March 2015 Infinity Gaming Magazine

Carl Icahn takes Taj Mahal

Dutch founder online gambling act steps down

Finland call for online gambling review

InfinityGaming

www.gaming-awards.com | ISSUE MARCH 2015

The WIG Awards Welcome to the 6th year John Edmunds Joins the writers rosta

THE

APP MAN FEATURE

Sense & nonsense from Congress

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EXCLUSIVE INTERVIEW PAUL SWADDLE CEO Pocket App

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contents InfinityGaming

EDITOR’S LETTER

The App Man Interview........................................04-07 Paul Swaddle talks to Infinity Gaming Magazine

The 6th Women in Gaming Awards.................07-09 New Categories announced and launched

Snese & nonsense from Congress....................14-17 Professor Nelson Rose returns with superb article

Sheldon Adelson.....................................................18-21

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THE APP MAN

Protector or Protectionist? Tina Thakor Rankin article

Finland politicians call for online......................22-23 gambling review

Poland relaxing.........................................................24-25 Country set to ease online gambling laws

John Edmunds joins the family.........................26-28 Industry veteran with his superb 1st article

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PROTECTOR?

EU Gambling Case Law is an ass.......................32-34 Andrew Tottenham article

Marty Baird article...................................................38-40 Spend and invest but don’t foget people

Caesars lose $1 billion in Q4...............................42-43 Casino giant latest results

Woods Talk.................................................................44-47 JJ Woods speaks to Dennis Korthouwer

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JOHN EDMUNDS

Connecting with us................................................48-49 InfinityGaming • ISSUE MARCH 2015

How to follow the latest news

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How and where can you read the magazine?

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WOODS TALK

EDITOR’S LETTER Lana Thompson - Chief Editor

by

EDITORS NOTES

InfinityGaming

Welcome to the March edition of the Infinity Gaming Magazine.

CONTRIBUTING WRITERS Christina Thakor-Rankin Martin R. Baird John Edmunds Andrew Tottenham JJ Woods Professor Nelson Rose

Well can you believe it a quarter of a way through the year already, it only seems like yesterday we were all celebrating the 8th International Gaming Awards!

But never fear we have the 6th Women in Gaming Awards coming and have already launched the categories and accepting nominations. Indeed let me say a big thank you to all our superb judges for the Women in Gaming Awards, you can see them inside the magazine.

As for the magazine this month all I can say is wow!!! What a bumper edition, so many articles from our great writers and we welcome another who joins our ranks in the form of industry veteran John Edmunds, welcome on board John.

To start off we have the CEO of Pocket App, Paul Swaddle, what he does not know about Apps he could write on a postage stamp, so

if you want to know the dangers when developing an App read this first.

We have the wonderful Professor Nelson Rose with a hard hitting look at Congress and Tina ThakorRankin asking if Sheldon Adelson is a protector or Portectionist, you decide.

CONTACT US Clever Duck Media Newmarket 20 Centrix@Keys Keys Park Road Staffordshire WS12 2HA UK Tel: +44(0)1543 478 889 claire@cleverduckmedia.com

Of course we have Marty Maird with his never ending line of superb articles on customer service, he really knows his stuff Marty when it comes to keeping the customers happy.

PRODUCTION Clever Duck Media Newmarket 20 Centrix@Keys Keys Park Road Staffordshire WS12 2HA UK

Finally but not least contributing wroter come interviewer JJ Woods and his “Woods Talk” speak to Dennis Korthouwer.

Enjoy!

PUBLISHING Infinity Gaming Magazine is operated by © Clever Duck Media Ltd ® Company Reg. No. 687 1018 (Registered in England) ADVERTISING: Sponsorship Opportunities Colin@cleverduckmedia.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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EXCLUSIVE INTERVIEW

Exclusive Interview with Paul Swaddle CEO – Pocket App Ltd Infinity Gaming Magazine spoke to Paul Swaddle the boss of Pocket App and a man who knows more about Apps than most, you could call him “The App Man”

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: Paul thank you for talking to the Infinity Gaming Magazine today, to start off can you explain to our global readers what is your company Pocket App? PS: Pocket App is the largest independent app developer in the UK. Essentially we design, develop and distribute award winning apps and enable ourclients to take advantage of all things mobile with our broad range of solutions.

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Q: You have been CEO of the company since it started back in 2011 and indeed co-founded the company, what was the reason for starting the company?

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PS: I felt that other companies were taking the wrong approach. At Pocket App we are a mobile company first and foremost and software developers second. By that I mean that we are mobile experts, we know that the mobile experience is different and that an individual’s mobile is very personal and we understand how to get the best out of the mobile platform. Being early adopters of mobile technology ourselves means that we have expertise across the whole mobile ecosystem working with leading brands, operators, media agencies and device manufacturers.

Q: In just the 4 years and some since launching Pocket App what changes in that time have you seen in the sector?

PS: : We’ve seen rapid change! There has been a proliferation of tablets, not only for consumer but also for enterprise use. There really has been exponential growth in the enterprise market and since the start of 2010 tablets have clearly established their place as the next generation of digital development with huge growth in sales every year, and now they seem to be more and more adopted by big enterprises.

Q: What types of companies request the development of Apps, is it just technology companies or is there a broader spectrum of companies?

PS: Definitely not. The request for app development comes from an incredibly wide breadth of organisations; from consumer led brands, to event companies and from engineering companies to printer manufacturers. Any organisation keen to increase their real time customer engagement through the mobile channel would benefit from a mobile app. Likewise, organisations that want simpler and more efficient customer service and sup-

ties involved in app development and sofail to work with a specialist company.

Working with a specialist organisation is more beneficial as not only do we help with design, strategy and consultancy, but also with the development and distribution of the app once it’s ready.

Q: The App market has grown phenomenally over recent years, on average every person on the planet has 10 App on their mobile, is that going to become greater in time?

Q: Would you say that every company can benefit from having an App or does that company need a clear perspective of what the app is for before just going out and getting their own app?

PS: I think it’s important that before acompany builds a mobile app for their business,they set clear objectives and then build their strategy accordingly.

That is really the benefit of working

Q: What are the common mistakes by companies wanting to launch their own app?

PS: I alluded to it slightly in the previous question, but one of the most common mistakes is that organisations underestimate the complexi-

Q: Which sector in the App world will see greatest growth, would it be Games, Education, business, which?

PS: I think there is going to be growth across all sectors. Simply because regardless of your sector, increased engagement with potential customers will always be key.

(Continued overleaf )

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port, or who want to monetise promotional offers or even sell products or services online could benefit from a mobile app. So requests come from companies in all sectors and range from start-ups to blue chip organisations.

with a specialist company like ours.

At Pocket App we provide all of the consultancy and support needed for our clients’ different mobile journeys. We help them understand where mobile fits within existing business functions and processes and, very importantly, how it can deliver real ROI. We think it is essential to a successful partnership, for us to guide our clients through their mobile strategy from initial design through to planning and development.

PS: Mobile is the future. IDC’s mobile phone forecast predicted that total sales of smartphones would reach 1.2 billion units before the end of 2014, which was a 23.1 percent increase over 2013. Additionally, in 2014 British companies building apps for smartphones and tablets were forecast to generate £4bn in revenues.

This trend shows no sign of abating so I would expect to see the app market to continue to grow and for consumers to have more and more applications on their smartphones.

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EXCLUSIVE INTERVIEW PAUL SWADDLE CONTINUED

Q: In general what tips can you offer any company wanting to launch their own app, what are the common mistakes made that should be avoided?

PS: As mentioned above, my main piece of advice would be to work in collaboration with a specialist organisation and not to underestimate the complexities that are associated with the development of mobile applications.

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A specialist organisation, such as ours, will enable you to harness the latest technology, user interface design and development methodologies, and therefore deliver a mobile app that works across all mobile devices and operating systems.

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Q: Since Pocket App launched back in late 2011 how has the company grown and do you specialise in any specific areas?

PS: Our specialism is mobile and so we help organisations across all sectors. If I had to pick out some sectors in which we are particularly knowledgeable I would say sports,

mHelath, logistics and user activation and retention.

Q: You recently visited the Mobile World Congress, what new and exciting technologies were there?

PS: As always it was great to attend Mobile World Congress to see what we can expect over the coming months and years.

Wearables and the Internet of Things were still very much high on the agenda, but something else which was also very interesting was the development made around autonomous vehicles. I don’t envisage that there will be any significant impact before the end of 2015/2016 but these will definitely be the areas of interest and innovation.

Q: Will we all be living our lives on mobile more and more in the future do you think and in what areas is there still expansion possible?

PS: It may sound like a cliché, but the only certainty is change. Having said that, smartphones have

penetrated every aspect of our daily lives. Not only are they the fastest selling gadgets in history, eclipsing the growth ofthe mobile phones which preceded them, but about half of the adult population now owns one and by 2020 it will be around 80%.

The real power of smartphones comes from their size and connectivity, realistically, their size makes them the first truly personal computer and with that in mind I would expect mobile to continue to enrich lives and reshape industries.

Q: Before we let you go Paul, you are a techno geek, if there was one thing you could just make happen in technology to make lives better what would it be?

PS: For me it is not the tech per se, but rather what you do with it. For me it’s really about about enabling.

So I would like to see more impacts in the education space, as this has the potential for the biggest long term impacts…… oh and a really cool thin computer watch, just because!

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InfinityGaming• ISSUE MARCH 2015

Meet the Judges

6th Women in Gaming Awards

10 Leading ladies from the World of Gaming will Judge entries in all categories. Nominations are now open, nominations are FREE to enter. The WIG is here to inspire, motivate and recognize the huge importance of women in the Gaming sector.

Britt Boeskov – COO Unibet

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Christina Thakor-Rankin – Gaming Consultant

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Onika Russell – Head of Payment Services at Ladbrokes

Rhonda Whittaker – Corporate Communications Manager at GTECH

Emma Lindley – Director of Confyrm Inc

Tammy Schuiling -Marketing and Communications Consultant

Lee-Ann Johnstone – Head of Acquisition & Merchant marketing for NETELLER at Optimal Payments

Tracy Cohen – TCSJOHNHUXLEY Director of Marketing / AGEM Director of Europe

Lyndsey Barrett - VIP Operations Director Les Ambassadeurs Club

Una Murga – Online Gaming Industry Executive

15 Categories: Affiliate Manager of the Year - Affiliate Team of the Year- B2B Excellence Award - Employee of the Year - Excellence in Customer Service Award- Hidden Talent of the Year (Online or Land Based)- Industry Achiever of the Year (Online or Land Based)- Innovator of the Year - Inspiration of the Year - Leader of the Year (iGaming) - Leader of the Year (land based) - Star of the Future - Marketing Excellence Award B2C- Team of the Year (Land based or Online) - Industry Pride of the Year

FREE TO ENTER - CHECK THE WEBSITE FOR FULL DETAILS

FREE TO ENTER NOMINATIONS OPEN NOW

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2015

GAMING-AWARDS.COM/WIG

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GAMING NEWS

Suncity looks at Vietnam island casino resort

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uncity Group which is the largest VIP junket operator in Macau wants to invest in a new casino resort in Vietnam’s largest island. The southwest island of Phú Quốc is 155 miles from Ho Chi Minh City and the CEO of Suncity has already met local officials on the island to bring the companies plans further according to local reports.

The report also says that the province’s vice chair Nguyen Thanh Nghi has welcomed Suncity Group’s interest and has invited the group to submit an official plan of the resort for consideration.

Safecharge reports “outstanding” year Safecharge had an outstanding 2014 said Chairman Roger Withers after the payment services provider announced their first annual report as a public listed company.

Revenues stood at $76.9 million for the year compared to $43.2 million in 2013, representing a rise of 78%. Profits jumped 79% for 2014 to $44.5 million for the year.

The payment services firm said that its cash balances at the end of the year totaled $146.5 million, which represents huge growth on the$11.8 million in 2013.

“It is a privilege to present such an outstanding set of results in our first year as a public company,” Withers said “I congratulate David Avgi (chief executive officer) and the whole of the SafeCharge team, for an excellent performance during a landmark period for the group.

“We entered the year trading strongly with financial strength to pursue our stated M&A strategy.”

Carl Icahn takes full control of Taj Mahal Carl Icahn has been granted full control of the Trump Taj Mahal after a bankruptcy judge in Delaware approved the Chapter 11 reorganisation of Trump Entertainment Resorts over to the billionaire property investor.

In total Icahn was owed $290 million by Trump Entertainment Resorts and was their most senior investor, which he has now swapped for all the stock in the casino resort. Icahn says he wants to keep the name of the resort and refurbish it back to an excellent standard along with keeping the 3,000 employees.

“We hope to emerge with a healthy balance sheet, a solid platform from which the Trump Taj Mahal can emerge as the leading gaming destination in Atlantic City,” Trump Entertainment attorney Erez Gilad told the judge.

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The move comes as Macau struggles with declining revenues and an estimated two year wait for the world’s largest gambling hub to recover. Suncity which has seen their VIP number plummet are interested in looking at new opportunities and the Vietnam resort is one of those such opportunities.

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WORLD NEWS

Bloomberry to buy south Korean casino T.H.E Hotel & Casino is one of seven casinos located on Jeju island a popular vacation destination for Chinese.

Bloomberry chairman and chief executive Enrique Razon said in a statement. “This is our first venture outside of the Philippines, and the possibilities for expansion in this

Founder of Dutch online gambling act steps down

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he Dutch State Secretary and founder of the Dutch Remote Gambling Act has stepped down from his government post and a scandal broke regarding a payment worth millions of dollars that prosecutors at the time paid back to a well-known drug trafficker.

It was 15 years ago that the then prosecutor in the case Fred Teeven had told lawmakers that the drug dealer, Cees Helman, had been paid far less than the almost $2.6 million he received back from the state, and

that all records of the transaction had been lost. Both assertions were discovered to be false.

Teeven had authorized the tax-free payment after authorities were unable to show that the money confiscated had been illegally obtained and the funds were returned to Helman.

Now that Teeven has stepped down and was the architect of the Remote Gambling bill it is unclear if it will proceed to reform the countries online gambling laws.

country are promising.”

Bloomberry owns and operates the $1-billion Solaire Resort and Casino in Manila Bay that the government hopes will rival Macau and Las Vegas. “Solaire is on a trajectory of growth and we are now slightly shifting our focus to other destinations,” said Razon.

Macau report better February figures than expected Macau gaming revenues for February were slightly better than expectations coming in at $2.4 billion a drop of 49% from the same period last year. The drop was caused by VIP players staying away from the world’s largest gambling hub for the Lunar New Year holiday period.

Expectations were between a drop of 51% and 54% for February so the news was better than hoped in what many casino operators know will be a very difficult year with analyst’s calling a drop of 8% in revenues for 2015, this compounds the revenues fall in 2014 which was 2.6%.

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loomberry Resorts the Philippine gaming compnay said it would be acquiring a South Korean Casino Hotel in its first ever venture overseas. The company said it had purchased 92% of Golden & Luxury Co. Ltd the owning firm on T.H.E Hotel & Vegas Casino on the southern island of Jeju.

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FEATURE ARTICLE

Sense and Nonsense From Congress

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.

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t’s generally known that Congress is about as popular today as cockroaches.

It’s not just the misuse by the GOP of the filibuster in the Senate or the repeated attempts at economic extortion That is actually unfair to cockroaches. In a head to head by the Tea Party crackpots in the House of Representasurvey conducted by Public Policy Polling, cockroaches tives. On the few days that Congress actually meets had a more favorable rating than to work in D.C., the politicians seem Congress is so Congress. And that was in January to have no connection with the real strange.

A man 2013. world. The Republicans in the House orchestrate televised “investigations,” gets up to speak

By June, a different polling organizaon burning non-issues, like Bengand says nothing. tion, Gallup, found congressional aphazi, or hold hearings on abortion Nobody listens proval had gone down even further, and women’s health with no women to a historic low of 10 percent. This and then everyone testifying. is not only the worst rating ever for disagrees” -Boris the legislative branch of the federal The most recent example was a hearMarshalov. government, it is the lowest approval ing on Internet gambling, with only rating for any institution of any opponents, and one guy who wants kind since Gallup first started takto sell something, testifying. ing surveys of the public approval of Congress 40 year ago.

Worse, the few members of Congress who actually showed up for this hearing on online gaming seemed to And this was before the Republicans in Congress shut not know what they were talking about. down the federal government and brought the U.S. to the brink of defaulting on its national debt.

The new Democratic U.S. Senator from Hawaii, Brian

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“

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Sense and Nonsense From Congress

But the Republican U.S. Senator from Nevada, Dean Heller, has no excuse. He is the ranking member of the committee hearing the testimony. And coming from Nevada, he had to know that the main point he kept reiterating was simply wrong. Many of the members of Congress, but especially Heller, repeatedly blamed President Obama’s Department of Justice for “unilaterally” overturning decades of established law.

The law in question is the federal Wire Act. And the position that got overturned was that of the Department of Justice’s Criminal Division, which used to hold that the Wire Act covered all forms of gambling.

Heller is not a lawyer, but had he bothered to ask one, he would have been told that the DOJ’s position had been criticized for years, and had been rejected by federal courts, including the only U.S. Courts of Appeals to consider the issue. Even the DOJ does not have the right to reject published opinions from these Courts, second only to the U.S. Supreme Court in their power to interpret federal law.

Missouri Senator Claire McCaskill (D.-Mo.) started things off by declaring that Congress was concerned that online gaming was being used by “terrorists looking to launder money to fund their activities.” This is known as a canard, defined as “a false or unfounded report or story; especially: a fabricated report; a

groundless rumor or belief.” There is no evidence that Islamist fundamentalists are sitting around plotting how to blow up airplanes, while they play Texas Hold ‘em.

The hearing was by the Senate Subcommittee on Consumer Protection, Product Safety, and Insurance.

You knew how things would turn out when you read the title of the hearing: “The Expansion of Internet Gambling: Assessing Consumer Protection Concerns.” If that weren’t enough, here’s who they chose as witnesses: Chuck Canterbury, National President of the Fraternal Order of Police. The highlight of his testimony: “We know this for certain, organized crime is using offshore online operations to launder their profits.”

Really? Is that offshore online gaming operations? Name one.

Matt Smith, President of Catholic Advocate, who accused “large states” of lobbying to get the DOJ to

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Schatz, might be forgiven for his comments. He was only appointed to Congress at the end of December and is the second youngest member of the Senate. But somebody, like an aide or a senior Senator, should have told him that, no, the federal government is not going to overrule Hawaii’s complete prohibition on commercial gambling. It is impossible to imagine Congress imposing the same policies toward gaming on Nevada and Utah, or Hawaii.

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(Continued)

Sense and Nonsense From Congress

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hange its position on the Wire Act. Assuming a lobbyist for a state could do that and not go to prison, exactly which states are those? California? Texas? Florida? He wants the federal government to overrule the states and crackdown on legal gambling. He’s only about 60 years too late, since every state except Hawaii and Utah have large-scale commercial casinos, tracks or lotteries; or all three.

criminals need to use gambling to finance their other crimes. Doesn’t dealing in illegal drugs and prostitution produce enough money?

Jack Blum, a lawyer specializing in money laundering cases, began his testimony with, “Personally, I think gambling is dumb and I learned early on that the house always wins.” I have always loved that canard. If the house always wins, why are there repeat customers?

This would cause a political problem, if there were any chance Congress

Meanwhile, members of Congress from states with legal gambling and those without, conservative Republicans and liberal Democrats, U.S. Senators and Representatives who know the law and those who don’t – all have plans for Internet poker.

They all want it done their own way.

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Thomas Grissen, whose company makes bio-identification for online applications. Grissen started by saying he is neutral on online gaming.

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So, what new facts did the Subcommittee discover from these experts? I bet you did not know that not just terrorists, but drug dealers, pornographers and human traffickers “could be” using Internet gambling to launder money. Exactly how are all these terrible human beings utilizing online gaming? Blum, the moneylaundering expert, explained how Al Capone and Meyer Lansky bought casinos and race tracks to launder their money. It’s always good to throw in organized crime, when you want to scare people.

But I’ve always wondered why

might actually pass a law dealing with online gaming. But since our federal lawmakers have literally not passed any new substantive law since the Republicans took over the House in January 2011, that’s not likely.

Congress has passed some bills: naming post offices, appointing people to commissions, while fighting over money. Democrats, with the help of a handful of Republi-

cans, have managed to overcome Tea Party resistance and approve extending the Federal Aviation Administration and renew the Violence Against Women Act. But, except for amending the patent laws, no new substantive proposal has gotten through both houses to be signed by the president.

So, there is virtually no chance that the only new substantive law would be a bill legalizing Internet poker, or outlawing it.

The states, including governors, state legislators, and state lotteries, have woken up and are actively lobbying Congress to keep its hands off legal gaming. The argument that the states can’t handle Internet gaming falls in the face of a century of states-only regulation of alcoholic beverages and gambling.

And the idea, advanced again at this hearing, that a completely new federal gaming commission would do better than state regulatory agencies with decades of experience, is just plain silly.

The good news is that all this nonsense is only a waste of time. It won’t produce an actual new federal statute.

This may be the only time that it is actually good for the country that Congress never passes any new laws.

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FEATURE ARTICLE

Sheldon Adelson: Protector or Protectionist

By Christina Thakor-Rankin Feature writer Christina Thakor-Rankin takes a look at the US online gambling situation and asks is it protection or protectionist.

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or any number of reasons, gambling is a divisive issue at the best of times. In the build up to an election, however, it seems to take on a life of its own, bringing out the very best, and the very worst of those who argue for and against: prohibition or regulation.

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Aside of the fact that it is easier to engage people using a moral, religious and societal issue which most voters are familiar with and can relate to, than say tussling with the complexities of budget deficits and foreign policy, what makes this a really interesting debate is that for both sides, the weapon of choice, or basis for their argument is ‘protection’.

Historically both have been seeking to protect someone; customers from themselves, from unscrupulous grasping operators, from temptation, and the general evils of

the wages of sin, and increasingly from being unwittingly involved in criminal or terrorist activity.

One, or all of these make for an emotive discussion in themselves, but throw in the fact that the ‘naysayers’ are currently led by one of America’s richest individuals, whose wealth comes from operating one of the world’s most successful gam-

bling businesses, and suddenly, the blue touch paper is lit.

Throw in the additional fuel that Mr Adelson is not against all gambling, but a particular form of gambling, namely online or remote, in which

he does not appear to have any significant vested commercial interest, but which potentially poses a huge threat to the land based gambling sector, and to his current interests in Las Vegas Sands, and suddenly, we have an explosion on our hands.

Since the regulation of online gambling in some States in the last couple of years, and an early foray into the world of online gambling by some of Sands direct competitors such as MGM and Caesar’s, Mr Adelson has been on something of a mission to close the loop-hole which has allowed individual states to regulate online gambling.

Starting with the launch of the Coalition to Stop Internet Gambling and culminating in his backing of a bill in February 2015 introduced by Representatives Jason Chaffetz, a Utah Republican, and Tulsi Gabbard, a Hawaii Democrat, which aims to Restore America’s Wire Act (RAWA), and see a

The reason behind this is Mr Adelson’s concern that online gambling is essentially a vehicle for the exploitation of the young, the poor and the elderly, in that it crosses a line by bringing gambling directly into people’s homes, 24 hours a day and without necessary protections, in a way which land based gaming does not.

Rep. Chaffetz has stated that his reason for supporting the bill was as a result of concerns that online gambling companies are targeting children, saying that is ‘...offensive and wrong. When you’re a seven year-old kid and there is no physical barrier, and all you need to do is get your iPhone - that becomes a whole new world.” He further added that, ‘This is the Wild Wild West. There are no rules, no prohibitions, no structure, no oversight, nothing.

Republican Sen. Lindsey Graham, has described internet gambling as

a ‘nefarious activity’ and suggested that ‘people in the criminal world and terrorist world could get a benefit from it.’

By anyone’s standards these are very strong, very emotive statements.

To someone who has no knowledge or experience of online gambling, the image of opening the door to a world where criminals and terrorists are able to exploit children and the vulnerable with impunity is a very scary story.

To those who do have knowledge or experience of online gambling this is just a scary story.

The key words here are ‘knowledge’ and ‘experience’.

Rep. Chaffetz describes online gaming as ‘the Wild, Wild, West…no rules, no prohibitions, no structure, no oversight, nothing.’ And he is right – if we were still in the early days of the 2000s.

When online, or as it was called then internet gambling first started, it really was pretty lawless, being a classic example of technology moving faster than legislation and regulation – not unlike the world of Bitcoin today. It attracted the good, the bad and the ugly – and there was no way of distinguishing the good from the bad, or indeed the ugly.

It was new, very few people understood it, and even fewer had any idea as to how to go about regulating it – this new concept which transcended all state, national and international boundaries.

But with time came knowledge and experience, to the point where today, almost a decade on from UIGEA, those who work within the online gambling sector, will tell you that the best way, the only way in fact, to protect the young, the poor and the vulnerable, and keep criminals and terrorists away is to regulate.

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return of a ban on online gambling at federal level.

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he online gambling sector is now quite possibly one of the most regulated sectors in the world. Operators are not only required to check and confirm the age and identity of each and every player when a player first signs up to play, and take proactive steps to promote and ensure that players take a responsible approach to their gambling, they are also required to actively monitor all player activity and behaviour for signs of problems or criminal activity.

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There is no such thing as player ‘anonymity’ online. Online operators are required by law to not only literally know who their customers are, but where they play from, when they play, how they play, what they play, how much they play, every single time they log-in. They are also required to conduct money laundering and other checks to ensure that their money is not linked to criminal or terrorist activity.

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Compare this to land based casinos. How many casinos check and confirm the age and identity of every single player who comes in and plays for cash? How many insist upon membership applications where the information provided by the customer is verified prior to them being able to access gambling services? How many casinos monitor and log every single spin on a machine or bet at a table that a customer makes? How many land based casinos offer ATMs on the premises, and how many of these are monitored to identify customers who make repeat or frequent visits as an early indication of a problem?

How much must a customer spend in a land based before anyone considers conducting any money laundering checks or trying to establish where the customer’s money came from? Would a land based casino know if a customer was deliberately engaging in loose play at a table if the stakes were relatively low, or has otherwise passed cash over to another in the form of chips?

The test is could a customer who looked to be of an acceptable age be able to walk unimpeded into a land based casino, hit the tables or machines and then cash-in or cashout out say $3,000.00, without any problems or questions being asked by anyone at any stage, and without anyone knowing what they played or how much?

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.

in the experiences of the past - when internet gambling first started it really was a free for all. The world has moved on from this, but the US has effectively been sitting in an internet gambling vacuum for the past decade. Under such circumstances, and the absence of more recent experience, it is easy to see why the arguments of today might be fought on the experiences of the past.

US citizens already have access to online gambling; they are already being targeted and exploited by unscrupulous operators; and these operators are getting away with it because they sit outside of the reach of law enforcement – off-shore or in the world of Bitcoin. The only antidote to this is US regulation. And without regulation there can be no protection.

There is a case to be made that it is easier to detect an underage gambler in a face to face environment, but if the concern is that firms will target the young, a group who commercially do not have much money to spend, then applying the same rules of advertising, incitement and penalties to gambling, as currently apply to any other adult product, such as alcohol or tobacco.

In view of the above, and given that he is a very intelligent, intuitive

Businessman what exactly is Mr Adelson’s motivation for opposing online gambling on the grounds that he has? It is unlikely to be a veiled attack on those rivals who have moved into the online space, nor is it likely to be a slight or insult against the competencies of those regulators who have licensed his businesses to date. And it flies in the face of credulity that someone who is a staunch Republican, patriot, capitalist and defender of the constitution and its tenets of equality and freedom of opportunity would use the political system to stifle competition – it flies in the face of everything this man stands for.

Could it be that the fear of the internet gambling Bogeyman is rooted

So, is Sheldon Adelson a protector or protectionist? There is only one person who can answer this. But actually, in the end it really doesn’t matter.

What does matter is that those people who hold the future of US gambling in their hands base their decision upon the facts of today, not the fictions of the past.

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,

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f the answer to this is yes, then it is also possibly fair to say that, if you wanted to launder cash via gambling, land is probably faster, easier and more anonymous than online.

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GAMING NEWS

Finland politicians call for online gambling review

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inland could be set for a crackdown on overseas online gambling operators after politicians and regulatory organisations called for a review of the country’s gambling market.

Both parties say that at present the regulatory framework controlling online gambling is not strong enough and does not have the ability to protect consumers.

A recent study from YLE.fi says that Finish gamblers spend over €1.7 billion a year on internet gambling, which is one of the highest spending countries for online gambling in Europe.

Timo Kiiskinen, Senior Vice President of Business Operations at RAY said, “It’s clear that often customers will take the best deal when they’re considering gambling, this causes quite a headache for us, and the authorities should look at the issue more closely.

“Many international gambling sites are very aggressive with their direct marketing. And they make no effort to care for their customers. They can, for example, promise new customers €100 bonuses when they register” Interior Legislative Director Katrrina Laitinen said that her office would increase monitoring on internet gambling operators. Furthermore the director commented that the office was aware of which sites were actively targeting its national consumers.

Currently advertising by overseas online gambling operators is against the law in Finland but is bypassed using digital advertising techniques.

However the government has not stated that it will conduct a review of online gambling practices in the country, but it did say that whatever their decision it would not look at punishing their nationals for gambling online with overseas online gambling operators.

Bwin.party show loss for 2014 Bwin.Party announced its annual results for 2014 showing a decline of 29% in its online poker business which was instrumental in the online gambling company showing a loss for the year.

The struggling online firm which is in talks with at least one investor over a takeover showed a pre-tax loss of €97.7 million compared to a profit of €44.9 million in 2013. Revenues sank to €611.9 million for 2014 compared to €652.4 million the year earlier.

However the company has said that they have reached their goal of reducing costs by €30 million in 2015 and aim to reduce by another €15 million this year.

So far this year the company said its betting volumes are ahead of last year, but adverse results were not increasing profit margins making a 12% drop on profits already for the year.

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Politicians say that the current laws do not regulate foreign online gambling sites enough in advertising and targeting their nationals in marketing campaigns and as such are damaging the revenues of state owned charity focused operators such as Raha-automaattiyhdistys (RAY), Veikkaus and Fintoto.

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WORLD NEWS

Poland to relax strict online gambling

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oland are moving to more liberal online gambling laws after the European Commission approved the countries plans to allow overseas online gambling operators into the country. It is planned now that Poland will allow foreign operators to offer their services in the country without having to locate a base within the country.

Following a review of its current law, Polish ministers have lifted operator requirements to be partnered with a local partner.

It was last year that the EU Commission criticized Poland for its ruling

that only online operators based within its borders were allowed to offer online gambling.

Currently only four online operators have been granted licenses to offer

their services to nationals, they are Fortuna Entertainment, Milenium, STS and Totolek. A timeframe for the new laws is not known but it is expected to be changed this year.

Caesars want lawsuits halted against it

CEOC which is in Chapter 11 and is the part of the company that operates the casino division of the business unlike Caesars Entertainment which is now the real estate holding part of the company and the most valuable part of the business.

At the hearing in Chicago CEOC said that during Chapter 11 any and all lawsuits against itself are halted but not that of its parent company which it needs to operate fully to try and help bring CEOC out of Chapter 11.

If the suits against the parent and other nonbankrupt affiliates go on, CEOC said, “it would be nearly impossible for CEC to provide any substantial contribution to a reorganization, including the $1.5 billion that it has agreed to contribute.”

Caesars Entertainment Corp. has pledged $1.5 billion as part of a restructuring of CEOC, which would be reshaped into a real-estate investment trust and a management company. Senior lenders support the deal, while more junior creditors, including the group of second-lien holders that is suing, oppose it on the grounds that it favours senior lenders more and that second-lien creditors will

lose out heavily.

Caesars Entertainment plans to reorganise CEOC’s and see it emerge as a REIT and reduce the debt from $18.4bn to $8.6bn, but junior creditors feel they will be the losers in this deal and want both parts of the company in Chapter 11.

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aesars Entertainment Operating Co. (CEOC) has asked a bankruptcy court to halt the four lawsuits brought against its parent company that is not in Chapter 11 to allow it to continue to reorganize its finances or that opportunity could be placed in grave peril.

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FEATURE ARTICLE

Is Commoditization A Threat To Your Business?

John Edmunds Infinity Gaming Magazine is delighted to announce industry veteran John Edmunds as our latest contributing writer and we all look forward to reading some superb insights within the sector.

With over 16 years’ industry experience building high-performance teams and successful businesses around the world, John Edmunds is passionate about enabling people and technology deliver superiorbusiness results. As Chief Marketing Officer at FutureLogic, John was at the heart of FutureLogic’s digital transformationfrom hardwaresupplier to software solutions providerand subsequent acquisition by JCM Global. As an experienced thought-leader, strategist and writer, John is a regular contributor to numerous gaming publications and has been guest speaker on technologydiscussion panels and industry forumsin Buenos Aires, Las Vegas, London and Toronto.

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InfinityGaming • ISSUE MARCH 2015

ommododitzation can be a virulent and inevitable form of hyper-competition, disrupting industries, damaging firms and destroying successful products. It can also be a perceived phenomenon and the danger is that customers and business leaders buy into the commodity designation too readily so that it becomes a self-fulfilling prophecy.

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At its extreme, commoditization leaves business leaders with a very simple and stark choice: to become commoditized and fight for survival or avoid it through some form of strategic response. For some businesses the former may seem the only option, but even fighting for survival requires a strategy. For many it is a combination of both. As the zone of commoditization continues to expand, it is increasingly seen as a critical factor by industries around the world, and so organisations must do everything they can to compete without destroying the value they offer their customers.

So how should we respond to commoditization? What can we learn from the responses made by other businesses and how does this relate to their existing and

future strategic intent?

Based on the review of academic thinking, management theory and interviews with business leaders from some of the largest, well known and influential high-tech businesses in the world including Cisco, Dell, HP, IBM, Microsoft, Verizon and Vodafone, a set of business principles and recommendations follow which all business leaders and companies facing the threat of commoditization should consider.

All companies interviewed had adopted multiple strategic responses to commoditization based on their product and marketing strategy and overall business strategy. Innovation was most commonly seen as the antidote to commoditization, either through acquisition or development of discontinuous technology having the effect of resetting the market requirements. Value-added differentiation was a close second to innovation with most companies building a broader value proposition and a deeper relationship with the customer, bundling commoditized products with value-added services and innovative features.

‘When experiencing Commoditization companies should not restrict their response to a single strategy, rather pursue multiple response strategies’.

The good news is that commoditization, by itself, does not mean the end of innovation or the end of business opportunities. In fact, it can be the exact opposite. Commoditized products can be ‘inputs into innovation’. The fact that products get commoditized actually means it’s easier and cheaper to use them innovatively to gain a competitive advantage. It’s about taking advantage of the fact that they are commoditized and realizing that they are now a resource and part of a much larger total solution and not end products themselves.

‘Commoditization does not mean the end of innovation or the end of business opportunities rather commoditized products become new

platforms from which to move up the value chain.’

Commoditization is also a process rather than an event and companies should know where they and their competitors are in the commoditization cycle. Commoditization therefore should never by a surprise and can be managed proactively with a clear understanding of the future growth opportunities within and outside the core market with continued investment in both continuous and discontinuous innovation. Understanding the key capabilities within the company and within the product portfolio is central to building a technology roadmap and future growth platforms for sustainable profitability.

‘Commoditization is a process and should be managed proactively through the life of every product as part of a technology roadmap.’

Through carefully managed stra-

tegic responses, it is possible to compete in a commoditized market where commoditization can be seen as an opportunity for growth rather than the threat of decline. Even in industries with high commoditization levels, firms can respond to environmental challenges with several strategy levers that can have a positive affect on the company’s performance. An assessment of commoditization is a vital part of a firm’s efforts to address evolving marketing competition and a strategy that is balanced across operational excellence, product leadership, and customer intimacy was shown to be critical to driving performance. Where companies aim to build a broader and deeper relationship with customers by moving up the value chain replacing products and services with total client solutions. As markets become more commoditized however, a stronger competitive focus on customer intimacy seems to have the greatest impact on performance.

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“Commoditization: The process by which a product reaches a point in its development where one brand has no features that differentiate it from other brands, and consumers buy on price alone.”

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In addition below are a set of practical recommendations which business leaders can use to respond to the threat of commoditization:

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1. Monitor core markets for the following signs: a. Prevalence of me-too products and services b. Lack of connecting unique value to customer’s business drivers c. A belief that all suppliers are fundamentally the same d. Decreasing customer desire to review new options or features e. Increasing customer preference to select on price only f. Increasing pressure on margins g. Pressure on buyers to make quality buying decisions

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2. From the above signs identify the actual or perceived type of commoditization affecting the company; it’s products, and market segments: a. Deterioration b. Proliferation c. Escalation d. Evaporation e. Quasi-Commoditization f. Perceived Commoditization

3. Build a greater understanding within the company of what customers really want and what performance metrics drive their business over the short, medium and long term. This should involve representatives from all departments.

4. Analyse the cost structure of the business and decide how the company can make money on the individual commoditized products now and in the future and how it will compete with low cost alternative products and services. This may involve outsourcing or offshoring low value products and services to third parties to reduce total cost of sales.

5. Where the market allows, introduce a low cost product or service to compete in the commoditized segment, creating degrees of separation between low cost, mid range and premium products.

6. Differentiate the value proposition from competitor offerings by bundling or customizing the commoditized products with additional value added products and services.

7. Move up the value chain by addressing more customer valuedrivers and building broader and deeper customer relationships.

Particularly in product orientated markets this may involve adding professional services to the product offering.

8. Build the value of the brand in specific market segments through reputation, scale, credibility and global relationships to differentiate the brand from the competition and build a unique proposition for the customer.

9. Invest in continuous and discontinuous innovation strategies focused on solving bigger and more complex customer problems and addressing more customer valuedrivers.

10. Leverage more of the customer’s business concerns and increase percentage of customer’s total spend.

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GAMING NEWS

New Mexico Gambling Compact

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proposed new gambling compact of a handful of Native American tribes in New Mexico has been approved by the New Mexico Senate and will now move to the House for consideration and approval. The vote by the Senate was approved by a majority of 35-7 however some of the Senators dis-approved of gambling altogether but the majority of senators along with Gov. Susana Martinez’s office has spent the past three years working with tribes to craft a new gambling compact that supporters say would bring stability to New Mexico’s gambling industry, protect jobs and increase revenues

to the state.

“Certainly the art of good negotiation is the ability to make concessions. … Clearly, not everybody is happy, but that’s just the way it is,” said Sen. Carlos Cisneros, D-Questa.

“In real life, we tend to understand that when you negotiate a contract, there’s going to be give and take.”

However there are some tribes that have problems with the new proposals as it removes them from automatically gain a casino license.

The senators agreed that any tribal land owned by that tribe before 1988 can apply for a license with-

out approval from the senate. That removes tribes such as the Fort Sill Apache tribe, which wants to build a casino on land in southern New Mexico that was put into federal trust in 2002.

Last year tribes that operate casino reported net profits of $731 million and gave the state $66 million under the revenue sharing scheme.

Tribal leaders are asking the House to vote before the current session closes on the 21st March to approve the current compace.

Macau to face two more years of revenue Consultative Conference (CPPCC). He said that Macau in this time will need to look at new customer bases and indeed consider moving more towards tourism and entertainment and not rely on Chinese gamblers so heavily. Something the Chinese President Xi Jinping said on a visit to the world’s largest gambling hub recently.

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acau casino operators could face another two more years of revenue declines and difficult trading circumstances according to Co-Chairman & Chief Executive of Macau Legend Development Ltd David Chow Kam Fai. According to a recent interview with TDM Radio a Chinese broadcasting service the well-respected boss of the casino service firm who is also a member of the National Committee of the Chinese People’s Political

A question on a new gaming license was also asked of the Macau Legend Development boss and if his company was the favourite to receive the license which is rumoured to be offered to a Chinese-subsidised company , to which he replied that the speculation is all rumours at this time and must wait till the full review of gambling in Macau has been completed by the government to see if any new licenses will be issued at all.

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Mr Chow also pointed out that Chinese operators would fair better than overseas operators in this time as they have stockpiled large sums of cash as opposed to foreign operators and can see out the downturn better.

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Feature writer - Andrew Tottenham

When it comes to gambling European case law is an ass!

Andrew Tottenham Our new feature writer Andrew Tottenham takes a look at EU gambling case law and sees it is far from just about the law.

I have been involved with the gambling industry since before the internet was born. My consulting career, which began in the 1980s, has taken me to many countries around the world , which has enabled me to learn about the vast cultural and regulatory differences surrounding the gaming industry – in all its forms, including casinos, slot machine halls, VLTs, lotteries and remote gambling - in all of these different places. Through this series of occasional articles for the Infinity Gaming Magazine I will be putting pen to paper (finger to keyboard) and writing about my experiences, knowledge and thoughts developed during more than thirty years in this industry.

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he European Commission started to get interested in the gambling (and when I write “gambling” I include betting) industry in 1990 when it commissioned Coopers & Lybrand to write a report on the European industry as part of their 1992 Harmonisation program. It did not help that the C&L report was badly flawed; adding gaming table drop, slot handle and betting handle to determine the size of the market.

It is a bit like adding kilograms to kilometres; both are a measure of how big something is but are not the same.

The Commission determined there were barriers to entry and perhaps action needed to be taken to uphold the founding principle of the European Union; the free movement of services, goods, capital and labour.

The Commission held hearings in Brussels and many different groups made presentations about the nature of their particular sector or market and why the Commis-

sion should leave them alone. Most notable were the lottery groups; they likened their products to addictive drugs and themselves to drug dealers that needed strict controls that only national governments could apply. At the time I also remember having a conversation with a particularly visionary owner of a number of casinos in the UK who when I suggested that harmonisation could mean the ability to operate any number of casino slot machines answered, “Why would I want that? It would mean having to alter or find larger premises!”

This was the time of the Maastricht Treaty and the Commission desperately wanted the Treaty to be approved by the Member States. I believe that to get the Treaty through one of the things that the Commission agreed was to leave the gambling sector alone. Member States did not want the Commission messing with their gambling monopolies.

Feature writer - Andrew Tottenham

In its final report the Commission agreed that the principle of “subsidiarity” should apply and the regulation should be left to the Member States for them to determine what should be done. The Commission also noted that they awaited the outcome of the various cases that were making their way through the European Court of Justice. In other words, they weren’t convinced but did not have the political clout to go against the Member States on this one.

So it was left to the ECJ to make judgements and determine how gambling should be regulated in the Member States. Since then the ECJ has made quite a few judgements; Schindler, Laara, Zenatti, Lindman, ANOMAR, Gambelli, Placanica, Bwin Liga, De Lotto, Sjoberg, Carmen, Winner Wetten, Stoss, Engelmann, Dickinger and HIT. (Sounds like a Champion’s League football team!)

When I was younger, in my naivety, I used to believe that court judgements were about justice and law and not anything to do with political expediency. But I am sad to say that when it comes to gambling the European Court of Justice is one of the most political courts around. Each of these judgements was highly political; the court has tried to justify the unjustifiable, trying to make national gambling monopolies compatible with the founding principles of the EU. Even going so far as calling gambling a “social evil” to defend that a Government should be a gambling operator! Slowly but surely, and we are now almost 25 years since the European Commission first started to investigate gambling, these judgements have chipped away at the ability of National Governments to operate gambling monopolies in a commercial manner.

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When it comes to gambling European case law is an ass!

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Feature writer - Andrew Tottenham

When it comes to gambling European case law is an So what do these judgements mean? Well in broad terms the ECJ has decided that; 1. Gambling is a commercial activity and therefore subject to the Treaty of Rome; the free movement of services, goods, capital and labour 2. Member States cannot discriminate on the grounds of nationality 3. Member States may limit the supply of gambling product but only for social reasons 4. Member States may determine what type of gambling is allowed 5. State monopolies are compatible with EU law provided that the protection of the public is the main purpose 6. Monopolies may advertise so long as the purpose is to channel consumers towards regulated gambling

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7. Restrictions on the number of operators must reflect a “genuine diminution of gambling opportunities”

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I certainly disagree with the last five of these but the last point is a nonsense when applied to online gambling. It is true that all European Governments have sought to restrict the number and size of gambling outlets. Generally, where they have left a sector unrestricted that sector proliferates at the expense of the other sectors and flourishes; betting shops in the UK or machine arcades in Germany for example. By limiting the size of the outlet the distance people are prepared to travel is lessened and so the market area is reduced.

Reducing the number of outlets reduces access too; some people will find themselves to be a distance from the outlet and not prepared to make the journey. If you put one slot machine in a desert very few people will make the journey but if you put 200,000 machines in a desert and surround it with other activities and call it Las Vegas….. need I say more? Assuming they do not find illegal or other forms of gambling locally, limiting supply may reduce social harms. But in the age of the ubiquity of the internet, mobile phones, tablets it makes absolutely no sense. Gambling is everywhere. By reducing the number or size of land based outlets

governments are not reducing gambling opportunities.

Governments could and do argue that by maintaining a monopoly for online gambling or reducing the number of online operators as well as restricting the number of land based outlets they are seeking a “genuine diminution of gambling opportunities”. If you allow only one (or five or ten) online gambling operators in a country how is that a “genuine diminution of gambling opportunities”? The access is everywhere. I only have to go as far as my pocket.

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WORLD GAMING NEWS

Japan casino bill to face obscure committee Bet365 in Australian court over deposit bonus

The Land and Transport Committee which is has little importance compared to the Cabinet Committee which would normally hear such important bills is being chosen as a way of the bill being heard as the Cabinet Committee has a full schedule all the way till the end of the Parliamentary sessions end on June and thus terminating any hope of resorts being built anytime close to the Tokyo 2020 Olympics.

Supporters of the bill from Prime Minister Shinzo Abe’s Liberal Democratic Party believe that at least it has a chance of being heard there against all the opposition against the bill which has effectively now expired.

“As long as the ruling coalition can agree and win support, it doesn’t matter which committee it’s submitted to,” LDP lawmaker Takeshi Iwaya told Reuters, adding that more discussion among ruling coalition members was needed.

It is understood that this really is the last chance at all for casino resorts to be built in time for the Olympics and open the door to revenues for operators of some $40 billion annually.

However observers believe this is just the last ditch attempt to have the bill heard, if it ever surfaced from this obscure committee opponents would again

Bet365 is being taken to court in Australia by

the Competition & Consumer Commission because the organisation says the online gambling operator breached consumer law by making “misleading representations” to customers.

A pre-trial hearing in Darwin’s Federal Court heard that the online gambling operator has breached consumer laws on misleading customers with its free bet or deposit bonus offers. The case has come to the courts after a complaint from customers based in Darwin.

The offers, it was alleged, “conveyed the general thrust or dominant message that new customers of Bet365 would be entitled to up to $200 in bets without limitation or restriction. In fact, the offers were subject to a number of such conditions that were not prominently displayed”.

The ACCC said Bet365 customers “must first risk their own deposit to receive a free bet or deposit bonus, so that consumers would only receive a $200 free bet or deposit bonus if they paid and gambled $200 of their own money first” and in order to be eligible for the offers, customers must have gambled three times the value of their deposit and bonus within 90 days before being able to withdraw any winnings.

However Bet365 since the Commission contacted them has changed it’s offers online to comply with the Commissions requests, but the case will still go ahead.

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he Japanese bill to legalise casino resorts seems like it is going through the last throes of life after remaining supporters of the bill attempt to push it into a committee hearing used to decide on utility matters such as electricity pylons locations.

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ARTICLE

Casinos Should Spend, Invest and Grow but Not Forget Their People

By Martin R. Baird Our feature writer Martin Baird in his March article looks at the dangers to operators spending and investing but forgetting the customers they serve.

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s 2015 rolls along, I keep hearing casino executives use the words “investment” and “expense” synonymously. I think this deserves close examination and I’ve included a couple of definitions to see if it helps.

competitor might see that as a soft target because the barrier for entry is relatively low. But if the casino adds table games, it’s not only providing more entertainment opportunities, it’s creating obstacles for the competition.

Investment ( n-v st m nt) n.

These are the familiar progressions that many casinos follow as they expand. They know expansion has a high cost. For some casinos, expansion can be extremely expensive to the tune of hundreds of millions of dollars.

But they need to either stay in front of the competition or at least keep up.

1. Property or another possession acquired for future financial return or benefit.

2. A commitment, as of time or support.

Expense ( k-sp ns ) n.

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1. Something spent to attain a goal or accomplish a purpose.

2. A loss for the sake of something gained; a sacrifice.

3. An expenditure of money; a cost.

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Casinos constantly face a very expensive reality – if they don’t grow, their competition will. It’s a basic rule of nature that plants and animals with protection survive while those without it are lunch. The same is true in gaming where protection is often viewed as growth.

Growing a casino and adding amenities makes things difficult for the competition.

For example, if a casino has machines and bingo, a

So is expansion an expense or an investment? If it’s done properly, it probably is both. It’s money spent to accomplish a goal. It’s also something acquired for financial benefit.

And just like an expansion, the cost of improving your people is both an expense and an investment. You need to do it to compete.

One of the first casinos we did guest service consulting for quickly understood that the money they spent on training – an expense – was also an investment in their people and property. Most of this casino’s staff were tribal members with little guest service experience. As a matter of fact, some of the guest service expectations were the opposite of some of the tribe’s cultural beliefs.

ARTICLE

Many casinos’ training departments are viewed as a money pit. Training is a necessary expense that they pay for because they “have to.” If you see training only as an expense, then either you don’t understand the potential return on investment or you’re doing the wrong training.

Improving your people is one of the best investments you will ever make. It can pay a huge dividend and you now have an appreciating asset.

I was recently at a casino that was spectacularly beautiful inside and out. But it was almost empty. I was shocked at how few guests were at the property. I visited their competitor later that day. The competing casino was nice but not nearly as large and expensive. Nevertheless, it was packed! When I asked people why they were there, they said it was because of the people.

A good investment is like having a money tree. You know that once it’s planted and nurtured, it will consistently produce a good return.

Spend. Invest. Expand. Grow. They’re all critical to success. But along the way, don’t forget that your people must be an equally important part of that formula.

People tend to make serious financial mistakes when they focus on the expense and don’t see the return. There are entire industries that have focused on expense only to be crushed by the competition. The first one that comes to mind for me is the United States automobile industry. It was so focused on costs, it ended up building cheap cars.

Martin R. Baird Bio Martin R. Baird is chief executive officer of Robinson & Associates, Inc., a Boise, Idaho-based consulting firm to the global

Or Read on App Store growth and profitability. Robinson & Associates is the world

gaming industry that is dedicated to helping casinos improve their guest service so they can compete and generate future leader in casino guest experience measurement, management and improvement. For more information, visit the company’s Web sites at http://casinocustomerservice.com

Spending and investing are critical to a casino’s success.

And investing in your people is the best way to ensure a bright future. Grand buildings and breathtaking golf courses are great but it’s people that make the difference.

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.

InfinityGaming• ISSUE MARCH 2015

Fortunately, auto manufacturers learned their lesson and turned their focus back to investing in order to produce very competitive vehicles. I think they are producing some of the best, highest quality designs in my lifetime.

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GAMING NEWS

Scientific Games post annual loss but optimistic on acquisitions

Full year figures for the company stood at $234.3 million for 2014 compared to a loss of $30.2 million for 2013 when Scientific Games

purchase WMS for $1.5 billion. With the 2014 acquisition of Bally Technologies for $5.1 billion on the 21st November the figures included 40 days of positive economic contribution said the gaming giant.

Revenues for 2014 increased by 29% to $565.8 million with the bulk of the increase coming from casino equipment sales and revenues from interactive games which saw a rise of 43% to $43 million.

Second online bill introduced in Pennsylvania to exclude PokerStars

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ith the Pennsylvania House Gaming Oversight Committee preparing for a hearing on Internet gambling come 16th April another online gambling bill has been presented for consideration this time

by Rep. Nick Miccarelli in the form of HB695.

This follows the first bill by Rep. John Payne and on the surface seem quite similar but HB695 has one major difference, it aims to refuse a license to any online operator that offered online gambling to US citizens after December 31, 2006.

In effect removing the world’s largest online poker operator PokerStars from entering the Pennsylvanian online gambling market, not even the acquisition by Amaya

Gaming would help it as there is a clause from a company acquiring another that did operate in the US after that date.

To all it looks like PokerStars have been targeted to be kept out and almost certainly pressure was put on by land based operators in the state to ensure they do not lose out should they take part in online gambling.

Both bills presented have a $5 million licensing fee requirement, 14% tax rates on revenue, and require all online gaming applicants to be currently licensed in land-based gambling in Pennsylvania, meaning online operators would have to partner up as in New Jersey, Nevada and Delaware.

“With the combination of Scientific Games and Bally, we are focused on becoming the partner of choice for gaming, lottery and interactive customers,” said Scientific Games’ president and chief executive Gavin Isaacs said in his report.

Mr Isaacs said that the firm planned to launch new products across its Bally Technologies, WMS, Williams, SHFL, Barcrest and lottery brands during 2015.

South Korea gambling hit 9 year consecutive rise South Korea’s gambling industry hit a ninth year consecutive rise in revenue growth but is slowing compared to previous years.

Figures released by the government for 2014 showed that revenues hit 19.87 trillion won ($17.6 billion) which is a rise of 1% compared to last year.

However previous years showed higher revenue increases, 2011 saw an increase of 5%, 2012 had an increase of 6%, but it is up on 2013 which only saw an increase of 0.6%.

On Kangwon Land, the only casino open to Korean nationals to gamble in saw a jump of 10% on its revenues, while the casino there for foreign only players moved slightly on last year’s figures by 0.3%.

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cientific Games reported a net loss of $47.1 million in the final quarter of 2014 with the firm saying that pre-tax expenses and costs of $75.8 million were related to the acquisition of casino equipment maker Bally Technologies contributed to the quarterly net loss.

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GAMING NEWS

Caesars lose over $1 billion in Q4 of 2014

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t may be an improvement on last year but Caesars Entertainment recorded a loss of $1.01 billion in the fourth quarter of 2014, which is better than the same period in 2013 when the ailing casino giant reported a loss of $1.76 billion.

Currently the largest part of Caesars Entertainment, Caesars Entertainment Operating Corp which runs 30 casino operations is in Chapter 11 while they try and restructure the huge debt of $23 billion.

However the numbers did not meet analyst’s expectations and shares fell on the news, revenues for Caesars in the period climbed 6% to 2.13 billion, but was off expectations of $2.22 billion.

“As we begin 2015, we are highly focused on enhancing performance at CEOC through a series of cost initiatives and the implementation of the previously announced financial restructuring plan,” said CEO Gary

Loveman, who recently announced that he was stepping down his role and be replaced by Mark Frissora in July.

“With more than 80% of first lien noteholders supporting the plan, we are committed to working with additional creditor groups to build greater consensus and complete the restructuring process as quickly as possible,” said Loveman.

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new gambling expansion bill is set to hit lawmaker’s desks on Tuesday 3rd March

by House Republican Leader Dana Young in a 100 page blue print to expand gambling in Florida.

However at present the sponsor of the bill is keeping very quiet on exactly what is contained in the bill that in recent years has seen many others present gambling expansion bills and eventually failed to push through.

“Everything is on the table and that’s all I’m going to say about

it,” House Republican Leader Dana Young of Tampa said of the 100-plus page piece of proposed legislation.

Casino operators Las Vegas Sands and Genting will be hoping that there will be something in there for them as they have tried and currently failed to develop casino resorts in the state.

The proposal is still being drafted but should be filed by Tuesday, when Young said she’ll hold a “media availability” and answer questions from the press.

Currently Indian tribes have the

exclusive rights to offer gambling In Florida with Balckjack and for that right the tribes pay at present $200 million a year in to state coffers. However that right is due to expire by the end of this year and only have until the 31st July to sign a renewal of the current offer or they will have to cease all gambling within thirty days of the current agreement expiring.

At present the tribes and state are locked in negotiations on how much the tribes should pay for the privilege of having blackjack which is understood to be a lot higher than they are paying now.

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Florida to see new gambling expansion

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WOODS TALK

“Woods Talk” In this new section entitled “Woods Talk” our contributing writer and now intrepid reporter JJ Woods will be speaking to some of the leading figures in the gaming industry. In this interview JJ speaks with Dennis Korthouwer from Hit Utopia.

ABOUT JJ Woods JJ Woods Director of Operations founded and set up Atlantic Casino Consultants to deal specifically with the Irish Market and the impending Casino Legislation. He was born in Ireland but left in the Seventies to live in London and for a career in Banking that lasted nearly four years after which he joined the Casino Industry in London where he trained and has over the last 30 years been involved in the setting up, design, management, and opening of Casinos around the world. JJ is also an Author on Gaming and has written for several magazines, spoken at gaming conferences and has appeared on TV and Radio discussing Gaming issues and can be contacted through his website... www.atlanticcasinoconsultants.com

Exclusive Interview with Dennis Korthouwer MBA (SCL) MSc Inventor Founder/Developer and Chief Executive Officer of Hit Utopia Ltd

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InfinityGaming • ISSUE MARCH 2015

asinos have always been looking for the next big thing to place on their gaming floors and it is incredible to think that after all these years Roulette and Blackjack are still part of the main games on offer when we look at the live game sector. There really have been no changes to the way these games are played or dealt over several decades.

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Whilst on Blackjack we have seen several different in house promotions for example ,any 3x 7’s or 3x 7’s same suit qualifying for a special prize etc there have been no major changes to how the game is promoted and blackjack tournaments have had only minor success .

The same can be said for roulette as yet again there have been no major changes to this game over many years.

Now if we look at Add –Ons for these games there are

several on the market and in the case of roulette they are usually found on the last number display unit where they nominate a bonus number which might pay double your stake etc and similar systems are available on Blackjack where a lucky card is nominated on a display system again paying a prize should this card be dealt to you.

Most Casino operators are wary of any bonus system if it slows down or interferes with their normal percentage hold on that particular game and rightly so. In my experience the success of any Add-on or new bonus system must take heed to the following principals. Attract more players to the game, Increase the player’s time spent at the table and not interfere with the speed of the game or how the game is administered normally.

DK: Hit Utopia developed a product that instantly and without cost attracts first-time-visitors and players.

Since starting in the casino industry in 2000, I have both been working in Holland Casinos as a part-time croupier during my studies and visiting casinos in over 80 countries selling casino products. In my talks with so many decision makers, all were dreaming of more customers, so that’s where I focused on when creating Hit Utopia.

The Netherlands, Germany, Austria, Israel, and the USA, we managed to get Anton Hofland on-board.

Anton is a top IT executive with an amazing track-record at Salomon Brothers, Morgan Stanley, Nomura, UBS and Arcapita. It was due to his relationship with the top of TechMahindra that we decided to develop the software in India. With around 100,000 employees we could quickly fill and continuously update the

Q: How competitive is the market?

DK: The market for attracting players with casino products is very competitive. The market for attracting ‘first-time-visitors’ – which on average is 95% of the population and where we mainly focus on – is not competitive. Of course you cannot attract first-time-visitors with a new type of slot machine or table game. Because if that were true the 95% untouched market would not exist anymore!

Q: It is widely known that India has the expertise and the certainly the manpower when it comes to software solutions and I understand this was your preferred location for developing your product, were you satisfied with the final outcome?

DK: : In October 2012, shortly after we raised nearly a million dollar in our 2nd round from former online and land-based casino industry CEO’s and 5 private investors from

skill-set we required for each part of the development process. The team of 25 developers and project managers – under the supervision and continuous management of Anton – was able to develop the product we required. The guys and girls from TechMahindra even added certain features which we had not thought of but which made the product a lot more useable. It was really a great achievement of the team and in particular of Anton because without him, I really doubt this project had ever been developed. Just as an example, try doing what we do on

cruise lines, or have your system with your money and the RNG live at someone else’s property in a country that is not known for its reliability.

Q: The unique Prizes that Hit Utopia offer seems to be a major part of promoting the System , what did you base this on ?

DK: Experiences people dream of are often out of reach. Most unique experiences are not for sale; even not to the richest persons alive. Hit Utopia makes people unique by making its winners experience the impossible.

With our customized and continuously updated “experiences you can’t buy” prizes, we target and attract the 95% of the population that has never seen a casino from the inside.

Making these special prizes and the highest cash prizes available is simple, but to do it profitably and on a continuous basis you can only do when you operate on a globe scale with lots of scale of economies. We are the only company that offers these cash prizes and experiences you can’t buy on a global scale; effectively empowering small local casinos for the first time in history to compete with big global ones.

Q: What Gaming shows, exhibitions do you feel are the most important to demonstrate your product?

Continued on next page

InfinityGaming• ISSUE MARCH 2015

Q: Can you tell us about Hit Utopia and the services it offers to the Casino Industry?

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WOODS TALK

DK: I first wanted to proof the product technically and operationally in the market before showing it to the public. Now that we have done that, we might consider showing it in Vegas at the end of the year.

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Q: Hit Utopia is unique in that you undertake to pay the prizes that are won at the Casino, Do you think this is the major factor in your appeal to Casino operators?

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DK: Our scale of economies allows casinos to offer huge jackpots without the inherent risks while we guarantee and pay them. Of course that also improves the competitive edge, but I see it more as an extra service rather than a USP. It’s similar to our free installation, free maintenance, free marketing materials, and continuously updated free graphics.

Q: Hit Utopia is relatively new to the market but you are already installed in 15 independent casinos around the world including the U.S , Is your ambition to be a truly global product ? and where do you see emerging markets?

DK: If you want to offer the high-

est cash jackpots or “experiences you can’t buy” you need to be truly global. We focus on new markets which we can enter relatively quickly at this stage of our growth. That does not mean that we do not also sign up casinos in highly regulated markets. We already have deals in for example Colorado, Mississippi, and New Jersey.

Q: My understanding is that because of the unique design of the system it can be fitted to any table game, what game is proving the most popular?

DK: Actually the product is designed to fit not just casinos, but any industry. In effect what we have is an extremely flexible and highly secure global gaming/gambling platform that increases market share of companies in general. In casinos we are currently active on table games where most systems are installed on blackjack and poker; but it can be also installed on for example Texas Hold’em. While keeping the back-end ‘as-is’, we are in the process of designing the Hit Utopia slot machine.

Q: As an AD-ON the Hit Utopia seems to tick all the boxes in that there is no cost to the Casino owner, it attracts players to the table, it extends the players time at the table can you mention any other?

DK: Our main focus is attracting players and first-time-visitors. These have to play the underlying game in order to participate for Hit Utopia prizes. New players playing the underlying game is really where the casino makes the money. One of the great features we have is our level 2 prizes. Here casinos can let us know which prize they want to give away on the system. As an example, big casinos in Las Vegas herewith can extend their entertainment into the casinos and so cross promote and cross-sell the entertainment which it has already paid for! Another feature that casinos love is our instant dealer tracking capability.

This on the one hand allows us to make a judgement on the dealers’ performance and on the other hand it is the basis for our unique global dealer incentive program.

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InfinityGaming• ISSUE MARCH 2015

INFORMATION

The iGaming Post News site The iGaming Post is an online, international, daily newspaper for the gaming industry. It strives to cover all the latest headlines, delivering them seamlessly through smartphones, laptops and tablets all day, every day. The iGaming Post prides itself in reaching out to global readers, from online poker players to the industry executives.

To find out how your company can advertise contact our sales team

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To find out how your company can advertise contact our sales team

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InfinityGaming • ISSUE MARCH 2015

Just search for us in the App stores “infinity gaming magazine”

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Subscribe to the iGaming Post & The Infinity Gaming Magazine for FREE reaching more than 10,000 global industry readers. Advertising in the magazine and news site can help your business get seen by the decision makers that count. With the iOS and Android App our publications reach a potential 500 million readership.

To find out more about advertising contact: media@cleverduckmedia.com

GAMING NEWS

Paddy Power report huge annual rise

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addy Power the Irish bookmaker has reported record profits for the past year showing a pre-tax profit of €167m which is a rise of 21% from 2013, with revenues rising 18% to €882m.

With such a bumper year the bookmaker said that it will be paying out an extra €8 per share, or €392m, on top of the dividend.

The firms retail business profits soared by 50% to €21.2m on its 565 units operated in Ireland and the UK. While reporting the annual results the company known for its comical marketing said it had overcome sports betting results which “had more ups and downs than Taylor Swifts love life.

“2014 was an excellent year for Paddy Power with robust double digit growth in stakes, revenues and profits, and a marked increase in customer acquisition,” said chief executive, Andy McCue. “We are strongly positioned in the key growth areas of online and mobile, whilst also benefiting from a differentiated and resilient retail presence. Our distinctive brands and deeply rooted marketing capability are core assets.

“As I look ahead, the pace of change in the sector and in the wider consumer environment is intensifying. We continually develop and adapt to anticipate the needs of customers and maintain an edge in the market.

Taylor Swift “Time and again we see that product is the key factor in attracting and retaining customers. We have re-organised the business to significantly sharpen our focus on product differentiation and innovation, and to increase in-house development. This, combined with clear investment priorities, will pave the way for sustained performance and market leadership.

In a report from the Financial Times the newly elected

government in Greece the Syriza party has sent a letter to EU finance ministers on a plan to raise new taxes by selling online gambling licenses to overseas operators.

The leaked document to the Times says that letter composed by Syriza Finance Minister Yanis Varoufakis in it he offers ways of reducing the huge debt owed to the EU on raising more taxes and one of those is to offer

online gambling licences to foreign operators in a bid to raise €500 million extra in taxes.

A total of seven new tax raising ideas were outlined and one of which is online gambling, the tax to overseas operators would be the same as other operators in the country, however the new licensees would have to use recognized payment processors controlled by the Greek Central Bank.

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Greek government could offer online gambling licenses to foreign operators

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