preservation and conservation factors taken into account for the development? DS: The Vietnamese government has been very strict about a number of development issues before they granted an investment certificate to this project. In order to satisfy the government’s requirements, the proposed design has had to adhere to a number of stringent environmental preservation and conservation guidelines. This was not an issue for us, as it was always our intention to blend this resort into the beautiful natural surroundings while disturbing as little of the environment as possible. This can be seen in a number of aspects of our development, from technical issues such as our plans for waste management and removal right through to major parts of the development, such as the championship golf course being designed by Greg Norman. Greg has always made it 26 Casino & Gaming International

his approach to disturb as little of the surroundings as possible, while seamlessly fitting the course into the natural environment. This made him a natural fit for our project and we are very pleased to have him on board. I like to think he is equally excited, as he has said that Ho Tram is one of the most beautiful pieces of land he has had the opportunity to work with. CGI: What do you consider the design highlights and what is cutting edge about the resort’s attractions? DS: We feel that the one of the biggest attractions we are able to offer is the very rare combination of beach, entertainment, and adventure vacation experiences all in one location. Of course, we have the beautiful white sand beach, designed by nature that we can’t hope to improve on, but we will add to it with experiences like the Greg Norman golf course, a huge underwater aquarium, state of the art conference facilities, a wide selection of top end restaurants and night clubs, expansive spa and shopping facilities, as well as activities unique to South East Asia, such as an opportunity to swim with dolphins. As the development will contain five separate and distinct resorts, we have the luxury of being able to incorporate a number of different design elements while still maintaining the necessary degree of consistency. The first two resorts have been designed by Paul Steelman, who provided spectacular touches like the world’s longest piranha bar, while paying attention to every detail. He did an excellent job of combining traditional serenity with modern luxury. CGI: What does it mean to ‘blend traditional serenity with modern luxury’ in Vietnam? DS: Because Vietnam remains somewhat of an underexplored tourist destination, you still have very much this feeling of peace and calm that pervades the tourist industry, particularly in coastal areas such as Ba Ria-Vung Tau province. What the country has been lacking is the true 5-star vacation experience, as the infrastructure to accommodate that type of vacation has not been available. However, it is precisely what we are offering with the Ho Tram Strip. It will boast every type of modern luxury imaginable in a beautiful, relaxing setting, providing guests with a truly memorable experience. CGI: Describe the core foreign visitation expected and what projections/models were used to demonstrate potential?

ASIA: CASINO RESORT DEVELOPMENT

DS: As I mentioned earlier, there are more than 300 million people who live in close proximity to Vietnam, with the resources to travel there. We expect many of these visitors to originate from mainland China, but are also confident we will welcome large numbers of visitors from Korea and Japan, as well as other South East Asian nations. There are also other destinations such as Russia and Germany, which also send many visitors to Vietnam on a yearly basis. We also have a growing percentage of Vietnamese nationals with the resources to visit the Ho Tram Strip and a growing ex-pat population in Vietnam. Macau stands out as a model that shows the potential of Las Vegas style gaming in Asia, but as mentioned earlier, up until now they have stopped short of offering the full Las Vegas experience. This is increasingly true of as well. We also expect other Asian destinations, like Singapore to name one, to be extremely successful. But we feel that we will be one of the only Asian resorts to offer world-class beach, adventure and entertainment vacations all in one. It must also be said that the growth of gaming in Asia has been so fast that some people fear we may be approaching critical mass, but if you compare the number of casinos in Asia with those in North America, Asia is still far behind and has a much larger population base from which to draw. CGI: What about regional instability factors and calculations made for this risk? DS: I think the past few months have shown us that there is an instability factor throughout the world and that Asia may in fact be best positioned to weather the storm moving forward. We feel one of our biggest strengths in this regard is the fact that we are planning a multi-phased development. Staggered construction schedules also provide us with the flexibility and agility to deal with any economic challenges proactively.

CGI: Have you developed a social responsibility programme? DS: We feel strongly about being a socially responsible corporation and have already made several strides in that regard, with several more initiatives on the horizon. We have teamed with local contractors to donate houses to the some of the needier members of the local populations and have also been in contact with NGOâ&#x20AC;&#x2122;s operating in Vietnam about how we can support their projects, including the renovations of a childrenâ&#x20AC;&#x2122;s hospital in Vietnam. Recently, we have entered into negotiations with the well-respected Room to Read charity about how we can offer support both locally in Ba Ria-Vung Tau and nationally to their projects, which include building libraries and computer labs for the youth of Vietnam. We are also working with a local charity called Koto, which provides hospitality industry training to at-risk youth and offers them hands-on experience through a network of restaurants in Ho Chi Minh City and Hanoi. Moving forward, we have some very exciting ideas in the pipeline, including many of our own initiatives and you can expect some major announcements along those lines in the months to come. Throughout this process, we have remained in close contact with the Vietnamese government to ensure that our efforts are concentrated where the government feels they are needed the most. CGI: In what way do the Governmentâ&#x20AC;&#x2122;s plans for tourism in general assist casino resort growth? DS: The Vietnamese government recently identified tourism as a major driver of economic growth and has publicly stated its support for continued growth of the tourism sector and the development of a limited number of high-end, integrated

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entertainment complexes able to compete with the best attractions in the Asia-Pacific region. Simply put, The Vietnamese government realises that tourism will be a major source of income moving forward and will also help to spread and enhance Vietnam’s reputation as a great place to business throughout the world. Unfortunately, at this point, the demand for destinations appropriate for high-spending vacationers and business men is far outstripping the supply. The government has wisely identified that major investment is needed in a hurry to bring the tourism infrastructure up to top international standards. This is where the investment in mega-resorts, such as the Ho Tram Strip is so important. The billions of dollars invested in such projects will act as a catalyst that will stimulate the development of the rest of the country’s tourist industry. CGI: Do you think Vietnam will ultimately compliment or compete with Macau in the future? DS: Obviously, on some level Vietnam will be competing with Macau for the same tourist dollars. However, if you look at tourism on a global scale, as the emergence of Vietnam as a top-tier tourist destination in such close proximity to Macau really just serves to strengthen Asia as a premier tourist destination on the global map that is attractive to visitors from all over the world. As I said earlier, Macau is primarily a gambling destination catering to serious gamers and high-rollers with a penchant for one day visits. The Ho Tram Strip, meanwhile, will offer a complete resort experience that will be attractive to families, individuals looking for a longer vacation experience, and businesses looking for a unique conferencing and meetings destination. CGI: What is the significance of Thailand’s and Singapore’s growth for the forthcoming casino resorts in Vietnam? DS: As with Macau, we will be competing for the same vacation and MICE dollars on some levels, but looking at the big picture, the competition will make for a stronger continental tourist industry that will position Vietnam, Thailand and Singapore among the world’s most desirable 28 Casino & Gaming International

destinations. CGI: What is the extent to which Vietnam’s venture into Vegas-style casinos will act as another gaming catalyst in the Asia-Pacific region? DS: We are confident it will be a catalyst for the region, but it is our hope that Vietnam’s casino expansion in general, and the Ho Tram Strip in particular, will act as a catalyst not only for gaming but for the entire travel industry within Vietnam and the region in general. What we are building here is on scale with some of the largest resorts in the world with a unique product in a unique location. We are confident it will be received as having a positive domino effect on the travel and hospitality industries throughout the region, thereby increasing income and improving living conditions for a large number of citizens in some of the world’s most quickly emerging economies. CGI

DAVID SUBOTIC Prior to becoming Asian Coast Development CEO, David Subotic was a leading investment consultant with respected Canadian investment banks Haywood Securities and Yorkton Securities. While specialising in the gaming sector, Subotic has cumulatively raised more than US$2bn in financing. Widely recognised for his extensive knowledge of the gaming and hospitality industries, his vision and most importantly, his foresight, Subotic has also played key roles in financing deals for resort-casino developments planned by a number of top North American gaming firms. A pioneer in exploring the feasibility of establishing Las Vegas-style gaming internationally, Subotic anticipated exponential growth in Asia long before the current expansion. David has long held that Vietnam is an underserved tourist market and intends to spur its evolution into a must-see Asian destination, while simultaneously examining opportunities in emerging tourists markets throughout the world.

Unidesa’s mystical and diverse ‘Time Gate Series’ launched at SAGSE 2008 CIRSA, one of the world leaders in the gaming and leisure sector, is present in every industry segment, from the design and manufacture of gaming machines through to the operation of bingo halls, route operations, casinos and lotteries. Within Cirsa, the B2B Division provides gaming machines to the Operational Divisions of the Corporation and also sells them to external clients. One of the B2B Division’s brands is Unidesa Gaming & Systems, which is focused on casinos slots, electronic bingos, gaming machine control systems and bingo hall inter-connection systems. Founded in 1983, Unidesa Gaming & Systems (UGS) has become one of the mainstays of the corporation, focusing its activity on design, manufacturing, sales and services for casino and slot systems all over the world. UGS offers casino operators all the high quality solutions they need and the technical service support they require. Nowadays, Unidesa Gaming & Systems focus the efforts on positioning itself in its natural markets: Latam & Spain. The company’s philosophy is undergoing a change of thinking and positioning, recognising the analysis of players’ and operators’ preferences and needs, as well as competitors’ strengths and weaknesses in each of the target markets. As a result of this new approach, a series of games have been developed with redesigned maths and innovative images. Besides, it is well known that UGS supports all initiatives and works hard to contribute to the development of the gambling sectors, including at shows like SAGSE. For that reason, Unidesa Gaming & Systems presented its new products at SAGSE 2008 in Argentina, on 15th, 16th and 17th of October. As novelties exhibited at SAGSE it is worth mentioning ‘Time Gate Series’, a global solution with a multiprogressive and four games designed exclusively for this one, where the player will experience the four most mystical and diverse civilizations ever: Romans, Chinese, Hindus and Vikings. These games are shown in the action dual slot with additional information and animations on the top screen. ‘Time Gate Series’ has already been installed in different casinos in Panama with great success, creating expectation among players. The excellent quality of its graphics and sound and, overcoat, the possibility to win any of the jackpots without playing to the maximum bet as a must, makes wider its attractiveness. And a proof of that is the positive attitude of the casino’s responsibles: “Players perceive Time Gate Series as a multiprogressive that gives big prizes, besides is easy to play it and it offers more opportunities to win”. Edicta Barrios, Manager of Casino Fantastic La Doña in Panama. Besides, Unidesa Gaming & Systems presented others novelties with models like Polynesian Dreams, Ocean’s Treasure, Chaman, Bad Bad Kitty, Wonderful 50s, My Money Humps, etc. Once again, Unidesa Gaming and Systems took advantage of its participation at SAGSE 2008 to put at the disposal of its clients the last innovations.

GAMING HISTORICAL PERSPECTIVE

HELL AND HAZARD: GAMING ROYALS, ARISTOCRATS AND THE ESTABLISHMENT BY JULIAN HARRIS

In the second of three parts on the rich and eventful progress of gaming in Britain we reach the second half of the 18th Century, just as the ‘gentlemen’s clubs’ begin to flourish in earnest. These were the preferred domains of the scions of the British aristocracy and political establishment, where their leisure was spent and, quite often, immense fortunes gambled in a day, amounting to many millions in current values. Most famously of all when William Crockford died he was estimated to have amassed £700,000 – a billionaire by today’s standards.

t was in the second half of the 18th century that the “gentlemen’s clubs” came into their own. They were able to offer banks which private parties could seldom match. If proof were needed of the real purpose of many of these clubs of the mid-18th century, the fact that the author Horace Walpole designed for Whites a coat of arms inscribed with a hazard table, dice and cards, would probably suffice. Ostensibly formed for political reasons, the two most famous were Whites and Almack’s (later Brooks’). Whites was patronised by the Tory establishment. It was primarily a gaming club, not only to serve the preference of the members, but also to maintain that membership in the face of competition from Almack’s, founded in 1764 specifically as a gaming club. In 1777, a Mr Brooks built a house for the accommodation of Almack’s, whereafter it became known by his name, as it continues to be today. In these and other clubs the scions of the British aristocracy and political establishment spent their leisure time and their fortunes. Gambling was so intense that the Earl of Oxford (formerly Sir Robert Walpole, the longest serving prime minister at 27 years) was said by Jonathan Swift never to have passed by Whites “without bestowing a curse upon that famous academy as the bane of half of English nobility”. The principal games played were hazard and pharaoh, or faro, the former being a dice game, and the latter a card game which was popular because it was easy to learn, appeared to be fair, and was very quiet when played. That appearance was deceptive, since the game offered substantial rewards to the banker: of Lady Buckingham it was said that she “actually sleeps in the parlour with a blunderbuss and a pair of pistols at her side, to protect her Pharaoh bank” . In 1797 she and other titled ladies were prosecuted for, and

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convicted of, keeping a common gaming house. Their crime was running a Pharaoh bank. Charles James Fox, one of the founder members of Brooks, preferred Pharaoh to any other game. In the official history of Whites , Bourke describes a typical night in 1743: “dinner say at 7 o’clock, play all night, one man unable to sit in his chair at 3 o’clock, break up at 6 next morning and the winner going away drunk with 1,000 guineas.” The prevalence of dice on the other hand may be demonstrated by the fact that when the floors of the Middle Temple hall were taken up in about 1764, amongst other things found underneath were nearly 100 pairs of dice which had fallen through the chinks of the flooring. They were about one third smaller than those now in use. It was not just these games however that were played at Whites. The betting book of the club dates back to 1743, while the older book and other records had been destroyed in the fire of that year. The early ones had principally lives being pitted one against another, for example: “February 3, 1743/4. Lord Montford bets Mr Wardour 20 guineas on each that Mr Shephard outlives Sir Hans Sloan, the Duchess Dowager of Marlborough and the Duke of Somerset – voide.”

“Mr J Jefferies bets Mr Stephen Jansen 50 guineas that 13 members of Parliament don’t die from 1 January 1744/5 to 1 January 1745/6, exclusive of.” “November 14, 1746. Lord Montford wagers Sir William Stanhope 20 guineas that Lady Mary Cooke has a child before Lady Kildare and 20 guineas more that Lady Mary Cooke has a child before Lady Fawkener.” “January 14, 1747/8. Mr Fanshawe wages Lord Dalkeith one guinea that his peruke (wig) is better than his Lordships to be judged of by the majority of members the next time they both shall meet.” The practice of gambling on the lives of others was brought to an end by further legislation in the shape of the 1774 Gambling Act which made it illegal to purchase insurance on another’s life where the policy holder had no recognised insurable interest, thus limiting the extent to which human life could be converted to a commodity. Brooks was notorious for very high gaming, and at levels that would not be seen today. On one occasion Lord Robert Spencer contrived to lose the last shilling of his considerable fortune given him by his brother, the Duke of Marlborough.

>> DURING THE LAST QUARTER OF THE 18TH CENTURY, THROUGH THE PRINCE OF WALES’ REGENCY AND ACCESSION AS GEORGE IV, GAMING REACHED ITS ZENITH...NEVER HAS THERE BEEN A TIME SINCE WHEN THE WHOLE OF FASHIONABLE SOCIETY, INCLUDING MOST OF THE ARISTOCRACY AND THE GOVERNMENT, INDULGED IN GAMING. NOR HAS THERE BEEN A TIME SINCE WHEN THE AMOUNTS STAKED HAVE BEEN SO GREAT. GAMING CLUBS WERE AT THE PEAK OF SOCIETY, AND NOWHERE WAS THIS MORE APPARENT THAN AT CROCKFORD’S CLUB. >> 34 Casino & Gaming International

GAMING HISTORICAL PERSPECTIVE

>> THE PRINCIPAL GAMES PLAYED WERE HAZARD AND PHARAOH, OR FARO, THE FORMER BEING A DICE GAME, AND THE LATTER A CARD GAME WHICH WAS POPULAR BECAUSE IT WAS EASY TO LEARN, APPEARED TO BE FAIR, AND WAS VERY QUIET WHEN PLAYED. THAT APPEARANCE WAS DECEPTIVE, SINCE THE GAME OFFERED SUBSTANTIAL REWARDS TO THE BANKER: OF LADY BUCKINGHAM IT WAS SAID THAT SHE “ACTUALLY SLEEPS IN THE PARLOUR WITH A BLUNDERBUSS AND A PAIR OF PISTOLS AT HER SIDE, TO PROTECT HER PHARAOH BANK”. >> £6,000; and between 3 and 4 in the afternoon he set out for Newmarket.” His stamina, both financial and physical, was plainly remarkable. Even Whist was a game that could end in financial ruin; according to Captain Gronow, George Harley Drummond, of the Drummonds bank family, Charing Cross, only played once in his whole life at Whites, on which occasion he lost £20,000 to Beau Brummel, the famous dandy and friend of George IV. This caused him to retire from the banking house for which he was a partner.

REGENCY AND RUIN

General Fitzpatrick being much in the same condition, they agreed to raise a sum of money in order to run a Pharaoh bank. The members made no objection and, as is generally the case, the bank was a winner, with Lord Robert bagging £100,000 as his share of the proceeds. He retired from play, and never gambled again. The lowest stake at Brooks was £50 and it was a common event for a gentleman to lose or win £10,000 in an evening. Sometimes a whole fortune was lost at a single sitting. In today’s values, these would be a minimum stake of almost £4,000 and a loss or win in an evening of well over £1m. On one occasion Stephen Fox sat down with £13,000 and rose without a farthing. His brother was Charles James Fox, then Prime Minister, and the great rival for office of William Pitt. Noting in February 1772 that Fox did not shine with his usual great oratory in debates in the House of Commons, the writer Horace Walpole observed that the cause could hardly be wondered at since: “he had sat up playing at Hazard at Almack’s from Tuesday evening the 4th til 5 in the afternoon of Wednesday the 5th. An hour before he had recovered £12,000 that he had lost; and by dinner, which was at 5 o’clock, he had ended, losing £11,000. On the Thursday he spoke in the above debate, went to dinner at half past 11 at night; from thence to Whites where he drank until 7 the next morning; thence to Almack’s, where he won

During the last quarter of the 18th century, through the Prince of Wales’ Regency and accession as George IV, gaming reached its zenith. Andrew Steinmetz is adamant on the point: “it seems that the rise of modern gaming in England may be dated from the year 1777 or 1778”. There are numerous anecdotes concerning the frequency and depth of gaming at this time. By way of example, a contemporary wrote of Lord Hervey: “the beginnings of his life was spent in attending his father at Newmarket and his mother at the gaming table”. (Williams (1962), 38). Even the Prince Regent was not immune. According to James Grant, the editor of the Morning Advertiser, “everyone is aware that George IV, when Prince of Wales, was, as a common phrase is, over head and ears in debt, and that it was because he would thereby be unable to meet the claims of the creditors, that he consented to marry the Princess Caroline of Brunswick. …….Those debts, then, were the results of losses at the gaming table. He was an inveterate gambler – a habit which he most probably contracted through his intimacy with Fox. It is a well ascertained fact that in two short years, after he attained is majority, he lost £800,000 at play. It was with the view and in the hope that marriage would cure his perpensity for the gaming table that his father was so anxious to see him united with Caroline; and it was solely on account of his marriage to that Princess constituting the only condition of his debts being paid by the country, that he agreed to lead her to the altar.” Under the patronage of the Prince Regent, other clubs were established in the early years of the 19th century and by then, even those clubs founded for some other purpose, quickly included gaming in the facilities on offer. Never has there been a time since when the whole of fashionable society, including most of the aristocracy and the government, indulged in gaming. Nor has there been a time since when the amounts staked have been so great. Gaming clubs were at the peak of society, and nowhere was this more Casino & Gaming International 35

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apparent than at Crockford’s Club. John Crockford had been a fishmonger – a very successful one – with a shop near Temple Bar. This was probably the first purpose built gaming house or casino, designed and built by Wyatt in 1827. A writer in the Edinburgh Review commented that: “it rose like a creation of Aladdin’s lamp and the genies themselves could hardly have surpassed the beauty of the internal decorations, or furnished a more accomplished maitre d’hôtel than ude.” Crockfords became the rage, and the world of fashion hastened to enrol. The Duke of Wellington was a founder member, and the Club’s first chairman, although unlike Field Marshall Von Blucher, the Prussian commander at the Battle of Waterloo, who repeatedly lost everything he had at play, the great English Field Marshall was never known to play heavily at any game, except of course war and politics. The Edinburgh Review noted that card tables were placed, and Whist played occasionally, but commented that “the aim, end and final course of the whole was the Hazard bank, at which the proprietor took his nightly stand, prepared for all comers.” It concluded that “many a ruined family went to make Mr Crockford a millionaire, for a millionaire he was in the English sense of the term, after making the largest possible allowance for bad debts. He retired in 1840, much as an Indian Chief retires from a hunting country when there is not enough game left for his tribe, and the Club tottered to its fall.” There are many stories told about Crockford and its eponymous proprietor, but it is said, for example, that in 1847 he was told to return to Prince Louis Napoleon of France (the future Emperor Napoleon III) £2,000 which a cheat had obtained from him within the Club. The death of Mr Crockford in May 1844 is mentioned in a contemporary journal of Mr T Raikes, who rather unflatteringly wrote: “that arch-gambler Crockford is dead, and has left an immense fortune. He was originally a low fishmonger in Fish Street Hill, near the Monument, then a ‘leg’ at Newmarket, and keeper of ‘Hells’ in London. He finally set up the club in St James Street, opposite to Whites, with a Hazard bank, by which he won all the disposable money of the men of fashion in London, which was supposed to be near to millions”. Apparently his death was 36 Casino & Gaming International

accelerated by anxiety about his bets on the Derby, but at the time he died, Crockford was allegedly worth £700,000, which in today’s values would make him a billionaire. (Part 3, CGI Q1 January 2009). CGI

REFERENCES 1 2

S Harcourt A Gaming Calendar (1820), 86 Colson (1951)

JULIAN HARRIS Recognised as a leading expert in national and international gambling and licensing law, Julian Harris is highly regarded by both operators and regulators throughout the world. He and John Hagan are the founder partners of Harris Hagan, the first UK law firm specialising in legal services to the gambling and leisure industries. He, John and other members of the firm have been at the forefront of those advising UK and international operators alike on the opportunities presented by the UK Government’s major reform of gambling law. With over 20 years experience of gambling law Julian has advised some of the world’s largest gaming and entertainment industry corporations. He and his team have also advised trade associations, including the British Casino Association and the Casino Operators’ Association of the UK. Julian came to specialise in this area representing the Gaming Board for Great Britain (the UK regulator) for five years early in his career. Julian is an experienced advocate, a respected and sought after conference speaker and the author of numerous articles and papers for gaming and legal publications and in the national press. He is recommended in all sides to the legal profession, and has been described by Chambers Guide as “astute” and “never misses a trick”. Julian is a Trustee of the International Association of Gaming Attorneys.

CASINO DESIGN

PRINCIPLES, PRACTICE AND PERFORMANCE: A ROAD TRIP OF DISCOVERY BY JOHN BURROWS

Some of the most refreshing results have come from designers and architects who, though relatively new to the casino gaming scene, carry with them an established and respected reputation in many other design and architectural fields. Such is the wealth of creativity already in evidence that it is difficult not to learn a great deal from the vast range of styles and scale of casino developments. And so, there is always a perspective that generates more food for thought.

t the end of 2001, we realised that there was going to be substantial growth in the gaming markets in the UK and the rest of Europe and we began to educate ourselves in the basic principles of casino design. We saw this as a natural progression from our specialist niches in entertainment facilities, cinema and multiplex design and food and beverage operations as part of the shopping centre and resort industries. Before embarking on this avenue of design, we came to the conclusion that there were many different levels of understanding about how casino design works best from a casino operatorsâ&#x20AC;&#x2122; point of view whether he or she was in United States (Las Vegas or Native American), France, the emerging markets in Russia and CIS countries, South East Asia and the Far East. We also realised that in the existing UK market there was wide divergence between the London private clubs and the provincial cities. We recognised immediately that some operators with their international brands were able to operate in a more cavalier fashion toward their customers. We know whatâ&#x20AC;&#x2122;s best for you! Alternatively the smaller more boutique clubs that existed in the UK appeared to be far more customer driven with each club differing from each other matching their traditional clientele. At the start of 2002, a team of ours undertook a very intensive road trip to the various American casinos both in Las Vegas and the Native American lands and began to put a picture together of the brilliance of some of these environments and the obvious weaknesses of others. We were always mindful that ultimately the European experience was going to have to be different to the standard American model and so we began to quantify the strengths and

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CASINO DESIGN

>> LIGHTING AND AUDIO-VISUAL ARE NOW THREE OF THE BIGGEST DRIVERS IN CASINO DESIGN. WE HAVE GONE BEYOND THE NOISE AND CLATTER OF GAMING MACHINES AND THE BRASSINESS OF TRADITIONAL CASINOS. THE SOUNDS OF THE MACHINES ARE NOW RELATIVELY MUTED AND INTEGRATED WITH THE AMBIENT SOUNDTRACKS. >> weaknesses of the casinos we visited. We also strongly believed that the design ethic in Europe would have to be different from the cloned and themed American model. We quickly realised that the modern day European casino would need to interact with a wider palette of uses than the standard gaming atmosphere... we would need to integrate live entertainment, cinema, comedy, luxury dining and bar facilities into the casino environment and not separate and segment these areas as is often done in the US. The European casino would need to be more accessible and lively attracting the so-called “new market” to casinos... the young professional market used to a wide selection of highend bars and clubs. Some of the old design adages required rethinking. “A physically segmented casino is better than an open plan layout.” Yes and no. We discovered that whilst it was good to break up the spaces, people loved the idea of overlooking and getting glimpses of secondary and tertiary spaces. This added to the mystique and the glamour of the environment. “Gambling equipment should be located immediately inside casino entrances.” The theory here is that a casino with a sophisticated and

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well-designed reception puts off the hardened gambler. We discovered we were dealing with a mixture of players and customers. Allowing the customers to make a decision for themselves as to which direction they wanted to go or which type of space they wanted to use gave them more confidence and created a more relaxed and less intimidating environment. “Short lines of sight are better than extensive visible depth and a maze beats long, wide, straight aisles.” Again, the success of our recent casinos belies this fact. Whilst we do not promote long straight lines of sight, we are moved towards allowing the customers to understand their environment and feel at ease moving from one space to another. “Create the illusion of being crowded and enhance excitement with a multitude of small, appealing gambling worlds with intensified machine noise!” This rationale is the holy grail of Las Vegas casinos and wherever you go there are compact and congested machine layouts impacting on the players’ world. Our rationale was to accept that the European model was to be a quieter more sophisticated space, allowing players to step back from the frenetic environment of the tables and machines and enjoy a

CASINO DESIGN

cocktail or a sophisticated meal. This balance appears to be more appealing to the general public and doesn’t alienate the regular high-end players. Whatever the design considerations are, it has to be acknowledged that casinos make most or all of their profit from the customers actually playing but that does not mean that the environment needs to be cramped and noisy. “Low ceilings are better than high ceilings” Our casinos combine a mixture of cathedral-like and intimate spaces. There is no doubt that these spacious environments create iconic and glamorous environments which are well-remembered and liked by the customers. Our target customers are becoming more discerning than the traditional gambler. It is not just about the table in front of them. The gaming becomes part of the wining and dining experience… the general ambience. “Use the ‘ugliness’ of casino and gaming equipment” Many American casino operators and designers believe that the majority of international designers are ignorant of the gambling product. We realised that there is an inherent ugliness and coarseness about gaming machines but also realised that the players define the casino ambiance. There is uniqueness about the machine areas that you either love or hate and it is for this reason that the modern European casinos have become segmented and zoned. This is not meant to sideline the flashing lights and bells but to create specific areas close to the entrances and circulation routes. Allow them to show off. This brings us neatly to the question of technology and its significance for innovation and creativity. How does this enhance projects combining the necessary design and cost efficiency? A casino today is one of the most sophisticated environments combining a massive IT function with special effects, lighting and sound. These in turn affect the material

selection of the rooms and canopied spaces. Lighting and audio-visual are now three of the biggest drivers in casino design. We have gone beyond the noise and clatter of gaming machines and the brassiness of traditional casinos. The sounds of the machines are now relatively muted and integrated with the ambient soundtracks. The flashing lights of the machines are no longer jarring but are designed as part of the entire lighting set, which will change four or five times a day to reflect the atmosphere most suited to the time of day or season. Within the overall ambient lighting we need to address the function of task lighting and security. Lighting over the playing areas needs to be constant to ensure clarity of vision but at the same time highlight these areas to ensure that they stand out from the quieter areas of the casino. The IT functions of a casino have advanced in leaps and bounds and the operators now have a much faster and clearer understanding of the gaming wins and losses. As an architect and designer, I won’t belabour the point about the importance of design other than to say that every aspect of the functional operation and the interior must be thought through in terms of the target market, ambience, budget, maintenance and operation, creature comfort, the perception of excitement and frisson and visual triggers. In short, every floor, wall and ceiling surface must be thought through in detail; the textures and colours; objet d’art and graphic design; the temperature, aromas and functions of light must all blend together to provide the operators the exact ambience necessary to entice their target market into their environment. Within this total environment the special needs of special categories must be looked after. The live poker players, the table players, the machine enthusiasts, the diner, the person sitting at the bar, the groups of people who have come for a special night out and… the smokers. Since the Casino & Gaming International 43

CASINO DESIGN

smoking ban came into force there have been many casualties in the entertainment industry. The one that springs to mind is bingo but fortunately the casino customer has appeared not to be forced away by the ban and the operators have done everything in their power to make it easier for smokers still to enjoy a night out by the introduction of smoking terraces. This has been done both retro-actively and in all new-builds in the last three years. Food has always been a special part of the casino interesting but recently catering has reached new heights and attention to the catering and service functions has become as important as the gaming function. All our casinos now have a series of restaurants and bars allowing the customers to choose from a wide variety of cuisines and eating styles. Gone are the days of fast-food buffet style eating forcing the players to get back to the table as soon as possible. In almost every casino around the world now, you will find separated restaurants with their own identity and waiter service. This one aspect of the evolution of casinos has contributed to the growing of the “new market”. The less pressured the casino environment is, the more new customers will come. The dropping of the 24-hour rule in the UK was also a huge driver to allow inexperienced customers to feel less inhibited about entering casinos. One of the conundrums within the European market is that unlike other international markets our planning legislation precludes us from designing the mega-resort complexes that we have seen in Macau such as Venetian, Sands and Wynn Casino; in Las Vegas such as Wynn Casino, Bellagio and all the others; Sun City in South Africa and Genting Highlands in Malaysia. These resorts thrive on the mixture of retail, entertainment, sports activities, leisure and multiple hotels. They are genuinely creating holiday destinations that are for the whole family. The gaming is an important financial component but within the whole environment many families wouldn’t even visit the casino. As we as a society have come to look at ourselves more critically in terms of climate change and environment and cultural and community sustainability, the casino operators have taken a keener look at their own operations and there is no doubt that the UK Gambling Industry is the most strictly governed and monitored anywhere in the world. Social responsibility is a key aspect of design and the sizes and locations of casinos are seriously debated in courts of law before licenses are granted. It is unfortunate though, in my mind anyway, that over the last three years during the debate about small, large and regional casinos the red top newspapers were able to skew the debate so negatively that the British Government lost its nerve when coming down to the final decisions. It is a common fact that casinos contribute to only 11percent of our national gambling debt and those losses are often incurred by the more affluent members of our society and our international guests. A finger can be pointed at casinos when it comes to their “green” credentials but, again, it is my experience that operators are looking at these issues very seriously… even if in some instances it is only to reduce their energy bills! However, when weighed against some of the other serial offenders such as Shopping Centres and Cinemas, then maybe it will be easier for casino operators to reduce their carbon footprints and drop below the parapet In conclusion and summary, we are enjoying our rollercoaster ride with our clients, the casino operators. It is 44 Casino & Gaming International

an exciting and complex industry with new design models being put forward all the time. We have to be aware of the local and cultural impacts our designs have on communities but generally I see the UK industry as being a very responsible one. We are clear in our minds that the European experience is a very different one from the American model Our regeneration of Casino du Liban on the outskirts of Beirut and the casinos we are working on in Egypt, I believe, represents more openness and confidence within the Middle East and North African region. There is still obviously great social and religious concern in these areas about the rise of gaming within restricted areas but there is already debate about sacrosanct areas such as Israel (Eilat) and the UAE. It is unlikely that the Muslim countries will accept casinos for some time to come but there are already “casino” style resort hotels appearing in Dubai. The Atlantis at The Palm is the new resort hotel opened last month on The Palm Jumeirah. Created by Kerzner the 1,500 room resort is very similar to all of Kerzner’s mega resorts with every form of entertainment imaginable… except a casino. The resort hotel and casino that we are beginning to look at in Cambodia again stretches some of the community, social and environmental issues in that country. We are in a fortunate position that the developer here sees it as his duty to preserve the natural precinct along the south coast of Cambodia. However it remains to be seen whether the Cambodian government will clamp down on irresponsible developers and operators or allow the south of Cambodia to become like Macau. Important to us is the consultation with social, local/regional groups. Action groups are still strongly adverse to casino development and it is part of our responsibility as architects to assist our operators and developers to understand those concerns. We are fully aware that the concept and impression of casinos is still negative but casinos in the UK are the most controlled and legislated form of gambling in the country and accounts for only 11percent of the UK’s gambling spends. I see a positive future for casinos due to a number of factors. There will be less regulation; the environment is smoke free; operators are concentrating on the fun and entertainment of the casino; they are attracting a younger more frivolous market, “the Cocktail generation”, which will lead us to far less intimidating environments. And, last but not least, there will be less ubiquity. Casinos will derive their own styles in the same way that club and bar design has developed. CGI

JOHN BURROWS John Burrows is Director and Co-Founder of Burrows Cave International. Educated in South Africa, John began his career in 1980. By 1986 he was Chief Architect of the South African Breweries' Shopping Centre Development team. Moving to London in 1989, he was appointed a Director of McColl. In 1993 he joined Design International as Director of Architecture and then established Burrows Cave International in 1998. He has worked on retail, leisure and entertainment projects throughout the world.

Quin Sculpture Garden, Gallery & Studio 5 Suid Street, Alexandria, 6185, South Africa Tel/Fax: +27 46 653 0121 Cell: +082 770 8000 Email: quin@intekom.co.za Website: www.quin-art.co.za

REARING ARAB STALLION GOLD SOUK, DUBAI MALL, BURJ DUBAI “The challenge of a project of this nature and magnitude was stimulating beyond belief.” Maureen Quin Maureen Quin was among several world renowned artists who were invited by the Chairman of Emaar, H.E. Mohamed Bin Ali Alabbar, to submit a proposal for the sculpture of an Arab Stallion for the Gold Souk in the Dubai Mall which forms part of the Burj Dubai. Her presentation sketches and subsequent preliminary model (maquette) of a Rearing Arab Stallion dressed in traditional Arab tack was accepted. Having been brought up with and on horses her capturing of the essence of the subject came from deep within. Maureen Quin was born in 1934 on a farm in the Bloemfontein district, South Africa. Her sensitive, artistic nature gave her a natural affinity for animals and for horses in particular. She went on to become an accomplished horse rider. Being accepted to execute this commission was a privilege and a highlight of her working career. As with all projects Maureen first researched her subject, beginning with sourcing an Arab Horse breeder. In Plettenberg Bay, South Africa, she found a breeder who welcomed her to the stables where Maureen could study all aspects of the breed, including the conformation particular to the Arab Horse and its unique nature. Research was done into the reins and saddles that make up the traditional Arab Horse tack. Then, immersing herself in the spirit of the subject, the presentation and the maquette was born. During the sculpting of the Arab Stallion, Maureen became a frequent visitor to the stables, befriending both the horses and their owners. With the maquette accepted, enlarging of the sculpture to four metres high began in earnest. Engineers were consulted in the design of the armature to ensure a structurally sound sculpture. Working at the Bronze Age Foundry in Simonstown, South Africa, Maureen Quin and two specially appointed apprentices constructed and sculpted the four-metre high Arab Stallion. Maureen modeled the horse, concentrating on maintaining the spirit of the animal, breathing life and energy into the sculpture. The Foundry cast the sculpture into bronze, executing every stage with care and precision. After many months of intense craftsmanship, and a love affair with the Rearing Arab Stallion, the finished tribute to an amazing animal can be seen in the Gold Souk of the Burj Dubai. The strength of this rearing Arab Stallion has added the “wow” factor to the environment of the mall, and transformed the ordinary into the extraordinary. With this immensely powerful monument, capturing the essence of the Arab Stallion, Maureen Quin has proved herself to be a world class sculptor. As a young South African student Maureen won a bursary to study in London. In later years she was given the opportunity to travel Europe and live in Paris for three months. With more than 40 solo exhibitions and four retrospectives, her work is sought after world wide by art collectors. The artistic and thought provoking value of sculptures created by Maureen Quin have been recognised by world class academics such as art history lecturer at the University of Martinique, Agurtxane Urraca, who published an article on the vital Hunt Series in the Goya revista de arte, no. 282, May/June 2001. This academic publication recognised the originality of Quin’s sculptures by featuring her work on the cover. In Alexandria, South Africa, where the artist resides, her sculpture garden draws visitors from throughout the world. Open from Monday to Saturday, visitors enjoy refreshments under the trees, surrounded by Quin sculptures out in the garden and in the gallery.

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CASINO DESIGN

BEING THE MERLIN OF FLAWLESS ILLUSION AND DESIRE

BY PAUL HERETAKIS

The starting point for all casino design is, without exception, the client. The client sets the goals both financial and experiential. It is the designer’s talent that extracts the vision and makes it a reality. Designable energy and the creation of illusion is the fantasy. If casino design is to succeed, clients, operators and designers must keep their fingers on the pulse of their customers’ needs and desires, be aware of all of the influences on society and be able to predict future trends.

s architects and designers we always believe we can design any type of building or space. The same ego that occasionally makes us great can also create great failure. The difference between casinos designed by an expert and a casinos designed by an amateur can be the difference between success and failure. Las Vegas, Atlantic City, Macau and other cities around the world are littered with bankrupt examples of bad design, in spite of a business that has the odds in its own favour. It seems impossible, but it’s more common than you think. The challenge lies within an industry that is constantly evolving due to customers’ gaming and spending habits, project location, technology and the ultimate influence of “one-upmanship”. Designable energy and the creation of illusion is the fantasy. We must also be aware of all of the influences on society and be able to predict future trends. Being a design Merlin is a plus! In what follows I will explain a few of the idiosyncrasies of casino design that I have developed over the past 15 years. These subtle nuances also mirror our obsession with the mystical showgirl and our never ending quest for the ultimate goddess. Being at a gaming table during a hot streak is intoxicating and exhilarating; the surrounding crowd is thick with terror waiting for the table to change its course. A love affair with a showgirl can be just as hypnotic and fanciful; unfortunately, they both can end just as quickly as they started. Design and beauty is subjective; while ugly is not always bad and beautiful is not necessarily good. Remember, casinos and showgirls live in worlds of castles, eggs, pyramids and pirate ships. This world does not make sense – Warning: do not try to define the indefinable! Just bring your money and

Casino & Gaming International 49

CASINO DESIGN

be prepared for the ride of your life. The most successful casinos are a perfect balance of entertainment, amenities and the overall energy of the design – a place of escapism. Remember, gaming is a competitive activity that requires a stimulating visual environment. The true essence has to be the perceived energy and comfort level. The space must be interesting, alluring, influential and of course participatory. Each casino must contain an architectural vocabulary unique to its core ideal of entertainment design. It should be an explorative journey of spatial volume and variety. Surprise, interest and energy must be in every space and around each corner. The eye level must move with the lighting sources and the changes in the scale of the space. Focal points must balance with grand statements while being wrapped in repetition and contradiction. The journey should be one of wonderment and joy – a candy store for adults. Where all of your wishes come true, nobody says no, and you are the star, the hero and the knight in shining armour. A casino must contain elements of sensuality, tactile experiences, sparkle and reflectivity; lighting, colours and organic movement round out that balance and complexity. This backdrop of fun and excitement creates a world in which you can lose yourself and your inhibitions. It’s the only place where the entire universe revolves around you and your desires. Welcome to fantasy Island!

WHO OWNS THIS PLACE? Our starting point for all casino design is, without exception, the client. The client sets the goals both financial and experiential. It is the designer’s talent that extracts the vision and makes it a reality. The systems of studios we’ve developed over the years continue to bring our clients

50 Casino & Gaming International

tremendous success. Our “client-driven vision studio” engages the client with an extensive use of questionnaires; this approach helps to identify the goals of the client. Programme, operations, investment and profitability are balanced with customer influences and brand identity. The vision is identified, defined and the project takes it shape with a bounty of ideas. We take these ideas into our “innovations laboratory studio” where we turn traditional thinking upside down. New ideas with great potential are sprinkled with a little Showgirl dust, a shot of energy, a quick prayer and then we sit back and watch the magic begin. Each and every new casino should offer its clientele something old, something new and something that has never been seen before. It needs to be special, unique and of course - spectacular! Each amenity is dissected using our “alternative revenue generating studio”. We analyse how each amenity can maximise its earning potential. Can a restaurant be open for three meals? Can it turn into an after hours night club? A space that is closed is a space that does not add to the energy the customer experiences or the clients’ bottom line. Our “operational branding and service studio” is used to create an identifiable experience. Every guest must walk away with a positive memorable touch point in which the service team made their trip special. Ale Angels, floating bars and dueling chefs are all actors in your guest’s visit. The show must be flawless to increase repeat visits and revenue. We also use our “restaurant development lab” to explore food and beverage venues that are unique to each geographic location. Restaurants, bars and nightclubs can be a big financial feeder for the casinos. Many large resorts have over 30 food and beverage outlets. Celebrity chefs are, of course, very popular and bring their own following. Specific

CASINO DESIGN

food trends, such as burger bars and tapas servings, are very popular today; we track trends and set new menus and cultural food pairings with our staff of culinary experts. It’s all born of the client’s vision, cultivated by the designer, brought to its potential by the operators and enjoyed by the customers. It’s a team effort that creates a successful casino. The client, however, has final say on everything and they get to count the cash in the register at the end of the day. The rest of us get to enjoy that investment.

JUST GET IT DONE! We are a “get it done” group, and so are the most successful casino clients and operators. It is never more profitable than in the casino model - to get the project open as soon as possible. The amount of money you will spend in your quest to catch the illusive Showgirl is nothing compared to the profits generated in successful casinos. The casino must be open and operating no matter what type of remodel or expansion project is taking place. You cannot break the energy flow that passes through a casino. Schedule, budget and design are the three factors that make up a normal project. Well, the design and level of finish is a given – it must be great! That factor of the equation does not change. The schedule never changes, so that factor is also locked in. The last factor is budget. Any project can be designed and built based upon any schedule. It’s just a matter of how much money you are prepared to throw at the project. Once the design and schedule are decided upon, it’s time to “get it done” - no excuses, just solutions and completion. Failure is not an option! The most profitable projects are the most beautiful projects. A successful casino makes the entire team look like geniuses. It’s hard to argue with financial success. Open = money. The most important value a designer can offer our clients is expertise. The knowledge of the building type, customer needs, operational requirements and target market are just the beginning of our understanding and expertise. Designed energy is built from this foundation and translated into profit. Each level of customer, whether they be a penny slot player that is bused to a casino or the proverbial “Whale”, have their own needs, desires and expectations of what their fantasy should be. The fantasy must be delivered without flaw. Just as importantly, these groups must coexist without interfering with each others expectations. Each has their own interests, expectations and self worth and neither the two shall meet. An Asian Whale requires a private gaming room, quick noodle bar and villa accommodations, all within a few steps of each other. A slot customer requires loose slot machines, a buffet and convenient access. They might never use any of the other amenities on the property. Another local drive-in customer might visit the property for the bowling alley or cinema. Other customers might never gamble but will spend thousands on dinner and a show or a shopping spree.

THIS PUZZLE HAS WAY TOO MANY PIECES? Each resort casino is a town, without stop signs of course. They are some of the largest buildings in the world. An ever growing list of revenue generating amenities has added to the urban sprawl of the resort experience. Gone are the days of free food and rooms. Each amenity must be a profit centre.

The retail dollar is just as important as the gaming dollar. In many jurisdictions it’s also less taxed. Each amenity can also bring its own customer base to a casino. A certain high-end retail store can command a large following, as well as major publicity to a casino. Nightclubs can bring in a younger crowd with lots of cash and the added bonus of non-stop celebrity sightings for the media to write about. Vegas casinos are constantly at the centre of Hollywood’s young and rich crowd of silicone and 5” pumps. Other casinos are built upon the MICE business model. The Venetian will introduce this type of resort around the world. Many Las Vegas style casinos have over 25 restaurant offerings, 2 or 3 showrooms, 4,000 seat rooms, lounges and hundreds of thousands of square feet of gaming, shopping and convention space. Each amenity must be carefully designed and placed in order to capture as much of its target audience as possible. Many billion-dollar casinos will begin remodels as soon as they open because a certain amenity is not performing to its planned potential. That level of investment requires such perfection.

THE NEXT GREAT THING? Casino design is always evolving to meet the demanding expectations of their customers. If the experience is not improving on each visit a customer makes to the property, you are fast becoming a place of yesteryear. Multiple centres of action/energy throughout the casinos are extremely important as is organisation through sequence of experiences. Voyeuristic spatial relationships with multilayered volumes of interactive dynamics create must see amenities. People (especially showgirls) like to see and be seen. Blurred and shared spatial boundaries with overlapping functions build energy and vibe. Free flowing expanses of space with a clean and timeless palette seem to have appealed to the American market, while the Asian market still tends to be themed or highly stimulating visually. The most important layout focus should always be to maximise the spending drive of the customer. Casino & Gaming International 51

CASINO DESIGN

>> WE TAKE IDEAS INTO OUR “INNOVATIONS LABORATORY STUDIO” WHERE WE TURN TRADITIONAL THINKING UPSIDE DOWN. NEW IDEAS WITH GREAT POTENTIAL ARE SPRINKLED WITH A LITTLE SHOWGIRL DUST, A SHOT OF ENERGY, A QUICK PRAYER AND THEN WE SIT BACK AND WATCH THE MAGIC BEGIN. EACH AND EVERY NEW CASINO SHOULD OFFER ITS CLIENTELE SOMETHING OLD, SOMETHING NEW AND SOMETHING THAT HAS NEVER BEEN SEEN BEFORE. IT NEEDS TO BE SPECIAL, UNIQUE AND OF COURSE - SPECTACULAR! >> Limited site constraints are creating a more vertical solution to casinos design. The attached diagram that we developed helps to delineate our model for casinos design in the future. Of course, the casino is at the core of the facility but all of the amenities are built around it and complete the experience. The energy comes from all different sides and levels and creates an enticing gaming environment. From the moment you reach the property it grabs your attention, raises your energy and excitement level and doesn’t let go until your vacation is over.

SHINY, WE LOVE SHINY! New advancements in material developments have created a vast palette for the designer to use to create the proper environment for a casino in its cultural setting. Exotic woods, stones and manufactured millwork materials can add a tremendous feeling of wealth and sophistication to a space – quite common in the states today. Experienced craftsman can recreate traditional spaces that appeal to the old world wealth of Europe. The highly manufactured shiny glass materials might appeal to the Asian clientele’s sense of dramatics and intense good luck colours. Feng Shui can influence casino layouts and perceived energy amongst the Asian clientele that is so highly coveted. A Hi Limit gaming room looks different from property to property and from continent to continent. Travel the world on just one trip to the Las Vegas Strip! Technology has been introduced into the casino. Technology saves on operational costs while providing a certain appeal to the younger generation who have lots of cash to spend and little discretion in spending it. Community slot games are becoming very popular as they create a great deal of social activity. Many People who prefer to game in a group environment, but might be scared of the pressure created on a live gaming table, can now feel at ease on a communal game. The operators are happy with the savings of labour required for electronic tables. Gaming energy is at its highest when a group of people have formed an allegiance against the house. The social interaction creates that noise and an overall buzz that is contagious throughout the gaming floor. Winning sparks more gaming and more gaming infuses more profits into the casino. This approach to technology was invented to appeal to a younger demographic but it has translated to additional play for the traditional slot reel customer. It’s been a big win for the casino’s energy as well as profit.

THE YING AND YANG OF CULTURAL INFLUENCE! The most influencing factor that can change dramatically 52 Casino & Gaming International

change casinos design is its location and cultural influences. Macau design, for instance, has themed, sophisticated, modern and over-the-top, visually-stimulating casinos which offer very different environments and solutions but are equally successful in gaining market share amongst their targeted market segment. All coexist and have excelled to create the number one gaming destination in the world. The designs can also be skewed towards site conditions of a particular urban environment. Vertically stacked amenities and experiences are becoming more popular with rising real-estate costs throughout the world’s gaming destinations. The resorts of Las Vegas tend to be spread out over larger sites to create a sprawling experience that can seem overwhelming to some and all encompassing to others. Either way most of the world’s largest gaming destinations have a casino for everybody’s preference. It is up to clients, operators and designers to keep their finger on the pulse of their customers’ needs and desires, and to fashion spaces that create the energy and escapism that is, ultimately, customer-driven casino design. CGI

PAUL HERETAKIS Paul Heretakis, RA, Vice President of WESTAR Architects, has over 15 years of experience overseeing hospitality design and master planning projects throughout the country. The firm has completed over 400 hospitality projects, 100 bars and restaurants, and over 3,000 hotel rooms and suites. His marketing efforts in hospitality and gaming have yielded a 600 percent increase in revenue for the firm. Paul works with the top gaming and hospitality companies in the world, as well as many celebrity chefs in the industry. Among them are The Venetian, Bellagio, MGM Mirage, Caesars, Harrah’s Entertainment, Trump, and celebrity chefs, Mario Batali, Paula Deen, and Georges Perrier. He has also successfully established new design studios which include branding, restaurant development, and think-tank dreams. WESTAR Architects continues to be ranked and published by local and national periodicals including national industry magazines, Interior Design and Hospitality Construction, as one of the top hospitality design companies in the country.

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REVENUE MANAGEMENT

DETERMINING TOTAL CUSTOMER VALUE BY LEAVING NOTHING TO CHANCE INTERVIEW WITH BRUCE BARFIELD

Casinos are ideally suited for revenue management and, to accomplish revenue efficiency, group space, casino floor use, transient guest rooms, restaurant optimisation, special events, Internet bookings, comp rooms, casino rates, valuable customers, unknown guests, and so on, have to be quantified and assessed. But that requires a thorough revenue management culture at every level of casino organisation to translate that into a positive effect on the bottom line.

GI: What, in general, are the key principles of a sound revenue management system?

BB: The number one criterion is to start out with good quality data. If you do not have it, you are going to have problems. We use 13 months of data to build seasonality curves for forecasting. A second principle is to adopt a revenue management culture. By that I mean the adoption of revenue management from the very top level of the organisation all the way down. If you have one person who is out of sync, it will not work. At a casino, for example, you could have one person whose priority is selling the group business, another whose priority is selling the casino business, another one whose priority is the cash business. They are all competing for the same inventory space. That is why you need someone at the top to set ‘Total Customer Value’ as a priority. When you have those two components you have a good adaptive forecast model. CGI: Based on your concepts and experience, have you developed a distinctive model? BB: Yes, we have. Our model considers multiple sources of revenue per guest and we forecast that based on Total Customer Value. We look at all the possible spending a customer may do—at the restaurant, casino, spa, golf, and room—and we consider all these factors when we value a customer and forecast a customer segment. This is unique in the industry. The Traditional practice at most casinos is to look at the cash value of a room. We’ve broadened and improved on that approach.

Casino & Gaming International 57

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REVENUE MANAGEMENT

We are also distinctive in the way we work with our customers. It is in our DNA to be customer-intimateâ&#x20AC;&#x201D;we listen to our customers to understand what comprises their business so we can develop the most profitable segmentation forecasting strategy. We also understand it is people who use our technology. We want to ensure they are comfortable with it to make it as effective as possible. This personalised approach is as much a part of our distinctive practice as our technology is. CGI: Why did you decide to apply RMS to the casino sector and did that require remodeling in any particular way? BB: Casinos are actually the perfect industry for revenue management. Think about it: say a hotel only has one

casino/hotel room to sell. Without the insight revenue management provides into oneâ&#x20AC;&#x2122;s forecasted business, the hotel might sell that room to a guest who does not care about gaming, thus displacing thousands of dollars of potential revenue. CGI: Do casinos pose a particular challenge compared to the revenue management requirements you encounter in other industry sectors? BB: Only in that they are a very complex business. They must consider group space, casino floor use, transient guest rooms, restaurant optimisation, special events, Internet bookings, comp rooms, casino rates, valuable customers, unknown guests, etc. There are a lot of moving parts to the casino business and our system must adapt to all the conditions to be credible.

Casino & Gaming International 59

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REVENUE MANAGEMENT

>> WE CAN ALMOST GUARANTEE THAT A CASINO CUSTOMER WITHOUT AN RM SYSTEM IS LETTING IN LOW VALUED CASINO GUESTS ON THE HIGHEST OCCUPANCY DAYS AND IS ALSO SELLING OUT TOO SOON TO LOW VALUED CASH GUESTS. MANY TIMES WE SEE PROSPECTS (AND NOW CUSTOMERS) HAVE COMPLIMENTARY ROOMS WITH NO PLAY, WHERE THE CASINO HOST IS GIVING A FREE ROOM TO A GUEST WHO VERY WELL MAY BE GOING TO ANOTHER CASINO TO PLAY. IN ONE CASE, WE SAW MORE THAN 20,000 ROOM NIGHTS COMPED WITH NO PLAY. >> mega-resorts have the same goal; however, they have to balance their customer mix with group and transient traffic. Often the group is simply ‘taken’ out of the mix because of contracted business, but the transient, cash guests will be valued solely on the value of the room revenue. The cash guests will actually displace the mid-tier gaming guests. Our system responds to both of these models—a pure casino model or a mix of group, transient and cash guests. CGI: Tell us about your experiences with Boyd Gaming and Foxwoods. Has that given you a significant insight into big scale revenue management systems?

CGI: When you engage a casino client, what appraisal do you make initially and what deficiencies or improvements do they tend to be most concerned about?

BB: It has. Both are big proponents of revenue management. Boyd implemented our system in early 2006, and Foxwoods recently installed the latest version of our revolutionSM system. CGI: How are their systems currently performing?

BB: We can almost guarantee that a casino customer without an RM system is letting in low valued casino guests on the highest occupancy days and is also selling out too soon to low valued cash guests. Many times we see prospects (and now customers) have complimentary rooms with no play, where the casino host is giving a free room to a guest who very well may be going to another casino to play. In one case, we saw more than 20,000 room nights comped with no play. This stops immediately when a property installs our system. Another example: one casino host was sceptical about our system until it detected that she had been comping rooms to a guest she thought was playing, when in fact the guest had won a jackpot 20 months earlier and did no gaming on her subsequent 10 comped visits to the hotel. The system knew that the guest’s value was not at all what the casino host’s thought it was, and recommended a rack rate for the guest. The host was ecstatic. She became our biggest advocate after that. CGI: Given that casinos have a vast range from independent properties to mega-resorts, what strategy and application differences does Rainmaker take into account? BB: We work with our customers to understand their business before we recommend a segmentation strategy. Usually, the independent gaming casino/hotels are concerned about one thing—make sure the best customer has a room if he or she wishes to overnight in the hotel. The

BB: Boyd Gaming reduced comp expenses 35 percent and increased cash revenue four percent by updating its strategy and automating its operations with our revenue management system. They have also reduced stay-no-play and other lowprofitability customers by 23 percent. Foxwoods, North America’s largest casino, is using the system’s predictive forecasting model to help set optimal rate recommendations by customer segment. They tell us that the forecasting is spot-on. CGI: What are the special demands of integrating RMS where the casino is part of a complex? BB: The biggest demand is the change management that goes along with an RM system implementation. Part of our implementation has a business component where we interview all key personnel—reservation agents, hosts, senior executives, front desk—just to make sure that everyone is in tune with what the property is trying to accomplish. The last thing you want is somebody walking up to the desk and doing an end-around to get a special rate based on some relationship they might have with the hotel. The front desk needs to rely on the revenue management system to tell them what kind of customers to let into the hotel. We touch on many components in our change management sessions, including group sales. They need to be in tune with what they are displacing in the forecast and the potential loss of hundreds of dollars per room night in transient casino Casino & Gaming International 61

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REVENUE MANAGEMENT

>> OUR MODEL CONSIDERS MULTIPLE SOURCES OF REVENUE PER GUEST AND WE FORECAST BASED ON TOTAL CUSTOMER VALUE. WE LOOK AT ALL THE POSSIBLE SPENDING A CUSTOMER MAY DO—AT THE RESTAURANT, CASINO, SPA, GOLF, AND ROOM—AND WE CONSIDER ALL THESE FACTORS WHEN WE VALUE A CUSTOMER AND FORECAST A CUSTOMER SEGMENT. THIS IS UNIQUE IN THE INDUSTRY. THE TRADITIONAL PRACTICE AT MOST CASINOS IS TO LOOK AT THE CASH VALUE OF A ROOM. WE’VE BROADENED AND IMPROVED ON THAT APPROACH. >> revenue if a group is put in on a high demand day. Marketing on the promotions side is also part of the change management focus. Because our system does a 13-month forecast, marketing can see at a glance when the low-growth days will be. The result is that they can be very tactical in their management of promotions. CGI: In many ways ongoing install maintenance is as important as the install itself. What pre- and postinstallation consultancy do you provide clients? BB: Great question, because this is another way we differentiate ourselves. We hold an offsite customer user steering committee meeting every year for our customers where we work together planning our system enhancement roadmap. This is a collaborative environment that enables our business users to interact with our scientists to build the most effective state-of-the-art forecasting algorithms. We listen to our customers and prioritise everything customers request. Because we believe strongly that this is not just about implementing software, rather a way of doing business, before the software goes live we provide Revenue Management Best Practices (RMBP), during which we conduct a series of interviews to understand current business practices and evaluate them against industry best practices...we provide an Executive Summary to serve as a roadmap for moving toward industry best practices along with a series of workshops for those involved in using they system and others in the organisation to learn about Revenue Management. CGI: On an international scale what is your experience of applying RMS software? BB: We have a number of customers with international operations in the gaming business. We’ve set up an office in Singapore to work with our existing clients, and we are cultivating new business as a result of our presence in Asia/Pacific. We see the same challenges applying RMS software in Asia/Pacific as we do in the states. The biggest thing we hear from overseas prospects is, “Will the system work in Asia/Pacific? Will it work in Europe?” My answer is that it will absolutely work with enough data points. Culturally, there are some differences in Asia/Pacific that we have addressed and will refine in the future. That’s just a normal part of our process. But we are winning a lot of business as a result of our value proposition. CGI: Over recent years what have been the key technology changes that have enabled the

development of such precisely effective software? BB: The sheer volume of data that we are able to store and exploit on a nightly basis allows us to do things like regenerate seasonality curves every single night, forecast out five plus years, take multiple extracts per day, eliminate the need to “reinitialise” the system. Believe me Harrah’s started nine years ago! None of this would have been possible unless the technology curve had not moved forward. There is more to come, too: 64 bit processors will change the game again. We have some things working now that will leapfrog us beyond where we are today. The challenge is that there is so much data we want to continue to make sure the interface is good and people are happy to use our product. CGI: As a two-way process, presumably casinos’ experience of installs over time leads to new ideas improving your model? BB: I agree with that. We work as partners with our customers so that their ideas and voices are heard as we develop our product roadmap. We don’t pretend we know everything about their business. They are living and breathing it every single day. We know they are the experts, and we are constantly trying to learn as much as we can on a daily basis. CGI: What pre-existing installs do you encounter these days and are intermediate upgrades acceptable or is it more a question of complete replacement? BB: It’s more of a complete replacement for legacy systems. As we say in the States, you can’t be “a little bit pregnant.” You cannot implement just a portion of the system and expect to get the best results. CGI: How important is data storage/archiving to the efficiency of RMS and what are the casino experiences of its effectiveness for customer retention? Casino & Gaming International 63

REVENUE MANAGEMENT

customer said it’s like “flying the space shuttle with a compass.” That’s a great analogy. It’s simply too big a challenge to decide the room rate for thousands of rooms every night with length of stay equations and all the other factors that have to be taken into account. That’s why you need a software system. CGI: How does RMS improve casino customer retention, monitoring, marketing and forecasting? BB: The best customers love it because they will always be guaranteed a room whenever they desire to go to the casino. The unknown guests may find it frustrating because the hotel is filled with loyal customers. The mid-tier players will understand their status and may not be able to get a room on value nights like New Year’s Eve. It inspires them to go to the next level. BB: It’s very important. As I said earlier, we require 13 months of data to run our systems so we can generate a seasonality curve to predict patterns of the hotel over a 12month run. Everything is built on that. For example, on October 15, we don’t look back at October 15 last year to see where we were. We look at where October 15 fits on the seasonality curve. Is it on a rise or a down market? Customer retention is the other side of the coin. Our systems maintain a vast amount of data so a casino can understand its customers and keep them loyal—how frequently they visit, how much they game, whether they typically go to the East Coast or the West Coast, Atlantic City, Las Vegas. There’s a lot of good customer information the casino can use outside of the RMS in decision-making and providing the personalised customer service our customers are known for. CGI: Security is such a vital factor today: how rigorously protected are your RMS installs? BB: Rigorously. We follow all of the industry standard protocols. It’s our customers’ data and we take every step necessary to be sure it is protected. Our firewalls go beyond industry standards for the utmost security and prevention of exposure on the ‘wrong’ Internet. CGI: If you were to quantify results, what revenue improvements are commonly achieved in the casinos you have worked with? BB: It’s generally around 15 percent improvement in profit per room. Many casino customers also look at gaming win per room, and the improvement we offer there is also in the 15 percent range. Is the increase bigger than I ever thought it would be? The answer is absolutely yes. But then once you see the data and the patterns, once you see how people operated without the system vs. how they are performing today, it doesn’t surprise me at all. CGI: Are you experiencing any growth in interest from casinos in revenue management linked to the current environment of financial crisis? BB: Yes. Now more than ever, casino executives are looking to improve their top line revenue without incurring lots of expense. That’s what revenue management systems do. Without a system, people get emotional in their pricing. One 64 Casino & Gaming International

CGI: What future innovation is in the pipeline for RMS and its development in casinos? BB: We’re constantly looking to improve our models. Currently, we’re working on embedding price sensitivity into our model for group pricing, so our customers get the best forecast possible for all segments of our customers’ business. We also routinely look at ways to improve our forecasts. Historically, revenue management systems have generated one forecast across all customer segment models. We’ve rebuilt our system so we can now have different models for different segments of the business. Casino customers can have one forecast methodology, cash customers another, promoted business yet another, and these can be tweaked and tuned on the fly on a daily basis. Foxwoods installed this new version recently. Their response is validation that forecasts focused on customer segments are the way to go. CGI

BRUCE BARFIELD Bruce Barfield is president of The Rainmaker Group, a leader in profit optimization solutions for casino gaming and multi-family housing, providing revenue management for more than one-half million units in the gaming hospitality, multifamily housing and other industries. Rainmaker implements and supports the revolution Product Suite, which maximises total property profitability for operators of casino hotels and other hospitality enterprises. The company enables clients to identify and maintain availability for their most profitable revenue sources through revenue management implementations. The Rainmaker Group helps casino hotels increase profitability through the accurate, instantaneous ability to determine the minimum acceptable value of each guest. This increases client profitability by securing the most profitable customers and developing more effective business processes. Hospitality clients include Boyd Gaming, Harrah’s Entertainment, Omni Hotels, MGM MIRAGE, Trump Entertainment Resorts and other leading hotel companies.

MALTA

STRIVING TO ACHIEVE NEW GAMING MILESTONES

INTERVIEW WITH NICHOLAS XUEREB

Since 2002 Malta has steadily built a reputation as an ideal gaming jurisdiction with European exposure. The country has become an enviable base for quality, highly regulated remote gaming businesses and the developments ahead, as the Lotteries and Gaming Authority begins its renewal process, will be eagerly awaited.

GI: What is your vision? What challenges do you see ahead?

NX: I was appointed Chairman of the Lotteries and Gaming Authority (LGA) several months ago and from my experience so far I can say that I have been trusted with an exciting yet challenging role. I am determined that, together with the newly appointed Board of Directors, we can carry out our mission to ensure that the LGA enhances its reputation whilst consolidating our position as a leading jurisdiction. The LGA will strive to accomplish further milestones and continue to develop our regulatory regime as the industry grows. The main challenge over the next few months is landbased gaming. We are working on a major project, with the Ministry and international consultants, to pave the way to fully regulate this industry. At present the LGA only regulates remote gaming, land-based casinos, bingo halls and the National Lottery whilst Video Lottery Terminals, Commercial Communication Games and Broadcasting Media Games are still in the pipeline for regulation. Undoubtedly, the process of putting regulation in force is a lengthy one and that starts with a policy of having the right laws and regulations in place. The other challenge the board sees is to restructure the Authority internally. The Board believes that there needs to be clearer autonomy between the compliance and marketing functions. Although we have a professional approach toward delivery we may not be perceived to be impartial if, while promoting Malta, we are at the same time regulating the companies we attract to Malta. CGI: What was involved with the setting up of Maltaâ&#x20AC;&#x2122;s LGA â&#x20AC;&#x201C; did you have a particular model? Casino & Gaming International 65

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>> A STRONG REGULATORY FRAMEWORK COUPLED WITH MALTA’S EXPERTISE IN THE GAMING INDUSTRY ENSURES A BRIGHT FUTURE FOR THE GAMING SECTOR IN MALTA. UNDOUBTEDLY, REGULATION IS IMPERATIVE TO PROTECT BOTH PLAYERS AND OPERATORS ALIKE. THE ADVANTAGE OF A LICENSEE DOMICILED WITHIN A ROBUST REGULATORY REGIME LIKE MALTA IS CONSUMER TRUST. AS OPERATORS KNOW FULL WELL, CONSUMER TRUST CAN MAKE OR BREAK A BUSINESS. IN A VIRTUAL ENVIRONMENT, WITH INTANGIBLE GEOGRAPHIC BOUNDARIES, CUSTOMERS WANT TO FEEL ADEQUATELY SAFEGUARDED BEFORE PARTING WITH THEIR MONEY. >> NX: The LGA was set up in July 2002 under the Lotteries and Other Games Act, 2001. Having been chairman of the Authority for just three months or so I have no intention of taking any credit for the previous Board’s work. The LGA was built up over a number of years and still requires the creation of several other functions to strengthen its ability to deliver on its main objectives. CGI: Since the first license was awarded to a remote gaming company abroad, what has the LGA achieved?

66 Casino & Gaming International

NX: Malta was the first EU Member State to adopt specific regulations for remote gaming. Its success as a principal jurisdiction can be measured by various yardsticks, but irrespective of that the underlying concept thrives due to its dynamic attributes and continues to bear positive results. Over past years Malta experienced an overwhelming response from start-up companies and Tier-1 remote gaming operators alike who have opted to migrate towards a wellregulated jurisdiction. Thus, I firmly believe the LGA has definitively put Malta on the Remote Gaming map.

MALTA

CGI: Are you still getting a lot of interest from other operators? NX: On average the LGA receives around eight to ten new applications per month, which demonstrates there is still a lot of interest from other operators to get a remote gaming license in Malta. Undoubtedly, the rate of new applications received is not as high as the LGA’s earlier days when, back in 2004, we had only five fully-licensed operators. However, more importantly, we are focusing on quality rather than quantity and we are therefore working hard on improving the regulatory environment to entice more Tier-1 operators. CGI: Has the LGA’s role been a useful factor in generating business confidence in Malta? NX: The LGA’s role as a sound and responsive regulator has certainly left a positive impact on the country’s business confidence. The gaming industry in Malta directly employs around 5,000 people; 2,200 of whom are employed with remote gaming companies. This does not include the employment generated indirectly by service providers and consultants. Furthermore, Malta is reaping many more financial rewards as from remote gaming because we are attracting foreign direct investment and upmarket property investment. CGI: How have the LGA’s priorities evolved over the years since it was first established?

NX: Particularly in the gaming industry the remote sectors’ dynamics are constantly evolving and the LGA, consequently, aims to continue to develop its regulations as the industry expands. To a very large extent, the success of Malta as a remote gaming jurisdiction is due to the quality of its regulation. Malta was the first EU country to have comprehensive regulation for this sector. This is not a minor consideration: traditionally, the tendency was to approach gambling or specific types of gaming rather narrowly – which is restrictive. Malta’s regulations originally fell into this trap, but have since been amended to refer to gaming as a broader term able to accommodate a wider variety of activities. CGI: Does regulating lotteries, casinos, remote gaming, bingo halls, amusement machines and video lottery terminals help create solid professional expertise for the future of gaming? NX: A strong regulatory framework coupled with Malta’s expertise in the gaming industry ensures a bright future for the gaming sector in Malta. Undoubtedly, regulation is imperative to protect both players and operators alike. The advantage of a licensee domiciled within a robust regulatory regime like Malta is consumer trust. As operators know full well, consumer trust can make or break a business. In a virtual environment, with intangible geographic boundaries, customers want to feel adequately safeguarded before parting with their money. Players want to be sure that an independent source has Casino & Gaming International 67

MALTA

their operations are as serious and well controlled as any other gaming establishment licensed in other member states. The LGA reached another milestone earlier this year when the Commissioner for Internal Market and Services, Charlie McCreevy, held a meeting with the Members of the LGA to discuss remote gaming regulations. The meeting also included a detailed and live account of the Internet-based monitoring systems developed and operated by the Authority. CGI: How does the LGA view social responsibility issues in remote gaming and address gambling addiction?

at some point verified credentials and integrity of the operator. Malta’s experience shows that operators, who have a lot at stake, are eager to give this guarantee to their customers. CGI: What key differences are there in the way each gaming sector – casinos or online – are regulated in Malta? NX: The casino sector is regulated under the Gaming Act 1998, whilst remote gaming, the national lottery and commercial bingo halls are regulated under the Lotteries and Other Games Act, 2001. The Remote Gaming model has proved to be a successful regime with respect to player protection and advertising in particular and therefore the new regulations will be based on the remote gaming regulations. CGI: As technology advances, what has LGA policy been to keep up and generate leadership in this field in order to strengthen Maltese remote gaming? NX: The LGA defines remote gaming as a cross-border service. The Remote Gaming Regulations refer to gambling in which a player participates by means of remote communications and is not restricted to igaming. Moreover, any form of game whereby a player wagers money to win a prize is considered as remote gaming. CGI: As a member of the European Union how does that assist Malta’s eGaming development and what is the LGA looking for with its European involvement? NX: The Remote Gaming Regulations, as part of the entire legislative framework, are in line with EU directives and therefore fit with that of other member states. Besides that, Malta’s membership in the EU allows us to build robust systems to monitor and supervise operations, and therefore actively support our licensees at a political level as we can provide tangible evidence as to the nature of their operations. This has attracted many operators who wanted to show that 68 Casino & Gaming International

NX: One of the main roles of the LGA is to protect young and vulnerable players. Malta, like most other jurisdictions, does not allow under-age players to gamble. But we do much more than that. Malta’s rules differ in one important aspect: we ban under-age players according to the rules in the player’s country, not according to our domestic rules. However, age verification is just one of the safeguards in place to keep remote gaming safe for players. Other techniques are also used to help prevent people from developing a gambling problem. For instance, the LGA obliges all land-based operators to provide players with voluntary ‘self-ban’ procedures, which allow them – for a period up to six months – to temporarily deny themselves access to gaming. This has proved to be extremely effective so the LGA intends to apply this mechanism to remote gaming operators. There are also voluntary limits players can impose upon themselves and also ‘reality checks’ put in place by the operator when a player seems to be falling into a potentially dangerous pattern of play. Moreover, most of the operators as well as the LGA website provide players with information about problem gambling and even links to counselling services that can help overcome it. CGI: What does the future hold in these straightened times? NX: Obviously, our function is that of a regulator and we cannot forget this. We will continue to promote our country as a remote gaming jurisdiction but we are not prepared to sacrifice this to attract all manner of operators into Malta. I believe that the LGA needs to re-position itself in the next few years to have the appropriate regulations and administration in place to cater for a continuously, rapidly moving industry. I look forward with excitement to my three-year term on the Board to continue to professionally develop this fascinating industry in Malta. CGI NICHOLAS XUEREB Nicholas is an accountant by profession and is also a Council Member of Malta Institute of Accountants. He has worked for eleven years in public practice and at present works with an industrial group. Nicholas was recently appointed Chairman of the LGA.

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SECURITY & SURVEILLANCE

SILENTLY RUNNING: CONFIDENCE, SAFETY AND CRYSTAL CLEAR PROTECTION BY FRANK OETJEN

The ability of casinos worldwide to ensure such an absolutely safe environment that no one ever notices it is increasingly a norm of gaming activity. As technology advances with greater effectiveness, minimal intrusion, and expanding scope, so operators naturally place their trust in the appropriate, tried-and-tested systems. Ensuring that networking functioning and preventative monitoring performs flawlessly is vital. As a result many casinos have established reputations for being highly, yet quietly, protected.

asinos from Germany to South Africa install top flight security technology and the decisive factors for choosing the most effective systems remain the same: image quality, reliability and user-friendliness of the systems. We adjust the surveillance solution to meet the individual requirements of the customer, and the projects at the Casino Esplanade in Germany and the Golden Valley Casino in South Africa are two prime examples of that corporate philosophy.

CASINO ESPLANADE, GERMANY The Casino Esplanade in Hamburg is one of the most modern and innovative gambling houses in Germany. More than 150 high-resolution Cam_inPIXÂŽ colour dome cameras ensure that everything that happens is above-board despite the high numbers of daily visitors. The casino daily attracts numerous visitors with its great entertainment possibilities. There are 18 gambling tables available, ten roulette tables, four poker and four blackjack tables. Additionally the Casino provides 140 slot machines. Between the games the bar offers a great relaxing ambiance and in the restaurant visitors can expect culinary delights. Moreover, scores of special events - like poker tournaments and parties - attract even more visitors. There are 275 employees working in the Casino Esplanade, giving the visitors the sensation of being in â&#x20AC;&#x153;Las Vegas" for a moment. It is important for those in charge of the Casino to guarantee an ideal service and the greatest possible safety for gambling. Therefore the Casino Hamburg received the international certification DIN ISO EN 9001:2000 as the first grand casino in the North. The Casino Esplanade is groundbreaking: It totally Casino & Gaming International I 73

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SECURITY & SURVEILLANCE

reinterprets the term “Casino” and counts on a stylish and modern interior design – contrary to more classic casinos. To offer the customers a safe gambling experience, the casino also breaks new ground in its use of technology. Otto Wulferding, general manager of the Casino Hamburg says: “It is very important for us to make our guests feel comfortable and absolutely safe, particularly regarding their stakes. Possible discrepancies at the table need to be clarified quickly and simply. A reliable video surveillance system, providing clear and precise pictures, was an absolute must for us.”

A CUSTOM-MADE SECURITY SYSTEM VTS-Videotechnik GmbH from Hamburg planned and realised the security system for the Casino Esplanade together with DEKOM Video Security & Network GmbH, a system house for professional video surveillance and management systems that is independent of the manufacturer. The entire technology derives from Dallmeier electronic GmbH & Co.KG, a company known worldwide as a specialist in networked casino surveillance that regularly hits the headlines with its major projects like the Sands and the Venetian Casinos in Macau and the Barona Casino in the U.S.A. Wolfgang Haack, managing director of DEKOM Security & Network GmbH, relies on products and solutions from our company for casino projects. “When you buy products and solutions from Dallmeier, you are also buying their substantial experience in casino projects worldwide. Customers benefit from this fact and I have no doubt that it contributes to their purchase decision.”

DETAILED AND TRUE-COLOUR PICTURES Gaming is monitored round-the-clock by more than 150 of our high-resolution CasinoCams (in this case vandal-resistant colour dome cameras) with Cam_inPIX® technology and by ten controllable PTZ dome cameras. Especially in a casino with difficult lighting conditions, our Cam_inPIX® technology demonstrates all its abilities. With its specially developed software, CasinoCams delivers the best picture material possible under specific casino conditions. Due to high contrast and true-colour pictures, the imprints on playing cards and the colour of chips can be identified clearly even though the colour of the table varies. CasinoCams compensate for the light reflections from fast spinning roulette wheels and there are no smear effects. Robert Heymann from VTS says: “Alongside the perfect recording systems and the ideal network managementsystems, the cameras are pre-configured for the special challenges presented by casino surveillance. When immediate clarification of attempted fraud is required the accuracy of the colour pictures and the unique detail captured is essential for the clear distinction of the chips and playing cards”

RECORDING IN BROADCAST QUALITY Captured video images are shown on three workstations featuring high resolution flat screens. This digital matrix, which involves the connection of many components into a network, is the core of the surveillance system. In total there are 88 DIS-1/S recorders recording in MPEG-2 format to ensure the best possible image quality. The one channel MPEG-2 video streaming server is at the

same time encoder and decoder offering triplex functionality - audio and video recording, transmission and replay simultaneously. All other cameras are integrated in the network through six DMS 180 III recorders.

EASY AND INTUITIVE OPERATION The entire video system is controlled using the SeMSy management system. The major advantage of SeMSy is that it can easily be customised in order to fulfil the individual requirements of the client. For example, it is possible to personalise the graphic interface and to integrate individual floor plans. The Casino Esplanade implemented this skilfully. Via a front view of the building the operator can switch with only one mouse click to any floor. This generates an exact plan of the floor, with the location of every camera marked. One click is sufficient to obtain the view of any specific camera. The operation of the system is intuitive and selfexplanatory.

A SATISFIED CUSTOMER Dr. Hergen Riedel, press chief of the Casino Hamburg, confirms the customer’s complete satisfaction: “The user friendliness of the system is really impressive. Disagreements at a table can be clarified discreetly and clearly within a few minutes.” Indeed the clarification of dissent is well-organised. In case of an unclear circumstance, the course of the event is investigated in a matter of minutes with the help of our SmartFinder in the security room. The result is shown to Chairman and Croupier, due to the recorded picture material available with our system. Should a guest not accept the situation despite the clear investigation and the issue goes to court, the relevant pictures can easily and quickly be burned on a CD and with the Kalagate-Certification they can be used as evidence in court.

READY FOR THE FUTURE The requirements in the Casino Esplanade will surely grow or change in the next years – for example when new components are added or when new functions are needed. Due to the company’s open and flexible system architecture, expansion is straightforward. The system is perfectly prepared for the future and makes it easy for the customer to accommodate the system to current needs.

GOLDEN VALLEY CASINO, SOUTH AFRICA That high flexibility, image quality and reliability were the very reasons that prompted the Golden Valley Casino to choose our products. South Africa is a fascinating country – not only because of its breathtaking fauna and flora but also because it offers premium gaming entertainment. Sun International is South Africa's leading provider of gambling opportunities. The Sun International Casinos are leading the way when it comes to offering visitors a gambling experience at the highest stage. However, the Sun International Casinos are also pioneers in security. The Golden Valley Casino now has South Africa's first video surveillance system with a fully IP-based real-time matrix in operation. As a result, the Sun International Casinos line up with the ever lengthening list of satisfied customers who trust in the extensive experience of the CCTV/IP and our casino specialist expertise. The Golden Valley Casino is located in Worcester, about an hour away from Cape Town and situated amidst majestic Casino & Gaming International I 75

SECURITY & SURVEILLANCE

mountain ranges, scenic landscapes, noble vineyards and blooming orchards. It mirrors the splendour of the characteristic Cape Dutch architecture and welcomes its visitors with a variety of entertainment facilities. The casino offers various slots with exciting games and much more. Additionally, the Kuipers buffet restaurant provides sustenance and the Winners Action Bar invites to enjoy a glass of wine while listening to live music. For those who would like to enjoy the pleasant atmosphere of the casino for more than just one day, the Golden Valley Lodge is the ideal place to stay. Furthermore, Worcester can now offer delegates an alternative and sophisticated conference facility. The Golden Valley Conference Centre consists of a main conference room accommodating 90 people banquet style. In addition, there is a 10-seater breakaway room ideal for executive board meetings. The modern, high-tech conference facility is totally self-contained offering a comprehensive range of presentation equipment.

HIGH REQUIREMENTS WITH FAILURE-SAFETY Opened in November 2006, the Golden Valley Casino is the first of a range of Sun International Casinos that trust in the latest video surveillance technology we create. The Golden Valley is the first casino in South Africa to use a real-time CCTV/IP system with digital matrix! The decisive factor in choosing our system was first and foremost the applied blade technology provided by the DIS2/M, whose single-channel approach provides maximum availability and service friendliness. The DIS-2/M, a modular recording and transmission device conceived for mounting and operation in a 19’’ module rack, records directly onto the integrated memory. It thus ensures a maximum availability of recorded data even in the case of network problems or failures. Thereby the 76 I Casino & Gaming International

company guaranteed the highest availability of the comprehensive solution because there is no single-point-offailure. Our solution achieves an availability of 99.99994 percent. This value is even higher than the "Five Nines" praised throughout the IT world! In order to further increase failure-safety the system enables on the spot redundant recording, where hard disks of different capacities can be operated within one system (mixed operation of capacities). For all digital hard disk recorders for casino solutions we exclusively employ Linux which is deemed highly reliable among experts. In order to further increase stability the operating system was separated from the hard disks and relocated onto a Flash-ROM.

MINIMUM DOWNTIME DURING MALFUNCTIONS Sun International Management Company director for `Compliance and Tables´ Jaco Coetzee said: "Apart from the high failure-safety, service was also very important to us. Owing to the Dallmeier blade technology it is possible to exchange a malfunctioning component with every single channel. Also, the exchange can be carried out during its operation since the DIS-2/M modules come with hot-plug functionality. So, there is very little effort to it and the downtime of the system is reduced to a minimum.”

COMPLETE IP SOLUTION The CCTV system installed at the Golden Valley Casino is a pure IP solution. It's no wonder, therefore, that the network is playing a particularly important role since it acts as an important interface between the operator and the system. The Golden Valley Casino emphasised that the bandwidth requirements should not be too high and we provided an ideal solution for this as well. This is because the

SECURITY & SURVEILLANCE

company’s CCTV/IP systems require network operations only for the work of the operator and the system’s management, not for recording. Network bandwidth is only used when necessary. We are, in fact, working closely with leading manufacturers of the network industry and are thus familiar with new developments and technologies ahead of everyone else.

INNOVATIVE TECHNOLOGIES – EASY TO USE Our management software, SeMSy® (Security Management System), allows for the easy and convenient operation of the complete video surveillance system at Golden Valley Casino. SeMSy® enables the easy management and administration of different streams of media data and provides live display and recording of video and/or audio data at any point in a networked system. Additional network components can be integrated into the network at later points in time, without limitations. Therefore, systems based on SeMSy® are optimally prepared for any future requirements - today! The major advantage of SeMSy® is that it can easily be adjusted to meet the customer’s requirements.

INTEGRATIVE TECHNOLOGIES FOR THE ENTIRE SUN INTERNATIONAL GROUP Sun International in its search for a suitable digital product extensively researched and reviewed a number of solutions before eventually deciding on our solution for all of the South

Pioneering the World of Real-time IP Matrix

November 18 - 20

See you at stand 6111 For more information please contact our Casino Project Team: casinoteam@dallmeier.com www.casino-surveillance.com

African, Sun International casinos. The first installation at the Golden Valley was very successful and a number of other casinos are already being equipped with it. Jaco Coetzee stated: “We believe in standardisation because of all the efficiencies linked to this and Dallmeier proved to be the better solution for casino operations according to our intensive evaluation criteria. The high failure-safety and the unbeatable image quality as well as the support are simply convincing!" CGI

FRANK OETJEN Frank Oetjen is International Sales Manager of Dallmeier electronic and responsible for Southern Africa and Australia. He has more than 15 years of experience in the CCTV industry and has been responsible for many national and international CCTV projects. Since 2001 he led the development of Dallmeier’s digital matrix system and managed the implementation of the first digital matrix system worldwide. Many international projects have been implemented based on this technology since then - especially for Casino Solutions.

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We made our name with the payment system that we developed for the gaming industry. However, we’re not associated with any gaming companies. Our independence and the security of your sensitive data is paramount to us. It also means that our systems have grown to accommodate any kind of merchant, gaming or otherwise.

Real-time & Off line Transaction Analysis

Unusually for an online business, it’s in the off-line world that we really shine, if you’ve got specific requirements we’ll meet you face to face, find out what you need and adapt (or build) our system to your exact needs. If you need something special, we’ll find a way to do it. If you need a product that works but that’s also backed up by a team of dedicated professionals at your beck and call, Lateral Payment Solutions is who you need to speak to. G i v e u s a c a ll o n + 4 4 ( 0 ) 2 0 8 5 4 5 8 8 4 0 o r v i s i t u s at www.latpay.com , but please do it with a smile on your face as you imagine us stretching over desks or leaping over chairs to get to you as fast as you deserve.

We have particularly good, well-established relationships with a number of Acquiring Banks in both the UK and Europe. So, if you’re just setting up or making a change we can help you through the Merchant Account application process and show you how to stack the odds in your favour.

Proven Automated Fraud Engine Personal, Efficient Merchant Support Pay-ins & Pay-outs Covered

Discretion and anonymity on demand – It Pays to Dotpay Poles spend more on gambling in a year than all of the casinos in Las Vegas earn together The number of Polish clients that regularly gamble is growing each year and this has prompted an increase in the number of services and goods targeted at Polish-speaking Internet users. As companies scramble to attend to this emerging client base, the need to invest in the development of services to make them safe and easy to access for Polish clients has never been greater.

Poles love a flutter As the number of Poles with access to the internet grows, so too does the interest in online entertainment and gambling. In 2008, Poles will spend over 7 billion dollars on gambling – that’s twice as much as in 2006 and more than the total annual income of all the casinos in Las Vegas! With hundreds of thousands of Poles living abroad and Poles at home earning more, providers of online gambling services simply cannot afford to ignore the Polish market. Those companies that make transferring money easy and safe for Polish customers will undoubtedly have the odds in their favour. The potential and possibilities for online service providers are enormous. The increased comfort and confidence of Internet users in online services and shopping, combined with the elimination of fraudulent transactions and threats to payment security, means that the benefits of implementing an online payment system have never been clearer. A leading provider of online gambling services recently incorporated an online payment system and, in its first quarter of operation, generated an additional £100,000. Over this same period, the company’s revenues grew by an average of 100% each month, explains Grzegorz Serafin, Sales Manager at Dotpay.

Dotpay – discretion and anonymity on demand At present, there are three companies on the Polish market providing internet users with online payment/transfer facilities. However, one stands above the rest as the market leader. Dotpay not only enables credit and debit card transactions but also facilitates online transfers with almost 20 Polish banks as well as many international banks. In addition, the Dotpay system is compatible with the UKash vouchers and cash payments via a network of over 9,000 shops and post offices. This last option is particularly cherished by Polish Internet users, who unlike their Western European counterparts, are less likely to pay by credit or debit card. Dotpay understands the need for discretion and anonymity, especially for services such as online gambling. That’s why Dotpay guarantees complete anonymity and discretion for purchases of online services – no transaction details appear on bank or credit card statements.

Safety first Today, the development of e-commerce has reached a level where transaction security for both the payer and recipient is unrivalled. In fact, in many cases it’s safer to pay online than by credit or debit card at regular shops. Dotpay is the world’s safest online payment system. A strict adherence to procedures and implementation of the latest technologies and standards (including PCI DSS Certificate, McAfee, “Hackersafe” certificate and Thawte SSL Certificate) has led to Dotpay being recognised as one of the best and most secure online payment and transfer services. Dotpay assumes all responsibility for payments that are made fraudulently through the Dotpay system. For clients, this approach helps instil a feeling of confidence and trust in the Dotpay online payment system. Dotpay also provides insurance cover up to the value of 2 million pounds sterling. This insurance applies to all transactions and is provided at no extra cost, explains Grzegorz Serafin.

Elektroncek leads through live functionality, ergonomic design and durability Elektroncek is a trendsetter in the international market of electromechanical and electronic gaming machines, in large part because of the vision of its founder Joc Pececnik. We talked to the CEO of the company Thomas Zvipelj, who is optimistic and sees in the segment of multi-terminal gaming machines enormous opportunities for development, and good profits by maintaining quality production and gaining niches in the open market. The story of our Elektroncek’s success, unique in many ways in the Slovene environment, began with a dream move – the launch of the innovative electromechanical gaming device Princess Roulette. Immediately it became a success attracting a lot of attention, especially due to its technically impeccable operation which has its basis in tried-and-tested European quality. Elektroncek’s gaming devices are recognised for their technical excellence and durability, and after ten years the majority still fulfills the fundamental demands of casino owners and players. Development of Elektroncek’s 4th generation of gaming devices, sub-branded “G4 Organic”, has been a real achievement. The new generation stands out with the G4 Organic Card BlackJack – the first electromechanical gaming device enabling genuine game experience with real cards. “There is no comparable machine on the market, because development stopped with the machines that displayed the cards on a video screen. The video screen does not provide the player with an authentic experience, so they prefer to choose a traditional blackjack run by a croupier. But our innovation filled a niche, and we announced a new path for development of the multi-terminal gaming machines – electromechanical solutions for traditional live games,” explained Thomas Zvipelj, CEO of Elektroncek. He also points out that in many countries, as well as in Slovenia, live games like roulette or blackjack are not allowed in arcade markets. However, electromechanical devices can introduce those traditional games to this so far unexploited market segment. According to the first theoretical estimates the product will increase sales revenue within a period of three years by as much as 6080 percent.

A step forward “We believe once the development of gaming devices is focused on the interaction between the players, casino owners and manufacturers – the circle is complete. Success is guaranteed for companies which are quick to adapt and are able to detect changes early. Players, especially the younger generation, will come to love the product. Above all the product must be comfortable, likeable, appealing, technologically modern and ultimately flawless,” commented Joc Pececnik. During the last ten years automated roulette and dice have become exceptionally popular. Currently, both modes complement each other, but we at Elektroncek, they foresee a rise in the number of automated games. Why? Because of the numerous advantages they bring, among which the following are most crucial: security for owners, protection of players against possible manipulation by the casinos, and substantially lower fixed costs for individual games – indeed they almost cover the cost of the workforce, which is the most expensive element.

The key strategic guideline: regulated markets only “About five years ago we had two choices. The first was to enter unregulated markets or only minimally regulated markets from the standpoint of technical and sales licensing. We chose the other path and started acquiring extremely expensive technical and sales licenses through lengthy and complex procedures. Those were the markets where our products were not yet available – Australia,

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Canada, the USA and Macao. This required a completely different management of company business processes. We were, in fact, pioneers of sorts. In spite of large investments and lengthy procedures it seems our strategy paid off, because this provided us with a exclusive midway presence in some of the markets,” Zvipelj pointed out.

Product improvement and energy consumption The 4th generation of our gaming devices bring improvements in functionality, attractive ergonomic design and technological solutions for the future. New technologies enable implementation of innovative gaming functions like, for example, the identification of the operator and player with the help of a fingerprint scanner. The machine also offers a wider selection of games and options for adjusting these games to the needs of a casino, which are naturally influenced by the wishes of guests on a day-to-day basis. In comparison with other machines on the market they are significantly more energy efficient and operationally very secure. To the question, how is it possible to pay your employees well and at the same time fight global competition, Joc Pececnik responded that the gaming industry is both very simple while also very complex: “The company has a specific advantage: it can reach its financial goals very quickly if the product or service is of the highest level of quality. In this industry the fact that the results are measured every day is a distinct advantage. It is very simple, which does not mean that it is easy to succeed, because the customers who put the machines in their casinos count the money in the “cash box” every day. If they are satisfied, then they are willing to buy the products even at very high prices. If there is no money, we could give them the product for free but they would not take it, because they would rather put in a machine that brings in the money, in the limited space they have”.

Multi-game platform innovation Multi-game technology enables players to choose the game they want to play on a gaming terminal, which is connected to several centres simultaneously. This gives the players the option to choose any game – roulette, dice, blackjack, baccarat, keno and others – without leaving their micro-location in a casino. On the other hand, it gives the organisers the chance to optimise their offer, because the player can choose to play a different game at any given moment, which is of key importance because of the spatial restrictions, and constraints on the number of gaming stations imposed by the legislators in many countries.

Innovation awards Technological development of the G4 Organic Card BlackJack lasted four years, in cooperation with 61 engineers. It was officially introduced to the public in January 2008 at the ICE/IGE (International Gaming Expo) in London. The futuristically designed machine for automated and 100 percent random dealing of real playing cards convinced managers, owners of casinos as well as the international panel of judges of International Gaming and Wagering Business (IGWB), which awarded us for the most innovative product of the year. In Slovenia, G4 Organic Card BlackJack is placed among the top five innovative products in the government projects and contests, which strive to increase recognition of Slovene technological creativity and entrepreneurship in the EU. The live game is transferred into the machine, which is secure from tampering and gives the casino owner overall contro while which also lowering workforce costs. It also offers increased personal value to players and enables learning for beginners through the instruction screens. Comfort and user experience are the object of numerous improvements across the entire fourth generation range of gaming devices.

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Making online gaming safe, secure and compliant with an effective payment solution Jon Prideaux, Deputy CEO at SecureTrading

There are many payment and security-related challenges faced by the online gaming industry today. Operators need to protect against risks such as money laundering, underage gambling and compulsive gambling. On top of this, recent industry research has suggested that four out of five of their customers are concerned about the security risks they are taking. The punters want to know that their personal data is safe. Outstanding online safety, security and integrity of financial transactions are key requirements, to reassure customers and regulators and also to fight off organised attempts to gain unauthorised access to payment data. By working with online providers such as SecureTrading, businesses can offer a safe and secure payment solution that builds consumer confidence and offers a host of counter-fraud services. SecureTrading has recently launched a new suite of counter-fraud tools to provide the highest level of protection for online businesses and their customers. Online fraud is growing at an alarming rate and has become a truly global operation, orchestrated by well-organised criminals who are making hundreds of millions of pounds each year. These criminals are becoming increasingly sophisticated in their attempts to overcome existing measures, so in response, SecureTrading has introduced the most comprehensive range of counter-fraud and security services and made sure they are affordable and accessible to all. The two new counter-fraud solutions – SecureTrading Identity Check and SecureTrading Fraud Score – work alongside existing security products to enable sites to better recognise and block attempted fraudulent or unauthorised transactions. SecureTrading Identity Check allows operators to verify if someone exists and lives at their given address. It also allow documents such as Passports and Driving Licence details to be checked and age to be verified. SecureTrading Fraud Score calculates the risk of a transaction being fraudulent and assigns it a score of between 1 and 100 dependent on the threat. Underage gambling is understandably an emotive issue, but by using SecureTrading Identity Check, businesses have access to an age-checking facility. By combining secure real-time payment processing with innovative counter-fraud and security tools, gaming sites can reduce the risk not only of underage gambling, but also money laundering and abuse by organised crime. Our service allows a full Know Your Customer (KYC) level check against databases maintained by the US and EU authorities. Details of these prohibited persons are held on various lists covering known terrorist and other criminal elements. By connecting to SecureTrading these operators can ensure that their enrolment processes include a check against the Bank of England (BoE) Sanctions List, the CIA's Politically Exposed Persons file and The United States Office of Foreign Assets Control (OFAC) Sanctions list. SecureTrading has been at the forefront of counter fraud initiatives since its inception, for example, by its participation in the UK Government and private sector Internet security awareness campaign – Get Safe Online – and as one of the first payment services providers to be accredited as PCI DSS level I. Furthermore, SecureTrading and its parent company UC Group are working closely with legislators and regulators in the US, UK and at the EU Commission to provide domain expertise and assistance in introducing wide ranging new pieces of Internet-related legislation which are designed to prevent the exploitation of children, combat organised crime and minimise the funding of terrorism.

SYSTEMS TESTING

COMPLIANCE AGAINST ALL RISKS – A TECHNICAL PERSPECTIVE BY SALIM L ADATIA AND NOAH TURNER

For over a decade in the interactive gaming sector, and several more in the traditional land-based gaming sector, we’ve seen countless examples of what can go wrong if we don’t have an opportunity to do what we do best – our testing! Whether it’s an inane mistake in the software, a critical weakness that gets exploited, or just a cautious regulator shutting down someone’s operations before things get worse, it’s clear that testing should never be skipped over. Failure to keep up with compliance can mean a failure to make money!

lthough compliance testing touches on many areas of your business as a whole, such as legal and accounting, today we’re going to focus on compliance purely from a technical perspective. And if you don’t think that technical compliance applies to your business, just look at a few of these examples. We’ve seen untested Random Number Generators (RNG’s) compromised by external attackers who found a pattern or bias in the game outcomes. Worse yet, we’ve seen internal attackers find ways of exploiting untested RNGs because they had prior access to the source code for the RNG, and a hankering for burning their former employer. We’ve seen operators running untested games in the live environment for months, unaware that the games were incorrectly designed to pay out at well over 100 percent Return to Player (RTP), resulting in a consistent profit for the players! Conversely, we’ve also received scathing complaint emails from punters who are convinced the games they are playing are purposely rigged to pay out significantly less than the advertised RTP. We’ve seen untested control environments allow the success of Denial of Service (DoS) attacks, hackers to break into high-security computer networks, and super-user accounts to be compromised and used for fraudulent purposes. We have seen these events repeated over and over, time and time again. Many of which have transpired under the spotlight of the public eye. If you’re okay with exposures like these and negative publicity for your business, then maybe you don’t need compliance testing after all. But if you’d rather avoid these costly and embarrassing disasters, then by all means keep reading.

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>> WE’VE SEEN OPERATORS RUNNING UNTESTED GAMES IN THE LIVE ENVIRONMENT FOR MONTHS, UNAWARE THAT THE GAMES WERE INCORRECTLY DESIGNED TO PAY OUT AT WELL OVER 100 PERCENT RETURN TO PLAYER (RTP), RESULTING IN A CONSISTENT PROFIT FOR THE PLAYERS! CONVERSELY, WE’VE ALSO RECEIVED SCATHING COMPLAINT EMAILS FROM PUNTERS WHO ARE CONVINCED THE GAMES THEY ARE PLAYING ARE PURPOSELY RIGGED TO PAY OUT SIGNIFICANTLY LESS THAN THE ADVERTISED RTP. >> Over the years, compliance testing has evolved in an effort to protect those willing to participate from these horror stories. To understand where we stand today with this evolution, we’ll have to first take a step back to yesteryear. Necessity is the mother of invention and the same applies to compliance testing. We all know that in some parts of the world gaming had unlawful roots. However, to better understand the roots of compliance testing, we need to fast forward to the end of that era. We’re talking about when the gaming industry began to increasingly need a way to ensure the safety and security of its operations to guarantee business continuity and a steady flow of revenue. This was made even more critical by the high-profile nature of the business, where any bad press meant significantly reduced profits. So compliance testing was born to answer these demands, and give the industry and the players the safety and security it needed. This compliance testing made gaming systems comply with prescribed minimum technical standards, thereby protecting them from potential exposures. As Government bodies became increasingly involved with the process, official regulatory technical requirements were increasingly put in place, thereby enforcing what was previously voluntary. In effect, it became illegal to operate without complying with the requirements. That worked fine for the time being, but as we all know, things change. Long periods of uneventful operations or economic downturns called for technical requirements to be loosened. On the flip-side, public scandals and costly exposures called for technical requirements to be tightened. This tug-of-war continues today as well, and as new technologies are introduced, new exposures are created. With each new form or complexity of gaming came new ways to cheat the system, and new ways for things to go wrong. The technical requirements had to be updated to reflect the changing landscape, and experts were soon in demand to help Government bodies keep up. Again, necessity had given birth to a new invention: the Accredited Testing Facility (ATF). There are now numerous ATF’s operating around the world, experts specialising in technical compliance testing for the gaming industry. These ATFs help Government bodies to keep their technical requirements up-to-date, and to provide operators and suppliers with compliance testing and support. The result was that compliance testing was being performed by experienced and specialized agencies, and in many cases the technical requirements were being refined by those responsible for the actual testing effort. The interactive sector of the gaming industry has 88 I Casino & Gaming International

followed an almost identical course, albeit highly accelerated. Like any other industry today, the Internet is the fastest growing playground for business, calling for all those involved in e-commerce to adapt at an unprecedented rate or risk missing the boat. Since the history of the interactive gaming industry is much more condensed than its traditional landbased counterpart, it is much easier to track its history. Since interactive gaming is relatively new, and tends to change so quickly, Government regulators often look to one another to set precedence for technical requirements. Why re-invent the wheel, when your neighbour already has a great design to lend you? That’s why jurisdictions half-way around the world will sometimes have nearly identical technical requirements. In many cases, the requirements will match word-for-word. In other cases, each jurisdiction will tailor their requirements to meet their specific and unique needs; however, the underlying themes usually remain the same. So who raised the bar and set the highest precedence for technical requirements? In the world of interactive gaming, that would be Australia. Although they were first out of the gates, a legislative moratorium was quickly put in place to control the existence and expansion of interactive gaming in Australia. The technical requirements set forth at the onset have remained some of the strictest across the globe. Australian Technical Standards Documents (TSD’s) are often used as a basis for other jurisdictions seeking to put in place their own. ATF’s are often called in to draft TSD’s for new jurisdictions, thus making sure that the technical requirements match perfectly with what the jurisdiction wants and needs. In fact, many Government regulators borrowing technical requirements from other jurisdictions may not even realise that those technical requirements might have originally emanated from Australia. As technical requirements continue to evolve over time, we’re seeing a convergence across different mediums of gaming. For example, downloadable Server-Based Gaming (SBG) in casino environments has elements of traditional land-based gaming combined with interactive gaming. The resulting merger requires new TSD’s to be authored by Government regulators and ATF’s to ensure that these new systems comply with appropriate standards and incorporate the necessary controls. Similar convergence can be seen with many other new technologies across the board, such as mobile gaming (telephone and PDA) and wireless hand-held devices in casinos. Again, Government regulators and ATF’s are challenged with responding with the associated technical requirements for compliance testing.

SYSTEMS TESTING

We’re also seeing a number of betting and gaming organisations offering their services over multiple mediums, where the same player account can be accessed over the internet, by mobile telephone, and even in person at the casino. These innovative models present new challenges from a compliance perspective, but not as much as you might think. Naturally, there are significant differences behind the scenes, as each new model requires an entirely new set of IT infrastructure to support it. But from the player’s perspective the differences are few. If done right, the differences are virtually invisible and seamless. In fact, it is quite deliberate that the player’s gaming experience remains effectively unchanged regardless of whether accessing their account over the Internet or via mobile telephone or PDA. Sure, the screen may be smaller, and the buttons may look a little different, but the images and game functionality are basically the same. The intention is for the operator to more easily migrate player accounts across different mediums and for the player to be able to more easily adapt to the new interfaces. This will allow the player to quickly get into the swing of things, and start gambling with the new medium as soon as possible. We can even see this happening between traditional land-based games and interactive games. International Game Technology (IGT), one of the world’s largest suppliers of traditional land-based Electronic Gaming Machines (EGM’s), recently purchased interactive supplier WagerWorks, and has expanded WagerWorks interactive offering by including games from IGT’s library. We’ve seen the converse of this with Boss Media, who ported their interactive offering over to traditional land-based EGM’s. What does this mean for compliance testing? It means that many of the technical requirements specifically relating to game design can remain effectively unchanged. What was required for a game on the Internet is also required for a mobile device game, or a game operating on an EGM in a bricks and mortar casino.

ATF Case Study: Technical Systems Testing (TST) Established in 1993, TST is an internationally-recognised ATF offering a full range of testing and consulting services to the traditional land-based and interactive gaming, wagering, lottery, e-commerce industries. Since its inception TST has worked closely with industry operators, suppliers, manufacturers and Government regulators. The mandate is to ensure that gaming systems comply with Governmentprescribed technical requirements, manufacturer’s technical specifications, and world-best-practice industry standards. Fully independent, impartial and confidential assessments are performed by highly qualified and skilled teams of full-time probity checked in-house personnel through a global network of TST laboratories. Who keeps ATF’s in line you might ask? Well, beyond the Government regulators themselves, TST itself has been independently certified for compliance with International Standards Organisation (ISO) 9001 and ISO/IEC 17025 requirements. Government regulators are increasingly using such qualifications as minimum benchmarks to accredit ATF’s. Over the years, TST has performed compliance testing on a vast array of gaming systems for both traditional landbased and interactive applications. These have included

hardware, Software, Games, RNG’s, Communications Protocols, Central Monitoring Systems, Jackpot Controllers, and Websites. TST also performs Information Systems Security (ISS) Audit, Field Data Analysis, Game Payout Calculation, and Expert Witness Testimony services. Although TST’s trained and qualified staff routinely perform all areas of compliance testing, TST’s particular strengths are focused towards the high-risk areas of gaming. System elements such as RNG’s and game mathematics are among the most complex, and can result in the most damage if a potential exposure is not identified and corrected at the outset. TST has routinely identified errors or omissions in RNG solutions. These high-risk elements are also prevalent for both traditional land-based and interactive applications alike. TST’s evaluation methodologies are not limited solely to established gaming mediums, thereby allowing testing staff to quickly adapt compliance testing to unique new systems. These are merely some of the reasons that many Government regulators choose to use TST for compliance testing of entirely innovative and hightly complex systems. TST has observed that the on-going improvement of testing methodologies by ATF’s has undoubtedly resulted in an overall increase in quality of gaming systems on the market today. But that doesn’t mean that we’re all in the free and clear. Common problems tend to pop up throughout the course of compliance testing. First of all, we see countless non-compliant RNG’s still crossing our path. Whether software-based algorithms, or physical hardware-based devices, RNG’s are extremely complex system components that should not be taken lightly. RNG’s should always be subjected to adequate compliance testing to ensure fair distribution and non-predictability of the RNG outcomes. A misconception we often have to deal with is that RNG testing need be overly cumbersome and time consuming. On the contrary, the associated testing time and costs are actually quite low, and pale in comparison to what you risk losing if there is an exposure. We also see systems being pushed through compliance testing before they’re actually finished being developed – especially games. Naturally, any ATF with adequate experience should be able to jump in and perform compliance testing at any stage of system development. This isn’t necessarily a problem, as long as all concerned parties are aware of the pros and cons associated with each approach: Casino & Gaming International I 89

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Getting Compliance Testing Done before Development is Finished

Waiting until Development is Finished before Getting Compliance Testing Done

Pros: • Uncovers issues of non-compliance early on, so that fixes are quicker and easier for your development team to make, thus avoiding potential expensive retrofits.

Pros: • Easier and cheaper for ATF to complete their testing, since system is fully functional and ready to go. Avoids the ATF having to evaluate an evolving / moving target.

Cons: • Harder for ATF to complete their testing, since system is not fully functional. • Potentially higher compliance testing costs, since issues of non-compliance will be identified together with development bugs and faults.

With either approach, one of the best ways to avoid the cons is to ensure that your development team has a copy of the relevant TSD in front of them while they work. They should be well-versed as to the regulatory requirements, so that they don’t start down a development path doomed to fail with a non-compliant end result. Also, ensure that your development team works closely with the ATF before and during the compliance testing process, so as to give them the technical support that ATF’s require to get through the testing as quickly and costeffectively as possible. It is critical to the process that the ATF and your development team are on the same wavelength as to the requirements and the objectives. The best evaluations are those where ATF’s and their clients work together rather than oppose one another. At times the ATF can be perceived as an enemy rather than an ally in the process to achieve a fair and secure gaming system.

ATF Expansion Although each ATF has a country of origin, in the case of certain ATF’s their operations have expanded to include a physical presence in additional geographic locations. This growth tends to follow the current or anticipated demand for compliance testing local to that jurisdiction, particularly for traditional land-based gaming systems. This growth is beneficial for operators, suppliers and Government regulators, since there are more ATF offices available to perform their compliance testing in multiple time zones. It is also beneficial for the recipient country, since it strengthens the gaming integrity of the region while simultaneously bringing additional commercial attention and tax dollars to those areas. It also inevitably culminates in the creation of new jobs, and attracts highly skilled and educated personnel to those areas. Some Government regulators go as far as requiring that a local office be set up before an ATF can be accredited to perform testing for their jurisdiction. TST has offices located in London (England), Vancouver (Canada), Sydney and Melbourne (Australia), and Macau (China). Steps are taken to ensure that local staff training with the company’s standard ISO procedures and proprietary 90 I Casino & Gaming International

Cons: • Any identified issues of non-compliance will be harder for your development team to correct, since elements of the system may need to be entirely re-engineered. • Implementation of fixes could have farther reaching impact than initially anticipated, due to overlap with other systems in place.

testing methodologies, resulting in a proper transfer of knowledge so that testing quality is never sacrificed. Burgeoning regions in Europe, Asia and South America are increasingly demanding ATF attention as they intend to establish themselves along the same level as more mature jurisdictions. TST continues to pursue opportunities to open new offices worldwide, as local demands require. ATF’s like TST are here to help protect from costly mistakes, exposures and scandals. They have the same underlying goal as you: get you up in running with a high quality product and service, in the jurisdiction of your choosing, as quickly as possible, fair and secure. No matter who does your compliance testing, or where you get it done, the fact remains the same: ATF’s are your first line of defence against the hassles and disasters associated with not keeping up with compliance. The nature of gaming compliance is changing, and everyone has to choose to either keep up, or fall behind and pay the price! CGI

NOAH TURNER & SALIM L ADATIA Noah Turner and Salim L. Adatia are the Chief Technical Officer (CTO) and Chief Executive Officer (CEO) respectively of Technical Systems Testing (TST), an internationally recognised Accredited Testing Facility (ATF) offering evaluation and consultation services for traditional/land-based and interactive/remote gaming, lottery and Information Technology (IT) industries.

Winning the battle against cyber criminals, London, 27th January 2009

Join 150 + international anti-fraud specialists at the 5th annual Combating Cybercrime • The only conference dedicated to the ﬁght against fraud in i-gaming • Spend one totally focused day on solutions for DDoS attacks, Authentication, Age Veriﬁcation, KYC, PCI Compliance, Anti Money-Laundering and much more. • Co-located with the world-famous ICEi exhibition. • Visit the Cybercrime Zone during your visit to the conference

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ONLINE STANDARDS

INEPT ONLINE CASINO MANAGEMENT CAN DAMAGE PROFITABILITY

BY TEX REES

The new breed of online gambler has a better knowledge of the industry than ever before, and a sound appreciation of what is acceptable conduct from online gambling venues....and what is not. So it is no surprise that managers cannot afford the luxury of sloppy and uneconomic promotions or bad decision making. Rapid ease of online communications requires that disputes are handled with care – and swiftly.

n the fast maturing online gaming industry, it is not just technology, games and management that has improved – a growing community of smart and competitive online gamblers has evolved that looks for financial reward as well as entertainment. That means that managers cannot afford the luxury of sloppy and uneconomic promotions or bad decision making. Whilst this is rarely the risk in professionally managed operations such as those displaying the eCOGRA Safe and Fair seal, mistakes and subsequent mismanagement can create severe problems for both players and operators who become entangled in the disputes that follow. The new breed of online gambler has a better knowledge of the industry than ever before, and a sound appreciation of what is acceptable conduct from online gambling venues....and what is not. He or she is prepared to nurture and educate the new players who constitute future business, and to pursue issues through a diversity of private and public channels if unfairly treated. Added to the fast and easy communication provided by Internet media, portals and message boards this is a potent combination that online casino managers should note with care.

PLAYING TO THE RULES These players may or may not leverage bonuses to increase their returns, but they generally strive to achieve reward by playing strictly within the casinos’ rules – the Terms and Conditions (T&C) – and have become expert in interpreting these to the letter. Woe betides the inept casino manager who designs uneconomic promos – such offers will be played to the max by this growing legion of skilled players. Casino & Gaming International I 93

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Someone will then have to foot the bill, and trying to offload this unwelcome cost on the players is not only unethical – it can be a recipe for disaster. Recent disputes in the online casino industry have again highlighted this hoary problem of management errors…and who pays for them. Disputes can escalate rapidly on the Internet into very public rows if not quickly and fairly addressed by managers with the authority to make decisions, and that can cause substantial damage to a business. The days of “ignore it - it will soon go away,” are long gone. Players communicate more now than at any time before in this industry, and the growing ranks of experienced online gamblers are savvy when it comes to using message boards, portals, affiliate sites, licensing jurisdictions and even the media to air disputes. One school of thought is that in a perverse way these knowledgeable players are valuable in finding errors in an industry where some managers do not really understand the complexities of odds, wagering, games and the into the melee and shown to have a dysfunctional dispute channel. In another recent incident a hitherto respectable group changed a promotion T&C but through internal inefficiency failed to communicate this to players who had already been specifically offered the promotion by email. When players who had adhered to the terms and conditions claimed the bonus it was denied, triggering an immediate outcry across the Internet. At this stage the situation could still have been contained with a simple public apology and a fair and honourable adjustment giving the promised bonuses to those who qualified for them in terms of the original T&Cs. Instead, the dispute was allowed to rage unaddressed for weeks because key managers were not available! Fortunately for the players, this operation was one of eCOGRA’s Safe and Fair seal casinos and use of the complaints channel initiated a dialogue at more senior levels 94 I Casino & Gaming International

and the fair and appropriate adjustments were made. Good business sense prevailed and the prejudiced players were paid and offered an extra bonus for their trouble.

MANAGEMENT TIPS Players can be extraordinarily forgiving if they are treated fairly and with respect, and the following notes may assist inexperienced managers to avoid common pitfalls: 1. Truthfulness and honesty are admired by players. If you have erred, be prepared to recognise it at an early stage and set things to rights. Then take your financial lumps and attend to the internal problems that created the situation in the first place - it is the right and professional thing to do and will be cheaper in a business sense in the long run. 2. If the issue has gone public on message boards or the media, be prepared to make a timeous public statement broadly explaining the situation and the remedial measures that have been taken. Lack of communication is interpreted by the player community as arrogance, discourtesy or plain dishonesty. 3. Remember: the “ignore it and it will go away” tactic is disastrous in today's more knowledgeable and communicative market. 4. Bonuses are the single greatest cause of player vs. casino disputes. Never, ever attempt to retroactively impose changed Terms and Conditions. Savvy players record the T&Cs they have signed up for as future reference, and there are archive sites where this sort of information can be retrieved to embarrass the unwary. Players have a straightforward view on promotional offers: if the offer is made by the casino and accepted by wagering and full compliance with the T&Cs, then a binding contract exists and they expect to receive any rewards due. Preferably quickly and without difficulty. 5. Check promotional mailing lists and clean them up frequently - once an email has gone to a player it is too

ONLINE STANDARDS

late to back away from the offer it contains unless the player has a proved record of chargebacks, false ID or multiple account fraud. Internal communication errors between risk and fraud management and marketing are a common source of casino error. 6. Declining the business of a particular gambler or group of gamblers is the prerogative of casino management, but it must be applied fairly, transparently and not after a player has accepted a bonus and played. In such cases the casino should meet its obligations and then lock the player out or limit the bonuses available, ensuring that he or she is not sent future offers. Afterthe- fact disqualification of bonuses without solid reasons is unfair and unreasonable and will be widely condemned. 7. Do not use the irrelevant phrase “did not play to the spirit of the promotion.” If you are not happy with a player’s conduct then after reading (6) above ban him from further bonuses or lock the account – don’t use the “bonus abuser” pejorative to “punish” a legitimate player by hammering rewards you have already promised. Legitimate players regard the T&C as the rules of the game for both themselves and the casino. The casino makes the rules - it must adhere to them, too. 8. Attend to player complaints quickly - these are the people who pay your bills and produce your profits and they should be treated with respect, fairness and courtesy. Never ignore a complaint or brush a player aside. 9. Asking for ID verification is legitimate and necessary on occasion - but do not use it merely to delay payouts. 10. Avoid delaying payouts and then suggesting that the player reverse his cashout and play further in return for a bonus - that can be construed as devious marketing by many players. 11. Support reps are the first line contact for customers, and therefore a critical element in Customer Relations Management. Choose the best people you can afford for the job and then train, motivate and constantly update their knowledge of current promotions. When these representatives of the company stumble it makes for lost custom, extra management work and danger to reputation. At the top end of the market there are many competitive sites as good as your own - really good CRM can be the decisive differentiator. 12. Avoid the use of the lawyer’s catch-all phrase: “The management can do what it wants and its decision is final.” Ensure you have reasonable grounds to act against a player before you do so, because the use of this sort of blanket and non-specific rule is guaranteed to breed distrust, resentment and lose customers if it becomes public. 13. Remember that although there are fraudsters and villains out there, the majority of online players are legitimate gamblers looking for entertainment and if possible reward, and they are prepared to play the game by your rules. They are entitled to professional and fair treatment. It is imperative that managers accept responsibility for their decisions and actions, and with that comes a requirement for expert construction of promotions and the

terms and conditions that are to govern them. It is unrealistic to expect players to happily accept the cost of a business error at a casino when they have put their own money at risk. *eCOGRA’s Total Gaming Transaction Review recognised to assess payout percentages and Random Number Generation fairness The independent online gambling standards and player protection organisation eCOGRA has been approved as an accredited testing facility by the Gambling Supervision Commission on the Isle of Man, a premier European licensing jurisdiction. The accreditation followed extensive presentations by eCOGRA Chief Executive Andrew Beveridge, the organisation’s Independent Directors and audit team to the Commission earlier this year, which delivered credentials and explained the testing methodology used. Commenting on the accreditation, Beveridge said: “We are delighted that a regulator of the calibre of the Isle of Man Gambling Supervision Commission has accepted our credentials, audit experience and professional qualifications after intensive study. Our testing principles and methodologies have now been recognised by several international jurisdictions concerned with protecting players through the professional and continuous testing of online casino and poker room operators. “Over 130 tier one online casinos and poker rooms currently use our test and audit services, and we number 25 leading operator companies and 16 quality software providers among our clientele. In addition, we have the added scrutiny of the leading audit firm KPMG through its annual quality assurance reviews, thus providing an unrivalled verification programme.” The organisation’s Total Gaming Transaction Review, used for continuous monitoring and data analyses to assess accurate payout percentages and certify Random Number Generation fairness, has previously been extensively evaluated and accredited by other leading jurisdictional authorities. CGI TEX REES TEX REES, eCOGRA Fair Gaming Advocate, with more than 15 years of management and customer relations experience in both land-based and online gaming businesses, Tex Rees personally handles player disputes as they occur, resolving most cases in 48 hours or less. Most recently, Rees managed customer relations for LiveBet Online, where she was the primary point of contact for clients regarding development and operational issues. Responsibilities included interpreting client needs to develop a software solution and overseeing the installation, testing and training of the platform. Prior to that, Rees managed a staff of 40 administrative and call center employees for SuperBet, which ultimately became South Africa’s first online gambling operation. While there, she managed customer dispute resolution, established a customer care protocol and oversaw its implementation. Rees also assisted in wagering software development and testing for SuperBet and served as a liaison to the Gaming Board regarding compliance issues.

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The Cake Poker Network Offers a Piece of the Action — And a Lot More Don’t tell the Cake Team that poker can’t help you in real life. Like savvy rounders, the Team pushed all in with their collective gut when they saw opportunity stacked before them. Four years ago, the Cake Team recognized that online poker networks, which had been around since the early part of the century, were not working the way they should. Many were cannibalistic. They attracted partners with the promise of big payouts, then lured the players from the vast pool they had acquired away from their originating websites. The tactic allowed those early poker networks to maximize their own revenues at the expense of network partners, while still invoicing partners for network dues and other ongoing fees. The Cake Team set out to do it better. They enlisted an array of talent that included, professionals with experience in online game development as well as various aspects of the poker industry. The group spent nearly two years developing software and a company structure that would result in an industry leading poker network, one that worked because of its refusal to compromise on integrity. “Operating a winning network takes commitment, integrity, flexibility and partnership,” CEO Nick Mellios said. “We understood from the beginning that we were not going to grow without a dynamic mix of complementary parts. Our greatest strength is the relationships we have with our network partners. We cultivate those partnerships by making sure we deliver consistent benefits and services every day.” Mellios understood that poker websites are very much like the players they cater to: Players want assurances that their money is being placed in the stewardship of a reputable and credible organization. Poker sites feel exactly the same way about their businesses. One way to build trust at the outset of any relationship is to attach clear rules that are common to all network partners, with no strings attached. The Team members behind the Cake Poker Network (www.cakepokernetwork.net) are so confident in their ability to meet the demands of the members of their network that they allow their partners to leave at any time with their players, without penalty. “We know what we do works for one simple reason,” Mellios said. “No one has left the Cake Poker Network.” No term contracts need to be signed by Cake Poker Network partners and those who join this poker network with players can exit with them, as well. Although, as the Cake Team notes, no one has left. That’s due to the fact Cake listens to its partners, who in turn enjoy the rewards of a collaborative system that benefits all involved.

Cake Poker Network Rises Fast as Partners Sign Up True partnership, as a way of doing business is rare in the competitive world of online poker, an industry that is estimated to have revenues in excess of $3 billion annually. Cake’s “all for one, one for all” philosophy appears to resonate with industry leaders. The partners in the Cake Poker Network each get a piece of the action and, as the network continues to grow, that means each piece provides greater and greater returns. The network has expanded at an extraordinary pace during the past 18 months and it has quickly become one of the top five online poker networks in the world.

“Whether it’s the poker business or politics or any aspect of life, you want to maintain a solid reputation and be seen as a reliable contributor who can be counted upon to perform,” the Cake Team said. “That’s how we have succeeded and how we plan to continue with the phenomenal momentum we are experiencing.” A company can go only so far on principles and philosophies, however. The Cake Poker Network wouldn’t be flourishing if it didn’t deliver concrete value and bottom-line results for the members of its network. Flexible, customizable options allow Cake to offer services for operations small or large. For example, if an organization provides its own backend, customer support and payment solutions, then Cake’s Team understands that business shouldn’t be required to accept those same services from an outside source. Instead, that network partner can choose just the software. However, if another Partner does want Cake to do it all, it can deal out expertise and managerial experience in every area of the operation. The Cake Poker Network has developed turnkey solutions for several of its partners. These service components can include poker software, marketing, customer support, web hosting, licensing, e-commerce solutions, database management, and seemingly anything else necessary to run a profitable poker website. “Our wide-ranging solutions present the opportunity for knowledgeable poker operators to see excellent fiscal results,” the Cake Team said. “Our flexibility is very attractive to all our partners. Some of our partners have strengths in one, two or three core business areas, but need help in others. That’s where our broad and deep expertise comes in.”

Making Sure Players Have Fun The partners who have joined the Cake Poker Network — and several of them are among the biggest names in online gaming — bring a diverse blend of players, many of whom are new to online poker [eludes to fish but seems ok]. When they learn that they’re eligible for rewards like the industry-exclusive Gold Card and Gold Chip loyalty programs from the Cake Poker Network via their network partner site of choice, they are surprised and thrilled with the kind of excitement unique only to poker players. In addition, the software used on the Cake Poker Network features realistic game play that is clearly designed to provide an enjoyable experience for the user. The Cake Poker Network currently has the capacity and scalability to handle over 25,000 concurrent players and its multi-table tournaments can sustain more than 10,000 players. It also utilizes an advanced auto-failover system on its game servers, ensuring that play can continue with no or little interruption in the event that there is a hardware issue. By creating a game that adds more fun to online poker, Cake helps its partners to build their own player base. As the Cake Poker Network rises, it does so with a global outlook. The network is borderless, and its partners clearly appreciate and benefit from the company’s international scope. The Cake Team also says it isn’t expanding blindly. They seek out only quality partners who are committed to operating principled businesses that reach for excellence in their area of expertise. Those who are accepted into the network are then provided with access to the most significant markets in the world. That’s a major advantage for the Cake Poker Network, whose competitors can be limited to one particular region or nation. This Cake, though, is designed to be dished out everywhere. The experience of the Cake Team is crucial to developing the network’s reach in key markets. The Cake Poker Network is currently aggressively expanding into Europe through strategic partnerships with groups who have specific knowledge and experience to effectively target their markets. “Online poker is evolving and I’m happy to say the Cake Poker Network is at the forefront of the positive changes occurring for our industry,” Mellios said.

www.cakepokernetwork.net

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ADOLESCENT GAMBLING: IS INTERNET GAMBLING A PROBLEM?

BY JEFFREY DEREVENSKY

Todayâ&#x20AC;&#x2122;s children and teens are the first generation of youth to grow up in a society where a multiplicity of gambling activities exists and where gambling venues are not only readily accessible but also heavily advertised and promoted. Gambling, once considered to be a harmless form of adult entertainment, has become mainstream amongst adolescents, with youth engaging in almost every form of regulated and unregulated gambling. In fact, there is ample evidence that some children as young as 9 and 10 years of age are beginning to gamble for money.

he popularity of gambling continues to grow. The gaming industry is comprised of creative, smart, techno-savvy people with incredibly innovative marketing strategies and managerial skills. The evolution in gaming, or better phrased as the revolution in gaming, has resulted in such wide scale proliferation as never before witnessed. The U.S, Canada, Europe, Asia, South America and Australasia have become home to multiple outlets for gambling. The glitz and lights once only recognisable on the Las Vegas strip have spread around the world. While some individuals have argued that the history of gambling can be viewed as a pendulum, from prohibition to widespread proliferation and back again, there is little doubt that we will ever return to prohibition as governments around the world view gaming as a lucrative source of revenue generation. Even those individuals and legislators staunchly opposed to gambling are really only opposed to certain types of gambling, whether it be electronic gambling machines in non-traditional gaming venues, Internet gambling, sports wagering, mobile gaming, etc. While most forms of regulated gambling are prohibited for underage youth, the age varying depending upon the type of gambling activity and jurisdiction, a growing number of young people are gambling in spite of such restrictions. With increased exposure to different types of gambling, including Internet gambling, more youth are yielding to the temptations and social pressures to engage in these activities. There is a growing body of research suggesting that greater accessibility is related to increased rates of gambling, increased money spent on gambling, and increased rates of problem gambling. Research in Canada, the U.S., and internationally suggests that approximately 70-80 percent of adolescents have participated

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in some form of regulated or non-regulated gambling for money (Derevensky & Gupta, 2004; National Research Council, 1999; Shaffer & Hall, 1996). Adolescents often site entertainment, excitement, the opportunity to make money and competition as the primary reasons for gambling. Most alarming is evidence indicating that between 4-8 percent of adolescents between the ages of 12 and 18 have very serious gambling-related problems, while another 10-15 percent may be at-risk for developing a gambling problem. Further, while there is sometimes disagreement over how we measure pathological or problem gambling for youth, there are consistent reports that the prevalence rates of problem gambling in adolescents and young adults are considerably higher than rates of problem gambling in the general adult population. Problematic gambling among adolescents has been associated with a number of negative individual mental health outcomes, interpersonal problems, school-related academic difficulties, and financial and legal problems.

ONLINE INTERNET GAMBLING Aided by technological advances in the gaming industry, new forms of gambling are continually evolving which have wide appeal to underage youth. The proliferation of online gambling sites poses yet a new problem for youth. While other types of gambling are, for the most part, strictly regulated and prohibited for underage children, the Internet provides an accessible and largely anonymous route to an otherwise illegal activity for young people. This is not to suggest that other types of gambling (e.g., electronic gambling machines, scratch lottery tickets, bingo, sports wagering) are rarely engaged in by underage youth. On the contrary, there is ample research to suggest that adolescents are more likely to engage in these activities than Internet wagering for money. Nevertheless, the ease with which gambling websites can be accessed by young people is of concern. 100 Casino & Gaming International

A significantly large number of Internet gambling websites offer free games and free practice sites available to anyone with access to a computer. Some sites now appear to cater specifically to adolescents and young adults who have spent much of their childhood and adolescence engaged in playing video-games on personal video-game machines and/or computer games. Such sites offer a wide variety of games including blackjack, roulette, slots, poker, and other casino games virtually identical to actual land-based casinos. With new Internet gambling sites appearing almost daily, clinicians have raised the possibility that the distinction between gambling and gaming may be becoming blurred. Many Internet gaming sites offer rewards in the form of “tokens” where players can trade these tokens for a prize. As a result some youth who play regularly on these free practice sites become prime targets as future players. Other Internet casino sites also have reward and loyalty programs which offer high initial deposit bonuses, while others guarantee bonuses of up to $20 per month for returning players. Often, players who refer a friend are awarded monetary bonuses. Some sites even provide “Bettor’s Insurance” programmes which returns a percentage of gaming losses. Casino games are interspersed with other, more innocuous games, each following the same basic theme. Graphics are often colourful and realistic sounds and images add to the excitement of the game. Many games also include multiple players so individuals can compete with each other online. This competitive playing behavior has been reported to be enticing to youth. Even when playing on these practice sites without money, Internet gambling is perceived as being engaging, exciting and exhilarating.

THE APPEAL OF INTERNET GAMBLING Like adults, there are a number of reasons why youth perceive Internet appealing; (a) it is easily accessible, (b) individuals can participate from home using a personal computer 24 hours per day, seven days per week, 365 days per year, (c) Internet gambling has the potential to offer visually exciting effects similar to video- games, slot machines and other electronic gaming machines, (d) the event frequency can be very rapid, (e) it allows underage youth to engage in an activity generally prohibited, (f) individuals can play against each other as in poker, thereby enhancing the competitive notion, and (g) small stake gambling on many sites is generally readily available. Given the increasing popularity, accessibility and familiarity of the Internet amongst adolescents, this represents yet another venue for potential problems for youth. Adolescents and young adults, in particular, have increased access to the Internet via personal computers at home, school, and in their municipal libraries. Personal computers and Internet access is becoming more affordable and the connections are becoming faster, with an increasing number of mobile phones easily accessing gambling sites. Given youth enjoy gambling, the colourful, fast-paced video-game like qualities, their knowledge and sophistication in the use of the Internet and ease of accessibility, Internet gambling provides an ideal venue for youth to help relieve their boredom and provides an exhilarating form of entertainment. Many of these sites entice males with sexually provocative pictures and offer the opportunity to win trips and desired products (e.g., clothes, motorcycles, cars). Other clever advertising messages such as “soon everyone will be a

SOCIAL RESPONSIBILITY

winner. You could be next” are quite common. Still further, there appears to be strong evidence that many of these gambling sites fail to provide age restrictions (Smeaton & Griffiths, 2004) and those that suggest or mandate age restrictions provide few if any checks on the reported age of its players.

INTERNET GAMBLING AND ADOLESCENTS While it is difficult to ascertain how many young people are aware of Internet gambling sites and how many are spending time gambling online, only a small number of empirical studies have examined Internet gambling behaviour among underage individuals. Griffiths (2001) provides data from a small sample of 119 adolescents, 15-19 years of age, none of whom report having gambled on the Internet. However, four percent of youth reported that they would like to try Internet gambling. In contrast to U.K. youth, recent findings from Canada suggest that that at least 25 percent of young people with serious gambling problems and 20 percent of those at-risk for a gambling problem (defined by cut-off scores on a screening measure) may be gambling online using so-called “practice sites” where no money is needed to play (Hardoon, Derevensky & Gupta, 2002). It may be that amongst individuals at risk for developing a gambling problem, the Internet presents a special danger. In a recent study of college studnets, the overall prevalence rates for pathological gamblers who engaged in Internet wagering was 18.8 percent, with an additional 22.5 percent being identified as at-risk for a gambling problem (McBride & Derevensky, 2008). These prevalence rates are exceptionally high. However, as previously noted the causal relationship between problem and pathological gambling and Internet wagering has yet to be determined. While no significant gender differences were noted, the younger the individual gambling on the Internet the more likely they exhibited significant gambling problems. Underage online gambling may be problematic, although its magnitude is uncertain. Addressing this problem is likely going to require greater cooperation and education with a number of parents and jurisdictions incorporating Internet blocking software either through normal browser content controls or specialized software. Gambling amongst adolescents and young adults remains extremely popular. When asking youth why they gamble on the Internet the most popular reasons were for the competition (60 percent) (this is especially true for card playing), convenience (40 percent), 24-hour accessibility (33 percent), privacy (33 percent), high speed of play (33 percent), good odds (33 percent), fair/reliable payouts (33 percent), bonus money (27 percent), graphics (20 percent), sex appeal (20 percent), and anonymity (20 percent) (McBride & Derevensky, 2008, in press). It is interesting to note that amongst individuals identified as problem gamblers, 60 percent reported that the thrill and rush associated with Internet gambling centered upon the competition and competitiveness of the games. The fact that it remains so convenient and the perceived fairness just adds to the likelihood of continued playing.

MOVING FORWARD While the vast majority of individuals engage in recreational gambling without ever experiencing any gambling-related difficulties, a small percentage of individuals experience

serious gambling and gambling-related problems. Adolescents and young adults appear to be among the groups having the highest prevalence rates of gambling problems and are extremely vulnerable. The Internet gaming industry is becoming aware of the need to adopt enhanced social responsibility practices (e.g., e-COGRA [e-Commerce Online Gaming Regulation and Assurance] and G4 [Global Gambling Guidance Group] are good examples of industry/social responsibility partnerships). This is a good thing. It will help convince legislators in jurisdictions which currently ban Internet wagering to take a second look. Responsible gambling practices will help ensure that vulnerable groups are protected while those that play in a safe, responsible way continue to enjoy their games. Working together, researchers, clinicians and members of the industry can help develop responsible codes of practice. Let’s all help keeping the game a game. CGI

REFERENCES Derevensky, J., & Gupta, R. (Eds.) (2004). Gambling problems in youth: Theoretical and applied perspectives. New York: Kluwer Academic/Plenum Publishers. Griffiths, M. (2001). Internet gambling: Preliminary results of the first U.K. prevalence study. eGambling, 5. http://www.camh.net/egambling/issue5/research/griffiths_article.html Hardoon, K., Derevensky, J., & Gupta, R., (2002). An examination of the influence of familial, emotional, conduct and cognitive problems, and hyperactivity upon youth risk-taking and adolescent gambling problems. Report prepared for the Ontario Problem Gambling Research Centre, Ontario, 113 pp. McBride, J., & Derevensky, J. (in press). Internet gambling behaviour in a sample of online gamblers. International Journal of Mental Health and Addiction. McBride, J., & Derevensky, J. (2008). Internet gambling among college students. Unpublished manuscript. Montreal: McGill University. National Research Council (1999) Pathological gambling: A critical review. Washington, DC.: National Academy Press. Shaffer, H. J. & Hall, M. M. (1996). Estimating the prevalence of adolescent gambling disorders: A quantitative synthesis and guide toward standard gambling nomenclature. Journal of Gambling Studies, 12, 193-214. Smeaton, M., and Griffiths, M. (2004). Internet gambling and social responsibility: An exploratory study. CyberPsychology & Behavior, 7(1), 49-57.

JEFFREY DEREVENSKY Jeffrey L. Derevensky, Ph.D., is a child psychologist, and Professor of School/Applied Child Psychology, Department of Educational and Counselling Psychology; and Professor, Department of Psychiatry at McGill University. He is a clinical consultant to numerous hospitals, school boards, government agencies and corporations. Dr. Derevensky has published widely in the field of youth gambling, is on the editorial board of several journals, and is an internationally recognised scholar in the field of gambling. Dr. Derevensky is CoDirector of the McGill University Youth Gambling Research & Treatment Clinic and the International Centre for Youth Gambling Problems and High-Risk Behaviours. Casino & Gaming International 101

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STRATEGIES FOR DETECTING AND CONTROLLING ELECTRONIC GAMING VULNERABILITIES BY MARK GRIFFITHS

A growing feature of global gaming expansion is the recognition that developing socially responsible guidelines and infrastructure is essential to enhancing the appeal and credibility of the industry. The current financial uncertainties serve to highlight the need for monitoring atrisk players, and especially to consider strategies minimising gambling harm before any who are susceptible become confirmed problem gamblers. Prevention, therefore, lies in the vigilance, adaptability and development of pre-emptive mechanisms in an increasingly highspeed gaming environment.

ased on the amount and type of consultancy that our research unit has engaged in over the last three years, one of the fastest growing and most important areas for the gaming industry is in the area of social responsibility and the protection of vulnerable players. Some of the guidelines and policies the unit has developed are outlined here (with particular emphasis on electronic gaming machines [EGMs], in conjunction with a number of gaming companies including Norsk Tipping (Norway), Nova Scotia Gaming Corporation (Canada), Svenska Spel (Sweden), Camelot (UK) and Atlantic Lottery Corporation (Canada). We assume in this article that the mandate of most regulatory authorities is to protect players particularly those who are vulnerable. In addition, the mandate of those in the gaming industry is to sell games responsibly. As a consequence, individual gaming companies should also have internal discussions about the following: • Consideration of flexibility in game design to allow for slower, entertainment-driven games versus rigid restrictions on maximum bet, maximum return-toplayer (RTP), and minimum game duration. • An examination of upfront regulation versus experienced-based regulation (i.e., registered actual player behaviour). • Debate over a carefully considered upfront approach versus a market-led approach (i.e., giving players what they want). • Introducing tighter regulations if games cause extensive problems or if responsible gaming tools prove inefficient. Vulnerable players are here defined as any adult with either a biological, psychological/emotional pre-disposition to

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>> A FOCUS ON BUYING ENTERTAINMENT RATHER THAN WINNING MONEY IS RECOMMENDED. WHEN INDIVIDUALS PRIMARILY GAMBLE TO WIN MONEY, AND THAT IS THEIR ONLY OBJECTIVE, THAT IS WHEN PROBLEMS CAN START. THAT IS WHEN A PROPORTION OF VULNERABLE PEOPLE CAN GET INTO DIFFICULTY. >> gamble excessively, or for those players whose personal circumstances may put them at a greater risk of developing gambling problems (e.g., low income individuals, those with co-morbid disorders, etc.) (Wood, Griffiths & Parke, 2007). It is also worth noting that our research has worked from the premise that well designed social responsibility measures have most impact on vulnerable players rather than those who are already problem gamblers. In many ways, the most effective approach to minimising potential harm to players is to focus upon those vulnerable players who are at risk of developing gambling problems as many of the social responsibility measures may not have much of an effect if the person already has gambling problems. For this group, social responsibility comes mainly in the form of tertiary prevention measures (e.g., referral to treatment). What follows are some suggestions that the gaming industry should think about implementing. For our purposes here, EGMs can include slot machines, poker machines, fixed odds betting terminals, video lottery terminals, and interactive video terminals. Focus on entertainment rather than gaming – A focus on buying entertainment rather than winning money is recommended. When individuals primarily gamble to win money, and that is their only objective, that is when problems can start. That is when a proportion of vulnerable people can get into difficulty (Griffiths, 2007a).

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Focus on prevention – Prevention and protective measures are to be recommended. Although it is a cliché, prevention is always better than cure. Therefore, by focusing responsible gaming initiatives towards vulnerable players they are likely to be more effective in reducing the development of problematic play in the first place. Focus on privacy and data protection – Players should expect such a measure as an absolute minimum. They need to be assured that all data accrued from both volunteered information and behavioural tracking will remain confidential. Many consumers unknowingly pass on information about themselves that raises serious questions about the gradual erosion of privacy. Players can then be profiled according to how they transact with service providers. Linked loyalty schemes can then track the account from the opening established date (Griffiths & Parke, 2002). When it comes to gambling there is a very fine line between providing what the customer wants, (i.e. enhancement) and exploitation. The gaming industry sell products in much the same way that any other business sells things. They are now in the business of brand marketing, direct marketing (via mail with personalised and customised offers) and introducing loyalty schemes (which can create the illusion of awareness, recognition and loyalty) (Griffiths & Parke, 2002). As Griffiths and Wood (2008a) noted, on joining loyalty schemes, players supply lots of information including name,

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address, telephone number, date of birth, and gender. As a consequence, gaming companies know players’ favourite games and the amounts they have wagered. They know more about the gamblers’ playing behaviour than the gamblers themselves. Some will send gamblers offers and redemption vouchers, complimentary accounts, etc. Supposedly all of these things are introduced to enhance customer experience. Benefits and rewards to the customer include cash, food and beverages, entertainment and general retail. However, more unscrupulous operators will be able to entice known problem gamblers back onto their premises with tailored freebies (such as the inducement of “free” bets) (Griffiths & Parke, 2002). It is recommended that gaming companies should not use the data they collect for activities that might be perceived as exploitative. Development of guidelines for measuring player behaviour – Such guidelines shall state criteria for when player activity shall be stopped and whether or not a game is too problematic to distribute. Such criteria for when play is suspended should be developed in advance of the new games being introduced. Gaming companies need to consider what tools and/or mechanisms will be utilised in deciding whether a game is too problematic to distribute. Tools such as GAM-GaRD could perhaps be considered (Griffiths, Wood & Parke, 2008). Use Player Card and Responsible Gaming Tools as central elements in developing a Responsible Gaming Platform – This is to be recommended particularly if social responsibility measures are at the heart of all gaming companies’ gaming practices. Player behaviour to be subjected to research – This is to be recommended on the assumption that the analysis of player behaviour will be used for protective rather than exploitative means. Further research using these data is also to be commended particularly if this is disseminated to other gaming companies and stakeholder communities.

Use socially responsible game monitoring tools – Such social responsibility initiatives have already been pioneered and introduced by other gaming companies (such as Svenska Spel with PlayScan). Systems such as these are likely to have a significant impact on the national and international gaming markets. If a players’ behaviour indicates gaming problems it is recommended they should be deleted from the direct advertising address lists. Via such initiatives, it is also recommended that players should be offered control tools (e.g., personal gaming budgets, self-diagnostic tests of gaming habits, and the chance to self-exclude from gaming). The really innovative aspect of such technologies is that they predict future gaming behaviour. The use of such systems should be voluntary, but gaming companies should strongly recommend its customers to use it. Development of Responsible Gaming Tools to increase player awareness and help players to make informed decisions – Ongoing development of Responsible Gaming Tools is recommended. This could perhaps be taken a stage further by sharing the outcomes of these developments with other gaming companies and stakeholders (as long as it did not impact on any commercially sensitive information). EGM limits – There should be a maximum pre-agreed number of EGMs by gaming companies throughout a particular geographical location or jurisdiction. Staff training – Gaming companies should be required to offer relevant training to vendors. Ongoing staff training around the area of social responsibility should be given at all levels to all those working in the gaming industry (Griffiths & Wood, 2008b) – including the vendors. Awareness raising of such issues is a necessity to enable staff to deal with relevant situations. Staff training should be ongoing particularly because of (a) staff turnover and (b) the growing amount of empirical research in the gambling studies field. Customer support in handling problem gamblers – Gaming companies should be required to educate its Casino & Gaming International 105

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>> PREVENTION AND PROTECTIVE MEASURES ARE TO BE RECOMMENDED. ALTHOUGH IT IS A CLICHÉ, PREVENTION IS ALWAYS BETTER THAN CURE. THEREFORE, BY FOCUSING RESPONSIBLE GAMING INITIATIVES TOWARDS VULNERABLE PLAYERS THEY ARE LIKELY TO BE MORE EFFECTIVE IN REDUCING THE DEVELOPMENT OF PROBLEMATIC PLAY IN THE FIRST PLACE. >> customer support staff in handling enquiries regarding problem gamblers. Such training must be updated every two years. Staff should also be able to identify aspects of policy and practice relative to appropriate intervention that will contribute to minimising the harm attributable to uncontrolled gambling. Mandatory information about problem gambling – At the core of exercising a duty of care lies the principle of assisting players to address any concern about their gambling. For instance, telephone helplines and addresses of helping agencies should be displayed on posters, leaflets, and on the back of lottery tickets or smart cards. Information should be freely available without having to ask a member of staff and should be placed in areas of high accessibility (e.g., a poster in a toilet, leaflets at the exit door). Gaming companies should also have a good referral system with local and/or national helping agencies (Griffiths & Wood, 2008b). Implementation of sanctions – Gaming companies should have guidelines and sanctions against vendors who fail to report or prevent minors playing with borrowed or stolen player cards. Use of responsible gaming tools – Gaming companies should voluntarily encourage players use Responsible Gaming Tools. Such tools are about empowering people to make their own choices rather than the players being forced to do something. Of course, the provincial authorities may demand that these are mandatory, in which case you will have no option. Mandatory self-exclusion programme – The option for self-exclusion should be offered to any player that requests it and is a good demonstration of a company’s ‘duty of care’ towards its clientele. Care needs to be taken on the length of self-exclusion and the criteria for re-inclusion. It may also be worth noting that self-exclusion measures can also be useful for social gamblers who may not want to spend money in a particular month (e.g., December when there are Xmas presents to buy) or at a particular time of the month (e.g., the week preceding ‘pay day’ at work). Mandatory game breaks – Continuous EGM games should feature a mandatory break very 60 minutes during continuous play. This measure inhibits continuous play and allows players to have a reflective ‘time out’ to think about their gambling during this ‘cooling off’ period (Griffiths, 2007a). No credit policy – It is recommended that the vendor is not allowed to offer credit to players as they should not be able to gamble with money they may not have. Customers should always be advised against gambling with credit and only gamble with funds from their bank account. When borrowed money has already been secured, its availability is difficult to resist for gamblers who have experienced continued losses. It is highly likely that such money will be used to chase losses. Credit cards themselves are designed

to make customers over extend themselves’ financially. Minimum age limit for playing interactive games is 18 years and controllable age enforcement – EGMs must be placed indoors in controllable facilities where age limits can be enforced. The facility must be permanent. Children and adolescents need to be protected as research worldwide demonstrates that children and adolescents are one of the most high-risk vulnerable groups (e.g., Griffiths, 1995; 2002; 2003a). As a consequence, age limits should be mandatory. Although some countries (such as those in North America) have minimum age limits of 21 years for access to gambling, 18 years appears the most appropriate (especially when compared to most other European countries). Age limits should also be in place as research has consistently shown that the younger a person starts to gamble, the more likely they are to develop a problem (e.g., Griffiths, 1995; 2002; 2003a). Griffiths and Wood (2008b) recommend that operators or their agents should prominently display the minimum age of entry and not make external premises attractive to youth. There should be a sufficiently controlled and supervised point of entry to make underage gambling difficult. This means that EGMs should be prohibited unless they are supervised and/or in an area that no minor has access to. Griffiths and Wood (2008b) also recommend there should be strict sanctions for those operators or individuals who are caught allowing minors to gamble. In summary, gambling should be restricted to well-regulated, age-controlled, properly supervised specific gambling venues where staff members understand issues relative to gambling. Monitoring of EGMs – EGMs must be placed so that the vendor can continuously monitor playing activity. Ideally this should be dedicated staff who oversee which clientele are playing. Vendor evaluation – There shall be an individual evaluation for each vendor in terms of eligibility and placement. Ideally, EGMs should not be placed the following places: (a) typical grocery stores, (b) common areas in shopping malls, commuter stations or traffic terminals, and (c) aboard transportation vehicles. This provides a more centralised gaming model where people can play on EGMs at age-regulated establishments (e.g., bars) and dedicated gaming environments. There are other issues that may have to be considered such as the mix of alcohol and gaming if EGMs are placed in alcohol-licensed establishments. Advertising and promotion – Quite clearly it is appropriate that the gaming industry needs to advertise and promote its facilities. In addition to conforming to each country’s own advertising codes of practice, the most important recommendation would be that advertisements and promotions should not appeal to vulnerable individuals (such as minors, those with severe learning difficulties, problem gamblers, etc.). Casino & Gaming International 107

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ways in which players are attracted to play on their products (e.g., ease of accessibility in gambling, advertising to attract custom, incentive bonuses to gamble), the design of their environments in attracting people to gamble (e.g., the use of light, colour, sound and music in gambling venues), and the design of the gambling product itself (e.g., game speed, prize structure, jackpot size, and illusion of control features on a slot machine). Games on EGMs should be designed to limit excessive play in environments designed for customer enhancement rather than customer exploitation (see Griffiths, Wood, Parke and Parke [2007] for some initiatives to help in this area). CGI

REFERENCES

Industry compliance to codes of conduct – Operators within the gaming industry should adhere not only to government regulators but also to the codes of conduct and practice formulated by their trade associations. Furthermore, all personnel should be made aware of and understand the codes. Information about staying in control – Although players are clearly responsible for their own gambling, they should still be reminded of the need to exercise control. Information in the form of posters or leaflets should highlight the need to stay in control (e.g., “Bet with your head, not over it”) and be prominently displayed where it will be seen by players (e.g., next to the EGM). Pop-up windows – Another socially responsible strategy might be for EGMs to have a non-intrusive but clear pop up window that appears after pre-determined periods. It is advisable to ask the customer if they wish to continue so that they must read and acknowledge the time and the duration of their play. Gambling can create and maintain dissociative states where customers can lose track of time and duration of gambling (Griffiths, Wood, Parke & Parke, 2006). Therefore, actual information regarding these two factors needs to be periodically recognised consciously. Develop guidelines for responsible gaming development in collaboration with recognised research communities – This is to be recommended as it shows a serious commitment to social responsibility by gaming companies and includes and element of external audit and external review. Gaming development can include many levels from initial design through to how they are marketed. Although gambling behaviour can be influenced by a person’s individual risk factors (e.g., genetic predispositions, personality factors, social environment in which the person was raised) (Griffiths, 2006; 2007), gaming operators have responsibility for the 108 Casino & Gaming International

Griffiths, M.D. (1995). Adolescent gambling. London: Routledge. Griffiths, M.D. (2002). Gambling and Gaming Addictions in Adolescence. Leicester: British Psychological Society/Blackwells. Griffiths, M.D. (2003a). Adolescent gambling: Risk factors and implications for prevention, intervention, and treatment. In D. Romer (Ed.), Reducing Adolescent Risk: Toward An Integrated Approach. pp. 223-238. London: Sage. Griffiths, M.D. (2006). An overview of pathological gambling. In T. Plante (Ed.), Mental Disorders of the New Millennium. Vol. I: Behavioral Issues. pp. 73-98. New York: Greenwood. Griffiths, M.D. (2007a). Gambling Addiction and its Treatment Within the NHS. London: British Medical Association. Griffiths, M.D. (2007b). Gambling psychology: Motivation, emotion and control, Casino and Gaming International, 4 (November), 71-76. Griffiths, M.D. & Wood, R.T.A. (2008). Gambling loyalty schemes: Treading a fine line? Casino and Gaming International, 4(2), 105-108. Griffiths, M.D. & Wood, R.T.A. (2008b). Responsible gaming and best practice: How can academics help? Casino and Gaming International, in press. Griffiths, M.D., Wood, R.T.A. & Parke, J. (2008). Social responsibility in gambling: How to build responsibility into the programme. eGaming Review, January, 43-44. Griffiths, M.D., Wood, R.T.A., Parke, J. & Parke, A. (2006). Dissociative states in problem gambling. In C. Allcock (Ed.). Current Issues Related To Dissociation. pp.27-37. Melbourne: Australian Gaming Council. Griffiths, M.D., Wood, R.T.A., Parke, J. & Parke, A. (2007). Gaming research and best practice: Gaming industry, social responsibility and academia. Casino and Gaming International, 3, 97-103. Wood, R.T.A., Griffiths, M.D. & Parke, J. (2007). Development of the Gambling Assessment Measure – Risks Involving Structural Characteristics (GAM-RiSC). Report prepared for Camelot Plc.

MARK GRIFFITHS Dr Mark Griffiths is a Chartered Psychologist and Europe’s only Professor of Gambling Studies (Nottingham Trent University). He has won many awards for his work including the John Rosecrance Research Prize (1994), CELEJ Prize (1998), International Excellence Award For Gambling Research (2003), Joseph Lister Prize (2004), and the Lifetime Achievement Award For Contributions To The Field Of Youth Gambling (2006). He has published over 185 refereed research papers in journals, a number of books, over 35 book chapters and has over 550 other publications to his name. He has served as a member on a number of national/international committees (e.g. European Association for the Study of Gambling, Society for the Study of Gambling, Gamblers Anonymous General Services Board, National Council on Gambling etc.) and was former National Chair of Gamcare (1997-2003). He also does some freelance journalism with over 120 articles published in The Guardian, Independent, The Sun, Sunday Post, Daily Mirror, as well as Arcade and Inside Edge.

REVIEW

SUCCINCT AND ACCESSIBLE STARTING POINT ON UK GAMBLING LAW BY JOHN HAGAN AND MELANIE ELLIS

n preparing a practical guide to gambling and gaming licensing in the UK, Roger Butterfield faced an enormous task. The Gambling Act 2005 (“the 2005 Act”) is the first major overhaul of UK gambling legislation since 1968, consolidating a vast amount of legislation and creating a new regulating body, the Gambling Commission, which regulates betting and online gambling for the first time. The book sets out to provide a “clear, easy-to-use guide through the complex procedures of the 2005 Act”, collecting together in one place the essential parts of the legislation, regulations, licence conditions and codes of practice. The author does not attempt to provide detailed analysis or commentary on the new legislative and regulatory regime but rather focuses on explaining which licences are required for different activities, how to apply for them and who issues them. Those seeking to understand the gambling licensing system must grapple with regulations, codes of practice, guidance from the Gambling Commission as well as issues subject to ongoing consultation. The legislation has purposely been drafted widely so as to be flexible enough to deal with what the future may bring, particularly in terms of technological advances, but as yet there is a lack of case law on the interpretation of difficult clauses in the legislation. Regulations are being created and updated as new issues come to light. Political pressures are also leading to changes in the legislation, such as the recent proposal to increase the number of gaming machines allowed in bingo clubs to counteract the detrimental effect of the smoking ban, and the bringing forward of the triennial review on the allowances for stakes and prizes on gaming machines. New types of operating licence were made available in August 2008. Due to this changing landscape, Butterfield’s book was, inevitably, out of date before it was even published. For example, the section dealing with remote operating licences

Gambling & Gaming Licensing: A Practical Guide, 1st Edition by Roger Butterfield Published by Shaw & Sons Ltd, pbk, 192 pages, £24.95

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REVIEW

states that it is a requirement that the remote gambling equipment used by an operator must be located in Great Britain. Section 89(2) of the 2005 Act which made this provision was in fact repealed before the Act came into effect in September 2007. Nevertheless, the book provides a useful starting point and would give the reader a basic understanding of the law relating to a particular type of licence. It cannot, however, act as a substitute for good specialist legal advice, although, as specialist gaming law practitioners, we would say that. But to take an example, the section covering the law on lotteries does not explain how one might alter a lottery-style product so that it does not require a licence (by providing a free entry route or a skill requirement). This is an area in which we are frequently asked to advise, and the necessary information cannot be discovered from the book. Neither is there any indication that it might be possible to alter a lottery product in this way, nor any mention of the Gambling Commission’s guidance on this issue. In creating a succinct and accessible guide to the law, Butterfield has dealt with some topics with what we feel is too much brevity. The section on gambling advertising, which is a difficult and complex area, has been summarised to such an extent that it may well be confusing to someone seeking to gain an understanding of the topic. Three tests are set out which must be fulfilled by advertising of gambling carried out by remote means. What Butterfield fails to mention, which would clarify this section enormously, is the effect of these tests not being met (it is not, as appears on the face of it, that advertising may not take place). A ‘code of practice in connection with gambling’ is outlined, including items from the Gambling Industry Code for Socially Responsible Advertising but only a select few from the CAP and BCAP Gambling Advertising Rules. We would certainly not recommend that anyone base a decision on whether and how to advertise gambling on this section of the book. Police and licensing officers seeking a general understanding of the new regime and the relevant procedures may find this a useful guide, as might solicitors who are asked to advise on gambling issues from time to time. Butterfield’s book would also be useful to for those applying for a licence, if they know already which licence they require, particularly the smaller scale licences such as small society lottery operating licences and club gaming permits. Larger gambling venues such as casinos and betting shops are likely to require more extensive preparation and strategic planning than this book can assist with. CGI

JOHN HAGAN AND MELANIE ELLIS John Hagan is a partner and founder with Julian Harris of the first ever niche gambling and leisure law firm in the UK, located in the City of London. John qualified in 1993 and specialises exclusively in gambling law. John is an experienced advocate, a frequent and respected conference speaker and a regular contributor of articles to national and international gaming publications. John is a Trustee of GamCare. Melanie Ellis is an assistant solicitor at the firm. After graduating from Oxford University in 2003, Melanie qualified as a barrister before joining Harris Hagan in 2005 and retraining as a solicitor. Melanie has advised major casino operators, online operators and start up companies on issues relating to land based and online gambling, establishing operations in the UK and offshore and advertising gambling in the UK.

110 Casino & Gaming International

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Corrections: CGI, Issue 3, July 2008: Joe Kelly’s article ‘A Tale of Two Jurisdictions: US and Canada’ (17-24) was with the assistance of Alex Igelmann; Ryan Kneale’s biography (108), missing final word: “Ryan's day to day responsibilities include financial markets research and hedging market risk on the betting book.” Stacy Elliston’s biography (55), missing company details: Stacy works for RDH Associates.