7th IGA Finalists Announced inside
Euro Vegas goes up in smoke
European casinos in decline says new report
InfinityGaming
www.gaming-awards.com | ISSUE DECEMBER 2013
MACAU CAESARS
ISRAEL
Online could hurt business
ATLANTIC CITY
Atlantic Club Casino for auction
EXCLUSIVE INTERVIEW
Could see casinos
EURO VEGAS SCRAPPED
The super casino resort gone
Mikael Pawlo - garbo.com
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BUSINESSMAG • ISSUE DECEMBER 2013
contents InfinityGaming
EDITOR’S LETTER
03 EDITORS LETTER Mikael 06 Interview Pawlo
04
Welcome to the Nov edition
Tells us abour garbo.com
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Exclusive Interview Angelo Dalli
20
All about the Games
62
CEO of Bit8
Williams Interactive
Interview Dan Stewart Man behind PokerScout
FEATURES IGA Finalists 10 7th UK Gambling Bill 24 32 The Golden Rule Casino 38 Maturing Market Affilaite Fairy Tale 46 50 What’s another year A tale of two cities 56 Look what you can get 66 this December Christina Thakor-Rankin
Martin R. Baird
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Wayne Openshaw Ellen Learmonth
InfinityGaming • ISSUE DECEMBER 2013
JJ Woods
04 4
Concluding part from Prof. Nelson Rose
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EDITOR’S LETTER Lana Thompson - Chief Editor
by
Welcome to the December edition of the Infinity Gaming Magazine. First of all we would like to say congratulations to all IGA Finalists. We are looking forward seeing you all at the Savoy Hotel on 3 February 2014 for great networking, celebration and fun. We will start the party with the famous King Pleasure and the Biscuit Boys Band and Tiffany’s Raffle and of course we will have more surprises for you through the evening… In this issue we continue our interviews with most successful CEO’s in the industry, it is Mikael Pawlo founder of Mr Green this month, he will let us know where he is placing his bets next year with garbo.
interviews but as always the best features writers covering both online and land based gambling issues along with all the very latest news and opinions. I would like to thank you our industry experts contributing to Infinity Gaming Magazine with their knowledge and opinions. Huge thank you to Martin R Baird, Ellen Learmonth, JJ Woods, Wayne Openshaw and Professor I Nelson Rose. We thank you Dan Stewart for taking his time to answer our questions (see interview inside) and for being an IGA Judge. Finally, dear readers, I hope Santa brings you everything you wished for and more. Have Great Winter Holidays and Very Happy New Year! Merry Christmas to all and to all good night. Enjoy
Lana x
Not only do we have those superb
The Infinity Gaming
InfinityGaming CONTRIBUTING WRITERS Christina Thakor-Rankin Martin R. Baird Wayne Openshaw Ellen Learmonth J.J. Woods CONTACT US Clever Duck Media Suite 105 Park Plaza Point South Hayes Way Cannock WS12 2DB UK Tel: +44(0)1543 578 689 claire@cleverduckmedia.com PRODUCTION Clever Duck Media Suite 105 Park Plaza Point South Hayes Way Cannock WS12 2DB UK PUBLISHING Infinity Gaming Magazine is operated by © Clever Duck Media Ltd ® Company Reg. No. 687 1018 (Registered in England) ADVERTISING: Sponsorship Opportunities Colin@gaming-awards.com Business Partnerships Svetlana@gaming-awards.com
Opinion Disclaimer: 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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BUSINESSMAG • ISSUE DECEMBER 2013
EDITORS NOTES
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EXCLUSIVE INTERVIEW
Interview with Mikael Pawlo Founder of garbo.com
Q
: Mikael thank you for speaking to us today, let’s get straight into the interview and can you tell our international readers a little about your background.
InfinityGaming • ISSUE DECEMBER 2013
MP: Prior to Mr Green I was partner at a PR firm which we sold to a major PR outfit called Springtime. I have also done my share of start-ups, most notably an Internet consultancy aimed at the public sector called Municel that we sold in 2001, which at the time was quite an achievement to get out of the dotcom craze “alive”. I have also done some investments in numerous startups (both gaming related and not) and serve on some boards. The biggest achievement outside of Mr Green is probably Happy Pancake, Sweden’s number one dating web site, now being rolled out in Finland and Norway, where I am the chairman of the board.
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Q: Following on from the success of Mr Green, you have now launched a female focussed online gambling website called garbo, where did the idea come from for this? MP: Basically the idea has been floating around since Mr Green became Mr Green, everyone was always asking for Mrs Green, but I like doing research and when I discovered that the average player on the Internet is a 43 year old woman while very few companies in i-gaming target them I knew I had to do something. I was also seriously disturbed by the very male:ish culture in i-gaming that
felt a bit old-fashioned in my taste. I then refer to oldfashion in the bad way... Then I worked about a year on the concept coming up with the major pillars: female oriented, for casual players rather than big punters, extremely fast-loading and an interface built for mobile, i e finger navigation rather than desktop or mouse navigation. Then I set together a stellar team of developers consisting of some of the early Mr Green developers and artists. Q: What does the site offer that is different and unique for female players? MP: I think the big difference is the approach. We are trying to create an environment for entertainment that is safe and stylish. We don’t go for the big punters, but rather the casual gamers that want an everyday thrill. We do this with a unique navigation and look and feel as well as a selection of games targeted both towards mobile and a more female friendly approach. It might be more of lottery tickets than poker rooms. Still, just like with Mr Green we don’t want to scare anyone away. Male players are welcome as well, we just have a softer approach on the web site and in the brand. Q: What games does the site offer at present? MP: We offer games from Net entertainment and NYX Nextgen.
Exclusive interview with Mikael Pawlo
Q: Do you think that there is a big opportunity for female focussed gambling webites?
just push the button”. So yes, I think you need to work on the brand, the style, the look and feel, the content and also on your overall attitude if the web site is to attract the female audience. We operate in an environment which is vastly dominated by men, both in management of the
Q: : Is the new venture completely separate from Mr Green, there will be no cross over marketing?
MP: Well, it is more or less virgin territory. Unibet has done some groundbreaking work with its Maria Bingo, but other than that I think the market is up for grabs as long as you take the players seriously and don’t try to shove some My Little Pony-concept in their respective faces.
MP: No, every brand has to survive on its own merits, even though we share a lot of resources in the background. Q: : On support, design and day to day operations is the site managed by female online gambling staff or a mixture?
Q: Was it yourself that decided on content for the site or was it a focus group or how was it set up? MP: Myself together with my team. I don’t believe in focus groups at all. When we were finished we tried the concept on friends and family and then did some adjustments. Q: At present online bingo is the main focus toward women in the online gambling sector, do you think your site will change this perception? MP: It depends on the success I would gather. Q: What has to do be done differently in style etc to attract women, do you believe female players are attracted to different styles compared to male players? MP: Obviously, some women will be a bit put off if you like one our competitors put Victoria Silvstedt in a commercial stating “it is so easy,
Q: : Is the site currently focussing on the Swedish market or international? MP: We start with a Swedish version but will roll out quite quickly as soon as we see the key metrics performing as they should.
companies – except Betclic – and in terms of the players. If you want to change that you need to change a lot. So our first hire was a female casino director. Q: The Website definitely has a completely different feel and look compared to more traditional ones, was that a conscious effort to do that? MP: Indeed. We wanted the web site to be unique and also very efficient for tablets and smartphones. Most older websites are built with a desktop perspective. We started out with a mobile first approach so naturally it would look a lot differently. We wanted something that was nice to navigate with a touch screen, with your fingers.
MP: The head of the support is female and the casino manager is female. I am not sure though that it is a prerequisite for Garbo to have female only staff, but I think there is an advantage that key staff are at least 50% female. Q: : Where did the name Garbo come from? MP: Actually, my wife came up with it. She is the real genius. BUSINESSMAG • ISSUE DECEMBER 2013
Nextgen. We are in final negotiations with a handful of more suppliers so I guess we’ll add content rather quickly.
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EUROPEAN GAMING NEWS
Euro Vegas goes up in smoke
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he planned Eurovegas casino resort project in Madrid has been sensationally scrapped by Las Vegas Sands boss Sheldon Adelson after the Spanish government refused to move on the major point of smoking being allowed within the resort. The $30 billion project which would have contained 6 casinos and 12 hotels along with leisure facilities was to create some 250,000 jobs both directly and in the supply chain, that has now all gone which is a blow to the Spanish government which has a 27% unemployment rate in the country.
taxes and legal protection … which could not be taken on board by the administrations involved,” “The government needs to preserve the general interests of all Spaniards,” she said.
The other point of contention between the casino developed and the government was a demand for a lower rate of gaming tax compared to other Spanish casinos, another request which the authorities refused to move on.
Las Vegas Sands chief executive Sheldon Adelson said: “While the government and many others have worked diligently on this effort, we do not see a path in which the criteria needed to move forward with this large-scale development can be reached.
Deputy Prime Minister Soraya Saenz de Santamaria said: “New conditions were put forward concerning
“Developing integrated resorts in Europe has been a vision of mine
for years, but there is a time and place for everything and right now our focus is on encouraging Asian countries, like Japan and Korea, to dramatically enhance their tourism offering through the development of integrated resorts there.” Observers believe that Adelson has used the tax and smoking ban to pull out of the development as he sees no real return on the investment, especially as since the Eurovegas was announced Japan has now shown strong signs of opening up to legalising casinos, a much more lucrative market for the Las Vegas Sands company to which to use the $30 billion.
Gala sell last remaining casinos to Double Diamond
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InfinityGaming • ISSUE DECEMBER 2013
s exclusively reported by our sister publication last month, Gala Coral Group has announced it has completed the sale of its remaining four UK casinos in Aberdeen, Bristol, Cardiff and Teesside to Double Diamond Gaming.
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The gaming group also sold its cold casino license in Dundee. The four casinos were excluded from a sale of 19 casinos to the Rank Group in May 2013, following a Competition Commission ruling. Gala chief executive Carl Leaver said: “This transaction concludes the exit of our casino interests in the UK and
is a continuation of our strategy to focus on growing our core operations.” Double Diamond managing director Duncan Savage added: “We are delighted to have worked with Gala Coral to conclude this transaction. The acquisition is a continuation of our strategy to build a high-quality casino group in the UK. “It builds on the success of our acquisition and relaunch of the Rainbow Casino in 2010 and we look forward to re-launching the casinos under the Rainbow brand over the Christmas period.” Double Diamond is an independent casino operator which owns the Rainbow Casino in Birmingham.
US GAMING NEWS
Poker Princess pleads guilty
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olly Bloom dubbed the poker princess for organizing high stakes poker games for the rich and famous has pleaded guilty at her hearing on Thursday 12th December in New York.
New York in 2010 after two men, described in one report
She was among more than 30 people charged earlier in 2013 with connections to the Russian gangsters that the prosecution said laundered over $100 million in poker games and sports betting activities. Ms Bloom told a judge in federal court in Manhattan that she and others running the games at The Plaza, a luxurious landmark on the southern edge of Central Park, collected a percentage of the rake. Playing poker is legal, but organizing games for profit is against state law. “The conductors of the game, including me, took a rake,” Bloom said. Bloom, 35, could face a maximum of six months in jail at her sentencing hearing on April 30. Before Bloom’s arrest, she was called the Poker Princess by many local tabloids because of her reputation for hosting invitation-only games in Los Angeles for the rich and famous. Media outlets said she went back to Los Angeles from
as “Eastern European thugs,” roughed her up at her Upper West Side apartment.
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ew Jersey regulators gave the green light for the Golden Nugget to go live with their online gambling site Saturday14th December. The Golden Nugget was held back from going live with real cash play from launching on the 26th November because what the company said were glitches that needed to be resolved. At the time the company said at the time it was working out glitches with its system and would
not open until it was ready to give its customers a first-class experience.
we make it easier than anywhere else to fund an account and get started.”
That time is now, said Tom Pohlman, the casino’s general manager.
The Golden Nugget will allow customers to fund accounts using Visa, MasterCard, bank transfers, personal checks, or cash at the casino. But it also is offering a prepaid cash card that runs on the Discover card network that lets customers instantly transfer cash to and from their online gambling account.
“We weren’t satisfied with what we were ready to offer our customers at that point,” he said. “Now, we are very satisfied. Everything is exactly where we want it to be. We offer more titles of slots, video poker and table games titles than anyone, and
BUSINESSMAG • ISSUE DECEMBER 2013
Golden Nugget goes live in NJ
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InfinityGaming • ISSUE DECEMBER 2013
US GAMING NEWS
Caesars say online gambling could hurt land based business Optimal Payments and 888 announce partnership
Optimal Payments and 888 announce partnership to provide payment processing services to licensed U.S. online gaming operators.
The gambling giant that owns 4 of the 12 casinos in New Jersey said in a securities filing that their new entry into online gambling in both states could harm their bottom line, with the number of visits from gamblers decreasing. “Caesars will, and other online providers do, offer online gaming options that compete with our live poker offerings in Nevada and New Jersey,” the company wrote to investors. “Expansion of online gaming in Nevada, the commencement and expansion of online gaming in New Jersey and the introduction of online gaming in other jurisdictions may further compete with our operations. Online gaming may reduce customer visitation and spend in our traditional casinos in Nevada and New Jersey, which could have an adverse impact on our business and result of operations.”
Optimal Payments Plc (LSE AIM: OPAY) (“Optimal Payments”), a leading global online payment provider, announces that it has extended its existing partnership with 888 Holdings Plc (LSE: 888) (“888″), a leading global provider of online gaming services, to offer an integrated suite of payment processing services for the licensed U.S. online gaming market. Under the partnership Optimal Payments’ services are offered as a pre-integrated solution for the 888. com brand and all other licensed operators who use the 888 platform in the U.S. gaming market. The Optimal Payments solution includes payment, gateway and digital wallet services specifically designed to meet the stringent requirements of U.S. state gaming regulators, and is already live and processing for licensed operators. 888 currently have agreements in place with operators in Nevada, New Jersey and Delaware.
The company also said that their four New Jersey casinos — Harrah’s Resort Atlantic City, Caesars Atlantic City, Bally’s Atlantic City and the Showboat Casino Hotel — could be further affected because all the games they offer at their physical locations can now be played online. Following the statement a Caesars company spokesperson went on to say the announcement was for legal reasons only and even Caesars themselves were unsure if there would be any impact from their online business to their bricks and mortar casinos. Caesars also added in their filing report that dangers also existed for the company in another economic downturn, war, or a terrorist attack.
Joel Leonoff, President & CEO of Optimal Payments, added: “888 are a long-time, strategic partner for Optimal Payments. We are very excited to extend our relationship with 888 as we deliver on our own strategy to provide a complete solution for the licensed U.S. online gaming market.”
BUSINESSMAG • ISSUE DECEMBER 2013
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aesars Entertainment have warned their investors that online gambling could impact on their land based casinos in New Jersey and Nevada.
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InfinityGaming • ISSUE DECEMBER 2013
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InfinityGaming • ISSUE DECEMBER 2013
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BUSINESSMAG • ISSUE DECEMBER 2013
ino Equipment Supplier
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EXCLUSIVE INTERVIEW
Interview with Angelo Dalli
CEO of Bit8 Infinity Gaming Magazine speaks to the CEO of Bit8, a company going from strength to strength with their innovative intelligent gaming solutions.
Q
InfinityGaming • ISSUE DECEMBER 2013
: Angelo thank you for speaking to the Infinity Gaming Magazine, firstly can we start off by asking you what your role is with Bit8 and how long you have been there?
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AD: I act as Bit8’s CEO and take care of the company’s strategic direction together with the innovations in our product roadmap. I have been with Bit8 since the beginning, having invested in the company from the start and recently took a more active role as CEO from this year. I have a technical background, having a Ph.D. in Computer Science, and many years of experience working in the gaming industry where I obtained the business knowledge from both a day-to-day operations perspective and an executive point of view. Q: our International readers can you explain what Bit8 do and when the company was founded? AD: Bit8 was founded in 2010 out of a desire to provide operators the means to increase revenue while reducing costs via innovative technological solutions that automate manual labour. Bit8 is a gaming platform company
that offers an innovative intelligent gaming backend for modern operators, both new and established, for desktop, mobile and tablet gaming. The Bit8 platform offers a revolutionary bonus system that works across multiple game suppliers and crossproduct, promotions and tournaments, and seamless wallet integration. In addition, the Bit8 platform gives a cutting edge to operators while maximising retention and the overall player lifetime value, using data mining and player segmentation coupled with an artificial intelligence rule engine and CRM add-ons. Q: So Bit8 offers services to online operators, what makes Bit8 unique in such a competitive market? AD: The Bit8 bonus system is unique in the way that it uses Artificial Intelligence technology to automate labour and offers an infinite amount of ways that players can be segmented and targeted in a simple manner using powerful data mining and big data analysis techniques.
Exclusive interview with Angelo Dalli
customers that use your software?
Q: You Co-Founded the company, who are your other partners?
AD: Bit8 is currently focusing on the European market, specifically also including the Eastern European market and is looking towards South America as the next step.
AD: The company was co-founded together with our COO, Keith Galea and our CTO, Brian Fenech. Q: Since your launch how has business been, do you have any
AD: Bit8 as a company has been growing extremely fast since we started marketing our product in the last few months. Prior to our exposure we had already signed a few operators who helped us perfect the product, while also raising an external round of investment that gave us the funds needed to fuel rapid growth. In a few months we have attracted well established operators including a sizeable number of operators in the top 50 casinos in the world. Q: Is Bit8 focussing on the European market only?
Q: Can the software also work on mobile and tablets etc?
AD: Yes, Bit8 has invested a lot of research and development into creating cutting edge mobile and tablet technology that delivers HTML5 applications that respond four times faster than the average mobile client created with competing systems. On the acquisition channel side, the Bit8 platform is equally at home on desktop, tablet and mobile sites. Special middle layer technology for mobile sites and sportsbook-type sites enables faster data updates and more responsive applications to be created. Q: Is the company involved in the US market at present? AD: Bit8 is currently observing the developments in the US but we are not currently actively involved, although we are not excluding any such possibility. Interestingly enough, some of the existing Bit8 technology, for example, the geofencing of boundaries and tracking of transactions according to location, already supports legislation such as the New Jersey regulations.
BUSINESSMAG • ISSUE DECEMBER 2013
Once the players have been segmented, various bonuses can be applied across multiple products from multiple suppliers in a seamless manner. The comprehensive modular manner of the Bit8 platform eliminates the need to login into multiple backends and systems, and makes marketing campaign management and anti-fraud and risk management simple and straightforward without limiting their possibilities by imposing technological bottlenecks. The Bit8 system can also handle multiple brands and sites, including those that are operating across multiple jurisdictions each with their own unique licensing and ring-fencing requirements.
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Bit8 interview with Angelo Dalli
Q:What has been the most challenging part since launching Bit8? AD: Managing our amazing growth while keeping our service delivery levels at an excellent standard of quality – while simultaneously juggling increased sales and demand for our product. Q: Can Bit8 be used for new start-up online companies?
InfinityGaming • ISSUE DECEMBER 2013
AD: Absolutely, the Bit8 platform is suitable for both new and established operators. Apart from converting some big established operators and selling modules to others, we have helped businesses transition from a land-based presence to setting up their online operation and also a few exclusively online start-ups.
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Q: What are the company’s plans and expectations for 2014? AD: : Bit8 is on a rapid growth path where we are reaping the benefits of years of innovation that already is bringing a disruptive element in the industry. Our expectations for 2014 is to become established as one of the top platform providers in the industry. Q: How long did it take to develop the software for Bit8?
AD: We have spent the first three years developing the initial product and the last year perfecting it and turning into the best-in-class platform it has become. I have to note that we did not start development completely from scratch and a lot of technology was adopted from previous companies that the founders were involved with in the past decade. Q: Finally Angelo how do you see the online gambling industry progressing in 2014, will it be more mergers, great expansion and will there be any new unique products? AD: :The online gambling industry will certainly be focusing more on tablet and mobile betting solutions and new markets which will bring about fresh expansion. There will certainly be more emphasis on products that offer added value to operators in a modern integrated solution. Bit8 itself is offering new technology that will enable innovative operators to fuel such growth.
You can find out more about Bit8 and their products by visiting their website: www.bit8.com
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InfinityGaming • ISSUE DECEMBER 2013
US GAMING NEWS
Wynn looking for a Director of Online Gaming
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teve Wynn is looking for a Director of Online Gaming to be based in Pennsylvania for the Wynn Resorts Interactive division. Although the state is not currently operating online gaming they have just passed a resolution for a study into the possibility of online gambling in the state. With the state of Pennsylvania having over 12.5 million residents it would when more than if legalising online gambling be the largest state to enter the fledgling market in the US. Its neighbours in New Jersey and Delaware have already gone live with online gambling albeit on the case of Delaware on a small scale, recent reports say on average only 50 to 60 people play online at
any one time. But Mr Wynn is not waiting around and wants to be ready in Pennsylvania should the state move forward in 2014. “The group exploring online gaming for Wynn Resorts happens to be based in Philadelphia,” said Wynn spokesman Michael Weaver. “Their work, and the fact that they live in Philadelphia, has no relationship to specific gaming activity in Pennsylvania,” he said. The role for Wynn Resorts Interactive reads; “The Director of Products is a mission-critical role responsible for ensuring that the quality, breadth and depth of our real-money and social casino products on mobile, tablet and desktop web is second to
none in the market. This position is based out of Philadelphia.” “Candidate will take a hands-on leadership role in helping to set the product roadmap for the Company and ensuring the designs, features, and user-experiences of our products deliver extremely engaging experiences to our players. Candidate will work with in-house and third party product teams to help direct and define the various product designs to meet a very high level of product quality. This will include working with UX and UI designers, product engineers, product managers and product marketing teams. Candidate will be held accountable for the final quality of the product and user-experience.”
Atlantic Club Casino up for auction
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The casino listed all its assets at a filing case so they could be considered for auction before the end of this year. Excluding its real estate value the casino said it had $17.1 million in assets and $16.8 million in debts. Although the Atlantic Casino Club has to release the value estimated of its real estate value, it was given till the end of this week to do so. The Rational Group who offered $15 million for the casino over a year ago now was accepted originally by the owners before deciding to take the option of withdrawing from the deal, costing the online poker giant all its deposit. It is not expected to be sold at auction for anywhere near that value now and whom may want to buy the struggling casino venue that is at the southernmost
point of all the casinos in Atlantic City. Currently the casino is still operating although in Chapter 11 however how long this will remain if no buyer comes forward is questionable. Some of the debts carries by the Atlantic Club Casino are: Slot machine manufacturers are owed according to the listing, Bally Gaming ($722,654) and IGT Corp. ($453,453). The casino owes the city of Atlantic City $2.25 million and Atlantic City Electric $435,897.
BUSINESSMAG • ISSUE DECEMBER 2013
he New Jersey Atlantic Club Casino that was at the centre of a bitter battle with PokerStars after the casino pulled out of the deal by the Rational Group to purchase the venue for $15 million is to be sold at auction on the 17th December.
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Williams Interactive Special Feature
All About the Games Damon Gura, a 20 year veteran of the global casino industry and Executive Director of Games for Williams Interactive, a Scientific Games Company, discusses the Company’s recent successes and upcoming multichannel content distribution strategy.
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illiams Interactive finishes 2013 with encouraging performance from a number of strong game engine and new theme launches from their portfolio of authentic Vegas-style slot games for gaming sites integrated with their Remote Game Server. Infinity Gaming Magazine sat down with Gura to discuss Williams Interactive’s recent successes, as well as plans to continue the trend into 2014 and the ICE trade show.
InfinityGaming • ISSUE DECEMBER 2013
Q: Your recent product launch strategy has been to introduce unique game engines to the European iGaming space – how has this been received by players? DG: We recognize that operators receive a lot of content from the various content providers, so we’ve adjusted our launch strategy to comprise of our more innovative and sophisticated game engines. This benefits us not only with players who have a large appetite to try new things, but also with helping us stand out with our gaming site partners as well.
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Since the release of our KISS: Shout it Out Loud! and Spartacus Gladiator of Rome, both built on our Colossal Reels game engine, we have been putting out innovative game engines in regular monthly intervals. We recently launched BRUCE LEE Dragon’s Tale using our Super Multi-Pay game engine and ELVIS: THE KING Lives built on our Double Money Burst game engine. Some of these releases are newer (ELVIS: THE
KING Lives launched in November) but thus far the numbers are validating that this strategy is promising and is resonating with online slot fans.
Q: How will this content strategy progress in 2014? DG: In 2014 we will expand this strategy to not only include more innovative content and game engines but also execute a multi-channel distribution strategy for our monthly tent pole products at launch. In January we plan to start releasing titles in both desktop and tablet/ mobile at the same time. We believe that will give more players the ability to enjoy our games by providing access to the themes when they want and where they want. We also recently joined the Scientific Games family and as part of that merger are combining our existing roadmap of fan-favorite WMS Gaming themes with the
Finally, starting in early 2014 we are going to launch themes online that are much newer to land-based casino floors, having shown extremely good results with those players which we expect to recreate online. Visitors to our stand at ICE can experience this and other new themes first-hand in February ahead of its scheduled multi-channel launch.
Q: What are some key game launches we should look for in early 2014, and why are they part of your roadmap? What type of players are these games designed for? DG: We’re really excited to launch Zeus III, which has the successful Reel Boost play mechanic, planned for January release for desktop, tablet and mobile devices. We also plan to launch the Barcrest smash hit Rainbow Riches in January in for desktop, tablet, and mobile. We will follow these with Raging Rhino, an
Any Way game engine theme and our first release from the land-based Blade product line which is performing very well on casino floors, as well as more themes powered by the popular Colossal Reels, Super Multi-Pay and Double Money Burst game engines.want. We have two decades of slot game play innovation and ongoing new land-based launches from which we can cherry-pick the most unique, innovative and successful game engines, so we’re constantly evaluating the appropriate mix in our roadmap of new themes on performing online game engines with new smash hits from our evolving offline catalogue.
For more information about Williams Interactive visit their website: http://www.williamsinteractive. com
BUSINESSMAG • ISSUE DECEMBER 2013
popular Barcrest game library. Access to that excellent content portfolio offers us even more strategic levers for our roadmap.
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US GAMING NEWS
NJ online revenues downgraded
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ew Jersey’s online gambling entry this week will not help the struggling Atlantic City casino business that were hoped for by Governor Christie as ratings firm Fitch said revenues will be well short of predictions by the governor. Fitch ratings say that online gambling in the state will generate $300 million in revenues for 2014, with the following years increasing to as much as $750 million. Those estimates are much less than hoped for by Governor Christie who said online gambling will generate $1.2 billion over the next year alone. The hope for Atlantic City casinos were that online gambling would
give them the boost needed for their struggling casino businesses since revenues fell from their high in 2006 at $5 billion to $2.8 billion this year. The state although the biggest so far of the three to go online along with Nevada and Delaware will need to enter into interstate compacts to generate the larger revenues expected.
market when the level of demand dictates that some supply should be removed.”
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In a statement from Fitch Ratings an analysts noted: “Although some market participants will benefit, New Jersey online gambling is not going to be the saviour of the casino market, in some ways, it will be detrimental because it has kept brick and mortar supply in the
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eo of 888 Brian Mattingley says his company is happy with the early results from the New Jersey online gambling launch that happened on the 26th November, although Mr Mattingley did also confirm that the New Jersey online gambling business will not be as big as hoped, which Fitch Ratings earlier this week an-
nounced. Mattingley thinks that online gambling will be popular but is unlikely to reach the $1 billion a year the state Governor is counting on to make up for lost tax dollars from declining Atlantic City casino revenues. “We believe that the market will be in the region of $250 million in its infancy, growing to
half a billion probably at maturity,” Mattingley says. Mattingley says his company was eager to get back into New Jersey seven years after online gambling was outlawed. “The consumer in New Jersey had the propensity to spend more than virtually any other state,” said the CEO of 888.
BUSINESSMAG • ISSUE DECEMBER 2013
888 CEO confirms NJ revenues will be lower than expected
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FEATURE ARTICLE
UK Gambling Bill Part 2: The song remains the same By Christina Thakor-Rankin Our feature writer Christina Thakor-Rankin takes a look at the recent changes to the UK Gambling bill and what it means for the industry.
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New protections, not new casinos”, was how Tessa Jowell summed up the government announcement in 2003 to undertake the most radical shake up of gambling legislation in the history of the UK in 2003 due to primarily the rise of unregulated internet gambling.
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This in spite of the fact, that the bill included very little by way of enforcement of the new legislation other than the creation of the ‘powerful new Gambling Commission’, but did include allowing casinos to open their doors 24 hours, offer unlimited jackpots, the introduction of FOBTs – commonly regarded as the crack-cocaine of gambling, and in its first draft the introduction of 8 new super-casinos - and was heavily backed by the Treasury. The bill designed to deliver better protection in terms of problem gambling, fairness and keeping crime out of gambling, as well as the white elephant of revenue,
failed to deliver on pretty much every level. Gambling prevalence surveys have shown that the incidences of problem gambling have not really changed much, and if anything have gone up ever so slightly; the Gambling Commission’s own statistics in relation to adjudications against operators, by the Advertising Standards Agency suggest that the CAP Code has been pushed to, and beyond its limit; recent evidence suggests that the drug dealers’ money laundering vehicle of choice, is by a country mile, the FOBTs; and as for revenue - well, presumably we wouldn’t be discussing a revision of the existing Bill now if that one had gone well, would we? In the words of the internet generation, the 2005 Bill, designed to address both the opportunities and the challenges of the internet has been nothing short of an epic fail. Within 2 years of the Act coming into force, pretty much all of the UK remote gambling industry had
taken itself off-shore, beyond the control of the Gambling Commission, and leaving huge holes where revenue and player protection should have been. Of course it is easy to see with hindsight where things went wrong. The Bill was presented as a vehicle for the protection of players and society but the reality was that it was always about revenue generation. Due to polarised views on gambling it had to be presented under the guise of protection as coming out with ‘gambling generates tax revenue – let’s have more of it,’ would have raised far too many eye-brows; too much debate and discussion about protection would have led to discussions about enforcement; too much discussion about enforcement and policing would have run the risk of exposing exactly what the government was trying to protect, or even worse, resulted in enforcement measures which might have impacted on profit. The bill itself was then followed by the UK
Much blame has been laid at the door of the white-list for what happened, but just how much of an impact did the white list actually have? Let’s go back for a moment and ask ourselves – what would have happened had there been no white-list? What if, the only way to target the UK was to stump up 15% tax? What would have happened to those operators already making money out of the UK from off-shore territories – do we realistically believe that in the absence of any real enforcement or penalties, and the global access all areas element of .com they would have just gone home? Of course not! This is the gambling industry, expert at exploiting loopholes and grey areas, and happy to take a catch me if you can approach
with regulators who can bark but have no actual bite. Whilst the Gambling Act was supposed to introduce “…a powerful new Gambling Commission...” in reality it simply introduced a new Gambling Commission – a body with the best of intentions but little power of enforcement in the world of .com and against operators sitting outside of the UK. Having spent a considerable amount of time and effort passing a law which was about protection not profit, the government either now had to hold its hands up and say it had got it terribly wrong, or find a way of legitimising something which it was powerless to stop – which perhaps also helps to explain some of the quirkier aspects of the white-list. The fact is that had the government of the day been braver and acknowledged that the bill was about revenue, then the 2005 Act might have been a document which sensibly and effectively addressed the inter-dependent relationships
between profit, protection and policing. As it was it didn’t, and the industry ended up with a bill which, due to its lack of effective policing supported neither, profit nor protection. (Continued on next page)
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BUSINESSMAG • ISSUE DECEMBER 2013
white list – a seemingly spectacular example of self-inflicted shot in foot, where the government introduced a caveat which effectively allowed all UK facing remote gambling to be legitimately conducted off-shore and tax free.
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en years on, the current government, driven by the changes in Europe, has finally woken up to the fact that it is haemorrhaging gambling tax dollar, and has determined to do something about it. Given the turbulence of the last decade and the mess we got ourselves into, we might be forgiven for thinking that the lessons of the past have been learnt and this time round, the discussion will start with where the last bill fell down - enforcement. This is a fantastic opportunity to get it right, but to do so we need to take a very grown up approach which acknowledges that this is about profit first and protection second. A brave move but necessary if we are to achieve both objectives with any degree of success. Unfortunately, whilst the people, the year and the government have all changed, the political machinations of rushing a ‘profit wolf in protection clothing’ have not, with Helen Grant advising us that the changes are ‘about consumer pro-
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tection…. Taxation matters are ones for the Chancellor of the Exchequer’. Despite everything that we have learnt, the government’s determination to stick to the same old tune will most likely see us back to where we started - only this time round, without the benefit of a white list to cover our blushes. ABOUT THE AUTHOR Christina Thakor-Rankin is Principal Consultant at 1710Gaming working with start-ups, investors, operators regulators, and industry groups internationally, covering all aspects of the gaming and gambling cycle - from initial research, licence and operational go-live, to new markets and opportunities, to customer engagement and experience. She has over 20 years industry experience and has previously held roles at William Hill, Blue Square, Tote (Sport) and Virgin Games managing multiple business disciplines, functions and teams.
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BUSINESSMAG • ISSUE DECEMBER 2013
FEATURE ARTICLE
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US GAMING NEWS
SHFL execs cash out
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ollowing the sale of SHFL Entertainment to Bally Technologies for $1.3 billion, ten of SHFL’s senior executives have taken the option to sell their shares in the company with a total value of $13.6 million.
All the sales came as SHLF Entertainment asked for the Nasdaq to
SHFL filed with the Nasdaq in New York that three of the biggest winners from share sales were Gavin Isaacs SHFL’s CEO who cashed out $3.08 million, Mr Isaacs was with SHFL for less than three years prior to the buy-out.
Bally Technologies announced their new line-up of senior management this week and of the three men mentioned above only Mr Snow was named as being kept on with Bally as senior vice president of table games.
Also cashing out their shares were Garry Saunders, founder and a director of the firm, who made $2.49 million and Roger Snow, Chief Product Officer, known as one of the biggest driving forces in making SHFL so successful, he cashed in $1.72 million.
de-list them from stock trading.
Mr Isaacs and Gary Saunders were not mentioned in the new shake up at Bally so will both be leaving their roles for new pastures.
Bally Technologies have yet to confirm whether they will keep the SHFL name brand or merge with the new owning company.
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eoff Freeman the boss of the American Gaming Association (AGA) is not quite done facing up with Sheldon Adelson on their differing points of view regarding online gambling in the US.
is like burying your head in the sand. “Those opponents that want to pretend the Internet doesn’t exist, that we can squeeze the Internet back into the bottle, they’re behind the times.” Freeman said.
The chief of Las Vegas Sands has made very public his strong opposition regarding online gambling whether it be state by state or federal, however Freeman who represents most of the land based casino operators in the US including Las Vegas Sands (at present) said on Monday 25th November during an interview on the “Daily Rundown with Chuck Todd show” that regulation NOT prohibition would protect US consumers from online gambling.
Adelson has come out and said he will use all his financial and political muscle to stop online gambling, so Freeman’s comment can only anger and split the association on this topic, certainly for Las Vegas Sands point of view.
Freeman said people will gamble online whether it is legal or illegal, so to ban it and pretend it is not happening
Freeman continued to say that government should regulate on a federal level and hence protect consumers. Surely it will only be a matter of time before Adelson has enough of the AGA and leaves the association.
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AGA and Adelson poles apart with online gambling
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MACAU GAMING NEWS
Macau gambling revenues for November once again beat expectations and reached the higher end of all predictions with a 21.3% increase from the same period in 2012. Total revenues for the month stood at $3.78 billion which is the fourth highest increase of the year reported the government department who announce statistics for the gambling hub. Most expectation were for Macau to reach 20% but the 35 casino resorts based in Macau beat that easily and there is still another 8 casino resorts being built. With the Chinese government putting pressure on casino operators to do more in entertainment and leisure as opposed to focusing solely on gambling the former Portuguese colony hosted the Filipino boxing icon Manny Pacquiao in a world title fight along with the Formula one motor racing championship, both helping to increase revenues.
Mark Brown is new COO of NagaWorld
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ark A. Brown has been appointed Chief Operating Officer (COO) for NagaWorld Ltd, he will be responsible for overseeing the initial stages of NagaCorp’s casino project near Vladivostok in Russia’s Far East. Previously Mr. Brown was President of The Venetian Macao and also of Sands Macao
between 2006 and 2009, however in 2012 he was refused a gaming license by the Australian state of New South Wales after accepting a job by Echo Entertainment as Marketing Manager for their Star Casino resort in Sydney Australia, no reason was given to why the license was not granted to Mr. Brown.
NagaCorp announced in September it was planning to invest $350 million to build a casino, resort in the Russian province of Primorsky Krai, which borders both with China and North Korea. The resort will have 100 gaming tables, 500 electronic machines, the resort is planned to be opened by late 2018.
Japanese government present gambling bill
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he Japanese ruling party have now presented the land based gambling bill to parliament for voting on approval, it is still not clear if their coalition party members will support the bill which is needed before it can go to the upper house to be made into law, as they are requesting a longer con-
sultation period for the impact of gambling in the country. The parties aim to pass the bill in the next Diet session that begins in January, said Hosoda, who is also an executive acting LDP secretary-general.
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BUSINESSMAG • ISSUE DECEMBER 2013
Macau November revenues soar
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ARTICLE
It’s Quaint, but the Golden Rule Works Our feature writer Martin Baird in his December article looks at the Golden Rules for employees, they need respect and support too.
By Martin R. Baird
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or years, consultants have told casino managers that their employees are a valuable resource that must be respected and nurtured. Now someone with considerable clout is saying the same thing. Anyone who has stayed at a Four Seasons hotel knows what a great brand it is. The hotel chain’s founder, Isadore Sharp, has published a book titled “Four Seasons: The Story of A Business Philosophy.” In a review of the book, the Wall Street Journal wrote: “The core reason for the Four Season’s staying power, Mr. Sharp believes, is a credo that may sound almost quaint. Follow the Golden Rule. Workers, he says, are vital assets who should be treated accordingly. At most hotel companies, he notes, housekeepers, cooks, bell staff, waiters and clerks … were the ones ‘who could make or break a five-star service reputation.’”
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Sharp knows how to provide good customer service and all he has to do to prove it is open the doors of any Four Seasons hotel. If he believes something as simple as treating employees with respect can lay the foundation for outstanding service, then let’s hear it for quaint and corny.
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All casino employees who have direct guest contact are on the front lines of making or breaking their property’s service reputation. Indirectly, the same applies to employees who never rub elbows with guests. For example, the chef who grills a guest’s steak to order also helps polish the casino’s reputation. So here’s a challenge. If your casino wants to offer fivestar service, pay as much attention to your employees as you do to your guests. Employees are the ones who
actually deliver the service. This is more important than ever today because of financial strains and staffing restrictions that have swept through the gaming industry. Even with a smaller workforce, there are still employees working the casino floor, the restaurant and the resort hotel. They need respect and support. Here are four keys to following the Golden Rule with employees. Key No. 1. Show Your Respect With Training. Yes, money is tight, but setting aside dollars for employee customer service training accomplishes two things. First, it shows employees that the casino values them. They will see that the casino made an investment in them and that will inspire them to generate a return on that investment by giving guests an outstanding experience at your property. Second, training gives employees the skills they need to provide stellar service. Few people are born with the service gene. This is something that must be learned. Give them the skill sets they need. Key No. 2. Empower Your Employees. Once employees have the skills to provide great service, turn them loose and let them do their thing. Again, Isadore Sharp shows the way. The Wall Street Journal review went on to state: “Turning the top-down management philosophy on its head, Mr. Sharp authorized every Four Seasons employee to solve service problems as they arose and to remedy failures on the spot. Managers were told ‘Keep your egos in check and let the people who work for you shine.’” What a concept – teach people how to do something and then let them show you they can actually do it! That gives employees a sense of empowerment and empowerment is a potent motivator. Motivation leads to success.
ARTICLE
Key No. 4. Give Employees Reasons to Advocate for Your Property. This wasn’t in Isadore Sharp’s book, but if your employees become advocates for your property of their own accord, then you know you are giving them the respect, encouragement and positive work environment they deserve. And the payoff for you can be huge above and beyond quality guest service. Employee advocates love their jobs and wouldn’t dream of defecting to a competitor. This goes a long way toward reducing turnover. Employee advocates come to work on time and are prepared for their shift. That certainly improves efficiency. These advocates are shining ambassadors for the casino where they are employed. They say positive things about the casino in the
community and that could lead to new business. They also encourage friends and family members to consider working there, broadening your potential talent pool.
The founder of Four Seasons is right. Employees are absolutely critical to maintaining any company’s reputation for service. Therefore, treat them the way you want to be treated. Follow the Golden Rule and your guest service will shine.
Martin R. Baird Bio Martin R. Baird is chief executive officer of Robinson & Associates, Inc., a Boise, Idaho-based consulting firm to the global gaming industry that is dedicated to helping casinos improve their guest service so they can compete and generate future growth and profitability. Robinson & Associates is the world leader in casino guest experience measurement, management and improvement. For more information, visit the company’s Web sites at http://casinocustomerservice.com and www.advocatedevelopmentsystem.com or contact the company at 208-991-2037. Robinson & Associates is a member of the Casino Management Association and an associate member of the National Indian Gaming Association.
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(Continued) Key No. 3. Reward Employees for A Job Well Done. We all crave recognition and casino employees are no different. When an employee is observed providing great service, let them know they got it right. Simple praise is greatly appreciated. A formal reward-and-recognition program is another option. The critical thing here is to provide the reward as soon as possible after the appropriate service behavior occurs. That helps the employee connect the two mentally. A reward loses its punch if it comes a week later.
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ASIA GAMING NEWS
Singapore ready to tighten online gambling laws
The country already has strict laws regarding land based gambling but none of the current ones properly cover online or telephone gambling as the government has not updated the gambling regulations since the boom in online/remote gambling, that will change in early 2014 according to government minister Iswaran. The Home Affairs Minister added that while these measures may not be foolproof, they will impede access to remote gambling platforms and send a clear signal of the regulatory stance in Singapore. However there is a small hope that the Singapore government may make some provisions depending on their study of local jurisdictions and whether a total ban would be even more destructive. “A total ban, without any authorised, or limited authorised options may be effective, but it will also create more problems with more activity going underground. If you offer something that is controlled and managed, it might create an alternative away from unauthorised activities.” Said the Minister. But he added that if there are exemptions, the govern-
ment would want to keep the number of regulated operators to a bare minimum. Mr Iswaran also gave several reasons why there’s concern over remote gambling. “It is ubiquitously and easily accessible through the Internet and mobile applications, especially by a younger and more tech-savvy generation. In a recent online survey of around 1000 Internet users commissioned by the Ministry of Home Affairs, we found that almost 3 in 10 respondents had gambled remotely at least once in the past year. This is not surprising as one can gamble anonymously from almost any location at any time.” He says the nature and design of the games, like poker and casino-type games, also lend themselves to repetitive play and addictive behaviour. And from a law and order perspective, remote gambling operations may become a source or conduit of funds for other illegal activities and syndicated crime. Some analysts estimate that the size of the remote gambling market in Singapore could be US$300 million, and it is expected to grow by 6 to 7 per cent each year. Prior to any new legislation there will be public consultations to find out the views and opinions of the public and all connected organisations.
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he Singapore government are moving to insert a new bill into law that would ban all types of online and telephone gambling within the country, said Second Minister for Home Affairs S Iswaran.
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SPECIAL FEATURE
A Maturing Casino Market
Recent growth masks underlying difficulties
Our feature writer Wayne Openshaw looks at the casino industry, what challenges there are, what casino spend would help, using future technology to push your bottom line and the all important customer traffic.
By Wayne Openshaw
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asino expenditure in the UK has remained above £1.1 billion in 2013, thanks to growth in the online sector compensating for continued decline in land-based venues.
Online players are motivated primarily by financial gain, whereas land-based players are more interested in the quality of facilities and games available than in their prospects of breaking the bank.
Short-term prospects for growth are likely to be constrained by on-going pressure on consumers’ disposable incomes, a maturing of the online gambling market and lack of scope for expansion of the land-based sector.
Potential of technology worth a spin
InfinityGaming • ISSUE DECEMBER 2013
More visits, but less money on the table
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Casino admissions grew rapidly following the introduction of the Gambling Act, with new levels achieved being sustained during the current recession. However, admission growth has not translated into increased revenues, as new customers have tended to be more casual and lower spending in nature, particularly where table gaming is concerned. Similar players, differing motivations Although land-based and online casinos share common demographic appeal – particularly to men, under-25s and more affluent groups – they appear to attract largely distinct audiences within these markets by catering to different types of demand.
Casino gaming is well placed to benefit from current technology trends towards platform neutrality in entertainment media and mobile internet connectivity. Opportunities are emerging to blend elements of land-based and online play, location-sensitive technology is enabling call-to-action marketing strategies, and casino game formats are well suited to small screen and mobile play through both their visual appeal and speed of action. Segment Performance The growth of online gambling, and particularly casino gaming, has been heavily driven by an appetite for inhome entertainment and the ability of technology to cater for it in ever more innovative ways. Recent advances have uniformly been about adding realism to the computer-generated experience: live dealers, 3D imagery and a replication of private tables available in land-based venues.
A special featured by Wayne Openshaw on the gambling industry
Key Challenges for Casino Operators Facing a maturing market, intense competition and more sophisticated customers, online casino marketers needs a new approach to online customer acquisition and retention. With sophisticated customer insight capabilities enabled by market knowledge, Marketers should now analyze customer data more granularly, predict customer behaviour more accurately and calculate the cost/response ratio for marketing campaigns more precisely. In Europe, nearly 8.5 million Internet users were exposed to a gambling banner advertisement, an increase of nearly 40 percent on the same period last year when the online gambling sector targeted six million. The online gaming industry has experienced enormous growth
during the last few years, with new customers eagerly embracing online convenience in droves. Growth, however, does not come cheaply. The costs to acquire new online customers is the highest in Europe, due to competitors heavy subsidizing of promotions, advertising space and retailer costs to make it easier for new users to sign up for service. As a result, we face a pressing need to maximize the average return per user (ARPU) by retaining the best customers for as long as possible. This challenge is particularly acute in the face of slowing growth due to market saturation and the impending expiration of many original customers’ service plans. However, Marketers cannot count on customer acquisition to increase or even maintain its desired share of the online gaming market. Casino Ad Spend Monthly average ad spend is currently above that of 2011 and 2012 as operators compete for share in a maturing market. Firstly, online casino advertising needs to be conducted in the specific niche within this business. Otherwise you will stay out of your target audience, as the competition level is very high. A great part of the whole process of online casino marketing is finding the correspon-
dent place on the online gambling market. There are a slew of internet marketing strategies. The most common are the following: Affiliate Marketing Search Engine Optimization Search Engine Marketing (Content & Product Features) Banner advertisements Sign Up Bonuses E-mail campaigns and newsletters Pay per click ad campaigns Offline Marketing Online Site Reviews Social Networks, Blogs and e-Directories Mobile Access At the very least, we need to determine how much it costs to acquire a customer from various media and calculate the lifetime value (LTV) of these customers. These two metrics are key to understanding the entire marketing process of getting new customers and maximizing the revenue from them by more regular contact. A third measurement that is often omitted when prospecting is where to spend to acquire customers. The “Multi Channel Strategy” should ensure that the advantages of the online and offline activity are optimally exploited and enhanced:
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The domination of online casino visiting by bookmaker brands indicates the on-going importance of brand recognition and trust, and also the extent to which sports betting is driving business to casino sites. The continuing appeal of bonuses and free credits shows that, despite their attraction to brand reputation, consumers’ levels of loyalty to these brands are comparatively low.
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A MATURING CASINO MARKET (continued)
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nline customers are acquired through the online activity through increased visibility with Search Engine Marketing which has visibly helped build brand awareness, gain competitive advantage and attract direct and indirect acquisition. Through offline activity, internet customers get to know the brand and the online services. Traffic, Traffic and more Traffic
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The success of any online gambling site is always determined by the amount of traffic which can be directed to that website. TRAFFIC. According to some of the internet rating services we can see who is getting the most amount of online traffic and we can measure how we compare to our competitors. Beyond name recognition, there are many creative ways to generate traffic. Any internet casino operator will need to spend money advertising or bringing in traffic, and this is the determining factor of an online casino’s success. Most of the expense a company will face in this venture is marketing to increase traffic.
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Simply listing a casino in search engines like Google, Yahoo!, Alta Vista, Excite, etc. will not get the traffic required. A search in Google for “Casino” comes back with millions of web pages. Required in the marketing activity is where www. grosvenorcasinos.com will advertise and the cost per acquisition (CPA) of new players must be measured with each activity. Low cost and effective is the target and the most effective low cost marketing is in SEO and SEM. With the average company relying on affiliate marketing for up to 80% of their customer acquisitions, it is glaringly obvious that marketing diversification is a top priority. This
need for diversification is twofold since not only is there the risk of dependency on a single advertising technique, but also there are low profit margins associated with affiliate traffic which help fuel this drive and the idea of obtaining thousands of customers per month from high rankings, and the knowledge of cutting affiliates out of the middle with good rankings and produce a positive ROI. Affiliate Programs make money and are the fastest and most effective way for an online casino to generate cost effective revenue and awareness. An affiliate marketing program is responsible on an average for 60 to 80 percent of traffic coming into a casino. Affiliate marketing plays a key role in marketing activity not only in traffic generation but also in acquisition and retention. For this purpose Search Engine Optimiza-
tion and Affiliate marketing are key drivers for traffic, acquisition, brand growth and retention. Gathering the data The method of determining how much we can afford to spend to get new customers and retain existing customers, before we can present a formula, we need to know a few details that should be available to us through financial data or historical performance: Net contribution Prospect advertising Customer advertising cost, 0- to 12-month Prospect average deposit value Number of annual customer contacts Customer average response rate
Conclusion The competitive nature of the online gambling industry has made it difficult to utilize traditional methods of internet marketing to increase casino traffic or to create dependency on a selected few marketing vehicles. Online casino marketing requires the full use of all available marketing tools both online and offline. Competitor analysis and web analytics are a the road map which is necessary to develop and maintain key marketing strategies and reach. Innovation, creativity and an understanding of potential customers and existing customers’ activity, preferences and requirements create the opportunity to capture casual players and retain the interest of existing players.
Calculating breakeven and acquisition cost It happens to the best of us. Occasionally, we lose a client. As a matter of fact, online gaming companies experience between 20 and 50% customer turnover annually. Maintaining a solid customer base means the difference between success and failure.
Understanding customer acquisition costs (CAC) helps refocus attention on customer retention and customer support. We need to properly identify acquisition costs for new customers. Acquisition costs reveal the efforts and resources involved in building a quality long lasting business. Calculating acquisition costs vary among gaming products. The method for calculating these costs is fairly simple if we get your ducks in a row. Losing an existing customer costs twice as much as acquiring a new customer. The cost doubles because you are losing the original CAC for the existing customer who must now be replaced by a new customer to maintain the stability of your client base.
E-mail marketing has been around since the early days of the Internet. It was one of the first firmly established Internet marketing tactics and is still today one of the most effective ways to reach an audience and activate, reactivate and maintain contact with customer databases.
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percent. - For example, if you advertised through email, and the first email advertisement generated a 1% response, and the second mailing generated a 3% response, the average response for the period would be 2%. With this data in hand, we can start by calculating breakeven spend per advertisement and move into the acquisition cost.
E-Marketing plans are becoming more reliant on social media, mobile access and promotions. The most important aspect of any E-marketing plan is deriving traffic to quality content. The critical part of any marketing strategy is that the traffic that you generate is highly targeted. Existing customers are gold, ROI is important, to make sure you get the maximum return from existing customers - it is essential to maintain contact with existing customers.
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US GAMING NEWS
NJ to consider casino resort out of Atlantic City
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ew Jersey lawmakers are to consider on Thursday 12th December whether Bergen County should be allowed to open a casino, the first of its kind outside of Atlantic City. The Assembly Regulatory Oversight and Gaming Committee will discuss and explore bill AJR11 on the prospects for gaming in Bergen County. The committee will evaluate the impact of recently enacted casino gaming legislation and research whether gaming should expand beyond Atlantic City for the first time in the state’s history. State Senator Ray Lesniak says a casino in North Jersey could stem the outflow of revenues to casinos in
New York and Jeff Gural the Chairman of the Meadowlands Racetrack says that a casino in the north of the state could generate over $350 million a year in revenues.
However some believe that a new casino in the north could damage the prospects of south state Atlantic City casinos.
T
he American Indian tribes have not so far taken part in any online gambling in the three states that have legalised online gambling in Nevada, Delaware or New Jersey but by the end of 2013 that could be changing.
How much the US market is worth a present is unsure, Fitch Ratings believes New Jersey which is the largest of the states to allow online gambling says the market is worth $300 million to $700 million a year in the coming seven years.
The American Indian tribe in rural California, the Alturas Indian Rancheria Tribe will be ready they believe to launch online gambling to customer outside of the US, either before or just into the new year. They are not alone with the same strategy being taken up by the Cheyenne & Arapaho Tribes in Oklahoma, looking to entice overseas online gamblers to their website that will be launched soon in 2014.
But the Indian tribes are not all together with online gambling with many believing it will harm their current land based casino operations, with the other side saying it will help with their large scale un-employment problem.
In total American Indian tribes operate 460 gaming venues in 28 states in the US and many tribal leaders feel with global revenues in online gambling at $30 billion a year, they are missing out on a piece of the action.
One thing is for sure the Indian tribes want to get into online gambling, how and in what form is still not certain but come the end of the year, they will be live with their own offerings.
BUSINESSMAG • ISSUE DECEMBER 2013
American Indian tribes ready for online gambling
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US GAMING NEWS
PokerStars license application for NJ online gambling suspended for two years
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okerStars application to take part in online gambling within the borders of New Jersey, has been dealt a blow following the news that the New Jersey Department of Gaming Enforcement (DGE) has suspended their application for two years. “The Division of Gaming Enforcement has determined that the application of Rational Services Limited (PokerStars) casino service industry licensure (CSIE) will be held in a suspended status for a period of two years,” the New Jersey DGE said in a statement. “The Division, within that period, may consider a request for relief to reactivate the application if significantly changed circumstances are demonstrated at which time the Division’s investigation of PokerStars and its affiliated entities and associated individuals will be resumed to assess suitability.” “The Division’s determination is based primarily on the unresolved federal indictment against Isai Scheinberg for the alleged violation of federal gambling statutes, namely, the Illegal Gambling Business Act and the Unlawful Internet Gambling Enforcement Act, and the involvement of certain PokerStars execu-
Eric Hollreiser, Head of Corporate Communications for PokerStars, said following the announcement, “We are disappointed that the NJ Division of Gaming Enforcement has suspended the review of our application at this time. We note that the DGE will resume the review of our application if our circumstances change. We will remain in open dialogue with the DGE and will update them on changes in our situation as they occur.”
AC casinos report back to back revenue increases Atlantic City casinos found themselves in the strange position of reporting two consecutive months of increased revenues, with November revenues up 27% for November compared to the same time last year.team is confident of achieving market expectations for the full year and beyond.” However, the increase was due to the fact last November superstorm Sandy shut down the casinos for almost a week, so the figures for the month will be skewered. The 12 Atlantic City casinos reported total revenues of $224.7 million for November, compared to 2012 which was $176.6 million.
US Congressional hearing gets under way into online gambling A Congressional hearing into online gambling is currently taking place with both, supporters and anti-online gambling groups happy to take part and let their opinions be heard, the hearing that started on Tuesday 10th December before the House Subcommittee on Commerce, Manufacturing and Trade, with Geoff Freeman President of the American Gaming Association stating on the first day of the hearing that the hearing was timely and also the gambling lobby appreciated Congress’ leadership. On the other side of the fence the Coalition to Stop Internet Gambling applauded Congress for “taking seriously the threat of Internet gambling” In their statement they said “the hearing provided a chance to explore the dangers associated with online betting.” Also on Tuesday Republic Senator Joe Barton a strong supporter of online gambling in the US said at the hearing, “I will say as a practicing Christian that God does give men and women free will, and I think that we ought to have a law that represent free will in this issue.”
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tives with Internet gaming operations in the United States following the enactment of UIGEA,” the New Jersey DGE said in its statement.
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AFFILIATE ARTICLE
By any means NOT! An Affiliate Fairy Tale By Ellen Learmonth Ellen Learmonth for December looks at the evil stepmother in our pantomine gaming special feature for affiliates.
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o!! That’s not allowed, please remove!! Is what our fair affiliates hear from their mean affiliate manager more and more these days? The T & C’s have become longer and longer and the restrictions to the marketing partnerships that used to be simple, have been poisoned by the wicked step mother. Gone are the happy simple days when all an affiliate had to do was get new paying customers and deliver traffic by any means.
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The story so far. The evil stepmother also known as the “Ruling Operators” had become very dependent on their fair but clever affiliate partners during the rise of the wondrous world of online gaming. This was the time that the humble affiliate was better at digital marketing than the big bad operator was.
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Operators were getting more reliant on their partners for incoming traffic while their marketing teams were split into affiliate and marketing managers. The marketing managers slaving over deals in direct marketing, media buys (often offline) and sponsorship opportunities. Strange words like SEO, SEM/PPC and Content Marketing was something the fair affiliates specialized in, but now gradually, slowly the operators realized that digital marketing was more than placing a banner on a mainstream website and casting a magical wish of conversion.
The evil plan of self-domination began and the Operators started to look with interest at what their most successful and brave affiliates were doing in order to understand the source of traffic. Once they started to understand, they became bewitched. Why?? - they thought - should we be giving away an average of 30% of our net revenue for traffic we could be sourcing ourselves? They didn’t like the answers, so off they went to find more marketing managers to enslave in their own offices that would fill departments named after the poised and magic words SEO, SEM/PPC and Content. Now the story starts to unfold as the evil stepmother that the operators had become - was tasked to building teams that can deliver paying customers through the disciplines affiliates excel in. Expectations were gigantic and resources grew like mushrooms with investments increasing in the race to get the number one spot. While marketing budgets increased the wicked affiliate had to be put in their place and savings had to be made at the cost of the humble affiliate. Strong competition between operator and affiliate forced new Terms and Conditions to be forged to the benefit of the evil stepmothers and the affiliates were enslaved to guarantee new deliveries in order to retain some of the earnings that they had worked for many years to achieve.
The evil stepmother
guin, Panda, and Phantom so their enslaved star pupils with their black hats and their white hats could not keep up.
The ruling Operator did not much care about the past; the future was hers and at a higher share! The evil stepmother seemed to have the spell at hand, but the riddle remained unsolved in many cases as the ghostly ROI was difficult to find in the Forrest of creatures named Pen-
The moral of the story is that you should keep to what you know you can do best and accept that others might be able to do things better. There’s no room for an evil stepmother in business, so stay fair in your business relationships and business will be fair to you.
Thus the ruling Operator started to re-organise her army of marketing soldiers again and again and along the way relationships with the fair affiliate would have to be mended as he who has worked hard deserves the best prize.
ABOUT THE AUTHOR: Ellen Learmonth has been active in digital media for over 14 years covering all disciplines of online marketing with strong expertise in acquisition and affiliate marketing. She is passionate about innovation and new technology with a strong drive for creativity. Her 2006 World Cup Campaign earned two prestigious creative design awards at the New York Festival (Bronze) and The International Davey Award (Gold). Now living in London, Ellen is lending her expertise to some of the major gaming operators.
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hy has the operator turned against me wondered the fair affiliate? Did I not deliver many thousand players in the past? Did we not have a gentlemen’s agreement in place? Was it too much to ask for a share in the spoils? I will not be able to chase the most relevant magic keyword and sometimes I am not even be permitted to write the most relevant brand names, so how can I retain my fair share if my efforts are hampered?
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EUROPEAN GAMING NEWS
Betfair announced their half yearly results to the end of October with revenues falling 6% to £188 million. However, underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 16% to £48.9m, which actually performed better than anaylsts expectations.
Erika Schwartz Poole new head of poker at 888 888 have a new Head of Poker following the departure of Gareth Edwards, her name is Erika Schwartz Poole. Ms Poole joins the online gambling firm from her previous role as a consultant and prior to that was Global Marketing & PR Manager for PKR.
Holland Casino to cut more jobs Holland Casino is to announce shortly that it will cut one in every three jobs in its head office in an attempt to lower costs and help make the loss making casino operator less centralised. The Dutch operator runs 14 casinos and plans to decentralise its operations in belief that this will help make the company more streamlined and let each individual casino make more of its own decisions.
Unibet to leave Microgaming poker network
Bet365 to add 600 new jobs
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nibet said that it would be leaving the Microgaming Poker Network (MPN) in order to become a standalone poker product. Unibet has commissioned the Estonian based solutions supplier, Relax Gaming to develop exclusive poker software for its brands so that it could go it alone with its unique online poker platform. Daniel Eskola, the head of gaming at Unibet, explained the motives behind this dramatic move. “The environment in the online poker industry has changed over the years and we have come to the insight that being part of a poker network is not sustainable for Unibet in the long term,” he explained. “This project has given us the possibility to start from a blank piece of paper and define everything we believe is important for a fun poker experience. In a way, our goal is to bring the fun back to poker by creating software with a clear focus on the casual player.”
Midlands based betting firm Bet365 has announced it is to create up to 600 new jobs in a new expansion plan that will see the company move into its new headquarters in Forge Lane Stoke on Trent. Bet365 has over 2,200 employees currently and with the move has promised to increase that by another 600 by the end of the decade, reaching almost 3,000 staff. Its joint chief executive Denise Coates CBE said: “I am from the area and apart from my time at university, have always lived here. “Key to bet365’s success, is our fantastic and loyal group of employees who have worked with me over the years I have worked in Stoke.
KEEP UPDATED FOLLOW US ON
BUSINESSMAG • ISSUE DECEMBER 2013
Betfair announce half year results
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SPECIAL Feature Article
What’s another Year? Our feature writer JJ Woods gives his opinion on the past year and the year to come in the gambling industry. JJ looks at everything from FOBTs to US online gambline
By J.J. Woods
JJ Woods was born in Ireland but left in the 1970’s to live in London and he started his career in banking. After four years in Banking in London JJ trained in the Casino Industry. Over the last 30 years JJ has dedicated his career to the setting up, including: design, opening and management of Casinos around the world. Throughout his time in Ireland JJ has also done several Radio, Television and Newspaper interviews on the subject of Casinos and gaming, he is above all extremely passionate about the Casino Industry and Completed a gaming submission to the Irish Government during Legislation Research. He is a leader in respect of the responsibility of customer care He was responsible for the following Casino designs and set ups in Ireland : Macau (Cork), Silks (Dublin). www.atlanticcasinoconsultants.com Email: info@atlanticcasinoconsultants.com
UK / Fobt’s:
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arliament in the UK this month has voted in favour of the Governments stakes and prizes proposal despite opposition from the Labour Party and what seems like a change of opinion from the Liberal Democrats in that several of their MP’s voiced their dislike of these machines but when it came to the vote they were happy enough to kick the whole issue back into the long grass ! Not in my experience has a gaming apparatus ever taken up so many headlines and opinions over the last two years, but this particular issue is unusual in that seasoned gaming professionals who are in the heart of the gaming industry have spoken out about the dangers of these Terminals and more unusual the Government are still not listen-
ing. My opinion is that they are seriously dangerous devices and set out to destroy the 1st rule of any Gaming Legislation ‘’to protect the vulnerable’’. The reality is Fobt’s have highlighted the dangers of something that has been around for years which is High Street Gaming Arcades. This type of gaming activity is highly addictive for the following reasons : Opening Hours, Locations, Easily Accessible, and the Initial stake is affordable. They have existed quietly for many years and to a large extent a lot of people who visit these gaming arcades prefer this. However compare the amount of Slot Machines in an Arcade to the amount of Fobt’s in a betting shop
and this is where I believe ‘’the gallery’’ was born. With only four machines in such a small area and people waiting their turn to play, Comments would be made on how the player was betting, and more importantly the privacy or the idea of playing in secret went out the window and I believe this played an important role in creating the very publicity that Fobt’s have in the media. The Government’s gambling control bill needs several amendments and I am sure that they understand that now. The Bill itself was eagerly awaited by many in the Gaming Industry an Industry that Ireland is slowly awakening to. Considering that it is taken 57 years and 45 years after the UK introduced a Gaming Legislation I guess the fairest comment would be that it did not set
Brief comment on gaming issues that arose during 2013 and the year ahead. Ireland / Gambling Bill : The Government’s gambling control bill which was released in July of this year needs several amendments and I am sure that they understand that now. The Bill itself was eagerly awaited by many in the Gaming Industry an Industry that Ireland is slowly awakening to. Considering that it is taken 57 years and 45 years after the UK introduced a Gaming Legislation I guess the fairest comment would be that it did not set the International gaming world on fire. The main issues regarding Casino and Slots are : It sets out a maximum limit of 40 casino licences that can be in operation at any one time in Ireland and limits the number of tables in casinos to a maximum of 15 and gaming machines to 25. It also suggests that the minimum amount of tables in a Casino should be 3 . These recommendations are in short nonsense! Ireland’s current population could not support any more than 15 Casinos at an absolute maximum. As for the 15 table / 25 slots I would like to see the business model for this and to top it off the suggestion that 3 table Casino models should also be allowed? Incredibly the Government Bill is catering for these types of Casinos after legislation and one does wonder what preparation and study was done in this area not to mention the message Ireland is sending out to the International Gaming World as these type of 3 table operations are associated with Countries who do not have a proper gaming regulations and are usually operated illegally.
USA / Online Gaming :
World :
New Jersey has just entered the online gaming business with reports of between 30,000 - 50000 signing up in the first two weeks. Whilst New Jersey is not the first state to introduce online gaming (Delaware and Nevada) were before , it is still seen as the great test for the very large online gaming companies because of its population size (over 9 million) and early predictions are that it will exceed 1 billion in first year revenues which would put it roughly in par with the UK market.
Sri Lanka has delayed its casino bill as it is busy with the Budget but all is expected to go ahead in the new year. Bermuda looks set to legalise Casino’s and the issue is set to go before the electorate in early 2014. Japan is also looking at introducing Casinos The first step of what will likely be a long process toward legalization of gaming was taken last week when the ruling Liberal Democratic Party submitted a bill into the nation’s Diet (legislature). Hiroyuki Hosoda, leader of the procasino group, wants to pass the bill in this session.
Of course other states will follow and a conservative estimate for the American online Gaming market is reportedly around 10 billion in 2020. By then we are led to believe that Brussels will have introduced a ‘’euro zone online gaming tax and legislation ‘’ so I guess it will be back to the euro against the dollar. Atlantic City as most people are aware has been underperforming now for some years and it is hoped that the new online business will resurrect it’s an image and revenues as there are significant property deals been done there right now on the back of this new legislation.
China has recently put its review of a proposed casino act on hold after lawmakers who are opposed to any new legislation demanded more time to gather all the necessary information required, again we can forecast that this will not be a quick process. It is in China’s interest to legislate though as Japan is not that far away . Cyprus is presently working on their Casino legislation and as I have always predicted will probably complete it before Ireland does !
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the gaming world on fire.
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we are poker
INTERNATIONAL GAMING NEWS
Sri Lanka casino bill not this year
Buddhist leaders also said the casino could be detrimental to the culture of Sri Lanka, a predominant Buddhist country where gambling is not accepted morally, despite the on-again, off-again presence of casinos dating back to the 1990s. It was expected that the gambling bill to allow for the construction of casinos would be pushed through before the end of 2013, however this seems more unlikely with the country’s investment and promotion minister, Lakshman Yapa Abeywardena, saying on Tuesday the deal “might not” be approved by the end of the year. “I haven’t prepared the cabinet paper yet,” Abeywardena told reporters in Colombo. “These days you can’t do it because we are busy with the budget. There is no hurry. These are long-term projects and we are aiming to start
by 2015-2016. You have time.” Crowns resort-casino complex is planned for a two-acre plot in the heart of the Colombo commercial hub. It has already been delayed once after the government asked Lake Leisure Holdings, the joint venture between Crown Ltd and its local partner, Rank Entertainment Holdings, to change its construction plans. Officials with the local partner downplayed the latest delay. “Possibly it will go through once the parliament starts in the first week of January, so one month does not make any difference,” Ravi Wijeratne, the owner of Rank Holdings, told Reuters. A Crown spokesman said the news wasn’t a shock to the company. “The delay is not unexpected given the Sri Lankan Parliament has been dealing with its recent budget and subsequent debate. Discussion between Crown and the Sri Lankan Government continue.”
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ames Packer’s $400 million planned casino resort in Colombo Sri Lanka faces further delays before Crown can start construction. Opposition leaders from outside the government say that Mr Packer and his company are receiving favourable concessions which are not being offered to local businesses.
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INTERNATIONAL GAMING NEWS
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ames Packer the billionaire owner of Crown Entertainment in Australia and partner in Macau casino operator Melco Crown Entertainment is reported to be dating Australian super model Miranda Kerr. The new romance is being reported in multiple Australia media outlets and according to reports neither Packer or Kerr are denying the rumours. The 46 year old billionaire recently completed his divorce from Erica Packer who were married for six years and Kerr herself who was married to English actor Orlando Bloom. Both families have been close and even holidayed on the same private island previously and Mr Packer has recently offered Ms Kerr business advice on her new ventures. One final piece of information is that both Mr Packers former wife and Ms Kerr come from the same small country town near Sydney, Gunnedah, they certainly do grow beautiful women in that small town.
Playtech selected by Holland Casino for online gambling Online gaming software giant Playtech has been selected by Holland Casino to be its preferred online casino software provider, however online gambling regulations for the country have yet to be concluded until 2014 and the online gambling launch will not happen till 2015, with the issuing of online gambling licenses. Under the deal Playtech will develop and provide online blackjack, slots, roulette, bingo and poker to Holland Casino.
New Sydney casino resort moves closer
Crown Entertainment is moving closer to their goal of a new casino resort in Sydney after legislation was passed for the license process by the upper house in Australia. The $1.3 billion project at Barangaroo, on Sydney Harbour, needs a special license before it can proceed with an expected opening date of late 2019. The resort is aimed a high end gamblers with high minimums and a clause banning poker machines from the development. Premier Barry O’Farrell gave his support for the development earlier this month, saying it would attract international tourists to Sydney. The agreement guarantees total licence fees and gaming tax payments of at least $1 billion to the NSW government over its first 15 years.
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James Packer dating Miranda Kerr?
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FEATURE ARTICLE
A Tale of Two Cities, Macau and Las Vegas Part 4 Concluding
By Professor I. Nelson Rose © 2013, I. Nelson Rose. Prof. Rose is recognized as one of the world’s leading experts on gambling law, and is a consultant and expert witness for governments and industry. His latest books, INTERNET GAMING LAW (1st and 2nd editions), BLACKJACK AND THE LAW and GAMING LAW: CASES AND MATERIALS, and the recently published GAMING LAW IN A NUTSHELL, are available through his website, www.GAMBLINGANDTHELAW.com. On June 27, the U.S.–China Economic and Security Review Commission held a hearing in the U.S. Senate Office Building on developments in Hong Kong and Macau. The second panel focused on “Money Laundering in Macau and Implications for the United States.” I was asked to testify, along with A.G. Burnett, Chairman of the Nevada State Gaming Control Board, and James H. Freis, Jr., Former Director of the U.S. Treasury Financial Crimes Enforcement Network (FinCEN). This article is an expanded version of my written and oral testimony. It is based on some of my prior published writings, including “China’s Gambling Problem,” “Does Macau Create Legal Risks for American Operators?” “Victim Of Its Own Success.”
Final part of Professor Rose’s must read article on Macau & Las Vegas
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roblems in one jurisdiction always lead to problems in others. State governments in the U.S. cannot ignore news like this. American casino companies in Macau have licenses in Nevada, Michigan, Mississippi and other states, that are now at risk, if any tie at all with organized crime is discovered.
approval. This included evaluating the foreign government’s controls. I still have a copy of the “Report on Gaming Control in New Jersey,” dated April 19, 1979. The Report concludes, “the Nevada State Gaming Control Board finds that a comprehensive, effective government regulatory system exists in New Jersey.”
Nevada has laws on the books that already require regulators to look at the operations of its licensees wherever they may be. The state’s “foreign gaming” law has gone through a number of changes over the years.
Although New Jersey might have been okay with Nevada evaluating its laws and regulations, politically, it became difficult for the United States when Nevada declared itself the arbiter of other nations’ governmental controls. The U.S. Ambassador to the Bahamas told me the leaders of that independent nation did not like being judged by a mere state. There were also legal questions of whether Nevada was creating trade barriers in violation of U.S. treaties.
Nevada’s original policy was to forbid its operators to open casinos anywhere else. This was obviously designed to keep Nevada the only game in town. And it worked, until the voters of New Jersey approved amending their State Constitution in 1976 to allow casinos in Atlantic City. The Nevada Legislature reacted by passing a law in 1977 allowing Nevada licensees to open casinos outside the state, but only if the gaming regulators gave their prior
The proliferation of legal gaming eventually made it too costly for Nevada to investigate every foreign regulatory system in advance. And Nevada operators complained that the delay allowed their competitors to get a new jurisdiction’s casino licenses first. So, the law was
A Tale of Two Cities, Macau & Las Vegas changed, in 1987, 1993 and 1997, to ease the standards and eliminate the requirement of prior Nevada approval.
New Jersey does not have a specific foreign gaming law. But the Casino Control Act, like similar statutes in all casino licensing states, requires that its licensees show they are of “good character, honesty and integrity” on a continuing basis. This expressly includes a licensee’s “business, professional and personal associates,” “to the extent that they may reflect upon actual character and present fitness to either hold a casino license or participate in gaming operations. Casinos in New Jersey have to meet a tough standard: rather than proof by a mere preponderance of evidence, found in other states and regular civil suits, New Jersey requires applicants and licensees to prove their worthiness by clear and convincing evidence. As New Jersey demonstrated in finding that Pansy Ho was unsuitable, and that MGM had to sever its ties with her or leave the state, the standard
is equally tough in practice as in theory. Nevada regulators had the same information, but reached a different conclusion. Part of the difference could be the more relaxed attitude Nevada has toward gaming. So long as an operator or its partner has not been charged, let alone convicted, of a crime, Nevada regulators will normally not suspend or revoke a license. Nevada regulators may not like Stanley Ho, but they held that they would not forbid MGM from being in a joint venture with Pansy Ho, unless they found evidence of Stanley Ho having influence over Pansy. New Jersey, on the other hand, found Pansy Ho unsuitable because she had obtained the $80 million she invested in her joint venture with MGM from Stanley Ho. Their position was that they did not need any actual evidence of influence; that no one, not even a multibillionaire, gives anyone, includ-
ing their daughter, that amount of money without strings attached. The difference in approaches can also be seen in the remarkable action New Jersey took in taking the license of the Tropicana Casino in 2007, without a specific finding of criminal wrongdoing, or even of charges having been filed. The New Jersey Casino Control Commission found numerous problems, including management’s “abysmal” regulatory compliance and a “lack of business ability . . . and a lack of good character, honesty, and integrity.” Although New Jersey found violations sufficient to deny the renewal of the casino license, Nevada regulators never seriously threatened the many Nevada casinos owned and operated by the same company, Columbia Sussex. Other states are more likely to follow New Jersey than Nevada if a license is actually revoked. Some, in fact, make it automatic. Indiana law, for example, required -
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Now Nevada licensees only have to notify state regulators within 30 days of signing a deal for a foreign casino and apply for a “finding of suitability.” And those regulators have been given the impossible job of continuously monitoring activities around the world. Even with contacts, reports filed by licensees, and occasional visits, there is no way a Nevada regulator can always be sure that there are not secret agreements made on the Chinese Mainland.
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A Tale of Two Cities, Macau and Las Vegas
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olumbia Sussex to give up its license for the riverboat Casino Aztar, because Indiana law does not allow the state to license anyone who has had its licensed revoked in another state. History is a factor here. When Nevada legalized casinos in 1931, it imposed no regulatory controls. The state allowed convicted felons to obtain gaming licenses. The theory was that since gambling was illegal in all other states, the only individuals with experience would be people involved in illegal gambling. Nevada, fearing federal intervention, only began regulating its casinos after the Kefauver televised Congressional hearings in the early 1950s focused on organized crime’s ties with gambling, including Nevada casinos. New Jersey took a completely different approach. When it legalized casinos in the 1970s, it expressly stated that it did not want anyone with a background tainted in any way. Its theory was that training schools and foreign gaming jurisdictions would fulfill the industry’s demand for skilled individuals. This proved to be
correct. Today, the children of those original Nevada licensees are sometimes now running the casinos in that state, or are even the state government. Nevada regulators are thus not in a position to revoke gaming licenses simply because an individual’s father allegedly had ties with organized crime. On the other hand, the state is still concerned with possible federal criminal investigations or developments in other states that could be interpreted as showing Nevada does not adequately regulate its licensees. Times may be changing. Macanese law was amended a few years ago to allow casinos to loan money directly to players. Hong Kong courts issued a ruling that allow Macau casinos to collect there. But, until the PRC allows the enforcement of gambling debts through its legal system, and loosens its restrictions on the transportation of cash across its borders, the “junket” system will continue. And who the VIP gaming promoters are remains a problem. It is significant that not a single Macau VIP gaming promoter has been approved by the government of Singapore. The two casinos in Singapore do even more business than the largest casinos in Macau. But Singapore requires disclosure of financial information and fingerprinting of VIP gaming promoters, and it won’t approve one of these VIP gaming promoters until it is sure that the real owners of the VIP gaming
promoter are actually who they say they are. U.S. state and federal investigations are the most obvious danger for American casino companies doing business in Macau. But the other potential problem comes from the PRC itself. As a totalitarian government, the PRC is not overly concerned with legal niceties, like holding hearings before changing its rules. But its leaders do care about bad publicity, such as stories of government officials embezzling money and losing it in the casinos of Macau. Nobody knows for sure why the PRC has occasionally put restrictions on travel from the Mainland to Macau. But when the PRC changed the rules for residents of the provinces nearest Macau from daily visits to only being able to enter Macau once every three months, the impact was immediate. I was teaching Gaming Law at the University of Macau at the time. One of my students was in charge of the frequent visitors program for an American-owned casino. When visa restrictions were imposed from Beijing, she lost her job, because there were no more frequent visitors. There is a fear that other American companies will become reluctant to partner with casinos in Macau, and that investors will get scared off if there are more rounds of bad news. But the major threat and unknown question is whether the Beijing government will once again impose visa restrictions on Mainlanders’ visits to Macau. If the PRC closes the border it would be shooting itself in the foot. But the bullet would kill the casino industry in Macau.
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(Continued)
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INTERNATIONAL GAMING NEWS
Israel to have casinos?
Negev Desert, Israel
The Nevada Governor visited Israel in October as part of a trade mission and raised the idea when he met with Prime Minister Benjamin Netanyahu and President Shimon Peres. According to reports Sandoval was not there to just talk about the possibility but just came up in conversation, “I think it’s an area of interest,” said Consul General of Israel David Siegel in Los Angeles. “It’s not in the tangible phase yet, but it’s something that we’re looking at.” Gambling in Israel is legal but under strict supervision from the government which allows state run lotteries and sports betting. Along with several legal borderline gambling ships cruising out of holiday port Eilat. There indeed was a casino in Jericho back in 2000 run by
Casino Austria in the Oasis Hotel Casino Resort in Jericho but that closed because of public disturbances at the time and never re-opened. But it is known that Israel is made up of many political parties and many have been strongly opposed to casinos for a long time. Before Nevada legalized gambling in the 1930s, Las Vegas was a desert town with about 5,000 residents. Today the city hosts 40 million visitors a year, and gaming funds one-fifth of the state budget. Siegel was quoted as saying that he believes Israel could use Nevada’s knowledge of how to “build cities in the desert,” citing that the Negev accounts for 60 percent of Israel’s land mass but holds only eight percent of the country’s population. “We can benefit from your expertise,” Siegel said. “Gaming could add to our tourism.”
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ould Israel be ready to turn the Negev Desert into their very own Las Vegas? According to Nevada Governor Brian Sandoval political leaders in Israel have shown more interest in that very possibility than ever before.
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EXCLUSIVE INTERVIEW
Infinity Gaming Magazine speaks to Dan Stewart, founder & owner of Pokerscout Q Dan thank you for speaking to us today, you run a hugely popular online poker web ranking site and know a few things about the game, can we start by asking how long have you be involved in poker? DS I started playing poker around 2000, after seeing the movie Rounders. When I started playing online, Paradise Poker was by far the largest site. PokerScout was launched in early 2006. Q Do you play poker yourself Dan? DS I don’t play much anymore. Reporting on the industry takes too much time to be able to play seriously. Q How challenging was it when the 2006 UIGEA came into effect, as you launched your site then? DS The UIGEA had a terrible effect on the industry, but it sent our website traffic soaring as everyone wanted to see what the new world order would be. It overwhelmed our server at the time. PokerScout had only launched six months earlier, so we were in a good position to follow all the changes. Q Since then the online poker world looks a different place with less poker sites, do you think this is a good thing for the online player? DS Overall it had a negative effect, especially on the US player. Fewer options were available and some of them were highly questionable, like UltimateBet and Absolute Poker. Many players had their funds confiscated en route, some were questioned by federal law enforcement, and overall the US government did its best to create an atmosphere of intimidation for the operators and players. That culminated in Black Friday, which was a disaster for US players. If we eventually get widespread regulation with reason-
able rules and tax rates, then it could be a net positive for the player in the long run. I don’t see that happening anytime soon, though. Q What in your opinion makes a great online poker site? DS I think a professionally run, customer-oriented organization with experienced personnel makes all the difference. Q How much damage do you think the former owners of Full Tilt Poker did to the industry as a whole? DS While I don’t think they originally intended to defraud anyone, they certainly damaged the industry’s reputation by running such a large operation so unprofessionally and selfishly. Q What makes poker such a great game? DS The combination of skill and luck in just the right balance, combined with the social aspect, makes poker a truly great game. Q Have you ever played bricks and mortar real live poker? If so how do you perform, better or worse than online? DS I have played live and online but I rarely play anymore, certainly not enough to measure performance. It would be hard to compete against the many skilled players these days. Q What makes a great poker player? DS You’d have to ask the great poker players. Q Can you imagine seeing a new online poker site being at all successful given the strength of the current sites? DS This is a very difficult environment in which to launch a new poker site. It may still be possible to succeed in a niche market or in a newly regulated market, but to rise
Pokerscout
Interview
with
Dan Stewart The Infinity Gaming Magazine speaks to Dan Stewart the founder and owner of Pokerscout, a leading source of information about the online poker industry.
Q The US has now opened the door to three states to offer online poker, the biggest being New Jersey, would you see this trend continue with more states going live in 2014? DS For any state to go live in 2014 would be a challenge, but I hope we’ll see more states opening over the next few years. Q Many poker observers believe that US online gambling will not make any real money until California legalises online gambling and there are interstate compacts, is that a fair assessment of the situation? DS Smaller states will have a tough time generating profits. New Jersey may be large enough. Some other states definitely are, but California is the big prize. Interstate compacts would help both players and operators, especially in the small states like my home state of Nevada. Q What has surprised you the most in the years you have been working in the online poker sector? DS The sheer determination of US authorities to shut down legitimate, healthy operators was most surprising. Playing the great game of poker should not be considered a crime.
Q Finally Dan how do you see the future for online poker both in the US and globally, do you think it will get bigger or have we reached saturation point? DS We have reached a saturation point at least temporarily. The popularity of online poker hit its peak in 2010 and 2011, and now the industry needs time to settle back a bit into the new reality. That process could take a number of years, especially as young people are not flocking to the game like they did during the boom. After things settle down, we should return to slow and steady growth. Newly regulated markets will help us get there faster.
BUSINESSMAG • ISSUE DECEMBER 2013
the way PokerStars, Full Tilt and PartyPoker did during the poker boom is pretty much impossible now.
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EUROPEAN GAMING NEWS
New report shows decline in European casinos
The main highlights of the report were that in 2012 the land based casino sector contracted by 6.5% compared to 2011, with revenues now standing at €6.58bn in 2012. The survey showed that 12 of the ECA’s 23 member countries declined in revenues for last year, with those worst hit being Greece, Italy and Switzerland. The survey also showed that over 80% of the
total revenues for the ECA’s European member states came from just 8 countries, France contributed €2.34bn of the total €6.58bn in revenues, followed by Germany, Switzerland, the Netherlands, Italy, Greece, Spain and Portugal which individually contributed in the region of 4 to 10percent of revenues each. Ron Goudsmit, Chairman of the ECA contends that casinos across Europe have been hit to varying degrees by smoking bans, competition from online rivals and slot arcades, as well as the widespread economic malaise. Two of the worst affected countries were
Greece and Italy, Greek casino revenues fell by more than a fifth to €339m last year, compared with a 19% drop in Italy to €449m. Switzerland is not far behind with poor revenues, where a strong Swiss franc and strong competition from border casinos has seen players take their business elsewhere, the domestic casino market shrank 11.5% to €623m. The survey and concluding report points the finger for the revenue declines at online gambling where ECA Chairman Ron Goudsmit believes that online gambling is cannibalising the land based casinos sector.
UK MP fails with online gambling inside casinos bill James Durridge MP tried to place an amendment in front of the House of Commons proposing for land based casinos in the UK to be able to run online gambling within their premises. The Conservative MP for Southend who has currently 3 casinos in his constituency and soon to be 4 said the Department for Culture Media and Sport had an “old-fashioned” view of gambling where there was a “clear division” between online and offline gaming. But he told MPs during the bill’s report “The reality is different. Online and Land Based gambling had merged into almost one industry with many operators involved in both sectors.” However for Mr Durridge and his supporters the amendment failed to win majority support and was asked to remove the bill.
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he European Casino Association (ECA) in partnership with Gambling Compliance and Herzfeld Consulting has released a survey of how the European casino business faired in 2012.
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BUSINESSMAG • ISSUE DECEMBER 2013
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