Canada's Premier Gaming Industry Magazine
Vol. 8 No. 2
www.CanadianGamingBusiness.com
Summer 2013
Getting Inline With the Online Gamer The habits of internet and land based players
Inside: Uncovering the Hidden High Roller Charitable Gaming Roundtable The New Deal in Table Games
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Executive Q&A with Casino de MontrÊal's François Hanchay
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2 | Summer 2013
www.scientificgames.com
Summer 2013 Volume 8 Number 2 Publisher
contents
Richard Swayze richards@mediaedge.ca 416.512.8186 ext. 246
20
www.CanadianGamingBusiness.com
14
26
Editor Matthew Bradford matthewb@mediaedge.ca Advertising Sales Richard Swayze richards@mediaedge.ca Senior Designer
Annette Carlucci
annettec@mediaedge.ca
Designer
Jennifer Carter
jenc@mediaedge.ca
Production Manager
Rachel Selbie
4-6
EDITOR’S NOTE & CGA MESSAGE
8
COVER STORY
14
GAMING TRENDS
kevinb@mediaedge.ca wrutsey@canadiangaming.ca
18
SPECIAL SUPPLEMENT
Senior Vice President Chuck Nervick
20
GAMING TECHNOLOGY
rachels@mediaedge.ca
Circulation Manager
Lina Trunina
linat@mediaedge.ca
Proudly owned and published by:
President Kevin Brown
President & CEO Bill Rutsey
Vice President, Public Affairs Paul Burns
chuckn@mediaedge.ca pburns@canadiangaming.ca
Getting Inline with the Online Gamer: The habits of internet and land based players Uncovering the Hidden High Roller: Building loyalty with analytics RG Check Turns Two: A report from the Responsible Gambling Council The New Deal in Table Games: Gaming innovations for the casino floor
Canadian Gaming Business is published four times a year as a joint venture between MediaEdge Communications and The Canadian Gaming Association
23 IGAMING
To advertise: For information on CGB’s print or digital advertising opportunities: Richard Swayze 416-512-8186 ext. 246 richards@mediaedge.ca
Evolving Table Game Products Through iGaming: A supplier perspective
25
Corporate Profile
26
EXECUTIVE Q&A
Copyright 2013 Canada Post Canadian Publications Mail Publications Mail Agreement No. 40063056 ISSN 1911-2378
François Hanchay General Manager of Casino de Montréal
28 LOTTERY
Setting the Standard: Canadian lotteries are among the world’s leaders in open industry standards
Guest editorials or columns do not necessarily reflect the opinion of Canadian Gaming Business magazine's advisory board or staff. No part of this issue may be reproduced by any mechanical, photographic or electronic process without written permission by the publisher. Subscription rates: Canada $40* 1 yr, $70* 2 yrs. USA $65 yr, $120* 2 yrs. International $90* 1 yr, $160* 2 yrs. *Plus applicable taxes. Postmaster send address changes to: Canadian Gaming Business Magazine 5255 Yonge Street Suite 1000, Toronto, Ontario M2N 6P4
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CHARITABLE GAMING SUPPLEMENT Charitable Gaming Roundtable: A look ahead with today’s leaders
36 MARKETING
SPECIAL INSERT
Official Publication of the Canadian Gaming Summit
Scientific Games
Canadian Gaming Lawyer Summer 2013 Edition
Not in My Backyard: Why the NIMBYs are winning, and what you can do about it
38 FINANCE
IFRS One Year Later – A Reality Check: Reflections on the transition to IFRS
41
INDUSTRY AWARD PROFILES
Canadian Gaming Industry Award Winners
Canadian Gaming Business | 3
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Showtime in Montréal It's time to say “salut!” to the biggest industry gala in Canada as gaming delegates from across the country converge on Montreal for the 17th Annual Canadian Gaming Summit. This premier event is poised to set the bar for summits to come with another round of impactful sessions, can't-miss presentations, top notch entertainment, a jam packed trade floor and a wealth of networking opportunities. And, as with every year, Canadian Gaming Business is excited to be on the ground floor covering all the action. Like the show itself, our summer issue aims to take an all-encompassing look at the industry. From Ipsos Reid's player analysis in our cover story, “Getting Inline with the Online Gamer”, to our review of table game innovations in our Gaming Technology feature, and SAS Canada's report on player value optimization in, “Uncovering the Hidden HighRoller”, we've turned our spotlight on the people, ideas, and technologies shaping the industry. This issue also includes an update on the Responsible Gambling Council's RG Check program, a one-on-one with Casino de Montréal General Manager François Hanchay, and our expert-driven Q&A on the future of charitable gaming. Within this issue, we've included the summer edition of Canadian Gaming Lawyer. As always, Editor Michael Lipton has collected a number of insightful and informative articles from his colleagues across the field. This edition is a mustread for stakeholders looking to stay one step ahead of the legal trends and cases affecting our industry. Please also join us in congratulating this year's Canadian Gaming Industr y Awards and First Nations Canadian Gaming Awards recipients. These are the men and women at the forefront of gaming, and we're proud to feature them in this edition. These articles and more await you in this feature-packed edition of CGB. And much like this year's summit, we're sure there's something for everyone. If you're participating in sessions, in the networking receptions or on the tradeshow f loor, do make sure you say hello to CGB's publisher and summit sales manager, Richard Swayze. We also welcome you to submit your feedback and ideas for future stories to matthewb@mediaedge.ca. Avoir un bon spectacle! Matthew Bradford Editor matthewb@mediaedge.ca
messagefromtheCGA
An important step in the evolution of a truly national event By Bill Rutsey, President & CEO of the Canadian Gaming Association
As a co-owner, the Canadian Gaming Association is proud of the fact that the Canadian Gaming Summit has become Canada’s premier annual conference and exhibition for gaming professionals. We are also proud that it delivers face-to-face interaction between attendees from all gaming sectors, disciplines, and regions within Canada and beyond; and is the leading provider of information, education, and interaction to the Canadian gaming community. The Summit’s top-notch educational program, ex pansive ex hibition, and enjoyable social events provide an invaluable and memorable learning and networking experience. That ha s been our g oa l since day one when the association was formed in March 2005 at a meeting in Niagara Falls during the annual gaming show. One of the priorities set by the founding members was to acquire the event from its third-party owner and “raise the bar” with regards to production and content. As a result, one of our first orders of business was to partner with Media Edge Communications for their event planning and implementation ex per tise. The combination of event production expertise and industry ownership and knowledge produced immediate results, starting with the 20 06 Summit in Vancouver which featured enhanced content and product exhibition. From the start, our goal for the summit has been to produce an event relevant to Canada’s major players, including the crown agencies charged with conducting 6 | Summer 2013
and managing, and regulating gaming; gaming property owners and operators; the charitable gaming sector; First Nations, and the manufacturers and suppliers of gaming equipment, systems, and services. Ever y year since 2 0 06 has seen improvements in the quality of the Summit education and information component s, which ha s been achieved pr incipa lly through consultation. I am pleased to inform you of a major step forward in this regard. Effective this year in Montreal, we have formed a work ing partnership with British Columbia Lotter y Corporation, Alberta Gaming and Liquor Commission, Saskatchewan Gaming Corporation, Manitoba Lotteries Corporation, Ontario Lottery and Gaming Corporation, Loto Quebec and Atlantic Lottery Corporation for the development and deliver y of the gaming education component at the annual Canadian Gaming Summit. This would not have been achieved w ithout the leadership and support of the senior executives from each of the agencies and their willingness to work together to create a national training and education program for their organizations, to come together to share their knowledge, develop common practices and standards, and to explore new and different thinking. Thanks to them, the bar has been raised yet again, and this year’s Summit in Montréal is now—more than ever—“Where the Canadian Gaming Industry Meets”.
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coverstory
Getting Inline with the Online Gamer The habits of internet and land based players
By Jason Allsopp and Paul Lauzon
8 | Summer 2013 8 | Summer
coverstory
The internet has changed the world, and with it, human behaviour.” Instead of going out to movies, you can sit at home and download a flick. Instead of heading to the mall to buy a new pair of pyjamas, you can sit at home in your old ones and order a new pair. Instead of catching up with friends at a coffee shop, you get the scoop on what’s going on in their lives through social media. Truly, the internet has changed the way we live and play. This rings true for gambling. You no longer need to jet off to Las Vegas to try your hand at the slots. You don’t even need to go down to your local casino to play the tables. And just because you can’t get your friends to agree on a time and place for a poker match, that doesn’t mean your hopes of a game have been flushed. All of these activities can be done over a computer, smartphone, tablet, or through any kind of device that has access to the internet. While there has been steady growth in online gambling, what kind of an impact is it having? Who are online gamblers? What are they looking for in online gaming options? What are their habits? How do these online sources differ from visitors of traditional brickand-mortar casinos? More importantly, how can you better serve their needs? The Lottery and Gaming practice at Ipsos Reid studies these questions and more. We examine the habits, attitudes, and motivators of Canada’s gaming population. We ask them what they are looking for in gaming entertainment, what their expectations are, what kind of gaming activities they engage in, how much money and time they spend, and what brings them back for more. In May of 2013, we spoke to casino visitors and asked them if they played online for money. From this group, we then sought to gain a better understanding of their habits and attitudes toward online gambling to see what the differences were between casino and online gaming. This was all done, of course, to uncover opportunities to help both online gaming sites and casino operators better understand their players, thereby identifying ways to improve their offer. The Name of the Game: Convenience One of the central findings of our study is that the convenience of online gaming has an impact on the frequency of play. In the ‘real world’ of casinos, about 17% of casino visitors will visit monthly or more often. However, those who play games online for money are more likely to play on a monthly basis or more often (41% agree with this statement), with 23% playing online games for money on a weekly basis or more often. Regular casino goers will make an average of five visits per year to a casino. For casino visitors who also play online for money, the frequency is much greater.
For those that play poker online against other people, they average almost 60 sessions per year. Clearly, the quick and easy access of online gambling makes it an attractive activity. The Casino Player Online Casinos may have a worry that online gambling is going to cannibalize their players and put them at a risk of shuttering up the doors. Our research shows that isn’t true. While online play is growing, casino players are quite happy with play in the casino. The experience and the expectations make the difference. In fact, in the past year, most casino visitors have never played a game online, be it for fun or money. Furthermore, most games played online are more likely to be played for fun rather than money. Only 27% of past year casino visitors have played any game for money on the internet in the past 12 months, while about 50% have played any game for fun. For those who have, the most played online games are slots, skills games such as backgammon or mahjong, and poker against other online players. The few online gaming activities to be played more for money than for fun include things like buying tickets (lottery and raffles) or placing bets on sporting events or horse racing. Hey Big Spender Let’s get down to dollars and sense. Our research shows some distinct differences in the spending habits of casino-goers versus online gamblers who play for money. During a typical visit, the average casino goer wagers approximately $119, with those who have visited in the past month typically spending higher than those who have not ($147 and $96 respectively). However, when they go online to gamble, they will spend approximately $180 per session, with the most money (by amount) wagered on sports ($98) and slots ($81). Casino goers will also play online as 8% have told us they have played slots on the internet for money in the past year, while 25% have done so for fun. This is in stark contrast to the 79% who play slots on a typical visit to the casino (24% of casino visitors who play slots online do so for money). Canadian Gaming Business | 9
coverstory Spend a Little Time with Me Once you get a player to the door of your casino or to your gaming website, how long do you think you can keep them there? We asked casino visitors to clock their time on a typical visit to the casino and how that compares to their time gambling online. The answer? During a typical visit, casino goers are there for an average of 98 minutes. Online, the typical session lasts 97 minutes—a mere 60-second gap. This is indeed a minute difference. Both in the casino and online, poker games take up the most time. In the casino, card games like poker typically take up an average of 87 minutes of the player’s time. Online, poker takes up an average of 104 minutes. Casino visitors dole out their time a little more evenly than online players. Looking at average times in the casino, card games like blackjack take up 70 minutes, the slots take up 67 minutes, and VLT and table games like roulette or craps take up a little over 50 minutes. Once online, poker clocks up the longest play by a wide margin. The 104 minute average for online poker adds up to being more than two or three times the length of time spent on other popular online gambling activities like slots, sports pools and wagers, and other card games—all of which fall within a range of 30 to 45 minutes of play. Looking ahead to anticipated play over the next six months, the convenience of online gambling appears to trump casinos. Our research shows that in comparing habits in the casino to habits online, the likelihood of participating in activities at the casino is generally much lower than the likelihood of participating in activities online. A big difference here is that those who are playing games online for money are very likely to do it again in the next six months, whereas those who are gambling at a casino are much less likely to go back to the casino in the same timeframe. Total Time Spent Per Visit and Per Session (In Minutes) Casino
Online 98
Gaming (Net) (n=935) Play card games like Poker (n=113)
87
Play card games like Blackjack (n=164)
70
Play slots (n=787)
67
Play VLTs (n=157)
56
Play table games like Roulette or Craps (n=109) Play lottery tickets (n=117)
51 11
Base: Played game during casino visit A4. Again thinking about a typical visit to a Casino where you play the game(s) below, how much time do you spend playing each game?
97
Online Gaming (Net) (n=266)
104
Poker against other people (n=72)* Slot games (n=80)*
42
Sport pools (n=65)*
40
Sports wagers or bet on sports outcomes (n=65)* Card games like Blackjack, Caribbean Stud Poker, etc. (n=54)* Purchasing interactive scratch style instant win lottery games (n=68)* Purchasing raffle tickets (n=73)* Purchasing lottery draw game tickets (n=104)
33 31 18 15 13
Small base size, interpret with caution. Base: Played game online B6. Again thinking about a typical session when you play each game below online for REAL MONEY, how much time do you spend playing each game?
Playing for Keeps Of course, one of the biggest differences between playing games of chance online versus playing inside a casino comes down to money. Casino play is all about the money. Online offers a mix of play for money or play that is just for fun. 10 | Summer 2013
Reason Will Not Play for Real Money Likelihood to play for real money
% Agree (5,6,7) I'm concerned about the security of giving credit card information
Very unlikely 62%
67% 66%
I am not interested in internet gaming Concerned about the legitimacy of website
Very likely 4% Somewhat likely 12%
64%
I like to play these types of games in person Don't like the idea of having to download software to play I can't afford it right now Concerned about professional players or sharks I'm not good enough at gaming
63% 60% 54% 44% 43% 32%
Spouse/partner would not approve
30%
I'm afraid I'll become addicted Somewhat unlikely 22%
Base: Play games for fun and not for money (n=307) C1. You indicated you have played games or activities on the internet for FUN but not for REAL MONEY in the past 12 months. How likely are you to play games or activities on the internet for REAL MONEY in the next 12 months?
I am morallly opposed to Internet gaming Internet gaming (except lottery ticket sales) is not regulated in Canada I'm concerned about getting in trouble with the law I don't have a credit card A friend or relative had a bad experience
27% 26% 19% 18% 16%
Base: Game for fun and not for money (n=307) C3. We're now going to show you some general reasons why some people have not played games on the internet for real money.
Getting online players to switch from play for fun to play for money is a challenge. Only 16% of those who have played a game online for fun only with no money at risk say they are likely to make the transition and play for money in the next six months. The majority (62%) say they are very unlikely to do so. Their reasons for not playing for money are somewhat obvious, and include security concerns, lack of interest, and enjoying the people aspect of in-person gaming. A select number say they are also scared of professional sharks taking advantage of them. A key to overcoming this challenge lies in building trust, a secure website, and a reputable online gaming brand. As one can imagine, this is not a quick or easy exercise. Playing for Real Trust. Security. Reputation. Those are all things that casinos have, and visitors can see it eye-to-eye and in person every time they come through the door. Casinos also offer an in-person, social, and interactive environment. That likely explains some of the gaming preferences, habits, and attitudes of casino visitors— especially when compared to their online gaming preferences. Although casino goers who play online typically have more sessions online than visits to a casino, and typically spend more per online session than a casino visit, they prefer playing casino based games at the casino, rather than online. This difference is much more pronounced for slots, card games, table games, VLTs, and off track betting – the preference for poker at the casino over online is slight. Just Getting Started There’s a f irst time for everything, and with internet gambling being rather new to the scene, it is something that does take some getting used to. That said it does appear to have caught on very quickly, having made tremendous strides within the past year. We asked casino visitors about their first experiences with online gambling. What they told us indicates a change in behaviour that is favourable to online, even if it started off as something less than serious. Of those who have played online for real money, 57% said they first started playing for
HSVL BLUEWAVE
coverstory Prefer Casino Prefer Online No preference
Preferred Method of Playing for Real Money 69% 8%
Slots Card games like Blackjack Table games like Roulette or Craps
Don't Play 9%
14% 38%
11% 13%
38% 38%
7% 9%
46%
35% VLTs
4%
46%
15% 34%
Buy lottery tickets
15%
30% Card games like Poker Off-TrackBetting
10%
17%
34% 24% 22%
9% 10%
36%
59%
Base: Game for real money (n=266) B9. For the following games, please indicate if you prefer playing them at a Casino, or online for real money?
fun before they actually played for money. Once the fun is over, they get down to business. For casino visitors who bet on sports online, 34% said they only started doing so in the past month, while 78% said they had started within the past year. Just under a quarter (22%) have been doing so for a year or more For casino visitors who have started playing online, card games like blackjack, Caribbean stud poker, or Pai Gow, as
Are young adults a part of your game plan? Get the freshest insights on what 18-34 year olds are thinking, doing, and playing. Subscribe to Ipsos’ 2013 Gaming Emerging Market Syndicated Study for an in-depth examination of gaming, technology and 18-34 year olds. Contact: Paul Lauzon Senior Vice President and Managing Director Ipsos Reid, Lottery & Gaming 403.294.7386 www.ipsos.ca/gaming
12 | Summer 2013
well as poker games against other online players, have the longest serving participants. Approximately one-in-three casino visitors who have played online started to play these games for money more than a year ago. However, in the past year, these games have caught fire. Just over a quarter of these players (27%) have started playing poker for money online in the past month, and two-thirds (67%) have started within the past year. Furthermore, on average, those who play online for money are members of 1.7 websites. This is still a relatively small group, but growing acceptance of online gambling—combined with growing trust and an appreciation for the convenience—indicates this is a behaviour and an activity that is set for major gains in the coming months. Wrapping Up As online gambling continues to become more popular and common across the internet, Canadian players are also becoming more interested in the ease and convenience of being able to play from any location and at any time they desire. That said, there are still challenges to face. Understanding what makes online gamblers tick, the types of activities they want to partake in, and the barriers and concerns they put up against playing for money online can only help to improve the offer and ease the perceived risks of online gaming. Brick-and-mortar casinos and online gambling sites aren’t necessarily competitors; they can, in fact, complement one another, with casinos providing a social, engaging and entertaining atmosphere that offers a bit of an escape, and online providing a convenient and easy-to-use option that makes the fun of gambling accessible and portable. Ultimately, the goal is to meet the needs of your players, and the first step in achieving that is through a better understanding of your players. Methodology These are findings from an Ipsos Reid Lottery & Gaming study conducted from May 3 to May 9, 2013. For the survey, a sample of 1001 Canadians was interviewed online. The precision of online polls is measured using a credibility interval. In this case, the poll has a credibility interval of plus or minus 3.1 percentage points. For more information about credibility intervals, please visit the Ipsos Public Affairs section of our website at www.ipsos-na.com. The data were weighted to the casino going population of Canada by region, gender, and age. Statistical margins of error are not applicable to online polls. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error and measurement error. Where figures do not sum to 100, this is due to the effects of rounding. About the Authors Jason Allsopp is an Associate Vice President with Ipsos Reid’s Lottery & Gaming practice. Based in Vancouver, Jason is part of a team of research experts dedicated to serving the market research needs of lottery and gaming organizations across Canada and the United States. Jason can be contacted at jason.allsopp@ipsos.com or 778.373.5035. Paul Lauzon is Senior Vice President and Managing Director with Ipsos Reid and head of the firm’s Lottery & Gaming practice. Based in Calgary, Paul leads the team of research experts dedicated to serving the market research needs of lottery and gaming organizations across Canada and the United States. Paul can be contacted at paul.lauzon@ipsos.com or 403.294.7386.
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gamingtrends
Uncovering the Hidden High Roller Building loyalty with analytics By Bruce Swann and Emmanuel Pacheco
As the Canadian gaming industry heats up, and competition increases between casinos and local entertainment venues, patrons have more choices than ever before. As a result, casinos need to match patrons’ increasingly selective spending habits with highly targeted offers that demonstrate an understanding of each customer’s unique preferences and value. To ensure continued financial stability, these offers and campaigns should be based on a true understanding of patron worth, both today and in the future. 14 | Summer 2013
gamingtrends
Achieving this requires an accurate 360-degree view of the patron that ref lect s rea list ic projec t ions for their activities across the property from restaurants to the casino and entertainment. This, however, is easier said than done for many casinos, as gathering this information from disparate operating systems and data sources presents a technical challenge for many. Delivering an excellent customer ex perience is essential to success. According to Frederick Reichheld of Bain and Company, as little as a 5% increase in customer retention rates can result in profit increases between 5% and 95%. At the same time, McKinsey and Company estimates that it is as much as 10 times more expensive to attract new customers than to retain existing ones. Delivering marketing ex periences tailored to individual customers is essential to a good customer experience, and according to a recent survey conducted by Leger Marketing on behalf of SAS, half of Canadian respondents were more likely to buy from companies that personalized its marketing. Today, it’s common for casinos to collect information about customer
visits using loyalty or reward cards. While this provides a historical view of patron behaviour, it lacks analytical insights into the patron life cycle to predict future behaviour, and is therefore of limited use to casinos. Data as to when and how often patrons visit, which outlets they frequent, which offers they respond to, and how much they spend can be used to create predictions about what offers they are likely to respond to, what services they would desire in the future, and their lifetime value. With a comprehensive solution that includes analytics, business intelligence, data management, and marketing automation tailored to the gaming industry, casinos can quickly find the answers to these challenges and more, enabling marketers to integrate data from a variety of disparate sources to gain a true 360-degree view of the patron, and use this information to design more targeted campaigns, adjust service offerings, and deepen relationships with patrons.
of key metrics are not the same. For instance, the restaurant point-of-sale data (POS) may come from one vendor and the loyalty program from another. For each disparate system, data is stored in different locations and in different formats, yet each captures a key piece of information about patrons. But, when this information is viewed as part of the bigger picture, it helps compose a 360view of patron behaviour and value. Accessing the data from these systems presents a challenge to many companies, which are compounded when individual customer records from these systems need to be linked. As a result, bringing together all these sources of information into a single integrated data management system is the first integral step toward turning patron data into gold. It enables casinos to then apply analytics, forecasting, and marketing automation technologies to devise successful, automated campaigns that are custom tailored to the customer and built to maximize returns while minimizing spend.
A 360-degree view In casinos, systems vary department by depa r t ment , d at a collec t ion s methods differ, and even definitions
Identifying key drivers for patron value Once the customer information is gathered, casinos can commence in analyzing their behaviours. It is this Canadian Gaming Business | 15
gamingtrends process of analyzing patron behaviour, both on the casino floor and off, that makes it possible to uncover the drivers of patron value. Determining what elements of an offer drive the spending of a gaming establishment’s most valuable patrons can help ensure future campaigns are more successful. Once the drivers are established, forecasting will help predict the impact on revenue and profitability far into the future, with plenty of time to take corrective action. Creating highly effective marketing Deciding which promotions to offer can be extremely difficult for marketers. The most effective promotions are ones that drive profitable business to the casino without displacing higher-valued patrons by filling the establishment with patrons of lesser value, or reducing profits by offering incentives to patrons who would have purchased without them. With limited marketing budgets and constant competition from other service providers, creating a highly effective promotion is more critical than ever. In order to accomplish this, gaming companies must first understand the needs and desires of the customer base in order to know what to promote or offer. Next, marketers need to predict the response rate to a proposed promotion to determine if it will profitably generate the expected business. To accomplish these two steps, access is required to information about patron behaviour, response rates to previous promotions, and the
profitability of proposed actions. From there it is possible to personalize these promotions to your most valuable patrons. For many organizations, creating marketing campaigns is a manual and multistep process. From segmentation, to offer creation, to contact and channel strategy, and to pulling customer lists, teams spend valuable time simply in the execution of a planned campaign, even before they begin to analyze effectiveness. Decisions about which channels are most effective and which segments should be targeted involve manual access of huge data sets, combing through that data and slicing and dicing for days before the campaign is ready to be sent. Data quality issues in the patron database result in duplicate offers and incorrect addresses. By using analytics to automate this highly manual process, marketers have more time to focus on marketing. Insight when it is needed Imagine this: A high-roller steps onto a casino f loor and within seconds, the team on the floor gets a message about who this patron is, and how they like to be catered to and which games they play, enabling the team to greet them by name, and provide an experience fully tailored to that individual patron. This is the reality for a casino that uses systems like SAS Patron Value Optimization and Real Time Decision Maker. Each time a high value patron v isits their establishment, they swipe their loyalty card and instantly the host receives a text message with key patron details, enabling the casino to deliver exceptional customer service leading to improved loyalty. Personalization is the key to success in marketing, and being able to maintain a personal relationship with patrons at each touch point leads to an advantage over competition in customer satisfaction ratings and loyalty. This degree of personal touch requires that patron-facing personnel have information about patron preferences and purchase behaviour at their fingertips, yet keeping this information updated and accessible is a constant challenge. Typically, key pieces of information, such as daily operating reports, can take much of a day or more to compile. Once compiled, the information is passed from hand to hand, updated in multiple departments by multiple analysts, reducing credibility. By the time it finally arrives on the executives’ desks, it’s often too late to take decisive action on the information. To be proactive rather than reactive, decision makers need quick access to information in the systems they use and in the format they need to make the most of it. With real-time reporting and always accessible dashboards available online, analytics makes it possible to get accurate, timely reports that provide real insight at the touch of a button. Automatically turning historical patron behaviour into highly dependable insights on future behaviour may sound like a daunting task for many gaming organizations, but with advanced analytics and data management, it’s quickly becoming a reality for casinos around the world. Brian Swann is Manager of Customer Intelligence Solutions at SAS; and Emmanuel Pacheco is Gaming, Hospitality and Entertainment Sales Lead, SAS Canada. For more on SAS Canada, visit www.sas.com/offices/NA/canada
16 | Summer 2013 Optimal_Payments_Can_Gaming_Ad.indd 1
13-05-29 9:40 AM
specialsupplement
RG Check Turns Two A report from the Responsible Gambling Council
RG Check, the responsible gambling accreditation program created by the Responsible Gambling Council (RGC), is two years old. The program is based on the Responsible Gambling Index, a s e t o f i n d e p en d ent s t a n d a r d s e s t a bl i s h e d b y t h e R e s p o n si bl e Gambling Council in consultation with other experts in the field. As reported in a previous Canadian Gaming Business issue, the f irst Canadian venue to receive accreditation through the RG Check program was Caesars Windsor. Since that time, an additional 24 venues have been accredited with 20 more in the pipeline. According to the CEO of the Responsible Gambling Council, Jon Kelly, the RGC is very pleased with the progress of the program, noting, “We spent years
developing and launching the standards and the accreditation process and it is great to see it fully implemented. We are happy with the real life operations of RG Check and the very helpful support and feedback from the industry. ” That said, the RGC is not content to rest on past success. This year, the organization is moving forward to expand and deepen the RG Check program in several ways. The first step it took was to hire a full time Director, Sue Birge. RG Check was initiated under the direction of Kevin Noel who was, at the same time, Operations Director for the RGC. Sue Birge, who started in her new role on May 6, was formerly Executive Director of Policy and Responsible Gambling for the BC Gaming Policy and Enforcement Branch.
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18 | Summer 2013
RG Check accreditation decisions are made by an arm’s length panel that acts as a ‘peer review process’ for RG Check. The Panel meets quarterly to review staff recommendations, and currently includes: • Stanley Sadinsky: Chair, Professor Emeritus in the Law Faculty at Queen’s University, and author of Ontario’s 2005 review of problem/responsible gambling programs. • Dan Perrins: Director of Outreach and Training of the Johnson-Shoyama Graduate School of Public Policy (University of Saskatchewan) and long time public servant with the Government of Saskatchewan. • Dr. David Korn: Private Practitioner, gambling researcher, and Ontario's First Chief Medical Officer of Health. • George Morfitt: Adjunct professor at the University of Victoria's School of Public Administration and former Auditor General of British Columbia. Chair Stanley Sadinsky announced in May that Randy Barber, former Chair of the Alcohol and Gaming Commission of Ontario, had joined the Panel, with more appointments to follow. So what's next? According to Sue Birge, there are a number of new developments in the works. The RGC has a newly minted set of RG standards for online gaming set to be released publicly this summer. These standards mirror the principles incorporated in the venuebased standards with many adaptations incorporated to reflect the realities of the on line environment. In the longer term, Birge sees ongoing vigilance “to assure governments and gaming providers that the RG Check program continues to reflect our best understanding of the safety measures that can help reduce the risk of problem gambling.” Part of that vigilance will be the introduction of an external process review of the RG Check program intended to ensure the ongoing integrity of the RG Check procedures. For more information, www.responsiblegambling.org.
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The New Deal in Table Games It takes new technologies and creative innovations to draw today's players to table games. With that in mind, we reached out to some of the industry's leading suppliers to show us what they're doing to bring audiences to their tables games and to take the casino floor to the next level. CREATION ROBCO Creation Robco has been serving the Canadian community since 1995 and has innovated w it h n e w pr o du c t s a nd st ate of t he a r t printing equipment. It prints casino layouts, using fabrics such as the Alcantara (suede) bra nd a nd it s ow n Brand-Busy Bee 100% polyester blend. Digital printing has greatly evolved these past few years as has the software programs that run them today. Creation Robco can print any Casino requirement from a basic design to a full blown graphic picture. It developed a special printing technique that prolongs the life of the table layout on your gaming tables. Games are printed on one of its brands that is pre-coloured by Alcantara, Italy’s most elegant and durable fabric, which is easily cleaned and disinfected each day without staining the artwork or the fabric. Working with the table game specialist at the casino or corporate level, each game mix is revised and fitted to be printed on a dedicated colour fabric of their choice. Once this is established, a catalogue is created for each game mix and the logo is added to each property who receives their copy. The advantage is two-fold: Customers easily recognize where are their games of choice are within that property and/or group (blackjack tables are a specific colour, baccarat’s are on another, etc.), and, in turn, the casino obtains a longer life usage while maintaining that elegant look and feel. For more, visit www.creationrobco.com. 20 | Summer 2013
GAMING PARTNERS INTERNATIONAL A global supplier and manufacturer of table game equipment, Gaming Partners International's (GPI) extensive product suite includes chips, plaques, and jetons by Paulson, Bud Jones, and B&G; gaming furniture and table accessories; table layouts; playing cards; dice; and roulette wheels. Additionally, GPI is recognized for innovating the use of RFID within table games, and continues to grow its RFID products and solutions offerings based on the heightened demands for currency security and table efficiency. One such product that works in conjunction with GPI’s RFID solutions is the Dual Chip Tray, which adds efficiency to table games by enabling quick and accurate a c c ou nt i n g of ch ip s , eliminat ing ma nua l accounting errors. It also provides instant access to tray float balances in realtime, and can integrate into ex ist ing ca sino management systems. The dual compartment feature ma x imizes cur renc y storage, thereby reducing the number of f loat fills and increasing rounds per hour. Enhanced security features include five security sensors, dual locks, and all tray movement and activities are tracked. “Our Dual Chip Tray and RFID functionalities can provide casino operators with a wealth of information about all chip inventory and movement throughout the table,” states Maricela Maciel, Marketing Manager with GPI. GPI is headquartered in Las Vegas, NV USA with operating offices throughout the US, Macau, France and Mexico. For more information, visit www.gpigaming.com.
gamingtechnology
INTERBLOCK Organic RouletteTM with its additional side bet game, Touchdown Roulette, is an exciting new side bet for Interblock's roulette table game that is certain to improve the hold on existing roulette games. As the name suggests, Touchdown Roulette is themed around the popular sport of American Football, and does not interfere with basic roulette play. Players can follow all the exciting football action! The Touchdown Roulette side bet game can be made before each roulette spin, except for when a Touchdown Roulette game is already in progress. A result of “0” or “00” triggers the Touchdown Roulette game and all other outcomes result in a loss for the side bet. If the game is triggered (“0” or “00”), the player will be prompted to choose either the “RED” or the “BLACK” team. A team will be randomly assigned to players who fail to select a team in the designated time. The object is for the selected team to score a touchdown, with each game lasting for a duration of four spins. Offering a unique rush to the game of roulette, Interblock's Organic Roulette with its Touchdown Roulette side bet game will have players and onlookers cheering for a win. For more information, visit www.interblock-usa.com.
unparalleled by any other product in the industry today. The large center screen encourages player interaction and the intuitive graphics make it easy for players to follow the action. The ProCore™ software is user friendly, allowing anyone to play with ease. In addition, game rules, limits, and payouts are easily configured to meet player demand and create the ideal game for any player. PokerTek provides multiple language options on a single table so everyone can enjoy the game at the same time and not be limited. Players also want electronic table games that are secure and PokerTek has taken all the necessary procedures to provide safe and reliable games that players can trust are secure and certified. ProCore™ creates a unique community friendly game that players can enjoy and fulfill their expectations when choosing a table game. PokerTek is a global leader in automated poker table software that increases revenue, reduces expenses, and appeals to new and existing poker players by spreading regular cash games as well as fun, action oriented games not typically available on traditional poker tables. With its innovative ProCore™ platform, PokerTek aims to extend its success in automated poker to be a leader in all electronic table games. For more information, visit www. pokertek.com.
POKERTEK Electronic table game players are looking for table games that offer intuitive user interface and f lexible game play. With PokerTek's ProCore™ system, which currently offers SHFL ENTERTAINMENT Blackjack and EZ Bac™, it is able to mimic the look and feel SHFL entertainment introduces Free Bet Blackjack, a new table of traditional table games, but create a unique experience game that lets players double down and split for free. With Free Bet Blackjack, players no longer have to stress about making a double or a split wager. Players can now split any hard two-card total of 9-10-11 or double down on any pair (except 10 value cards) on the house. When players want to double down or split, the house will place a lammer next to the original wager, which signifies that the house is matching the player’s bet. If the player’s hand wins, the house will pay as if the player made a traditional split or double down, even though the player did not risk any of their own money. If the dealer hand draws to a total of 22, all hands still in action will be a push. Player blackjacks are paid before the dealer hits out their hand, and they are exempt from the Push 22 rule. The Push 22 wager makes the players instant winners who made the bet. Canadian Gaming Business | 21
gamingtechnology
There are different payouts based on if the Push 22 hand was same suit, same color, or just a total of 22. Players may “Free Split” any pair, except for 10-value cards (10-10, J-J,Q-Q,K-K). Free re-splitting is also allowed. Players may “Free Double” on any hard two-card total of 9, 10, or 11. They may also “Free Double” after a split or Free Split is allowed as well. Players are allowed to traditional split or double on hands that are not covered under the “Free Double” or “Free Split”. Free Bet Blackjack comes from Blackjack Switch creator, Geoff Hall, and is part of the Push 22 Blackjack suite of games. This new version of blackjack gives players the added value of getting something free. And of course, the decision of doubling or splitting is much easier when it’s free! For more information, visit www.shufflemaster.com. TCSJOHNHUXLEY TCSJOHNHUXLEY presents Lunar Poker™, a highly interactive and exciting game of 5 Draw Poker played against the dealer. Designed to meet the demands of passionate players who relish playing against the house, Lunar Poker is unlike any other poker game available today. This fast paced game has a strong social aspect while offering players much of the same decision-making control as traditional poker games. Lunar Poker is ideal for novices and experts alike, creating challenge and excitement at all skill levels. It allows players numerous options and decisions to keep themselves in the game against the dealer, with very attractive payout odds on poker combinations. Exciting game features include the chance to win on the first five card “Instant Ante Payout Feature” with a royal flush or straight flush, as well as the “Double Combination Feature” where players get paid on two standard poker combinations in one hand, both with no extra bet required. For players looking for even greater rewards, the game's optional “Super Bet” offers a greatly enhanced pay table regardless of whether the dealer subsequently qualifies with Ace-King or higher, or not.
22 | Summer 2013
Benefits to casino operators are numerous, including the option to place an additional progressive jackpot system on Lunar Poker ™ tables, which in some cases can be linked to other poker variants on the f loor. Staff training is quick and easy. With the layout designed to quickly educate players on the new options, players learn the rules very easily as it’s a true draw poker game with poker combinations that are universally understood. Lunar Poker ™ is already enjoying much success in casinos worldwide with installations in South Africa and California and imminent trials about to commence in Atlantic City and Mississippi. For more i n for m at ion on Lu n a r Pok er a nd t o schedule a demonstration contact JP Symeonidis at Jean-Paul.Symeonidis@tcsjohnhuxley.com.
TOTAL UP TOTALUP has introduced a complete series of player activated games, each combining the most popular features of table and video/machine games. Among its many applications, TOTALUP has applied its player activated gaming system into lit table games such as Sic Bo, the Big Wheel and a new game “TREASURE BILLS”. There are eight betting areas that players can bet on, and each player places their wager on a designated chip size circle on the betting area. An automated dice shaker with four dice is activated in turn by players at the table by pressing a button at any station on the rail. The monetary bills $5, $10, $20, $50, $100, and $1000 are encrypted on the 6 sides of the dice. The croupier keys in the four outcomes and the winning betting areas light up. The croupier then collects the losing wagers and pays the designated winning player according to a payout schedule of 5 and up to 1000 to 1. TREASURE BILLS has most of the features that players are looking for in table games. Mainly, it allows players to be directly and actively involved in the game; it is easy to learn and fun to play; it provides a high level of integrity and fast paced gaming; and offers high payouts. For more information, visit www.totalup.com.
igaming
Evolving Table Game Products Through iGaming A supplier perspective By Cath Burns
The subject of land based gaming versus igaming promotes strong views from either side. Increasingly, however, both sectors are discovering that one cannot live without the other. In fact, the two more recently go hand in hand. In the past year or so, there has been a spate of partnerships or strategic alliances between land based casinos, gaming equipment suppliers, and online / social gaming companies—some of which are working really well, and others that have ended in tears. What cannot be doubted is these sec tors h ave ex t ensive customer demand—and more importantly— customers (or players) want to be able to engage across multiple platforms. Online gaming in particular has been growing at a rapid rate, endorsing the fact that casino games are extremely popular with a younger demographic. These games have most def initely not lost their appeal, and we’re now seeing them being enjoyed in many different formats. As far as casino gaming is concerned, the rea lly excit ing pa r t of these developments has been the innovations of games, content, and hardware that have evolved at an unbelievable pace over the past few years. The introduction of new games is being driven by the new, younger, and more technologically savvy demographic playing online as well as visiting casinos. These new players are familiar with everyday devices such as the web, iPhones, tablets, and video consoles, and they migrate much easier to new products while demanding something more interactive. The problem for a lot of land-based suppliers has been that although they may have great products, not all of them are able to communicate with each other or online channels. This,
however, is changing. Many suppliers, TCSJOHNHUXLEY included, have started task ing their development teams to take key products back to their core architecture and deliver seamless integration between them by designing a whole new back-end platform. Once these products start “talking” to each other, it’s possible the functionality of one can enhance the strength of another. This opens up exciting opportunities not only for land-based casino operators, but also for mobile and internet gaming markets. Convergence of off line and online is a key trend in world gaming. Both the operator and the player benefits from a base platform. There is a fluid movement for players between the different channels, which in turn offers efficiency gains for operators since data can be collected from all the products and systems. Not only are new intuitive user interfaces now available that better engage with players, but it's essentially leading to the creation of a platform delivery system that will translate the live gaming floor experience to a tablet, a mobile phone, or a computer of any kind. It means suppliers can design the user interface once but roll it out in multiple environments with different ‘skins' and full customizable branding.
A s o n e e x a m p l e , TCSJOHNHU X LE Y started this process last year with a system for our X ia Tablet product, a ser ver based solution offering live and automated roulette via hand held tablet devices in a live casino environment. The ba se plat for m deliver y s ystem provides a core structure that allows f lexibility and creativity at all points and is desig ned to be completely modular and scaleable to meet the needs of small casinos right up to multi-national / international group customers. We see Xia, and products like Xia, as the beginning of looking at our platforms to create a single market system. This includes integrated gaming systems that link all live tables, across all game types, played on multiple devices, with mystery jackpots and progressives, with yield management, centralized media distribution, reporting and security. All this, built around the internet and a multi-site infrastructure designed to bridge both traditional and i-gaming spaces. The evolution of land based casino gaming is well under way and the future looks very bright indeed. Cath Burns is Group CEO of TCSJOHNUXLEY Canadian Gaming Business | 23
Canadian Gaming
Lawyermagazine
Volume 6 Number 1 June 2013
Social Network Gaming: A Canadian Perspective
European Commission: Is There Regulatory Change Ahead? The Retreat of Legalized Gaming in Canada
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MESSAGE FROM THE PRESIDENT
Dear IMGL members:
It was a pleasure to see so many of you at the IMGL Spring Conference in Montreal. 2013 IMGL Spring Conference in Montreal Program Committee Co-Chairs Morden "Cookie" Lazarus and Murray Marshall welcomed over 120 delegates from 16 countries to the IMGL Spring Conference from May 8 - 10 at the InterContinental Montreal. GLI's Co-founder, President and CEO, James Maida, kicked off the conference by sharing his insights of where the gaming industry has been and his vision for the future of the gaming industry. Our panels of some of the foremost gaming law experts in the world participated in sessions on iGaming, Indian Gaming, Sports Betting and Social Gaming (following a spirited and informative one on one interview of Mitch Garber, CEO of Caesar's Interactive), among others, that reflected the evolution of the rapidly changing gaming industry. Keynote addresses by Lynne Roiter, Secretary and Vice-President, Legal Affairs of Loto-Quebec and David Baazov, President and CEO of Amaya Gaming, eloquently spoke to how their organizations are successfully adapting to such changes. Finally, a distinguished panel of gaming regulators, former gaming regulators, gaming executives and gaming attorneys discussed regulatory reforms that they believe are ones about which all can agree and how such reforms might be implemented. I am particularly appreciative of the work of the panel moderators whose thorough preparation and keen questioning resulted in a particularly lively and informative conference. Also, in recognition of his many contributions to the International Masters of Gaming Law, John Roberts, Deputy Commissioner with the San Manuel Gaming Commission in California, was presented the President’s Award. Future IMGL Events IMGL Member Reception at Global Gaming Expo (G2E) Las Vegas - September 24 IMGL again will host what has become a hugely popular annual reception that indeed has become one of the premier events during G2E Las Vegas. IMGL Autumn Conference in Oslo - October 1 - 4 - Co-located at the Grand Hotel with the International Association of Gaming Regulators (IAGR) At the request of the International Association of Gaming Regulators (IAGR), IMGL will be co-locating its conference with that of the IAGR Annual Conference in Oslo, Norway. The IAGR Conference takes place from September 30 through October 1. The conference will provide its attendees an unprecedented opportunity to meet with gaming regulators from around the world in both social settings and during conference sessions. IMGL Member Reception at EiG - October 8, 2013 - Co-hosted with GamingLaw.EU IMGL once again will co-host in Barcelona with members of GamingLaw.EU a reception in connection with the European iGaming Congress & Expo (EiG).
Canadian Gaming
Lawyermagazine June 2013
Volume 6 Number 1
Publisher Richard Swayze richards@mediaedge.ca Editor
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Conclusion Finally, I want to thank the General Members for adopting the significant changes to our Bylaws. Now with 304 members from 40 countries, the Amended and Restated Bylaws reflect our evolution over the past twelve years and provide a sound framework for our future. I look forward to seeing many of you at our Autumn Conference in Oslo. Best regards,
J. Kelly Duncan kduncan@joneswalker.com 2 | Canadian Gaming Lawyer Magazine
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Canadian GaminG
LawyermaGazine J. Kelly Duncan President Jones Walker LLP New Orleans, Louisiana, USA +1 504 582 8218 kduncan@joneswalker.com Joerg Hofmann Vice President MELCHERS law firm Heidelberg, Germany +49 6221 1850 0 j.hofmann@melchers-law.com
J. Kelly Duncan
Joerg Hofmann
President
Vice President
Jamie Nettleton
Michael E. Zatezalo
Secretary
Treasurer
Jamie Nettleton Secretary Addisons Commercial Lawyers Sydney, Australia +612 8915 1030 jamie.nettleton@addisonslawyers.com.au Michael E. Zatezalo Treasurer Kegler, Brown, Hill & Ritter Co., L.P.A. Columbus, Ohio, USA +1 614 462 5400 mzatezalo@keglerbrown.com Douglas Florence Sr. Vice President, AfďŹ liate Members Avigilon Las Vegas, Nevada, USA +1 702 683 6016 Douglas.florence@avigilon.com Keith C. Miller Vice President, AfďŹ liated Educators Drake University Law School Des Moines, Iowa, USA +1 515 271 2071 keith.miller@drake.edu
Douglas Florence Sr.
Keith C. Miller
Vice President, Affiliate Members Vice President, Affiliated Educators
Tony Coles Immediate Past President Jeffrey Green Russell Limited London, United Kingdom +44 20 7339 7000 arc@jgrlaw.co.uk Melissa Triplett Executive Director International Masters of Gaming Law Boulder, Colorado, USA +1 303 449 9955 IMGLDirector@aol.com Tony Coles
Melissa Triplett
Immediate Past President
Executive Director june 2013 | 3
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By Peter Czegledy
Social Network Gaming
A Canadian Perspective Social network gaming, or “social gaming”1, has become a force to be reckoned with. Over 173 million people are currently engaged in social gaming (far outstripping the 50 million people engaged in traditional online gaming)2, and as electronic social networks increasingly permeate our culture and establish a dominant role in our pattern of socialization, this appears to be only the beginning of a larger cultural shift. With an observed historic growth rate as high as 100% per annum3, social gaming is seen as a potential “game-changer”, particularly in regards to its potential to disrupt the online gaming business model. Established traditional gaming businesses are therefore justifiably alarmed when they hear that 95% of industry experts surveyed either “very much” or “probably” believe that social network-based companies will be able to compete successfully against established gaming brands online within the next five to 10 years.4 4 | Canadian Gaming Lawyer Magazine
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cover story However, recognizing the potential for change that social gaming might bring and actually harnessing that potential in an optimal fashion are two different things. The reality is that social gaming is still evolving, and many commentators— and even industry leaders—are uncertain of where its future may lie. This is true not only in relation to its essential business paradigm (monetization remains a critical issue), but also in connection with its legal basis. Unfortunately, limited understanding of the latter may often slow the proper development of the former. With Canadian jurisdictions generally shifting towards an acceptance of online gaming, albeit focused mostly on government-operated or controlled venues, a lack of clarity arguably poses significant legal risks as historic legal constraints are applied to the evolving social gaming business model. Defining Social Gaming The first and most obvious question is simply one of definition: What is social gaming? There is no single widely accepted definition, notwithstanding that there is a general understanding of its typical attributes.5 Although not all of the attributes need be present, a majority of them include the following: a. Social Network/Browser-Based: Social games are typically carried on large social networks accessed through the Web, operated by companies such as Facebook, Wooga, Social Point, Rovio, Friendster, Twitter, MySpace, Zynga, Playdom (Disney), Playfish (Electronic Arts), CrowdStar, Activision, Apple, Google and Ubisoft. b. Multiplayer: There are multiple players playing any social game at one time, on a scale that stretches from 2 to hundreds or thousands. c. Awareness of Others: Most social games allow a player to view the activity of and interact with other players. d. Casual gaming: On average, social gaming involves casual and occasional activity rather than sustained and uninterrupted play.
Popular social games have included Farmville (players harvest crops and build a farm), Words With Friends (players play a Scrabble-type game), Mafia Wars (players recruit friends and build a criminal organization), Gardens of Time (players find hidden objects in historical scenes), and Plants vs. Zombies (players defend against the undead using plants and other means). Generally speaking, social games measure success in either non-monetary units, such as points or rankings, or utilize some form of virtual currency and prohibit the player from gaining real-world financial benefits through any redemption of attributes or conversion of achievement for money or anything of monetary value. Conversely, online gaming assigns an actual monetary value to its wagers and winnings. Even when it involves settings or activities that are similar to traditional card games, social gaming is thought to be more focused upon a player’s experience than his or her potential monetary gain, and is considered to fall outside the traditional online gaming space.6 The Legislative and Regulatory Context If social gaming will influence online gaming to a significant extent, and if it is to be distinguished from it, it is useful to review the premise for regulation of online gaming in Canada. Historically, the oft-repeated and trite proposition of the law in Canada is that online gaming activity is criminal activity. This conclusion rests on the constitutional division of powers between Parliament and the provincial legislatures. This division of powers under s. 91 of the Constitution Act, 1867 defined criminal law as exclusively within the power of Parliament.7 As a result, Parliament has exclusive power over gaming, betting, and wagering as a matter of criminal law.8 Part VII – Disorderly Houses, Gaming and Betting provisions of the Criminal Code9 , designates gaming as an illegal activity. There are specific provisions relating to betting houses (s. 201), betting and book-making (s.202), and lotteries and games of chance (s.206).10 The broad scope of these provisions is qualified by a
few statutory exceptions, the principal one being the delegation to the provinces of the ability to offer games of chance under their “control and [management]”.11 The Canadian provinces chose different approaches to the opportunities that the Criminal Code offered, but all actively sought to establish and protect the bulk of gaming activity as a government business. This approach, while laudable from revenue, safety, and security and other perspectives, generally left Canada ill-equipped to react to the gaming industr y as it increasingly moved online in the 1990s. As elsewhere in the world, such a vacuum was not left unfilled, and online gaming became a signif icant activity of Canadians which enforcement authorities had difficulty controlling. Faced with fiscal challenges, limited revenue tools, the permeability of electronic borders, and recognition that online gaming was here to stay, all the provinces have now re-examined their initial approach, with each planning, implementing, operating, or regulating some form of online gaming activity. Social gaming in Canada has, however, so far largely avoided governmental control and is operated solely by private industry. I do not believe that any Canadian government has made a statement of its policy on social gaming or indicated an intention to be involved as an operator or regulator, but if such governments were to exercise jurisdiction under an analogous proposition as that employed in relation to online gaming, Section 206 of the Criminal Code might be where they would start. The Criminal Code and the Common Law In a summary fashion, there are three unifying elements that underlie illegal activity for purposes of the lottery and games of chance provisions under Section 206, namely that: (1) winning depends (at least in part) on chance, (2) participation requires payment, and (3) a prize is offered.12 There is one additional implicit requirement: “gaming”, as opposed to “betting”, requires “playing a game, whether of chance or skill, for stakes june 2013 | 5
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cover story hazarded by players.”13 In other words, participation in the game is essential. If these elements are present in the typical social gaming context is open to question. (a) Chance Whether an activity involves chance or skill, or some measure of both, is relevant as certain provisions of Section 206 apply only to games of chance, while others apply to games of mixed skill and chance. Typically, the analysis is carried out in a situation-specific fashion, with the rules, manner of play and the physical and mental prowess required to arrive at a desired outcome to be reviewed. “Skill” has generally been defined as what is needed to make the participant “capable of accomplishing something with precision and certainty, cleverness and expertise.”14 Unlike some other jurisdictions, Canada does not hold to a “predominance test”, as even a small element of chance will make any activity a game of mixed chance and skill.15 Instead, Canadian jurisprudence has generally required that all elements of chance be eliminated before a game could be considered to be purely of skill.16 Given the make-up of social games, it is possible—but perhaps unlikely—that they would qualify under such a high bar as a game of pure skill. The Canadian Supreme Court has made it clear that for purposes of Section 206, it is prepared to ignore the “element of chance in every game, even those that are admittedly games of skill such as chess, tennis and golf.”17 to the extent that chance is manifested outside the basic rules of the game (i.e. All golfers recognize the importance of some measure of luck governing the outcome, regardless of their level of skill). Most social games involve play in virtual environments where chance variables are designed to be similar to or replicate real-world environments. On this argument, social games may not be games of “chance”. On the other hand, when chance factors and random outcomes are programmed into the games to provide greater variability of game play, a court might find that an element of chance is present; a chance that would affect the ability of a player to
“win … with precision and certainty.”18 As social games increasingly become more complex, it appears that chance is effectively hard-wired into the structure of such games in a manner that is analogous to the pre-set role of chance in online casino games. From this perspective, social games would more likely be seen as games of mixed skill and chance. Even if this were not the case, although the majority of the Criminal Code’s gaming provisions include a reference to “a mode of chance”, Paragraph 206(1)(e), excludes any reference to “chance”, so that even if a gaming operator managed to remove every element of chance, it might still be engaged in an illegal activity19. (b) Payment Payment for purposes of Section 206 chief ly equates to the payment of “a sum of money” or the giving of a “valuable security.”20 In the context of online gaming, payment is generally the money paid to the gaming operator at the time of the activity in exchange for the opportunity to participate. Where a participant is not required to pay to participate, but is given either virtual currency, virtual game play tokens or virtual gaming chips by the operator, the requirement of payment is absent. Social games do not, however, always reflect such a clear distinction. Many games are indeed free to play. Others, however, have initial entry, membership or purchase fees. Typically, such fees, if they exist at all, are collected on a onetime basis, without a continuing cost to the player to continue participation, even if he or she participates later. Although such fees are normally small, and usually have no connection to the amount of play permitted, they are fees nevertheless, and while perhaps not readily characterized as bets or wagers of any kind, easily would qualify as a “sum of money”. Even though many social games have no entry fee, they often are designed to allow players to obtain certain attributes (e.g. buying a special virtual tool, weapon or device), play within particular scenarios (e.g. entering a unique game play level or environment) or otherwise participate in
some augmented fashion in the game if some payment is made. Although these players constitute a very small minority of all players (typically less than 5%), they are a critical source of income for the operator and important to the operation of the game. Such purchases might qualify as the necessary payment of a “sum of money” even if entry fees did not apply. (c) Prize The third traditional element is that of a prize to be won as a consequence of the outcome of the gaming activity. A prize may be money, money's worth or stakes. 21 Some of the provisions of Section 206 broaden the ambit to include “property”, “goods”, “wares” or “merchandise”. If the virtual points, status, currency, tokens or chips won from gaming cannot be used to obtain items of value, it is unlikely that the necessary element of the provision of a prize exists. Most social games historically have omitted prizes of money or property of any kind. In fact, most social games try to avoid defined winning conditions, or any conclusive winner, as the operators generally count on players playing their games frequently and rely upon their desire to improve their position vis-àvis the other players. Creating a final “winner” would then be self-defeating. Instead, systems of “levels”, “quests”, virtual goods acquisition or other ongoing challenges are the usual goals to be sought. This is not true in every case however - Scrabble-type games and other social games generally evocative of traditional board games normally do terminate with winners, but generally do not result in awards beyond recognition of winning status. Most social games which do reflect achievement or use a virtual currency, points or credits do not permit them to be redeemed for money or goods. As a consequence, social games would generally not be seen as creating prizes that would meet the requirements of Section 206. The Legal Risks of an Evolving Paradigm Social games may fall within the broad ambit of the lottery and gaming provisions
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feature of the Criminal Code, but some traditional elements appear to be lacking, at least at first glance. However, the diversity and complexity of social gaming networks and the increasing business and recognition paid to virtual property may change this, particularly as operators move to implement new business models. These trends may start to blur the lines between legitimately exempt gaming activities and those that may attract greater scrutiny under the Criminal Code. The currently predominant social gaming business model is generally described as the “freemium” approach. Freemium is a hybrid word, combining free and premium, and ref lecting a paradigm where the ability to participate in the activity is free, but the activity’s premium features can be purchased at the participant’s discretion. As noted earlier, this pattern, while involving only a small portion of players, is critical to the financial viability of the operators. It highlights the growing real world value placed on virtual elements in the social game. Such value has been recognized for some time among players, initially within the confines of the social game itself, and subsequently in the real world. Social game players now trade virtual characters, weapons, pets, real estate and other attributes at both remarkable rates and amounts.22 Secondary markets, effected directly between players, have given rise to tertiary markets using third party facilitators that act as exchanges, taking a brokers fee from each sale. Social game operators, while initially against trading outside of the game itself, have grown to
recognize the sizeable additional revenues that trading can make available, and have started to operate their own exchanges allowing such items to be purchased for real world money. These developments may create risks that social gaming participants did not originally anticipate. The Japanese government recently became increasingly concerned about, and eventually regulated, a social game on just this basis.23 Under the rules of the game, players were able to pay to take part in lotteries (called kompu gacha) within the virtual environment, where they could win cards that would enhance their in-game abilities. This activity would have likely been considered innocuous, since there was no ability to redeem the prize even though consideration had been paid. However, the government realized that a secondary market had developed whereby these enhancements were being sold for money. In effect, kompu gacha had become an unregulated lottery and the government declared it to be illegal. As virtual property in social games increasingly is seen as equivalent to real world property, and becomes the subject of real world commerce,24 it has become the subject of disputes between parties, and has led to tortious and criminal claims identical to those made in relation to tangible goods. 25 This transitioning role of virtual property will have consequences, including that virtual property, directly or indirectly, may more readily be found to constitute either “money”, “money's worth”, “property”, “goods”, “wares” or “merchandise” for purposes of the prize element of Section
1 The phrase “social gaming” is used interchangeably with the term “social network gaming” in this article. The author appreciates that the two can be considered distinct enterprises, with the former referring to traditional casino games played online on a play-for-free basis, but this is not the use implemented here – See Section 2, Defining Social Gaming. 2 Morgan Stanley Research. Social Gambling: Click Here to Play, Morgan Stanley Blue Paper. (Morgan Stanley: November 14, 2012) at 4. 3 Ibid, at 2. 4 American Gaming Association, The 10th Annual G2E Future Watch series: an insider look at new trends in gaming, “Online Gaming”, Vol. 10, (Global Gaming Expo, 2012) at 12. 5 Nick O’Neill, What Exactly are Social Games? (Social Times, July 31, 2008). 6 See also Kevin Flood, Internet Gambling’s Confused Definition of Social Gaming (Gameinlane, Inc., 25 June 2012) for a useful discussion on the current definition of social gaming at (http://kevinflood.blogspot.ca/2012/06/ internet-gamblings-confused-definition.html). 7 (30 & 31 Vict.), c. 3 at s. 91¶27. 8 Johnson v. Alberta (Attorney General) (1954), 18 C.R. 173 (S.C.C.); R. v. DeWare (1954), [1954] S.C.R. 182 (S.C.C.). 9 R.S.C 1985, c. C-46, ss. 197-209, Criminal Code. 10 Of these provisions, Section 206 is the most relevant to this analysis. 11 Criminal Code, supra note 9 at ss. 207(1)(a) and 207(4). 12 R. v. Robinson (1917), 41 D.L.R. 46 (Sask. C.A.).
206. The upshot may be that social games could more readily fall within the ambit of Section 206, creating a criminal liability risk for operators and a dilemma for Canadian governments and regulators. Conclusion Social gaming has been heralded as a revolutionary economic force in the gaming industry. The ongoing evolution of its business model and that of the virtual property created within such games however demonstrate the danger of over-reliance on a legal analysis that fails to take into account the complexity of social networks. Jurisdictions that ignore such changes will invariably find a mismatch of economic imperatives and legal constraints that will further no one’s agenda. If Canada is to avoid a repeat of its experience in the online gaming industry, it would do well to pay greater attention to the evolution of social gaming and how to adapt and apply legal constructs to this growing area of industry. CGL Peter Czegledy is a partner of Aird & Berlis LLP. Peter has a broad corporate finance and corporate commercial practice, with over 20 years expertise in gaming (land-based and online), contest, marketing and technology issues. He acts regularly for leading international gaming and technology companies on a regular basis, advising on governance, strategy, merger and acquisition, procurement, channel distribution, supplier, compliance and other issues. Peter has been selected by his peers as among The Best Lawyers in Canada in gaming law. He can be reached at pczegledy@airdberlis.com.
13 R. v. Gardiner (1971), 2 C.C.C. (2d) 463 (Alta.C.A.). 14 R. v. Robert Simpson (Regina) Ltd. (1958) 121 C.C.C. 39 (Sask.). 15 R. v. Ross (1968), 70 D.L.R. (2d) 606 (S.C.C.) at 617. 16 Gardiner, supra note 13. 17 Ross, supra note 15 at para. 12. 18 Robert Simpson, supra note 14 at para. 30. 19 For a review of Canadian law pertaining to games of skill and chance and the pertinent principles, see M.D. Lipton, M.C. Lazarus and K.J. Weber, Games of Skill and Chance in Canada, (2005),10 Gaming Law Review, Volume 6, Number 1. 20 The term “valuable security” refers broadly to shares, bonds, bills, documents of title, releases of payment, etc. – See Criminal Code (Canada) R.S.C 1985, c. C-46, s. 2. 21 R. v. Di Pietro (1986), [1986] 1 S.C.R. 250 (S.C.C.), per Lamer J. See also R. v. Roberts (1931), [1931] S.C.R. 417 (S.C.C.); R. v. Wilkes (1930), 66 O.L.R. 319 (Ont. C.A.) 22 Molly Stephens, “Sales of In-Game Assets: An Illustration of the Continuing Failure of Intellectual Property Law to Protect Digital Creators” (2002) 80 Texas Law Review 1513 23 Osamu Inoue, Eiki Hayashi and Kazuyuki Okudaira, Nikkei Weekly, “Social gaming companies scramble to shore up new income streams” (Japan: Nikkei Weekly (Japan), June 25, 2012). 24 Susan Abramovich and David Cummings, “Virtual Property, Real Law: The Regulation of Property in Video Games”, (2007) Canadian Journal of Law and Technology 73. 25 Maurice Dransfield, “Property Crimes in Virtual Worlds” (2010) Alberta Law Review.
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Feature
By Tony Coles
European Commission
Is There Regulatory Change Ahead? In October of last year, the European Commission issued its paper on the regulation of online gambling under the title “Towards a comprehensive European Framework for online gambling”. This paper was eagerly awaited by many in the online gambling industry and followed the Commission’s Green Paper consultation document which was published in March 2011. Since the release of the Commission’s paper, there has been much industry comment on the initiative, along with an opportunity to reflect on what might happen in the future and what, if anything, this Commission initiative will really mean for the industry. 8 | Canadian Gaming Lawyer Magazine
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feature Background It may be useful, especially for readers unfamiliar with the structures of the European Union, to set the scene. Since it involves the twenty-seven Member States of the European Union, each of which is a sovereign nation in its own right, and since it also involves the relationships between those twenty-seven Member States as governed by the Treaties establishing the European Union and the directives and other utterances emanating from the European Commission, let alone the jurisprudence of the Court of Justice of the European Union (see CJEU), it is not surprising that the scene is a complicated one. Thus, as the Commission itself writes in its paper, each of the Member States is, in principle, free to set its own regulatory policies for online gambling, but these policies must always “comply with EU law and Internal Market principles and rules”. This freedom arises as a consequence of the Treaties establishing the European Union and, in particular, because of Article 56 of the Treaty on the Functioning of the European Union (which relates to the free movement of services across the European Union) and Article 49 (which covers the freedom for businesses to establish themselves throughout the EU). The development of online gambling has imposed significant pressures on the relationship between Member States’ own desires for control over gambling regulation, and their desires for control over gambling taxation, and their Treaty obligations as members of the EU. This has resulted in significant jurisprudence from the CJEU where, in a variety of cases initiated in a number of individual Member States, the compatibility of a Member State’s national rules with the Treaty obligations of that State has been challenged. In a series of judgments, the CJEU has provided general guidance on the interpretation of the fundamental principles of the EU Internal Market, so that the national courts in the relevant Member States can then assess what the Commission describes in its paper as “the circumstances under which restrictive national gambling laws are justified on grounds related to the general interest”. Given these EU pressures, and given the fast pace of the development of online gambling and the fact that sites can easily operate from the EU, with consumers/players reaching across national boundaries to identify sites which attract them both in terms of the products on offer and the potential economic benefits, it is not surprising that the European Commission is involved. Thus, as stated above, the Commission adopted a Green Paper in the Spring of 2011 which was followed by a period of public consultation so as to enable it to seek to understand both the existing situation in the industry, the way in which Member States seek to regulate online gambling, and how the individual public policy objectives of each Member State can be reconciled with its obligations to the EU so as not to undermine the Internal Market. The Commission has also sought to identify whether differing national regulatory models could co-exist, or whether action is needed at the EU level. Because, interestingly, although the online gambling industry is one of the fastest growing service activities in the EU it, unlike other service activities, has not hitherto been the subject of specific pan-EU regulation. That there may be a
number of reasons to explain this did not deter the Commission from grappling with the problem and proposing what it sees as the way forward. The European Commission’s Action Plan In its October 2012 paper the Commission identified the need for an improved regulatory framework governing online gambling services within the EU as well as the need for greater co-operation between Member States and between EU institutions. In doing so the Commission accepted that issues raised in online gambling cross Member States’ borders and need to be addressed by harmonised regulation, but not necessarily by regulation at the EU level. Thus the Commission’s paper, issued with an accompanying Commission Staff Working document, identified “the key challenges posed by the co-existence of national regulatory frameworks within the Internal Market” and answered those challenges by identifying five priority areas where it says that action is required. Broadly put those five initiatives are: • Ensuring compliance of Member States’ regulatory frameworks with EU law. The Commission is to seek, or perhaps more correctly will continue to seek, to ensure that the regulation in each Member State complies with EU law. To achieve this the Commission plans to take enforcement action against those Member States which in its opinion do not currently comply, and it will do this by continuing, or initiating, infringement proceedings. Such infrequent proceedings are, of course, taken by the Commission itself where it believes that an individual Member State is not complying with EU law. The process can be time consuming, since it involves the Commission requesting an individual Member State to provide information regarding its regulatory law and an explanation of why that Member State justifies it where there is apparent inconsistency with EU law. Often this process can lead to a reconciliation between the Commission’s views and those of the Member State, with changes to its regulations being instituted by the Member State without further formality. But, in those cases where exchanges between the Commission and the Member State result in an impasse, the Commission may take proceedings against the Member State in the Court of Justice of the European Union and seek a ruling. Failure by a Member State to comply with a CJEU ruling is expensive both in terms of the financial penalties imposed on a Member State by the Court and also in terms of that Member State’s “loss of face” with its EU partners as a “good European”. In regard to online gambling regulation the Commission currently has a number of infringements proceedings outstanding against Member States, including Sweden, Germany, the Netherlands, Finland, Hungary and Greece, and it proposes to further accelerate its investigations into the complaints it receives and to take enforcement action before the CJEU where necessary. In its paper the Commission says that it will undertake june 2013 | 9
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Feature an on-going review of Member States’ licensing systems to gauge their transparency and so as to ensure the absence of any discrimination against operators from outside that State. • Establishing an expert group on gambling. The Commission is creating an expert group on gambling with representatives from all Member States. The plan is for those experts to share their experiences, to identify what are the best practices and to provide advice and expertise on future initiatives which may emanate from the Commission. • Enhancing supervision, administrative co-operation and enforcement. The Commission regards as a priority the enhancement of co-operation between EU Member States and, especially, between the gambling regulatory authorities in each of the States. The Commission considers it essential that its policies be successfully implemented at both Member State and EU level by the development of closer working relations between those regulatory authorities. The Commission also proposes to investigate the benefits and limitations of responsive enforcement measures, including website and financial transaction blocking, and procedures which may require online intermediaries to remove what are identified as “illegal gambling offers”, or to block access to those offers. The Commission has said that it considers that the possible use of the Internal Market Information System may be beneficial in this objective. • Protecting consumers, citizens, minors and vulnerable groups. The Commission states that it is eager to ensure greater protection for consumers who access online gambling sites, particularly minors (an ex pression used by the Commission to refer to those under 18 yea rs of age, even though in certain Member States young adults above that age may also be covered by the regulatory regime applicable to children) and other vulnerable people. The Commission intends to prepare recommendations for the establishment of a common set of consumer protection principles which would apply across the sector. It also considers that responsible gambling advertisements must make consumers aware of age restrictions, the fact that gambling can be harmful when not pursued responsibly, and that risks to players can be f inancial, social and health related. To this end, during 2013 the Commission will prepare recommendations for minimum requirements for gambling advertising across the EU. The Commission also intends to review recommendations from specialist research groups, and says that it consider initiatives for further research into pathological gambling. • Preventing fraud and money laundering. Although its assertion may be challenged by many in the industry, the Commission says that it associates
online gambling with online fraud, credit card fraud, ident it y theft a nd money launder ing. It reg a rds these problems as being transnational and requiring signif icant co-operation between Member States. It is therefore considering the possible extension of the current Anti-Money Laundering Directive, which at present applies only to casino gaming, so that in future it would cover all forms of gambling. And, given that in a number of Member States certain issues are addressed by a regulatory requirement that online gambling equipment and software be certif ied, the Commission is to seek to ensure consistent standards across the EU and to aim to reduce the administrative burden which currently arises from the need for operators to obtain certif ication in each Member State, often to different standards. • S a f e g u a r d i n g t h e i n t e g r it y o f s p o r t s a n d preventing match fixing. I n recog n isi n g t h at m at ch f i x i n g is a t h reat t o the integ rit y of sporting events, the Commission ack nowledges this threat can arise both w ith and without the involvement of sports betting operators. It is well-known that many leading online sports betting operators currently have well established reporting arrangements in place with the authorities in many sports, and that these arrangements have led to the identif ication of wrong-doing, and the conviction of the wrong-doers concerned whether sportsmen, administrators or those accessing a betting site. To expand on this the Commission intends in 2014 to publish its recommendations for EU-wide anti-match f i x ing measures, and w ill also assist the Council of Europe, the International Olympic Committee and other sports bodies to encourage and promote international co-operation so as to aim to prevent match fixing. The Way Forward and European Parliamentary reaction In its paper the Commission says that it intends the actions it has identified, and which are summarised above, to be implemented “promptly”. Thus within two years it will produce a report detailing whether or not those actions have proved suff icient to address the challenges which the Commission regards as facing online gambling. If not, the Commission is likely to propose that additional measures are taken, but meanwhile there are on-going opportunities for those involved in the online gambling industry, and for those from outside the industry who are interested in the way in which it develops, to engage with the Commission. Since although its paper sets out its current plans, it would be fair to say that the Commission has not turned its face against any particular solution to on-going issues in the industry.
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feature Following the publication of the Commission’s paper the Committee on the Internal Market and Consumer Protection of the European Parliament released in February 2013, a “Draft Report on online gambling in the internal market”. In this the Committee: • Recom mended t he Com m ission to consider legislation to create an EU-wide self-exclusion register, accessible by authorities in Member States and licensed gambling operators, so that any player who chooses to exclude himself from one gambling operator has the opportunity to be automatically self-excluded from all the other licensed gambling operators. • Took the view that common standards for online gambling should address the rights and obligations of both the operator and the player, including measures to ensure a high level of protection for players, particularly minors and other vulnerable persons, and the prevention of misleading advertisements. • Recom mended t he i nt roduct ion of u n ifor m and pan-European common standards for electronic identification and cross border e-verification services. It noted that the different registration procedures across the EU undermine regulated operators and can push players into the hands of illegal operators. The Committee therefore recommended that registration and identification procedures to be more efficient. The EU Parliament itself is likely to consider the Report in July 2013. Conclusion Many have said that the publication of the Commission’s paper will not have any immediate impact, and it seems to be clear that this initiative will not result in any, or at least any immediate, pan-European gambling regulation. Indeed the response of the European Parliament itself is perhaps indicative of this so that if developments ever come they will be some while hence and will only arise as a result of much greater work at the EU level. However the continuation of the in fr ingement proceeding s against individual Member States would ensure that, within a period of a few years, those States which are seriously out of step with EU law might be found to have adopted new regulator y regimes. With some twenty Member States having laws that are almost certainly out of step with their EU Treaty obligations it is clear that the Commission has much work to do in pursuing its infringement proceedings. And the involvement of the Court of Justice of the European Union is not at all unlikely before this process ends. Upon the publication of the Commission’s paper Michel Barnier, the EU Commissioner for the Internal Market, promised that the Commission would “fulf il its role as guardian of the EU Treat y”. But where a
Member State indicates plans to change its laws, and then begins to implement those plans, the Commission is likely to allow time for the change. For example there are currently infringement proceedings underway against the Netherlands but, with the Dutch Government’s plans to implement changes to the regulations for online gambling, it is likely that the Commission will allow opportunities for these changes to be introduced in a way it regards as satisfactory and only then will it review the changed regime. Furthermore it has been reported that the Commission “probably will not move before the Summer on complaints about countries breaking European Union Law on online gambling” because the Commission apparently plans to make simultaneous decisions on each of the Member States said to be infringing EU Law. This is in spite of the author of the Report by the Committee of the European Parliament (mentioned above) having pressed the Commissioner to be instructed in enforcing EU Law and to pursue infringement cases against Member States with more vigour. Of course one significant, but not unexpected, omission from the Commission’s paper is tax harmonisation. The level of individual gambling taxes in each Member State is, generally speaking, not an issue to be determined at EU level but nonetheless it continues to represent a signif icant issue for online gambling operators. In the writer’s view any move to tax harmonisation is a long way off, if it were ever to appear. On publication, the Commission’s paper was greeted by many in the g ambling industr y as representing a sig nif ica nt step for wa rd towa rds ending the discriminatory regimes in a number of Member States, but by others as a big disappointment. With the great range of operations within the online gambling industry, and with the pressures to maintain existing benefits at one end of that range and the entrepreneurial pressures for change and modernisation at the other, that divergence of opinion can only be expected. And furthermore one must not overlook the signif icant tax benef its which gambling provides for the revenues of many, if not all, Member States, as well as the political nature of the EU institutions. It may therefore be not at all unlikely that, five years hence, we will be looking back at this paper to remind ourselves of what was proposed to happen but which is still awaited. CGL Tony Coles is a senior member of the Gaming and Betting Group at Jeffrey Green Russell Limited in London. He is well-known for his specialist knowledge of gaming and betting law and enjoys an international reputation. Clients span a range of sizes and sectors and include a number of international household names. He is the immediate past president of IMGL. june 2013 | 11
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new Like ents d in the
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FEature
By Michael D. Lipton Q.C. and Kevin J. Weber
The Retreat of Legalized
Gaming in Canada In his 1986 book, Gambling and the Law, U.S. gaming law Professor I. Nelson Rose introduced his “wave” theory regarding legalized gaming. He reviewed two previous eras during which legal gaming spread across the U.S., only to run aground on scandals that revived arguments concerning the amorality of gaming, resulting in the reinstatement of complete prohibition. From this, he postulated that the current proliferation of gaming that began with the legalization of gaming in Nevada in 1931, and which picked up speed after state lotteries were re-established in the 1960s and 1970s, represents the “Third Wave” of legalized gaming in the U.S.1
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FEature In Canada, the prohibitions against gaming found in the modern Criminal Code (the “Code”) are rooted in legislation that predates Confederation. Until 1967, the only gaming that could lawfully operate in Canada on a commercial basis was pari-mutuel horse race betting. The 1967 amendments to the Code authorized provincial governments to conduct and manage “lottery schemes” and to license certain entities, primarily charitable and religious organizations, to conduct and manage lottery schemes. Until 1985, however, the Code provided no definition of “lottery schemes” to guide the provinces as to the scope of gaming permitted by these exemptions. Manitoba ascribed to an expansive interpretation that allowed for the conduct and management of casino gaming, Quebec attempted to expand into ticket-based parlay sports wagering, and Ontario allowed nothing more than ticket lotteries. This uncertainty was addressed in 1985, when the Code was amended to define “lottery schemes” in a manner that clearly allowed the provinces to introduce casino gaming and limited (parlay) sports wagering2 Canada is therefore in what Professor Rose might call its “First Wave” of legal gaming (pari-mutuel horse race betting aside). The wave is less than 50 years old, with the explicitly legal status of casino gaming in Canada being less than 30 years old. In years past, Professor Rose has expressed concern that the legitimacy of gaming in the public mind in the U.S. was built on flimsy ground, such that concerns relating to problem gambling addictions and related matters could give rise to gaming falling once again into the kind of scandal that brought it into opprobrium and led to the reenactment of total prohibition.3 More recently, however, Professor Rose has written that since the success of a number of state ballot initiatives relating to gaming in 1996, a tidal change has been evident in public attitudes towards legal gaming. This shift in attitudes arose after legalized gaming was placed before the electorates of a number of states and was approved by those electorates, despite the presence of organized opposition.4
In years prior, the expansion of gaming that had occurred in the U.S. had generally been carried out in ways that did not require direct approval of the electorate. Until 1996, in every case where legalized gaming had been placed before the electorate and subjected to real debate, it had lost.5 This pre-1996 U.S. experience mirrors how gaming has expanded in Canada since 1967. At no time has there been a wide-ranging national debate on gaming, nor has any province ever placed the future of legalized gaming before the electorate. Where controversy has emerged concerning the expansion of gaming or concerning the integrity of existing gaming, the provincial governments have for the most part attempted to manage the situation by ad hoc changes to gaming operations without seeking to gauge public opinion in an organized manner. In Canada, some of the first indications of public backlash against legalized gaming arose in the 1990s and early 2000s in relation to “non-casino video lottery terminal (VLT) gaming.” These VLTs and similar gaming devices are located outside “traditional” gaming venues such as casinos, racetracks and bingo halls. Many provinces introduced networks of these VLTs in the early 1990s. The media began to reflect public dissatisfaction with this expansion of gaming outside of its usual physical confines, with many stories focusing upon individuals who developed gambling disorders while playing VLTs in these establishments and repeated references to VLTs as the “crack cocaine” of gaming. In province after province, this backlash resulted in government restrictions on these VLTs, with moratoriums ceasing the expansion of VLT gaming followed by reductions in the number of VLTs and restrictions on the operation of the VLTs remaining. As well, provinces required that funds from VLT revenues be directed at organizations that address gambling disorders, and instituted responsible gaming measures as part of VLT programs.6 The only province which sought public input into the operation of such VLTs on a province-wide basis was New Brunswick. Shortly after implementing its VLT network in December 1990,
“Where controversy has emerged concerning the expansion of gaming or concerning the integrity of existing gaming, the provincial governments have, for the most part, attempted to manage the situation by ad hoc changes to gaming operations without seeking to gauge public opinion in an organized manner.” june 2013 | 13
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feature
“While needing the non-tax revenues generated by lawful gaming, provincial governments have been understandably reluctant to engage in public debate about the pros and cons of gaming.” the government of New Brunswick conducted public surveys on VLT operations from 1992 to 1996. Recommendations derived from these surveys resulted in amendments that curtailed the V LT program in 1999, and in 2002 the provincial government took over operation of the VLT network from private entities and held a referendum which gave the electorate the option of ending the VLT program in its entirety. The public opted to retain the status quo.7 In Alberta, local plebiscites were held concerning whether to remove VLTs placed in various municipalities under provincial authority. A number of municipalities voted to remove VLTs, while the majority elected to retain them. The provincial government enacted legislation to give effect to these local plebiscites, and defended that legislation against years of litigation from VLT operators.8 The other provinces 9 made the decision to implement VLT networks, and to limit and cut back on those networks, without direct or indirect public input.10 Decisions were made based upon interest group and media pressures, such that open public debate on issues relating to gaming never occurred. In light of Professor Rose’s observation that “Waves” of legalized gaming come crashing down in response to scandals, it is important to note the scandal that struck provincial ticket lottery operations across Canada in 2007. A number of cases emerged in which lottery tickets retailers were alleged to have stolen winning tickets from customers after being asked to check those tickets against the winning numbers. A great deal of bad public relations emerged from these incidents, in large part because the issue was not addressed publicly by any of the provincial lottery corporations until they were forced to do so by a combination of lawsuits, an investigation by the CBC’s Fifth Estate and an investigation by Ontario’s
Ombudsman, Andre Marin. The recommendations made in the Ombudsman’s report in 2009 were adopted by the Ontario government, and other provincial governments implemented similar reforms. At no point was the electorate of any province asked to determine the future of the ticket lottery program. In relation to casino gaming, the province of Ontario has recently undergone the experience of attempting to expand casino locations in the province. Because Ontario already has 27 casinos and slot locations at horse race courses across the province, some might have believed that casino gaming was generally accepted as legitimate across the province. However, the Ontario electorate has never been asked to consider issues relating to the future of casino gaming on a province-wide basis. No plebiscites have ever been held, except locally, and no provincial election has ever been held in which gaming was debated as a major issue. The debate in Toronto accordingly had to proceed from first principles, with many city councilors reiterating anti-gaming arguments no different than those which might have been made 20 years previously, when casinos were first being planned in Ontario. On May 21, 2013, Toronto City Council voted against any expansion of gaming in the City by a vote of 40-4. The Toronto City Council vote occurred days after the Ontario provincial government dismissed the chairman of the Ontario Lottery and Gaming Corporation (“OLG”), resulting in the entire OLG board resigning in protest, reportedly over differing opinions as to how the policy set forth in an OLG document entitled “Modernizing Lottery and Gaming in Ontario”11 was being carried out. 12 In the face of opposition from interest groups and unfavourable media attention, some have speculated that the entire policy may be severely curtailed.
1. Rose, I. Nelson. Gambling and the Law. Hollywood: Gambling Times, 1986. 2 See i.e. Proceedings, Standing Committee on Legal and Constitutional Affairs, Senate, 33rd Parl., 1st Sess., December 12, 1985, Appendix “Leg-31-B” (Letter from the Honourable John C. Crosbie to the Honourable Ian Scott, dated November 27, 1985), pp. 31A:3 – 31A:4. 3 Rose, I. Nelson, “The Rise and Fall of the Third Wave: Gambling will be Outlawed in Forty Years,” in Gambling and Public Policy: International Perspectives (1991), William Eadington and Judy Cornelius, eds., available at http://www.aproundtable.org/news.cfm?issuecode=casino&news_ID=1288. 4 Rose, I. Nelson (2010) “Gambling and the Law: The Third Wave of Legal Gambling,” Jeffrey S. Moorad Sports Law Journal: Vol. 17: Iss. 2, Article 5. Available at: http://digitalcommons.law.villanova.edu/mslj/vol17/ iss2/5. 5 Ibid.
6 “VLT Gaming in Canada,” prepared by HLT Advisory for the Canadian Gaming Association, March 2006, available at http://www.hlta.ca/reports/FINAL%20VLT%20Report%20-%20color.pdf. 7 Ibid. 8 Ibid. 9 Nova Scotia, Newfoundland & Labrador, Prince Edward Island, Quebec, Manitoba and Saskatchewan. Ontario and British Columbia never implemented VLT networks. 10 Supra note 6. 11 Available at http://www.olg.ca/assets/documents/media/strategic_business_review2012.pdf. 12 “Ontario’s gambling modernization plan in question after Paul Godfrey fired,” by Matthew Coutts, Yahoo! News Canada, The Daily Brew, May 17, 2013, available at http://ca.news.yahoo.com/blogs/dailybrew/ontariogambling-modernization-plan-paul-godfrey-fired-163953299.html.
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Feature W hile needing the non-ta x revenues generated by law ful g aming, prov incial gover nments have been understandably reluctant to engage in a public debate about the pros and cons of gaming. However, it may be that because that public debate has been avoided, the legitimacy of gaming in Canada rests upon uncertain g round. Scandals such as those which struck ticket lotteries towards the end of 20 0 0s, and more recent modernization plans relating to casino gaming, might have presented fewer public relations challenges if an opportunity had been given for public input before the scandals emerge or the plans are unveiled. The experience of recent years indicates that it may be a critical mistake to believe that the many gaming opportunities that ex ist in Canada ref lect a general acceptance of the idea that gaming is just another form of entertainment. Gaming has been regarded as a vice in many cultures for many centuries, and within human memory it was all but entirely illegal in Canada. One cannot assume that public attitudes towards gaming have been entirely altered by the “responsible gambling� a d ver t i si n g c a mp a i g n s o f t h e pr o v i n c i a l l o t t er y commissions. CGL
Michael Lipton has served as senior counsel on gaming law matters for over 20 years, regularly representing governments, lottery corporations, and gaming equipment suppliers/manufacturers and counseling licensees throughout North America on gaming compliance issues. Michael is a founding member of the International Masters of Gaming Law and a past President. He was recognized by his peers for inclusion in Best Lawyers in Canada and by Chambers Global for his expertise in gaming law from 2008 to 2012. He is editor of Canadian Gaming Lawyer Magazine, has authored many articles in gaming publications, and has spoken at conferences throughout the world. Michael Lipton is a Senior Partner at Dickinson Wright LLP and Head of the Canadian Gaming Law Group and can be reached at 416.866.2929 or mdliptonqc@dickinsonwright.com. Kevin Weber has practiced gaming law for his entire 15-year career. He is a prolific author and speaker on gaming issues. A member of the International Masters of Gaming Law, he has been recognized by Chambers Global and Best Lawyers in Canada as a pre-eminent expert in gaming law. In his practice, he guides clients through compliance issues with gaming regulators, and provides opinions on all matters relating to the lawful operation of gaming, both land-based and online. He advises clients on business immigration matters, facilitating cross-border transfers of personnel for companies in multi-jurisdictional industries such as gaming and can be reached at 416.367.0899 or kweber@dickinsonwright.com.
Why take a chance? At Dickinson Wright, we guarantee a full house of experienced gaming attorneys - more than 25 lawyers who actively represent gaming interests from strategically located offices in Washington, D.C., Toronto, Phoenix, Detroit and Lansing.
Pictured here, clockwise from top left: Robert W. Stocker II, Michael D. Lipton, Peter H. Ellsworth, Dennis J. Whittlesey Robert W. Stocker II and Michael D. Lipton are Tier I gaming attorneys in Chambers Global and all four lawyers pictured here are listed in Best Lawyers.
We provide a full range of highly sophisticated legal services addressing the complex array of commercial gaming issues, as well as issues unique to Native American and First Nations casinos and related facilities - another reason Dickinson Wright has earned its superior international reputation. Contact: Michael D. Lipton Q.C. at mdliptonqc@dickinsonwright.com Robert W. Stocker II at rstocker@dickinsonwright.com Dennis J. Whittlesey at dwhittlesey@dickinsonwright.com
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corporateprofile
Scientific Games
Scientific Games continues to innovate with patented gaming technology and research-driven programs delivered to customers with the highest levels of security, integrity and ethical standards. The company is committed to responsible gaming principles worldwide. In Montreal, its global manufacturing facility has received certifications from the International Standards Organization (ISO) for quality, information security and environment, as SERVING ALL FIVE CANADIAN LOTTERIES and the Interprovincial Lottery well as sustainability certification from the from a global manufacturing facility in Forestry Stewardship Council (FSC). Montreal, Scientific Games is a leading innovator in driving revenue performance Momentum in Montreal across Canada through customized Through the knowledge and experience of 300 Montreal employees – and 3,200 products and facilities management. Beginning with the breakthrough more worldwide – Scientific Games technology that launched the world’s ser ves customers from advancedvery first secure instant lottery game in t e ch nolo g y m a nu f a c t u r i n g a n d 1974, and later introducing the first retail operational facilities in North America, terminal with color touch screen, thermal South America, Europe and Asia. One printer and scanner technology, Scientific of two Global Technology Centers Games has continued to advance the of Excellence in North America, the games, technology, managed services, Montreal facility has the capacity to marketing research and security that have print eight billion instant game tickets been a driving force behind the success a year and its central gaming system of more than 300 lottery and regulated powers lotteries in seven of the 10 gaming customers on six continents over provinces in Canada. A full-service provider, Scientific the last 40 years. Canada’s lotteries – and other top- Games offers diverse products, technology performing lotteries and gaming and services that can be customized to organizations around the world – partner meet the unique requirements of every with Scientific Games to engage players in Canadian gaming jurisdiction, including: new and exciting ways. From best-selling • Instant, Interactive & Draw Game Development instant games to lottery systems, industryleading loyalty program and Sciplay™ • Lottery Systems platform and content for iLottery, • Video Gaming Systems Scientific Games provides solutions for • Internet, Mobile & Social Gaming both traditional and interactive channels • G a m ing Ter minals & Ga ming Terminal Content and ultimately, increases revenues.
• Retail Technology & Optimization • Marketing Research & Analytics • Licensed Properties • Loyalty & Rewards Programs • L ot t er y & G a m i n g O p er at ion s Management • Instant Game Product Management Game Enhancers: Licensed Properties & Loyalty Programs Since the 1980s, MDI Entertainment, A Scientific Games Company, has been enhancing games with some of the most recognizable entertainment, sports and pop culture brands in the world. Now, this same excitement has been added to interactive gaming with licensed property games featuring animation, sound and graphics. With exclusive rights to over 100 popular licensed brands, MDI customizes 2nd Chance drawings and promotional games, interactive games and multi-jurisdictional linked games for web and mobile platforms. This entertaining game content keeps players engaged and helps build strong product portfolios proven to perform well for customers. For more than 10 years, MDI has been a leader in internet gaming services, launching over 400 promotional micro-sites and boosting lottery revenues with exciting interactive programs – all with powerful data mining and direct marketing capabilities that help lotteries learn more about players, drive loyalty and ultimately, increase sales performance. With nearly one million players participating, MDI’s Properties Plus™ loyalty program has eight lottery customers in North America. For more information, find Scientific Games online at www.scientificgames.com. Canadian Gaming Business | 25
executiveq&a
François Hanchay General Manager, Casino de Montréal
The Casino de Montréal is celebrating its 20th anniversary this year and it's receiving a facelift to mark the event. Over the past 48 months, more than $305 million has been invested to modernize the installations. At the helm of the casino for the past four years, General Manager François Hanchay is confident that his organization is in a good position to take up the challenges posed by the competition. We reached out to François to learn minimize impact on customers. Schedules more about the Casino de Montréal's and budgets were scrupulously met. transformation and the future of Quebec's What is in store for customers once gambling industry. renovations are complete in the fall? Each visit will be a journey filled with What were the circumstances that novel moments. To help us in this task, led to the Casino de Montréal first we hired well-known Montréal design, opening its doors? The Société des casinos du Québec was architecture, and creative professionals. created following a government decree in They helped us plan a unique customer December 1992. The Casino de Montréal experience. Visitors will be able to choose opened on October 9, 1993, in the from a variety of atmospheres according to transformed former Pavillon de la France, their mood, whether they come alone, as a which was built for the 1967 World’s Fair. couple, or with friends. They will be able At the time, it was to meet growing to go from a lively environment to a cozier demand by Quebecers for casino games. atmosphere. Montréal firm Moment We estimated that they spent $135 Factory, which specializes in designing million annually in casinos beyond our multimedia environments, with the help borders. Opening our casino created real of Solotech for the sound component, excitement. We had estimated patronage created ambiance concepts for us that will would be around 5,000 visits per day, but be projected on a 45- foot wide by 70- foot that turned out to be far from reality, as high wall. The effects are spectacular. Customers will also have access to three at the end of the first year of operations, 12,000 visits each day were being recorded. mega structures that are literally suspended in the air. Inside, they will enjoy areas designed for relaxation and entertainment. What is the scope of the Finally, we have completely reorganized modernization work? The challenge we have taken on is colossal. food services by bringing them together We conducted renovation work over on Level 5 of our building to provide four years while keeping the casino open culinary experiences for every taste. 24 hours a day, 7 days a week. During all that time, we did not stop operating The Cabaret du casino is known for a single minute. We have to credit for its great shows. Is a new the incredible ingenuity of our staff and performance hall also in the works? general contractor Pomerleau for that feat. Of course. We have plans for a multiTogether, they were able to find original purpose hall. These installations will solutions to carry out the work and provide flexibility to accommodate gaming 26 | Summer 2013
areas, a performance venue, or space to hold one-off corporate or cultural events as needed. We plan to open the new hall in the fall of 2014. The fact that the area is set up as a gaming space will provide customers with a multimedia gaming environment where gaming, entertainment, and shows will come together as one overall distinctive experience. How does the Casino de Montréal wish to set itself apart from a competitive standpoint? We want to position ourselves as an unmistakable reference in Montréal’s entertainment market. We have dedicated much time to considering development perspectives for the Société des casinos du Québec, and more particularly, those for the Casino de Montréal. That is why we revised our business strategy. Our current positioning may be summarized as follows: “Operate the best casino in the immediate competitive market with regard to customer service by providing a unique entertainment experience based on games that are remarkable by their innovation and diversity.” In the world of entertainment, the Casino de Montréal sets itself apart thanks to a distinctive product that is awe-inspiring. We therefore developed a typical customer journey in which our best practices were identified in order to surprise and impress our customers. Starting in October, Montréal will be able to count on an incomparable gaming establishment in a mythical landmark building.
1534 Mathers Bay W. Winnipeg. MB R3N 0T7
www.betrite.ca • info@betrite.ca • 204.489.8260 Interblock is a worldwide recognised trademark of multiplayer gaming machines. Electronic gaming solutions by Interblock guarantee casinos, arcades and gambling lounges worldwide superior product performance.
Gary Platt has an over 40 year history of innovation in casino seating. Gary Platt chairs incorporate superior performance design features with ergonomic design, longevity, and level of comfort resulting in more “time on device”. TransAct Technologies designs, develops, assembles, markets and services worldclass transaction printers under the Epic, Ithaca®, BANKjet® and Printrex® brand names. TransAct designs Gaming and Lottery printers expressly for the specific needs of casino and non-casino gaming establishments around the world.
MEI bill validators excel beyond the competition. Casinos worldwide put their trust in MEI because they provide unrivalled acceptance and security, higher uptime, and lower jam rates. Satisfied players result in more money in the cashbox.
3M produces thousands of imaginative products for health care, highway safety, office products, abrasives, adhesives, and displays and graphics. 3M’s success begins with their ability to apply their technologies – often in combination – to an endless array of real-world customer needs including the casino and gaming industries.
Mappedin provides indoor mapping, marketing and analytics via interactive way finding solutions that include: Interactive Touchscreen Directories, Elegant Mobile Applications, Powerful Detailed Analytics, Content Management, and Service and Support. Increase revenue and understand customer behavior with stress free easy game finding and the ability to react to customer trends and needs.
Flexible EL creates animated electroluminescent (EL) solutions by illuminating and animating flexible panels that provide significantly better eye catching capabilities than ordinary back lit signs and posters. High resolution images on a thin, durable, lightweight medium that are more dramatic and cost effective than traditional signs.
lottery
Setting the Standard
Canadian lotteries are among the world’s leaders in open industry standards By SPIELO International staff
Canadian lotteries are leading the world in the adoption and use of open standards in distributed VLT environments. Why? Part of the answer lies in our geography: the wide geographic dispersion of gaming sites means that a reliable central system that can speak to all video lottery terminals (VLTs) is crucial. Players require variety, so Canadian lotteries build their VLT network using different vendors’ machines and games. Getting all the pieces of the puzzle to fit has been facilitated by open standards, and all Canadian gaming operators are members of the Gaming Standards Association (GSA). Operators embraced this idea because they wanted to reduce the complexity of hardware and software integration. Nonproprietary, open standards provide operators the freedom to take the best products from each manufacturer and integrate them seamlessly, giving them unprecedented control over changes and network development. Serious research and development, in Canada and elsewhere, has pushed the boundaries of technological innovation. The resulting advanced central systems are facilitating the move to open standards across the industry. Just having the technology alone, however, is not enough. Lotteries are fortunate that the GSA has embraced the role of visionary organization to identify, create, and promote innovative and efficient industry standards. SPIELO International, founded in Moncton, New Br uns w ick , is one gaming company that has had success during the recent Canadian VLT replacement cycle, winning all competitive procurements it bid for in Canada. “Of the lotteries in Canada offering VLT programs, we now count all of them as machine and central systems customers,” said Robin Drummond, Vice-President and General Manager of Public Gaming, SPIELO International. “Our relationship with Canadian VLT 28 | Summer 2013
operators varies. We have seven years of service with some, to more than two decades with other provinces, which now have fourth generation Spielo machines in their venues.” Now t h at we u nder st a nd how open standards came about, how are they actually being used in Canada today, and what else does the future have in store? Right now, G2S can: • C o n t i n u o u s l y m o n i t o r a n y manufacturer’s machine • Customize product and game mix • Make changes to the game line-up via remote game downloading and switching • Ensure quick game validation and authentication • G a t h e r a n d a n a l y z e c r i t i c a l performance information on demand • Perform remote, proactive predictive diagnostics and troubleshooting • Offer players extra features In summary, G2S protocols enable added functionality and operational flexibility, which translates to increased ef f iciencies a nd decrea sed g a me deployment costs for operators. “It is exciting to see Canadian lottery operators benefiting from open standards as we watch the provinces’ G2S protocols come online,” said Peter DeRaedt, President of the Gaming Standards Association. “We are happy to see the standards being used as we envisioned: To enable interoperability, education, and communication. “There is a difference bet ween manufacturers claiming that their product will work in a certain way, and
having them actually perform this way in the field. That is one of the reasons the GSA has created the Certif ied Product Registry: to facilitate accurate and consistent conformance testing of GSA standards in order to give operators peace of mind.” In September 2012, INTELLIGEN, SPIELO International’s flagship central system, was the first product to ever receive the GSA’s G2S certification. “We want to help our customers fut ure-proof their operations, which is why we applied for product cer t i f ic at ion ,” sa id D r u m mond. “Receiving this G2S certif ication means that INTELLIGEN has been proven to communicate in a multivendor environment using G2S as it was envisioned.” T h is f u nc t ion a lit y rea lly on ly scratches the surface of what will be possible when G2S is fully enacted. G2S will enable never-before-seen features for players like side game content on any manufacturer’s VLT, A MBER alerts, and public ser vice a n nouncement s, not to ment ion cr it ica lly impor t a nt Responsible Gaming features. It even opens the door to Wide Area Progressives in VLT programs, where players could seed the pots and be eligible for province-wide progressives with large jackpots. The beauty of open standards is that these features can be available from ever y gaming machine, regardless of manufacturer, so players will be able to enjoy a more customized and personalized gaming experience. It goes without saying that happy and engaged players are essential to a successful gaming program.
16 Years 19 Casinos 11 Jurisdictions For the past 16 years, we’ve helped build brands for 19 different casinos across North America. And while reaching players through advertising, social media and technology is part science and part art, we have the experience and capabilities to do it all. When it comes to really understanding your business, we’ve got game. To see some of our award winning work, visit marshall-fenn.com or contact Jim Kabrajee at 416-962-3366 or jimk@marshall-fenn.com
In our game, winning numbers have nothing to do with luck.
charitablegamingsupplement
Evolving Charitable
Gaming A look ahead with today's leaders
Canada's charitable gaming landscape is evolving, and with it the attitudes and habits of its players. For this issue, we reached out to some of the leaders and experts in this corner of the industry to discuss the state of charitable gaming and where it's headed.
30 | Summer 2013
Who are today's charitable gaming players and what are they looking for? FA: Our bingo customers are, on average, 60 years old and over 85% are women. They are regular customers for whom bingo is mostly a social activity. Our customers come up to three hours before the beginning of their session, sit at the same place, and chat among themselves. However, when the bingo game begins, silence is golden! This clientele is also very averse to change. The proof is that when a hall closes its doors, only 25% of its clientele move to another hall, while the other 75% simply stop playing bingo. Kinzo’s clientele is, on average, much younger than the bingo customers we had fifteen years ago and includes 40% men. The average level of education and revenue are also higher than those for bingo. LC : Extensive research carried out by our Ontario Bingo Development Fund found that while all genders and ages participate in charitable gaming, today’s main charitable gaming players are more likely to be married women between the ages of 25 - 54. The household incomes range between $25K – 100K and they have some post secondary education. Players consider bingo a social experience with nearly half playing bingo because of family and friends. They see bingo as an opportunity to socialize with friends, an escape or “me time”, and as an opportunity to have fun and win prizes at the same time. The charitable component is also important for the bingo brand. For bingo centres, players are looking for
updated decor such as a comfortable and bright environments with a fresh and modern look and feel, and have a positive attitude towards electronic bingo. RC: Today’s main gamers are what you’d expect to find when you step out of your house to do your groceries or watch a hockey game. Anyone and everyone is a gamer these days. You’ll find a lot of younger crowds ranging from 18-35 years old and you’ll have your regulars who are generally anywhere from 50-85. There really isn’t a specific age group or type of person. No matter how old or young or what language they speak, they are all looking for one thing: Fun! Of course, winning a jackpot doesn’t hurt either. TR : Today’s main charitable gaming players are the core players. I believe we have lost the incidental player—the ones who play once a week, once every two weeks, or monthly. They have moved on to other things since the product has not changed enough along the way to keep them interested. Our core players are mainly female. Most tend to be in the 45+ range, with skews at the 55+ range, and they tend to have high school education and generate low to middle income. 55% of them have played 10 years or longer and are good at playing the game. They take pride in the fact that they are fast, knowledgeable, and experienced at playing bingo. It’s a skill they have developed over the years. They also like the fact they can socialize on their own terms. Some days they just want to keep to themselves, while other days they want to be the centre of attention.
charitablegamingsupplement Furthermore, they are set in their ways and change has to be gradual, or as I like to say, an “evolution and not a revolution” of change. They are looking for entertainment value for their money, so time at bingo is important at a reasonable cost. Food and beverage also has to fall in those lines. Lastly, they want a clean modern centre, but nothing that puts them out of their comfort zone.
François-Patrick Allard General Director of the Société des bingos du Québec
What needs to be done to revitalize the charitable gaming experience? FA: First and foremost, we need to maintain bingo’s DNA. Regardless of the solutions being considered, I believe they should have a “community gaming” component and remain relatively affordable—approximately $10 to $15 per hour. With regard to bingo, we are currently taking three directions over the next two years. The first is to provide managers with a common set-up model so that gaming venues are more consistent. The second is to increase the flexibility of gaming session schedules, as the 3-hour sessions currently offered are not attractive to our new clientele. Third, we must use more new technologies such as touchscreens and similar technology that maximize not only interaction but—more importantly—winner gratification. LC: Charitable gaming requires the ability to offer a new entertainment experience to maintain existing customers and attract new customers. Options for entertainment have expanded widely over the last decade and there is increasing competition for the entertainment dollar. We need renovated facilities, improved customer service, innovation, technology, and new products to stabilize and grow the industry. RC: We need to bring back the social aspect of the entire gaming experience that we are losing more and more of through the use of technology. Nowadays, it is not uncommon to find people sitting quietly in a bingo hall staring blindly at their electronic bingo unit rather than chatting it up with the players around them. While there is a positive side to bringing in younger crowds through the introduction of technology, it also takes away from the entire experience. What people will take home with them is the fun they had not only playing the game, but meeting new people and potentially making lifelong friends. TR : We need to provide a different experience for new players than we do today. Our current core player likes the experience we have today and that’s why they continue to come out. Our lapse players have moved on because they found it to be too boring or that it took too much of their time. For new players, we have to provide more of a “social me time”. Research has shown we should be targeting women 18- 44 with average educations who are employed on a full or part-time basis, who are socially active, and enjoy games of chance. The future lies in our ability to attract and retain these best prospects. Our best prospects are looking for more than pure gaming; the gaming aspect is only part of the overall experience. Sociability is at the core of a successful Charitable
Lynn Cassidy Executive Director, Ontario Charitable Gaming Association
Roberto Carosielli VP of Operations, Bingo Servi-Jeux
Tony Rosa President & CEO, Community Gaming & Entertainment
Canadian Gaming Business | 31
charitablegamingsupplement
“The major challenges we tend to encounter are the common beliefs and misconceptions people carry about the charitable gaming industry.” Gaming Centre and one of the key factors that separates it from other gaming options. We must focus the message on the benefit to the player, as opposed to just the attributes of the centre, like bingo gaming. We also need to encourage the target to think of this as a complete afternoon or night out out with food, fun, friends, and gaming. This includes “Girls night outs”, promotions that would require multiple players, and promotions that encourage groups of women to visit and enhance their sociability. Also, the interior layout of the centre should be zoned to promote sociability, and include a dedicated food and beverage
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What are some of the biggest challenges to revitalizing charitable gaming in Canada? FA: The biggest challenge, in my opinion, is meshing cohabitation between our current and our new clientele. As previously mentioned, our current clientele is averse to change and does not always readily accept new players, who are often more noisy and sometimes not aware of all written and unwritten bingo gaming rules. New players don’t always appreciate being told to be quiet. Yet, to compete for attractive prizes, they must play in the same draws and see each other because, with bingo, the winner must be identified. In England, some groups have a set-up that meets that objective. A total of 60% of the hall is a traditional set-up with tables aligned in rows. The remainder of the hall, which is separated from the first with large glass partitions, provides a livelier set-up with round tables, bar service, music, and giant screens. Gaming in that section is also more electronic and fills up with new customers on weekend evenings. Halls that have those set-ups have significantly increased their market share. Another challenge is to develop synergy with bingo offerings on the internet. At Loto-Québec, we are privileged to be involved in both types, enabling us to set ourselves apart from the competition. LC: Criminal Code restrictions result in charities not being allowed to "conduct and manage" once technology is introduced. In most jurisdictions, Ontario being one, this has necessitated the partnering with government to introduce technology to charitable gaming. We have been fortunate here in Ontario that we have a terrific partnership with Ontario Lottery and Gaming that has provided support for the industry with various initiatives since 1998. RC: The major challenges we tend to encounter are the common beliefs and misconceptions people carry about the charitable gaming industry. In general, people believe that "if it isn't a casino it isn't fun", or that "charitable gaming is for old people". People don’t really understand that they will have better odds at winning in a bingo hall rather than a casino. The odds of winning a jackpot at bingo are 1 out of 200–500, depending on the number of players. There are also other fun games to play like pull-tab tickets or Double-Play, where again the odds are much better than what you’d expect to find in a casino or simple lottery. We hope to continuously develop new games and new ways to play traditional bingo games in order to bring back the crowds like we used to see in the 80s and 90s.
Find out more at igt.com/csi
© 2013 igT. all rights reserved. cSi: © 2000-2013 cBS Broadcasting inc. & daltrey Funding LLc. Tm in uSa cBS Broadcasting inc. & outside uSa daltrey Funding LLc. all rights reserved.
32 | Summer 2013
area; lounge areas; traditional bingo, both paper and electronic;, and other gaming. Clear, themed signage should also be used to identify the various zones. We must also understand that the commitment of time is flexible. The one thing they are short on is time, so by keeping things flexible they can spend a short or long period of time within the centre depending on what time they have available.
TR: I believe the biggest challenges to revitalizing charitable gaming in Canada relate to bringing the provincial governments along. Charitable gaming needs to partner up with provincial governments so we can have access to technology we do not have today. This is critical in order to provide different experiences within the gaming centre. Provincial government is trying to balance all forms of gaming within their jurisdiction and we need to make ourselves noticed.
charitablegamingsupplement Charitable caming cannot be lost in the big picture. We are a vital part of the gaming landscape in the province because of what charities provide to their communities. Charities fill the gap that the government does not provide in services in local communities. So it’s critical to get provincial governments to understand that by helping charitable gaming, they are, in turn, reducing resources they have to provide at local levels at a more cost effective manner. They need to know charities react to current needs of community faster than the government can. What is your organization doing to revitalize and/or enhance the charitable gaming experience? FA: In addition to what I mentioned for bingo, we are also working intensively on our Kinzo hall network. Kinzo’s gameplay is very similar to European bingo, but adds such features as a buzzer to indicate a win and the sound of a heartbeat when a player has a card on which only one number is needed for a win. The Kinzo adventure is now two years old and boasts 15 venues throughout the province. We plan to have over 20 by the end of the year and about forty in the next three years. Loto-Québec does not operate the halls; private or community partners do in exchange for which we pay them a commission. Just like bingo, 100% of Kinzo profits are turned over to charities throughout the province. To date, we have remitted over $135 million over 15 years. LC: We have worked with OLG since 1998 on the various initiatives to introduce technology to charitable bingo. We have been successful in obtaining government support to widely expand a pilot project that started the four e-bingo sites. The current initiative will see over 30 bingo centres transition to Charitable Gaming Centres with new technology for electronic bingo and break-open tickets, and a variety of new products consistent with charitable gaming. We were instrumental in developing a model that allows charities to remain on site carrying out responsibilities in return for a direct share of the proceeds. This model is unique in Canada. We also have worked closely with the Alcohol and Gaming Commission of Ontario to bring about many regulatory changes that have streamlined cumbersome processes and provide direct benefits to charities.
“Charitable gaming cannot be lost in the big picture. We are a vital part of the gaming landscape in the province because of what charities provide to their communities.”
RC: We are constantly looking to improve the gaming experience for the players. We work very closely with our end customers in order to get a better understanding of what players want in a game. It's not uncommon for us to spend a lot of time visiting bingo halls across North America in order to see what the latest trends are in the gaming industry. We then work closely with manufacturers in order to develop new games that have that extra fun factor, which the players enjoy. We do so by being innovative and coming out with new and original games to keep things interesting for the players. TR: In one particular centre we did a major renovation, but prior to getting started we did some homework on who our current player was and who might be a potential player. We hired a female designer who we shared our research with so we could renovate the centre to meet the demographics of our current and future players. 80% of our players are female so we figured we should have a female designer to ensure we were always focused on the majority of our players. We have upgraded the finishes on everything from the floor up. We didn’t just paint; we wallpapered and we used pot lighting throughout, not florescent lighting. We even had the designer work with us to enhance the washrooms themselves. We are providing different zones within the charitable gaming centre. In one of the centres, we are introducing a lounge zone which will be licensed for alcoholic beverages. This will be what we call “non-session based gaming”, wherein there is no
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Canadian Gaming Business | 33
charitablegamingsupplement
“The bingo industry is at a crossroads. We need to work hard to give this product a facelift, but we can do it!” commitment from the player to stay for a session or specific time period. They can come and go as they please. It has separate entrances and exits, as well as separate washrooms. In this zone, we are marketing the experience, not the gaming. We are keying on specific groups with various promotions like our “Girls Night Out”. We will have a good variety of appetizers, but no entrées, and there will be desserts that can be shared by a group along with specialty coffees, cappuccinos, espressos, and similar refreshments. Also, we will have some local wines available along with the standard beers and liquor drinks. The TVs will not only have sports on them, but cater to our players by having theme nights for various reality shows such as Survivor, The Bachelor, and Dancing With the Stars. Also in this zone, we will have electronic BOT dispensers and Play On Demand games—nothing session based. This will be a zone that you will come out and enjoy with your friends for an evening out, but it will be marketed as an experience that makes gaming secondary, not the primary reason for them to come out.
Overall, this is about evolving to something new, not a revolution to something new. I believe we have to provide different zones within a centre for different players. What do you see as being the biggest change to charitable gaming in Canada over the next 5 years? FA: That is a difficult question to answer. One thing is certain: The status quo is not an option. If the industry does not quickly adapt to new clienteles, there will remain only a handful of bingo halls in only a few years, which will constitute a kind of museum of a bygone activity. However, we must remain much more optimistic than that, and I firmly believe in the combination of a more modern set-up and the use of new technologies in order to breathe new life into this industry and maintain a source of revenue for charities. The bingo industry is at a crossroads. We need to work hard to give this product a facelift, but we can do it!
LC:AM Certainly, 2042_Cashtech_CanadianGamingSummit_Ad_1:Layout 1 13-05-07 10:52 Pa
the introduction of technology and the opportunities that the internet can provide are the biggest changes happening now and in the future. Charitable gaming—which includes bingo, break-open tickets, and raff les—is an essential fundraising tool for charities and non profits and generates over $170 million back to local communities in Ontario alone.
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RC: What we hope to see are changes to the laws governing the charitable gaming industry and the limitations placed on jackpots, prizes and a variety of playable games. The limitations are really the main cause of decreases in attendances, which directly translates into a decrease in revenue for both the charitable organizations and the private establishments who are finding it increasingly difficult to be profitable these days. As gamers are looking for alternatives to casinos, they are often turned off by the lower jackpots they find in bingo halls as well as the limitations to the types of games that are played, either the regular bingo or pull-tab tickets, which are both due to regulations. If there are fewer restrictions, the entire gaming experience will be much better for everyone involved and the big winners in the end will be the gamers themselves.
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TR: Our biggest goal over the next f ive years is to stay focused; there are not silver bullets out there. There is not just one thing that will make a difference in the future but a combination of things we must do. We must be patient and stay on course, since there will be lots of change occurring on the gaming front as government repositions itself. We must make sure we do not get lost in the shuff le and continue to be top of mind in government. We need to get our story out there.
34 | Summer 2013 Untitled-1 1
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marketing
Not in My Backyard
Why the NIMBYs are winning, and what you can do about it
By Paul Chater
What do you do when the NIMBYs organize? The NIMBY (Not In My Back Yard) forces are a common occurrence whenever change of any sort is proposed in a community. The gaming industry isn’t special or unique. The recent defeat of a casino in Toronto and a similar rejection in Surrey are now more common in North America than a successful campaign. Why is that? Opposition to casinos has always existed. The new norm, however, is better organized, more vocal, and more effective. Toronto and Surrey are not unique, just recent examples. Boston, Philadelphia, St. Louis, and Cleveland have all experienced the same public back lash and scrutiny. Is there a common thread? Are there lessons to be learned? Are the right tactics being employed throughout the process? NIMBYism often flies in the face of objectives desired by the very citizens who oppose a project. People want cheaper and greener energy, yet oppose wind farms. People want jobs and more tax revenue for their community that comes from a casino, just don’t build it anywhere near them. Understanding the roots of this dichotomy can help in managing it. NIMBYs are generally homeowners. You won’t find too many blocks of rental apartments joining together to fight community change. That’s because homeowners already feel as though they own a piece of their community which, in fact, they do. Organized with other homeowners and suddenly they don’t own just a single house and a yard, they own the neighbourhood. And because they have ownership, the prospect of a devalued property fuels the emotions and the impetus to act. They may not be able to change the country, but they can affect what goes on in their own backyard. It’s important to point out that their sense of ownership is based on emotion. That’s why corporations often lose, they can’t and shouldn’t fight the emotional. Understand the emotions, and take them into account 36 | Summer 2013
in every communication, but don’t try to fight it—counter it with practicality. The key to taking on dedicated community activists, whether you’re building a new property or want to expand an existing one, is to do it with information, direct contact, and humility. It is often believed that merely out-spending the opponents will neutralize them. Big mistake. Spending less but in the right places will be much more effective. Lavishly produced videos just cement the point that you’ve got vastly greater financial resources which makes you the “big bad rich guy” riding into town to fight the poor altruistic locals. It becomes an “us and them” issue. To avoid that, you need to be a part of the “them.” Information, preparing for misinformation, rumour management, and getting ahead of the issues are paramount. If you join the fight in a reactive mode, you’ll lose. Being prepared means anticipating everything that can happen. Get local consultants, have your social media strategy and tools in place before the issue breaks open. Gather all your facts first and understand what is really motivating the other side. They will bring up every issue possible from traffic to health so you have to know at least as much as about those issues and their context within that particular community. It may seem counter-intuitive to keep the corporation in the background, but a lower profile actually works. Don’t hide, but don’t be the only face of your argument. It’s natural to feel as though you need to trot the CEO out front to look transparent or to call a town hall meeting for him to answer questions.
Again, a big mistake. Town hall meetings are easily hijacked and you can guarantee that the soundbite on the evening news will be the CEO being shouted down. Activists are much more comfortable with, and will be more likely to listen to, one of their own. That’s why the biggest part of preparation is finding community allies, and not just politicians. Get local business owners who stand to benefit from the increased employment and wages that those employees will spend in their stores. Find the people who agree with you and mobilize them. Step back, let them be the face to the community. Now it’s a discussion among community members with differing points of view, not the local homeowners in a battle against the out-oftown corporation. W hen faced w ith g rassroots organizations, meet them on that level, don’t call in a high-level air strike. Make sure none of your communications shout. Listen. Mobilize your allies early, let them do the talking, and let them expand the conversation through social media. Obviously the strateg y and tactics are much more complex than can be fully addressed here but the key is u n d er s t a n d i n g ho w s o c i a l m e d i a t o ols h ave ch a n g ed t he n at u re of the discourse and the ability to rally support one-to-one. If you’re going to take on the NIMBYs, take them on in their backyard, community member to community member. Paul Chater is a partner and Head of Public Relations at Marshall Fenn Communications; a full-service marketing agency in Toronto with 18 years of casino marketing experience. Paul can be reached at paulc@marshall-fenn.com
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finance
IFRS One Year Later – A Reality Check Reflecting on the transition to IFRS By Lesley Luk and Silvia Montefiore
In 2012, lottery and gaming organizations across Canada completed their International Financial Reporting Standards (IFRS) transition projects and successfully published their first set of IFRS-based audited financial statements. The transition to IFRS provided an opportunity for organizations to streamline their processes, refine their chart of accounts, reassess accounting policies and embrace training at their organizations. I F R S Sh a re For u m s prov ide d the platform for lottery and gaming organizations to discuss industr yspecific matters and ultimately resulted in fundamentally consistent accounting policies for the industry. Furthermore, this accounting change served as a catalyst to process improvement. O ne ye a r l at er, or g a n i z at ion s reflected on the smooth transitions to IFRS that resulted in lower financial impact than initially anticipated, celebrated the success of ref ining processes and controls, and are just getting used to the converted systems. Organizations are just starting to enjoy “business as usual.” But is it “business as usual”? The second wave of IFRS changes, lined up for 2013 to 2015, will have additional implications on the lottery and gaming organizations’ processes, systems and f inancial results. Big changes are expected around key standards such as revenue recognition, leases, impairments, financial instruments and hedging. To begin, IFRS has introduced a new suite of consolidation standards, as well as several other standards that come into effect for annual reporting periods beginning on or after January 1, 2013. For most lottery and gaming organizations in Canada, the adoption date of these standards is April 1, 2013. Some of the new standards include: • IFRS 10: Consolidated Financial Statements, requires companies to re-evaluate their control models to determine which business units must be consolidated under the new single 38 | Summer 2013
model approach. The new standard requires a broader understanding of circumstances in assessing control such that previously disregarded facts could become relevant. • IFRS 11: Joint Arrangements, introduced new rules around joint control and has prompted companies to reassess all their joint arrangements to determine if they need to transition from a proportionate-consolidation model to the equit y method of accounting. The new standard can be challenging to apply, with a multistep analysis and many factors to potentially consider when assessing the implications of contractual terms of the arrangement. • IFRS 12: Disclosure of Interests in Other Entities, requires more onerous disclosures, not just for subsidiaries and joint ventures, but also for other interest and relationships, which previously would not have been considered under IFRS. • I F R S 1 3 : F a i r V a l u e Measurements, provides companies a single source of guidance on how fair value is measured, for both their financial and non-financial assets and liabilities. Fair value is defined and a framework for measuring fair value is included in the standard. For f inancial instruments, fair value disclosures required in annual financial statements now also apply to interim financial reports. • I AS 19R: Employee Benef its, i n clu d e s c e r t a i n r e v i s i o n s t o accounting for def ined benef it
pension and other post-employment benef it plans, which may have a significant impact on companies’ balance sheets and statements of income and comprehensive income. Upon adoption of this revised standard, companies will also need to reconsider the classification of its employee benefits as short-term or longterm, as well as the timing of recognition of terminations benefits. • IAS 1: Presentation of Items of Other Comprehensive Income, requires companies to present separately the items of other comprehensive income that will be reclassif ied to profit and loss in the future from those that will not be reclassified. • IFRS 7: Disclosure: Offsetting Financial Assets and Financial Liabilities, requires companies to include new disclosure over financial assets and liabilities that are offset on the balance sheet. In addition to these effective standards, the International Accounting Standards Board is currently working through new standards on Financial Instruments, Leases and Revenue, which are expected to have significant implications on a company’s processes, systems and financial statements. This second wave of IFRS is expected to cause pervasive changes to the lottery and gaming organizations, so get ready for another transition to IFRS. Silvia Montefiore (smontefiore@kpmg.ca) is National Leader for KPMG’s Gaming practice and Technology, Media & Telecommunications – Audit Practice Leader. Lesley Luk (lluk@kpmg. ca) is Senior Manager in KPMG’s Technology, Media and Telecommunications Audit practice.
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awardprofiles
The Canadian Gaming Industry Awards
Showcasing 2013's award winners By Matthew Bradford
Every year, the Canadian Gaming Industry celebrates the successes and contributions of leaders within the nation's gaming community. This year, three individuals were selected to receive the Industry Leadership and Outstanding Contribution Award: Twyla Meredith, President and CEO of SaskGaming; Luc Morin, Director of New Product Development for the Société des casinos du Québec; and Glen Sawhill, Senior Vice President of Caesars Windsor. Additionally, this year's Volunteerism and Community Service Award was given to Jean-Pierre Curtat, Executive Chef at Casino de Montréal. Twyla Meredith
Industry Leadership and Outstanding Contribution
As president and CEO of Saskatchewan G a m i n g C or porat ion (Sa sk G a m i n g), Tw yla Meredit h h a s helped t he crow n corporation and its f lagship casinos, Casino Regina and Casino Moose Jaw, become role models within the industry and stewards in community outreach. Twyla joined SaskGaming in 1996 as Chief Financial Off icer, and in 2009 was appointed to her current role. Under her leadership, both Casino Regina and Casino Moose Jaw have experienced notable growth and have collectively helped numerous causes through volunteer efforts, the dedication of resources, or the raising of much needed funds. SaskGaming's annual donations to its Community Relations program have increased by more tha n 35% , a nd in 2 012 alone Twyla and her team invested $737,000 in support of 105 charitable organizations and community events.
Recipient s of SaskGaming's charitable efforts include the Y WCA My Aunt's Place facility for homeless si n g le women a nd women w it h children; SaskGaming's annual Charity Royale in support of local charities; the Aboriginal Employees Network; Saskatchewan First Nations Winter Games; and Regina and Moose Jaw Food Banks. “This award inspires me to stay committed to the continuing advancement of Canada’s gaming indust r y throug h communit y g iv ing, social responsibilit y a nd modernization,” said Twyla, adding, “I’m thankful and excited to be chosen as a winner of the Industry Leadership and Outstanding Contribution award. To be named among such great leaders is an honour.” I n a dd it ion t o her non-prof it pursuits, Twyla has volunteered with a wide variet y of communit y and business organizations. Beyond her role as a director with the Canadian Gaming Association, she has served as the f inance chair for Reg ina's
Dow ntow n Business Improvement Director, a director with the Hospitals of Regina Foundation, the director of the Saskatchewan Roughriders Football Club, and numerous other positions. Tw yla's dedication to communit y development was recognized in 2005 with a Saskatchewan Centennial Medal, and in 2011 with the Dr. Robert and Norma Ferguson Award for outstanding ser vice to the University of Regina and the University of Regina Alumni Association. More recently, Twyla was featured in Women Executive Network's 2011 list of Canada's Most Powerful Women: Top 100. Speaking to all her accomplishments, Twyla noted, “I’d like to thank all my colleagues – past and present – for their contributions to SaskGaming and for helping me achieve this success.”
Luc Morin
Industry Leadership and Outstanding Contribution
Passion, creativ it y, and innovative think ing are just some of the tools in Luc Morin's toolbox that Canadian Gaming Business | 41
awardprofiles
“Passion, creativity, and innovative thinking are just some of the tools in Luc Morin's toolbox to have helped this industry veteran achieve great success...”
have helped this industry veteran achieve great success under the Casino de Montréal banner. With over twenty years experience in the industr y, including f ifteen in Casino de Montréal operations, he has helped the facility meet the challenges of today's industry, and prepare it to be a leader for years to come. Today, Morin continues to be a key figure in Casino de Montréal's modernization initiative. For the past five years he has served as director of new product development for the Société des casinos du Québec (SCQ). Among his achievements is SCQ's unique Zone concept that unites forty different gaming terminals into a single multimedia environment hosted by a casino staff. Once engaged in the “Zone” players can interact with the host and control their gaming experience by choosing between an assortment of games. “The Zone is a tangible manifestation of our company’s strategy to renew the casino experience. The creation of this innovative gaming experience is a direct consequence of Luc Morin’s leadership and category expertise,” said Germain Guitor, Vice-President, Sales and Marketing, with Quebec's casinos. “Luc Morin and his team are focused on providing cutting edge gaming experiences that meet the needs of current and future customers. The Zone is one of the many ways that Luc and his team contribute continuously to attain our company’s vision.” Commenting on what this award means to him and his company, Luc said, “I was happily surprised and extremely pleased that Canada’s gaming industr y recognized all that was accomplished over the years, enabling us to now deliver innovative products and to renew our customers’ entertainment experience. This distinction ref lects on the team effort that went into realizing our vision.”
Glen Sawhill
Industry Leadership and Outstanding Contribution
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42 | Summer 2013
From slot operations manager to senior vice president of gaming operations, Glen Sawhill has risen through the ranks to become one of Caesars Windsor's most cherished and respected figures, as well a recognized leader within the Canadian gaming industry. Glen's career with Caesars Windsor started in 1994 when he was recruited from Caesars World in Atlantic city to help launch Casino Windsor's (now Caesar's Windsor) slot department at Ontario's first commercial casino. As slot operations manager, Glen was also involved in the opening of the slot department of the Northern Belle Riverboat Casino. Three years later, Glen's ex pertise earned him an appointment to the director of slot operations, wherein he played an integral role in opening the permanent Casino Windsor facility in 1998. His upward trajectory continued in 2 0 07 w ith his move to v ice president of g aming operations, and again in 2010 to his current position as senior vice president. In between, Glen was a key figure in Casino Windsor's massive 2008 renovation and Caesars Windsor rebranding. "Glen is a day one employee of not only Caesars Windsor but also the Ontario gaming industr y,” said Kevin Laforet, President and CEO of Caesars Windsor, adding, “He has made signif icant contributions to both
awardprofiles and I am proud to work with him and pleased to see Glen recognized with this award." Ref lecting on his achievements, and his most recent award, Sawhill said, “It is an honour to be selected for this award. Canadian gaming has a great legacy, and I am very proud to be part of it.”
Jean-Pierre Curtat
Volunteerism and Community Service
Since Casino de Montréal opened its doors in 1993, Jean-Pierre Curtat has been a staple of its staff and a seasoned pro within its four casino restaurants. As executive chef, JeanPierre has played an active role in shaping the casino's Food and Beverage Department, and taken a leadership role in crafting new tastes and food services offerings for the casino's current modernization plan. Aside from lending his skills, mentorship, and time to the development of Casino de Montréal's kitchens, JeanPierre has demonstrated a strong commitment to his community. He has volunteered with numerous causes and associations, including the Chez-nous des artistes, Café de la rue, Table de l’espoir, Fondation Keroul, the Lance Armstrong Foundation, and the Heart Institute. Highlights of Jean-Pierre's volunteerism include his work with the Maison du Père, where for the past six years, he has worked with volunteers to create a hearty and festive meal for the shelter's homeless male population. JeanPierre also gave of his time and talents during Québec's 1998 Ice Storm, during which he helped prepare and deliver over 2,000 hot meals a day to areas most affected by the storm. That same year, he and his team responded to the destruction of the Accueil Bonneau shelter by feeding its sizable homeless population for nearly three weeks. More recently, Jean-Pierre joined fellow volunteers for 2011's Société des Casinos du Québec’s Employee Volunteer Day, and cooked up a gourmet meal for 360 g uests during 2012's gourmet gala in support of the Fondation de l’hôpital Pierre-Boucher. “These examples of community involvement are part and parcel of Jean-Pierre Curtat's personal and professional journey,” says François Hanchay, General Manager of Casino de Montréal. “He is a man who does not hesitate to lend his talents to help those in need.” Ref lecting on his awa rd, Jea n-Pier re adds, “I a m pleased to receive this distinction, which I accept in the name of all those who gave of themselves in our social commitment projects. This is truly a team prize, as I only serve to channel the group commitment found within our volunteer projects, and these projects would not exist if not for the unwavering support of our directors. I thank all who made and continue to make this possible.”
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Canadian Gaming Business | 43
firstnations
First Nations gaming plays a key role in the growth and development of First Nation communities by providing a significant source of revenue and employment opportunities to First Nations people across Canada. In recognition of this vibrant part of the Canadian gaming industry, the First Nation Canadian Gaming Awards were created to showcase some of the many First Nations individuals who have contributed positively to the gaming industry, as well as to honour the leaders and role models within the First Nations community.
Congratulations to the following recipients, and a special thank you to the 2013 award sponsors:
Employee of the Year Angela Higgins Caldwell First Nation EMR Security Officer, Great Blue Heron Charity Casino Equipped with a winning personality, elite customer service skills, and a keen sense of humour, Angela Higgins brings a unique mix of charm, talent, and professionalism to her position as E.M.R security officer at the Great Blue Heron Charity Casino. Since accepting her first security officer position with the casino in 2000, she has committed herself to keeping players and colleagues safe, as well as maintaining the security and integrity of the busy Port Perry facility. “As a security officer, we are the frontline. We are the first people that everyone meets,” says Higgins. “It is always important that we maintain a high level of professionalism and conduct ourselves appropriately because we have the power to create a positive or negative experience for all who come in contact with us.” In addition to her full-time responsibilities, Higgins donates her time to numerous charitable and non-profit events. These include volunteering for the Security Department's “Holiday Cheer” donation drive for the Community Nursing Home in Port Perry, and helping to spearhead crisis intervention counselling initiatives. Outside of the casino, Higgins is also active in many Caldwell First Nations activities and Scouts Canada. “Angela is a very busy individual who brings integrity and success to everything that she is involved with,” says Reg Legarde, Security Manager with Great Blue Heron Casino. Currently, Angela is pursuing her Bachelor of Social Word Degree through Ryerson University and First Nations Technical Institute.
44 | Summer 2013
firstnations
Leadership Award
Leadership Award
Community Service
Charles Ryder Carry the Kettle First Nation Director of Casino Operations, SIGA
Tammy Whitney Tsuu T'ina Nation Director of Dit'onik'odza Charities, Grey Eagle Casino
Lorne Paudash Ojibwa – Hiawatha First Nation Security Shift Manager, Great Blue Heron Casino
For over fifteen years, Charles Ryder has demonstrated tremendous leadership and vision throughout his career with the Saskatchewan Indian Gaming Authority (SIGA). From his inaugural role in 1997 as a pit supervisor with Northern Lights Casino, to his role as live games manager at the Painted Hand Casino (2001-2005), and to his current title as director of casino operations, he has been an asset to SIGA and a force of inspiration and growth for the staff and volunteers around him. “Charles is a leader who is goal orientated, and he challenges any team he works with to reach their maximum potential,” said Pat Cook, Vice Preside of Corporate Affairs with SIGA. “He leads with a 'hands on' approach that supports his team to meet their goals.” Charles’ accomplishments with SIGA are many. Most recently, he led as project manager for SIGA's Bally Casino Management System (CMS) Project, a $15 million dollar conversion project that affected all of SIGA's 1830 machines and required collaboration between multiple organizations, internal developments, and casinos. “Like any major initiative there were a few bumps in the road, but Charles and his team were able to successfully navigate the various intricacies of the project which ultimately led to a successful completion of the conversion. Bally’s project group have indicated that this was the smoothest implementation they have ever undertaken and this can be credited on our part to the team with Charles as their leader,” said Pat. With numerous expansions, gaming events, and initiatives under his belt, Charles has been vital to SIGA growth, a role model for SIGA staff, and an ideal candidate for this First Nations gaming honour.
Since 2010, Tammy Whitney has led Grey E agle C a sino's Di t 'onik'o dz a C har i t ies, encouraging growth, innovation, and positive changes every step along the way. In the past years she has helped carve a successful path for the new organization, as well as taken a hands-on approach in developing her team's skills, and the talents of those around her. Her many leadership successes include co-leading the 4 x 4 Leadership model, an initiative supporting the employment of First Nations with disability; developing her department's Shining Star Program, being appointed to the Child and Family Services Board in Calgary by Alberta Minister Yvonne Fritz, working with the Aboriginal Business and Professional Women network, and implementing numerous educational programs, workshops, and one-on-one mentoring. “Tammy is all about relationship building, and she fully understands the importance of developing strong working relationships where open communication and freely expressing one's opinion is encouraged and appreciated,” says Carrie Manitopyes, Human Resources Manager, at Grey Eagle Casino. Her passion for training and leadership also extends to community work, as it won her the 2007 Role Model of the Year award in recognition for her contributions to the well being of the community and inspiration to others. “Tammy is an asset to the Grey Eagle Casino, to the Tsuu T'ina Nation, and to the gaming industry. She exemplifies the qualities of a leader in her day to day dealings with staff and external stakeholders, and she is passionate about seeing more Tsuu T'ina Nation members at the management level at Dit'onik'odza and at the Grey Eagle Casino,” adds Carrie Manitopyes.
A respected community leader and a dedicated member of the Great Blue Heron Casino team, Lorne Paudash leaves a positive impression on everyone he encounters. Since 1999, he has gone over and above his duties as Security Shift Manager to lend a hand with numerous casino events and provide training and mentorship for fellow employees. L orne's c o m m u n i t y w o r k i s e q u a l l y impressive. It includes two terms as an elected councillor with the Hiawatha First Nation Council and over a decade of volunteering as a medical responder for local Pow Wows. In addition, Lorne is an active member of his community's Fire Fighters team, volunteer chaperon for community schools and youth groups and, most recently, he served as a trainer for an aboriginal hockey team that went on to complete in nearby tournaments. Reflecting on his work within the casino and his community, Lorne says one of his proudest accomplishments was helping to arrange for the construction of a Fire Hall in his First Nation, which is scheduled to open in October 2013. Overall, he adds, “Due to the nature of a small community, you get to know everyone, and often you form a relationship of sorts with those you are there to help.” Speaking to Lorne's influence on both his community and the Great Blue Heron Casino, Reg Legarde, Security Manager with Great Blue Heron Casino, says, “Lorne is a well-deserving winner of the First Nations Canadian Community Service Award as he has consistently placed the well-being and success of his community at Hiawatha First Nation as a priority.”
Canadian Gaming Business | 45
20132013 CANADIAN CANADIAN GAMING GAMING SUMMIT SUMMIT SPONSORS SPONSORS HOSTHOST
PLATINUM PLATINUM
GOLDGOLD
SILVER SILVER
BRONZE BRONZE
EVENTS EVENTS EDUCATIONAL EDUCATIONAL PROGRAM PROGRAM
GOLF GOLF CLASSIC CLASSIC
AWARDS AWARDS GALA GALA RECEPTION RECEPTION
OPENING OPENING KEYNOTE KEYNOTE
ROUNDTABLE ROUNDTABLE
HOTELHOTEL KEY CARDS KEY CARDS
DESSERT DESSERT & COFFEE & COFFEE
LEGALLEGAL & REGULATORY & REGULATORY DELEGATE DELEGATE PORTFOLIO PORTFOLIO PEN PEN SESSION SESSION
FIRST NATION FIRST NATION AWARDS AWARDS
2 | Canadian 2 |Gaming Canadian Summit Gaming 2013Summit 2013
DELEGATE DELEGATE & EXHIBITOR & EXHIBITOR RECEPTION RECEPTION
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G2S
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SPIELO International’s INTELLIGEN is the first-ever Central System product in the Public Gaming market to receive G2S Certification from GSA. TM
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WHAT DOES THIS MEAN FOR OUR CUSTOMERS? It means that when INTELLIGEN is deployed in your market, you can expect quicker turnaround times for interoperability qualification testing between our system and all suppliers’ G2S-compliant gaming machines. Our central system has been proven to communicate in a multi-vendor environment using G2S as it was envisioned by the GSA. WHEN IT COMES TO G2S, WE DON’T JUST SPEAK IT, WE DO IT.
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48 | Summer 2013