Infinity Gaming Magazine December 2022

The views and opinions expressed in all external articles are those of the authors and do not necessarily reflect the official policy or position of The Infinity Gaming Magazine Any content provided by our feature writers or authors are of their opinion, and are not intended to malign any religion, ethic group, club, organization, company, individual or anyone or anything.

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The December Edition of the Infinity Gaming Magazine

Welcome to the December edition of the Infinity Gaming Magazine, the very last one of the year and what a year we have had. But we managed to get through it not too badly.

Indeed some have done very well over the last twelve months and none more so that our superb list of finalists for the 2023 International Gaming Awards (IGA). Our wonderful judges had a terrible time selecting the finalists given we had over 700 nominations this time, a record I am told by the team that had to do all the admin for it.

So we are now all set for the 16th edition of the charity focused IGA on the 6th February at the iconic Savoy Hotel in London, I cannot wait to see so many of our international

Well back to the magazine, and what a great edition we have for you, we have some brilliant articles from Tim Cullimore, Andrew Cosgrove, Ryan Murray and Lynn Pearce. Some not to be missed articles I promise you and our team have got the very latest news for you inside, this edition will keep you busy if you have time over the festive holidays.

Have a super New Year everyone and see you in 2023.

Enjoy the magazine. “To Infinity and Beyond!”

Regards, Lana The Editor

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Infinity Gaming Magazine Contributing Writers

A magazine is only as good as the content inside and with some of the leading specialists within the gaming industry. With specialised articles covering customer service, the gaming law, new products, technology and current affairs with the sector the Infinity Gaming Magazine is delighted to showcase our superb line-up of contributing

Christina Thakor-Rankin

Christina is Principal Consultant at 1710 Gaming Ltd, a specialist betting and gaming consultancy, delivering a range of services including licensing and compliance (incl. regulation, money laundering and social responsibility), business start-up, training and strategic re-engineering, project management, research, business analysis and development, to start-ups and

Andrew Cosgrove - Slots Guru

Andrew Cosgrove is a seasoned slot operations veteran and certified project manager with over 24 years of hands on experience in Latin America and the Caribbean. Andrew has worked on both the operator and supplier side of casino slots and continues to help clients succeed and exceed customer expectations.

Lynn Pearce

Lynn has extensive senior management experience in online gaming. She is an experienced, data-driven, commercially focused, strategic marketing leader. She has over 15 years of proven success in gaming, from land-based casinos, to online gaming companies offering sports betting, poker and casino, live casino and Esports. Lynn has many start-ups under her belt

Tim Cullimore

From dealer to CEO in the U.K., Europe and North America, Tim has pretty much seen it all in Casino gaming. For over 40 years, from running slot rooms which needed to frisk for guns to the Ritz in Mayfair, arguably the most luxurious casino in the world, Tim has never stopped challenging what we think we know about casinos.

established multi-national operators and providers, gambling regulators, law enforcement and government agencies, media, and specialist interest groups and associations within the sector, in both established and emerging markets across the world.

www.1710gaming.com

Andrew can be reached at andy.cosgrove@hemingwaycasinoconsulting.com or see http://hemingwaycasinoconsulting.com/

and is now co-founder and CEO of a start-up igaming company, Mobius Interactive Ltd, headquartered in Vancouver BC Canada.

Tim is a well-respected Consultant to the gaming industry, encompassing project management and operational analysis, as well as representing and advising some key manufacturers within the industry. Tim is a renowned conference speaker and also proud to be visiting lecturer at the University of West London College of Hospitality and Tourism.

general manager and CEO

Is US Sports Betting Growing To Quickly?

By Ryan Murray

The Supreme Court’s historic overturning of PASPA legislation, carried out in 2018, catalysed a momentous shift in the way the United Statesrelates to gambling. In a functional sense of course, the shredding of this 24-year-old legal document, which set out the stifling parameters of the country’s sports betting marketplace, ensured that gambling could become a more recognizable feature of everyday American life. Yet, more importantly, the law change served to challenge the embedded attitudes of many U.S citizens and their political representatives, and so began a melting away of the stubborn, traditionalist stances which so oftenprove the obstacles to progress and prosperity. Such is the sensational swing in public opinion, a considerable handful of typically ‘conservative’ states, forever painted in Republican red, have now embraced their opportunity to construct a native sports betting industry – and are subsequently reaping the lucrative rewards on offer.

However, this mini-cultural revolution

hasn’t just attached itself to the sector previously restricted by the 1992 PASPA Act, rather, it’s also propelled all other gambling verticals on the pathtowards universal acceptance. True, these refreshed sentiments may never quite fully capture the hearts and minds of all residents, but, inarguably, the climate has changed significantly in the last four years. Now, bricks-and-mortar casinos are no longer stereotypically associated with the bright lights of Las Vegas or Atlantic City, or indeed the set boundaries of Indian reservations, rather, they’re increasingly viewed as a legitimate entertainment venue for any town or city – just ask those in Manhattan.

Whether its gaming or sports betting, the vehicle which has facilitated this dramatic re-configuration of attitudes most is the introduction (and of course legalization) of online gambling. In a world driven by convenience, the ability to place a bet in the palm of your hand, or play a slot title on your tablet, is a game-changing development. For the first time, U.S residents have

gambling services readily available in the comfort of their own homes. This not only instantly increases accessibility and therefore popularity, but acts as a lever of legitimacy to the practice of gambling itself.

These events have conspired to drive the U.S gambling sector into the stratosphere. Aided by a thriving online marketplace, sportsbook and casino operators generated an astounding $15.17bn in gross gaming revenue during the three months to the end of September 2022 – the highest quarterly figure ever. Furthermore, it’s likely that revenue will continue to grow into 2023, as the market steadily heads towards pre-pandemic conditions. Ironically, it was the COVID-19 crises itself that accelerated the U.S’ migration towards online gambling platforms, with its land-based sector subject to temporary closures, reduced capacities, and strict social distancing policies – hardly a recipe for success in an industry which depends upon high footfall and an electric atmosphere.

As a consequence, the usage of iGaming sites has grown exponentially over the last twenty-four months, its customer reach extended as a product of its legalization in a rising number of states. This, coupled with the fact that 22 U.S. jurisdictions (with a further three confirmed for 2023) have established a regulated digital sports betting marketplace, illustrates the enormity of the country’s current, and future, online gambling space. Indeed, by 2028, analysts predict this segment will be worth a staggering $7.61bn.

However, could this growth, if possible, be too quick?

As revenues proliferate, so does the

risk. Building an incredibly popular, highly-lucrative, and vastly rewarding industry is absolutely fine, providing you have the tools to handle the inevitable threats which occur as a result of its commercial success. This reality compels us to challenge whether any thriving market is adequately equipped to protect its future prosperity, let alone one which has matured far quicker than originally anticipated. In this spirit, lawmakers, regulators, and operators must ask themselves the following question: Do we have adequate controls in place to mitigate against the risk of criminal activity?

Perhaps the most pressing threats to the integrity of the global online gam-

bling sector are money laundering and the act of financing terrorism. Although these illicit practices can (and do) cause significant security headaches for landbased gaming enterprises, it’s more likely they will be deployed when attempting to infiltrate the financial operations of virtual gaming firms. This development is simply a by-product of the nature of online gambling;the absence of face-to-face interaction removes an operators’ ability to detect physical indicators of suspicious activity, whilst a complex web of financial payment systems, using various digital currencies and transaction methods, creates fertile ground for individuals trying to disguise and disassociate their actions.

In response, the U.S has implemented a series of anti-money laundering (AML) and ‘combatting the financing of terrorism (CFT)’ policies, designed to strengthen the industry’s resistance to a set of activities which have had a severely destabilising impact on a number of localized online gambling markets.

But, are suchcontrol measures enough to mitigate against these increasingly malignant threats? Do they account for the numerous ways criminal syndicates can penetrate the financial structures of mobile gaming operators? Can they be easily adapted in order to address changing risks, constantly evolving to circumnavigate existing security protocols? The fact that these issues remain prevalent in marketplaces where governments, regulatory bodies, and longstanding gambling entities have sought to establish effective defences to such activity gives us a fairly good steer on the likely answers to these questions. Regardless, it seems entirely logical to look towards those who have already tried to navigate these particularly complex challenges, and take direction from the strategies, initiatives, and approaches which have garnered most success. In this way, the United States should surely consider how Europe, a continent which presides over the largest, most diverse, and most established gambling industry on the planet, attempts to address the risks of money laundering and the channelling of funds towards terrorist organizations within its gaming realm. To do this, U.S lawmakers need only review the European Commission’s ‘Supranational Risk Assessment (SNRA)’ report.

The most recent SNRA was released earlier this year, its third edition since launching in 2017. According to its accompanying mission statement, the report is intended to assess ‘the risk of money laundering and terrorist financing affecting the internal market and relating to cross-border activities.’

Moreover, its findings are then analysed to produce a comprehensive plan of action, designed to tackle any emerging patterns which seek to undermine the integrity of operators’ financial infrastructure. The report, alongside any recommended response actions, are then presented to the European Union for appraisal – a process which became a constitutional requirement after the organization’s fourth anti-money laundering directive was passed seven years ago. Ultimately, this ensures that the region’s chief legislative body is engaged on relevant themes, and can therefore make better informed decisions when constructing policies and legal covenants.

The study considers the impact, role, andpresenceof money laundering and commercial terrorist funding across all industries, but, in recent times, has gradually attributed more attention towards online gambling. This is a consequence of the sector’s SNLA ‘risk level’, which, in essence, is a measure of susceptibility.On anascending scale ofone to four, digital gaming is ranked at a ‘4’ –the score applied to those most vulnerable of falling victim to the aforementioned ills.

In providing justification for this rating,

the assessment pulls out a number of tactics and manoeuvres used by criminal individuals/groups to bypass current AML and CTF mechanisms:

- A betting account is used to deposit funds earned through business operations, or via illegal activity. Often, these ‘credits’ are used to gamble in small volumes, before being transferred into another player’s account. These are then subsequently withdrawn as if winnings had been generated through normal gameplay.

- Deployment of ‘smurfs’. Here, two highly-competent gamblers are recruited to masquerade as typical players, and made to faceone anotherin a staged contest using illegally-gotten funds, duping observers into believing the game is an entirely innocent event. The winner is clearly irrelevant, as all ‘earnings’ are re-distributed to the illicit actors who organized the game.

- Creating fictional events in order to hoodwink operators into providing odds, and then betting on markets relating to an ‘outcome’ that they dictate.

- Pay ‘legitimate’ players are fee to take ownership of their accounts, offering more money than the value of existing

New Gaming Chief Named for Bermuda

Bermudian Charmaine Smith has been appointed the new Bermuda Gaming Commission Chief Executive.

A spokesperson said, “The Chairman of the Bermuda Gaming Commission, Mrs. Cheryl-Ann Mapp, is pleased to announce the appointment of Bermudian Mrs. Charmaine Smith as the Commission’s new Chief Executive effective December 1st, 2022.

“Mrs. Smith succeeds Mr. Jean Major who was appointed Chief Executive on November 2nd, 2020. Mr. Major’s tenure with the Commission has con -

tributed to the successful recruitment of Bermudian Mrs. Smith who previously held the post of Chief Regulatory Officer with the Commission.

The Chairperson said, “We would like to thank Mr. Major for his significant contributions to the Commission. We are pleased to have had someone of Mr. Major’s caliber leading the Commission over the previous two years.

“His tenure contributed to the successful recruitment of Mrs. Smith, and we acknowledge the role he played in executing the Commission’s succession plan, developing the regula -

tory framework for licensing casinos and issuing the first casino gaming license. We are excited to have Mrs. Smith accept the post and to continue to build on the work that Mr. Major has led over the last two years.”

A spokesperson said, “Mrs. Smith is a barrister and attorney of almost 25 years’ experience. Her career in public service began in the Office of the Director of Public Prosecutions and she has subsequently worked in the areas of law enforcement, corrections, employment, labour relations, immigration, anti-money laundering & antiterrorist financing.

Rule Breaches - Dutch Regulator Warns Operators

Given the scale of commercial opportunity that that this year’s World Cup affords to betting operators, it was perhaps inevitable that a handful of sportsbooks would breach regulations amidst the excitement. In the Netherlands, Kansspelautoriteit (KSA), the country’s gambling regulatory body, has already had to intervene as the long-awaited tournament in Qatar gets underway, with several operators guilty of Dutch gaming law contraventions.

Although the KSA has kept the names of the perpetrators under wraps, it’s

released details of each violation.

A warning was handed to a sports betting firm who had facilitated odds for yellow card bets, a market banned in the Netherlands due to its vulnerability to match-fixing practices. Another caution was distributed to an operator who had deployed a recognized ‘personality’ to market a sponsored event, in an advertising campaign which displayed the betting brand’s logo at various points. The utilization of any ‘role model’, whether a celebrity, sports star, or other well-known individual, is also prohibited by Dutch gambling

legislation. As soon as KSA notified the company of their violation, the advert was immediately de-commissioned.

Lastly, a gaming platform was given a wrap across the knuckles for offering a ‘game of chance’ product which used methodology uncovered by the operator’s licensed scope of activity. As a consequence, the operator was given an opportunity to re-calibrate the terms of the game in order to comply with the parameters of their existing license.

A World Cup like no other

How bookmakers are approaching Qatar ‘22

Unsurpringly, the vast majority of headlines surrounding the 2022 edition of football’s international showpiece event have been squarely focused on the social and political exploits of the host nation. Amidst claims of savage human rights abuses, avoidable migrant worker deaths, and its ban on practicing homosexuality, Qatar has been desperately trying to re-align the attentions of the watching world to matters on the pitch, rather than off it. However, given the level of scrutiny the Gulf state has faced, there’s one particular story, which has been quietly gathering momentum in the background all year, which hasn’t received its appropriate share of media coverage – the changing parameters of the sports betting industry, and, as a result, the sheer scale of commercial opportunity on offer.

Of course, historically, major sports tournaments, whether related to football or otherwise, have always attracted

punters to sportsbook kiosks, or, more recently, to sports betting applications on smartphones. Yet, given several significant factors which have materialised across the global gambling landscape over the last twelve months, analysts expect records to not just be broken, but obliterated during World Cup 2022. Indeed, this year’s competition is arguably positioned at the confluence of these developments, with many new gambling industry dynamics maturing just in time for the big kick-off in the Middle East.

The proliferation of sports betting across the U.S, unleashed by the Supreme Court’s overruling of restrictive PASPA legislation in 2018, has clearly had a major impact on the financial value of the international market. From the status of a sleeping giant a mere four years ago, the American industry now presides over legalized sports betting activity in 31 jurisdictions, with operators collectively generating over

$3bn in revenue in the first six months of 2022. Although the sector has been steadily building its commercial prowess since its inception in 2018, this financial momentum has recently been accelerated by the crystallisation of a cultural shift; many citizens who previously carried hardened, conservative attitudes towards sports betting, have now started to soften their stance, and are much more receptive to its widespread introduction. Indeed, even states with a typically Republican electorate, such as Wyoming, West Virginia, and Arkansas, have created a localized sports betting marketplace, with legislative proposals for its presence in Texas, Kentucky and Oklahoma currently tabled in local Senates. In the last eighteen months alone, eight states have legalized sportsbooks to operate within the parameters of their respective borders – with many more surely to come in the next year.

This has resulted in a major stepchange in customer reach. Only a tiny handful of states had managed to push through an appropriate sports betting bill in time for Russia’s staging of the last World Cup in 2018, fast-forward four years, and over half of the United States’ population will be able to place wagers on events unfolding in Qatar. A recent study published by the American Gaming Association, the leading trades body for U.S-based gambling operators, suggested over 20.5m U.S residents will engage in sports betting during the 2022 World Cup, with overall stakes projected to hit $1.8bn in value.

Operators across the Atlantic are also braced for an equally significant uplift in activity. Dublin-based gambling giant Flutter predicted its brands active in UK and Ireland markets will process £300m worth of bets throughout the duration of the competition, whilst it expects sportsbook subsidiaries in Australia, Spain, and Brazil – a country

which would may have seen a legalized sportsbook sector prior to the World Cup had its outgoing President Jair Bolsonaro not filibustered the progress of relevant legislation in order to retain the vote of Evangelicals in last month’s general election – to also encounter extraordinary betting levels. Given that on average of 9.5m account members interact with any one of Flutter’s available betting products each month, Qatar 2022 represents a significant operational challenge for the firm. Indeed, Dom Crosthwaite, Flutter’s Chief Trading Officer has stated that the company ‘‘must provide a compelling World Cup proposition, distribute accurate prices and manage risk effectively’’. Crosthwaite’s comments will surely resonate with a raft of key European operators. True, Entain, the parent organization of renowned sports betting brands Coral, Ladbrokes and Bwin, are ‘’predicting a record number of actives, bets, stakes, and first-time deposits.’’

If recent major footballing tournaments are anything to go by, sports betting entities will certainly have their work cut out. Sportradar, a group which conducts statistical analysis of sporting data, produced a study on wagering activity during the 2018 World Cup. The investigation, commissioned by football’s international governing body FIFA, revealed that approximately $136bn worth of bets were placed on fixtures in Russia. Furthermore, payment provider Worldpay, who are aligned to the Fidelity National Information Service (FIS), are expecting services to be substantially busier than they were during the delayed 2020 European Championships –despite record-breaking usage last summer. The tournament’s climax, which saw Italy overcome England at a packed Wembley, triggered an almighty wave of betting, with Worldpay handling 2.5m transactions, totalling roughly £50m in value, over the course of the Final.

Both countries involved in this barnstorming conclusion to the tournament have a thriving native sports betting market. Therefore, it’s hardly surprising that the event stirred so many punters to action, with millions of English and Italian residents able to conveniently bet on their respective nations lifting the trophy. Indeed, the progress of ‘home’ teams will by a dynamic that has a substantial bearing on the fortunes of operators the worldover – for differing reasons. Clearly, the stronger the performance of the ‘home’ side, the more opportunities its constituent sportsbook enterprises have to make money. However, for betting firms operating in certain markets, their own representative outfits advancing into the latter stages of the tournament may not be a good thing – true, if the U.S had defeated Netherlands in their last 16 tie, local sportsbooks who had afforded odds of 125-1 on Gregg Berhalter’s men going all the way in Qatar may have started to become a little nervous.

More than ever before, the prosperity of operators in relation to this World Cupwill also be contingent on the regulatory environment in which they are active.

As the industry endeavours to address the factors contributing to rising problem gambling rates, lawmakers, politicians, and regulators look to leverage further controls on betting operators. Whether these efforts materialise in the form of directives designed to limit player spending, or via curbs on advertising content or frequency, various stakeholdershave been successful in reducing the freedoms and flexibility of operators to engage, entice, and exploit their customer base. This development has been particularly prevalent in Europe in recent years, with many bookmakers on the continent now bound by a series of restrictive measures. The Netherlands’ regulatory body, KSA, fired a warning shot to operators just last month, in an attempt to discourage them from delivering similarly intensive marketing campaigns to the ones which accompanied the country’s online gambling industry launch last year. Due to an advertising ‘bombardment’ during this period, Dutch politicians felt compelled to intervene, subsequently applying some fairly draconian rules in regards to how gambling companies market their products.

French regulator ‘ANJ’ has worked hard to broker an agreement with operators and broadcasters to scale down the amount of betting adverts consumed by the general public, with a fourcharter plan constructed to reduce the presence of gambling across all marketing platforms – whether that be on T.V, radio, digital billboards or posters strategically positioned in high footfall areas. Furthermore, the UK industry will undoubtedly feel the close attention of its regulator, the Gambling Commission, as it continues to more closely monitor how operators implement their respective player protection initiatives, and ensure safe gambling practices aren’t undermined by reckless promotional incentives.

Nevertheless, regardless of these regulatory headwinds, and the risk of ‘home’ team success impacting profit margins, this year’s World Cup will see operators chasing their share of potentially the most lucrative commercial sports betting opportunity in history.

The outcome of these efforts? Unprecedented revenues, for an unprecedented tournament.

Merry Christmas

bet credits. The extra cost is irrelevant to many unsavoury actors, who stand to make a far greater profit as a consequence of the player’s agreement to hand over control of their account.

- Use of crypto-based and other digital currencies. Clearly, this is a development which presents a risk for all sectors, as regulators struggle to keep pace with a rapidly expanding, but nevertheless relatively unknown payment sector.

The European Commission argues that the conditions of online gambling conspire to ‘offer a low-cost opportunity to launder money’, and therefore the industry must be extra-vigilant in fending off the advances of criminal interests. It also suggests that any defensive strategy in this respect should be underpinned by the principles of communication and shared information – a notion it seeks to support through the SNRA process. Indeed, the production and presentation of the report, and the onwards implementation of its guidance outputs, offers a platform to leverage the combined efforts of all industry stakeholders, working against threats collaboratively as opposed to doing so in isolated silos. Although tensions still often exist between banking institutions and gaming operators, with the former failing to consistently direct the latter on whether specific transactions should be facilitated in light of suspicious activity, theCommission’s approach has undoubtedly served to galvanize those focused on reducing the impact of money-laundering and terrorism financing in online gambling.

The advantages of holding co-operative workstreams in a digital gaming contextare accentuated by the same reason the sector finds itself so vulnerable to attack. The aforementioned intricate interconnectivity of payment platforms and networks may expose online gambling more readily to undesirable individuals, but it also serves to offer, in the

SNRA report’s own words, ‘the possibility to track all transactions’’. This, coupled with executing appropriate personal verification protocols, affords the marketplace some extremely effective weapons to be used in this particularly challenging battleground.

So, what next for the U.S-specific gambling market? Will legislative officials, regulators, and operators take head of the European Commission’s methodology, and produce a response which has the buy-in and support of all impacted groups? Given the federalized nature of the U.S’ traditional economic and political structures, this level of cross-institutional teamwork may be harder to deliver. However, at the macro-level, there’s no reason why the relevant parties cannot unify in their efforts to reduce these progressively more poignant risks.

It’s inescapable - the stakes are remarkably high. The unprecedented rise of iGaming and mobile sportsbook applications will, without doubt, put more pressure on those tasked with shielding this particularly prosperous industry. However, this is something that the United States simply has to get right –the ramifications of missing the mark here could mean curtains for a sector which is still in its relative infancy. One

only needs to take a cursory glance at events unfolding in Australia to appreciate the consequences of failing to suitably land, and indeed enforce, effective AML and CFT regulations.

However, there’s reason to be optimistic. The establishment of the U.S’ AntiMoney Laundering Act in 2020 has not only worked to discourage criminal groups from entering the fray, but suggests there is already an appetite for stakeholder collaboration. If the country chooses to learn lessons from its European cousins, its online gambling industry may find itself well-equipped to deal with these urgent threats to its financial integrity.

In this particular fight, the next twelve months will be critical.

The Crystal Ball

What 2023 has in-store for the industry

By Tim Cullimore

There’s a lot going on at this time of year with the holidays approaching. I’ve spoken before about the wide differences in culture in various global regions when looking at how Christmas, New Year and all the other end of year celebrations are held in casinos, enough to say that I hope all the efforts made to make this a special time of year a success for clients and colleagues alike come to fruition.

Here is my personal look at what we may expect in 2023.

ICE

It seems to the time for rumours and speculation not least surrounding the International Casino Exhibition. Like many in our industry I have been attending ICE for more years that I care to remember,

always with joy in my heart and expectations of meeting up with old friends and confreres. Many of us regret the demise of the old venue at Earls Court in London. Sadly, despite having to move as the site was going to be developed, there is still just a hole in the ground. To think that we could have all spent a few more years in the old “home”. Despite this slight regret I continue to enjoy the event at its “new” place, and the expansion into the on-line sphere has been a great opportunity to discover new and impressive areas of gaming. The melding of on-line and land based continues at pace so I can only imagine the wonderful products we will see in the new year.

T here are rumours of the exhibition moving in perhaps 2024 or 2025 to mainland Europe, and I fully un -

derstand the reasoning behind this. When the move from earls Court was first discussed I was a member of an ad hoc committee tasked to investigate alternative venues, such as Amsterdam and Barcelona. That the organisers decided to stay in London was largely down to, I believe, the pleasure that the visitors had in coming to London, and the easy transport options that were available.

W hat nobody could have foreseen all those years ago was the devastating effect of Brexit on the ability of exhibitors to import their products, even for a short time. The added complications and administrative tasks must be a real headache for large and small exhibitors alike.

Which is a great pity as I am sure there are colleagues all around Europe and the wider regions who love coming to London, even in winter, and now that the new direct rail link from Central London to docklands, the Elizabethan Line, is up and running it would make getting in and out of central London so much more relaxed and less time consuming.

Still, if the show has to move at least the weather is likely to be better wherever it ends up. I am sure Clarion will make a success of it if the move is made.

Mayfair

The jury is still out as to whether

Mayfair, probably the worlds most exclusive casino neighbourhood, can recover from the effects of the pandemic. Clearly the continued lack of visitors from China and the Far East is having a lasting impact on casino revenues, and travel by high end players from across the world has undoubtedly been curtailed for many. The beautiful building that is the Claremont casino in Berkeley Square has struggled to get traction leading to its temporary closure not long after it had opened, despite the best efforts of its experienced owners and management. A new opening in the old Playboy property and new management of the Park Lane club may give some impetuous to the market, and the existing clubs continue

to offer industry leading levels of customer service, so maybe there is hope. Switzerland

The applications are in for the renewal of the concessions in my old home of Switzerland. The present licenses will become invalid at the end of 2024 so new operating licenses must be awarded before then so that the casinos can continue to operate from the beginning of 2025. As I was very much involved in the process of awarding the first licenses when I was working for the Swiss Federal Gaming Board in 2001 it will be interesting to see how the industry has developed since then. Most believe it has

been a great success, with a highly regulated market still allowing its operators to be financially successful and has very quickly matured into a highly professional industry.

There will be a maximum of 23 concessions and 29 companies have put forward their dossiers for consideration. My previous employer, the Casino de Crans Montana in the Valais region will have stiff competition for the renewal of their license by two applicants for new casinos in the region, and not too far from the Barrier Casino de Montreux there is a brand-new concession up for grabs in the beautiful city of Lausanne, one of the original city applicants in the year 2000. It looks like 20 years of patience has paid off for the town, with three candidates vying for the one license.

U.K. Government decision

Here in the U.K. we are still waiting to see what the “White Paper”, that is the government instrument for putting forward new legislation, will bring by way of changes to gaming regulations for casino gaming. Speculation is rife as to what the changes may be, and there is real hope that the landbased casinos may be given some latitude in operating more slots on their premises. Despite the UK Gambling Commission handing out some pretty serious fines to some operators the industry has made a great effort in policing themselves, endeavouring to ensure that the businesses are run in an open and fair manner, which I really hope will be recognised by the law makers.

City of Dreams

2023 will see the opening of the City of Dreams Mediterranean integrated resort in Limassol, Cyprus. I for one will be very excited to get a look at it. After all the years of discussion about having Vegas style resorts in Europe, will this be the one to show it can be done? Could it be the first of many, with the Hard Rock led Elliniko resort in Athens finally breaking ground, and continued rumours of a similar resort in Spain, perhaps in the region of Madrid.

I wish everybody a very happy holiday season, and I look forward to a very busy 2023 with lots of new projects on the table and great new colleagues to work alongside, and after the pandemic showed us how much we need each other, in business as in life, my promise for the New year is “Keep in Touch”.

Illinois Takes Second Spot in U.S Sports Betting

The question of whether Brazil will soon establish a fully regulated sports betting sector still looms large, as President-elect ‘Lula’ prepares to take office.

For months, exiting leader Bolsonaro has given mixed messages about the prospect of a legal sportsbook industry, as he attempted to appease different sections of the electorate. However, given his reliance on Evangelical support, a typically Conservative group with a clear anti-gambling stance, Bolsonaro did more to filibuster sports betting plans than he did to support them.

Nevertheless, one state has taken matters into their own hands, and are currently considering creating a local,

legalized sports betting marketplace. Sao Paulo, the region which holds the country’s most populous city, may soon offer the opportunity for international operators to descend upon Brazil, as it hopes to become an investment centre for companies with ‘high mobility’. The bill which would enable such developments to take place is progressing swiftly through the district’s legislative chambers, and is sponsored by Sao Paulo’s city mayor, Ricardo Nunes. Last month, Nunes held discussions with global gaming giant Entain, and emerged from meetings convinced of the lucrative returns a localized sports betting sector would provide for a range of stakeholders.

One of the benefactor’s would undoubtedly be Sao Paolo’s local government, with operators anticipated to pay a 2% taxation levy on revenues generated through any gambling vertical.

There is still considerable hope that the Brazilian Senate may push through legislation before the turn of the year – something that ‘Lula’ would endorse if such circumstances arose. However, given the pace of developments in Sao Paulo, it could be that local residents here are able to access betting services ahead of the rest of the country.

Slots management 101

Slots of confessions

By Andy Cosgrove

Being a slots manager is a great profession but no matter how good you are there comes a time when you’re going to get frustrated.

Getting frustrated is anecessary part of life that some of us would rather not experience but as unpleasant as it mightappear certain kinds of frustration can also lead to great discoveries, life changing moments, and a culture of innovation that legends are born from. However, reality can be very different from eutopia and inevitably we sometimes come up against certain disagreeable circumstances that would cause even the most optimistic slot manager todo a U-turn and choose not topursue their concernsany further no matter the consequences. Why do we do this?Because sometimes you just can’t change the time, the place the situation and certain mindsets. Sometimes the odds are stacked so high against you,that you just can’t win.This may cause us to bottle up our frustrations

and let them simmer inside of us to near boiling point. Some of us carry on our lives oblivious of the storm brewing beneath the surface and herein lies the danger. Some will inevitably explode and possibly lose their job; others will take it out on their staff as they are unable to confront their demons. Some may kick a slot machine while others might choose to seek a confession by challenging authority head on.

T he following is a list of bad decisions that a frustrated slots manager should take directly to their bosses with the hope of extracting a confession of wrongdoing (or plain old ignorance) before a casino full of virtue and promise becomes a vicious exercise onhow fast you can get yourself fired from your job!

T his is how we’ve always done

it. – Some might remember life before computers became mainstream and it mainly consisted of a slow, long winded, labor intensive, admin heavy process that involved a lot of paper, filing cabinets, typewriters, telephone calls and fax messages. My point here is that if you try the same strategy, same technology and expect different results while your revenues continue to decline, then doesn’t it make sense to, at the very least, ask for a different opinion? Most of us would say yes to this without thinking twice, so why is it that so many bosses continue to frustrate their slot manager’s by digging a slow grave for their once promising casino?

T ighten up the slots and the player’s will still come – How many proven failures and slots statistics does it take to convince a casino

manager that changing the slots hold from 6% to 12% might anger some of the local slots player’s?

I’ve had this particular challenge with more than one GM and no matter how much evidence you provide against the hypothesis that less is more when it comes to player retention, they still don’t get it. Sometimes it’s ego, sometimes it’s a lack of understanding and sometimes it’s the temporary blindless that comes from an inability to say no to the board of directors or CEO. When this happens, it could be time for a serious confession session with your boss with maybe a Yoga session thrown in from on top of a remote mountain somewhere on the other side of the world.

I don’t accept that my decisions are responsible for the decline in slots revenues – This scenario involves the GM asking the slots

manager for an in depth root cause analysis as to why slots revenues have fallen over the last few months in the hope that they could deflect the blame in the slots manager’s direction. It’s kind of like committing a crime, being caught on camera with multiple witnesses and still pleading not guilty. On one occasion a timeline was presentedon how bad decisions made by a GM coincided with the decline in revenues caused by each policy. The correlation score was a perfect +1. Those bad decisions included: tripling the base rate required to qualify for comps; eliminating comp points from all video poker machines; making it mandatory for player’s to have a club card before they could perform any transaction at the cage and throwing out all slot promotions that were targeting locals. It came as no surprise that revenues dropped by a total of 20% which represented 80% of

the casinos slots players who were locals!

Don’t plan your slots promotions, don’t tell your player’s and they will still come – This total lack of insightbased decision making is easy to avoid and anyone who has worked at a successful casino knows the importance of planning in advance especially when it comes to high stakes promotions. Depending on the size of you promotion the deadline to start advertising should be 3 monthsprior to the main event. If it’s a promotion that involves high rollers that live a long way from your casino, they have to make plans and they have to be sufficiently excited about the promotion to make the effort to visit your casino, so the reason has to look and feel like it’s the only choice available….

which also takes planning! Imagine that you calculate that you will need 100 extra player’s with an ADT of $500 to break even on your next record breaking promotion and then someone in marketing forgets to send out the invites and only realizes the error the day before the promotion. You,the responsible slots manager, hear about this through the grapevine and head to the GM’s office to make your case for avoiding heavy losses with the hope of a full blown confession from your boss stating that you are right, and that plan B should be put in place immediately. However even before you say a word, your boss dismisses your advice as micromanaging and end’s up losing a lot of money because no one turned up!

Take away the employee tips to improve customer service and everybody will be happy! This has to be the best example that I have ever heard of regarding theconfession of a bad idea that your boss should seriously consider making. Any slot attendant who has ever received a tip from a satisfied customer knows how good it feelsand they also fully recognize and appreciate the financial benefits that

comes with receiving tips which, in many cases, can be the main reason for them wanting to work at your casino in the first place. Any boss who might even consider taking away tips probably won’t be a boss for long. The ideabehind this particular example of genius (not) involved increasing the jackpot lockup limits by more than double in order to decrease waiting times for player’s to receive their winnings and was based solely on information given to them by the marketing team. The slots manager wasn’t consulted and as soon as the staff heard about it, they threatened to walk out. Only then was the slots manager consulted, a confession made,and a reasonable compromise reached.

Let’s buy only refurbished slots and we’ll still be able to attract the top slots players in the region withinthis highly competitive market – Imagine investing 500 million on an amazing resort and then some GM with no current market experience comes along and suggests to the owners (who have zero casino experience) that new slots won’t be necessary. In my experience GM’s like these will have come from a table games

background and will quite possibly have no idea about slot machines or their customers. What’s even more concerning is that they probably don’t even care. A competent slots manager has to know much more than just the latest slots products and how to keep them running.They need to know the market, their customers and as much detail as possible to make the customer experience memorable while consistently exceeding expectations. The key to extracting this confession is to get in early and convince your boss to confess that they could be wrong and that they shouldlet you do your job which, as a matter of fact, is what they pay you for.

Conclusion – Let’s face it, there is no such thing as a casino eutopia and knowing when to walk away is an art in itself that even the most experienced among us get wrong from time to time. Nobody agrees 100% of the time but through essential dialogue and a lot of listening you can get a confession from your boss (and others) in away that produces a better outcome for alland when it matters the most. No matter which way you look at it, any improvement initiative starts with having the courage to confess that we could be wrong.

Andrew Cosgrove is a seasoned slot operations veteran and certified project manager with over 24 years of hands on experience in Latin America and the Caribbean. Andrew has worked on both the operator and supplier side of casino slots and is available to help you succeed and exceed customer expectations via contracted consultancy services. Andrew can be reached at andy.cosgrove@ henimgwaycasinoconsulting.com or seehttps://hemingwaycasinoconsulting.com/

888 Holdings’

The rhetoric of 888 Chief Executive Itai Pazner in the immediate aftermath of his company’s Q3 trading announcement suggested all his well with the Gibraltar-based gambling giant. Clearly, the person at the helm of any business will be eager to present their asset in the best possible light; however, Pazner’s conviction regarding expected commercial improvements, enhanced operating procedures, and further international expansion, created a compelling narrative which sells a believable tale of future prosperity.

However, when one looks beyond the words of 888’s maverick CEO, a more concerning picture arguably presents itself.

Indeed, when addressing the raw numbers, it’s not difficult to identify the emergence of some concerning patterns. Moreover, these declining results cannot be exclusively attributed to one vertical or particular enterprise – performance across all business functions have been considerably weaker in 2022 than the levels delivered in the like-for-like period last year. True, when reviewing both Q3 in isolation, and progressive figures for

By Ryan Murray

the first nine months of the year, we can see some considerable disparages between equivalent returns in 2021 and 2022.

For the three months to the end of September 2022, revenues fell a significant 7% to £449m, representing a decrease of circa £35m. Within this total, we see each arm of 888 Holdings struggling to re-produce its 2021 outputs, with its recently acquired William Hill business suffering doubledigit annual dips in both its UK and International online exploits, whilst its core operations, concentrated on the digital casino sector, experienced a 5% drop-off. Progressive revenues, which were re-calibrated in order to account for July’s acquisition of William Hill

(predicting what the renowned high street bookie would have earned had it been integrated prior to the beginning of the calendar year), made for slightly better reading with regards to year-on-year comparisons. However, a decent proportion of these numbers were undoubtedly skewed by the impact of the coronavirus pandemic, with William Hill stores still subjected to temporary closures, social distancing, and compulsory mask-wearing at various stages throughout the first half of 2021. Therefore, it’s perhaps most productive to deploy the ailing operators’ quarter three numbers when attempting to gain a proper gauge on the severity of the commercial challenges it currently faces. Between July and September this year, William Hill’s UK online activities generated £125m in gross gaming revenue, a staggering 14% dip on Q3 2021. Furthermore, International digital GGR came in at just £52m,with the stuttering sportsbook falling 12% behind last year’s equivalent returns. The only silver lining came within its retail offering, with revenues remaining flat at £124m. As alluded to earlier, services operating under 888 branding could only muster £148m, five percentage points down on the previous year.

declining performance - a product of marketplace volatility, or something more concerning

Clearly, these underwhelming numbers have served to substantially undermine the firm’s share price listing. When 888 released their half-year trading statement on Friday 12th August, stock values tumbled 2.2% to 156.5p per share, a figure that continued to diminish in the following weeks. As of early December, shareholders find themselves in possession of shares positioned at around 105p – a remarkable deterioration from a twelve-month high of 327.8p. The reason for this sharp reversal in fortunes is not only tethered to revenue headwinds, but also due to fading profitability performance, partially driven by an eye-watering debt burden. Although the global gambling operator has been recently somewhat successful in controlling proliferating interest rates applied to its cash loans, locking down approximately 35% of agreements in accordance to current borrowing premiums, its debt outlay is still huge. 888 is saddled with around £1.81bn worth of debt, with interest charges by the close

of 2022 expected to amount to roughly £150m, a noticeable revision to the anticipated cost given by the company in August. Given current market trajectories, its assumed that charges will rise to £170m for full-year 2023.

The groups bottom-line performance was also hurt by a regulator-issued fine of £9.4m, with the Gambling Commission reprimanding 888 in March for ‘social responsibility and money laundering failings’ This clearly did little to support its brand reputation or credibility. Shockingly, one registered customer received clearance to deposit up to £1,300 per month into their betting account – the individual in question had a monthly salary of £1,400.

All of these elements, in addition to expenses associated with the sizeable summer acquisition of all of William Hill’s non-U.S assets, and indeed its dispensation of its internal Bingo platform, ‘888 Bingo’, resulted in 888 presiding over

a pre-tax H1 profit of just £14.4m; over £25m less than a coronavirus-stricken opening six months of 2021.

However, is this financial decay across all key performance indicators merely a representation of unprecedented market conditions, or is this a direct consequence of actions taken by 888 and its subsidiary establishments?

The obvious answer here is probably to say a bit of both.

Pazner emphasized ‘stringent safer gambling policies’ as one of the reasons behind the company’s deteriorating commercial performance in recent months – it’s easy to see why. The Gambling Commission has considerably stepped up its player protection efforts of late, demanding operators undertake a raft of procedures, as it attempts to reduce problem gambling levels across the country.

Furthermore, tightening controls are likely to play an increasing role in the UK marketplace, as the government, after a series of protracted delays, could be soon set to release a White Paper on Gambling Reform, which will lay out the parameters for a revamped gaming sector, one which will facilitate greater regulator powers, tougher compliance requirements, and more transparency on operator financial conduct.

The rising interest costs attached to loan activity is clearly an outcome of external market forces. A disastrous UK mini-budget in Autumn, coupled with growing instability in European economic circles caused by Putin’s occupation of Ukraine, has understandably preempted a significant financial backlash. As a result, 888 are now unfortunately paying a much heavier price for their acquisition of William Hill than originally anticipated. Furthermore, the troubled operator has also been subjected to radical changes in the Dutch market, having to withdraw its services for a prolonged period in order to address a series of licensing requirements as the Netherland’s seeks to professionalize its native gaming industry.

Indeed, if you strip out the company’s UK and Netherlands performance, revenues for H1 2022 were actually ahead of the returns amassed between January and June last year.

Nevertheless, the circumstances that 888 have had to adapt to are clearly no different to those faced by their competitors; many of whom, who have similarly invested in new markets over the course of the last six months, are in a far better bill of financialhealth – it is with respect to this dynamic that we should make judgements on the true catalysts for 888’s current demise. In October, Entain reported that their net gaming revenues had increased 2% in Q3 2022 versus the previous year, whilst Flutter, the parent organization of the likes of Paddy Power, Betfair, and Sisal, witnessed an

11% uplift in the third quarter of the year, although admittedly did receive an almighty boost from its U.S operations, a market which has so far alluded Pazner’s firm. These organizations are heavily involved in the European gambling theatre, and therefore have routinely encountered the same difficulties which have upended 888’s progress in the few quarters – why do they enjoy a greater level of financial security? We should not allow 888’s disappointing 2022 results to become distorted, as we review their ongoing performance through a lens permeated with intense external pressures – clearly, every operator is trying to acclimiatize itself with the exact same trading environment. One should therefore be duly concerned with the company’s recent plight.

In his commentary following the publication of Q3 results, Pazner stressed that the company’s efforts to ‘increase player protections and drive higher standards of player safety’ and a continuing focus on ‘integration, delivering (our) synergy plans, and driving higher profitability across the business’ will ‘put the group in an even stronger position in the future’. Given the dramatic swing in revenues Pazner and Co. have had to endure this calendar year, 888’s shareholder population will be hoping the assertions of the group’s figurehead prove to be correct.

Spain Pledges to Step up Regulatory Pressure

Spain’s Ministry of Consumer Affairs, alongside the country’s native gaming regulator, the DGOJ, are planning escalate the severity of punishments given to local operators for contraventions of gambling laws. During a busy first six months of 2022, the Ministry, who were awarded responsibility to govern Spain’s gambling sector after the new ‘Gambling Regulation Law’ was implemented in 2021, dished out a staggering €84.3m in fines – over €25m more than the collective value of financial penalties imposed throughout the entirety of the previous year.

Fines were attributed for a mixture of

‘very Serious’ and ‘serious’ violations, with a total of 53 operators reprimanded under the former description. Within this pool of gambling firms, 21 received the maximum punishment –a two-year licencing suspension, and an order to make their products inaccessible to the Spanish public.

Those who were found to have presided over ‘serious infractions of the Gambling Law’ were allocated fines in the region of €4-5m, whilst a raft of operators was subjected to a charge of €1m each.

Despite this level of activity, the Ministry of Consumer Affairs will be

even more aggressive in its monitoring of regulatory integrity in the coming months, as the DGOJ continues to post a ‘list of infringements’ (detailing the nature of operator contraventions) to its website in order to maintain a level of transparency across the sector. The Ministry will be supported in its campaign by a series of amendments to the current ‘Gambling Regulation Law’, which will enforce operators to incorporate stronger social responsibility measures and afford the authority better visibility on the financial conduct of industry players.

CONTINUING TRENDS IN GAMING IN 2023

By Lynn Pearce

Ia lways get excited to look back at the year and then look forward to the growth in the gaming industry, which is one of the fast-growing trends in the world, driven by the massive push towards Web3 and the metaverse.

However, to put this into perspective, I start off by looking at the industries that will always be in demand globally, at least for the foreseeable future. Food is always top of mind (for me anyway) and obviously big pharma, who have experienced ridiculously impressive growth and profitability over the past few years. Another growing trend around the world is Healthcare, particularly with regards to technological advancesand developments in transformative technologies such as artificial intelligence (AI), the internet of

things (IoT), virtual and augmented reality (VR/AR), cloud computing, blockchain, and super-fast network protocols like 5G.

In no order of importance, other than being what I think will be the top trends continuing through 2023, I will list these separately below.

The Power of ARTIFICIAL INTELLIGENCE (AI) – and Humans

A I has grown exponentially over the past few years and will continue its momentum unabated into 2023, with data scientists and researchers finding even more innovative ways of using AI. The area of AI that fascinates me the most is the power of AI – and human responses to either adopting it or finding ways of fighting the intel -

ligence.

I read a fascinating article by Topy Shapshat in The Daily Maverick recently on the fight between Chinese protestors and how they cleverly found a way around AI, which is massively and widely used by the Chines government to control every movement of their citizens daily.

C hina has been rocked by Covid lockdown protests in the past few weeks after a fire in Urumqi killed 10 people in a locked-down building that many people believe prevented victims from escaping and firefighters from getting in.This wave of protest has been likened to the student uprisings in 1989 that culminated in the infamous Tiananmen Square crackdown.

To counter these artificial intelligence (AI) forms of monitoring, angry protesters are holding up blank pieces of paper. To the AI systems trained to pick up words or phrases that are banned, these appear as just blank white pages. But to us, as humans, well, we can read between the lines, resulting in this simple act of defiance – it suddenly becomes a powerful symbol.

Chinese citizens also disguise protest videos with effects, filters or playing Western songs that have similar protest themes. This kind of smart skirting of the strict censor-

ship rules shows that the human brain — and its ability to think laterally and understand humour — can still thwart the literal logic of AI and its algorithms.Score 1 for humans and 0 for AI.

Relating AI trends back to the gaming industry, all you have to do is think of the simple bot, which is widely used in the gaming industry. Humans do not even realise they are playing against bots when gaming, and this has changed the gaming experience as AI technological advances become even smarter!

CLOUD GAMING

In addition, with Cloud gaming and with the speed of 5G on mobile, the gaming market has significant future growth potential. Nowadays, players do not need to download and install casino games, which was a huge blocker to developing countries, like Latin America and in particular, the esports gaming market in Brazil. In India and Africa, the massive rollout of 5G and the low cost of cloud gaming has opened up the market for gaming companies, who are able to install their games on their servers and make them easily accessible on

web browsers to players in these regions.

Couple that with augmented andvirtual reality (VR), which allows players to view games in real time on their devices, these technologies offer them a fantastic virtual gaming experience with awesome 3D graphics with dreamlikerealworld effects. This technology was estimated at $11.56 billion in 2019 and is projected to increase yearly at a CAGR of 30.2% over the next few years.

ESPORTS

Esports (electronic sports) has been around for many years, but I have seen rapid adoption on a global scale within igaming since the lockdowns in 2020, projected to be well over $2 billion by the end of 2022 and increasing to $3.6 billion by 2025 by various research studies that I have read. Newzoo reported that esports would be expected to increase

at an annual pace of 10.4%, with more than 351 million casual viewers and over 295 million spectator enthusiasts, bringing the total viewership to 646 million and counting, probably because this trend is as popular for women as it was for the guys previously.

One of the reasons of its huge popularity globally are the esports tournaments for professional teams and players – and the awesome high-tech elements, video, special effects and fast actionpacked graphics, which makes for a truly immersive experience for all, whether online or in stadiums around the world.

deposits and withdrawals for the players, which saves time and money, and provides transparency and immutability, which are essential for ensuring fair play.

Some of the top blockchain games include Axie Infinity, Decentraland and Alien Worlds.Decentralized blockchains open the door to verifiable digital ownership, enabling players to truly own the items they play with and with the ever-growing trend of NFTs, I believe this will continue into 2023 with a number of gaming companies adopting NFT payments for gaming, entry into events and in-app purchasing.

BLOCKCHAIN

Other than reported issues of fraudulent activities, there are many advantages of using blockchain in the gaming industry. Blockchain eliminates the need for intermediaries when making

These are just a few of the trends will continue to grow and expand with added innovations and technologies throughout 2023, assisting in driving the gaming industry to even greater immersive and enjoyable experiences for the players and profitability for the gaming industry overall.