Casino & Gaming International: Issue 37 by Casino & Gaming International

ISSUE 37 - 2019 Q2

INTRODUCING

OPEN TO YOU. TO YOUR PLAYERS. TO ALL SPORTS, ANYWHERE. OPEN TO POSSIBILITIES OF VICTORY, RISK AND REWARD. MAKING IT MORE FUN, ABSORBING AND REWARDING. EDGE OF THE SEAT EXCITEMENT FOR EVERYONE WHO PLAYS. OPEN TO YOUR IDEAS, OPEN WHEREVER YOU ARE. WITH SEARING TECHNOLOGY AND SOARING CREATIVITY TO PRODUCE UNMATCHED AND MEMORABLE EXPERIENCES FOR YOUR PLAYERS. UNMISSABLE PLAYER EXPERIENCES. NO ONE GETS YOU CLOSER.

FIND OUT MORE AT:

www.sgdigital.com/opensports

WELCOME ::

Welcome... Publisher Jamie Kean jkean@cgimagazine.com Client Services Director Tracie Birch tbirch@cgimagazine.com Editorial Assistant Harry Wainwright hwainwright@cgimagazine.com Production Designer Nancy Rae nrae@cgimagazine.com Circulation Manager Natasha Harvey nharvey@cgimagazine.com Commercial Director Daniel Lewis dlewis@cgimagazine.com Account Manager Nathan Charles ncharles@cgimagazine.com

Editorial Contributors Anthony Ure, Todd Haushalter, Keith O’Loughlin, Edward Winkofsky, Mark Clayton, Mark O’Sullivan, Marion Gamel, Martin Arendts, Ryan Cudnik, Omer Liss, Dr. Mark Griffiths, Tracy Damestani & Janny Wierda.

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ince our rebrand in 2016, the progress we a have made in an ever evolving world of magazine publishing and the casino and gaming sector as a whole, along with the

amazing feedback we continue to receive globally from our readers,

advertisers and editorial contributors has been incredible, so before I

give you a run down of who will be joining us in our 2019 Q2 Edition, I

just wanted to say, on behalf of the whole CGi team, a big thank you to everyone that has been and continues to be a part of the CGi journey,

which includes going back to when we originally launched in 2005 and

which also included us being the ﬁrst industry publication to publish in a digital format.

Anthony Ure (Isle of Man Digital) kicks things oﬀ by giving us his

views on how to protect player health, co-exist with the regulators and improve the sector’s reputation in the process and we also talk with Todd Haushalter (Evolution Gaming) about the future of gaming.

We take a look at sports betting, with Keith O’Loughlin (SG Digital)

discussing the plans they have coming up, whilst Edward Winkofsky &

Mark Clayton (Greenberg Traurig) give us an update on legislation in the US.

Mark O’Sullivan (KPMG) takes a look at AI technology and the

impact it is having on eSports, Marion Gamel oﬀers her thoughts on change in the workplace amongst modern day tech and gaming

companies, and Martin Arendts (Arendts Anwälte) updates us on the latest German regulatory issues.

Ryan Cudnik (Brownstein Hyatt Farber Schreck) takes a fresh look

at Gaming Patent issues within the industry from a legal perspective, Omer Liss (Optimove) oﬀers his latest analytical expertise whilst

Dr. Mark Griﬃths (Nottingham Trent University) takes a detailed look at behavioural proﬁling of problem gamblers in land-based gambling venues.

To conclude, we welcome Tracy Damestani & Janny Wierda from

the European Casino Association.

Jamie Kean, Publisher

The 2019 Q3 edition (Issue 38) of CGi will be published on 1st August.

CGiMAGAZINE.COM

CONTENTS ::

FEATURES 7

THE ART OF PROTECTION; PLAYERS, PROFITS AND REPUTATION Anthony Ure, Isle of Man Digital Executive Agency, Department for Enterprise

THE FUTURE OF GAMING, COMPETITION, AND wHY MOST GAMES FAIL

OPENSPORTS: OPENING UP THE SPORTS BETTING wORLD

A COMPREHENSIvE REGULATORY RESPONSE TO UNREGULATED SPORTS BETTING MARKETS

Interview with Todd Haushalter, Evolution Gaming

Keith O’Loughlin, SG Digital

Edward winkofsky & Mark Clayton, Greenberg Traurig

AI TECHNOLOGY: THE FUTURE OF ESPORTS?

THE POwERFUL HABITS OF TECH COMPANIES

Interview with Mark O’Sullivan, KPMG Malta

Marion Gamel CGiMAGAZINE.COM

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CONTENTS ::

FEATURES 31

GERMANY: MUCH ADO ABOUT (ALMOST) NOTHING

GAMING PATENTS AND “ABSTRACT IDEAS”: wHAT ARE THE RULES OF THE GAME?

Martin Arendts, Arendts Anwälte

Ryan Cudnik, Brownstein Hyatt Farber Schreck

KEEP THIS OL’ CLICHé IN MIND wHEN COMMUNICATING wITH YOUR PLAYERS: TIMING IS EvERYTHING Omer Liss, Optimove

BEHAvIOURAL PROFILING OF PROBLEM GAMBLERS IN LAND-BASED GAMBLING vENUES Dr. Mark Griﬃths, Nottingham Trent University

LAUNCHING DICE EUROPE: LAND-BASED CASINO INDUSTRY IS OPEN FOR BUSINESS Tracy Damestani & Janny wierda, European Casino Association CGiMAGAZINE.COM

REGULATORY ::

THE ART OF PROTECTION; PLAYERS, PROFITS AND REPUTATION T

ony Ure, Head of e-Gaming at the Isle of Man Department for Enterprise, gives his views on how to protect player health, co-exist with the regulators and improve the sector’s reputation in the process.

Anthony Ure Head of e-Gaming Isle of Man Digital Executive Agency, Department for Enterprise

With the ever-growing e-Gaming sector continuing to evolve at a rapid pace, predictions can often be null-and-void. However, one thing that’s certain to be a focus for the foreseeable future is player health, protection and safety. As consumer rights, satisfaction and transparency continue to gain prevalence across all sectors and regulation about user safety, privacy and data tightens, the e-Gaming world must react. In this article, I will discuss research findings, explore previous oversights and suggest an approach the industry as a whole, including the Isle of Man, can look to adopt to prevent problem gambling without damaging the countless positives provided by e-Gaming. Over the last three years, the UK Gambling Commission and Cross-Party lobbying groups have been campaigning for more stringent regulation within gambling and now, as these conversations gather pace and support, it is a question of whether the sector should jump before it is pushed. Whilst change may impact businesses’ pockets in the short-term, taking significant action to ensure player health, encourage responsible gambling and establish a protected gambling environment will reap happier and safer customers in the

CGiMAGAZINE.COM

:: REGULATORY

<< The best plan of action for the e-Gaming sector would be to focus on Responsible Gambling (RG) measures that would increase player protection ahead of further lobbying and regulatory speculation. >> long term, not to mention the reputational boost the industry would receive. So I believe now is the time for proactivity. Professionals in the industry must work alongside regulators, accept the outcomes of research insights and make a conscious effort to support an atmosphere that retains the excitement of gambling, without risking the wellbeing of consumers. Following recommendations from a gambling review published in May 2018 by RGSB, the reduction of fixed odds betting terminal (FOBT) stakes from £100 to £2 was agreed and scheduled for October of this year. However, protests from all parties resulted in this legislation being implemented earlier, in April 2019, at an estimated cost of £900m to industry bookies. In order to cover the loss in tax revenue, the government increased Remote Gaming Duty (RGD) from 15% to 21%, hitting online companies that had no retail FOBT operations in the process. Despite frequent warnings from The Remote Gambling Association (RGA) that industry should act on responsible gambling before the regulator did, the sector paid the price. Perhaps overconfident that the stake would be reduced to £20 rather than £2, companies missed the opportunity to protect revenue by committing to responsible gambling measures first. As the focus in the UK shifts to online gambling, industry must learn from this mistake, emphasise player health, and thereby protect their customers and their profits. Often ahead of the curve, UK banks have already responded by introducing measures on mobile apps that allow users to block deposits to gambling companies. Not finished there, reviews are currently in place on whether credit cards should be allowed for online gambling; a move designed to prevent players from betting what they cannot afford. Questions are also being asked about how successful current procedures intended to prevent underage gambling and advertising to this demographic are. For example, a UKwide review is currently looking into banning betting companies being shirt sponsors of football teams, a measure

CGiMAGAZINE.COM

that has proven successful in Italy. Despite the enormous financial clout and growing trend of sports sponsorship, these plans demonstrate the severity of the case involved and the need for the sector to respond, before their hand is forced. Other plans to ensure Responsible Gambling measures are fit for purpose include reviewing funding for research, education and treatment, and the more controversial idea of introducing Speed, Spend, and Stake restrictions in a similar format to FOBT’s. Whilst each of these precautions would have a positive effect on player health, they would also have a considerable impact on the UK industry. The latter proposal, in particular, would have vast consequences on international companies that have substantial UK business within their portfolio. So how can the sector protect their business interests without risking the safety of players? The best plan of action for the e-Gaming sector would be to focus on Responsible Gambling (RG) measures that would increase player protection ahead of further lobbying and regulatory speculation. Putting money into projects and research would emphasise companies’ commitment to the cause, whilst simultaneously deflecting the negative commentary the industry is regularly subjected to. This does not need to be a huge task as many operators are already running research projects looking into programmes with algorithms and machine learning designed to identify ‘problem gamblers’. However, these programmes presently remain under the radar and often exist independently of one another. This provides an exciting opportunity to co-ordinate industry-wide research; streamlining resources and funding leading experts to work with international universities. As companies begin to realise the importance of responsible gambling research and are already funding it, a joint campaign would help to create a self-supporting organisation that manages research, education and treatment. All of which would combine to keep player health

REGULATORY ::

at the forefront of industry minds and minimise negative financial implications. Often subject to intense scrutiny, this proactive approach to creating a highly regulated environment, that emphasises paramount player protection, would shine a positive light on the sector. Furthermore, contributing the resulting expert research into responsible gambling reports would also increase the pool of information available to users and steer the direction of further research and legislation. For instance, if industry-funded research discovered trends and habits of problem gamblers, they would be well-placed to inform and work alongside both regulatory and legislative bodies. It is often far easier to tackle problems that are understood as opposed to reacting to new information and data. After a few years of committed research and as studies develop and progress, the industry would be better prepared to update current systems to help customers, introduce new products, and understand user-journeys and how evolving technology can be implemented across the sector. Indeed, it is now a question of when, rather than if, this

commitment will take off, and it will be the first jurisdictions to act that will be considered centres for excellence in responsible gambling. The Isle of Man is fully committed to reducing problem gambling and improving methods on how to prevent it. We hope that international communities and jurisdictions around the world follow suit. If we can encourage the establishment of progressive gambling initiatives then players, profits and reputations around the world will be safer and better protected. :: CGi ANTHONY URE Tony Ure is the Head of e-Gaming in the Isle of Man. His role is to facilitate inbound investment from the e-Gaming sector to one of the worldâ&#x20AC;&#x2122;s leading gaming jurisdictions, encouraging diversiication, growth and innovation in this industry. Prior to working for the Isle of Man Government, Tony spent over 30 years working in senior roles for some of the most recognisable names in the industry.

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Mergers & Acquisitions Beyond our specialist Gaming team in Malta, KPMG possesses the competitive advantage of an unparalleled level of reach and diverse insight through its Global Gaming team. It is our network that makes us different – allowing our team to provide you with M&A advice from a global viewpoint.

KPMG – Awarded #1 M&A Advisor Thomson Reuters SDC and Mergermarket ranked the global Corporate Finance Practices of KPMG International’s network of independent firms as the #1 M&A middle-market advisor globally for 2017, based on the total number of completed transactions.

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Director, Deal Advisory +356 2563 1106 hermionearciola@kpmg.com.mt

Follow KPMG in Malta:

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© 2019 KPMG, a Maltese Civil Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

LIVE GAMING ::

THE FUTURE OF GAMING, COMPETITION, AND WHY MOST GAMES FAIL E

volution Gaming CPO Todd Haushalter talks to CGi about the future of gaming...

Todd, you just launched the most anticipated game of 2019, MONOPOLY Live, so how is it going so far?

TH: Amazingly well! It is easily the most successful launch we have ever had. The numbers are all incredible, but what excites me is that players are accepting this new genera of gaming that is not slots or tables, but more of a game show. We are seeing more first-time live players on this game than we have ever seen on a new game. That distinction used to be held by Dream Catcher, which is the game that started this new era, but I predict MONOPOLY Live will end up being the most powerful Live Casino cross-sell tool ever created.

Interview with Todd Haushalter Chief Product OďŹ&#x192;cer Evolution Gaming

Will Evolution Gaming do more of these game shows?

TH: Yes, we will. Players are done with simple games that have not changed much in the last 100 years. The gambling alone is not entertaining enough for every type of player. For ages everyone thought that table games, and by extension Live Casino, had to be serious like a fine restaurant and that playful things should be avoided. Countless people said we were wasting our time doing Dream Catcher, and then it became the biggest game in Live Casino, until Lightning Roulette came along. Itâ&#x20AC;&#x2122;s a new era of gaming and yes, our roadmap is full of game show style games that people who have never played a table game would love to play.

CGiMAGAZINE.COM

:: LIVE GAMING

It sounds like Evolution Gaming is going after slot players, is that true?

TH: Yes. It turns out these game shows are highly appealing to slot players. There are many elements that make a great slot game. We are incorporating those elements and then compensating for the fact that players don’t get to spin every 6 seconds by giving them something that is quite engaging to watch, instead of re-spinning the reels over and over. Do you think other companies will also do game shows?

TH: I hope they do, then players will be the winners by having more fun games to play. Lots of suppliers talk about being “mobile first” or “omni channel” or many other fancy terms, but the only thing any of us need to be is simple: player first. If others do this then they will dream up new fun ways to amuse players and they will do game shows, but I don’t think we will see too much here until Evolution proves out the concept beyond all doubts, because companies, and people inside those companies are afraid to fail and that is easy when you try wildly new things. As a competitor I welcome this approach, but as a lover of the casino industry and great new products, it saddens me. Speaking of competitors, which ones do you admire and why?

TH: Do Netflix, Electronic Arts, and YouTube count as competitors? I think they do – these are the companies we compete with for player’s free time, and specifically when indoors. I admire the way they keep their foot on the gas pedal and keep pushing more and more great content, making it easy to find that content, and constantly delighting users without raising the price. I admire how they do main stream stuff and push content for specific audiences. These are incredible companies. But I suppose you want me to talk about those in the gaming industry right? TH: I think our readers would be intrigued to know....what gaming suppliers do you admire? I admire lots of companies, or at least I admire things they do, I don’t really know the ins and outs of each company. Some examples I admire most are Big Time Gaming and their Mega Ways, Push Gaming’s great slot Jammin Jars, lots of innovations that PokerStars has brought to poker, Playtech has done a ton for the online gaming industry, NetEnt did the first super high quality slots, and right now some company is cooking up something I am sure to admire. What does it take to make a great game or conversely why do 99% of them seem to fail? Most fail because it is so hard to ask someone to give you $1.00

CGiMAGAZINE.COM

and you will give them back $0.95, and then they enjoy it enough to do it over and over knowing there is some chance they may win more. This may seem obvious when I state it, but it is profoundly difficult to achieve. But there are more reasons, because if this were the only thing then nobody would gamble. A great game needs to have some or all of 12 different elements and those all need to be in perfect harmony with each other. There may be more, but I use 12. It is sort of like a formula; A x B x C x D, etc. and if there is just one negative number in the equation then it makes the answer negative. For example, the visual presentation of a game is one of the 12 elements, and it must be in harmony with another of the 12 elements, the pays of the game. In a slot, you can’t have a symbol that seems powerful and only pays a medium prize. Very different looking game visuals must actually do very different

LIVE GAMING ::

things as the player expects they will. Even having a minor looking symbol that pays big is a negative (usually) as oppose to being a nice little surprise for players. This makes players feel like they don’t know what is happening and they quickly defect and never return. This example is just the combination of the two elements visuals and pays, and within each of them there are many sub-elements to consider. Then once you get harmony with both of those you can layer in the math and be sure that not only do the visuals match the pays, but they match the frequency of hit, the near miss, and dozens of other things. It is like trying to write a hit song – everything needs to be just right and be in harmony. After you have all of that, the game needs to be in the right time and place. I see a lot of games released that are based on hits from seven years ago, and will have no chance of success today, just as music that I listened to

in the 90’s can’t work if released today. You got me energized now talking about games, but I better stop here. That’s interesting. What impact do you see new forms of hardware such as wearables, or virtual reality having in the online gaming industry? I think there is a lot that our industry can do with voice, but I don’t want to go into it. I always say too much in these interviews and have to remember that our competitors get to read this too. But on VR and wearables, these have to be respected. Nobody remembers it, but there was a time when playing games not on a computer, but on that super tiny device called your phone seemed crazy too. Regarding Evolution’s roadmap on voice, wearables, home pods, and VR, you will have to wait and see. So, what is next for Evolution Gaming? Lots of stuff. We are launching Deal or No Deal Live, two different dice games, which I think are long overdue in the online gaming realm. One of those is a game called Lightning Dice, and it is sort of a younger edgier sister of Lightning Roulette, which won all of the major gaming product awards last year and is probably the biggest game released in the last five years in all of online, including slots, tables, bingo, etc. So, this is one I am really excited about! We are also injecting a huge does of fun, speed, and simplicity into our poker suite with a game called Side Bet City. In a month or so we will launch Free Bet Blackjack where players get splits and double downs for free. Then we are launching full RNG versions of Dream Catcher and Lightning Roulette. I think we have the best product roadmap in the gaming industry. There is something for everyone in there, and 2019 will be our most exciting year yet! :: CGi TODD HAUSHALTER Todd Haushalter is currently based in Malta (Europe) as Chief Product Officer at Evolution Gaming, the biggest live dealer online casino in the world. He has also lived in Macau and Las Vegas and has held senior leadership positions in the operations, supplier, and internet sectors of the gaming industry, working directly with over 300 casinos across 30 countries on five continents and over 100 online casinos. Prior to his current role, Todd was Corporate Vice President of Gaming Operations for MGM Resorts International, responsible for the profitability of all slots and table games at 15 properties globally. He also held roles at Shuffle Master as Vice President of Business Strategy, Director of Product Development, and Product Director - Asia. In addition, Todd spent almost five years at Wynn Resorts where he was focused on identifying and implementing new ways to increase casino profitability.

CGiMAGAZINE.COM

SPORTS BETTING ::

OPENSPORTS: OPENING UP THE SPORTS BETTING WORLD T

he sports betting industry is riding atop a wave of massive change, spurred by the U.S. market opportunity and continued growth in seasoned betting geographies. Our space is consolidating and the industry is hungry for fresh, diﬀerent takes on what it means to bet on sports.

Keith O’Loughlin Senior Vice President Sportsbook & Platforms SG Digital

At Scientific Games, we’ve been taking stock of the industry trends, listening to stakeholders in every position: operators, punters, competitors, media—the full gamut. In a space that’s bursting with opportunity, one message reverberates throughout the industry: sports betting should be open and intuitive from start to finish. From the very first days of brainstorming new product features through rollouts, launches, and tentpole sporting events, transparency and simplicity should reign supreme – it’s all about the end customer and that makes it easy and entertaining for them. When all’s said and done, that open approach will drive the industry forward. “Open,” of course, is a broad term. And as a larger business, we’ve been exploring what that can truly mean to anyone in the sports betting space. As we upgraded and added new functionality, innovation and offerings to our OpenBet™ solution, the comprehensive new sports betting proposition was packaged as OpenSports. With OpenSports we‘ve created a full technology stack to fit any customer’s need, big or small. We drew interesting conclusions about the idea of openness and how it’s perceived by bettors, customers, and suppliers. But the story goes beyond just product. OpenSports is about listening to our partners so we can transform the technology to meet their needs. Perhaps more importantly, we used that lens to look deeper into the industry CGiMAGAZINE.COM

:: SPORTS BETTING

and get a snapshot of the current landscape and its future. The Feedback Trifecta Understanding and creating a truly open sportsbook solution requires a firm grasp of everyone’s needs. The product development cycle needs to be constantly informed and tweaked by learnings from the supplier creating the product, the operator using the technology, and the bettors who interact with the interface. To build a sports betting technology portfolio that captures the ever-evolving needs of each stakeholder is a massive challenge, but the payoff—revenue, of course, but also player numbers and platform performance—can be immensely rewarding. Staying at the ready to use feedback to adjust product offerings yields a polished sportsbook with well-defined success measures and top-tier performance. Further, using those learnings to bring on new, modern technologies can make a product more current and future-proof. Laying the Groundwork as a Supplying Partner When you’re developing sportsbook technology to cater to any potential customer or bettor, openness means being receptive to feedback from all areas, willingness to adjust against challenges and invest in your technology to rise to those challenges, and a global mentality. The sports betting industry spans dozens of countries, millions of players, and billions of data pieces. All the elements interact constantly—systems are feeding each other information across vast distances. Sporting events are happening in certain jurisdictions while sportsbook operators are processing bets on those events across the globe. Zoom out on this interconnected web of information and diverse content streams, and it becomes clear that suppliers need to maintain a strong grip on a gargantuan amount of touchpoints and feedback. And that’s where an open and receptive approach will help suppliers stay ahead of the curve. Embracing a more open approach to sports betting and the technology that accompanies it means investing in your platform. To be on the cutting edge of the sports technology landscape requires investing early and often in new features and upgrades, especially when customers and players make their needs clear. Whether it’s analytics or directly voiced feedback, an open attitude toward positive change and product development flexibility will help shape your product based on the information pipeline. In essence, future-readiness and openness go hand-in-hand in the sports betting world. Stay nimble and receptive to feedback, then develop directly against stakeholder needs. A sportsbook solution shaped by a developer accepting of ongoing improvement ideas will constantly evolve and bring your offer to the next level. We’ve injected our portfolio with this concept, enhancing and upgrading OpenSports to address the feedback we’ve received, and our technology has shifted from a reliable but rigid solution into a flexible offer that covers the needs of any customer of any size.

CGiMAGAZINE.COM

Operating at Speed From an operator standpoint, openness is choosing a partner with a clear goal in mind and establishing key success measures from the beginning of the launch discussions and well beyond, spilling into months and years of live sports betting. But there’s more to the equation here; customers want to remain open, of course, so they can identify the ideal solution. But they also need the solution they choose to be highly flexible, and the partner developing it should mirror that flexibility. Customers have a heightened role in the sports betting industry now more than ever, because they’re shaping the way punters think about betting. Their understanding of players and even the sports that are popular in their regions is an invaluable tool that can spark massively impactful innovation while working with technology and platform partners. An open solution will meet customers where their greatest needs are. In my experience, the pillars of a world-class sportsbook platform are easy/speedy installation, modularized product offering, and long-term viability. The installation piece is fairly self-explanatory on the surface, but historical context underpins its importance. In the past, particularly prior to the PASPA decision, established markets had a distinct way of working within the sports betting realm. For our part, we supplied operators will fully customized, ground-up solutions that would take 12 to 18 months to launch. The U.S. market has turned this approach on its head through a need for quick go-lives to keep up with growing demand and stiff

SPORTS BETTING ::

For operators, staying open to the possibilities and seeking an open platform are inherently intertwined. On top of that, being at the ready for new markets as they open up should help inform your decisions. Find the solution that’s ﬂexible enough to ﬁt your needs now while simultaneously looking to the future.

competition. Partners continue to seek flexible suppliers who can adjust to the time crunch during rapid expansion periods. The modularization trend is equally essential to surefire success in sports betting. Again drawing on the U.S. as an example, the customer base has a diverse array of needs. Some prefer to hand over their logo and let the supplier build an entire product around the brand. Others have established technology but need one or two bits, like pricing or marketing services, to complete the puzzle. Whether it’s building on a strong foundation or a start-from-scratch request, sports betting technology leaders must be prepared to fill the need. We’ve embedded this into our OpenSports approach by making the entire product suite modular—customers can select the technology and services they need and bring the rest in house. Full-range, full stack solutions with customization options will ensure suppliers and partners are building open and successful relationships. Long-term viability supports sports betting operators by giving them security and reassurance that their platform will stay up-to-date even as they grow. Scalability and reliability have always been king in the gaming and sports betting industries; that truth is only magnified by the continued expansion of our industry. When you launch your platform and garner a big audience, will your platform support 1,000 bets per minute? 10,000? More? Operators need the assurance that their systems will not just support huge betting volumes—they need to be sure their platform will flourish when the masses roll in.

Power to the Punters Bettors are a cornerstone of our industry as the end user of sportsbook products. Providing them with a product that opens up opportunities for easy, accessible betting. Once again, the U.S. proves an intriguing sample by which we can analyze the need for open solutions in sports betting. The market boasts an incredibly diverse pool of bettors living in diverse geographies that have unique tastes in sports, bet types, or even betting venue. Not only that—there’s also a wide swathe of betting experience. On one end of the spectrum, seasoned bettors from established jurisdictions like Nevada have honed their preferences and developed loyalties to specific sportsbooks or bet types. Near the middle, you have players who have bet on the grey market solutions—they have betting knowledge to spare, but they may yearn for a more friendly solution. On the far end, there are players who may never have placed a bet or only participated in the occasional horse race. It’s a new area for those players. Of course, you also have plenty of people in between these points on the spectrum as well. An open solution will cater to every player on that scale with a pliable interface and intuitive educational tools for rookie bettors. Those punters can also help fine-tune your product based on the data they provide and direct feedback. To keep it simple, listening to players will transform your sportsbook solution for the better. They interact with it more than anyone else, and their response to the technology and services available can shape the future of your business and our industry. Opening Up The sports betting world has undergone a significant overhaul with the U.S. market opening gradually during the past year and newly reignited interest in already established markets. To stay at the top of the game, sports betting stakeholders should demand and trust in an open and flexible approach. The power to ignite positive and growth-oriented change rests with suppliers, operators, and players alike. But when they join forces, sports betting reaches its full potential. :: CGi KEITH O’LOUGHLIN As Senior Vice President, Sportsbook at SG Digital, Keith is responsible for delivering product management, direction and project implementation for sportsbook and related platforms across the group. Keith has previously held senior positions at some of the industry’s leading sports betting operators, including sportsbook director at Ladbrokes Coral, as well as CEO and CTO of BoyleSports.

CGiMAGAZINE.COM

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US SPORTS BETTING ::

A COMPREHENSIVE REGULATORY RESPONSE TO UNREGULATED SPORTS BETTING MARKETS

Mark Clayton

Edward Winkofsky & Mark Clayton Greenberg Traurig

tate legislatures throughout the United States are making progress in legalizing and regulating sports wagering in new jurisdictions. Regardless of whether that progress is substantial or frustratingly slow, an increasing number of gaming and lottery regulatory authorities will be tasked with issuing rules, awarding licenses, and regulating a new element of existing regulated gambling markets. While much of the regulators’ and other stake holders’ focus is rightfully on getting retail and mobile books up and running, the public discourse could benefit from increased focus on what happens once the bets are placed. While there have been no shortages of debates surrounding integrity fees, official data, mobile revenues, tax and licensing fees, college and minor league sports wagers, in-game wagers, and, to a lesser extent but still prevalent, responsible gaming, there has been little discussion about the illegal market’s impact on post-regulated markets. More specifically, there is a need for gaming regulatory and law enforcement authorities to take a thoughtful approach to protecting the new industry by identifying and utilizing sufficient resources to curb illegal sports wagering within their jurisdiction. If history, including recent history, is any indicator, the states are unlikely to find a partner in the federal government, notwithstanding the federal Wire Act. Since “Black Friday” on April 15, 2011, and excluding a handful of well publicized

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:: US SPORTS BETTING

indictments of individuals in cases that often involve violence or extortion, we have not seen a systematic application of federal resources to curb U.S. residents participating in illegal sportsbooks. Given the recent January 15, 2019 Department of Justice Office of Legal Counsel Opinion, which reversed its 2011 Opinion on the applicability of the Wire Act and the subsequent memorandum by Deputy Attorney General Rosenstein and ongoing litigation relating to the matter in New Hampshire, it seems unlikely either the Justice Department or other available federal resources will be deployed to aide states in curbing illegal sports wagering. Notwithstanding this, the states still have options. First, the state regulatory authority, with the support of the industry, can take a leading role in educating legislators, state enforcement agencies, advertisers and various media outlets about illegal sportsbooks. The resources of the state will not be deployed in support of an issue unless those resources are aware of and understand the issue. New Jersey has been a leader here. Following the legalization of sports wagering, the New Jersey Division of Gaming Enforcement (“NJDGE”) took the lead in contacting local media outlets, including local drive-time sports radio programs, to educate them on the impropriety of promoting illegal books. Some of the educational efforts have been public some have not been. The education was particularly effective because the NJDGE had the support of an informed and engaged New Jersey Attorney General’s office. Prospective sports wagering regulators do not have to wait for the legislation to pass or for the bets to be placed to begin the process of educating their colleagues at other state agencies. Such early efforts will position those regulators to have statewide support once the markets mature. Second, the state regulatory authority can exercise their rule making authority to clearly establish the discretion to impose disciplinary action against a licensee that has a commercial relationship with any party that does business with an illegal sports book operator. This is not intended to be a comment on the “bad actor” legislation that has been much discussed and even suggested in some states, including, for example, Illinois. Simply, the gaming regulator should have the authority to prevent the promotion of illegal sports books. For example, if a media outlet is accepting advertising from an illegal sports book operator, the gaming regulator can determine that it would be unsuitable for a licensed operator to also contract with that media company, which is effectively aiding and abetting an illegal sports book within that jurisdiction. Then it is up to the media company to decide whether it wants commercial relationships with licensed operators or continue to aid and abet an illegal sports book.. It should also be noted that this type of process works best if State legislators delegate this type of efficient use of regulatory authority to the gaming regulator and the rule making process.

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Third, the state gaming regulators can work with the legislature and law enforcement agencies to strengthen the State’s laws regarding unlicensed and illegal sports books and advocate for sufficient resources to enforce such laws. Finally, the gaming regulatory authorities need to be working in conjunction with other regulatory authorities to ensure consistency across markets. Pennsylvania should be, and may already be taking to New Jersey and Nevada about their efforts to curb the unregulated markets. The European regulators have a wealth of experience and history on this matter that should not be ignored by state agencies. Publicity about multi-jurisdictional cooperation between regulatory authorities will make it more effective. There has been a lot of focus on “How do we get sports wagering up and running?” and that focus certainly makes sense. But the states and all constituents in the regulated market could benefit from additional discourse on “What happens once sports wagering is up and running?”. Sending a clear message on the approach to illegal and unregulated markets will only encourage successful engagement and operation of the regulated market.:: CGi

EDWARD WINKOFSKY & MARK CLAYTON Edward R. Winkofsky focuses his practice on gaming regulatory compliance, licensure, and internal investigations. He also advises clients on transactional and general corporate matters. Since joining the firm in 2010, Ed has served as regulatory counsel to licensed gaming industry suppliers and operators, horse tracks, video gaming and on-line providers, lottery providers, tribal licensees, and social gaming operators and investors. He has also provided guidance on the gaming regulatory approval process for some of the industry’s largest transactions. With the support of the firm's Global Gaming Practice, Ed is focused on the evolving segments of the global gaming industry. Mark A. Clayton focuses on gaming regulatory matters, including those related to land based gaming, internet gaming and the manufacturing and distribution of gaming equipment. He also counsels clients on gaming legislation and regulatory projects. He represents clients with matters concerning gaming in U.S. and international jurisdictions. Mark has wide-ranging experience in the gaming industry, and has served as an executive and as counsel for many casino corporations prior to joining the firm. He is a former member of the Nevada State Gaming Control Board.

eSPORTS ::

AI TECHNOLOGY: THE FUTURE OF ESPORTS? C

Gi talks to Mark O’Sullivan, Gaming Industry Advisor at KMPG Malta, about the progression of AI technology within the esports sector.

Mark, increasingly, gamers seem to turning to state-of-the-art AI technology. How are AI technologies being used in esports?

MO: When it comes to the highly competitive world of esports, every edge counts. AI technology can be that edge, oﬀering elite players the chance to raise the bar. It can give them the training competition they need to improve and master their skill. AIpowered analysis and prediction mechanisms can help to identify ways to improve the player’s own gameplay, whilst also ensuring that opponent strategies are eﬀectively combatted.

Interview with Mark O’Sullivan Gaming Industry Advisor KPMG Malta

Is AI revolutionizing esports? If so, how?

MO: As has been the case in many industries since the industrial revolution, there is a gradual creep whereby machines are replacing humans in particular roles. Initially this was in relation to manual roles, but more recently, we are beginning to see more complex roles being replaced. Esports may be no different in the future, i.e. the team of bots with the best AI programmers would be the best team. As scary as this sounds, it is not all bad. If we look at another piece of interesting technology, virtual reality, this has similar potential. You could participate in a title fight as a professional boxer using VR technology, without ever suffering the short term pain and lasting damage of a punch. Clearly, this would reduce the long-term effects of injuries found in such combat sports, as well as others like American football, ice hockey CGiMAGAZINE.COM

:: eSPORTS

and rugby, to name just a few. What are the advantages of using AI, in its various facets, in esports?

MO: For professional players, AI can assist in a wide array of ways, particularly when it come to gameplay analysis, strategy predictions, AI bot training partners and AI bot training opponents. For governing bodies, AI has the potential to intuitively search for match-fixing within esports and provide detailed reports for follow up by the governing bodies. If we look at this from an iGaming perspective, operators are, of course, on the lookout for scams and match-fixing scenarios within esports. AI can assist greatly in the identification mechanisms used by governing bodies and iGaming operators alike. This, combined with the innovative approaches being undertaken by the likes of Google Stadia’s new platform, will help to reduce, and possibly even eradicate, match-fixing and cheating.

Games have recently pitted bots with human players (following research made by, for example, OpenAI). What does this tell us about the games and how can the use of bots be used to propel esports forward, as a business and an activity?

MO: AI-powered bots are beginning to match, and even surpass, the skillset of human players. Equally important is the fact that bots won’t succumb to the pressures of a live tournament atmosphere, which is in contrast to human players. An AI bot will play to its maximum level every time, and each time the bot plays, this should maximum reach higher levels than before through state-of-the-art algorithms. Through Elon Musk’s OpenAI Five esports team, an AIpowered Dota 2 bot, has beaten the world’s top single player Dota 2 players just a few months ago. Another company you may have heard of, Google, has developed a similar AI-powered bot named “AlphaStar” which beat two of Team Liquid’s best players in a whitewash at Blizzard’s StarCraft II in December 2018. It is important to note that these bots have been developed to play within the same gameplay conditions as a human player, e.g. similar actions per minute, viewing angles, etc. In essence, these bots are not being created in order to develop the world’s best player (beyond that of human limits), but to develop the world’s best human-like player. In fact, the aforementioned AI bots use less clicks per minute than the best human players (approximately half), but have a greater level of eﬃciency per click, showing that the bots are more strategic in their choices. Although not rooted in AI, this kind of battle between humans and robots has been running for many years. Many of us will have taken a penalty kick against a robotic goalkeeper at an event. It’s likely that you would have missed more than you scored. Add AI to this technology and it’s quite possible that you may never score a goal against this goalkeeper again, given its iterative improvement.

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eSPORTS ::

How do you foresee the developing interaction between AI and esports in Malta?

MO: Malta has a history of ﬁrmly establishing itself as a global hub for particular technological economic niches. It had successfully done so with iGaming over the last couple of decades, and in recent years, this has been the case with the video games and DLT sectors. In 2019, Malta has set its sights on the AI and esports industries. My feeling is that these industries are quite compatible and will grow together alongside Malta’s other niches and its well-established ecosystem. What does the future hold for AI in esports locally and internationally?

MO: After ﬁrmly asserting itself as a leader in the DLT sphere in 2018, Malta is working to develop a national AI strategy and framework. The country’s vision for AI was released in November 2018, with the subsequent establishment of the Malta.AI Taskforce. In March 2019, the taskforce held its ﬁrst public consultation workshop, where it was explained that Malta will prove itself to be an attractive hub for AI-focused projects and companies. Alongside this, the government has committed itself to work towards the creation of a strong regulatory environment to protect this technology’s implementation. So, how does this relate to esports in Malta? As mentioned, Malta’s bustling video games industry is beginning to spill over into that of esports. There are some well-established passionate esports event organisers on the island, who have worked tirelessly in recent years to grow interest locally. Additionally, many of the world’s largest iGaming operators based in Malta are looking very closely at the esports market, hoping to gain the interest of the next generation. As local players and companies begin to reach new heights, the crossover between the esports and AI industries in Malta is inevitable. :: CGi

MARK O’SULLIVAN Mark is an Advisor for the Gaming Industry for KPMG Malta and is actively involved in the Gaming Industry in Malta and overseas. He is knowledgeable in a wide range of areas within the industry, with a particular focus on esports. With a lifelong passion for video games, he is leading KPMG Malta’s efforts in the rapidly developing esports sphere. In addition, Mark is well versed on the worlds of iGaming, video games, and DLT. As part of KPMG Malta's core gaming team, Mark works to champion Malta as the jurisdiction of choice, and KPMG as the service provider of choice, within the gaming industry on a global scale. He has developed a strong network of key stakeholders within the industry, helping him to keep his finger on the pulse of this ever-changing environment.

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MANAGEMENT ::

THE POWERFUL HABITS OF TECH COMPANIES T

ech companies started to revolutionise the world we live in a couple of decades ago, not just because they started in a garage, but because they came up with different ways to do business. There’s good news: You don’t need to be a tech company to function like one. There’s a real opportunity for companies that are not tech-led in a wide range of industries including gaming, to adopt some of the tech ways of doing business and to benefit from similar growth, efficiency and innovation. I worked for a decade for two leading tech companies - Google and Eventbrite - before becoming Betsson’s CMO. Now as an Executive coach, I help leaders in gaming and other industries transform the way they function, focusing on agility, accountability, customers and talent.

Marion Gamel

Agility Gaming companies evolve in a fast changing environment. There’s a permanent need to adapt. This calls for an agile workforce that is comfortable with frequent changes. Driving change and fostering a culture of agility can start today with any change, no matter how small. Making your team comfortable with change is the required ﬁrst step to guiding your workforce towards agility. In life, change is inevitable. In business, change is vital” said Warren Bennis. Change is a “brain thing”. It is therefore important for leaders to understand the process of change. Our brain is not fond of change. Doing habitual tasks on autopilot is easy and reassuring. Embracing new ways consumes a lot of brain-energy and CGiMAGAZINE.COM

:: MANAGEMENT

demands full attention. There are 3 key ingredients that leaders must give to their team, while change is going on, to help them go through change as painlessly as possible:

Driving a deep change in your organisation may require that you let go of some over-challenging objectives for a while, or that you help your team prioritise and only focus on 2 things instead of the usual 10.

- Time: Dealing with change is a psychological process involving several steps. People go through this process at their own pace. It is therefore hard to plan for it, let alone compress this time into an “average” that works for everyone. While it’s common for leaders to want the change to be implemented the minute they made a decision about it, it’s more eﬃcient to agree on an acceptable amount of time during which the change is being processed. It’s a time to ask questions, address concerns and to communicate the beneﬁts of the change. As your team becomes more agile, the required time to process change will decrease, but it should never be nil.

Additionally to these 3 key ingredients, leaders need to acknowledge people’s emotions, sharing their own in the process. They must communicate generously about the change so the level of trust never drops. They also need to create psychological safety within their team, as everyone’s focus should momentarily shift from pure results, to learnings.

- Repetition: Embracing a new way of acting or thinking requires practice in order to reach ﬂuency. As a leader, you also need to repeat the message about the change several times. While this may feel patronising, it is important to remember that the harder something is to hear, the less it is heard! Repetition of the message is as key as repetition of the new task. - Attention: Attention is a limited resource. While a team pays attention to something that is changing, they’re not paying attention to much else. As a result, deadlines could be missed.

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Accountability Accountability means clarity about who's responsible for what, what employees’ and teams’ commitments are, and transparency on progress and results. A by-product of accountability is ownership and pride, which are important ingredients to employees’ retention, satisfaction and performance. Some companies’ workforce is very busy, but no one knows exactly who's doing what. When things go wrong, no one knows what broke or who broke it, which can lead to ﬁnger-pointing. Other companies have a workforce where everybody's clear about their area of responsibility and their commitment. When something breaks, the responsible team or individual steps forward, looks for an explanation, learnings and solutions. Tech companies are the second kind.

MANAGEMENT ::

To achieve high level of accountability, Tech companies use a tool called OKRs (objective and key results) that was invented decades ago at Intel. OKRs is a technique of setting and communicating individual objectives, making sure everyone’s working towards the same strategic goals. OKRs ensures everyone knows what’s expected of them, and what they can expect from others, driving efficient collaboration and accountability. Implementing OKRs is simple, the big part of the job is to decide that your organisation is ready for this level of clarity and commitment. If it is, one of the members of the management team should be the sponsor of OKRs. A project manager is then given a couple of months to train everyone on OKRs, starting with managers, getting the first OKRs drafted, and setting up a process in place so OKRs are, in time, integrated in the way teams function and collaborate and become a habit. Customer Most companies think that they are customer-centric, it's mentioned somehow in their mission statements: “Delight the customer”. Most companies are not customer-focused in a truly holistic way, I have also witnessed this in gaming where I witnessed an extreme focus on our industry,: What my competitors offer? What my competitors announced for last quarter? Who is merging with whom? Who gets my customers once they left me? Focusing on your industry only gives you a partial view of your customers. It’s the equivalent to believing that all your customers do all day long is play casino or think about playing casino. I advise leaders I coach to focus on their consumers rather than their industry, asking questions such as: What were my customers doing before coming to my site? What function does gaming play in their life? How do they make decisions to use a brand over another? Before coming to your site, your customers are living their normal digital life: They were listening to music on Spotify, checking out friends on Facebook, watching a series on Netflix, bidding on eBay, and booking a holiday using a mix of AirBnB and Trailfinder. Your customers’ digital consumption is the environment that influences their expectations when they are on your site. As a result, Facebook, Amazon, AirBnB, Spotify are the websites that yours is being compared to. If a large percentage of your users first and foremost seeks a few minutes of entertainment when they play casino, it means that your direct competitors are other available sources of entertainment: Netflix, YouTube, Facebook, Instagram, Pinterest… How does your customer experience compare to the one offered by Internet giants’? Talent Companies know that their work force is at the root of success and failure. Yet, most companies encounter talent issues, which are like toothache: They rarely go away by themselves. Here are a couple of truths that I have learned during my last 20 years spent working for tech companies:

1. Talent is not “an HR thing”. Talent is the responsibility of every single leader. When it’s time to improve talent acquisition or retention, HR cannot magically fix the mistakes or oversights that leaders made. There is not such thing as “talent issues”, there are Leadership issues. 2. Leaders, whether local MD or C-level, should focus about a third of their time on talent: Acquisition, retention, growth path, efficiency. Embracing these 2 facts put leaders in a good place to solve their company’s talent issues, which in a small market places like Malta and in insestuous industries such as gaming, can be severe. I often share with leaders a tip learned from tech-companies on assessing your company’s talent situation: Start by looking at recent business disappointments and some remarkable business successes. Find out how talent specifically contributed to them: Skills, manpower, leadership, organisational structure of a function... The key to assessing your talent “issue” is to start with your business reality so you understand how talent is fueling success and failure and what to enhance or change. Don’t start thinking about talent using HR data such as attrition. However interesting, if the only metric that matters is revenue, then start with that and work your way to understanding how and what talent is impacting that. Tech companies have revolutionised the way we conduct business. By emulating the way they tackle agility, accountability, customer and talent, gaming companies can be on par with the optimal digital growth. It’s the right time to focus on the ways of tech companies, as gaming will soon be a 100% digital industry. Whether you decide to drive the agility of your team, to benefit from optimal accountability, to focus on customers or to deal with talent differently, there’s a bit of tech wisdom for everyone! :: CGi

MARION GAMEL Marion Gamel is a C-level executive with over 20 years of experience. Having started her career as an entrepreneur, she then worked for Google and Eventbrite and was Chief Marketing Oﬃcer at Betsson Group. Marion has been coaching leaders around the world since 2015 and is a Registered Business Coach.

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SAFEGUARD

Automated Compliance for iGaming

WHAT WHA AT IS SAFEGUARD SAFEGUARD

SAFEGUARD SAFEGU ARD BENEFITS AML & RG Managers

A risk management tool with focus on AML L and RG.

Enables Gaming Oper ators Operators to monitor monitor,, profile, profile, escalate escalate and rreport eport on their customer base.

! Ability to schedule notifications and easily deadlines;"" manage time to meet deadlines; eporting;" ! Easy overview and rreporting;" egulatory rrequirements, equirements, audits ! Reports for rregulatory and assessments. " Employees ! Easy access to risk overview of name customers and easy escalation of risk rreporting;" eporting;" Recor ded escalation of risk rreporting;" eporting;" Recorded ! CEO

ailor made Tailor T mad fields and escalations escalations to suite your business.

eporting and building of ! Easy decision rreporting organisation memory;"" or ganisation memory; Touch ouc reporting reporting system;" system;" ! Touch ! Comfort that customer risk is being corr ectly recorded recorded and managed. correctly The Company

Risk flags designed to match your internal risk match assessment.

Website: Website: www.safecomply.com www.safecomply.com Email: info@s info@safecomply.com safecomply.com

ecord keeping ! Evidential management and rrecord of rrelevant elevant customer database; database;"" ! Overview of employee decision making and monitoring.

GERMANY ::

GERMANY: MUCH ADO ABOUT (ALMOST) NOTHING G

Martin Arendts Arendts Anwälte

ermany is certainly one of the most interesting markets for gambling and sports betting in Europe. However, a precise instruction for operators can hardly be given. So, none of the promised sports betting licenses has be issued in the current licensing procedure, running since 2012. The recently proposed Third Amendment to the Interstate Treaty on Gambling (Dritter Glücksspieländerungsstaatvertrag) will not bring a solution for the current regulatory problems in Germany and not the desired clarity. The new regulation (if it will enter into force) will only be effective for 18 months, not viable from a business point of view (and much less than the promised seven years experimentation period for bookmakers). It remains open how an enduring regulatory regime will look like after 30 June 2021, the end of the current Interstate Treaty. The attempts to properly regulate gambling and sports betting and to finally produce a mature coherent and consistent regulatory environment amount to a “Series of Unfortunate Events”. Already 13 years ago, the German Federal Constitutional Court held the state monopoly with regard to sports betting as incoherent with constitutional law. 2010, the CJEU followed with decisions on several referral cases from Germany (Markus Stoss et al.). The CJEU held the sports betting monopoly to be clearly inconsistent with EU law. Subsequently Germany finally decided to abandon its strict state monopoly system with regard to sports betting in 2012. CGiMAGAZINE.COM

:: GERMANY

The German states (LĂ¤nder) amended the Interstate Treaty with an experimentation clause in section 10a (experimentation period of seven years until end of June 2019) and started a licensing procedure to grant up to 20 licences. However, none of these licenses has been granted, as the non-transparent procedure has been stopped by several court decisions. Only the German state of Schleswig Holstein (at the border to Denmark) opted for its own state Gambling Act (before acceding to the Interstate Treaty in February 2013) and issued licenses under a qualitative licensing regime not only for sports betting, but also for casino games (including Poker). The last of this Schleswig Holstein licenses expired six

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years after its issuance in February 2019. Five years ago, I compared the situation in Germany with Waiting for Godot, the absurdist play by Samuel Beckett. Nothing substantial has changed since then. The sports betting licensing process, which began in August 2012, is still a never-ending saga, and one can now imagine Vladimir and Estragon discussing how perfect the situation might be if betting licences had finally arrived (or at least interim permits, as proposed in the Second Amendment to the Interstate Treaty, which, however, did not become effective as of 1 January 2018). The Second Amendment proposed only â&#x20AC;&#x153;minimally invasiveâ&#x20AC;? amendments to the existing regulations of the

GERMANY ::

Interstate Treaty on Gambling in a kind of formulaic compromise. However, this compromise did not work out in practice. Several state parliaments, most vocally the Schleswig Holstein parliament, did not ratify the draft. So, even the applicants which fulfilled the minimum requirements for license-holders were not granted an interim permit, let alone licenses. However, the grey market with no properly licensed operators has shown to be quite prosperous for operators which applied for a sports betting license (and even for the operators which did not really care about licenses). According to the betting tax figures (5 % betting tax on the wager), the market share of the German state operators (which have been offering sports betting under the brand “ODDSET”) has fallen well below 3 % (so a restoration of the monopoly clearly makes no sense from a business point of view). Over the last years, almost no prohibition orders have been served on operators and betting shops. Only recently, the authorities were trying to stop sponsorship deals with bookmakers which were also offering online casino games (which are regarded as illegal under the current gambling law) under the same brand. After much unsuccessful discussions, the German states finally agreed on a draft of a Third Amendment to the Interstate Treaty on Gambling at the meeting of the state prime ministers in March 2019. After the notification procedure with the European Commission, all 16 state parliaments will have to ratify the draft which is supposed to become effective as of 1 January 2020. In order to win over Schleswig Holstein, this state was allowed to renew the expired Schleswig Holstein licenses. So, in essence, the new interim regulation (if the Third Amendment will eventually become effective) is not even a formulaic compromise, as it allows two different set of licenses and rules. The draft for an interim regulation in Schleswig Holstein expressly states that the Internet prohibition according to section 4 par. 4 Interstate Treaty is not applicable. In Schleswig Holstein, there would be revived licenses for casino games, while in the other 15 states online casino games still would be regarded as illegal (a quite strange, not really coherent situation). The biggest problem remains that the states could not agree on how to regulate online casino games. Several states want to license casino games operators. Hesse proposed a new Interstate Treaty already a few years ago, which would have allowed online casino licenses to be granted. Other states, like Berlin and Hamburg, want to keep the Internet ban (without effective enforcing it). Currently, most remote gaming operators which are offering casino games file tax returns and, well-behaved as they are, pay VAT for an illegal service. The main change, the Third Amendment would bring, is the abolishment of the cap of 20 licenses to be granted. So, a selection procedure for the “top 20” applicants would no longer be needed (under the current regulation the best

applicants were selected under a points scheme, assessing the application and the concepts provided by the applicants). The experimentation clause would be prolonged for 18 months until the end of June 2021 (and would be prolonged for further three years until 30 June 2024, if the current Interstate Treaty remained in force after that date). So, operators could apply for a sports betting license in 2020 which would be valid only until 30 June 2021 (or hopefully, but not very certainly until 30 June 2024). A license-holder would then have to obey all quite strict terms and conditions of a license. Under the current regulation, a licensed operator would be banned to offer any casino games and also forms of (very popular) in-play betting. Also affiliated companies could not offer casino games (which have become economically quite important for most operators). The Third Amendment is therefore not viable from an economic point of view. In order to be attractive for operators, a license should be valid for several years (as the seven years experimentation period) and should not strangle operators, requesting a license, with economic disadvantages (without effectively suppressing illegal operators). As the market for casino games cannot be stopped, it would make more sense to properly regulate it and grant licenses. Only in a licensed market environment consumer and player protection can be safeguarded in an effective way. According to my point of view, the German states, and if they do not succeed, then the federal parliament, are called upon to finally create an enduring coherent and consistent gambling regulation. Market participants definitely need a quantum leap (and not further two years of wibble wobble). Otherwise, the billions in revenues for the 16 German states from the games of chance offered by them are clearly endangered. Recently the Administrative Court of Munich, in a judgment, reached by our law firm, concludes that the German lottery monopoly in its current form violates both the freedom to provide services guaranteed under EU law (Art. 56 et seq TFEU), as well as the constitutionally guaranteed freedom of choice. :: CGi

MARTIN ARENDTS Martin Arendts of ARENDTS ANWÄLTE is one of the leading gaming lawyers in Germany. He is a General Member of the International Masters of Gaming Law and regularly writes for national and international legal publications. Martin Arendts represented Ms. Ince in the referral case before the CJEU (decision of 4 February 2016, C-336/14).

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GAMING PATENTS ::

GAMING PATENTS AND “ABSTRACT IDEAS”: WHAT ARE THE RULES OF THE GAME? I

deas (and algorithms) cannot be patented. Mental processes cannot be patented. The rules of a game cannot be patented (unless there is a sufficiently inventive concept to “transform” the rules into patent-eligible subject matter … but what does that even mean?). The patent-eligible subject matter exception to 35 U.S.C. § 101 is one of the greatest impediments to obtaining (and enforcing) patents in the gaming arts. This article examines the current state of patent-eligible/ineligible subject matter (particularly, “abstract ideas”) and then offers strategies to navigate that landscape and protect gaming innovations (including through alternatives or additions to patent protection).

Ryan Cudnik Of Counsel Brownstein Hyatt Farber Schreck

I. “Maxims” of Subject Matter (In)eligibility Section 101 of the patent laws defines patent-eligible subject matter as “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U.S.C. § 101. The Supreme Court, however, has “long held that this provision contains an important implicit exception. Laws of nature, natural phenomena, and abstract ideas are not patentable.” Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013) (internal brackets omitted) (quoting Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66, 70 (2012)). Over the years, the “abstract idea” exception in particular has led to several maxims that are important in the gaming arts. Specifically: (1) Mathematical algorithms cannot be patented. See Gottschalk v. Benson, 409 U.S. 63, 71-72 (1972) (“The mathematical formula involved here has no substantial practical

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:: GAMING PATENTS

application except in connection with a digital computer, which means that … the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself.”); Parker v. Flook, 437 U.S. 584 (1978) (“[I]f a claim is directed essentially to a method of calculating, using a mathematical formula, even if the solution is for a specific purpose, the claimed method is nonstatutory.”) (internal quotations omitted) (quoting In re Richman, 563 F.2d 1026, 1030 (C.C.P.A. 1977); see also Rubber-Tip Pencil Co. v. Howard, 87 U.S. (20 Wall.) 498, 507 (1874) (“An idea of itself is not patentable ….”); Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U.S. 86, 94 (1939) (“[A] scientific truth, or the mathematical expression of it, is not patentable invention ….”). (2) Mental processes cannot be patented. See Planet Bingo, LLC v. VKGS LLC, 576 Fed. App’x 1005, 1007 (Fed. Cir. 2014) (“The district court correctly concluded that managing the game of bingo ‘consists solely of mental steps which can be carried out by a human using pen and paper.’”). (3) Rules of a game cannot be patented. See In re Smith, 815 F.3d 816, 820 (Fed. Cir. 2016) (“[T]he rejected claims are drawn to the abstract idea of rules for a wagering game and lack an ‘inventive concept’ sufficient to ‘transform’ the claimed subject matter into a patent-eligible application of that idea….”); In re Marco Guldenaar Holding B.V., 911 F.3d 1157, 1162 (Fed. Cir. 2018) (“[T]he claims are drawn to the abstract idea of rules for playing a dice game and lack an ‘inventive concept’ sufficient to ‘transform’ the claimed subject matter into a patent-eligible application of that idea.”). These maxims seem generally straightforward. But, as one examines the real-world application of those maxims to realworld inventions, several things become clear: (1) there is a spectrum of subject-matter-eligibility along which gaming inventions—which frequently involve (or can involve) mathematic algorithms, mental processes, and/or rules—can fall; (2) once an invention starts to move away from, for example, a pure mathematical algorithm (which is not patent eligible), there is no bright-line test for what is and is not patentable; and (3) the cases provide only guideposts from which to estimate whether a particular invention (as claimed) is subject-matter-eligible for patent protection. As such, it is worthwhile to examine some of these guidepost cases to understand where and how gaming inventions may fall upon the subject-matter-eligibility spectrum. II. Subject-Matter-Eligibility Guideposts A. The U.S. Supreme Court’s Subject-Matter-Eligibility Trilogy— Benson, Flook, and Diehr 1. Gottschalk v. Benson, 409 U.S. 63 (1972) This Supreme Court decision involved software containing an algorithm to convert binary-coded decimal numbers into true binary numbers. The Court found that a patent on the concept would pre-empt the entire mathematical algorithm and that the algorithm in question was not patentable because it was an abstract idea. 2. Parker v. Flook, 437 U.S. 584 (1978)

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This Supreme Court decision involved software containing an algorithm for updating an alarm limit (used to signal abnormal conditions) in a catalytic converter. The only difference between the invention (as claimed) and the prior art was the algorithm that calculated the new alarm limit. The Court found the invention unpatentable “not because it contains a mathematical algorithm as one component, but because once that algorithm is assumed to be within the prior art, the application, considered as a whole, contains no patentable invention.” 3. Diamond v. Diehr, 450 U.S. 175 (1981) This Supreme Court decision involved an invention for heating and curing rubber. The invention utilized software and a computer to calculate and control the heating times for the rubber. The invention (as claimed) included not only the computer program but also steps relating to heating the rubber and removing the rubber from the heat. The Court found that the invention was not merely a mathematical algorithm, but was a process for molding rubber and, hence, was patentable, even though the only new feature of the invention was the timing process controlled by the computer.

GAMING PATENTS ::

to be “enough” to qualify as patentable subject matter. The Court also discussed another underlying concern: too much patenting can foreclose future innovation. 3. Ass’n for Molecular Pathology v. Myriad Genetics, 569 U.S. 576 (2013) This Supreme Court decision found that isolated, but naturally occurring, DNA was not subject matter eligible. The main takeaway for us, however, was the Supreme Court’s admonishment that courts must balance (i) the incentives patents provide for innovation with (ii) the benefits that a freeflow of information provide for innovation. Put another way, courts must balance patent protections versus the impediment to innovation that can occur from “bottling up” information (or ideas) that are needed for further innovation.

B. Subsequent Decisions of Note from the U.S. Supreme Court 1. Bilski v. Kappos, 561 U.S. 593 (2010) This Supreme Court decision examined the so-called machine-or-transformation test that had been announced by the Federal Circuit as the sole test for determining the patentability of processes. Specifically, the Federal Circuit held that a process is patentable if “(1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” The Supreme Court ruled that the machine-or-transformation was not the sole test for the patentability of processes. Instead, the Court stated that the test should be viewed as “a clue” to this analysis. Ultimately, the Court found that the Bilski claims recited an unpatentable abstract idea. 2. Mayo Collaborative Servs. v. Prometheus Labs., 566 U.S. 66 (2012) This Supreme Court decision found that, when a fundamental principle is involved, the invention (as claimed) must include “enough” additional subject matter to amount to “significantly more” than the principle alone. Indeed, steps adding only well-known or routine subject matter are unlikely

C. Three Recent Decisions of Note from the U.S. Court of Appeals for the Federal Circuit 1. Planet Bingo v. VKGS, 576 F. App’x 1005 (Fed. Cir. 2014) This decision involved two patents for computer-aided management of bingo games. In affirming a rejection of the patent claims at issue, the Federal Circuit applied the two-part framework introduced in Mayo and further explained in Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014). First, the court determined whether the claims at issue were directed to patentineligible subject matter. Because they were, the court then examined the elements of the claim(s) to determine whether they contained an “inventive concept” sufficient to “transform” the claimed abstract idea into a patent-eligible application. Indeed, the court first determined that the claims at issue (i) “recited methods and systems for managing a game of Bingo,” (ii) “were similar to the claims at issue in Bilski … and Alice,” and, accordingly, (iii) were “directed to an abstract idea.” Specifically, the court found the claims were “directed to the abstract idea of solving a tampering problem and also minimizing other security risks during bingo ticket purchases.” Next, the court examined the claims to determine whether they contained an inventive concept sufficient to transform the claimed abstract idea into a patent-eligible application. The court determined the claims at issue did not contain any such inventive concept. Specifically, the court determined that the claims merely “recite[d] a generic computer implementation of the covered abstract idea.” 2. In re Smith, 815 F.3d 816 (Fed. Cir. 2016) This Federal Circuit decision involved a patent application for a “Blackjack Variation” that was “a wagering game utilizing real or virtual playing cards” in which a dealer engaged in the “conventional steps of shuffling and dealing” the cards. The patent examiner rejected the applicants’ patent claims, finding that they were “an attempt to claim a new set of rules for playing a card game” and, as such, “an abstract idea.” In affirming the patent examiner’s rejection, the Federal Circuit agreed with the Patent Trial and Appeal Board (“PTAB”) that “a wagering game is, effectively, a method of exchanging and resolving financial obligations based on probabilities created CGiMAGAZINE.COM

:: GAMING PATENTS

during the distribution of cards.” Further, the court found that “appending purely conventional steps to an abstract idea”—i.e., claiming steps of shuffling and dealing as part of the rules of the game—did not supply a sufficiently inventive concept to “transform” the claimed abstract idea into patent-eligible subject matter. The court did acknowledge, however, that innovations in the gaming arts are eligible for patent protection. For example, the court noted that a patent application claiming “a game using a new or original deck of cards” could (potentially) be patent eligible. It should also be noted that the patent application’s claims directed to a computer-implemented version of the game were allowed by the examiner. 3. In re Marco Guldenaar Holding B.V., 911 F.3d 1157 (Fed. Cir. 2018) This Federal Circuit decision involved a patent application for a “Casino Game and a Set of Six-Face Cubic Colored Dice” that related to “dice games intended to be played in gambling casinos, in which a participant attempts to achieve a particular winning combination of subsets of the dice.” The patent examiner rejected the applicant’s patent claims, concluding that the claims were directed to the abstract idea of “rules for playing a game,” which fell within the realm of “methods of organizing human activities.” In affirming, the Federal Circuit relied heavily on In re Smith in concluding that the applicant’s invention was drawn to an abstract idea. Specifically, the court found that “Applicant’s claimed method of playing a dice game, including placing wagers on whether certain die faces will appear face up, is, as with the claimed invention in Smith, directed to a method of conducting a wagering game, with the probabilities based on dice rather than on cards.” The court again, however, acknowledged that innovations in the gaming arts are eligible for patent protection. III. Where Does All of This Leave Us? A. Subject-Matter-Eligibility for Innovations in the Gaming Arts In the wake of the Supreme Court’s recent subject-mattereligibility decisions—which revived and expanded upon much of the rationale and analysis from its 1970s-era subject-mattereligibility trilogy (Benson, Flook, and Deihr)—and the Federal Circuit’s subsequent application of those recent Supreme Court decisions, several things are clear. Innovations in the gaming arts face some serious headwinds in obtaining patent protection. First, non-video innovations that constitute variations on existing games (e.g., variations on blackjack or craps) are likely to be found to be rules of a game and, without more, rejected as abstract ideas—i.e., patent-ineligible subject matter. Second, the patentable aspects of video game innovations are more likely to be found in the user interface of the game than in (i) the rules of the game, (ii) the software underlying the game, or (iii) the hardware on which the game runs, particularly where the video game innovation is a variation of an existing casino game. Finally, attempts to transform non-eligible subject matter into eligible subject matter are more likely to be successful, for

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example, through (i) a new/original deck of cards than (ii) a new/original set of dice. This is particularly true where the new deck of cards is tied to a new game—e.g., the new/original deck used in a game like UNO—as opposed to where the new set of dice is simply an alternative way of playing existing games—e.g., a new/original set of dice is used to play a game like Yahtzee. That is not to say, however, that new/original decks of cards or dice that, for example, employ new security or anticounterfeiting technology would not be patentable, as long as the technology itself (or the technology in combination with playing cards or dice) is itself patentable. B. Alternative (or Additional) Avenues of Protection for Innovations in the Gaming Arts As an alternative to, or in addition to, patent protection, there are, of course, other avenues of IP protection one can pursue to protect gaming innovations. Trademark, copyright, and trade secret protections, depending on the nature of the innovation, can provide alternative and/or overlapping protection of gaming innovations. Trademark or trade dress can protect, for example, the “brand” of a new game, whether a new slot, table, or video game. Copyright can protect, for example, the layout (i.e., felt) of a new table game or the code underlying a new video game. Last, some aspects of a new game may be protected by trade secret protections, as long as adequate steps are (and have been) taken to limit and protect proprietary aspects of the game. :: CGi

RYAN CUDNIK For complex and high-profile patent and IP actions, such as Hatch-Waxman (ANDA) litigations, numerous Fortune 500 companies have trusted Ryan with their cases. Ryan has litigated a broad range of intellectual property (IP) cases, including litigations over “blockbuster” pharmaceutical products with global sales exceeding $1 billion per year and bet-the-company gaming litigations involving a blend of IP and contract issues. His complex patent litigation experience includes multidistrict litigations (MDL), Hatch-Waxman (ANDA) litigations, and unfair import investigations (section 337 patent infringement actions) in the U.S. International Trade Commission. Ryan has also handled high-stakes trademark and trade secret litigation. Prior to joining the firm, Ryan practiced intellectual property law at Watson Rounds, a firm Brownstein merged with September 1, 2015, Finnegan Henderson in Washington, D.C., and Fitzpatrick Cella in New York, NY. Prior to law school, he worked as a high school teacher and varsity lacrosse and soccer coach.

ANALYTICS ::

KEEP THIS OL’ CLICHé IN MIND WHEN COMMUNICATING WITH YOUR PLAYERS: TIMING IS EVERYTHING T

here’s this saying: Nothing is worse than meeting the perfect person at the wrong time. When you communicate with your players or sending them offers on a specific day, even if it’s your best performing day, you are missing out on many golden opportunities to get so much more. Read and realize: Why there’s a good chance you’ve been doing it wrong this whole time

Omer Liss Optimove

Think about your day-to-day life. A lot of the activities you’re doing are probably being done at the same exact time and day, by others. Do you also eat your lunches around 12pm? Take out the dog first thing after getting back home from work? At Fridays, do you go out with friends or family? And every start of the week we all get the blues. And thinking about it, we very rarely stray from some of these daily or weekly routines. Taking this human behavior into the gaming world, it’s reasonable to assume that players have the same scheduled behavior. Many sport betting operators are sending their communications, whether it is ad-hoc information campaign based on this weekend matches or automated promotions – to all their players at the same time. In the online casino industry, 'Lucky Monday' or 'Super Thursday' kinds of promotion are very common, blasting the customers bases with this weekly 'happy day' of each brand. In one way, it makes sense. Most of the sport events occur during weekends, which dramatically affect the number of betting trend that reaches the weekly peak on Saturday. The online casino brands usually choose their strongest or weakest day of week when strategizing and picking the right day to CGiMAGAZINE.COM

:: ANALYTICS

attract players to play. But look again on your day-to-day routine and let’s see if you can answer these set of questions: On which day do you call your parents? On which day is it your turn to pick up the kids from the kindergarten? On which day are you going to the gym or play football with friends? Chances are that for this set of questions, we gave different answers, and if so, what made us so sure that playing and betting behavior is part of the more common set of activities? Do all bettors behave the same and have the same weekly timing? No.

Below you can find the outcome:

All Bettor Created Equal (Only Almost) Every sport betting company knows what the strongest days of the week for their customers are. The days can vary for different regions but usually, each brand’s aware of its strongest days. For our analysis, we chose UK as our region in order to try and keep our players homogenies. In the following analysis, which contains data from more than 10 sport betting brands who operate in UK since August 2018 and 6 months forward (to eliminate the world cup effects), we first confirmed our known fact – more bets occur during the weekend and mostly on Saturdays:

When taking a closer look on players with a significant single favorite bet day, we can find the following results:

20% of the bets are placed on Saturday. Furthermore, Friday and Sundays have the second and third highest bets distribution (both 15%), and these three days are responsible for 50% of the total bets placed. As the sport bets distribution made a lot of sense, we tried to asses what was the favorite sport bet day of each player, in order to understand whether most of our players holds the same betting behavior in terms of days of week. In order to do so, we defined the most active week day for each player, during the 6 months period. Basically, we counted whether the player placed a bet during each day, to flag it as an active day. The weekday which the player visited and played for most time, was considered as the favorite day of this specific player. Players with equal multiple days considered as multi-days customers and were split to 3 groups: More weekdays, more weekend days, or all around in a case of a tie. We ran the analysis for players with more than 1 bet day.

Out of the 42% of the customers with a unique favorite bet day, 43% hold Saturday as a favorite day (18% of the population, 43% out of 42%). In addition, 10% bet mostly on Fridays (4.2% of the population) and 13% bet mostly on Sundays (5.4% of the population). A sum of all players who prefer to bet during weekends, multi or single, will ends up as 44.6% of the population. Considering that weekends are the most popular days in general, will allow us to add to this figure the 'all around' players, that have an unknown favorite bet day – and we’ll get almost 62% of the population. Although most betting is being done during the weekends and most players are playing in the weekend, the numbers above still emphasize the wrong way most of sport betting brands communicate with players. Almost 40% of all customers prefer to play during weekdays, not at times the communications were sent.

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As the pie chart shows, 42% of the players do have a specific day which they tend to visit the brand more often. What's surprising is that 25% of the players have no significant favorite day but play more during the weekdays.

ANALYTICS ::

Not only sport The wrong communication timing is not exclusive for the sport betting industry. Many marketers share the same issue in terms of targeting. Online casino operators are in love with their weekly offers, which repeat for all players on the same weekday. When creating the same analysis, for British players based on casino game days, we find even more disturbing trend for players with a significant favorite casino game day (45% of the players):

Here in the online casino industry, we can see that although more players tend to be more active during the weekend, many players hold weekdays as their preferred game day. When aggregating all players with a significant preferred weekend day, players with multi weekend days and all-around players, we reach the same value as in sport betting: 63%. A blast communication before the weekend may be a bad idea for almost 40% of the players. In order to solve this issue, like many other marketers' challenges, we will need data to come for the rescue. A smart way would be to calculate each player’s preferred betting day and to reach out on that day – Instead of sending a mass communication on a specific day, split the campaign to seven, by the favorite week day, and send the communications separately to the relevant players. In this case you will ensure that your players are getting your messages on the days with the highest chances for them to response. It is important to mention, that in case of testing, you'll must compare the response rate to a control group. Why? As the activity during the weekend is higher, you might think that you are getting more response resulted from your communication, while a control group will assure that you are creating a significant impact every day regardless of the sport weekly activity trend. By the Hour In terms of timing, we have many assumptions that based on the plural behavior – we are sending most of our communications at the same time of day, assuming all customers will open our emails or engaged through our SMS at the same time. In the below matrix you can find the bets distribution for the same British players, combining days and hours

We can find that for most of the weekdays, or to be exact – working days, most of the bets placed after midday. During the weekend, bets are being placed earlier. Should sport betting operators be familiar with this fact? Should marketing teams change schedules of communications based on it? is this plural behavior knowledge should be enough? Similar to favorite day of week practice, I set the favorite time of day to be the hour with more than 50% bets of the total bets of each player. To make it relevant, I analyze only players with more than 20 bets during the analyzed period (6 months). The results: Among these players, around 45% had a significant favorite hour of day. When uncovering the preferred hours distribution, we can find that it's almost unified between 10:00AM to 8:00PM. In this case, when is the right time to communicate with these bettors? Optimize, Strategize, Personalize If you read carefully you understand that the answer is always personalization – each player should hold its own preferred hour and receive his own scheduled communication based on it. A proper analysis and personalized calculation may increase your communication metrics and KPIs. Having the ability to analyze and understand players behavior and to obtain an automated procedure which will allow you to act at the right time, can influence customers response dramatically. The gaming industry is getting more data driven and competitive- you need to make sure you're meeting your perfect persons at the right time. :: CGi OMER LISS Omer Liss leads the Strategic Services research team at Optimove, helping leading marketers optimize their customer retention strategy. As a marketing data scientist, Omer has vast experience consulting clients, analyzing their customer data and revealing actionable, data-driven marketing insights. CGiMAGAZINE.COM

SOCIAL RESPONSIBILITY ::

BEHAVIOURAL PROFILING OF PROBLEM GAMBLERS IN LAND-BASED GAMBLING VENUES I

Dr. Mark GriďŹ&#x192;ths Professor of Behavioural Addiction Nottingham Trent University

n many countries, problem or pathological gambling has been recognized as a significant public health concern (Calado & Griffiths, 2016). Although generally less prevalent than other recognized addictive behaviours (e.g., alcoholism), problem gambling is known to affect at least 1-2% of the population at any given time with significant impacts on individuals, their families and communities (Calado, Alexandre & Griffiths, 2017; Calado & Griffiths, 2016). Despite this, it is known that only a small proportion of people potentially affected by gambling seek formal help. Usually this occurs when legal, financial and/or personal pressures leave people with little choice (Griffiths, 2004). Accordingly, there is interest in whether interventions might be more effectively targeted towards gamblers before they reach a point of crisis where many harmful consequences may already have been incurred. As researchers in the gambling studies field have pointed out (Delfabbro et al., 2012a; Griffiths, 2009), one of the more challenging issues is to what extent the industry should take a proactive role in identifying and assisting people before any action is taken by gamblers themselves. Existing staff training provisions in land-based gambling typically encourage staff to assist people who show obvious signs of distress, who confess to having difficulties, or who are acting in a disruptive, abusive or violent manner (Oehler et al., 2017). Unless required by legislation, most training provisions do not require staff or venues in general to play any active role in trying to look for indicators or patterns of behaviour that might indicate that a particular person should be assisted. CGiMAGAZINE.COM

:: SOCIAL RESPONSIBILITY

Several reasons have often been advanced to explain why this might be the case. First, industry staff are typically not trained to diagnose problem gambling in-venue. Industry respondents will often argue that it is inappropriate for nonclinically or psychologically trained people to make a judgment about the status of gamblers (Allcock, 2002; Griffiths, 2010). A second problem is the threat of resentment and customer privacy. Unsolicited scrutiny of customer behaviour could be considered a violation of trust by some patrons and evoke an angry response (Hing et al., 2010), although there are international examples which suggest that this process can be facilitated by appropriate staff training. For instance, in the Canadian province of Saskatcheawan, gaming staff have conducted over 5000 interactions with patrons without complaint (Delfabbro et al., 2012b). This success may be due to the level of training received and the specialised nature of the staff in these Canadian venues. Similar findings have also been reported by Holland Casino who have engaged in such practices since 1996 (Goudriaan, de Bruin & Koeter, 2009). A third view is that it may not be in the industryâ&#x20AC;&#x2122;s interest to identify and assist problem gamblers if a significant proportion of revenue is being derived from those patrons. Finally, it has been argued that venue staff may not have sufficient time to observe particular patrons in enough detail to make any sort of judgment about their disposition (Allcock, 2002; Delfabbro et al., 2012b). Despite these practical obstacles, there are still likely to be contexts in which the process of behavioural profiling may be of value. This article briefly considers whether there are valid and reliable indicators or behavioural profiles that might be used to potentially identify problem gamblers in land-based gambling venues. More specifically, the aim of this article is to provide a summary of the range of indicators that have been identified and evaluated and the limitations of existing empirical research studies. Identifying problem gamblers in physical venues: Sources of evidence and indicators Although the behavioural characteristics of problem gamblers have been studied for several decades, it has only been the in last decade or so that there has been interest in studying the visibility or observability of gambling behaviour in land-based gambling venues (Delfabbro et al., 2012b). In this article, the focus is on examining the evidence from the small number of studies that have specifically focused on identification of problem gambling indicators. The first major review in this area was commissioned by the Australian Gaming Council in 2002. This project involved a compilation of submissions from a variety of Australian and international experts working in research or clinical practice (Allcock, 2002). The principal focus of the review was on problem gambling behaviour in land-based gambling venues. Contributors were asked to comment on whether there were observable indicators that might reliably be used to differentiate problem gamblers from recreational gamblers in such venues. They were also asked to state their views on the practical utility of this knowledge and how knowledge concerning the validity

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of indicators could be enhanced by future research. Most of the contributors identified indicators that they believed could be used, but most were pessimistic about how well staff could apply this knowledge given the various practical constraints associated with working in venue environments. Consistent with the points raised previously, these concerns related principally to the (i) visibility of behaviour in larger venues, (ii) consistency of observers, (iii) ability of staff to provide meaningful insights into pathological behaviour, and (iv) duration of observation periods (Delfabbro et al., 2012b). If staff changed shifts reasonably frequently, then concerns were raised about whether staff could observe individual patrons for a sufficient duration to develop a good knowledge of their behaviour. A study by Schellinck and Schrans (2004) in Nova Scotia obtained data from a population sample of 927 video lottery gamblers, 16.5% of whom were problem gamblers on the Canadian Problem Gambling Index (Ferris & Wynne, 2001). The authors used a technique called association analysis. Often used in marketing and polling research, association analysis is a method whereby the researcher tries to determine the probability of a given event occurring (e.g., in this case a problem gambler being identified in a land-based gambling venue) based on a combination of cues being detected at a given point in time. To conduct this form of analysis, the authors derived a number of variables. First, they calculated the likelihood of problem and non-problem gamblers ever reporting a particular event. Second, they weighted the data by the percentage of occurrences on which gamblers reported having displayed the behaviour. Based on their analyses, the authors found that the most common experiences or behaviours reported by problem gamblers in terms of frequency were (i) spending three-quarters of their time gambling, (ii) gambling for more than 180 minutes in one session, (iii) feeling angry, (iv) feeling sick/sad from gambling, and (iv) sweating. Feeling sick or sad, and gambling for over 180 minutes in one session were the factors that most strongly differentiated problem gamblers from other gamblers. For example, an individual was around three times more likely to be a problem gambler as compared with the base-rate in the sample if they reported feeling sick while gambling. A study conducted by Hafeli and Schneider (2006) in Switzerland carried out qualitative interviews with a sample of 28 problem gamblers, 23 casino employees, and seven regular gamblers in an attempt to develop a range of indicators that might be used to identify problem gamblers within Swiss casinos. Material from these interviews was content analysed and classified into meaningful categories. Only statements that were simple and concise, and which referred to concrete examples of behaviour were included. Problem gamblers were perceived as those who gambled more intensely and frequently, who were compelled to find many different ways to raise funds to gamble, and whose social and emotional responses differed from other gamblers. Problem gamblers were seen to be more socially withdrawn, angry,

SOCIAL RESPONSIBILITY ::

<< Although the behavioural characteristics of problem gamblers have been studied for several decades, it has only been the in last decade or so that there has been interest in studying the visibility or observability of gambling behaviour in land-based gambling venues. >> anxious, depressed, but also more immersed in the activity. Most of these items appeared to have good face validity as indicators of problem gambling, although some items such as “guest pleased by winning” and “guest seeks social contact” appeared more questionable because it is known that problem gamblers are often solitary and evasive in their social interactions and also report reduced enjoyment from gambling (Delfabbro et al., 2012b). Although the authors did not present statistical analyses to show how these indicators could be used to differentiate between different types of gambler, these indicators have been applied in training programs for staff working in Swiss casinos, where there are already policies and procedures in place to identify patrons with gambling-related problems (Delfabbro et al., 2012b). Swiss gambling policies are governed by the Casinos Act of 1998 which, as one of its provisions, requires staff to log instances of problem gambling. If individuals display two or more of what are termed A-type criteria (e.g., they admit to having a problem, try to borrow or steal money, or receive thirdparty enquiries), an interview will be conducted with gamblers (Delfabbro et al., 2012b). A similar Australian study was undertaken by Delfabbro et al. (2007) which also drew upon material from the previous studies outlined above. One difference was that attempts were made to develop indicators that were not so specifically focused on particular activities (e.g., casino table games), but which could be applied to venue-based gambling more broadly. In the initial stage of this research, a list of indicators was provided to both venue staff (n=120) and counsellors (n=20) recruited from several different parts of Australia. Both groups of respondents were asked to indicate whether each item in the checklist was a valid indicator of problem gambling. The results showed that almost all of the indicators were endorsed by both groups of respondents with venue staff, in particular, placing a very strong emphasis on social and emotional responses (e.g., player anger, blaming staff for losing). Venue staff also drew attention to the importance of looking for changes in player appearance and

behaviour or “out of character” behaviours rather than solely focusing on static indicators. The main component of the research was a detailed survey of almost 700 regular gamblers recruited either from the general community or from outside gaming venues. Participants were eligible to participate if they gambled at least fortnightly on gaming machines, casino games, and/or sports and race betting, although the principal focus was on gaming because this is largely venue-based. Analyses were based on the proportion of problem and non-problem gamblers who reported producing the particular behaviour rarely or more often. They found that indicators typically fell into one of two categories. There was one group of indicators that were relatively commonplace among problem gamblers, but which were also reported by a moderate proportion of other regular gamblers. A second group were more rarely reported, but typically only by problem gamblers. Each indicator was described in terms of its likelihood of being reported by a problem gambler versus other regular gamblers with higher ratios indicating a greater the likelihood of the indicator being reported by problem gamblers. Results showed that almost all behaviours or experiences were significantly more likely to be reported by problem gamblers, but that the divergence of responding varied across times. Some activities, such as using cash machines on several occasions, playing very fast, or try very hard to win on one machine were relatively common amongst problem gamblers but also reported by a modest proportion of other gamblers. By contrast, very strong emotional responses or attempts to disguise one’s gambling were rarely reported by non-problem gamblers. These indicators were used in a series of further analyses to determine the best predictors of gambler status (problem vs. non-problem). Several different final models were presented based upon combinations of different indicators. One model was based on the overall sample and another on males and females separately. The strongest predictors for males were related to impaired control (i.e., an inability to stop gambling) and emotional responses, whereas strong emotional responses CGiMAGAZINE.COM

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<< As with previous studies, results showed that problem gamblers were much more likely to report potentially visible emotional reactions, unusual social behaviors, and very intense or frenetic gambling behavior. >> and a preoccupation with gambling was most indicative for female problem gamblers. More recently, Delfabbro and colleagues replicated their 2007 Australian study and published their findings in a standalone report (Thomas, Delfabbro & Armstrong, 2014) as well as well as publishing a paper comparing the 2007 study with the 2014 study (Delfabbro, Thomas & Armstrong, 2016) and study examining the gender differences between the participants in the 2014 study (Delfabbro, Thomas & Armstrong, 2018). In the 2016 paper (Delfabbro et al., 2016), data from 680 regular gamblers in the 2007 study (Delfabbro et al., 2007) were compared with data from 505 regular gamblers in the 2014 study (Thomas et al., 2014), both of which were designed to identify reliable and useful indicators for identifying problem gambling in venues. As with previous studies, results showed that problem gamblers were much more likely to report potentially visible emotional reactions, unusual social behaviors, and very intense or frenetic gambling behavior. Delfabbro et al. (2016) reported that the best behavioral predictors of problem gambling based on the self-reports of gamblers were (i) betting $2.50+ per spin on gaming machines most times, (ii) leaving the venue to go and find more money, (iii) feeling sad or depressed after gambling, (iv) change in grooming/appearance (e.g., decline in personal hygiene), (v) gambling through usual lunch break, and (vi) putting money back into the gaming machines and keeping playing. However, very few of these can be reliably identified by venue staff. It was also reported that the accuracy of identifying problem gamblers in-venue was more accurate if based on an accumulation of a diverse range of indicators. In relation to gender differences using the same data but reported in a later paper, Delfabbro et al. (2018) reported that female problem gamblers were more likely than males to have indicators reflecting emotional distress whereas male problem gamblers were more likely than females to display aggressive behavior towards gambling machines and other individuals in the venue. The behaviors that most clearly differentiated male problem gamblers from male non-problem gamblers were showing signs of emotional distress and attempting to conceal

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their presence in venues from other individuals. The behaviors that most clearly differentiated female problem gamblers from female non-problem gamblers were signs of anger, a decline in grooming, and those attempting to access credit. These findings suggest that identification policies and practices cannot necessarily be viewed as a ‘one-size-fits-all’ and that male problem gamblers may display different signs and symptoms invenue compared to female problem gamblers. Limitations of venue-related problem gambling indicator studies Although existing studies found support for the notion that there are valid indicators available to identify problem gamblers in venues, there are a number of caveats that need to be applied to these findings. The first difficulty is that all of the studies described involved only single samples. For models to be usefully applied to support harm minimisation policies, it would be important to show that models developed in one sample can be replicated using another (Delfabbro et al., 2012b). Moreover, it should be possible for models to be applied and then validated against some independent and well-validated method for classifying problem gamblers. A second difficulty is that survey-based responses do not provide a lot of information concerning the practical reality of observing and consolidating information in a venue environment. Even if the same staff members are available in the venue over a protracted period, it does not necessarily follow that they will have the ability to observe the same players all the time (Delfabbro et al., 2012b). In Delfabbro et al.’s (2007) study, an attempt was made to position observers in venues for periods of up to four hours to determine how much behaviour could be reasonably observed in this period. In general, it was found that several indicators could be observed in this period, but that such a process was unlikely to be possible for venue staff members who generally only spent around 15% of their time in the areas where gaming machines were operating. Schellinck and Schrans’ (2004) research similarly showed that, if the actual frequency with which people produce different indicators are considered, the

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probability of observing two indicators together at a particular point in time is likely to be very low. Another potential challenge for the identification process is that studies are based on aggregate results. Although problem gamblers are likely to share many similarities, it is also known that different subgroups of gamblers very likely exist. These views suggest that the significance of particular indicators may, therefore, differ depending upon the type of gambler. For example, in a number of these models or typologies, a distinction is often drawn between gamblers who are emotionally vulnerable and gamble to escape from feelings of anxiety or depression and those who gamble because of the excitement or ‘action’ (Delfabbro et al., 2012b). Those gamblers who are more emotionally vulnerable may be more likely to display emotion when they gamble and be detectable because of these characteristics, whereas there may be others whose behaviour is distinctive because of stronger externalised behaviours (e.g., displays of anger, large bet sizes, histrionics, etc.). At present, based on existing research evidence, it is difficult to determine whether visible indicators cluster according to these subtype models, but it will be important for this possibility to be considered in future research (Delfabbro et al., 2012b). Most reliable indicators of problem gambling in land-based casinos Based on previous empirical research (outlined above and which is admittedly limited), the following indicators appear to be the best behaviors that could be looked for by staff based in landbased gambling venues. The more of these behavioral indictors that are present over a longer-term period (e.g., one to two months) the greater the likelihood of that individual being a problem gambler. It should also be noted that some of these indicators relate to one type of gambling only (e.g., slot machine players): • • • • • • • • • • • • • • • •

Gambles for over three hours in one session without taking a break Gambles continuously Gambles intensely without reacting to any external stimuli Rushes from one slot machine to another Spends more than €200 in one gambling session Increases gambling expenditure significantly over time Gets money out from an ATM more than twice during a single visit to the venue Continues gambling after a very large win Uses coin changing machine at least four times within a gambling session Plays two or more slot machines at once Looks sad and depressed after gambling session Cries after losing money Sits with head in hands after losing Complains to the staff about losing Swears at or is rude to staff Shows a decline in their grooming and appearance

• • • • • • • • • • • • • • •

Avoids cashier and only uses cash facilities Gambles in an aggressive manner (e.g., swears at or kicks the slot machine) Is sweaty and nervous looking (e.g., biting lips) Leaves venue but comes back having got more money to gamble Asks venue staff for a loan or credit while in venue Attempts to borrow money from others to gamble while in venue Stays to carry on gambling when friends have left the venue Asks venue staff to not let people know they are there Gambles in an aggressive manner (e.g., swears at or kicks the slot machine) Gambler is sweaty and nervous looking (e.g., biting lips) Gambler leaves venue but comes back having got more money to gamble Gambler asks for a loan or credit in-venue Gambler attempts to borrow money to gamble in-venue Gambler stays to carry on gambling when friends have left the venue Gambler asks venue staff to not let people know they are there

Conclusions In offline gambling venues, it appears possible for venue staff to be alerted to players with riskier gambling patterns (e.g., who have just gambled for three or more hours or spent very large amounts) and for this information to be used to by staff to enhance their capacity to identity players most likely to need assistance. As noted above, it is generally difficult for individual staff members to have the time and ability to watch most players, but the use of surveillance systems could be used to narrow down the field of potential gamblers at risk, then observation and identification of problem gamblers may become more effective. Such gamblers could be subtly approached with invitations to have a break or be given inducements (e.g., snacks and beverages) that take them away from the machine or table, or staff could observe those players more carefully over time. In summary, effective identification may have the potential to provide an important way in which to integrate the principles of responsible gambling and harm minimisation. From a responsible gambling standpoint, effective identification procedures may enable to the industry to monitor the impact of its products on consumers, but this will only be useful if it leads to appropriate action. Even in countries where legislation has been enacted, challenges still remain. Junior staff members who interact with gamblers may not have the authority to take action; referrals may need to made to other senior staff, and then a separate person again may have to interact with the player. A more effective model is one where skilled staff (with the ability to provide immediate counselling and assessment) are located onsite, or can be readily contacted in the event that a player with difficulties is identified. Some models of this nature are claimed CGiMAGAZINE.COM

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to be in operation already at some US casinos (Griffiths, 2010), but it is evident that thorough and transparent evaluations of these arrangements need to be conducted to ensure that they are making a genuine contribution to harm minimisation as opposed to corporate marketing in the guise of responsible gambling. :: CGi

Griffiths, M.D. (2009). Social responsibility in gambling: The implications of real-time behavioural tracking. Casino and Gaming International, 5(3), 99-104. Griffiths, M.D. (2010). The gaming industryâ&#x20AC;&#x2122;s role in the prevention and treatment of problem gambling. Casino and Gaming International, 6(1), 87-90.

References Allcock, C. (2002). Current issues related to identifying the problem gambler in the gambling venue. Melbourne, Australian Gaming Council.

Hafeli, J. & Schneider, C. (2006). The early detection of problem gamblers in casinos: A new screening instrument. Paper presented at the Asian Pacific Gambling Conference, Hong Kong.

Calado, F., Alexandre, J. & Griffiths, M.D. (2017). Prevalence of adolescent problem gambling: A systematic review of recent research. Journal of Gambling Studies, 33, 397-424.

Hing, N., Nisbet, S., & Nuske, E. (2010). Assisting problem gamblers in South Australian gambling venues. Adelaide: Independent Gambling Authority of South Australia.

Calado, F. & Griffiths, M.D. (2016). Problem gambling worldwide: An update of empirical research (2000-2015). Journal of Behavioral Addictions, 5, 592-613.

Oehler, S., Banzer, R., Gruenerbl, A., Malischnig, D., Griffiths, M.D. & Haring, C. (2017). Principles for developing benchmark criteria for staff training in responsible gambling. Journal of Gambling Studies, 33, 167-186.

Delfabbro, P.H., Borgas, M., & King, D. (2012a). Venue staff knowledge of their patronsâ&#x20AC;&#x2122; gambling and problem gambling. Journal of Gambling Studies, 28, 155-169. Delfabbro, P.H., King, D.L & Griffiths, M.D. (2012b). Behavioural profiling of problem gamblers: A critical review. International Gambling Studies, 12, 349-366. Delfabbro, P., Thomas, A., & Armstrong, A. (2016). Observable indicators and behaviors for the identification of problem gamblers in venue environments. Journal of Behavioral Addictions, 5(3), 419-428.

Schellinck, T., & Schrans, T. (2004). Identifying problem gamblers at the gambling venue: Finding combinations of high confidence indicators. Gambling Research, 16, 8-24. Thomas, A. C., Delfabbro, P. H., & Armstrong, A. R. (2014). Validation study of in-venue problem gambler indicators. Melbourne: Gambling Research Australia.

Delfabbro, P., Thomas, A., & Armstrong, A. (2018). Gender differences in the presentation of observable risk indicators of problem gambling. Journal of Gambling Studies, 34(1), 119-132. Delfabbro, P.H., Osborn, A., McMillen, J., Neville, M., & Skelt, L. (2007). The identification of problem gamblers within gaming venues: Final report. Melbourne, Victorian Department of Justice. Ferris, J. & Wynne, H. (2001). The Canadian Problem Gambling Index Final Report. Phase II final report to the Canadian Interprovincial Task Force on Problem Gambling. Goudriaan, A., de Bruin, D. & Koeter, M. (2009). Gambling in The Netherlands. In G. Meyer, T. Hayer & M.D. Griffiths (Eds.), Problem Gaming in Europe: Challenges, Prevention, and Interventions (pp. 189-208). New York: Springer. Griffiths, M.D. (2004). Betting your life on it: Problem gambling has clear health related consequences. British Medical Journal, 329, 1055-1056.

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DR. MARK GRIFFITHS Dr. Mark Griffiths is Distinguished Professor of Behavioural Addiction at Nottingham Trent University, and Director of the International Gaming Research Unit. He is internationally known for his work into gambling and gaming addictions. He has published over 750 refereed research papers, five books, 150+ book chapters and over 1500 other articles. He has won 19 national/international awards for his work including the US National Council on Problem Gambling Lifetime Research Award (2013).

LAND-BASED ::

LAUNCHING DICE EUROPE: LAND-BASED CASINO INDUSTRY IS OPEN FOR BUSINESS

Tracy Damestani

Tracy Damestani & Janny Wierda European Casino Association

n association, like the European Casino Association (ECA) that we are proud of leading as Vice-Chair and Vice President has a responsibility to tackle the key issues for its industry. There are of course many of these, but one pressing issue is diversity and inclusion. For this reason, we launched the ECA gender diversity initiative over two years ago and have since run a number of activities that have raised awareness of the issue and paved the way for sustainable action across our industry. This has included three dedicated workshops with members, partners and external experts. We were also proud to launch the firstever gender diversity scholarship for the prestigious Executive Development Programme together with our partners Clarion Gaming, the Association of Gaming Equipment Manufacturers (AGEM) the UNLV International Gaming Institute (IGI) and the University of Nevada, Reno College of Business and Extended Studies. This was awarded to Pauline Boyer Martin from the French casino group JOA in 2018 and we are delighted that this will continue again this year. We have closely collaborated with key stakeholders in our industry and were delighted to see that the code of conduct for exhibitors established by our partner Clarion Gaming had the intended effect of ensuring a much-improved picture of the key trade show for our industry, ICE London. Outdated gender representation has no place in our sector if we are to

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Janny Wierda

:: LAND-BASED

attract the talented employees regardless of their gender, race, ethnicity, religion, sexual preference and physical and mental constraints. It also harms our reputation among policy-makers and stakeholders. Most importantly we have to ensure equal access and opportunities in our sector. For this reason, we are now launching DICE Europe (Diversity and Inclusion for Career Enhancement) as the ECA’s platform for engaging with this topic. It is in line with our commitment as ECA to ensure the issue’s permanent position in our association by moving it from a temporary initiative to a constant feature. While gender diversity will remain a key issue, DICE Europe also aims extends to diversity and inclusion regardless of nationality, race, sexuality, disability and any other factor. We want to show anyone interested in our exciting industry that we are open for business. Recruitment and retention across the various jobs that modern casino companies offer have to compete with other sectors and we want to ensure that the best and brightest consider joining our sector. Our casinos are also closely embedded in the communities they operate in by providing employment, entertainment and great hospitality as well as significant economic benefit to the local communities in which they operate. It follows from this that our casinos reflect their communities. We are proud to co-lead the steering group leading the work of DICE Europe that will see further individuals from our industry join in the next months to spearhead the issues at hand. We will closely cooperate with the many initiatives of our members, such as DICE UK through the National Casino Forum (NCF) and others that are active on the casino floor and in top management to promote diversity and

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inclusion. Our group will bring these together and also seek connections with other industries in order to identify best practices. In practice this means looking at areas, such as recruitment channels, identifying barriers to promotion and developing measures making a positive difference. As ECA, we now have 29 member countries that each have a particular national context that is important to take into account. The aim of DICE Europe is therefore to take a bottom-up view and support our members and partners by providing strategic leadership. With over 1000 casinos represented within our membership, we have the benefit of being able to rely on a great base of ideas and best practices. Furthermore, our activities on diversity and inclusion are now enshrined in our overarching three-year ECA strategy that we recently launched. Through it we are committed to providing thought leadership and exchange of best practices on issues ranging from Anti-Money Laundering to Responsible Gambling and Diversity & Inclusion. For us this follows from the UN Sustainable Development Goals that we support as ECA through our membership of the UN Global Compact. With this editorial we want to introduce the work of DICE Europe and invite all our partners and members to cooperate with us to further promote the great side of our industry. :: CGi

TRACY DAMESTANI & JANNY WIERDA Tracy Damestani is the Vice-Chair of the ECA and the Chief Executive for the National Casino Forum (NCF), the sole trade association for land based casinos in the UK. Tracy is also responsible for responding to UK and EU Government departments and regulatory bodies on casino gambling related issues. Janny Wierda has worked at Holland Casino since 2011. which operates 14 casino’s in the Netherlands. She is the Vice-President for Diversity & Educaton at the European Casino Association (ECA) and is also part of the working group, Responsible Gaming.

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