Daw Summit Review 2017 by Edit Line Verlags- und Produktionsgesellschaft mbH

GAMING SUMMIT 2017 Congress of Land-Based Gaming Â· Berlin

Focussing on Quality

Welcome and introduction speeches Alexander Graf Lambsdorff, MEP Eduardo Antoja, EUROMAT Jason Frost, EUROMAT Georg Stecker, Deutsche Automatenwirtschaft (DAW) Juan Espinosa Garcia, Spanish Directorate General for the Regulation of Gambling (DGOJ) Speakers Amin Adina, Dermalog Identification Systems Alexander Allgaier, Allgaier Automaten Dr. Michael Auer, neccton Prof. Dr. Tilman Becker, University of Hohenheim Dr.-Ing. Andreas Braun, Fraunhofer Institute Stephan Burger,German Federal Association of Gaming and Amusement Operators (BA) Stefan Evers, Member of the Berlin House of Representatives, CDU Prof. Dr. Friedhelm Hufen, University of Mainz Dan Iliovici, Romanian Gambling Authority (ONJN) Stefan Knüpling, Automatendienst Steden Urs Meier, former FIFA referee Alexandra Nöthen, TÜV InterCert Saar Kieran O‘Keefe, EUROMAT Dr. Susanne Koch, Hengeler Mueller (law firm) Eric Olders, JVH Gaming & Entertainment Group Guido Plettner, TÜV Rheinland Cert Dr. Monika Poeckh-Racek, Admiral Casinos & Entertainment Prof. Dr. Hans-Peter Schneider, German Institute for Federal Studies Patrick Schnieder, Member of the German Parliament, CDU Dr. Berthold Stoppelkamp, German Association of Private Security Services (BDSW) John White, British Amusement Catering Trade Association Otto Wulferding, German Casino Association (DSbV) Moderators Dunja Hayali, TV journalist with the ZDF Joe Ewens, Gambling Compliance Michael Eulgem, German AWP Association (DAV) Hendrik Meyer, Association of Gaming and Amusement Operators of Berlin and Eastern Germany (AV) Simone Storch, German Federal Association of Gaming and Amusement Operators (BA) Christian Szegedi, Bavarian AWP Association (BAV)

The Gaming Summit 2017 – Congress of Land-Based Gaming was kindly supported by :

TABLE OF CONTENTS List of speakers 2 Table of contents 3 Preface by Jason Frost (EUROMAT)

Preface by Georg Stecker (DAW)

Introduction and talks Introduction: Promoting a culture of quality and responsibility

“Whatever the courts may say, it’s just not right that the decision on the fate of a business is made by drawing lots”, was one comment Alexander Graf Lambsdorff made with regard to the practice of the practice of the State Government of Lower Saxony in granting gambling licences. He also said that the protection of legitimate expectations must not be undermined and that intrusions upon the right of property are unacceptable.

2021 regulatory requirements: The future of gambling regulation

Gaming 4.0: The future of legal land-based gaming 10 Testimonials and photos Testimonials and opinions – Part 1

Gaming Summit 2017 snapshots

Testimonials and opinions – Part 2

Panel discussions, exhibition and

The Gaming Summit was moderated by wellknown ZDF journalist Dunja Hayali, and all our guests agreed that she was brilliant. Ms. Hayali, who has a reputation for her critical journalism, said already during her lead-in to the Summit that she was curious to learn more about the coin-op and amusements industry.

partnership ties Legal update

Our task for the future: Professionalisation of the industry

Certification as a quality mark

Identity authentication and biometric verificatio in everyday life 21 Innovation in the land-based gaming entertainment industry 22 The cashless society and its impact on consumer 23 behaviour and land-based gaming 2020 Quality Initiative and exhibition

Gaming Summit kick-off with EUROMAT

Reflections 26 Copyright and credits

Former FIFA referee Urs Meier from Switzerland is, no doubt, an expert in decision making. He delivered a barnstorming closing speech in which he said that there is no way to get around to making decisions. Because, he said, “making no decision is a decision within itself!”. That’s why it’s always better to actively make one’s own decision and follow through with it.

–––– Preface ––––

Ladies and Gentlemen, On June 1st, 500 land-based gaming professionals met to discuss the latest business and regulatory trends that will drive the industry’s future success. With the Summit concluded, it is time to thank participants for sharing their views and to reflect on what unites us and what lies ahead. While the markets in which we operate have their differences, getting together in Berlin showed us once more that we share similar visions on the value we create and the challenges that we face, and that unity is key. We are an industry of passionate people and great products, and the concept of offering amusement with modest cash prizes is thriving. Low stakes gaming fulfils an important societal need for entertainment within safe parameters. While the markets in which we operate have their differences, getting together in Berlin showed us once more that we share similar views on the value we create and the challenges that we face. Bringing the European industry together at the Summit helps EUROMAT to understand how to better represent its members. Members want to see an association that they identify with and that makes an effort to understand them and their own challenges. This can only be achieved through personal contact and discussion. I believe that the Summit also represents a good opportunity for companies to anticipate commercial and legislative trends which will shape the markets in which they’re operating. As an operator myself I certainly learned a lot and I think that experience is common to many. The Summit is also a fantastic advert for the industry. It shows that we’re an engaged and thoughtful group of businesses that are focused on finding solutions to regulatory problems and exchanging best practice for the benefit of our customers. Thank you once again for joining us and I hope we can welcome you at future EUROMAT events.

Jason Frost Präsident European Gaming and Amusement Federation (EUROMAT)

–––– Preface ––––

Ladies and Gentlemen, The GAMING SUMMIT 2017, the joint congress of the DAW and EUROMAT, was held in Berlin on 1 June 2017 and marked a milestone in discussing all aspects of the machine gambling business in Germany and Europe from a political, social, economic and legal perspective. The congress has succeeded in providing insight into the future perspectives for quality regulation of gambling to protect consumers and strengthen the role of legal gambling. In partnership with EUROMAT, the European umbrella organisation for the industry, the DAW also provided a valuable public platform for discussing the extent and the consequences of the increasing computerisation of gambling for money.

Georg Stecker Spokesman of the Board for the German umbrella organisation “Die Deutsche Automatenwirtschaft” (DAW)

The central message the congress sent out especially with regard to the current debate in Germany about the regulation of gambling was that effective and up-to-date player and consumer protection cannot be achieved by prescribing distances and sizes. Modern consumer protection is focused on quality control and uses professional tools such as well-defined certification procedures, biometric authentication to control access to gambling activities and venues as well as qualification standards for the profession on the operator’s side. This is the list of demands entitled “2020 Quality Initiative”, which was made public and put up for discussion by the DAW at the GAMING SUMMIT 2017 – Congress of Land-Based Gaming. However, modern gambling politics should not be confined to land-based offerings alone. Online gaming has long become a reality, although this form of gambling is not allowed in Germany (except for one very small exception). The GAMING SUMMIT was a forum at which examples of gambling regulation from other European countries such as Spain and the UK were showcased. In this context, the DAW also reiterated its position that player protection goes hand in hand with the protection of young people. In other words, when it comes to regulation, the same standards that apply to land-based gambling should also be applied to online gambling. The GAMING SUMMIT 2017 thus offered a perspective that extended beyond national models of gambling regulation and included international developments in gambling. It became clear that modern regulation must be based on quality criteria. In particular the increasing level of computerisation makes quantitative regulation obsolete. Therefore, what the DAW demands from the government is a shift in the political paradigm of gambling regulation to be able to carry out the mission of the German Interstate Gambling Treaty (GlüStV), to channel people’s natural desire to gamble into clearly defined, safe routes. It is with pleasure that we present this brochure to you which provides a glimpse back on the GAMING SUMMIT 2017 and of the atmosphere of the event. We are already looking forward to the next DAW Summit and to hopefully seeing you again next time.

–––– Welcome and introduction––––

The German and European coin-op gaming and amusement machines industry strongly advocates responsible gambling and demands that gambling be regulated on the basis of quality criteria. This was the core message of the GAMING SUMMIT 2017 – Congress of Land-Based Gaming, which was hosted by Deutsche Automatenwirtschaft (DAW), the umbrella organisation for the German coin-op gaming and amusement machines industry, in collaboration with its European counterpart, EUROMAT.

GAMING SUMMIT

2017:

romoting a culture of P quality and responsibility

hat concept of man do policymakers have anyway? Are we talking about politically mature citizens, or do we view adults primarily as immature children who need to be fully protected by the State? It was on the basis of these questions that Alexander Graf Lambsdorff, German Liberal Democrat MEP and Vice President of the European Parliament, spoke out clearly in favour of preventive measures against gambling addiction in his opening speech at the GAMING SUMMIT 2017. However, at the same time, he argued just as strongly against overregulation. Although the notion of the vulnerable consumer who needs to be protected by the state is widely used, it is not necessarily true. This notion needs to be dispelled, and the best way of achieving this is by a policy of openness, tolerance and respect for the individual, and also by a policy of entrepreneurial freedom which should be adopted across Europe.

Showing responsibility

These words were met with applause and approval from the audience of gaming and amusement operators. Over 400 of them had come to Berlin from Germany and across Europe to attend the GAMING SUMMIT 2017. The industry is well aware that AWP gaming is a sensitive product that needs to be, and actually is, handled with a high level of responsibility. At the same time, however, it expects a model of regulation to be applied that leaves businesses room for growth and development. The regulatory framework adopted in many other European countries is relatively restrictive. Particularly stringent restrictions apply currently in Germany where machine gambling arcades in some federal states are struggling for their very existence, or are even deprived of it.

“The role of legal gambling must be strengthened. However, in order to achieve this, we must all work together.” Georg Stecker, Deutsche Automatenwirtschaft (DAW)

“We are committed to promoting responsible use of the AWP services we offer and acknowledge the need for regulation.” Jason Frost, EUROMAT

In Lower Saxony, the dispute over the gambling legislation escalated into a court case because it is possible that the decision on the future of a machine gaming arcade is made by drawing lots – a practice also Graf Lambsdorff was utterly shocked about: He stated categorically that “Whatever the courts may say, it’s just not right that the decision on the fate of a business is made by drawing lots.”. The protection of legitimate expectations must not be undermined in this way in a country governed by the rule of law, and such an intrusion upon the right of property is unacceptable. In the speech he gave in Berlin, Graf Lambsdorff paid tribute to the rate of innovation within the coin-op

gaming and amusement machines industry and its openness towards new ideas and technologies, including for the protection of consumers. For example, he referred to biometric authentication to control access to gaming venues as “a very interesting approach”.

Quality initiative

Indeed, the DAW has high hopes that biometrics will be one of the tools to perfect the control of access to AWP activities and venues. The demand that TÜV certification be laid down in law and certain qualification requirements be defined for access to the profession of gaming and amusement operator and the introduction of biometric access control solutions form the three pillars of the “2020 Quality Initiative” of the DAW. Certification, biometric technology and formal qualification were the focal points of the GAMING SUMMIT 2017. Georg Stecker, Spokesman of the Board for the German umbrella organisation “Die Deutsche Automatenwirtschaft” (DAW), emphasised in his opening speech that the purpose of the “2020 Quality Initiative” is to strengthen the role of legal gambling for money. It is the joint intention of the German and European industry organisations to take a tough stance in depriving illegal gambling of its basis. “However, in order to achieve this, we must all work together, including with politics”, he added. Unfortunately, the opposite is happening in Germany. He warned that “New laws threaten the very material basis of legal amusement arcades” and demanded an immediate shift in the political paradigm. “The decision on whether or not to grant a gambling licence must be taken on the basis of quality and not on the basis of quantity criteria.”

Clear demands

These demands voiced by Georg Stecker were in line with the views of departing EUROMAT President Eduardo Antoja and his successor Jason Frost. They shared his concern about the increase in illegal gambling, including at the European level. Legal commercial gambling, on the other hand, is beset by more and more restrictions, especially in Germany. This is one of the reasons why our European colleagues demonstrated their solidarity by showing a presence of this year’s GAMING SUMMIT in Berlin, which was the most innovative and international event of this series which has promoted discussion within the industry since its inception in 2014.

“The decision on the fate of a business must not be made by drawing lots.” Alexander Graf Lambsdorff, MEP

“We need to continue to work towards improving even further the way in which our industry is viewed in politics.” Eduardo Antoja, EUROMAT

Juan Espinosa Garcia

“Offline and online gaming can mutually enrich each other.” Online gaming does not pose a threat to land-based gaming. This was the surprising essence of the opening speech Juan Espinosa Garcia, Director General of the Spanish Gambling Regulatory Authority, gave at the GAMING SUMMIT. He said that online gaming became legalised in Spain in 2012 and “gross gambling yields have increased in both the land-based and the online market ever since.” According to his own observations, offline and online offerings mutually enrich each other, make the market more attractive and in some cases even win over new target groups.

–––– SUMMIT Talk –––– “What needs to be done to curtail illegal gambling and regulate the legal gambling market?”, asked moderator Dunja Hayali. Is the German Interstate Gambling Treaty (GlüStV) good enough to meet the future challenges that lie ahead of us? The current regulatory framework does not achieve any of the objectives of the Treaty for the protection of players and young people at all. This is the conclusion of the Summit Talk entitled “2021 regulatory requirements : The future of gambling regulation”.

2021 regulatory requirements –

ith a scientist, a politician, the head of an industry association and a lawyer on the panel, the discussion could be expected to yield some constructive thoughts. It even had some surprising moments: Who would have thought that Stefan Evers, a Berlin Christian-Democratic politician, would ever say something like that the German Interstate Gambling Treaty is “rubbish” and that he as a state-level politician thinks that the gambling market can only be effectively regulated at federal level? “The Interstate Gambling Treaty has led to political injustice. It is also too ideologically loaded.

“What we need is a gambling commission equipped with sufficient resources to work effectively and be able to act.” Prof. Dr. Tilman Becker, University of Hohenheim

I think stringent regulation can only be effective if it is implemented at federal level“, he added. He also agreed with Georg Stecker’s argument that certification of gaming venues is probably a better way to assess their quality than checking prospective operators purely for personal reliability and integrity (Zuverlässigkeitsprüfung), as is the current practice in Berlin. Mr. Stecker concurred with the view that it probably makes sense to regulate some things uniformly at the federal level. However, at

times there is a lack of political courage to acknowledge and stand by an industry. “The number of half-legal amusement arcades in Berlin increases by 500 every year“, Mr. Stecker argued. This is just not acceptable. Evers admitted that there is “a huge backlog of enforcement” in Berlin, which is mainly due to the lack of personnel at public authorities. However, he counted it as a success that in Berlin, the burden of proof has now been shifted such that, for example, it is now for the operator of a restaurant or other food and beverage service venue (and no longer for the

“At the moment, regulation is heading in the wrong direction. Only legal gambling can ensure full and adequate protection of players and young people.” Georg Stecker, Deutsche Automatenwirtschaft (DAW)

Time to replace the patchwork quilt The panel (left to right): Moderator Dunja Hayali, Prof. Dr. Tilman Becker (University of Hohenheim, Centre for the Study of Gambling), Georg Stecker (lawyer, Die Deutsche Automatenwirtschaft – DAW), Stefan Evers (Member of the Berlin House of Representatives, Vice Chair of the CDU group in the Berlin House of Representatives) and Dr. Susanne Roberta Koch (lawyer, Hengeler Mueller).

authorities) to prove that the business he operates is not an amusement arcade.

Gambling control needs to be centralised

Prof. Dr. Tilman Becker criticised that the prescribed minimum distances between amusement arcades “make little sense in terms of consumer protection”. Politics had failed to respond to the increase in amusement arcades in the past. Mistakes and omissions of the past in applying building legislation should be rectified by actions under building legislation and not by actions under gambling legislation. “The

relationship between the choice of amusement arcades available and the spread of gambling addition is not a linear one – if the number of amusement arcades were smaller, there would not necessarily be fewer pathological gamblers”, Mr. Becker said, adding that this has been conclusively proven by research. Becker demanded that gambling control should be centralised in Germany, as it is in Denmark, Belgium and the Netherlands. Such a central control authority should work closely with the police and should have sufficient resources and powers to act. Dr. Susanne Roberta Koch concurred that there is a backlog of enforcement; however, in her opinion, creating a new authority would not be enough to solve this problem: “What we currently have in Germany is misregulation, which began in 2008 when online gaming was prohibited in general. The existing regulatory regime completely misses reality.” The flood of lawsuits that had been feared is in full swing now.

“The Interstate Gambling Treaty is rubbish and has led to political injustice because it is ideologically loaded. A regulatory system can only be effectively implemented at federal level.” Stefan Evers, Member of the Berlin House of Representatives, CDU

Everyone agreed that the tighter the regulatory restrictions, the greater the temptation to move into illegal business. Georg Stecker said he is convinced that “only legal gambling can provide player protection, and that’s why the legal gambling business urgently needs to be strengthened”. The safety of gambling can be guaranteed through certification by independent TÜV organisations and biometric authentication to control access to gaming venues. In addition, more needs to be done to professionalise the profession of gaming and amusement operator. “Unfortunately, the trend is going in the wrong direction. The aim must be to ensure full quality control of amusement arcades”, Mr. Stecker added. All the panelists disapproved the practice of making decisions by drawing lots, as is already being done in Lower Saxony. Dr. Koch said she is convinced that “the lot-drawing procedure is unconstitutional”. It is also unfair to existing businesses that already hold a licence. According to Stecker, “The fact that authorities resort to drawing lots shows that they have given up on using reasonable discretion”. This is another point where the hope is that the concerns of the industry will be heard, understood and addressed by politics.

“What we need is sensible regulation. If legal amusement arcades are forced to close down and online gambling is prohibited, players are pushed into the illegal gambling market.” Dr. Susanne Roberta Koch, Hengeler Mueller

–––– SUMMIT Talk ––––

Online gaming has long become a reality, but it is by far not everywhere subject to government regulation. In Germany, this form of gaming is even illegal. Nevertheless, its importance will increase in the future. This was the theme of the Summit Talk entitled “Gaming 4.0 – The future of legal land-based gaming in Europe”.

The conventional gaming market

hough Germany acts as if online gaming could be simply prohibited and otherwise ignored, it is a market reality. As the Summit Talk “Gaming 4.0 – The future of legal land-based gaming in Europe” revealed, other countries have long responded to this reality by introducing a regulatory system to oversee online gaming. Both in Spain and in the UK, the online gaming market is a regulated one. There is not much experience with online gaming yet, which is why the findings obtained to date are not conclusive.

“We see a general tendency towards nostalgia and tradition, especially among young people. This is something only brick and mortar gaming can offer.” Otto Wulferding, German Casino Association

Fresh life to the market

Initial fears of the conventional gaming sector that online gaming would kill brick and mortar gaming have not materialised in Spain and the UK to date. On the contrary, according to observations of Juan Espinosa Garcia, Director General of the Spanish Gambling Regulatory Authority, conventional gaming has even attracted new players. John White from the UK also described the land-based gaming market as “remarkably resilient”. In Germany, there is not much to be said about this, at least not officially. Online gaming is unregulated and

thus illegal. Speaking from the perspective of casinos and the coin-op gaming and amusement machines industry, respectively, Otto Wulferding and Georg Stecker described this situation as extremely annoying at the GAMING SUMMIT. Mr. Wulferding said: “Illegal gambling is our common enemy.” “It is not right that land-based gaming is strangled by rules and regulations while online gaming grows stronger and stronger right under the eyes of the regulatory authorities.” Georg Stecker emphasised on

“We will always be competitive if we take the path of quality. But online gaming cannot be left entirely unregulated.” Georg Stecker, lawyer, Deutsche Automatenwirtschaft (DAW)

is “remarkably resilient” Die Talk-Teilnehmer (v. l.): Moderatorin Dunja Hayali, Otto Wulferding, Vorstandsvorsitzender des Deutschen Spielbankenverbandes (DSbV), Georg Stecker, Vorstandssprecher der Deutschen Automatenwirtschaft (DAW), Juan Espinosa Garcia, Director General of Gaming for the Spanish Government, John White, Chief Executive der British Amusement Catering Trade Association (BACTA).

behalf of the DAW that this situation is “entirely incomprehensible and of course unacceptable” also for the coin-op gaming and amusement machines industry.

Technology versus tradition

The legal situation is one thing and the fact that online gaming will not disappear is another. Whether it is regulated or not – this is the reality all market players have to face. Experience in other countries shows that online gaming attracts mainly younger people, the generation Juan Espinosa Garcia described as “millennials”, i.e. 30- to

40-year olds, mostly with above-average income. They are particularly attracted by the new technology. Brick and mortar gaming customers, on the other hand, tend to be older and more attached to tradition. ((Text zum über die Doppelseite gedruckten großen Foto:)) The panel (left to right): Moderator Dunja Hayali, Otto Wulferding (Chairman of the German Casino Association – DSbV), Georg Stecker (Spokesman of the Board of Deutsche Automatenwirtschaft – DAW), Juan Espinosa Garcia (Director General of the Spanish Gambling Regulatory Authority) John White (Chief Executive of the British Amusement Catering Trade Association – BACTA). However, technology is not the only important factor. The social experience of gaming is paramount in land-based gaming. “Providing our guests a venue for a night out in style is part of what we do”, said Otto Wulferding, speaking for the casinos. This is something online gaming cannot possibly offer. “We see a general tendency towards nostalgia and

“Online gaming attracts mainly millennials. However, their income is an important factor in this field, too.”

Juan Espinosa Garcia, Spanish Gambling Regulatory Authority

tradition, especially among young people.” Georg thinks that “the guest host relationship, which is often very personal in amusement arcades, is an irreplicable factor in our success“.

Player protection and fairness of competition

The target groups of land-based and online gaming are apparently different, at least in part. However, this does not alter the fact that there is competition between landbased and online gaming. Therefore, all the panelists of the second talk session at the GAMING SUMMIT 2017 agreed that there is no way around introducing a regulatory system to oversee online gaming. This is the only way to ultimately ensure consumer protection and fair competition in the industry. The German side expressed the hope that the European Union will take some action in this regard because it has “prevented stupid things many a time”. None of the panelists at the GAMING SUMMIT had any doubt about the competitiveness of land-based gaming. To sustain its competitiveness in the long term, the land-based gaming sector needs to approach younger target groups and invest in equipment and personnel. “Quality will be key, but this has long been understood. This is what we’re working on”, said Georg Stecker, speaking on behalf of the DAW.

“The land-based gaming business is growing and the online gaming business is growing, too. But the online gaming business is growing faster.” John White, British Amusement Catering Trade Association

–––– Testimonials and opinions –––– Georg Stecker Spokesman of the Board of DAW

“I liked the fact that the Summit brought together representatives of the German and European industries, which gave us a perspective beyond our own. The very professional way in which Dunja Hayali, who is also known for her critical journalism, moderated the discussions was a highlight to me.”

Simone Storch Secretary of the BA

“The Gaming Summit was very well organised, a great teamwork experience, we had high-profile speakers and panelists. The level of interest the congress attracted was so high that it was fully booked. Dunja Hayali did an amazing job moderating the event.”

Wolfram Seiffert Management of Bally Wulff

“Dunja Hayali and Urs Meier had a lively and engaging way of guiding the audience through the programme. One thing that was particularly interesting to me was the ‘legal update’ panel discussion which led to the conclusion that our cause is still worth fighting for.“

Freddy Fischer msp Münzspielpartner, Essen

“I came here not only because of the interesting panel discussions but also because I think it’s important for us to have an industry event that is not organised by manufacturers. Now that the IMA trade fair is no longer held, the Summit is the only event where people from our industry come together.»

Pit Arndt Chairman of the DAGV

“Our German and European guests had a very good time at the Summit. We had great discussions with other colleagues. It’s been a really good and truly international experience.”

Uwe Schwarzpaul, Novomatic, International Coordination Research & Development “I liked the international flavour of the Gaming Summit because many aspects of Eur1opean player protection came up in the discussions. We got an insight into gambling regulation in Spain and the UK.”

Jörg Meurer Secretary of the DAGV

“The Gaming Summit 2017 has reached a European dimension, which broadened our perspective beyond Germany. I found everything very well organised. I particularly liked the panel on biometric technology because this is such a new thing.”

Katrin Koch Assistant to the Chief Sales Officer of adp Gauselmann

“Urs Meier’s speech was informative and entertaining at the same time. A very good closing for this interesting event.”

Peter Brandt Brandt Automaten, Hamburg

“This is a difficult but exciting time for anyone working in the industry. We are in a process of radical change. However, the Gaming Summit encouraged me to look ahead into the future, despite all difficulties. Urs Meier made it clear in his speech that we too have to make decisions now. If we do nothing, we have already lost.”

Giuseppe and Nicole Marino MG Automaten, Mannheim

“It is great to meet members of the various industry associations here and exchange views and thoughts with them. This is an important element in building our image. One thing particularly worth noting was, in my opinion, what Mr. Evers, the politician from Berlin, said, namely that enforcement against illegal gaming providers needs to be enhanced. The European flavour of the Gaming Summit was also great because it allowed a broader perspective.”

–––– Photos ––––

GAMING SUMMIT 2017

The GAMING SUMMIT in Berlin is more than a forum for information and high-quality discussions: It offers opportunities for both social and business networking. The end of the GAMING SUMMIT is marked by an informal get-together where participants and speakers meet up to enjoy a drink and a chat in a relaxed and friendly environment. This unique combination is what makes the GAMING SUMMIT, the flagship event in our quest for quality, so special.

–––– Testimonials and opinions –––– Tilmann Brauch, Manging Director of Löwen Play

“I was happy to see a wide range of topics from different countries being covered, especially online-gaming, which was discussed quite extensively. We had an excellent moderator and high-profile speeches.”

Torsten Bächer, Easy Play, Ilmenau

“This was the first time that I attended the Summit and I liked it very much. Keeping oneself informed and staying up to date with relevant legal developments is important, especially in difficult times like these. For us as medium-sized business owners more than for anyone else.”

Peter Mahler-Jakob, Head of Sales of Gauselmann Großhandel

“I liked the Gaming Summit very much. Especially the first half of the day was very entertaining and hugely informative. Dunja Hayali did a great job moderating the event. I also found interesting that the Summit had a European touch to it this

David Reinheckel, Storm Casinos, Kriftel

“I was particularly impressed by the points Graf Lambsdorff made and by the quality and depth of the discussion about the Interstate Gambling Treaty. I was also pleased to see the industry’s tireless and persistent efforts to convince politicians of our arguments. I think the 2020 Quality Initiative that was presented at the Summit will be beneficial in this context. This can only be good for our industry. The Gaming Summit is also a good opportunity for me to meet up with other people from our industry and have a chat with them.”

Alexandra Nöthen, TÜV InterCert Saar

“The fun and lively speech by Urs Meier was my personal highlight. I also liked the international flavour the Gaming Summit had to it this time. This was the best Summit I have ever attended, both in terms of the topics covered and the speakers.”

Bernd Denker, Automaten Discount Nord, Seevetal

“I was amazed by Dunja Hayali’s professionalism in moderating the Summit. The entire event was very well organised. It gave me a lot of encouragement and optimism to take home with me.”

Peter Baur, Schnicks Casino, Prüm

“The points the two politicians, Graf Lambsdorff and Mr. Evers, made were what most impressed me at the event. They showed that the way our industry is viewed is indeed changing, including in politics. Apart from that, there is mainly one thing I would like to say about the Gaming Summit 2017: The event was perfectly organised as always.”

Sonja Wilhelmy, Social Responsibility Officer at Schneider Automaten

“The Gaming Summit is the place where past, present and future come together. You analyse the mistakes of the past, tackle them now and can take your business stronger into the future.”

Wolfgang Pütz, Automaten Pütz, Troisdorf

“The Gaming Summit was wonderful. This is the fourth time I have attended the event and I just love it. It is always very professionally organised and the venue is amazing. For me, this was the best Summit ever, with Graf Lambsdorff’s speech being my highlight.”

Udo Nickel, Apex Germany

“I think this year’s Summit was the best to date because it offered such an international platform. I also liked the speeches by Graf Lambsdorff and Urs Meier very much.”

–––– PANEL DISCUSSION Legal update –––– Naturally, two recent rulings of German highest instance courts that affect the industry were the dominant topic of this year’s “Legal update” panel discussion: one by the German Federal Constitutional Court (BVerfG) and one by the German Federal Administrative Court (BVerwG). All three speakers were very outspoken about what they think about them. Their descriptions ranged from “a chance blown” to “a real scandal for the German justice system”.

“A real scandal”

“The judgement of the Federal Constitutional Court is shocking.” Prof. Dr. Hans-Peter Schneider, German Institute for Federal Studies

“If a German court referred the matter to the European Court of Justice for a preliminary ruling, this would be a chance for the industry.” Dr. Susanne Koch, Hengeler Mueller (law firm)

“Paternalism is a shackle that prevents this country from progressing.” Prof. Dr. Friedhelm Hufen, University of Mainz

Prof. Dr. Hans-Peter Schneider is one of Germany’s most renowned researchers in federal studies. As a member of the Federalism Reform Commission, he was even involved in the modernisation of Germany’s federal order in 2006. But even he can be surprised: “The decision of the Federal Constitutional Court is shocking”, was what he said about it at Gaming Summit. In his opinion, our constitution makers did not intend to give such extensive powers over the gambling industry to the federal states. This fact was simply ignored by the Court, which is, according to Prof. Schneider, a “real scandal for the German justice system”. Now the industry has to contest as many requests for hardship variance as possible and file lawsuits against implementing acts. He advised that the industry should become more politically active and even more open and transparent, e.g. by having an “open house” day at amusement arcades.

Dr. Susanne Koch of the law firm Hengeler Mueller presented her critique of the Second Interstate Treaty amending the Interstate Treaty on Gambling (GlüÄndStV) that has been adopted by the Minister Presidents of the German federal states. She said the European Commission has already expressed doubts that the proposed practice of granting licences to betting operators will be economically viable. The only reason why the Commission has not intervened so far is “overriding political considerations”. The advice she gave as a lawyer was that the industry should take advantage of the new post-election political situation in North Rhine-Westfalia and Schleswig Holstein. And indeed something is beginning to change in this respect: The new government of the State of Schleswig-Holstein has announced its intention not to ratify the Treaty. In her review of the recent court rulings, Ms. Koch also emphasised that, although both the Federal Constitutional Court and the Federal Administrative Court had sanctioned the existing legal status quo, they did not exclude the possibility of it being altered by the legislator. Prof. Dr. Friedhelm Hufen of the University of Mainz also referred to the two rulings: On the one hand, the Federal Constitutional Court applied double standards here and, on the other hand, paternalism, i.e. the infantilisation of citizens by the state, “is a shackle that prevents this country from progressing”. Nevertheless, lawyer Hendrik Meyer from Berlin, who moderated the panel discussion, concluded with a positive outlook for the future: “Although the die is cast on some issues, some questions still remain unanswered, and there is still hope.“

–––– PANEL DISCUSSION Task for the future: Professionalisation of the industry

“We can work on quality, but we can’t do anything about distances.”

Alexander Allgaier, Allgaier Automaten

“We have to set higher standards for entry to the profession of gaming and amusement operator to ensure quality.” Stephan Burger, German Federal Association of Gaming and Amusement Operators

“The image of an industry is an important factor in the competition to recruit the best people for one’s business.” Berthold Stoppelkamp, German Association of Private Security Services

“A job not for everyone” The AWP business is a very sensitive business. Nevertheless, everyone can start their own machine gaming business. However, the discussion about quality does not stop at the entrance of an amusement arcade. Professional standards should also be defined for entry to the profession of gaming and amusement operator.

Alexander Allgaier (business owner), Stephan Burger (in-house counsel of the BA) and Dr. Berthold Stoppelkamp (German Association of Private Security Services) agreed that quality is the only way to improve the image of the coin-op and amusements industry. Professionalising access to the profession must be part of these efforts. “But what makes a good gaming and amusement operator?”, asked moderator Simone Storch, Secretary of the BA. “We can work on quality, but we can’t do anything about distances”, said Alexander Allgaier. Responsibility, focus on solutions, sensitivity, love for the profession and a strong sense of personal commitment are important assets for the successful management of a business. After all, the AWP business is a very sensitive business. Prevention of addiction and player protection are not just words but must guide our actions. Certification and biometric authentication to control access to gaming venues are part of quality, as is active involvement in industry associations, close ties with politics, corporate citizenship activities and training young people for the profession. To achieve this, a basis of knowledge needs to be defined for young entrants to the profession. In Mr. Allgaier’s opinion, the certificate of competence (Sachkundenachweis) from the Chamber of Industry and Commerce (IHK) is not enough. Stephan Burger agreed that higher standards need to be defined for entry to the profession of gaming and amusement operator. The personal reliability and integrity of a business owner is just as important as other criteria for entry to the coin-op and amusement business. If the Chambers of Industry and Commerce were given a higher status and mandatory certification were introduced, this could contribute to the professionalisation of the industry. Dr. Berthold Stoppelkamp illustrated how important professionalisation is for quality and for the image of an industry: The German Association of Private Security Services represents 1,000 guard service companies. Generally acknowledged qualification standards did not exist until 1982, and access to the profession became regulated only in 1996. A vocational training programme for the profession was introduced in 2002. This helped the industry very much because the image of an industry is also an important factor in the competition to recruit the best people.

–––– PANEL DISCUSSION Certification as a quality mark ––––

“With the TÜV certificate, we reward ourselves for our hard work.” Stefan Knüpling, Automatendienst Steden

“The reaction we have received from authorities and public order offices (Ordnungsämter) in applying the certification process has been very positive to this day.” Alexandra Nöthen, TÜV InterCert Saar

“We make sure that the same quality is maintained at a gaming venue from the morning to the evening.” Guido Plettner, TÜV Rheinland Cert GmbH

ertification as a means C to ensure quality The need for certification remains controversial among some members of the industry to this date. However, the participants of this panel discussion agreed that it takes more than compliance with applicable laws to ensure high level protection of players and young people. Certification gives especially staff at gaming venues the level of self-assurance and confidence they need in their day-to-day work.

The coin-op and amusements industry attaches great importance to the quality of its gaming venues. Stefan Knüpling has 30 years of experience as a gaming and amusement operator and explained how this can be achieved. Compliance with applicable laws, control of work processes within the amusement arcade and the qualification of staff - this is the “triad” that makes up the quality of a gaming venue, Mr. Knüpling said. “If we document all our work processes thoroughly, this brings us already close to certification.” The TÜV certificate is one’s reward for the hard work done. “If you have a TÜV certificate, you no longer need to justify yourself for what you do. The certificate disproves all the public clichés of our industry.” Apart from that, certification leads to the creation of better organisational structures within a business. “Certification is not rocket science. But it secures a competitive advantage and the future of one’s business. I’m absolutely certain about that.” Alexandra Nöthen of TÜV InterCert Saar and Guido Plettner of TÜV Rheinland Cert GmbH, two TÜV representatives on the panel, also had a few points to make about quality: The audited international standard of TÜV InterCert Saar was developed by reference to the situation in the market and consists of 78 knock-out criteria. Alexandra Nöthen spoke about follow-up audits which are held in the case of complaints. In addition to the certificate, certified businesses are awarded a quality seal. The reaction from authorities and public order offices (Ordnungsämter) to this procedure has been very positive to this day. TÜV also receives positive feedback from politicians at state and federal level. Guido Plettner explained from the perspective of a guest of a gaming venue how the test purchases commonly known as “mystery shopping” work. The current practice is that only the operator of the gaming venue concerned is informed about such test purchases. “The quality of a gaming venue must be ensured in the evening in the same manner as it is in the morning”, Mr. Plettner said. The mystery shoppers TÜV uses are experienced, fully qualified auditors, some of whom have undergone additional training.

–––– PANEL DISCUSSION Identity authentication and biometric verification The control of access to gaming activities and venues is a key instrument to optimise the protection of players and young people. The level of control must be perfect to ensure the best possible protection. Therefore, the industry demands that a uniform biometric system be introduced throughout Germany to ensure self-exclusion works in practice. The aim is to have this laid down in law. The Gaming Summit offered an insight into this topic from three perspectives.

New standards in player protection “Multi-biometric solutions offer the highest level of security. They use a combination of biometric features.” Amin Adina, Dermalog

“We have no economic interest whatsoever. What we want to do is bring legally safe systems to the market.” Dr.-Ing. Andreas Braun, Fraunhofer Institute

“Politics must find an appropriate balance between biometric technology and the risks arising from the use of data.” Patrick Schnieder, Member of the German Parliament, CDU

During his speech at the Gaming Summit, Alexander Graf Lambsdorff praised biometric authentication to control access to gaming venues as a promising way forward. Amin Adina of Dermalog explained from a manufacturer’s perspective that this kind of solutions is not just a vision for the future but is already part of our everyday life. He gave examples to illustrate the state of development and use of such systems in everyday life, e.g. in the finger payment project at a supermarket in Hürth which yields considerable time savings compared to payment by cash or credit/debit card. Mr. Adina indicated other interesting fields of application, including that of the coin-op and amusements industry. This was the point where Dr.-Ing. Andreas Braun came in. He is a scientist at the Fraunhofer Institute for Computer Graphics Research where he heads the Department of Biometric Technologies. He drew the attention of the audience to the “Face-Check” system by Gauselmann, which was evaluated by the Fraunhofer Institute until the end of June. Nine systems at six venues were tested with over 650 participants. The interim results Dr. Braun presented showed good performance of the system in terms of reliability. He also showed how some last variances in identification performance could be rectified. According to Dr. Braun, mistakes can be avoided by interaction between man and machine, as is intended for the systems currently available in the market. Man serves as a backup to provide 100% security. Patrick Schnieder, Member of the German Parliament and Secretary General of the Christian Democratic Party (CDU) in Rhineland-Palatinate, then added a political perspective to the discussion. He said he sees a “huge potential” in biometric access control in a time where biometric technology is everywhere around us. “I use fingerprint recognition myself to unlock my phone.” Mr. Schnieder gave a “thumbs up” for voluntary self-exclusion by biometric technology if adequate data protection and protection against forgery are ensured. Moderator Michael Eulgem (lawyer) concluded the discussion, saying that “We are walking a path of technology that leads us to good solutions for optimising quality at our venues which are also accepted by politics.”

–––– PANEL DISCUSSION Innovation in the gaming entertainment industry For many people, the buzzword “Big Data” has a rather negative connotation. However, the discussion by our panel of international experts on the potential the gambling industry holds for innovation revealed that collections of data and their analysis also present unparalleled opportunities. In particular player protection could continue to benefit from the new technologies that are being created.

The Big Data opportunity

“The future of player protection could lie in a combination of technical data analysis and observation.” Dr. Michael Auer, neccton

“It is becoming increasingly important for companies to sell their products through different channels.” Dr. Monika Poeckh-Racek, Admiral Casinos & Entertainment

“The gambling industry has never suffered from a lack of innovative capacity.” Eric Olders, JHV Gaming & Entertainment Group

Does Big Data present an opportunity for player protection? Yes it does, according to Dr. Michael Auer of the Austrian firm neccton, because it could be used in online gaming to allow “communication” with the customer at any time for the protection of players. What he means by that is that, compared to land-based gaming, the gaming behaviour of players can be analysed in a very short time by reference to various data – a technique known as data tracking. “In our analyses, always look out for unusual behaviour patterns. That way we are able to give warning signals to players if their gaming behaviour or their losses become problematic. The problem with these highly technology-led methods is, however, that they do not capture a player’s mood. Therefore, Dr. Auer sees the future of player protection in land-based gaming in what he referred to as a “hybrid method”, i.e. a combination of automated data collection and observation by staff. The first pilot projects for such a method are already running at casinos. Dr. Monika Poeckh-Racek of Admiral (Austria) mentioned different trends in her speech. In her opinion, the slot-gaming industry has to serve not only the landbased gaming sector but also other channels. She thinks that, although land-based AWP gaming will remain popular in the future, especially the younger target group feels more and more attracted by online gaming. Therefore, she concluded, “companies have to sell their products through different channels”. Virtual reality gaming, on the other hand, a phenomenon that is much talked about these days, will remain a niche product, she said, although it could become interesting especially for line poker gaming. The last panelist to speak was Eric Olders from the Netherlands. He emphasised that the innovative spirit of the industry is not the problem. The industry has always been very innovative. But, according to Mr. Olders, there are two other aspects it will need to take even more care of in the future: On the one hand, the regulatory practice in the different countries, and on the other hand improving its own image with the public.

–––– PANEL DISCUSSION Cashless Society –––– From left to right: Moderator Joe Ewens (Managing Editor of GamblingCompliance), Dan Iliovici, Kieran O‘Keefe and Jason Frost talked about the complex challenges to the industry posed by cashless payment.

An increasingly cashless society on the one hand and a market for coin-operated AWP gaming machines on the other: This area of conflict was the topic of the lively discussion on the effects of contactless and cashless payment on land-based AWP gaming.

The challenge of cashless payment

Land-based AWP gaming is facing the great challenge of having to realign itself for the future. Society is becoming increasingly cashless while AWP gaming machines are operated by coins. The industry needs to keep up with this development, shift its focus clearly onto the customer and must be able to offer cashless payment options. Otherwise the market will shrink dramatically. According to Jason Frost, the newly appointed President of EUROMAT, and Kieran O‘Keeffe, Secretary General of EUROMAT, “the process of change has long begun”. We have read the signs of the times and are working hard to find solutions: EUROMAT communicates extensively with lawmakers, researchers, manufacturers, operators, professional organisations and financial service providers. “The stakes are high and we want to do it right. We have an expert group and are able to provide important data, for example for card payment”, said Mr. Frost.

All parties involved are aware that these challenges are complex. For example, payment by credit card is just one of many solutions which must be possible in the future to ensure the sustainability of the business. At the same time, however, we need to work on solutions for payment by bitcoins, smartphone or customer cards or third-party cards. This is not made easier by the fact that in AWP gaming, cashless payment entails a number of other difficult aspects that need to be considered. After all, amusement arcades are a place where customers do not only pay cashlessly but also win money, which would then also have to be handled cashlessly. Data protection is a big issue. But there also completely different issues to be tackled: The assumption that cash gives the player more control (a view widely held in politics) needs to be disproved. Mr. O‘Keeffe advocated for cooperation in order to find solutions that are technically, legally and economically viable. Addressing the regulatory authorities, he said they “need to understand that our industry is legitimate and that we have to find solutions together”. Dan Iliovici of the Romanian Gambling Authority agreed entirely with this statement. He told the audience about the modern, “operator-friendly” gambling legislation in his country which welcomes innovation in information technology. However, he also admitted that regulation always lags behind technology.

–––– Exhibition –––– Enshrinement of certification in law, the introduction of biometric access control and qualification for access to the profession of gaming and amusement operator are the three pillars of the “2020 Quality Initiative”. These three pillars were presented at the Gaming Summit 2017, and each of them was discussed by a special expert panel.

Switching to the future A real step forward: The DAW had an exhibition stand at the GAMING SUMMIT 2017 where it presented its “2020 Quality Initiative” and the accompanying information campaign and information materials.

In Germany, the legislation of the individual federal states provides for regulation to be purely quantitative. According to applicable law, amusement arcades have to close down if they are too big or because they are unable to meet the minimum distance requirements to other amusement arcades. “However, this does not say anything about the amusement arcade or its staff. Quality is not considered in this decision. In my opinion, this is utterly scandalous”, said Georg Stecker, Spokesman of the Board for the DAW.

Ensuring quality

However, the DAW did not leave it at that. The industry demands that, in addition to the existing regulation by the German Gaming Ordinance (SpielV), the German Protection of Minors Act (JuSchG), German trade law and the Building Codes of the individual federal states, the existing quality guidelines be replaced by quality criteria. The industry demands the following three actions towards quality:

1. Enshrinement of certification in law

It is already possible for gaming venues to be certified by an independent TÜV organisation. The associations of the coin-op gaming and amusement machines

Combining protection of players and young people: Access control systems by adp Gauselmann, Löwen Entertainment and Bally Wulff.

industry call for TÜV certification to be made a mandatory statutory requirement.

2. Biometric authentication to control access to gaming venues

The DAW demands that the introduction of a uniform biometric system to control access to gaming venues throughout Germany be laid down in law. This would help ensure that self-exclusion works in practice. Face identification systems could, in addition, ensure protection of young people.

3. Qualification standards for the profession

The industry demands that qualification standards be introduced for access to the profession of gaming and amusement operator. These standards should be tighter than those applied so far to “separate the wheat from the chaff”, as Georg Stecker put it.

Time for a political paradigm shift

These three demands are the fundamental pillars of the “2020 Quality Initiative”. This initiative was presented at the Gaming Summit by the DAW and widely discussed with participants. Also presented were the technical solutions by which the industry will be able to implement biometric authentication to control access to amusement arcades. In addition, the Summit served as a platform to launch the information campaign to promote the “2020 Quality Initiative”. The initiative is a quality-based concept the DAW developed to oppose the purely quantity-based regulatory schemes of the German federal states and to underpin its demand for an “immediate shift of political paradigm because the role of legal gambling needs to be strengthened”.

–––– Partnership ties ––––

We were happy to welcome the entire EUROMAT team at the Gaming Summit in Berlin.

The GAMING SUMMIT 2017 was a joint event of the DAW and the European umbrella organisation, EUROMAT. At the eve of the Summit, members of both associations gathered at the British Embassy.

Jason Frost (right) from the UK is the new president of EUROMAT. Uwe Christiansen, the representative of the German associations, was appointed Vice President.

“The UK has an overall positive attitude towards gambling that should be a model for other countries.” Georg Stecker at the meeting between EUROMAT and DAW at the British Embassy in Berlin.

SUMMIT kick-off with EUROMAT When discussing gambling regulation, one cannot help but feel a little envious looking at the UK: At the EUROMAT cocktail reception on the eve of the GAMING SUMMIT 2017, Georg Stecker, Spokesman of the Board of the DAW, said: “The UK has an overall positive attitude towards gambling which should be used as a model for Germany and the other European countries.” The reception was held at the British Embassy, probably because of the good example the UK gives to other countries, at least as far as gambling regulation is concerned. Another reason is that the UK is home to Jason Frost, the new President of EUROMAT, who immediately took up topics concerning the future of regulation.

Wowing the customer

These topics are different from those currently discussed in Germany. This was also noticeable in the contributions EUROMAT made to the GAMING SUMMIT 2017: They were about online gaming, electronic payment systems and new technologies, including for land-based gaming. The aim is to offer customers an

even more attractive gaming experience while at the same time acquiring new target groups and expanding the business base. From a German perspective and with the debate currently taking place in Germany in mind, this is somewhat odd given that what we are currently seeing in this country is exactly the opposite.

United in advocating legal gambling

The GAMING SUMMIT 2017 has shown that things can be done differently: The progression of gaming, the fight against illegal gambling and efforts to ensure effective consumer protection do not exclude one another. Georg Stecker, the spokesman of the Board for the DAW, said at the eve of the joint congress of the DAW and the European umbrella organisation said that this should be the message of the EUROMAT GAMING SUMMIT 2017 – Congress of Land-Based Gaming. “We are all united in our commitment to legal gambling in Europe”, he said.

Reflections Eduardo Antoja, EUROMAT

Stefan Evers, Member of the Berlin House of Representatives (CDU)

“The event was an opportunity for us to learn from each other and to have an open and constructive dialogue with our partners from the regulatory authorities.“

“The Interstate Gambling Treaty has led to political injustice and is also too ideologically loaded.”

Juan Espinosa Garcia, Spanish Gambling Regulatory Authority

“Online gaming became legalised in Spain a few years ago and gross gambling yields have increased in both the land-based and the online market ever since.”

Patrick Schnieder, Member of the German Parliament (CDU)

“Biometric authentication to control access to amusement arcades offers a huge potential for the protection of players and young people.”

Prof. Dr. Friedhelm Hufen, University of Mainz

“Apparently, Germany has no cure for its paternalism.”

Otto Wulferding, German Casino Association (DSbV)

“Illegal gambling is the common enemy of casinos and the coin-op gaming and amusement machines industry.”

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