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MCA Publicaciones S.A.C. Calle Luis Mannarelli 181 Of. A 2do Piso Magdalena del Mar - Perú Teléf. (511) 264 4314 Manager Director
María Victoria Cabrera I. mariavictoria@revistacasinoperu.com mariavictoria@mcapublicaciones.com.pe
Administration
administracion@mcapublicaciones.com.pe
Editorial Committee
Pedro Criollo Gustavo Pichilingue Sulehi Aquino
Publicity
Tatiana Benites Correction
TOURISM AND GAMING IN PERU We are now in the third quarter of 2015 with a global economic analysis which does not show us a positive picture. Nevertheless, the gaming industry maintains the dynamics of its activities. For instance, China, which has suffered an economic deceleration, is developing one of the largest markets of casinos and entertainment rooms. Likewise, there are opportunities in the sector in Latin America, and we show Peru as a great example of that, a country where the gaming activity of casinos and slot machines is entirely formalized, regulated and controlled, and where there are clear and predictable norms for operators and the general public. As a proof that, Peru will be the host of the meeting of regulators organized by the IMGL, where nearly 400 regulators will get a closer look of the development of the gaming sector in Peru. See you in Peru.
Javier Ágreda Designers
Miguel Portillo Carbajal Rocío Yamaguchi Oishi Photograph
Edgar Tenorio Maritza Rosales
Best regards,
Collaborators
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María Victoria Cabrera I. Manager Director
summary 06
Tourism the encrease. Figures going upwards
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October 10 Sustainable Peru
Fiscal Impact.
Tax analysis of the sector
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Gambling potencial in Peru.
12 soUND figures
36 responsible gaming
Activity in Peru is completely legalized
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Joerg Hofmann, President IMGL Special Interview
88 ANCESTRAL CELEBRATIONS
cusco
Tourism the increase The tourism activity in Peru has become one of the main axes of the country’s economy. This sector expects a significant growth in 2015.
T
he way Peru is seen overseas continues to change in a positive way. Our country was recently in the 58th position of the Travel and Tourism Competitiveness Index of the World Economic Forum (WEF), moving up fifteen positions compared to the previous ranking in 2013.
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That index includes more than 140 economies around the world and measures factors and policies improving the tourism sector’s sustainability as well as its contribution to the competitiveness level of a country. According to the National Association of Industries (SNI), the
fact of moving up positions is a relevant achievement since the country is in the 7th position among the 17 countries of Latin America and the Caribbean included in said ranking. This good news shows us the Peruvian tourism perspective in 2015, which starts
to consolidate itself with the positive figures obtained since last year. For instance, it is known that Lima led the ranking of the highest flow of tourists in Latin America with 5.1 million visits in 2014, according to a report prepared by Mastercard. Another interesting fact is that between 2002 and 2013 the arrival of tourists tripled in the whole country. Reports and indicators of the Ministry of Foreign Trade and Tourism (Mincetur) indicate that there are still margins for growth. What other figures are there behind this large industry of travel and stays for 2015?
The Tourism Group of the Chamber of Commerce of Lima (CCL) estimated that this activity would grow 6% in 2015.
INTERNATIONAL FAIR By mid-May, the International Tourism Fair “Peru Travel Mart” (PTM) 2015, the most important fair in the country, took place. A total of 163 international buyers and 113 Peruvian companies of this sector participated in this event organized by the National Chamber of Tourism (Canatur). “The fair is having good results. The number of participants has been very good, especially in seminars and showrooms, and now we see that all of the tables are surrounded by buyers from overseas”, said the President of this organization, Jorge Jochamowitz. After two days of negotiations, the 12th edition of the PTM 2015 closed with 115 million soles in business commitments.
FIGURES GOING UPWARDS At the beginning of this year, the Tourism Group of the Chamber of Commerce of Lima (CCL) estimated that this activity would grow 6% in 2015. The greater arrival of Chilean and American tourists would boost this percentage. In 2014, according to the National Migrations Superintendence, 1’446,689 visitors from the southern country and 312,086 visitors from the nor-
thern country came to Peru. The Mincetur also has information on significant percentages regarding the arrival of visitors from Asia, the new segment of visitors with the highest dynamism for arriving to our country. It is known that in 2014 a higher number of visitors from Indonesia (35%), Japan (24.5%) and the PhiNew international buyers at the Peru Travel Mart 2015.
lippines (22.7%) arrived. As the Minister of Foreign Trade and Tourism, Magali Silva, said by the end of 2014, “for 2015 we have the goal of achieving a growth of 6% to 9% of visits of foreign travelers”, which is a favorable projection considering that this year the Mincetur has planned promotion campaigns in 22 countries around the world which represent 90% of the travelers who come to Peru.
GROWING TOGETHER Gabriela Fiorini, President of the Tourism Group of the CCL, said that although 2015 seems to be a better year for Peruvian tourism, this will only happen “if there is collaborative work between the public and the private sector, between authorities and local populations, and between the central government and regional governments”. That idea has been reinforced in recent times, and it continues to be strengthened OCTOBER 2015
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in a strategic manner at present. To give an example of that, among the most ambitious initiatives for improving the sector’s dynamism stands out the one involving the creation and implementation of a OneStop-Shop for Tourism.
Lima led the ranking of the greatest flow of tourists in Latin America with 5.1 million visits in 2014. This will be a new tool which will allow tourism infrastructure project managers to know the status of their files at any time. Besides, this will offer them transparency and a more appropriate model for promoting investment, both at local and international levels.
NATIONAL PRIDE The Mincetur has launched a series of campaigns for reinforcing Peruvian culture and national pride. One of them is “More Peruvian than…”, which consists of three spots telling the stories of three foreigners who love the country: a French fan of chicha music who lives in New York, a Puerto Rican married to a Peruvian woman, and a Panamanian woman who loves criolla music. The logo of this campaign uses some graphic elements of the artist Elliot Tupac, which are part of the Peruvian culture.
HAVE A GOOD TRIP Along with well-organized campaigns by PromPeru and the Mincetur extolling national identity, and new local gastronomy icons—a strength of Peruvian tourism—, different meetings and international fairs serve as a showcase for displaying the qualities of the country.
According to Magali Silva, head of this Ministry, actors of the public and private sector have embraced the commitment of developing fifty new products for tourism until July 2016. This represents an investment of 58 million soles in projects in nine regions. With these good precedents, we can affirm that tourism will continue to have a preferential position in the national economy in the years to come. These new destinations, the improved infrastructure and sustained investments will have the Mincetur’s support to benefit tourists and, of course, the national economy.
In 2014, the country was chosen as the World’s Leading Culinary Destination by the WTA.
Peru has a large number of regional dances.
STRENGTHS According to the World Economic Forum index, natural resources and culture are advantageous strengths for Peru, as well as its good tourist service.
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Sustainable Perú The country has started taking a new economic direction in which fishing is one of the main driving forces of Peruvian development.
G
lobal economy is currently experiencing a moderate growth after the financial crisis from seven years ago. According to the United Nations, in 2014 it had a growth rate of 2.6%, a slight recovery which was then affected by geopolitical conflicts. In its report called World economic situation and prospects 2015, this organization also indicates that most of the economies have experienced a change towards lower growth rates of Gross Domestic
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Product in comparison to rates before the crisis. For instance, in developed economies—the Euro area and Japan—there are still risks for this year and the next one, while Latin American only suffered a deceleration in 2014.
PERUVIAN GROWTH Economic changes in the past few years have also had an impact on Peru. The International Monetary Fund (IMF),
in its report called World Economic Outlook, indicated that this year Peru will grow 3.8% and will be the third region with the greatest expansion, after Bolivia and Paraguay. The organization also informed that, thanks to macroeconomic policies and its solid economic foundations, the country could significantly improve with respect to poverty reduction. For his part, the Director of the Ecological Mining Center, Mario Cedron, explained during his speech at the Peru Gaming
subway and the Peruvian gas pipeline of the South.
DOMESTIC SECTOR
Alonso Segura Minister of Economy and Finance.
Show 2015 that when the country experiences growth above global average, it gets an advantage over countries with a lower level of development. In the same vein, the Minister of Economy, Alonso Segura, assured that the economic growth expected for this year will be better than that of 2014. Furthermore, he said that sectors still experiencing low rates will be boosted to obtain better results. For this reason, he estimated that in 2016 the country could grow more than 5% thanks to the major infrastructure works, such as the Line 2 of Lima’s
From 2001 to 2014, GDP has grown four times. Madrio Cedron pointed out that even though many people consider that it is thanks to mining, this activity only contributed to it during the last five years with 30%. He explained that this number is equivalent to an average investment of 20 billion dollars and stressed the fact that the rest would come from other Peruvian sectors.
According to the INEI, Peruvian economy has grown more than 4% in April thanks to the manufacturing and mining sectors. Moreover, he added that a 1% growth of GDP is equivalent to 3 billion dollars and it would represent 100,000 new jobs. The head of the National Institute of Fishing has become an essential activity for the growth of the country.
Statistics and Informatics (INEI), Alejandro Vilchez, informed that Peruvian economy grew 4.25% just in April, being fishing, manufacturing and mining the sectors which contributed the most to this growth. Compared to the same period last year, fishing grew 154.03% as a result of the anchovy season: in April 2014 more than 330,000 tons of this species were caught, while during the same period in 2015, more than 1.3 million tons were caught. The mining and hydrocarbon sectors also grew. However, there are other sectors which have experienced a decline. Due to the low production of liquids of natural gas and crude oil, the hydrocarbon subsector decreased by 17.11%. Other sectors which have been affected the most by climate change are agriculture and farming. This last sector was negatively affected by social conflicts in production areas such as the Valle del Tambo and Andahuasi.
YET TO ACHIEVE The Minister of Economy informed that thanks to reforms made by the Country Program, work is being done so that Peru gets to be part of the Organization for Economic Cooperation and Development (OECD), an intergovernmental organization which groups 34 countries and has the goal of improving the economic and social well-being of their citizens. Furthermore, Segura said that only the most developed economies of the world belong to the OECD. However, he indicated that the real goal is that with all the reforms required to be part of that organization, the quality of life of thousands of Peruvians will be improved. This goal is expected to be achieved in 2021, the year of Peru’s bicentenary celebration.
RECONnaissance According to the IMF, Peruvian economy has one of the best performances in Latin America.
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Sound Figures The gaming sector in Peru has built a solid image thanks to taxes intended for tourism and sports projects.
T
he Peruvian gaming sector has established itself as an industry of remarkable achievements in the past few years. The international certification of its systems, its broad range of services and good corporate practices of its regulatory agency reflect the professionalism of an activity used to having standards of excellence. All of this can be seen in the financial
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reports made each year by the National Tax Administration Superintendence (Sunat). With these reports, the General Direction of Casino Games and Slot Machines (DGJCMT) monitors the compliance with the industry’s objectives it supervises: to protect users, to secure legal stability and to consolidate itself as an axis for tourism and economic development. Among the main indicators, the most
evident one is maybe the gaming tax, which taxes the operation of casino games and slot machines. This tax evolution achieved has put the sector at the same level of its regional peers, and has allowed it to direct that growth to social, sports and tourism projects.
FISCAL NATURE One of the first references to this tax
can be found in Law N° 21753 (Law regulating the activity of casino games and slot machines) of 1999. Article 39 of this Law stipulates that the proportion for determining this tax would be 12% of the tax base, which, after slight variations, has remained so till now. Said base would be established according to the monthly net income: the difference between the total amount of the money gambled and the total amount in prizes awarded each month. Article 42 of said law provided the answer needed. It established that the taxes collected would be destined to the Provincial Municipality (30%), District Municipality (30%), the Ministry of Foreign Trade and Tourism (Mincetur) and its different programs (15%), the Public Treasure (15%) and the Peruvian Sports Institute, IPD (10%).
FIRST FIGURES It was not until the creation of the General Direction of Casino Games and Slot Machines (DGJCMT) in 2006 that an appropriate registration of this tax could be made and its total amount could be known. Up until 2005, and saying goodbye to an era without the rigorousness of the coming years, 49 million soles had been collected, equivalent to 18 million dollars approximately. That phase started with a slight upturn: 50.4 million soles (more than 16 million dollars)–an encouraging start considering that, as at January 1st 2007, the industry barely had 3.63% of its slot
Collection of the tax on casino games and slot machines (S/.)
machines rooms operating legally. Tax collection during 2007 and 2008 was astonishing: figures of 108.6 million soles and 170 million soles were achieved (more than 35 million dollars and 54 million dollars), respectively. The slowdown in economic growth in Asia, bank imbalances in Europe and the real state crisis in the United States had a toll on investments, affecting markets all over the world. Their effects generated a visible decrease of gaming tax in 2009—162.9 million soles (more than 51 million dollars)—, although it recovered in 2010, with 187 million soles (59 million dollars).
ESTABLISHED INDUSTRY The tax collection increase would consolidate itself in the following years. Almost unaffected by the crisis and sustained by the solidity of Peruvian economy, in 2011, 199 million soles were registered, almost 72 million dollars. One year later, in 2012, the bar of 200 million soles was passed by collecting 218.5 million, while in 2013, said amount rose to 268.5 million soles. During last year, the DGJCMT, in its annual report (with figures as at November), indicated an estimated tax collection of 285 million soles, approximately 105 million dollars. For this 2015, estimations are favorable: the regulatory agency is expecting to collect 300 million soles, about 111 million dollars. The historical total 20062014 has left the astronomical amount of 1,646 million soles (more than 524 million dollars) destined to tourism and sports programs. As we can see, the progress of those amounts in the following years will depend on the efforts of the actors involved. Aside from the positive statistics, this performance has resulted in the satisfaction of a progress sustained by a solid, transparent, formal and socially responsible activity. OCTOBER 2015
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Solid outlook Formalization was a milestone in the Peruvian gaming history. Its progresses enabled a historical change in the region.
I
f we review some history, we can see the vicissitudes of the gaming industry in Peru in its beginning stages. A series of episodes marked by political, legal and social changes help define its nature as persistent and modern since the 90’s, when dice started rolling.
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Today, everybody agrees that the breaking point happened in 2006. That year, an ambitious goal was set: formalize and regulate this dynamic sector. The General Direction of Casino Games and Slot Machines (DGJCMT), a line agency of the Vice-Ministry of Tourism, attached
to the Ministry of Foreign Trade and Tourism (Mincetur) was responsible for this mission. This agency—directed since then by the engineer Manuel San Roman—knew that if it accomplished that, Peru would become one of the countries with the best perspective in South America.
Reorganization and formalization.
DIFFICULT PROCESS Before this dream could be accomplished, complexed episodes occurred. First of all, Law N° 27153 of 1999—Law regulating the activity of casino games and slot machines—needed an update, which happened in 2002 with Law N° 27796, which modified and specified several articles of the previous norm. Until then, the growth of the sector was disorganized. It was not until the last months of 2006 that Law N° 28945 (Law on the Reorganization and Formalization of the Activity of Operating Casino Games and Slot Machines) appears and most operators could have access to the legal framework in force. According to the DGJCMT, before this law there were 950 informal slot machines rooms in the country.
AN INDUSTRY TAKING SHAPE By mid-2007, however, the seed of formalization started to grow: 28 companies operated 36 authorized establishments (29 slot machines rooms and 7 casinos). On the other hand, those nonauthorized establishments accounted to
Law N° 28945 of 2006 allowed operators to have access to the legal framework in force. 771 slot machines rooms, involving 247 companies. The DGJCMT undertook the task with honest and transparent management. Thanks to these remarkable qualities, it was possible to formalize the whole industry between 2007 and 2010. During that time, Law N° 29408 of 2009 (General Law on Tourism) would give it a greater boost by recognizing casino games and slot machines as “tourism service providers”. Little by little, the image of the sector changed. Currently, according to the regulatory agency, there are 726 gaming establishments dully authorized and managed by 291 companies, consortia or groups. To
speak more in detail, there are 705 rooms of gaming machines (401 in Lima and 304 in provinces) and 22 casinos. According to statistics about slot machines, there are 78,569 of them operating in the country. More than half of them are in the capital city (46,201 terminals), while the other 32,368 are installed in cities in the interior of the country. With respect to gambling tables, the Direction’s data indicate that there are 307 in Lima and 42 in provinces, making a total of 349. When gathering this information, the agency excludes the possibility that establishments operating without a license exist.
A NEW STAGE This work, together with specific regulations and especially with a policy of open doors, helped build a new relationship with operators. Thanks to those practices, the DGJCMT received an award for “Good Practices in Public Administration” (in 2010 and 2014), and the sector–already formalized–gained a good image internationally. The task continued with taxation realignment (12%) and decisive actions for OCTOBER 2015
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According to the DGJCMT, there are now 726 authorized establishments (705 machines rooms and 22 casinos) in Peru. strengthening the formalized status recently attained. These factors allowed to outline a modern environment and to develop policies to safeguard the transparency of this activity, with the intervention of new fiscal agents and technology.
in the country–established itself as the supervisor of the new Asset Laundering and Terrorism Financing Prevention System (SPLAFT) in the last few years. Next to it, the Financial Intelligence Unit (UIF) receives, analyzes, assesses and transmits information for detecting asset laundering and terrorism financing. In parallel, the National Customs and Tax Administration Superintendence (Sunat) is responsible for inspecting, collecting, managing and distributing taxes from the sector. Without the combination of these efforts it could not have been possible to apply the technological innovations the industry demanded. This progress included the tacit presence of companies commercializing slot machines, certification laboratories, manufacturers, assembly plants, importers and online systems suppliers.
THE SUPERVISING TRIANGLE That way, on behalf of the Mincetur, the Direction–in charge of authorizing, inspecting and sanctioning gaming activities
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AN INTERCONNECTED SECTOR The next step took place on September 3rd, 2010 with the Supreme Decree
015-2010-Mincetur which approved the Complementary Technical Norms for the implementation of the Unified System of Real-Time Control (SUCTR). After a trial period, the online system started functioning by mid-2012 and interconnected 100% of the terminals with the government in a short time. The action was supported by the Registry of Slot Machines, the installation of a Data Center and the progressive application of BI (BusinessIntelligence) and BPM (Business Project Management) in the sector. During three decades of existence, our industry seems not to have lost the perspective and strength it had in its beginning stage. On the contrary, the experience gained enables it to tackle new challenges with combined and intelligent efforts. These are virtues promoted by the laws enacted by the government and the good will of the sector’s actors, just like it happens in the case of the most modern industries of the world.
Experience in consolidating
the gaming sector The gaming sector in Peru has overcome obstacles in its path to succeed in the national market.
Eddie Thornberry, CEO of the ATLANTIC CITY casino.
T
he positioning of the gaming industry in Peru has not been an easy task. This process has implied huge combined efforts of the government and the sector’s main actors. Eddie Thornberry, CEO of the Atlantic City casino, tells us how this sector has successfully made its way in the country.
— How difficult was the process of restructuring the industry in Peru? Even though the groundwork for the restructuring process had already been laid, it took a long time for the whole sector to adopt all rules established, due to the economic effort they implied. Little by little, the Mincetur (Ministry of Foreign Trade and Tourism) was perfecting the regulations for the registration, sale, approval and import of machines and games. Besides, it knew how to set sufficient pressure by establishing dates and deadlines for complying with the rules.
— After finishing this process, what is the new picture of the sector? Looking back, we can now say that the effort and the great amount of economic resources used by operators were worth it. We have left behind those times of upheavals because of the successive changes in legislation which put us on the verge of collapse every time they were published. Today we have a sector which sets an example for the rest of the country: it is calm, regulated, controlled, and provides guarantees of operation to the government, our clients and our collaborators.
— Which was the breaking point for the industry in Peru? The breaking point was the enactment of Laws N° 27153 and 27776 and their regulations. From that moment, changes started happening. Judgments of the Constitutional Court annulling petitions for amparo protecting some operations and
generating instability were also part of those changes. Then, by combining pressure and flexibility, the Mincetur led to the adoption of all aspects of those laws.
— After this great progress, is there still something to be done? There is something very important to fight against, which has been somehow left aside by operators. The industry has not been well seen due to the first years of a little disorganized activity, changing laws and petitions for amparo, and added to this are the stories of Hollywood movies involving gangsters, prostitution and drugs. It has taken a lot of work to gradually change this image, and there is still work to be done for the public to accept us as an entertainment alternative just like any other one. The most convenient thing would be to launch public information campaigns in the different media channels. OCTOBER 2015
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Legislative innovation Peruvian authorities are preparing three propositions for updating rules and improving regulation of the industry in the whole country.
T
he General Direction of Casino Games and Slot Machines (DGJCMT), regulatory agency of Peru, recently announced that it is preparing three draft acts for improving regulation of the activities of the industry. One of its main initiatives is to update Law N째 27153, which is in effect since 1999. With this legislative project, authori-
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ties seek to incorporate new technologies to the formal market, such as progressive systems. The DGJCMT considers these platforms as promotion processes which grab the attention of users allowing to increase profits from slot machines. There are two types of systems in the market: standalone progressive systems and multi-level
progressive systems.
REGULATING PROGRESSIVES The first type of progressives is subdivided in those making part of a game program which has previously been certified and approved, and those which do not have that, which have to comply with these obligations separately, ac-
“Our goal is to regulate online gaming, which currently offers zero protection to users… Someone may win a prize, but we do not know if that person will actually receive it”. Yuri Guerra, Technical Department of the DGJCMT.
cording to the standards established by the DGJCMT. Multi-level progressives— known in the market as “carousel systems”—are those linked to each other in the same room. During the Second Biannual Gaming and Slot Machines Convention Peru 2015, Yuri Guerra, head of the technical area of the Peruvian regulatory agency, informed that they are working on the regulation of this type of machines. “Only interconnection of rooms of the same company will be allowed, and the amount of the highest prize will belong to
the room with the smallest number of slot machines (…). The other technical aspects are related to manufacturers and certification laboratories”, explained Guerra.
POLICIES REGARDING SERVERS Another type of technology which will be regulated by the new legislation is client-server architecture, which allows to store game programs and download them to slot machines or execute them from that same platform. “The Mincetur (Ministry of Foreign Trade and Tourism) and the regulatory Not only on-site gaming will be regulated. Peru is already working on the regulatory framework for online gaming.
agency will have remote-access terminals which will connect servers outside the country as well as those inside the rooms. These terminals will also allow to verify gaming libraries and see whether they have the corresponding authorization”, explained the engineer Yuri Guerra during his speech. The DGJCMT is also preparing a third draft act which seeks to regulate the online gaming market and remote sports gambling, which operate without paying taxes and with no regulations or security measures regarding the delivery of prizes to users.
ONLINE MARKET In order to achieve that, authorities are gathering examples and experiences from American and European countries where policies regarding this subject have been established and could be used as references. Among them we can find the regulations and mechanisms applied in Belgium, Denmark, Spain and some parts of the United States. “With respect to sports gambling, an authorization will also be required since they need a physical facility for operaOCTOBER 2015
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Peruvian authorities will submit this year before the Congress the draft act for regulating online gaming. ting”, said the engineer Yuri Guerra. The General Director of Casino Games and Slot Machines, Manuel San Roman, also discussed the subject. During an interview with international media, the head of the DGJCMT informed that guidelines for the development of these activities are been established. “For instance, only companies authorized for operating games on the Internet and sportsbooks will be able to adver-
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tise and be sponsors. (…) The possible tax on online gaming could be at a rate higher than 15% and lower than 20% (slightly higher than the one established for on-site casinos). (…) Only those with an electronic address or a domain given by a telecommunications company ending with ‘.pe’ will be authorized to operate in the country”, explained the head of the DGJMT. Then, he added that his agency was considering regulating this new market by means of a unified system of realtime control–similar to the one connecting slot machines to on-site casinos and gaming rooms–joining terminals companies of the online sector would install in Peru.
NEW PLANS In his speech during the last edition of Peru Gaming Show regarding the general balance of the industry in the country, the engineer Manuel San Roman
informed operators that he intends to submit this year before the Congress a draft act for regulating online gaming and sports gambling. Likewise, he announced that the agency he leads will update–together with organizations assembling operators–policies of responsible gaming and prevention of asset laundering promoted by the FATF and the Financial Intelligence Unit. With all these initiatives, authorities expect to improve the image of the gaming industry, which has been stigmatized for a long time and is currently one of the most formalized sectors of the country.
taxes On-site casinos annually pay 12% of their incomes for complying with the gaming tax.
Fiscal
Impact
The gaming industry generates fiscal incomes due to several taxes. Which are they and how much did they amount in the past few years? Jorge Manini Chung, Estudio Manini, Padrón & ASOCIADOS
T
he goal of this article is to determine the fiscal impact the sector of casino games and slot machines generates by complying with the fiscal obligations affecting all of its activities. Those activities are considered special and complex, which is why the government applies differential treatment to them. The role it plays in tax collection is not limited to the tax on casino games and slot machines. It also contributes significantly with the general sales tax and the income tax, among others, as we will see in the following lines. We must keep in mind that the recreational services casinos and slot machines offer are not taxed with the general sales tax (IGV), which is obtained by applying a rate of 18% on the CIF value plus the tariff, all of this in Peruvian nuevos soles. It is important to point out that this sector does contribute significantly in the collection of this tax.
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TAXES ON IMPORT The industry of casino games and slot machines is characterized by the constant renovation of its machines, equipment and services, which in turn generates continuous import of those goods. That way, based on import figures– which can be obtained from the National Customs and Tax Administration Superintendence (Sunat)–regarding the tariff subheading 95.04.30.1000, which includes, among others “slot machines, gaming machines activated by coins, tokens…”, Chart N° 1 was elaborated. We can assume that the industry does not only import goods belonging to a single tariff subheading, and that is why the amounts included in the chart are only used as a reference. Nevertheless, according to figures of the sector, which were submitted by the National Association of Games of Chance (Sonaja), in 2013, 133 million soles were paid as taxes related to imports (tariffs and IGV). However, since 2012, a number of
countries exporting these goods benefit from a tariff reduction rate of 100% in virtue of international treaties, such as the U.S.-Peru Trade Promotion Agreement or the free trade agreements signed with Canada, China and South Korea, among others. These countries take part in a high percentage of transactions made by this sector. The IGV paid for imports in the gaming industry amounted, in 2013, to approximately 133 million soles, which leads us to the conclusion that the estimated volume of import operations, in that year only, amounted to 738.8 million soles. Furthermore, on Chart N° 1 we can see that from imports of the period 2008-2014, the IGV collected amounted to 282.3 million soles approximately. Without prejudice to what has been pointed out before, we must take into account the IGV paid in domestic transfers of imported goods, which should fluctuate between 10% and 20% of the import price approximately, which increases the
Chart N° 1: Distribution of the collection of tax on casino games and slot machines. Source: Sonaja.
amount of IGV generated by the gaming industry.
GAMING TAXES The tax on casino games and slot machines, which has a monthly frequency, is levied on monthly net incomes minus 2% of that amount, which corresponds to maintenance expenses. Then, a rate of 12% is applied to this new number. Distribution of this amount can be seen in Chart N° 2. On that chart we can see that the tax on casino games and slot machines is not only destined to the Public Treasure, but it also benefits municipalities where related activities are develo-
The gaming industry is characterized by the constant renovation of its machines and services, which in turn generates continuous import of those goods.
Chart N° 2: Volume of imports of the tariff subheading N° 95.04.30.1000. Source: Sunat.
ped, the Ministry of Foreign Trade and Tourism (Mincetur) and the Peruvian Sports Institute (IPD). Collection of this tax has grown throughout the years, as we can see on Chart N° 3–elaborated based on data from the Sunat–, which shows that collection of this tax is even higher than what was indicated by Sonaja. It is important to mention that this tax, as well as the fifth category income tax, is one of the few ones which maintain their level of growth through the years, which demonstrates the constant development of gaming activities in our country. Besides, the chart proves that in the last six years this tax has allowed to collect 1,131.8 million soles.
INCOME TAX According to the data provided by the Sonaja, the income tax paid by the sector in 2013 amounted to 25 million soles, and the estimated amount for the period 2014-2019 is 139 million soles for said tax. With respect to this tax, there is a tendency to say that goods given to people in casino rooms–snacks, beverages, souvenirs, etc.–are not representation expenses–contrary to what has been specified by the Tax Administration–because their goal is not generating an image which helps maintain or improve the OCTOBER 2015
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situation of the company. However, since those expenses are directly linked to generating income, they comply with the principle of causation, established in Article 37 of Law on Income Tax. Therefore, those expenses are deductible, provided that they comply with the criteria of proportionality, reasonableness, necessity and normality.
Chart N° 3: Annual collection of tax on casino games and slot machines (million soles).
SOCIAL CONTRIBUTIONS Here we find contributions to pension funds, either to the ONP (public system) or to AFP’s (private funds), and to social
Businessmen of the industry are retention agents of contributions related to the pension system and they are obliged to pay social security contributions on behalf of their employees.
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insurance services (either to EsSalud or to an EPS ). Those involved in these activities are retention agents of contributions related to the pension system and they are obliged to pay social security contributions on behalf of each of their employees. According to the information provided by the Sonaja, in 2013 there were 22,000 direct employees, which generated contributions to EsSalud amounting to 37 million soles. Based on that, we can infer that the payroll for that year amounted to 411 million soles, with an average salary of 1,556 soles. In addition to that, approximately 53 million soles (13% of the payroll) would have been paid as contributions to pension funds
during that year. This demonstrates that in previous years similar amounts have been paid as contributions to social security and pension funds. In sum, it is interesting to take into account that the gaming industry, for instance, in 2013 has paid around 516 million soles as contributions for the taxes mentioned above, an amount which is higher than what has been collected for the tax on waters and soft drinks, and which approximately represents 50% of what has been collected that same year for the selective tax on fossil fuel consumption. Furthermore, it is important to indicate that the industry is in constant renovation, which is why these numbers are expected to increase.
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Manuel San Román Benavente, Director DGJCMT
Gambling potential IN PERU C
urrently, the gambling and slot machines activity in Peru is completely legalized, regulated and controlled, with open and predictable rules to the operators and the general public. Any attempt to run illegal casinos is repressed by the confiscation of the slot machines and the closing of the facility. Before 2007, less than 4% of the slot machines activity was legalized, the other 96% was operating due to special injunction actions; in December of 2006, Law N° 28945 “Law for Realignment and Legalization of the Slot Machines Activity “is enacted, and in February 2007 the Constitutional Tribunal decided to support the demand MINCETUR had against the special injunction actions that allowed the operation of slot machines
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facilities without control, supervision and tax payments, declaring null and void all of them. Within such legal context, all operators which had been operating slot machines facilities illegally adopted the formalization process, and the 35 legally established slot machines facilities grew up to 698 facilities, closing the facilities that didn´t accomplished the conditions and requisites for the formalization or haven´t submit a request for it. After legalization, the gambling and slot machines activity insertion to the Prevention Against Money Laundry and Terrorism Financing System (SPLAFT) was achieved, it was enacted the Law against the compulsive gambling, which created the List Of People banned to access to gambling facilities, legal rules for the transfer of gambling facilities between companies by means of the Gambling Regulator were enacted, all 75 000 slot machines were interconnected between the gambling facilities and the Gambling Regulator and the Tax Regulator (SUNAT) having information in real time of each machine under production, in order to know the correct amount for the tax calculation, as well as technical events to ease the supervision of all the machines by the Gambling Regulator. Up to date, Peru has a completely legalized gambling industry, and committed to keep a good image and reputation facing the society; this image has been strengthen with different activities by the Gambling Regulator and by legal entities and individuals involved in the gambling activity. This allow operators to invest in technology, as the slot machine industry is dynamic, and having the Gambling Regulator go along with such technology by regulating technical aspects as Server Base, customer fidelity systems, cashless, TITO, among others. Is important to notice that the diverse products are previously certified by authorized labora-
tories before they start a homologation process by the Gambling Regulator, in order to operate in the country, maintaining security on the systems installed in the gambling facilities, bringing guarantee to the Gambling Regulator, manufacturers, operator and general public. We consider we currently have a good legal frame, based in the principles of judgement, transparency, predictability, honorability and juridical security for investors in the gambling activity; these principles, among a permanent open doors policy, allow operators to express their concerns or explanations if required, with the security to be heard by the Gambling Regulator.
MID TERM PROJECTS A topic to be found in any Agenda, without any doubt, is the regulation of Internet Gambling and Sports Bets, this
core aspect has to be seriously analyzed, with responsibility and objectively. It is a long but necessary path, as the current condition is the worst scenario; there are companies offering gambling games in the Region without any control, supervision and tax payment for the activity they perform. Likewise, we are working on additional topics such as Server Base regulation enhancement, progressive systems for slot machines, adjustment of game rules according to technology, among others. Nevertheless, it is important to strengthen the prevention against money laundry system, rules against compulsive gambling, everyone involved in this activity must generate responsible gambling policies with an own self-control and initiatives against it, with a clear principle. It is not enough to follow the rules; we need to be sure they will work. OCTOBER 2015
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Joerg Hofmann, President IMGL
T
he International Masters of Gaming Law (IMGL) is the pre-eminent global gambling law networking and educational organization. The fact that IMGL membership consist of gambling law experts from all over the world and that we are represented on all continents already demonstrates this. But it is also important to us to bring our expertise and the opportunity for players of the gambling community to interact with each other to all parts of the world. We do this through our publications and of course especially through our con-
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ferences. By hosting the conference in Lima/Peru we are actively reaching out to Latin America in order to discuss the developments and issues arising in the emerging gaming markets and jurisdictions in Latin America. Also we are hoping to attract new qualified experts from Latin America to expand our global presence. Obviously, the geographical location within South America and the many attractions Lima has to offer already speak for hosting the conference in Lima, but Lima was also chosen as the venue for this first ever conference in
Latin America due to us having outstanding and very committed members there and considering the pioneering role Peru takes up in gambling regulation across Central and South America.
- At the same time International Association of Gaming Regulators (IAGR) will be organizing its Conference of Regulation in Lima. Do you think that these two events are going to improve the image of Peru as a leader state in the gaming regulation in Latin America?
The International Association of Gaming Regulators (IAGR) will not only be organizing its conference in Lima at the same time as the International Masters of Gaming Law (IMGL) but will be partly hosting their conference together with the International Masters of Gaming Law (IMGL). Both organizations have been involved in the planning and organization of the conference and joint sessions and panel discussions will be held. This will provide an unparalleled opportunity to exchange views on market developments and potential regulatory issues between representatives of the international gambling industry, the legal community and regulators from all over the world. Clearly, the fact that both organizations chose to host this joint conference in Lima/Peru shows the great respect and recognition for the Peruvian gaming regulation, since none of the two organizations would randomly chose where to host their conferences and both organizations attach great importance to quality and an environment where a constructive dialogue can be had. It also highlights that the developments in Peruvian gambling regulation are not going unnoticed and that there is an interest to learn more about these developments.
- How many members are there in IMGL and how many of them are from Latin America? The IMGL consists of more than 360 members from 43 countries as well as members in 34 states and territories in the United States. These include e.g. gaming attorneys, regulators, educators, executives, compliance officers and consultants. In Central/South America we are represented in Argentina, Brazil, Mexico, Panama and Peru by a total of 10 members. Of course we hope to extend this number in the future. To ensure that only leading experts of the
industry join the IMGL and to maintain our high standards IMGL membership is invitation-only and subject to a series of strict membership criteria. General Members must e.g. have at least five years of experience in gaming law either as a private practitioner and must demonstrate their pre-eminence in the area of gaming law by regularly contributing to industry publications or conferences and having a distinguished list of gaming clients. General membership applications must be sponsored by three IMGL General Members and the qualifications must be approved by a special examination board.
- As an expert in the field of Gaming Law, what would be your recommendations to the Latin American governments regarding the regulations of the gaming industry? In my experience it is a recurring theme – globally – that whenever gambling regulation or changes to gambling regulation are discussed in a jurisdiction the same set of problems, doubts and concerns are raised. Mostly these result from a general uncertainty, lack of information and knowledge of the industry, the industry players, their idea of a sensible regulation and the fact that prior to regulation regulators have only made experiences with unlicensed operations. In theory it is of course possible for individual jurisdictions to “reinvent the wheel” and make their own decisions with regard to gambling regulation. In my opinion, the more sensible way to go about resolving the issues arising with regard to gambling regulation is, however, to learn from successful jurisdictions or from mistakes that were made with regard to the regulation of gambling and to promote a sensible and trustful dialogue with regard to past and future regulatory issues between regulators amongst each other
and between regulators and representatives of the gaming law practice and the gaming industry itself. This applies to both to the regulation of land-based and online gambling. The latter, however, makes the necessity for an exchange of experiences and knowledge even more apparent, as the online gaming industry is technology driven and therefore constantly raises new regulatory questions. It is of course better to seek advice about the “Do’s and Don’t’s” from those who already have made their own experiences on this to avoid the “Don’t’s”. I therefore not only encourage Latin American governments and regulators to attend industry seminars, gaming shows, conferences etc. but hope that there will be more opportunities for governments and regulators world-wide to interact with each other and the industry. In order to achieve the best possible regulation and to be most productive I further consider it important that these regulators do not attend just any conference or seminar but focus on quality and expertise. Similarly when considering how to organize gambling regulation, I recommend that instead of entrusting multiple authorities with the task jurisdictions should focus on having one or few gaming authorities made up of experts. Speaking of regulation experts, I may let you in on a little secret. Mr. San Roman, regulator with the Peruvian Gaming Authority, has been selected as the IMGL’s Regulator of the Year for Central/South America 2015. He will receive his award at the IMGL Autumn Conference in Lima. The fact that Mr. San Roman operates in the country where our IMGL Autumn Conference is being held is of course a mere coincidence but it will give me great pleasure to honour his remarkable achievements and his commitment towards a sensible gambling regulation and an open dialogue in his home town. OCTOBER 2015
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Quality management Companies are implementing different protocols to ensure their sustainable growth and the satisfaction of their clients. What are they and how do they work?
I
n an increasingly changing and competitive global market, companies, regardless of their size, have seen the need to implement quality management systems in order to achieve their goals and be able to respond to the high demands of the market.
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From her experience, Giovanny Mendoza Bastidas, General Director of Incrementa Consulting, analyzes this subject in depth and highlights the importance of adopting that type of actions for ensuring a successful future for the sector.
— What quality management system models are being currently used in the market? There are many models and management systems being applied in the local and international market, however, all of them are based on the continuous
improvement principles or the Deming Cycle (PDCA). Quality management systems are a series of international rules and standards linked to each other in order to standardize and normalize processes to increase the level of compliance with quality requirements a company needs to fulfill to satisfy its clients. Nowadays, there are several quality management systems. All of them are regulated by an international non-governmental organization called ISO (International Organization for Standardization), and its most important standards are ISO 9001 (quality), ISO 14001 (environment) and OHSAS 18001 (industrial safety and occupational health).
—In what industries are these protocols required? What benefits do they bring to them? Models of excellence and quality management systems are complementary and must be applied in all types of industry or business which have the firm conviction to increase their financial results, as well as the quality of their processes, products and/or services. The major benefits we have been able to obtain thanks to the implementation of these models of excellence throughout the years in companies of Peru and the region are sustainable and efficient growth, as well as more productive collaborators. They also increase the level of safety and satisfaction of the clients, employees, suppliers, the company and its shareholders. Likewise, they enable the standardization of processes, products and/or services, as well as a more efficient and effective risk management. International standards will contribute to making life easier and increasing the effectiveness of products and services we use every day. They help us guarantee that those materials, products, processes and services are appropriate to serve their purposes.
— What successful experiences of those management systems could you share with us? Throughout these years we have had
Quality management systems must be applied in all types of business which have the firm conviction to increase their financial results. the chance to see several success stories in organizations of our country and the region, in companies of different sectors and sizes. In all of them we can see that critical success factors are commitment–starting with the general management–to overcome the obstacle of resistance to change, and adaptation of the programs and methodologies to the particularities of the business and to the characteristics and culture of the organization. As success stories in our country we could name the cases of Backus & Johnston, the Banco de Crédito del Perú, the companies of the BRECA Group, the mining company Antamina, the Telefónica Group, TECHINT, Austral Group and JR. LINDLEY Corporation, among others. These successful experiences do not only occur in large companies. We have also seen, with great satisfaction,
how small and medium-sized companies of our country have achieved improvements by applying these models and their methodologies.
— Finally, how much does a businessman have to invest for implementing this type of systems? What mechanisms or specialists are necessary? The investment can vary and it will depend on the dimensions of the project, the level of expertise of the consulting company and the implementation timeframe established by the organization. It is important to analyze the costbenefit relation in order to have a clear idea of how much return we can obtain from each dollar invested. Prices in the Peruvian market go from 80 to 200 dollars/hour per expert consultant, and the estimated time for the implementation goes from 4 to 10 months depending on the complexity of the project. For a successful implementation and in order to obtain the greatest benefit from the use of a model of excellence or management system it is essential to work with specialists willing to learn and train others, and they must have skills for change management and interpersonal relations, they must be passionate, highly motivated and action oriented, as well as opened to change, continuous improvement and innovation. OCTOBER 2015
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Online business Online gaming keeps positioning itself in Latin America. How profitable is it to invest in this gaming modality?
T
he market of online gaming is positioning itself and has become one of the favorite in the world, especially in Latin America. It is a gaming modality which, although not yet regulated in many countries of the region, is generating great profits for companies which opted for this business. Olaf Schimpf, Head of Sales and Marketing of Merkur Gaming, provided information, during the second day of the Peru Gaming Show, about the current situation of this market in the region
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and the tools required for investing in this attractive modality.
A GROWING MARKET If we compare Latin America and Europe, we notice with surprise that there is more growth of online gaming in our region. “The highest rate is 14.4%, while in Europe there has been a growth rate of 1% or a decrease of 0.5% between 2012 and 2014”, explained Schimpf during his speech. According to what he said, this is
due to the fact that the Latin American middle class is increasingly growing, and that is why people are now spending money on entertainment and leisure. “It is a younger public, compared to the average German citizen, and they have been changing their consumption patterns”, said Schimpf. Other factors making the region attractive are Internet penetration, broadband and the large number of smartphones and tablets, among others. “I live in one of the biggest cities in Germany, Hamburg, where there are
a very attractive figure for companies which have not yet explored this important market. But the situation of this business is different in each country of the region. For instance, in Brazil, Uruguay and Paraguay this practice is banned. The opposite happens in Costa Rica and Panama, where there are regulations. Mexico, Argentina and Chile are heading towards that direction, while Peru is planning on taking the first steps. Starting from this point, we can add that players lifestyle is different in each country, which is why the same strategy cannot be applied to all of them. “Marketing strategies for Peru will not be the same as those for Mexico or Brazil. In order to attract players, localized messages must be used”, stated Olaf Schimpf.
In Latin America, online gaming handles around 5,600 million dollars. more than one million inhabitants. In the case of Peru, Lima by itself has 6.5 million telephones. Imagine the figures if all people living in Lima would gamble online”, said the Head of Sales and Marketing of Merkur.
MARKETING STRATEGY In Latin America, online gaming handles around 5,600 million dollars,
In this context, he emphasized that it is necessary to have a specialized marketing staff with broad experience in the sector. “Many clients come once or twice and never come back, and that is why there should be a strategy for each player. You have to contact them, know their names, their age, their birthday date, etc.”, explained the specialist.
Olaf Schimpf, jefe de ventas y marketing de Merkur Gaming
ESSENTIAL TOOLS If you want to explore this business, Olaf Schimpf recommends in the first place having the necessary software, a qualified staff and an operating license. “A lot of people make the mistake of creating a webpage and think that it is going to work automatically”, said the Head of Sales of Merkur. Furthermore, he said that people opt for a particular game or platform because they trust the software. They have already played before on the site and know that they will get their prize without problems. “There lays the importance of working on the reputation of the company, since that is essential for ensuring its success”, he added. It the payment does not come on time or it is simply not made, people affected by that will never use the platform again and, along with them, other 50 or 10,000 people. He also mentioned that a good multi-currency system is necessary since people would like to play with the currency of their country, that is, with soles, pesos, euros, etc. “Flash technology is going to disappear and it will be replaced by HTML 5. If someone ever offers a software 5, do not buy it”, he suggested. Finally, he underlined the necessity of having a good floor manager due to constant robbery cases of which online companies are victims. According to what he said, many of these robbery cases are made in complicity with employees of the company. OCTOBER 2015
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The SUCTR facilitates the regulatory, enforcement and tax collecting tasks of government authorities.
Technology and management Peru has a system that allows monitoring what is inserted into all your slot machines. How advantageous was it to apply this protocol during all these years?
T
he robust legislation of the country regarding the industry is in large part due to a range of policies implemented several years ago. The advantage of this market is that all of its slot machines are approved and connected to two servers of the government through a complex management system known as the Unified System of Real-Time Control (SUCTR). This protocol transmits information about the money entering and coming out of the slot machines operating in the whole country. Each slot machine sends data to the establishment’s server and
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then forwards them to the computers of the General Direction of Casino Games and Slot Machines (DGJCMT) and to those of the National Customs and Tax Administration Superintendence (Sunat). This way, it facilitates regulatory and enforcement tasks of both institutions and– especially in the case of the second one– tax collection tasks. This system prevents the presence of operators working outside the law who represent unfair competition for those paying taxes and complying with the established standards. Currently, the SUCTR operates
around the clock. Any type of failure, either partial or total, is reported to a computer center in less than an hour, and the same happens when its activities are restored. Thanks to this system, Peru is well seen by foreign investors of the United States, Ecuador, Chile, Brazil and Italy, among others, who keep arriving to the country. This is thanks to its economic stability and its transparency. The successful functioning of this system has allowed authorities to evaluate the use of a similar protocol for regulating the market of online games.
Responsible gaming The gaming sector promotes a series of measures for avoiding pathological gaming.
B
usinessmen of casino rooms and slot machines have always shown their commitment to offer the best entertainment to their clients, taking their health as a priority. That is why, for some time now, the industry has been promoting different initiatives for the well-being of players. “Responsible� gaming is based on a series of principles and practices orien-
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ted to prevent the effects of compulsive or pathological gaming. In this sense, during the Peru Gaming Show, a specialist in the subject and representative of the Peruvian Institute of Cognitive Behavioral Psychotherapy (IPSICOC), Jorge Shimabukuro, said that in order not to transform gaming into a passive activity, there must be a shared responsibility of the sector as well as of players themselves.
DISSEMINATION OF THIS SUBJECT IN THE INDUSTRY The industry raises awareness about this important subject. Identifying compulsive players is not enough. Efforts must also be made so that they, after treatment, manage to control themselves and determine when to stop gaming. As a proof of that, the National Association of Games of Chance (Sonaja) has been
developing, since 2009, different campaigns for orienting players about the limits they should establish for themselves so that they can play in an entertaining and healthy way.
The Mincetur has raised awareness about compulsive gaming to more than 48,000 people. As for the IPSICOC, it considers gaming as a legal social-recreational activity at which a vast majority of people gets entertained within the parameters of any pleasing activity. Shimabukuro has pointed out that actions of players lacking self-control will have strong impacts on the activities they do, both personally and in terms of work.
THE GOVERNMENT’S POSITION Alongside the efforts of the industry for promoting healthy gaming, there is also work of the government. In the Second Biannual Gaming and Slot Machines Convention, the representative of the Ministry of Foreign Trade and
DISSEMINATION OF INFORMATION ON GAMING Diptychs and triptychs with phrases such as “Gaming is fun when I establish limits” and “Bet on you. Go for responsible gaming!” are handed out in casinos. La Puerta, representative of the Mincetur, also said that they are seeking ways to disseminate information on this subject on the radio, television and social media.
Tourism, Claudia La Puerta, emphasized that the government is committed to promote responsible and regulated gaming in which transparency is guaranteed, and to eradicate illegal gaming. She indicated that the Executive Power enacted Law N° 29907 in 2012. Among others, this law allows the creation of the Registry of People Banned from Entering Gaming Rooms, a list Peru constantly promotes responsible gaming.
which will be kept confidential and will only be handled by authorized staff. Another action taken by the government was the creation of an alliance with the Ministry of Health (Minsa). La Puerta explained that both institutions are in charge of promoting campaigns for raising awareness about compulsive gaming. She also highlighted the fact that the Mincetur organizes talks in different parts of the country. Until now, 48,000 people have participated in them.
REGISTRY OF PEOPLE The opting-out list is one of the strongest measures adopted by the sector and the government. There are currently 46 people on that list, and according to data provided by the Mincetur, 32 of them live in Lima and 14 in the interior of the country. But how does someone get to be included in this registry? As established by the existing rules, registry can be voluntary or at the request of the family, having been previously diagnosed by a medical board. From that moment, people are banned from entering any gaming room for six months. Once that period is over, OCTOBER 2015
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the agreement can be renewed or cancelled, depending on the player’s condition. Although the registry is managed by the Mincetur, all gaming rooms in the country can also have access to it by means of an intranet user. People having access to this registry shall not reveal the identity of people included there. The agency in charge of supervising that list, its implementation and sanctions to be applied is the General Direction of Casino Games and Slot Machines (DGJCMT). Its Director, the engineer Manuel San Roman, informed during his speech at the Peru Gaming Show that both businessmen and employees must check that list so that they can properly By means of teamwork, the Atlantic City identifies people included in the optingout registry who try to keep entering gaming rooms.
The Atlantic City casino implemented a strategy for identifying players on the opting-out list. control the entrance of people with compulsive gaming problems.
IMPLEMENTATION OF MEASURES In order to keep track of people in-
cluded in the opting-out registry, the Atlantic City casino implemented a strategy which implies collaborative work of its entire staff. The Chief Security Officer of said entertainment establishment, Cesar Sanchez, explained that identifying those people is not an easy work to do at all. “Now players find the way of getting in, either by giving a fake name or changing their appearance”, he said. For that reason, he said that his employees are constantly accessing the intranet for memorizing names and faces of each person in order not to be deceived so easily. If those people are identified in the gaming room, they will be asked to leave the establishment and their relatives will be notified about it. These are important achievements helping the industry continue to grow hand in hand with fair, healthy and responsible gaming.
AlLIANCE The National Association of Games of Chance works together with the IPSICOC and other institutions to promote responsible gaming.
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Strenghthening
tHE INDUSTRY
Specialists consider that the service sector is one of the sectors which has contributed the most to the annual growth of employment. Felix Rosenberg, President Nevada Alpamayo Group
T
he gaming industry in Peru has become a world of opportunities. For some years now, this sector has produced a great amount of specialists and professionals, becoming increasingly solid and competitive. Felix Rosenberg, President of the Nevada Alpamayo Group, tells us that the country is in a good period for reinvesting and that it is only a matter of strengthening the stability of gaming with more trust.
Businessmen bet to continue to grow in the gaming sector and strengthen their links with employees.
—How important are employees for the business sector and society?
Many people have the wrong idea of how to achieve real happiness. It cannot be attained through our own gratification, but through our loyalty to a cause that is meaningful to us. The same happens within a company.
A company improves its productivity when the organization and its collaborators have the same goals. That is crucial, and when achieved, it translates into the existence of a feeling of shared values directed towards the same goal, just like it happens with families, communities and society at large.
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—Could you give an analysis of companies as employment generators? What impact do they have on society?
We should keep in mind that the sector started its operations in a very complicated context for our country. We were going through an economic and social crisis with high unemployment rates. We needed a fresh, dynamic and attractive industry able to create new opportunities. Some years later, the gaming sector opened the doors to a whole new world of opportunities, which made it possible to teach, train and educate specialists in the sector. With the passage of time, those specialists professionalized and became highly competitive. At the same time, they improved their economic levels and their quality of life.
—How have casinos grown in the last few years? Our industry belongs to the service sector. According to specialists, it was one of the sectors which has contributed the most to the annual growth of employment.
The sector has experienced sustainable growth regarding that aspect due to the formalization and the implementation of the online system. We currently have an estimate of nearly 700 gaming rooms and 22 casinos. The level of job rotation is high and there is an estimate of nearly 25,000 employees.
—How does society see the gaming industry? The sector is currently seen as a healthy and attractive entertainment option by many people who go out to have fun. Our clients feel that they are treated
as though they were part of the family. Society will increasingly require that we show a behavior with high doses of corporate social responsibility. That is why we are obliged to continue making efforts to unify the industry and promote solidarity with those in need.
—Do you think that there are margins for reinvestment in Peru? Of course! What we need is to strengthen the stability of gaming so that it guarantees trust. If we manage to improve in that aspect, positive things will await us in the future.
Regarding sectors, I think some stand out more than others. Whatever it is we decide to do, we have to do it right, especially for our clients, their families, their communities and our country.
—What has your business experience been like and what are your most successful investment channels? Some experiences have been good, but others not that much. But that is what it is all about: having the right attitude at all times, smiling when success comes because of the achievements attained, knowing how to get up when things get complicated, and fighting and persisting until we fulfill our dreams. My great team of collaborators is there with me through thick and thin. For me, that will always be my greatest achievement: having been able to sow in the heart of our people the values of loyalty, respect and admiration for what we do.
—What would you suggest to new investors? To bet on the country. I would tell Peruvian businessmen to invest and show patriotism, and I would tell foreign investors to trust and show profitability. OCTOBER 2015
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Our contributions to allied or
indirect businesses The gaming industry has allowed the emergence of great professionals as well as the development of allied businesses which contribute to the sector’s sustainability.
Fredy Gamarra, President of SONAJA
W
ith the passage of time, the sector of casinos and gaming rooms has developed and consolidated itself until becoming what it is today: a formal and mature market, for reassurance of serious businessmen. In parallel, we have also witnessed the growth of different and very important elements supporting the development of our activities, from individual professionals to companies supplying a great number of goods and services generated not only for our activity and market, which is now allowing them to expand to other sectors and other markets with outstanding success. While making an effort to remember everything for this analysis, I will try to provide a summary about these important supporting elements, starting with lawyers. I know many who, with the passage of time, have specialized in gaming regulations and who are now internationally renowned consultants and
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Lawyers has specialized in gaming regulations and who are now internationally renowned consultants and speakers. speakers. It has even been possible–and it is worth mentioning it–to achieve that Lima is selected as the seat of the IMGL 2015 Autumn Conference in October, an event which will gather together in our city the members of the International Masters of Gaming Law, and this will be the first time that this event will be held in Latin America. Following the order of the process, we have architects and decorators. The
design and decoration of casinos is a separate area of specialization, since it is essential to know the needs, motivations and tastes of different types of clients in each country or city, as well as to know the areas, zones, components, materials, regulations, budget (very important) and other elements related to and conditioning the creative process. The internationally renowned architect Willy Gomez– with important works in different countries of Europe, the Americas and Africa–deserves a special mention. In terms of equipment, aside from suppliers and manufacturers of basic gaming elements, such as casino tables and slot machines, there are also companies supplying spare parts and elements helping achieve greater productivity, which is the case of bill validators, printers for TITO systems, cumulative prize systems, among many others. With respect to elements for decoration and to give ambiance to casinos,
there are several local companies specialized in manufacturing signboards and lighting equipment for facades and interiors which, based on their experience and the development of technology, have products which have reached competitiveness levels enabling them to be suppliers of the Peruvian and international markets. That is, a Peruvian industry with an exportable offer has been generated. Regarding specialized equipment, general carpentry, plinths or drops, pieces of furniture and other elements we can find in every room, I know companies developing and implementing projects related to that in countries such as Egypt, Colombia, Panama and Chile. A recent–but not less important–development, is that of companies supplying software systems required at first for complying with the regulation of the Uni-
fied System of Real-Time Control (SUCTR), the Ministry of Foreign Trade and Tourism (Mincetur) and the National Tax Administration Superintendence (Sunat), but mainly for managing companies of the gaming sector. There are several of them one hundred percent locally developed. A factor which defines us and characterizes us–for better or for worse–and which draws the attention of clients and businessmen who visit us is the one related to promotion and customer service, which includes snacks, beverages and other things we invite to our clients, draws and shows. Regarding this point, it would be very important to calculate the number of artists who have permanent jobs thanks to contracts with casinos. In addition to this, we have the payment of the corresponding rights to associations of songwriters, producers of phonograms,
among others. We should also consider our contribution to Notaries Public and fees payed for organizing draws. Even though I am not mentioning here many other partners or strategic allies which have grown along with the sector, there are also valuable professionals in the public sector–at the level of regulatory bodies–who have achieved not only the formalization of the sector–this because 100% of them have a license–but also that Peru is considered as a role model for other jurisdictions. Just like the IGML 2015 which I mentioned before, in October, the 2015 Conference of the International Association of Gaming Regulators (IAGR) will be held in Lima–an acknowledgement Peru has received as a result of combined efforts: both of the public and the private sector. As our main direct–more than indirect–partners who are not suppliers we have municipalities and the Peruvian Sports Institute (IPD), which receive 8.4% of the gross income (or sales) of the sector–a percentage higher than the one many other companies receive. Finally, developed along with us and supporting us through their own business, we have companies organizing trade shows such as the Peru Gaming Show– an event of international scope–and our beloved magazine CASINO, with editions for several countries of the region. OCTOBER 2015
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Betting on Perú Major projects and investments keep coming to Peru, providing further impetus for the growth of the gaming industry.
T
he gaming industry in Peru has been characterized by maintaining a steady growth rate throughout the years, which has enabled the arrival of major investments. The solid management of the economy as well as the existence of a market governed by clear regulations have been recognized by the most important com-
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panies of the sector around the world. New gaming rooms, company mergers and large constructions are just some of the projects coming this 2015 which establish the country as an increasingly more attractive market.
HARD ROCK IN LIMA One of the most ambitious projects is
the construction of the Hard Rock Hotel Casino, from the American Hard Rock, in which a sum of 20 million dollars is expected to be invested. Its representatives expect to start this project after opening a second café-restaurant in Lima and expanding its operations within the country. The brand plans to open a Hard Rock Café in Lar-
comar, which would have an area of 700 square meters, while the luxury theme and five star hotel could be built in the districts of Miraflores or San Isidro. “Before awarding the franchise of the hotel, the brand conducts a study for assessing the economic indicators of the country, and Peru fulfills the necessary conditions”, said the Director of the company in Lima, Alberto Araujo.
One of the most ambitious projects is the opening of the Hard Rock Hotel Casino, in which 20 million dollars are expected to be invested. This new project proves that this American company has focused its attention in Latin American countries, such as Paraguay, where the construction of a hotel in Ciudad del Este is expected to start before the end of this year.
COMMERCIAL ALLIANCES By the end of April, Enjoy entered into a memorandum of understanding (MOU) with the Decameron hotel chain,
The Hard Rock has set its sights on Peru once again.
linked to the Colombian Terranum group. This alliance will allow the Chilean company to operate gaming rooms in the group’s resorts and commercialize the hotel offer of both chains. Enjoy will start operating gaming rooms in Punta Sal, while, in Colombia, it will do that in its hotels in San Andres and Baru. “We estimate that said projects will start operating at the first semester of the year 2016”, said Javier Martinez, Executive Vice-President of the Chilean company. He added that those projects fall within a modality of infrastructure leasing for operating casinos. The company estimates that the total investment will mainly focus in the purchase of more equipment. Martinez said that this alliance represents the starting point of a valuable long-term relationship. “The Decameron chain is the category leader, even in Latin America, and a highly complemenThe sustainable growth of the industry allows investments from different hotel chains to arrive.
tary agent for Enjoy, with which there is a great potential to develop business”, explained the company’s representative.
ENTERTAINMENT AT THE JOCKEY CLUB Another important announcement recently given is the signature of an agreement between Ezugi and the Jockey Club of Peru, which makes it its exclusive supplier of digital contents and land, online and mobile entertainment games. In said four-year contract, the company agrees to promote a complete product range, including live casino, slot machines, lottery and gambling. Players will be able to have access to the content of online games through a web site, apart from having access to 105 gambling rooms, known as teleracetrackers, in the whole country. Luis Razzeto Rios, President of the Jockey Club of Peru, showed his satisfaction for having signed with Eguzi an agreement thanks to which innovative contents of digital games will be offered. “This partnership shall guarantee our clients high quality gaming products and new distribution channels for gambling”, said Razzeto. For his part, Kfir Kugler, CEO of Ezugi, highlighted the long-term relationship established with the Jockey Club. He assured that his company will deliver the content of localized games through a safe platform which guarantees the highest standards of responsible gaming for OCTOBER 2015
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Javier Martinez. Executive Vice-President of ENJOY
Enjoy entered into an alliance with the Decameron hotel chain, which will allow its gaming rooms to start operating soon in Punta Sal.
MODERN AREQUIPA The construction of the City Center has already started in the so-called “White City”, which is a major business center comprising the construction of two towers of twenty floors each. This construction will have a five star hotel, a casino, financial and insurance institutions, offices, restaurants and cafés, among other attractions. The gaming rooms will be on the first floor, as well as the supermarket and the management office. The construction of the project, which will demand an investment of 49 million dollars, is scheduled to finish in the following months.
the protection and integrity of players.
MORE USERS Furthermore, these investments enable the growth of the number of clients who see games of chance as an excellent alternative for healthy enter-
tainment, and, above all, of high quality. For instance, in the Jockey Club, the upcoming combination of social and innovative games with technology will contribute to ensuring that the industry in Soon the Jockey Club will not only be characterized by horse races, but also by their new gaming platforms.
the country continues to grow with firm steps. “There will be younger clients than those who go to horse races, and, after some time, that crowd will go to the racing tracks”, said Kugler. This 2015 offers an auspicious picture for the sector in Peru, especially with the next edition of one of its main fairs coming soon: Peru Gaming Show.
STRATEGY Eyal Tregierman, Ezugi’s Commercial Director in LatAm, has headquarters in Latin America, since the company plans to expand in a few years.
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Why invest in the gaming industry in Peru? Carlos Fonseca
P
eru is one of the most developed countries in the gaming industry in Latin America. There is a complete regulation for the operation of slot parlors and casinos. Currently there are 700 slot parlors and 21 casinos. They operate more than 70,000 slot machines. Major international manufacturers are in the Peruvian market. The models of slot machines and the game programs must be previously evaluated by an international laboratory. In Peru, one can obtain license to import slot machines and also to sell or lease slot machines to licensed operators. Consequently, a company can do business as an importer and distributor of slot machines without a license to operate slot parlors. Peru is the world’s twentieth largest country with an area of 1,285,216 km2 and is ranked 42nd among the world’s most populous country with over 30
million inhabitants. Consequently, the market is still not satisfied, mainly outside Lima. Some 100,000 slot machines could successfully operate in the country. Slot machines and casino games are not the only opportunities that Peru offers to the investors in the gaming industry. The lottery is a business with an outstanding agenda. According to peruvian law only Public Welfare Societies can organize lotteries and hire private companies for the operation of these games. In practice, the chosen private operator signs with the Public Welfare Society a partnership agreement and gives between 5 and 10% of the gross earnings. There are over 100 Public Welfare Society in Peru but less than 10% operate lotteries. Another great opportunity is to use Peru as the hub for companies that provide online gaming services to peruvian
Partner at Varela & Fonseca Abogados Member of the International Masters of Gaming Law
and latin American citizens. There is no a prohibited activity in Peru offer online gambling. There is also no legal barriers to offer sports betting. Therefore these businesses are likely to grow in the coming years. With respect to taxes, the situation is also attractive. Games of chance are not subject to VAT. The income tax on domiciled companies during 2015 and 2016 will be 28%. In the case of the operation of slot machines and casino games they are levied with a tax of 11.76 over monthly income gross. Peru is a country with amazing historical sites. Machu Picchu in Cusco, the Nazca Lines in Ica or Kuelap in Amazonas. It has great natural places. For example, Colca canyon in Arequipa or the longest wave in the world, ideal for surfing in Chicama. And the cuisine is recognized worldwide. Many reasons to visit and do business in Peru. OCTOBER 2015
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- Based on your previous experience at Spielo, how has this first phase been for you at IGT, after its merger with GTECH? Which new strengths does the company have now? This first phase as the new IGT has been very positive and productive, and we have accomplished a lot since the completion of the merger agreement. In our second quarter results we reported a 17 percent increase in IGT’s international business on a pro forma constant currency basis. By creating the world’s leading end-to-end gaming company, we can meet more of our customers’ needs by leveraging the depth and breadth of our combined product portfolio. We can also better serve our customers, as we now have a presence in more than 100 countries, providing local support and market-attuned solutions.
- Which new machine platforms does IGT have now? What is new about interactive games, social games and online systems? IGT continues to innovate across
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Walter Bugno, CEO IGT International
multiple platforms. Our introduction of the S3000 cabinet over the last year has helped to redefine the stepper category, and this cabinet has been a runaway success. Our popular CrystalCore cabinet inspired the launch of the new CrystalDual cabinet, which utilizes stunning LCD screens to enhance the game experience dramatically. In terms of taking our best-in-class content beyond the casino, we have a strong distribution channel through our interactive and social gaming businesses, so we embrace it as method for further leadership and innovation. A great example of how this has driven results is with IGT’s Wheel of Fortune slots, arguably the most popular slot machines of all time. We have
introduced Wheel of Fortune slots in the online and mobile environment and the games have proven to be as popular there as they are in the casino.
- Why social gaming is so important for IGT? How has demand for this type of games evolved in the international market? Which regions are you planning to expand to? IGT’s DoubleDown Casino and Play for Fun solutions are important because they bring our best-in-class content to more players, and help our customers market to more players. By helping our casino partners leverage a social casino to expand the scope of the player base
to include a larger demographic, we help create affinity for games in casinos at the same time. Having these two distinct solutions in the social space give us broader flexibility to expand into more international markets, and we’re progressing with that now. Operators have expressed demand because they understand the need to connect with players by providing gaming experiences where and how players want them.
- How has the company innovated in game content? What do you think the new generations look for in land-based and online gaming? A great example of IGT’s innovation in game content is with our TRUE 3D te-
chnology. Games such as SPHINX 3D have performed extremely well and established a benchmark for content innovation. We’re excited to introduce TRUE 3D on IGT’s Wheel of Fortune slots, combining this groundbreaking technology with the most popular slot theme of all time. In terms of addressing demand from new generations, we have to strike the balance between the pace of change and the investment required to keep pace. Understanding the player is of fundamental importance as we work together to address the different needs and interests among changing demographics. IGT can help operators understand players by providing them with our systems solutions, which feature sophisticated diagnostics tools.
- Finally, which projects and challenges does the company have for 2016? Our focus for 2016 revolves around introducing new games, systems and solutions that help our customers drive profitability and increase player engagement and excitement. We are focused on even further expanding our industry leadership. The depth and breadth of our products and solutions, combined with the strength of our relationships throughout the world give us unique competitive capabilities. The challenges we experience are not unique to IGT; the industry as a whole cannot be complacent and we must all innovate to deliver preferred entertainment options.
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B
MM Testlabs has been expanding its operations in Asia Pacific on the back of increasing demand for testing, compliance, online, training and operator services in a growing number of regulated gaming jurisdictions around the region. BMM delivers the highest quality testing services available in the gaming industry today and the quality of work coming from our Macau and Singapore testlabs is no exception. The number of regulated gaming markets in Asia is increasing as the Asian markets legalize gaming and put in place their own gaming technology regulations and standards which are overseen by gaming legislation and gaming regulators. BMM’s activity for certifications in Asia are mostly for Macau, Singapore and the Philippines. However, BMM’s certifications are accepted in all other Asian markets where regulators and operators see BMM certifications as a mark of quality and confidence in the integrity of the gaming technology being sold. In relation to online gaming many Asian markets are still assessing their position in legalizing this form of gaming. Regulators in Asia are assessing what to do with online gaming and how to do it in the best way possible. iGaming removes geographical restrictions on access to gaming products. For this reason most countries that have not yet legalised iGaming are moving ahead with caution to ensure they fully understand and are able to mitigate against any social impacts of this broader reach.
- What strengths have allowed the company to position itself in the Asian mar-
Kirk White, Executive Vice President & General Manager
ket ? How was the experience of the company regarding regulatory policies ? BMM Asian labs are not just used for product transfer, BMM has teams of gaming technical experts who are able to provide an incredibly high level of support throughout the complex process of product testing and certification in Asia, as well as multiple locations around the world. This, coupled with our responsive and transparent customer engagement methods, are just some of the reasons why so many Asian manufacturers are choosing to partner with BMM to guide them through the regulatory processes. Since 2009 BMM has operated a testing Laboratory in Macau, in partnership with the Macao Polytechnic Institute (MPI) and also a testlab in Singapore. With recent technical staff hires in both our Asian labs, BMM’s presence in Asia is well aligned for the future growth of the region as it continues to cater to the increase in local demand for high quality, thorough and cost effective testing services. BMM also provides educational programs, offered locally in Macau, with the support of MPI. BMM takes pride in having the largest footprint of Compliance Testlabs in Asia, while the company also provides services to many
existing and emerging Asian gaming technology manufacturers in other global locations. The expansion of BMM Asia operations has added a personal touch to its service as Asian manufacturers appreciate the convenience of working with a lab and testing experts in their same language and timezone.
- China , Macau and Hong Kong are considered as the “ key trio “ game in Asia. What kind of control do you have? What are the games and solutions with the highest demand ? BMM is involved in delivering services to a broad range of customers from China, Macau and Hong Kong. These customers understand the value BMM can bring in educating them on gaming technology technical standards and the regulatory processes that exist, and vary, in each regulated jurisdiction. Highest demand for BMM services are for gaming machines (SLOTS) and game certifications. However increasing demand is also being seen in education, online gaming and operator support services. BMM is committed to supporting the delivery of high quality and compliant gaming technology into the various Asian gaming markets. OCTOBER 2015
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ECIAL
Protection with technology Mobile devices, surveillance cameras and lie detectors are the tools most commonly used for fighting against insecurity in casinos.
I
n the world of casinos and slot machines rooms actions are being taken in order to avoid being victims of burglary, robbery or frauds. In this sense, businessmen have had the need to continuously perfect their security systems. These systems are now able to closely track each unusual movement or incident inside and outside the rooms. Thanks to surveillance cameras it is also possible to detect robbery or fraud modalities occurring inside the rooms. Technology allows to monitor, from de
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control center, gaming tables, the number of clients entering the rooms and employees in activity. Cell phones are another element which also has a monitoring role: through a software connected to the nearest police station, businessmen will be able to send alert messages, which will be activated from the very moment at which the criminal is caught by surveillance cameras. During the second day of the General Annual Meeting 2015 of the Latin American Association of Security of Casinos
(Alasca), businessmen of the sector exchanged their experiences regarding these topics and, above all, they got to know what technological tools exist which can allow them to efficiently tackle this issue.
SECURITY SYSTEMS These designs have evolved over time and now we can find, for example, that some systems have alarm management and intuitive play controls. Their advanced features allow to track suspicious activities by jumping from one camera to another
until the infringer is caught on the spot. Another trend is the one Jaime LopezChau, President of the Pro Social Assistance for Responsible Gaming Association (PROAS) mentioned during the Second Casinos and Slot Machines Convention. It is a new device called Detecpro, and it will be available in the market soon. It is a detection system based on sensors and it could be installed in the doors of slots machines. Warning signs will be activated and reported to the control center of the company when a person tries to force machines.
Oculomotor is a lie detector which uses a sensor for determining the human eye behavior in cases of fraud or corruption. ONE STEP AHEAD There are alarms which can be activated from the operations center, and there are other novelties, such as lie detectors which help detect trickery, fraud and corruption cases. For instance, the Oculomotor is an ocular detector which uses a sensor for determining the human eye behavior. It is
OTHER SYSTEMS There is a technique which measures people’s credibility just by recording their voice. It is a device which could chart frequencies, intensity and duration of noise emissions of the human voice while a person is being interviewed. This tool has already been implemented in Colombia, where a journalist interviewed a candidate by telephone to measure how true what he was saying was. After the evaluation, he obtained failing results.
composed by a computer and an online questionnaire with true or false choices, and meanwhile a camera registers all reactions of visual organs. Data obtained are saved in a server and five minutes later we can have the conclusions which determine if the testimony of a person was true. This procedure has a duration of 30 minutes and an efficacy of 85%. This product was presented in Mexico after a ten-year research conducted by
the University of Utah, United States. The polygraph is another element of great precision which registers a person’s reactions based on physiological changes they experience when asked a particular set of questions. Crime is everywhere and it is up to businessmen to invest in these systems which help prevent and quickly detect these illegal acts. This is also for the sake of their clients and their own business.
Security cameras register all movements during on-site games.
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T
his is the most exciting and certainly the most challenging jobs that I’ve ever had. Since I joined Scientific Games, we have really been focused on integrating four great companies – Bally, Scientific Games, Shuffle Master, and WMS – while simultaneously focusing on our customers’ needs, meeting our deliverables, and managing our day-to-day business. It has not been easy, but having great people makes a tremendous difference. Each member of the Scientific Games team is focused, first and foremost, on achieving the best outcomes for Scientific Games, our customers, our employees, and our many stakeholders. With the majority of the integration activities complete, we are laser-focused on empowering our customers with innovative new gaming and lottery products and services to help their businesses succeed. For more than 83 years, Scientific Games and its legacy companies have
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Gavin Isaacs, President and Chief Executive Officer
delivered what customers and players value most: trusted security, creative content, and innovative technology. Growth and innovation are hallmarks of Scientific Games and all of our legacy companies. Remaining true to these objectives is key to the continued success of Scientific Games for years to come both as a great supplier and business partner as well as a great employer.
- Why do you consider Scientific Games the industry supplier of choice? As a global leader in the gaming and lottery industries, our mission is to empower our customers by creating the world’s best gaming and lottery experiences. Our games,
systems, content, services, gaming machines, and interactive products are design to reach players wherever they are, whenever they want to play, and in any channel they choose: retail, casino, or digital. Because your readership is primarily focused on the casino gaming industry, I can say with certainty that Scientific Games has the largest and broadest portfolio of gaming products. We have end-to-end solutions for the casino floor that include electronic gaming machines, casino- and slot-management systems, proprietary table games, electronic table games, and utility products such as card shufflers and chip sorters. In the interactive space, we offer free-play and wager-based online
games as well as social games, mobile concierge applications, a remote gaming server, and even VenueBet platforms. Our interactive content leverages proven landbased content from our terrific Bally, Barcrest, Shuffle Master, and Williams game studios. And finally, even though we are a large company with nearly 8,500 employees around the globe, we make it a priority to listen to our customers and truly try to be accessible, flexible, and responsive. One of our core values is to win by surpassing the expectations of our stakeholders, and that means we focus on building partnerships with customers to deliver products that their markets need to succeed – and service to back it up.
- It has been a little over a year since you took on the role of president, in this short time, what have been the primary areas of focus and how has the market responded? It has certainly been a busy and fast-paced year! As I noted earlier, this has been a year of integration as we focused on bringing together Bally, Scientific Games, Shuffle Master, and WMS into one combined company under the Scientific Games name. We have spent much time teambuilding, reorganizing, rebranding, communicating, and developing a common culture with a focused mission and common set of core values. However, even with all the focus on integration, we have worked very hard to maintain and promote our great product brands Bally, Barcrest, Shuffle Master, Williams, and WMS. The brands, products and content they represent are well known, well respected proven performers for casino operators across the globe. We know how important it is to our customers that these brands maintain their identities and their sovereignty. Regarding market response, we have been very pleased with how our customers have embraced the integration of our legacy companies. They are already seeing the benefits of working with a single solution provider for games, systems, table products, and interactive solutions. Revenue for most of our operations is on track for our fiscal year, and we have seen growth
in gaming operations, gaming systems, and table products. We appreciate our customers’ patience with us during the integration process and are just getting on with business – focused on empowering our customers by creating the world’s best gaming and lottery experiences.
- What is the gaming platform that SG offers and its features? We offer several sophisticated slot platforms that are supported by a large library of engaging and highly entertaining game content, including game titles developed by our Bally, Shuffle Master, and WMS studios.
- What are the countries with the greatest demand worldwide? How does the company does face this situation? Scientific Games is a global company with nearly 8,500 employees on six continents. We have more than 250 locations in over 26 countries staffed with employees monitoring opportunities for our business. We also have sales, customer service, and product managers in all the major gaming and lottery markets around the globe, enabling us to tailor our product development very specifically to each market.
- Is Scientific Games committed to promoting responsible gaming initiatives such voluntary as pre-commitment programs?
Of course we are. We are a responsible company operating in a highly-regulated and somewhat socially-sensitive industry. Everything we do is planned with responsible gaming initiatives in mind. Where appropriate, we provide financial support to organizations involved in the research, education, advocacy, and treatment of problem gaming. In some cases, we offer customers the technology to promote responsible gaming intiatives in their operations.
- What are the goals for Scientific Games in the short and medium term? Our long-term mission it to empower our customers by creating the world’s best gaming and lottery experiences, and this is what drives our goals in the short and medium term. The next few months will be very exciting. We are preparing for the Global Gaming Expo (G2E) in September, where we will present our end-to-end solutions for the gaming industry. Our 26,006 square foot, multi-level exhibit will be the largest at the show. We will showcase exciting legacy and licensed brands as well as a host of other solutions to drive casino revenue and operating efficiencies. With most of our integration initiatives complete, we will continue our focus on goals revolving around customer partnership, innovation, and cost savings in all of our divisions – gaming, lottery, and interactive. OCTOBER 2015
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O
ne of the first things was to establish a clear and concise strategy to further develop Ainsworth’s position in this challenging market into a force. To that extend, we looked to strengthen operations, resources, and product offering in order to satisfy the specific demands of the clients we serve. Today we enjoy success in several market segments where we are strong and continue to look for opportunities to expand on that. Our goal is to provide our clients the best possible investment choice. Ainsworth’s game portfolio is expansive with some of the best products in the market today. We are well-known leaders in the manufacturing of exclusive products created for the Latin American market such as Rio Grande Rapids™ and El Toro Bonanza™. Both products have been meticulously developed to satisfy the needs of the unique characteristic of the Latin American player.
- What is Ainsworth potential? What makes Ainsworth such a strong player? What makes Ainsworth unique and strong, is its fundamental and classic design of products. We offer a robust gaming math which has allowed us to remain
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Miguel Cuadros, Ainsworth, President Latin America.
competitive and one of the most profitable brands for casino operators. Our product offering has evolved as such that the current product range is full of great products from exciting gaming cabinets such as the A560-ST, A560-SL and the A560 Wide Boy to the exceptionally successful core game titles 40/50/100Lines and specialized game categories such as Quad Shots, Multi Win and Frontier.
ver, in the conquest of mainstreaming their operations, these companies are losing the added value component that a close relation to the customer can offer. This is where Ainsworth capitalizes its opportunities. We offer a great product coupled with excellent service and continue to have small successes in the region. This is the result of careful investments in building client relationships by focusing on their development.
- It is known that two of the major gaming manufacturers have merged with the purpose of optimizing their strategies, however, Ainsworth has remained a solid and independent organization. What are your thoughts about this?
- What are Ainsworth’s goals for the years to come?
In our opinion, the recent mergers occur because companies seek product diversification and operational optimization. Howe-
Our goal for the Americas is to further expand our market share in the regions where Ainsworth is already present as well as conquering new markets. We will continue to invest heavily in research and development and to work incessantly to launch new and innovative products to satisfy the demands of our clients.
Álvaro Nores, Vice president Aristocrat Latin America
A
ristocrat goal is to bring the best game experience to players everyday. We have an award winning product portfolio for all type of players. From entertainment to core games and jackpots, we have it covered. To run the best games, we have developed the best cabinets, starting with our award winner HELIX cabinet, powered by the GEN8 platform, the most powerful and ergonomic cabinet in the industry. The Latin America region is rapidly evolving and players are now more sophisticated and require more world class games. We have proven performers that are preferred by players and operators. That’s the secret of our success; the preference of players and the support of our customers based on many years serving the region with the best gaming solutions.
— What strengths have allowed 58
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Aristocrat to adapt to markets with different regulatory policies ? How will it adapt to the new legislation for online gaming ? Aristocrat compliance group works closely with regulators in each jurisdiction to meet their requirements. This is done flawlessly in order for players to have the best games and for operators to receive a fully compliant product. Our firm commitment is to work with regulators in each jurisdiction within their legal framework to bring the best games. We are always monitoring jurisdiction gaming laws to conduct the proper testing to meet the regulators requirements. This is part of our commitment to the region.
— Why is it important for Aristrocrat to enter the mobile gambling market ? Besides the slot machine apps , are you thinking of develo-
ping other types of games for the international market? Social networks as well as mobile platforms are part of the future of the gaming industry and Aristocrat has clearly taken a leadership position in these industry trends. Our Product Madness company is the leading social network provider of games. “Heart of Vegas”daily user base has grown exponentially and you can now play the most popular Aristocrat games in your smart phone or tablet. In Latin America we need to wait for the development and approval of the regulatory framework for social and mobile gaming in order to develop the correct strategy to enter the different jurisdictions in the region. Until then we will keep an eye on the market, and I have no doubt that Aristocrat will play a leading role based on our world experience in these new developments.
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Rossi Mckee, Casino Technology Vice President
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he new generation of players and latest technology are shaping the face of the Global Gaming Industry. Brick and mortar casinos are changing, serving as a bridge between the online and land based gaming, ensuring wider and more diverse reach of customers. Paving the road ahead, Casino Technology created a powerful solution that empowered the seamless connection between land-based and online gaming with the complete range of systems THE BIG5™ offering continuous gaming experience to the players from all ages.
- Which are the strong sides of the company after being slot manufacturer for more than 15 years? We built a reputation for a company developing great innovative products. During the last few years the great multigame series GAMOPOLIS™ became a success story. As a recognized multigame maker, the design of distinct and
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recognizable slot machines and their ergonomic advantages, became really important. The latest series of our elegant cabinets AURORA™ upright, and TANGRA™ slant top have accomplished our goal to become a magnet for the players. Out strong team of professionals that joined us during the years became our leading force and moving power ahead to success.
- What is the range of products you offer? Which is the most demanded? The Company offers full range of casino and gaming equipment including multi-players, jackpot systems, serverbased gaming systems, online and mobile gaming products. Developing unique math models, new original and eye catching graphics, and new game concepts, one of the most sought after products from the game side now is the multigame Gamopolis, which today has more than 30 releases in different versions with more than 300 games.
- Which are the goals for the Company for the next years? Casino Technology is renowned for its unique quality and innovation. We have always aimed to be at the front line in the gaming industry and being there we continue to provide progressive technological solutions and products. The gaming nowadays became borderless in terms of concepts and reach. We continue to invest in the solid foundation of our products - first on the technological and platform quality levels, but also on the innovative, user intuitive and creative level of product design, which is critical in the development of the gaming products of the future. The new generation is searching new dimensions of interaction, social relationship, merged gaming exposure and borderless experience which continue to shape the gaming innovative minds. This definitely is keeping alert our corporate brains and experts who try to foresee the trends and demands for new game devices, platforms and concepts and of course produce them in the most spectacular form, shape and look!
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Mihaíl Volokotkin, CEO
S
elf-belief, determination and flexibility. After Russian market closed, which came as a jolt to many, we had to look for new market outlets and Latin America looked very tempting, as this region comprises many markets where gaming is allowed and players of those countries know to appreciate a good product. We entered the market with confidence and at the same time with caution, constantly geared to customers and adapting to their needs and wishes; as the result – distribution of DLV products throughout almost the whole region.
How would you describe DLV 20 years after the Company initiated its activities? DLV has that knows which steps desired. 20
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become a mature company what it wants and knows to take in order to attain the years’ experience is a long
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period and the knowledge obtained during this time allows us to avoid possible errors and make it easier to enter new markets, based on what we know about those markets where DLV already has presence. 20 years – it is also a positive characteristic for company’s image, as this proves the reliability and stability of the enterprise.
How would you describe your company’s relationship with operators? This is a relationship of mutual support: we try to help operators and recommend games best fit to be placed in their casinos or gaming halls; as soon as we release new products our customers immediately get information about them and proposals, often with special prices for long-term clients; apart from all this, there is of course the ongoing technical
support. Operators also render us aid sharing their observations and advice, often very useful to DLV as a gaming equipment manufacturer and software developer.
What is the importance of aftersale in your company’s activities? Aftersale maintainance is an integral link in our relationship with clients. Customers need to know that the service doesn’t end up with their purchasing our products, but that they can always count on DLV’s help in case any spare parts or technical advice are needed, thus they will always be able to fix any issue instead of having the product stand idle because of something broken or not functioning properly. This attention to the client pays off – customers want to order products from a provider who has proved himself ready to help and lend support at any moment.
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Harald Neumann, CEO Novomatic
D
espite the re-alignment in recent years of the financial strength of, mainly Asian, gaming market sectors outside of the US, America still stands as the ‘heartland’ – the ‘spiritual home’ if you will – of modern day international gaming. For that reason, market entry into the US is a logical target. For NOVOMATIC, the undoubted leader in Europe and a key figure among the world’s leading innovators and manufacturers, a major presence in the US has been a long held ambition that now, through the formation of its US subsidiary NOVOMATIC Americas, is an ambition that is moving to reality. For G2E 2015 NOVOMATIC predicts a truly great show, with our increased US presence and with the many international Group subsidiary companies all expecting an extremely busy and productive three days as the entire NOVOMATIC team looks forward to welcoming the many customers, business partners and guests that will join us on booth 2656 in Las Vegas.
- How would you describe Novo64
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matic when it comes to: - perfomance as a manufacturer and Novomatic’s influence in the industry - advantages offered to casino clients - as an employer NOVOMATIC’s position as both a leading manufacturer and operator is unquestioned. It is this position of duality, as both producer and operator, that gives NOVOMATIC such a huge competitive advantage in licensed gaming markets around the world. That duality clearly comes to the fore when you ask about the advantages that NOVOMATIC offers its clients in all of the different segments of the industry. Those segments include our activities in the online space, sportsbetting and most recently in lotteries as well as the systems that support all forms of machine based gaming). As well as outstanding excellence, from drawing board to manufactured products, NOVOMATIC’s own experience of operating some 232,000 gaming machines in its own traditional and electronic casinos and
also via rental concepts provides a wealth of knowledge and experience that is of direct benefit to all our customers, worldwide. As an employer NOVOMATIC has a workforce of over 23,000 worldwide and each and every one of those dedicated professionals contribute to the success that the Group has had throughout its history and which it will continue to enjoy in the future.
- What innovations are you going to present at G2E Vegas 2015. NOVOMATIC has established itself as a rising force in the US gaming supply chain and, as such, has risen to the challenge of bringing to market product lines that do, indeed, provide operators and their customers with attractions that are packed with gaming entertainment. At G2E Austrian Gaming Industries (AGI) and the numerous Group subsidiary companies, including of course the recently expanded NOVOMATIC Americas team, will come together to ‘go live’ to excite the many business partners, customers and guests attending.
As always, G2E in Las Vegas will prove to be a magnet for visitors from Latin American countries and, in order to cater completely for these welcome arrivals representatives of the NOVOMATIC subsidiary companies in Peru, Argentina, Colombia, Mexico and Panama will be on hand and ready to present their product portfolios and answer all enquiries. NOVOMATIC Americas, located in Illinois and very soon to move to new and larger premises close to Chicago’s O’Hare International Airport, will have a major presence at G2E. With the recent key advances in both product approvals and licensing the team, led by President and CEO Rick Meitzler fully expect to be inundated with enquiries from US operators as word of the arrival of NOVOMATIC on the US scene has spread rapidly. Set on two levels of the NOVOMATIC booth the NOVO LINE Novo Unity™ II display will feature three live dealers - operating Novo TouchBet® Blackjack, Novo TouchBet® Roulette and Novo TouchBet® Live-Baccarat. 10 slant top player terminals (five NovoStar SL1 and five units from Apex will seat the players in comfort while Las Vegas’ very own DJ - Dennae D will mix and play music to suit the mood. Additionally, all the gaming action will be prominently displayed on six video screens set above and behind the dealers. Novo Unity™ II also provides guests with the possibility to play up to 23 thrilling slot games directly at their seats. Coming at a time when Electronic Table Games are making huge strides in popularity in casinos around the world, this display of NOVOMATIC’s top quality and leading technology multiplayer products will certainly to be a major attraction at G2E. On the booth’s main floor guests will find two major Jackpot displays, the Magic Joker will be presented in the Dominator cabinet while the new (launched at ICE in London) Book of Ra Jackpot, that of course takes its name from the sensational NOVOMATIC hit game that is known the world over, will appear in the ever popular Super V+ Gaminator.
The Dominator Curve will feature prominently at G2E and will naturally be an attraction in its own right as it is now being launched for use in the US markets where NOVOMATIC Americas is licensed and where the necessary final product approvals are pending. Launched at ICE 2015 as a significant technology evolution of the original Dominator®, the Dominator® Curve takes up its twin brother’s successful concept and enhances its attractiveness with its own unique feature: the upright 40” full HD touchscreen that ideally places the player position exactly at the focal point of the curved screen and thus guarantees maximum
Max Lindenberg, Director of Marketing
impact gaming with sophisticated graphics and sound. In terms of gaming entertainment the NOVOSTAR® V.I.P. slant top is already, as its name suggests, a huge star on gaming floors around the world and this high end gaming experience will feature prominently in Las Vegas. With its Crown V.I.P. chair, huge 50” LCD top screen, armrest-loca-
ted additional Start button and the unique FLIPSCREEN® feature represents gaming in a truly grand style. Group subsidiary Octavian product presentation at G2E will showcase the company’s internationally established products such as the ACP Casino Management System (Accounting – Control – Progressives), the latest jackpot developments and a selection of new Octo-Games. Reinforcing NOVOMATIC’s position as a provider of innovation in gaming entertainment is the unique Panther Roulette II. Itself an evolution of the original groundbreaking Pinball Roulette, where the guest is not just the player but also the ‘dealer’ thanks to the unique Pinball launch system, Panther Roulette II gives the possibility for guests to switch between the main Roulette game and a choice of up to 23 slot games, all at the same machine. Presenting NOVOMATIC’s ‘third pillar’ of innovation and activity, the online gaming segment, Vienna based subsidiary Greentube Internet Entertainment Solutions¬ has, since its acquisition in 2010, grown to where, today, the Group of companies now under the Greentube aegis is a leading provider and operator of online gaming and social gaming services in only markets with a clearly defined legal framework Europe, the U.S. and Australasia. The NOVOMATIC Interactive area of the G2E booth will be packed with the latest innovations and developments for this, currently the fastest growing segment of the international gaming industry. Another important presentation will be that of NOVOMATIC Lottery Solutions (NLS), a sector in which the Group has made huge strides on one hand with advanced solutions development and continued sales success as a premium supplier and also strategically by membership of the industry’s key trade bodies; the World Lottery Association and the CorporaciónIberoamericana de Loterías y Apuestas de Estado (CIBELAE). Key members of the NLS team will be on hand in Las Vegas to present and discuss the latest developments and innovations. OCTOBER 2015
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Jhon Connelly, Chief Executive Officer
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or 25 years, casino operators worldwide have known Interblock® as the leading developer and supplier of luxury electronic table gaming products. Our multi-player gaming devices continually set industry standards and provide the ultimate in luxury interactive entertainment experiences for our customers’ players.
- What innovations will you show at G2E? In G2E booth#1239, luxury gaming manufacturer Interblock® will celebrate 25 years of incredible innovation and landmark creations with a dazzling line of products that are current, evolutionary and revolutionary – a perfect blend of products for today’s players with an eye keenly focused on tomorrow’s players as well. Interblock is steadily and methodically releasing enhancements and innovations that take each of its ETG categories to new levels of excitement and profitability, including StarBar, Big 6 Wheel, Blackjack and Craps. The revolutionary new Diamond StarBar is Interblock’s first multi-game/multiplay product, allows players to easily toggle
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between games, and can offer more than 500 games per hour. StarBar is an innovative new bar-top way for players to enjoy the entire spectrum of player-favorite Interblock games, as well as brand new Diamond video poker games, all with the touch of luxury and added levels excitement that only Interblock can provide. Interblock will also show its new Diamond Big Six Wheel game, which is fully automated, ideal for venues where live, dealer-operated table games are not allowed. Interblock’s Big Six mechanical wheel spins automatically at pre-set intervals and up to 150 games can be spun per hour. The transparent wheel can be connected to multiple, modular Diamond Play Stations placed on either side, providing the flexibility to add an unlimited number of simultaneous players and excellent economies of scale – in multi-play and multigame settings. Interblock is also showing new versions of its classic Blackjack games: Phase 0 Blackjack and Phase 1 Blackjack. Both enhance game play, efficiency and player experience, with evolutionary tweaks to
content intended to bring a higher win per unit that put them ahead of the competition. Phase 0 Blackjack is now faster with more interactivity, more anticipation and more game stats. Phase 1 Blackjack is an entirely new version of the classic game, complete with a virtual dealer. Interblock’s landmark Craps games have had a revolutionary makeover with new and innovative IP that change the game forever. Extensive research has also revealed in-depth player data concerning Baccarat, and Interblock’s ETG version serves this landscape of players in a direct way that will enable operators to successfully embrace the game’s target demographic. Interblock has carefully analyzed every segment of it extensive portfolio at G2E will see the results of the efforts – with subtle innovations to existing products and revolutionary advancements. With a mix of games firmly grounded in thorough product research, Interblock’s portfolio is current, evolutionary, and revolutionary. Interblock has never been in a better position globally, and there has never been a better time to do business with Interblock.
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asinos are stunning buildings. These are designed as spaces which have to stand out in their environments, be elegant, invite to comfort and entertain. And their success is achieved due to the genius of architects and companies such as GG International, which is dedicated to the design and construction of hotels and gaming centers around the world. Guillermo Gomez, CEO of GG International, says that location is crucial for the business of gaming. “It is easier to achieve success with a well located room than with a room at a not so preferential location which requires a lot of effort and expenses.”
–What do you think of the sector’s performance during the last few years in Peru? The sector has made a lot of progress and two of the main factors for that were the formalization of gaming rooms and the
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Guillermo Gomez-Morón, CEO of GG International
great support received from the Mincetur. We can also feel the spirit of improvement of businessmen who constantly offer better things to users.
–How would you assess the evolution of the architecture of casinos in the country? Casinos have improved and we have seen some major renovations, which in many cases change the architecture itself and that appears with greater emphasis in new projects. We can sense an effort in terms of growth and presentation, but we can also see a great development regarding
rooms, as well as an approach which takes into account the presence and external exposure of the business.
–Is there international influence in the design of Peruvian casinos? It is evident that there are influences regarding design and decoration, but in our country we can see a purely national culture which is getting increasingly refined and certainly gives the rooms a Peruvian aspect. In new casinos we can see the influence of international designs because they use new elements developed in the field of gaming, such as new machines and games,
as well as the modernization of almost all the equipment.
–How does architecture favor the image of casinos? Architecture is the creation of a comfortable, fluid and attractive space. These factors help attain success when you have a higher flow of operations, clients and employees in a daily routine.
–What role does the layout play in the initial stage of the design? The layout is extremely important because with this you will determine the number of positions your space can accommodate and the way you arrange your games. This will depend on the business you have (whether for locals or tourists) and on the comfort you give to your clients. All in all, the layout is an essential factor and it is frequently readjusted by the operator as the business develops.
–How do you see the future of the sector and the design of casinos in Peru? The future is now! We are constantly changing, innovating and applying new techniques, new elements and new technology. The sector, due to its own dynamics, is obliged to compete, offer better services and modernize itself. We are in constant renovation, and not only us, but also the whole country.
–Which are the main design trends in Peru? In Peru there is no such thing as a unique design, and that is not advisable either. We can see a great variety of styles in casinos, and both modern and conventional designs try to be as pleasant and impressive as possible.
–Do you consider that spaces for gaming are heading towards modernity? There is definitely a trend towards modernity, towards the use of new materials and especially of new techniques and implements which guarantee security, and towards the creation of spaces of full satisfaction and cleanliness in all of their areas and services. For instance, I can guarantee you that in the last casino opened in Peru, located at Mega Plaza, we use equipment, systems and materials which can only be seen in large casinos around the world, such as technical floors and 100% LED lighting. OCTOBER 2015
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he gaming industry is blossoming with glorious innovations as the industry is changing so quickly. New products, ideas and concepts are emerging; technology is making way for new developments as well as enhancements in the player experience. This is something Ortiz Gaming has prided ourselves on, delivering high tech products which bring excitement and fun to the player as this is where the industry as a whole is moving to.
- What are the strengths of the company to maintain over 20 years of development in the gaming industry? Ortiz Gaming, and the gaming industry in which we operate, has evolved greatly over the past decades. In this time we have prevailed as a leader in bingo around the world, expanded in all areas of development to serve gaming industries on nearly every continent. The strength of Ortiz Gaming has been consistently developing high-tech, innovative and engaging games, keeping the player and casino operator’s needs at the forefront. Always maintaining to our mission: “To provide entertainment and happiness to people through the products and provide our customers growth,” is what has made Ortiz Gaming successful for over 20 years.
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Maurilio Silva, President
- What are the upcoming releases of games? What is the range of products offered? This year Ortiz Gaming is expanding its product line to encompass almost three times as many products. We have more than doubled our booth space this year at G2E to make room for all the new bingo, slot and keno games; and new cabinets, systems, and hardware we will be offering. Additionally, Ortiz Interactive, our interactive gaming division will present new takes on our classic games -from online, to server-based, to electronic bingo- and everything in between. Ortiz Interactive currently serves as a bridge for Ortiz Gaming’s development in various online gaming markets which have quickly emerged, including server based, mobile, and social platforms. Ortiz Interactive will feature at G2E, Ortiz Gaming’s most popular games internationally as well as new content to reach the ever evolving demands of this new gaming submarket.
- What is the most popular? Why? This year Six Bingo™ was the most
requested product form Ortiz Gaming. An American style bingo game, Six Bingo™ has been our top seller in North America. Six Bingo™ takes the familiar 5x5 bingo card game to a new level by adding multiple cards and extra bonus balls. The game is designed for player engagement and in increased revenue generation, making this product a star amongst both the players and the casino.
- What are the goals set for the coming years in regards technology and expansion. Ortiz Gaming has had an intense path of development and technology over the past year and we plan to continue. Research, development and execution are important for Ortiz Gaming. This is more significant as we proceed in the high tech era. For us, at Ortiz Gaming, we cannot be static, we are always pursuing integrating the latest technology into our games, cabinets, and systems. Technology is developing exponentially and we maintain to be ahead of the curve. I expect the rest of this year and the upcoming years to exceed the success we have attained.
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volving technologies is one of the most exciting parts of our business. When technologies grow and become more dynamic and consumer-responsive, it keeps our entire industry more fun and interesting to work in. At GLI, we have teams of people whose job is to keep pace with and stay ahead of new, emerging and evolving technologies so that we can keep regulators around the world up to date. We do that in several ways - one of which is our GLI University® and annual events, such as the Regulators Roundtables, and through in-depth sessions that we conduct throughout the year. These are very important events where regulators from across the industry – land-based, online and lottery – can come together and hear first-hand from a neutral third-party about technologies that may be impacting their jurisdictions and how different regulators may want to think about adjusting their existing regulations to keep pace with changing technologies and consumer interests so that their
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James Maida, President
jurisdictions remain competitive in the larger entertainment landscape. We also keep regulators informed through our GLIAccess® program, which automatically notifies our clients of any changes that affect their existing rules. GLI has also been proactive in creating the GLI Standards Series, which is a collection of testing standards that have been adopted by regulators all over the world. We proactively research new technologies, as well as existing standards, and bring them together in a common standard for the industry.
- How is the evolution of the industry you rate since its inception? The gaming industry remains one of the most dynamic, interesting and fun businesses on the planet. When Paul Magno and
I founded GLI back in 1989, gaming was fairly limited, and since then, it has grown exponentially all over the world. Land-based, lotteries, online gaming, combinations of all three – consumers now have more gaming entertainment choices than ever in more jurisdictions that ever. The credit for this goes to the very smart law-makers and regulators who have either brought or expanded gaming in their jurisdictions while firmly maintaining the public trust. The entirety of Latin America is a great example of this evolution, where gaming and regulation have grown together and now the region has some of the best regulated and most consumer-friendly gaming options anywhere. This trend continues now in Mexico, where law-makers and regulators are taking strong moves to bring sensible
regulations to gaming there to help boost consumer confidence and public trust even higher.
When that happens, we have made a global, lasting impression, and that makes us feel very good about the work we do.
- In all studies, what is the country that considers more developments in the sector? Why?
- What has been the experience of GLI in the Asian market? What can you tell us about regulatory policies in this part of the world?
It would be difficult for me to single out one country, because even within a country there may be several different jurisdictions, all of which do things different and do things well. We have been very fortunate over the past 25+ years to work with outstanding public servants on the regulatory side and incredible developers on the supplier side across the spectrum of land-based, online and lottery, and jurisdictions around the world who have reacted in varying ways to technology and opportunity. There are so many great examples.
- With 14 editions of the Roundtables organized by GLI. How can we describe the result? It’s sometimes hard for us at GLI to believe that we have staged so many roundtables already. Time goes by so quickly when you’re doing work that you love. The Roundtable series started out as what we thought would be a single meeting in Colorado where giving an update to a group in person was more feasible than having a teleconference. It wasn’t too long into that first meeting when we thought, you know what, this is working really well, and there is so much more we can bring to the table to help regulators in their jobs. And that’s how the Roundtable came to be. Now, we stage them annual in North America, Latin America and Europe, and each year, our attendance grows at each event. So, how can we describe the results of our Roundtables? One way might be that our attendance grows each year, so we can know from that that our attendees like what we’re doing and the knowledge they take away. Another might be from the surveys we do after the events, and that feedback is generally overwhelmingly positive. We do get feedback for improvement each year, and we take that feedback very seriously. We implement that feedback into next year’s events as best we can. Perhaps the best measure of our results is that regulators take what they learn from our Roundtables and implement that knowledge into their jurisdictions.
When some people think of gaming in Asia, they limit their thinking to Macau; however, Asia and the entire Asia Pacific region is what people should be thinking about. With that said, Asia Pacific has been a tremendously successful region for GLI, since we first opened our lab in Adelaide in 1994 to the present day. Asia Pacific is an interesting market because there are so many distinct idiosyncrasies and regulations in each jurisdiction. Keeping pace with demand and ensuring that regulators and the large number of suppliers in the region are served as completely and quickly as possible is why we now have three labs in Australia and one in Macau, and we’re expanding at each location as we speak. Our work there crosses all disciplines – land-based, online and lottery – and the work is always exciting. Besides adding more physical space and staff, we have also created several tools for suppliers in this region that have dramatically cut testing time and costs and reduced time to market. Our patented GLI Link® cuts costs by allowing suppliers to test their devices against systems remotely. Then our Point.Click.Submit.℠and Point.Click.Transfer.SM tools speed testing times by allowing suppliers to submit for testing online, and then, transferring previously certified devices to jurisdictions around the world. We have had a great experience in this market, and we hope our regulator and supplier clients would say the same.
- What requirements had to meet the company to set up business in Asia? What games and solutions are more in demand in that market? Setting up business in Asia was very similar to the processes we have followed in other jurisdictions around the world where we have established offices. The process itself isn’t that interesting; what might be more relevant is why we establish and grow our labs where we do. We ca-
refully analyse the business needs of our supplier clients, our regulator clients and operators, and we have established labs where our clients have told us it would suit them best. It’s our business to make doing business as easy and cost-effective as possible for our clients, and that’s why our locations are in the global locations they are. We also want to be sure we have local eyes and ears in important marketplaces – that’s why we can say that while we are a global company, we are local in focus. As for what games and solutions are most in demand, that’s a question better suited for suppliers and operators. GLI remains a neutral third-party, issuing test results; the sale is out of our hands.
- What are the policies related to slot machines? Is there a standard for approval of slots? What the law says regarding the certification and management systems online? The policies related to slot machines and systems are as numerous as there are jurisdictions. That’s one reason why we created the GLI Standards Series - to help bring a testing standard to regulators and suppliers. Many jurisdictions around the world have adopted GLI’s standards completely, others have adopted them along with some of their own additional guidelines, and others have their own standards. Regardless, our job is to test and certify games and systems to whichever standard the regulator has specified because the regulator’s job is to maintain the public trust, and our job is to help them do that. Online systems operate in much the same way. We have been testing online systems for more than 20 years, and our GLI-19 standard is a technical standard based on an extensive review of several key interactive gaming jurisdictions which have experienced great success in regulating the inherently complex systems associated with iGaming. GLI-19 is the culmination of more than a year’s worth of in-depth consultation with iGaming regulators, software developers and operators from around the world. One area of online gaming that is not truly regulated yet is Fantasy Sports, and GLI recently released a whitepaper on this topic, highlighting the needs and benefits to properly test and certify these sites and systems. OCTOBER 2015
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Ergonomics for players Maria Emma Ramírez, General Manager
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n 1940, the British psychologist Hywel Murrell put together the Greek terms ergon (work) and nomia (knowledge) in order to name a new science, which is currently called “human factors engineering” to provide it with a wider scope regarding human, physiological and sociological aspects, which its definition actually includes. When I ask myself why “ergonomics” is an essential concept for the design and furnishing of casinos, the answer which comes to my mind has clearly the form of another question: What is my main interest in a place built for gaming? First of all, clients must find a space making them want “to be part” of the action taking place there and actually stay there. In order to achieve this, we have to create a place not only full of magic thanks to its exterior and interior design, but also comfortable. This is when the science of human factors engineering becomes particularly im-
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portant, since according to the International Ergonomics Association (IEA) “ergonomics is the scientific discipline concerned with the understanding of interactions among humans and other elements of a system, and the profession that applies theory, principles, data and methods to design in order to optimize human well-being and overall system performance.” A space which does not take into account ergonomic factors regarding measures, vital spaces and comfort might have all types of design creations but will not be pleasant for visitors. A space must be correctly designed so that visitors can feel that furnishings invite them to let time go by without even noticing it because their body will be in a space of efficiency, security and comfort. If we analyze the general furnishing of a space created for gaming, we find three important aspects: machines, tables for on-
site gaming, and areas for relaxing and for food service. All of them have a common element: chairs! And they cannot be taken away. If we evaluate how many hours we sit versus how long we are in movement, results indicate that on average people sit up to 15 hours a day. This certainly gives meaning to the several studies conducted on ergonomics of chairs. I believe that for some years now there has been a greater awareness of the fact that furniture, especially chairs, should be rethought in terms of the use of space, particularly if our purpose is that clients stay for long periods of time in the same space. There are already many manufacturers who have understood this aspect and have added to their machines special chairs with which they aim to retain players precisely by betting on “ergonomics”, which makes the interaction player-machine last longer.
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Hotel growth The growth of tourism in the country—in addition to the quality service being offered— has transformed Peru into a great power in the hotel industry.
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eru has consolidated itself as one of the countries with the highest tourist demand in Latin America and as a destination attracting the main investors of the hotel sector. Currently, the country has more than five hundred establishments divided in three categories: midscale, upscale and luxury—three, four and five stars—, that
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is to say, of average, high and luxury cost, respectively. The income generated by each of these categories transformed the hotel industry into a great support for the national economy. The country registered a growing corporate tourism index, which, according to the Peruvian Chamber of Tourism (Canatur), must be boosted by means of
more public and private investment. There are two associations dedicated to promote this activity: the Association of Hotels of Peru (SHP) and the Peruvian Association of Hotels, Restaurants and the like (Ahora). Both of them promote inter-institutional relations with similar national and international organizations.
Business trips have increased in the last few years.
Javier Hundskopf, President AHORA
BUSINESS DESTINATION In the last few years, Peru has also become the seat of important events gathering presidents, intellectuals and businessmen. During 2014, Lima received more than five million visitors, from which 35% came for business and stayed during five to six days. According to the SHP, 70% of accommodations are occupied by this type of tourists. For this reason, events are being organized and international and national alliances are being promoted in order to improve the services offered to this type of tourists. For instance, last February more than 700 travel agencies, tour operators and companies of this sector participated in the second
According to the Association of Hotels of Peru, more than 70% of accommodations are occupied by businessmen. edition of the SHP Workshop 2015. In that event, hotels members of the association presented their luxury, corporate and ecological tourism services. Lima has become the seat of several international events.
TOURIST EVENTS In April, the fair “Peru’s Regions: Northern Beaches� took place, in which participated representatives of the hotel, tourism and gastronomy sectors from different parts of the country. In this meeting, the virtues of the northern beaches of Peru were promoted and disseminated, thereby encouraging internal tourism. Besides, information about business opportunities in the previously mentioned sectors was also provided. In order to promote the country internationally, the Ministry of Foreign Trade and Tourism (Mincetur) organized in Lima, on May 15th, 16 th and 17 th, the fair Peru Travel Mart, which gathered together national promoters and international businessmen in order to discuss topics of interest, such as the sustainability of tourism and hotels in the country. In this opportunity, representatives of Holland praised the infrastructure of three, four and five star hotels, while French and American investors showed interest in community visits and bird preservation.
HOTEL OPPORTUNITIES The growth of hotel buildings develops in a particularly rapid manner in the country, but there are still some gaps to fill. The last international business events OCTOBER 2015
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have shown that there are not enough hotels—generally four star hotels—for meeting the demand of visitors in this type of events. In order to fill that gap, some tourists rent houses and private departments completely furnished, which provide them with the necessary amenities to have a nice stay in the country.
After Peru Travel Mart, investors from Holland praised the infrastructure of three, four and five star hotels in the country. The president of the Peruvian Association of Hotels, Restaurants and the like, Javier Hundskopf, explained that the association does not oppose to the existence of these spaces as long as they are formal, duly registered, and comply with the payment of taxes and with all the sanitary standards established for providing a quality service. In this sense, the government is evaluating to authorize this accommodation modality for participants of the most important
STILL WAITING Authorities have submitted a draft act for implementing a One-Stop-Shop for Tourism, with which they expect to speed up certification procedures for building new hotels in the country. According to Ahora, there are currently more than eighty projects of that type which are stalled representing an investment of more than 2 billion dollars.
international events which will take place in Lima, such as the Annual Meetings of the Boards of Governors of the World Bank Group and the International Monetary Fund.
STRATEGIC LOCATION Currently there are many hotels near The city of Arequipa, one of the Peruvian destinations with the highest hotel demand.
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financial and business centers of the whole country which offer good service and have large rooms for international events. One of the cities with the highest demand in this sense is Lima. The Peruvian capital has more than ninety hotels of different categories and different prices. Among the districts with the highest demand we have Miraflores and San Isidro, where there are four and five star establishments, such as JW Marriott Hotel, Meliá Lima and Sheraton Peru, among others. Indeed, the district first mentioned registers a greater growth in terms of accommodations. Some businessmen are looking for new spaces in other districts. For instance the Hilton hotel chain is interested in San Miguel and the Callao. In other parts of Peru—such as Cuzco, Arequipa, La Libertad and some regions of the Peruvian Amazon—there is also a high hotel and tourist demand.
Rubén Solórzano, General Manager and Joe López, CEO
Peru Gaming Show
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he world’s gaming industry is always changing and growing rapidly year by year, producing the newest software and product technology year by year. As a result of this, every single issue related with the gaming industry goes through permanent changes. Governments work on improving regulations, business operators develop technology and infrastructure and, game manufacturers and systems developers come out with new gaming systems and products. In summary, in this globalized world, with open boundaries, to seek better ways for achieving success has neither limits nor barriers. In this context, Peru Gaming Show 2016, having set new goals and targets has become an excellent option for those wanting to display their state-of –the art products and services.
PGS 2016 is a unique, comfortable and safe spot that anyone should take advantage of. During the last years, PGS 2016 has become a sort of market display of great importance in Latin America, both to offer and search products. You may find the greatest and renowned trademarks of the gaming industry, as well as operators and investors of different countries who travel to find innovated technology. We invite you to visit PGS 2016 June 15th and 16th in the city of Lima, Peru. It will be an extraordinary chance to meet once more and do business. Don’t forget that Peru is the most developed, formal and regulated market of Latin America, and that we are working on improvements to guarantee your full satisfaction. OCTOBER 2015
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Region of meetings Meetings tourism is consolidating itself in all Latin America, and countries of this region are working to give a significant boost to this business activity.
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eetings of executives and senior government officials in conferences, congresses, forums and conventions are becoming more and more frequent. According to a study of the Harvard Business Review, three out of four businessmen prefer making business face to face, despite the development of technological tools
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which can help avoid traveling from one place to another. Latin America in particular is one of the regions gaining more presence as seat of these important international events thanks to policies being implemented by countries of the region which allow the growth of the so-called meetings tourism.
This has become the most important type of activity of global tourism since it represents almost 22% of the flow of tourists in the world and it generates more than 1,500 trillion dollars in total and 350 trillion dollars just in the region.
COMBINING EFFORTS During the first week of June, Lima
The construction of the Lima Convention Center will require an investment of 534.8 million soles.
was the seat of the 2nd Latin American Political Forum on Meetings Tourism, which was held on the framework of the Latin American and Caribbean Meetings and Incentive Exhibition–FIEXPO 2015. At this important meeting, different governments explained actions they take with the goal that, based on this experience, improvements in this business in the whole region can be fostered.
It represents almost 22% of the flow of tourists in the world. “This is an activity which stimulates our economies so that they continue to grow while seeking to achieve social development of every nation and obtain scientific contributions, which is vital in the 21st century”, explained Arnaldo Nardone, Director of FIEXPO. An important aspect highlighted by Yolanda Perdomo, Director of the Affiliate Members Program of the World Tourism Organization (WTO), is that experts are looking for a place where they can learn. This leads us to the conclusion that the advantage is not in the resources of the place of destination, but in its capacity to generate knowledge.
PERUVIAN GROWTH Peru also follows the path of its sis-
ter countries and has decided to bet on meetings tourism. “We have just participated in the 10th edition of the World Economic Forum for Latin America, in Mexico, and, in this framework, the Travel and Tourism Competitiveness Index was presented. We can say with great satisfaction that Peru has moved up fifteen positions. Now we are in the 58th position”, announced Maria del Carmen de Reparaz, Vice-Minister of Tourism. During her speech, she mentioned that one of the pillars upon which this achievement rests is the growth of infrastructure, demand and service. “Although Maria del Carmen de Reparaz, Vice-Minister of Tourism.
it is true that we are making progresses, we know that we have to continue to invest and channel our resources in order to position Peru in the global industry of meetings”, said De Reparaz. To achieve this, Peru is working on a cooperation alliance involving public and private institutions so that they share knowledge and experiences, and this reflects in the fact that the country moved up four positions in the ICCCA 2014 ranking. “Our goal is to continue to lead the growth of international meetings and reach a figure of one hundred meetings in 2016”, informed the Vice-Minister of Tourism. Furthermore, she announced that the Lima Convention Center will be ready in August and it will be able to accommodate 10,000 people. This place will be the seat, in October, of the summit of the International Monetary Fund and the World Bank.
ROLE MODELS Delegations from different countries, such as Argentina, Brazil, Uruguay, Paraguay and Mexico, also took part in this important forum. OCTOBER 2015
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Enrique Meyer Minister of Tourism Argentina
The Lima Convention Center will be ready in August and it will be able to accommodate 10,000 people. One of the most solid cases is Brazil, which is among the top ten destinations according to the ICCCA ranking. “We registered the arrival of 127,000 of meetings tourists, whose expenses amounted to almost 300 million dollars”, indicated Marco de Britto Lomanto, Products and Services Director of Embratur (Brazilian Tourism Institute). Meanwhile, Argentina has begun twelve years ago a transformative process which has positioned tourism as a great source of employment and wealth. “Our marketing plan started in 2008, and now we are seeing the results: a growth of 250% of the number of international congresses held in our country”, said the Minister of Tourism, Enrique Meyer. Argentina has passed from being in the 36th position at a global scale to being in the top 20 for the sixth year in a row. And, as if it were not enough, Buenos Aires is the number one city in this
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Fiexpo 2015 On June 2nd and 3rd the 7th edition of the FIEXPO Latin America took place. This event, as every year, was an important tool for promoting meetings tourism. For Peru, business commitments for more than 231 million dollars were established, according to the information provided by the head of the Mincetur, Magali Silva.
type of events throughout the Americas.
CONSOLIDATED DESTINATIONS In Mexico, tourism represents around 8.7 of the GDP, that is, 172,838 million dollars. “We have 56 international airports, more than twenty cruise stations and a very important number of hotels”, said Carlos Joaquin Gonzales, Innovation and Tourism Development Secretary of Mexico. He pointed out that there are currently more than 60 convention centers, which enables an economic flow of almost 32,500 million dollars. “Congresses generate more than 784,000 jobs and represent a little more than 1.5% of the GDP”, he explained. For its part, Uruguay, despite not having a conventional conventions center, has proved to have the capacity to organize meetings of more than 2,000 participants. An example of that is the
successful organization, in 2012, of the meeting of the Inter-American Development Bank. “Uruguay invested three million dollars and obtained a return of twelve million dollars. This did not only represent a quantitative value, but also generated more infrastructure, which the country had not been able to finish for years”, explained the Vice-Minister of Tourism and Sports of Uruguay, Benjamin Liberoff. These are just some examples of how the region has been growing for some years now by using different tools which make it a consolidated destination for these important international events.
BUENOS AIRES Argentina will be the seat of the next congress of the International Congress and Convention Association (ICCA).
Peru trade agreements with other countries, for the importation of slot machines Renzo Piaggio, General Manager
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ew years ago Perú in order to open more markets to export their products and import of raw materials has been implementing the state policy of reducing barriers to protect their imports and reducing duties on most of its products in general, within these benefit reductions are importation of new and used slot machines. Initially a tariff heading handled of 12% of the CIF, and then reduced to 9% now since the year 2012 tariff heading 95.0430.10 has been reduced to 6% of CIF value. This tariff rate is applied to the import of Slot machines from any country to Peru. From 2012 Peru signed many trade agreements with various countries, and within tariff headings are negotiated slots machines, achieving up to 100% release in many countries and in others it is giving a discount gradual increases year by year, which in time will reach 100%. To qualify for these benefit reductions and / or duty-free, it must be requested during the customs process presenting the original Certificate of Origin, whose format varies from country to country and so does the government agency that issues in each country. To apply this process not only just
the certificate of origin, also the import must meet certain requirements, without these can not accommodate the release: new or used goods manufacturing should be the country issuing the certificate must be indicated on the label the country of manufacture, It must be imported directly from the country of manufacture to Peru. In the case of transshipments shipments it is also possible to apply releases but it is exposed to observe the customs and ask what it is proven through documents that the merchandise was transshipped during its trip to Perú , It was unchanged during transfer and was under customs control in the country of transshipment, documents that are difficult to get and when you get it, takes several weeks to be issued We can cite some countries which can be imported and used new slot machine invoking these benefits Some countries with which the whole or part tariff is released. • NORTH AMERICA - TLC TRADE PROMOTION AGREEMENT: USA, Canada and Mexico are free to 100% • CENTRAL AMERICA – TLC TRADE PROMOTION AGREEMENT: Costa Rica – Only pay 3.6% of the CIF
Panama – Only pay 1.8% of the CIF • SOUTH AMERICA - ALADI / FREE TRADE AGREEMENTS / ANDEAN COMMUNITY: Argentina/Brasil/Bolivia/Colombia/Chile/ Ecuador/Uruguay/Venezuela: are free to 100% • CHINA - FREE TRADE AGREEMENTS: is free to 100% • EUROPE- PERU TRADE AGREEMENT EUROPEAN UNION: only pay 4.5% of the CIF to 2015 year gradually reducing year by year • ASIA – ECONOMIC PARTNERSHIP AGREEMENT /PROTOCOL / FREE TRADE AGREEMENTS: Corea/Japon/Singapur: are free to 100% To finish, the conditions are already given is a matter of each importer to take advantage of the benefits already in place and to achieve a significant reduction in taxes for the importation of slot machines. It notes that the VAT of 18% is not released in any commercial agreement and this is payable on all imports. We can cite some websites where more information could expand trade agreements and FTAs signed by Peru: http://www.acuerdoscomerciales.gob.pe y http://www.sunat.gob.pe OCTOBER 2015
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A journey across the dunes The desert of Ica is the best alternative for practicing adrenaline sports and enjoying unforgettable moments.
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ome of the biggest sand mountains of the country are located in the Huacachina desert, in the coastal region of Ica, approximately five hours away from the city of Lima. During the summer, temperature in this part of the country reaches over thirty degrees Celsius (86 °F). This place is peaceful and calm, and from time to
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time you can feel the wind blowing and drawing some sand. You can enjoy all these pleasures during the day, which is why guides recommend wearing appropriate clothing and sun block to enjoy the visit.
ACTION IN THE DESERT Different
types
of
vehicles
pass
through these dunes. For instance, motorcycles, quads and cars of the rally Dakar–one of the most important and risky races of the world–passed through this area. Today it is difficult to see one of those vehicles, except for dune buggies transporting tourists (from different parts of the world) from one place to another. These vehicles go up and down
SWEETS FROM ICA One of the most traditional desserts from Ica is the teja, which is made of sugar, lemon, fig, orange or grapefruit. It can also be filled with dulce de leche and pecans. It is traditionally presented wrapped in white sheets of paper with fringes on the ends. This dessert is also known at international level.
You can practice sandboarding– one of the main attractions of the Huacachina desert –either standing, sitting or lying down on a huge board. the dunes at a high speed, transforming the landscape into some sort of natural roller coaster. Those with more practice recommend sitting in the copilot’s seat for enjoying this experience to the fullest. Getting on one of those cars can cost between 35 and 85 soles per person, depending on the duration of the ride.
SURFING ON THE SAND On the huge dunes of the Huacachina desert you can also practice another extreme sport: sandboarding. This activity is
definitely one of the main attractions of this place. It consists of sliding on the dunes standing, sitting or lying down on a huge board, just like snowboarders do on snow mountains of the United States and Europe. Those who practice this sport wear a series of implements: helmets, ankle braces, elbow pads and special glasses for their safety. Many speed lovers usually put wax on their boards in order to gain more speed and add adrenaline to it. It is very important not to take cameras, cell phones or valuable items with you in order to avoid possible losses. Practicing this sport is simple and not risky at all. If tourists do not have their own board, they can rent one for two hours at a price of 10 soles. Those who want a professional board can rent one at a price of 30 or 50 soles.
CHARMING LANDSCAPE In the middle of this desert, surrounded by palm, eucalyptus and carob trees, and approximately ten minutes away from the city of Ica, we find the Huacachina oasis, a small emerald green lagoon where ducks, herons and other birds can be seen swimming. OCTOBER 2015
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This place was considered the best tourist destination of the early 20th century due to the great amount of people who went there during that time.
Tourists rent pedal boats in order to sail through the waters of the Huacachina oasis and enjoy beautiful panoramic views. Local people say that in this emerald green oasis lives a mermaid who takes away all the men who bath in those waters. But that is not the only myth told in that part of the desert. According to another legend, the name of the place was that of a princess who cried because of the absence of her beloved, a brave warrior who died in a battle. The oasis has several spaces for relaxing and spending great times in family. Besides, tourists can rent pedal boats at a price of forty soles to sail through its waters and see the city during a sunny morning or the sunset.
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SEAT OF INTERNATIONAL EVENTS Last year, the Huacachina desert was the seat of the Sandboarding World Tour 2014, an event organized by Team Sandboard Pro Ica and Dune Riders International, the organization which represents sandboarding worldwide. In that championship, which gathered the best national and international sandboarders, the Peruvians Victor “Dito� Chavez and Gerson Valle stood out. With their victories, they both left a highly positive impression of the country.
Due to its landscapes and the range of options it offers to visitors, this is one of the destinations with the greatest tourist demand. At sunset the lights of surrounding establishments are turned on. Here you can find hotels and places to spend the night.
GASTRONOMIC FEAST The main pisco cellars and production plants are located near the lagoon. In fact, some of the most important ones of the country are located in this area. Visitors can learn here about the process for producing wines and piscos, thanks to the tours offered there. Ica is also renowned at national and international levels for its gastronomy. One of its best dishes is, without a doubt, carapulcra with sopa seca. This is a noodle-based dish, seasoned with colorado chilies, garlic and onions, and served with dried potatoes boiled and seasoned with panca chilies, mirasol chilies, garlic and other spices. This dish is also served with pork or hen, yucca and chopped onion. This makes it clear that the desert can become an ideal destination for relaxing and spending unforgettable vacations. No matter the time of the year, it will always offer culture, gastronomy and lots of adventure.
Exclusive trips The country has many destinations for luxury tourism. How much has this sector grown and how profitable is it?
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eru has been consolidating itself as one of the main luxury destinations of the region. In 2014 alone, a total of 3,000 visitors—mostly Americans, Germans, Englishmen, Mexicans and Asians—have stayed in four and five star hotels, which have suites and a personalized service of spa, meals and wine, as well as boutiques, swimming pools and clubs, that is, everything you need for relaxing during many days or simply for a business trip. Among the most visited destinations by this type of tourists we have the beaches of the northern part of the country—such as Mancora, in Piura, and Paracas, in Ica—,
the valleys of Arequipa, Puno and Cuzco, and the reserves in the Peruvian Amazon rainforest. The level of income and the services purchased by travelers vary from one region to another. For instance, in Cuzco a tourist spends on average approximately 10,000 dollars for getting to know the region and visiting the Inca fortress of Machu Picchu, one of the new seven wonders. Some others pay a little more for getting on the Hiram Bingham train, which has a classic style decoration and a gourmet restaurant service on the way to the pre-Columbian citadel.
The Peruvian coast, besides having luxury hotels, has ports which welcome tourists coming in cruises from different parts of the world. In the jungle, travelers get on river vessels in order to see protected areas of the country, such as the Pacaya Samiria reserve, in Loreto, which received 12,000 tourists last year, which represents an increase of 19% compared to 2013. The growth of this type of tourism is mainly thanks to the promotion of the virtues of the country on the part of authorities and to the awards that gastronomy and some of the most exclusive hotels of the country have received. OCTOBER 2015
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Inti Raymi
ancestral celebrations The city of Cuzco commemorates one of the most glorious ancestral festivals of the Inca Empire, which is still celebrated by its people: the Inti Raymi.
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here is a crowd surrounding the Main Square of Cuzco. Children and adults are anxiously awaiting the glorious arrival of the Inti Raymi. This is the most important festival out of the four ancestral celebrations which took place in the times of the Inca Empire as a way of thanking the god Sun for the benefits of its lights for the harvest. Thousands of tourists arrive to the socalled navel of the world to witness this magical, traditional and spectacular Inca celebration. The first celebration is that of Pawkar Raymi, which represents the beginning of the Indian new year. This date commemorates the blossoming stage, the time when the harvested crops are tasted while rituals of water and flowers are performed. The next celebration is that of Killa Ra-
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ymi or festival of the jora, which represents the end of the preparation of crops. During this celebration, the Incas performed the ritual of the moon and the earth, as elements of fertility. It is also known as the festival for celebrating the feminine beauty and its values, as well as for acknowledging the spiritual support they represent for the Indian culture. The Kayak Raymi was dedicated to teenagers because it meant the beginning of maturity. It represents the festival of masculinity and Christmas season, a festival which coincides with the sum-
mer solstice. Lastly, there is the most important festival of all: the Inti Raymi. For the Incas, it was the beginning of the new year, and it coincided with the summer solstice, a time of the year when the weather would get colder and the sun would go away. The celebration lasted nine days,
a period during which offerings would be made to their god.
THE ENTRY OF THE INCA Nowadays, the staging of more than 800 artists, which takes place every June 24th, takes visitors back to the 16th century. Once the people begin acclaiming the Inca, it is the moment of his triumphal entry. The dance troupes do not stop singing religious songs and dancing to the sound of quenas and zampoñas.
The Coya and her ñustas are an important part of the Inti Raymi.
The Inti Raymi or festival of the sun is celebrated in order to thank their god for the virtues of its lights. The ñustas (Inca princesses) and the pallas (women of the Inca nobility) can be seen in the distance, parading along the streets with their multicolor typical clothing. That way they get closer to the Qorikancha or golden fence–a religious temple where the first rituals to the Apu Inti (Sun) were performed–, while the Inca Pachacutec comes behind them. After staying some minutes at the temple, the Sinchi–who represents a warrior of the imperial army–orders the other warriors to clear the way for the Inca and the Coya– the Inca’s wife–to arrive.
As second act, a parade takes place at the Auqaypata square, or sacred place, where the warriors of each suyo gather together: Antisuyo, Contisuyo, Chinchaysuyo and Collasuyo, which represented the four divisions of the Tahuantinsuyo. The government of the suyos was a responsibility of the Inca through a designated governor called Suyoyuc Apu (Lord of a Suyo), who was also part of the Imperial Counsel. Each representative of a suyo has his own traditional clothing and they walk alongside the ñustas, coyas and pallas,
who head towards the Main Square to welcome the Inca.
THE RITUAL OF THE CHICHA The Sacsayhuaman esplanade, a monumental architectonic complex located two kilometers away from the city and at 3,671 meters above sea level, is the place where the main ceremony starts. Everybody stays absolutely silent at the square and waits at dawn for the sun to come, and then the ritual of the chicha takes place. The Inca is the one who receives the first lights of the sun while holding in his OCTOBER 2015
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hands a golden cup filled with sacred chicha and offers it to his god as a sign of his filial love. Afterwards, he pours it in a channel which will take the liquid towards the sacred temple. Then, he takes a silver cup also filled with chicha to make a toast with the Sun and shares it with everybody so that they participate in the ritual.
The Qoricancha, the Sacsayhuaman esplanade and the Auqaypata square were the favorite places for celebrating the Inti Raymi. Another ritual is that of the sacred fire and the sacrifice of a llama. According to the Incas, the viscera of this animal could help predict what would happen next year, but this ritual has stayed in the past.
THE PERUVIAN JUNGLE The Peruvian jungle was also celebrating in June, with the popular festival of San Juan. The gathering point was the San Juan neighborhood, where a mass is officiated in honor of Saint John, the Baptist. Besides that, men and women get in the rivers to purify themselves, since there is the belief that the water is blessed during this period. Then, the traditional pandilla dance takes place around a palm tree with gifts hanging from its branches. And we cannot fail to mention the traditional juane, a dish made of rice and hen meat, which is wrapped in banana leaves.
THE RITUAL OF THE SANKO Nevertheless, the ceremony of the Sanko or sacred bread is still practiced, which involves preparing some apple-shaped pieces of bread, which during the Inca era were prepared with the blood of the sacrificed animal. Although these rituals are no longer practiced, the procedures are still the same. The Sanko was considered sacred food because it was blessed by the first lights of the sun.
The story says that after three days of fasting, those who would take that food could only do that if they had a noble heart without resentment. If that was not the case, everything would turn against them. This is how the festival of the Inti Raymi comes to an end, a traditional celebration which does not only gather together people from Cuzco or Peru in general, but also tourists from the rest of the world, and this is because the history of the Inca Empire is the remembrance of thousands of cultural expressions Peru has in each of its corners. Staging of the Inti Raymi in Cuzco.
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