Canadian Gaming Business August/September 2007 by MediaEdge

Canada's Premier Gaming Industry Magazine

Vol. 2 No. 1

August/September 2007

What Makes a Successful Lottery Product? Inside:

Perception versus Reality Fishing and the Paralysis of Analysis Consulting Services April 29 - May 1, 2008 - please visit www.canadiangamingsummit.com for details

Aug./Sept. 2007

Volume 2 Number 1

Publisher

Chuck Nervick

chuckn@mediaedge.ca 416-512-8186 ext. 227

Editor

Fred Faust

ffjr@swbell.net

Advertising Sales

Philip Soltys

philips@mediaedge.ca

Senior Designer

Annette Carlucci

contents 5

MESSAGE FROM CGA

Gaming News Roundup

Norm Peterson steps down as CEO of the Alberta Liquor and Gaming Commission, Dakota Dunes Casino opens near Saskatoon, poker pros defeat Canadian software, the Georgian Downs racino will more than double its number of slots, and recent developments involving First Nations and Internet gambling.

annettec@mediaedge.ca

Designer

Ian Clarke

PERCEPTION VERSUS REALITY

ianc@mediaedge.ca

Circulation Manager

Julie Shreve

esearch from Decima Research examines the discrepancy between Canadians’ beliefs about R problem gambling and the reality of the prevalence of problem gambling.

julies@mediaedge.ca

GAMING PERSONALITY – GLEN SAWHILL, CASINO WINDSOR

THE TRUTH (REALLY, THE HONEST-TO-GOODNESS TRUTH)

WHAT MAKES A SUCCESSFUL LOTTERY PRODUCT?

SUMMIT HIGHLIGHTS

Photos from April’s Canadian Gaming Summit in Toronto.

FISHING AND THE PARALYSIS OF ANALYSIS

CONSULTING SERVICES

Proudly owned and published by:

President Kevin Brown

President & CEO Bill Rutsey

kevinb@mediaedge.ca

wrutsey@canadiangaming.ca

Vice President, Strategic Development Chuck Nervick

Vice President, Public Affairs Paul Burns

chuckn@mediaedge.ca

pburns@canadiangaming.ca

Canadian Gaming Business is published six times a year as a joint venture between MediaEdge Communications and The Canadian Gaming Association For advertising information, Contact Chuck Nervick 416-512-8186 ext. 227 chuckn@mediaedge.ca

For editorial information, Contact Fred Faust 866-216-0860 ext. 271 fredf@mediaedge.ca

Copyright 2007 Canada Post Canadian Publications Mail Sales Product Agreement No. 40063056 ISSN 1911-2378 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 $44.94 per year, $80.79 two years. All rates are payable in Canadian Funds only. Postmaster send address changes to: Canadian Gaming Business Magazine 5255 Yonge Street, Suite 1000, Toronto, Ontario M2N 6P4

A lesson from Steve Wynn, the visionary casino mogul, in making believers out of consumers.

L ottery tickets are still an immensely popular form of gaming. Experts discuss the attributes of a good game.

asino managers often find themselves overwhelmed with data. But a disciplined approach to C all of these numbers can result in a useful analysis that leads to improved operations. Thirteen companies provide brief descriptions of the services they offer to the gaming industry.

lottery and gaming corporation highlights

News from Ontario, Quebec, Nova Scotia and the Atlantic Lottery.

Correction: Our story in the June/July issue on First Nations Gaming incorrectly explained the breakdown of revenue from First Nation casinos in Alberta. This is how the paragraph should have read: First Nation casinos in Alberta get 15 per cent of their slot machine revenue. Another 15 per cent goes to approved charities and the remaining 70 per cent goes into the Alberta lottery Fund. Of that 70 per cent, 30 per cent is for traditional Alberta Lottery Fund initiatives and 40 per cent goes into the First Nations Development Fund. Of that 40 per cent, 30 per cent is available to First Nations that host casinos to use for economic programs. The remaining 10 per cent is available to non-host First Nations to support their programs. We apologize for the errors.

Volume 2 No. 1

Canada's Premier Gaming Industry Magazine

Vol. 2 No. 1

August/September 2007

What Makes a Successful Lottery Product? Inside:

Official Publication of the Canadian Gaming Summit

Perception versus Reality Fishing and the Paralysis of Analysis Consulting Services

On the Cover A hot lottery game must get a lot of things right – payout structure, brand, marketing and visual appeal.

April 29 - May 1, 2008 - please visit www.canadiangamingsummit.com for details Canadian Gaming magazine August 1 1

8/28/07 2:21:18 PM

Canadian Gaming Business |

messagefromCGA

The More Things Change By Bill Rutsey, President and CEO of the Canadian Gaming Association

We’re always being told that in today’s fast-paced world, the only constant is change. This has never been truer for gaming here in Canada. Who would have bet just six months ago that the CEOs of three of the largest lottery and gaming corporations (including the recently announced retirement of Norm Peterson from the Alberta Gaming and Liquor Commission) would no longer be in their positions, that many other senior, public-sector gaming executives across the country would move on and that lotteries –- the sleepy, steady-Eddie segment -- would be a major cause of controversy? The odds on that trifecta would have been enormous. To this you can add a complete revamping underway of horse racing in Quebec, expansions and new facilities in progress across the country, and ownership changes of companies and properties. Innovation and change were also part of this year’s Canadian Gaming Summit in Toronto, with a bigger trade floor, more information, content and education, new awards, a great fundraising evening highlighted by Martin Short and a fantastic opening party at the Hockey Hall of Fame. The pictures and overview in this issue will give a taste of this to those of you who couldn’t be there in person. Another thing that we are also always told is that the more things change, the more they stay the same. The one constant to all of the change going on in our industry is that anyone with an axe to grind about any aspect of the gaming industry is always given a platform by the media, together with uncritical acceptance of any assertions that they make. This is why we commission and publish research – to get the facts out and to get people talking about the facts instead of myths and misperceptions. I didn’t get the opportunity to circulate at this year’s Summit and see as many of you as I had wished to for precisely this reason. From the moment that the preliminary results of the in-progress (by HLT Advisory) National Gaming Impact Study were released, I was inundated by and constantly responding to requests from -and doing interviews with -- television, radio and print media. I was getting the facts out, that gaming is:

• Canada’s biggest entertainment industry – roughly equivalent to television, the movies, radio and professional sports combined; • A major employer of Canadians, directly employing more people than the forestry industry or manufacturers of passenger automobiles; and • A significant source of non-tax revenue for governments to fund programs and services like health care and education. While we all know this, nine times out of ten I was met with incredulity and disbelief, and almost always came up against the serious misunderstandings that the public has about gaming –- as set out in our second annual Canadian Gaming Monitor (by PMG Consulting), the findings of which were also presented at the Summit. Also announced at the Summit was the Canadian Gaming Association’s exciting new strategic partnership with Decima Research, which will provide us with valuable research, insights and information, including reports from the editor of Decima's Gaming Market Insights, such as the one that appears in this issue of Canadian Gaming Business. Additional research projects commissioned and underway include reviews of problem gambling propensity studies and responsible gaming policies and practices. Which is all to say that there’s a lot going on and lots more to do –- to ensure that the public has the facts about this great industry, including our constant striving for improvement. We note that Statistics Canada recently (May 23, 2007) released a short overview on Canadian Gambling as part of its ongoing Perspectives on Labour and Income report series. HLT Advisory, the consultants we retained to conduct the National Gaming Impact Study, will review the Stats Canada report in the next edition of Canadian Gaming Business.

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Norm Peterson: Time for a change Norman C. Peterson retired July 31 as CEO of the Alberta Gaming and Liquor Commission. Gerry McLennan, head of the AGLC regulatory division, is serving as interim CEO until a permanent successor to Peterson is named. Peterson, 59, said the move was “more just a leaving,” rather than retirement. “It was time for a change,” he said. “I’m taking a couple of months off, will recharge the batteries, and then see what interesting opportunities might be out there.” That could include opportunities in the gaming field. Peterson said that when he joined the old Alberta Liquor Control Board in 1992, he planned to stay for only three years. He was part of the team that oversaw the privatization of Alberta’s liquor industry. In 1995, the liquor control board merged with Alberta Lotteries and the Alberta Gaming Commission to form the AGLC. Peterson, a chartered accountant and graduate of the University of Calgary, held several positions at the AGLC before getting the top job in 2001. Asked about the biggest changes in gaming that he’s seen during his tenure, Peterson cited the growth in the industry, and the emphasis on social responsibility. “The quality of casinos in Alberta now are far superior to what they were six, seven, eight years ago and they continue to improve,” he said. “First Nations gaming is brand new to Alberta in the last couple of years, and is going to develop even more significantly over the next couple of years.” He had particular praise for the River Cree Resort and Casino, which opened in October on the Enoch Cree reserve near Edmonton. Peterson also praised Kent Verlik, who heads the AGLC’s Social Responsibility division, which was created about five years ago. “Kent is one of the best social responsibility people in Canada and maybe even in North America as well,” he said. Back in the 90s, Peterson said, social responsibility didn’t get a lot of attention. But that’s changed.

“I don’t think you can continue with the gaming business anywhere these days,” he said, “without dealing with the social responsibility issues that go along with gaming.”

New First Nation casino in Saskatchewan Dakota Dunes Casino, the largest of the five casinos operated by the Saskatchewan Indian Gaming Authority (SIGA) and the closest to a major city, opened Aug. 10. The 80,000square-foot facility is part of a resort being developed on the Whitecap Dakota First Nation, 30 kilometres south of Saskatoon. The casino opened two months early and within its $61 million budget. Whitecap Dakota Chief Darcy Bear said 75 per cent of the 420 casino employees are First Nation. The building is owned by the Saskatoon Tribal Council, which is comprised of seven First Nations, including the Whitecap Dakota. The Council leases the building to SIGA, which made all the leasehold improvements and manages the casino. The Saskatchewan Liquor and Gaming Authority is the regulator. In addition to 625 slots and 12 table games, Dakota Dunes Casino has a theatre that seats 1,000 and banquet facilities for up to 650. Bear said construction will start next spring

on a 100-room hotel, scheduled to open a year later. The 18-hole Dakota Dunes golf course opened in 2003, and was named the best new course in Canada by Golf Digest. Bear said future development on the site will include another nine holes of golf, a new clubhouse, townhouses and condos, stores and an industrial park. The provincial government is spending $25 million on the highway to the Whitecap Dakota reserve, he said, work which may be completed by this fall. “All residents of Saskatchewan will benefit from the casino,” Bear said. The provincial government gets 37.5 per cent of the profit, local charities get 25 per cent, and a First Nation gaming trust gets 37.5 percent. All 74 First Nations in the province share in the trust. Bear said there were no problems finding enough employees, either for construction or for operation of the casino. “One thing that everybody overlooks is that there’s an untapped First Nation labour force out there,” he said. “We’ve learned how to tap into that market, and we trained that labour force.” Dakota Dunes is one of the few casinos in the country to have a smoking section. Bear said his government has its own smoking bylaw, which stipulates that a smoking room be fully enclosed, with strict HVAC specifications. “If you’re wearing a toupee in there, you’d better glue it down well!”,

Entrance to Dakota Dunes Casino.

Canadian Gaming Business |

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he joked. Employees have the option of working in the smoking room or not. The room has 125 slots; the rest are on the main, non-smoking gaming floor. One week prior to the opening of the new casino, the old Emerald Casino in Saskatoon closed. As compensation, its operator, Prairieland Park, will receive $2.6 million annually from SIGA for 30 years. Bear said that deal follows the precedent set in Regina, where the Regina Exhibition Association closed its casino upon the opening of Casino Regina and receives $2.6 million annually. The provincial government wants only one casino in each market, Bear explained. Even beyond the build-out of additional features at Dakota Dunes, Bear said, are plans to develop the larger area. “We’ve set up a partnership with the city and all the rural municipalities,” he said, “to build a tourism corridor that goes from Saskatoon to Lake Diefenbaker, and to start marketing that.”

Poker pros defeat Canadian software In June, we reported on a $50,000 contest between two of the world’s top poker players and Polaris, the University of Alberta’s renowned poker-playing computer program. The results are in: Phil Laak and Ali Eslami defeated Polaris in the two-day, Texas Hold ’Em event in July. The humans won two of the four rounds, Polaris won one round, and one round was a draw. The creators of Polaris, the university’s experts in artificial intelligence, said the contest taught them how to improve their program.

More slots for Georgian Downs racino Great Canadian Gaming Corp. announced in July that it had signed an agreement with Ontario Lottery and Gaming to allow the redevelopment of Georgian Downs, a harness track in Innisfil, Ont., which is north of Toronto. The project will more than double the capacity of the track’s racino, to 1,000 slots from the current 451. Great Canadian agreed to spend a maximum of $30.3 million on the expansion. OLG operates the slots, and pays Great Canadian 10 per cent of the slot revenue. The term of the agreement between OLG and Great Canadian has

been extended to Nov. 30, 2021, with an additional five-year option for OLG. Great Canadian said construction will take about 18 months. The company is also drafting a master plan for further development of the site. In October, Great Canadian paid $28.9 million for land adjacent to Georgian Downs.

First Nations and Internet gambling Two First Nations were among the applicants for the United Kingdom’s “white list” of Internet gambling jurisdictions whose websites will be permitted to advertise in the UK – the Mohawk Territory of Kahnawake, near Montreal, which the UK estimates is host to 401 gambling sites, and Alexander First Nation, of Alberta, which had hoped to start hosting gambling sites if it could reach an agreement with the provincial government. On August 9, the UK announced that only the licensing regimes of Isle of Man and Alderney had passed muster. It rejected the applications from Alexander First Nation, Netherlands Antilles and Tasmania, and said it was still considering Kahnawake and Antigua. The ad ban on sites from nonapproved jurisdictions takes effect Sept. 1. Sites based in the European Economic Area are automatically approved. Separately, the Kahnawake Gaming Commission was a defendant in an interesting case in Quebec Superior Court, a case that was decided on July 4. A Mohawk who lives on the Kahnawake reserve sued the commission, claiming he had improperly been denied a license to host gambling sites. The court ruled in favour of the commission. What was most interesting about this case, however, was what was not discussed in the courtroom. During three days of trial in June, no one raised the question of whether Kahnawake even has the legal authority to host Internet gambling on its reserve. The judge could have raised that issue, either in court or in her ruling, but did not. Lawyers familiar with the case say this is the first time any court in Canada has considered any cases involving the online gambling that’s licensed and regulated by the Kahnwake commission.

Perception versus Reality Attitudes toward Gaming By Kurt Eby

10 | August/September 2007

Do you know anyone personally whom you think has a problem with some form of gambling?

Source: Decima Research

The phrase “perception is reality” is extremely relevant when applied to the Canadian gaming industry. Whether our gaming is operated directly by government, or run by private businesses under strict government regulation, how much gambling is allowed in the future and how it is regulated will be shaped by Canadians’ attitudes and opinions toward gambling growth. In other words, the reality of our gaming landscape can be very dependent on the public’s perception of the sector. But what shapes perception? Unfortunately, it’s not always reality. Recent research conducted by Decima Research Inc. shows an extremely large discrepancy between Canadians’ perceptions and reality when it comes to the prevalence of problem gambling in our country. For instance, the prevalence rate, as measured by the Canadian Problem Gambling Index (CPGI), for “severe” problem gambling encompasses only 1.9 per cent of the population. But when Canadians are asked if they know someone personally who they think has a problem with some form of gambling, 31 per cent say “yes.” [The CPGI was developed by researchers organized by the Canadian Centre on Substance Abuse.] Even delving further into the CPGI scores does not close the gap between perception and reality. The CPGI, which classifies problem gambling as “gambling behaviour that creates negative consequences for the gambler, others in his or her social network, or for the community,” is subdivided into the following five categories: severe problem gamblers; moderate problem gamblers; at-risk gamblers; non-problem gamblers; and non-gamblers.

69%

71%

31%

29%

Total

65%

62%

35%

38%

MB/SK

YES

In 2007 the prevalence rate for the “atrisk” and “moderate” groups combined to account for 16 per cent of the population. When you add the 1.9 per cent of the population identified as severe problem gamblers, the total prevalence of Canadians who have a gambling problem or are at-risk gamblers is still only 17.9 per cent, clearly illustrating the public’s disconnected perception.

Improvement in both reality and perception Although perception is not the reality, it is a reality, and it’s one that the industry has to be cognizant of and should work toward changing. The good news is that

70%

69%

30%

31%

63%

37%

ATL

as Canada’s gaming industry continues to expand, the rate of problem gambling – both the reality and the perception – is actually improving. Our research shows that the prevalence rate for the severe problem gaming group has dropped from 2.1 per cent in 2005 to its current 1.9 per cent. As well, the combined group of moderate problem gamblers and at-risk gamblers has declined 3 per cent since 2005. On the perception side, the rate of those who responded “yes” when asked whether they know someone personally who they think has some form of problem with gambling dropped from 37 per cent in 2005 to today’s 31 per cent. The decline is

Prevention and treatment favoured over prohibition When it comes to addressing the problems of gaming, however, Canadians favour prevention and treatment much more than prohibition. In the specific case of VLTs, only 37 percent of the population believes the terminals should be banned, while 67 per cent feel they should be limited to casinos and racetracks. Overall, 41 per cent of Canadians feel the government should do more to restrict gambling, 52 per cent think more money should be spent on preventing/treating gambling addiction, 59 per cent feel the government should do more to address problem gambling issues, and 59 per cent think the advertising and promotion of gambling should be cut back. To further asses public opinion, it’s valuable to segment Canadians based on their differing attitudes towards the economic value of gambling, its social implications, changes to the status quo and an individual’s responsibility for his/her gambling behaviour. A proprietary segmentation conducted by Decima reveals that 35 per cent of Canadians hold strong beliefs about the

Gaming Attitude Segments

Gambling Benefits the Economy

Concerned But See Benefits

35%

19% Source: Decima Research

even more dramatic regionally. In 2005, 51 per cent of Atlantic Canadians, 54 per cent of the residents in Manitoba/Saskatchewan, and 41 per cent of Albertans responded “yes” when asked if they knew someone with some form of gambling problem. By 2007 those rates had dropped to 37 per cent, 38 per cent and 35 per cent, respectively. Taking a regional look at opinions about problem gambling also sheds some light on why certain Canadians perceive the problem to be greater than others. Atlantic Canada, Manitoba/Saskatchewan and Alberta also have the highest rates of all regions in Canada of people who have used an electronic gambling machine outside of a casino in the past 12 months (18 per cent, 16 per cent and 10 per cent, respectively). Vilified as the “crack cocaine of gambling” by anti-gaming forces, VLTs are highly associated with problem gambling and Canadians are likely more apt to identify VLT users as problem gamblers.

Problems Outweigh the Benefits

economic benefits of gambling, while 19 per cent feel strongly that gambling problems outweigh the economic benefits. A third group, 26 per cent, is concerned about the problems of gambling but also see its economic benefits, and the remaining 21 per cent find gambling acceptable and place the individual as the one responsible for controlling how much time and money he/she spends on gambling activities. Looking through this segmentation lens, we see that only 6 per cent of those who value the economic benefits of gambling think more should be done to restrict gambling, compared to 70 per cent from the segment that believes the problems outweigh the benefits. However, a higher 28 per cent of those who value gambling’s economic benefits feel the government should do more to address problem gambling issues, a sentiment that is echoed by 90 per cent of the problems-outweighthe-benefits segment. These two groups come closest to agreement (40 per cent and 81 per cent, respectively) on the notion of limiting VLTs to casinos and racetracks. Recognizing which issues Canadians from the various segments most agree on

26%

21%

Freedom to Choose

and where they are most polarized presents a good starting point for governments trying to address problem gambling, and the perceptions about it, as effectively as possible. Although perceptions about problem gambling may never fully reflect reality, they are just as important, because they will continue to drive public policy surrounding gaming regulation and expansion. And while changing perceptions may be the ultimate long-term goal for the industry, understanding attitudes provides real benefits right now.

Kurt Eby is editor of Gaming Market Insights, published by Decima Research. This article is based on a study conducted by Decima Research's Tourism, Recreation, Gaming & Leisure practice. For more information contact Richard LeighBennett: rleighbennett@decima.com. The Decima National Gambling Report is a unique syndicated consumer research study that explores behaviour and attitudes towards the issues that surround policy decisions related to gambling. The study involves surveying 3,500 Canadians during January of each year. The data is weighted by gender and age distributions to reflect the Canadian population. Canadian Gaming Business | 11

gamingpersonality

Glen By Anakana Schofield

Sawhill

Vice-president of slot operations, Casino Windsor In 23 years in the gaming i ndustry, Glen Sawhill has only worked for two companies. Ironically, he will soon be back working for his original casino brand Caesars (although Caesars is now owned by Harrah’s Entertainment), when Casino Windsor is rebranded as Caesars Windsor next year. Sawhill, 50, who graduated with a bachelor of science degree from Stockton State College in Pomona, New Jersey, left a secure environmental consulting job to enter the industry in 1984 as a slot attendant at Caesars World in Atlantic City. He went physically inside the machines as a technician for a number of years before an aspiration to return to the gaming floor struck and he was “fortunate” to obtain a position as slot operations supervisor. He began building an experience of the total operation. A promotion to shift manager followed. When a Caesars bid for a Louisiana casino, where he’d been proposed to run the slot operations, did not succeed, an opportunity in the company’s pioneering Windsor, Ont., bid was discussed. A weekend visiting the city and examining layouts and plans convinced him to accept that position as slot operations manager. He would call Windsor home for the next 14 years, and eagerly joined the team responsible for introducing the first

12 | August/September 2007

commercial casino in Ontario, a milestone in Canadian gaming history. Its significance is still not lost on Sawhill today. He recalls that period with the awestruck appreciation that others may reserve for the Beatles. “It was outstanding when we opened up in 1994,” he said. “No one anticipated it. It was unbelievable, in those days, so much so that within a year we opened the Northern Belle, a riverboat that was just to take care of the overflow.” Windsor, a border manufacturing town, previously revolved around the Big Three automakers. The arrival of the hospitality industry in such an overpowering manner was warmly embraced. Sawhill recalls images of long lineups just to get inside, jam-packed action on the gaming floor, and people lucky to find a parking spot within five blocks of the casino. “Customers would be lined up around the building, waiting for the doors to open; then they’d run to their favourite slot machines,” he said. With Sawhill’s duration in the industry, he’s observed all kinds of progress – from staff moving outwards and upwards (“There are people who started out here in ‘94 that are running operations throughout the country.”) to massive technological change. Progress bought its fair share of challenges, not least of which was the was start of casino gaming in Detroit in 1999, leading to three large competitors that Sawhill describes as “formidable.” He calls the aftermath of the Sept. 11 attacks as the most challenging time, when Casino Windsor discovered that the advantage of its location had suddenly become a peril. “Windsor is very dependent on the U.S. market,” Sawhill said. “Before 9/11 it was a free-flowing border, complimentary on both sides. Obviously

after 9/11 the restrictions and questioning have rightly taken it to a different level of security.” After 9/11, Casino Windsor put significant marketing initiatives and advertising campaigns in place. Sawhill explained that guests did want to come back, and the biggest hurdle was the perception of long delays at the border crossing. Along with promotions such as Triple Cash Back, Double Rewards and Bonus Bucks, Casino Windsor increased its headline entertainment and addressed practical issues with border updates via its website and toll reimbursements. Other immediate challenges are the falling U.S. exchange rate, which reduces the entertainment value of the player’s dollar. The smoking ban has created its own pressures, because U.S. players have to drive past three other casinos where they can smoke. Heated smoking patios and promoting a healthier gaming environment have helped. On his personal horizon, Sawhill says he’s had many opportunities to work stateside again. While these are flattering, he said,

“they’d never have been opportunities if I hadn’t come to Windsor. I find this place to be my home.” A personable man who speaks quickly, Sawhill has plenty to stick around for as Casino Windsor undergoes a $400 million expansion and reinvention that includes 400 additional hotel rooms, 100,000 square feet of convention space, a 5,000-seat theatre and other amenities to become Caesars Windsor in Spring 2008. While Sawhill urges the gaming industry to continue to evolve as entertainment facilities, it is the prospect of server-based gaming that fires him up the most. “This is the future of gaming. It’s going to hit on all three fronts: a better play experience for the customers, [it will] increase our efficiency and we have an opportunity for increased revenues. There are a tremendous amount of things that server-based can bring to us.” Sawhill, whose contribution to gaming in Ontario, was honoured in 2003 with the “Display of Excellence Casino Award,” is also chair of the Ontario Slots Initiative.

Established two years ago, this progressive committee (which also has representatives from Casino Rama, Fallsview Casino Resort and Ontario Lottery and Gaming) allows the properties to share information and liaise with their regulator, the Alcohol and Gaming Commission of Ontario, to become more efficient with their gaming submissions and approvals. The group meets quarterly, with one meeting reserved for product representation from manufacturers. Members discuss products, which games are and are not working, staffing, and technological advancements they want to evaluate and pursue as a group. There’s an “only in Canada” feel to this level of cooperation among casino executives. When you hang up the phone after a talk with Glen Sawhill, you can’t avoid feeling that this is someone who ended up in the place he’s meant to be, and he’s truly happy to be there. Anakana Schofield is a freelance writer based in Vancouver.

Canadian Gaming Business | 13

The Truth

(really, the honest-to-goodness truth) By David Bellerive Why don’t people believe us? We spend millions on advertising. And in all our efforts to get people to believe us, we’ve accomplished the exact opposite. Words have lost their meaning. In March, Steve Wynn, the visionary casino mogul, spoke at THE Conference on Marketing, held at the Venetian in Las Vegas. Truth was the heart of his message. He told a story to illustrate how we’ve drained our language of its lifeblood. You may know that Wynn’s newest resort in Las Vegas is the first five-star hotel on the Strip, and one of only a handful of five-star hotels in the world with a five-star restaurant. For a hotel the size of Wynn Las Vegas, with its 2,700 rooms, five Mobil stars is a big achievement. Wynn gave the audience some indication of how hard it was, confessing that he tried for a five-star ranking when he built Bellagio. He almost made it. Bellagio is outstandingly luxurious, but not lavish enough for the people who issue the stars. So Wynn poured his heart and soul (and hundreds of millions of dollars) into Wynn Las Vegas, the only hotel/casino in the world to have a five-star rating. That rating represents an “exceptionally distinctive luxury environment offering expanded amenities and consistently superlative service, with attention to detail and the anticipation of every need.” At least that’s what it’s supposed to mean. Imagine how Wynn felt after he achieved that milestone and then saw new hotels in Macau, where he also has a major hotel/ casino, list themselves as six-star. Six? That must be better than five. Except for a tiny little thing called the truth. There is no such thing as six Mobil stars. It’s something dreamed up. And, not 14 | August/September 2007

surprisingly, almost as soon as one hotel boasted six-star status, other hotels in Macau started claiming seven stars. How do you compete with that? Eight stars? Nine? By loading our ads with hyperbole, marketers really distance themselves from the truth. It’s not long before five-star loses its meaning. Like the word quality. People aren’t dimwitted. They get it. They understand what’s true. And when it is true, you can whisper it and they will believe you.

Spreading the truth, with creative thinking So in the face of all this, how can you tell the truth? Because the truth is … the truth doesn’t seem like it’s enough. If everyone’s saying they have a six-star hotel, then bragging about your five-star status seems – well … kind of lame. You can combat that, however. You just need some creative thinking, and some truth. Wynn lamented how much he spends on advertising; all of it trying to convince people that what he’s telling them about his hotel is true. And what do people do? They ignore all his messages, they ask a cab driver and they believe every word the driver says. That’s the truth. At least it’s the truth that the consumer believes. And rather than fight it, you can do like Wynn does, and use it to your advantage. He could start a “don’t believe your cabbie” campaign, or he could get the cabbies on his side and pay them for a recommendation. Maybe develop a rewards system or commissions for recommendations, but it wouldn’t be seen as true. Luckily for Wynn, he believes in his property. He is convinced it is the best. So he was willing to earn the recommendation of cab drivers.

Every cab driver in Vegas is treated to a night at Wynn Las Vegas, with their family. That is no small promotion, considering there are 6,000 cabs in Vegas and even more drivers. I asked my cab drivers if Steve Wynn had offered them a night at his hotel. It was true. And every one had taken him up on the offer. Who wouldn’t? (Although, one driver still preferred the Bellagio!) Wynn also offers the cabbies a waiting zone worthy of a five-star hotel. It Includes refreshments — just to ensure that every impression they have with Wynn Las Vegas is positive. Consider how much you spend every year on marketing. Then look at who influences your audience’s decisions. Where do they go for the truth? Is there a way to deliver your message to them using a credible medium? Is there a way to “sample” your product with the influencers? Helping clients find these connections has led us to some very innovative and surprising solutions. I wouldn’t recommend they replace your entire marketing budget; after all, traditional media is still a very powerful influencer. However the payoffs can be big if you connect the right message with the right crowd at the right time. That all leads to the most important question. What is the right message? What is the truth about your property? And how do you find it? Steve Wynn will tell you: It starts at the very top. Have an idea. Have a truth.

David Bellerive is creative director of the Phoenix Group, an advertising agency that is based in Regina, Sask., and works with many Canadian gaming clients.

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What Lot

16 | August/September 2007

t Makes a Successful ttery Product? By Bradley Vallerius

Experts say payout structure, brand, marketing and visual appeal all play a role. And oh yeah, the game has to be easy to understand. Sales for the North American music industry reached $23 billion in 2006 while movie box office sales totalled $9 billion. Both are easily recognized as massive consumer industries, but their sales figures -- even combined -- are pale compared to the $60 billion in sales earned by retail lottery games in North America in 2006. [The above figures are in Canadian dollars.) The lottery ticket, both as an online and instant win game, is clearly one of the most successful products ever developed, but not all games are created equal. Some seem to jump off the retail counter while others sit there idle and unwanted. “The difference between a marginal and a great performance is very tangible,” said Jim Kennedy, senior vice president of sales and global marketing for Scientific Games, which is based in Alpharetta, Georgia. Scientific Games has printed approximately 250 billion instant tickets since creating the first scratch card game for the Massachusetts Lottery in 1974. To hone in on exactly what makes a game successful, the company classifies each game according to specific parameters and logs every minute detail of performance. “We measure everything,” Kennedy said. “We are very empirical in our approach. At this point we have 15,000 games in our database, and we track and measure about 50 different attributes per game to determine what is effective.”

Payout scheme Kennedy says a simple, attractive prize structure is one of the most important elements of a successful game. A large enough percentage of the handle must be distributed to players as prizes, and the payout scheme must be arranged in such a way that there are enough smaller prizes in addition to the jackpots. The same is true for online games. An

excellent example of a well-balanced payout scheme is the one used in the national lottery game 6/49. Games that use the same basic concept of 6/49 -- pick 6 numbers drawn from a pool of 49 -- have proven the most successful worldwide, dating back to the 1950s. “No game has sustained itself and been as successful for so long. I think it’s partly because of the game matrix itself and because the levels of prizes are just right,” said Michelle Carinci, CEO of Atlantic Lottery Corp. Multi-million-dollar jackpots are enticing, but super-slim odds can be discouraging. Rewards for correctly matching three or more numbers make 6/49 a much more acceptable proposition for a lot of players, and Carinci doubts the game would sell as well without those smaller prizes. “The math just works for the players,” she said. Wendy Montgomery, vice-president of lottery marketing for Ontario Lottery and Gaming, said that explaining the annuity structure of games like Cash for Life and Millionaire Life helps in the marketing of these games. “The annuity option is often important on the larger-payout games,” she said. “There is consumer interest in a lot of products that offer annuity prizing, even though, in the end, the winners often take the lump sum [rather than the annual payments].”

Brand Besides being the oldest and most successful

Canadian lottery game, 6/49 also enjoys one of the best-positioned brands, which will help ensure continued success. Carinci says that 25 years after the game’s initial launch in 1982, focus groups still reminisce about the first 6/49 commercials. The game’s design may have changed a little to meet the demands of a changing market, but the its core promise remains the same. “The game has a clear values-based position,” Carinci said. “Players imagine living a dream of a better life, but the game also has the added value of being able to help those you care about -- letting dad retire early and putting kids through college.” “Super 7s, on the other hand, has a different position,” she added, “like change your life and do wild and crazy things.” The importance of branding can also be seen in Canucks Scratch & Win, launched by the British Columbia Lottery Corp. in September 2003. The $10 ticket featured images of Vancouver Canucks players and had the appeal of a sports trading card. The game offered more than $2.2 million in cash prizes, including Canucks prizes like hockey tickets, road trips and jerseys, in addition to a top prize of $100,000. The game proved so popular that BCLC printed an additional 200,000 tickets for release the following month. One of BCLC’s best performers at the moment is a scratch game branded off the hit television game show Deal or No Deal. “The Canadian Gaming Business | 17

play mechanic of this game is similar to the TV show in that players eliminate suitcases, and whatever is left is their prize. BCLC sold out of the game in four weeks, compared to 12 weeks for most other scratch-and-win tickets,” said Jim Lightbody, vice-president of lottery gaming for BCLC. “We have re-ordered and are bringing this back in the fall.” Improper branding can sometimes prove the main factor behind dismal sales. Carinci tells the story of a game called Punto, which was released by the BC Lottery when she worked there in 1988. As Canada’s first sports lottery, Punto was expected to fare well, but Carinci suspects that the game’s somewhat silly-sounding name may have been responsible for its slow take up. Holiday themes, crosswords and lucky 7’s are almost always certain to perform well, but beyond that it is difficult to predict which brands or themes will prosper in which countries and provinces or states. Scratch games branded off the hit reality-TV series Survivor killed in several jurisdictions, but had lackluster performance across Canada. Stars Wars and Monopoly themed games also received much less attention in Canada than elsewhere.

Marketing Lottery games must co-exist on the retail counter with about 10 to 30 other instant games and a handful of online games. Experts say that an individual game should be marketed so that it distinguishes itself and drive its own sales, but care should also be taken to ensure that the collective marketing of the games doesn’t create an environment that overwhelms or intimidates the consumer. “We look at how games fit and make sense together,” Kennedy said. “We segment in position with each other. It is a very important distinction that most classical-minded consumer marketers don’t understand.” Online game Millionaire Life provides a sterling example of an effective marketing campaign. The game boasted a top prize of $1 million every year for 25 years, but tickets were sold only during the month of February 2007. In addition to mass media advertising and retailer incentives, the game was supported by a pre-launch teaser campaign that put ads on the top of other lottery tickets. “Millionaire Life was a national game that was successful for jurisdictions across Canada, 18 | August/September 2007

but particularly so for BCLC,” Lightbody said. “BCLC achieved almost double its sales target. The sales target for BC was $6.8 million, and actual sales achieved were $11.5 million -- quite impressive for a new game. The on-ticket advertising had players asking retailers when the game was going to be available and made for an extremely strong launch. The fact that it was a limited-time offer and had an easily understood top prize contributed to the excitement.” As Lightbody indicates, the communication of prize information is a crucial component of success. “Communication entails how you present a game to the public and display it in retail, how lottery teams educate the public on aspects of playing the game, and of course full-blown advertising -- all wrapped together,” said Tom Dawley, senior vicepresident of marketing for GTECH, which is based in Providence, Rhode Island. “All of these things affect the player’s experience and help him form an impression about whether the game is winnable or not.”

Visual Appeal Attractive tickets with bright colours that catch the consumer’s eye tend to sell well, while plain drab tickets linger behind. “If it doesn’t pop, you might not see it,” said Laverty. Vivid displays are the main attraction behind the new Scratch FX tickets that Pollard Banknote, headquartered in Winnipeg, introduced earlier this year. The tickets are made from recyclable paper stock, but the company says they replicate the look of foil or even holographic foil. The first game to use the Scratch FX technology is the $2,000,000 Explosion game from the Michigan Lottery, a $20 game launched in March that offers players the chance to win up to 26 times. Pollard describes the game as “a towering, big value ticket that is truly hard to miss at retail” with “an eyecatching spectacle of glitz and color.” In its first three weeks on the market, the average sales for $2,000,000 Explosion were approximately 37 per cent higher than all other games at the same price point in the last year.

Other Considerations Simplicity One sure way to kill a game is to make it too difficult for the consumer to understand quickly. “What tends not to work are things that are in any way complex,” said Connie Laverty, GTECH’s senior vice president and chief marketing officer. Laverty recalls a game called Lucky Day that asked players to begin the game by selecting a day of the year. Sales were poor, and Laverty learned that even though the concept sounded great in theory, it was too complex to be efficiently marketed. “A game has to be intuitive,” she said. “It has to have a clear proposition. If the name of a game doesn’t capture the concept or isn’t clear, the ticket will not sell.” Jim Lightbody offers online game PayDay as an example of a game that has underperformed as a result of complexity. “Other jurisdictions have also launched this game with a different prize matrix and have had the same result: the game started out with a bang at launch, but cannot continue its sales performance,” he said. “Our evaluation of the game is that the prize structure may be too confusing for players.”

Market timing is very important, especially with instant games. Although scratch-card players are willing to try a lot of games, after enough losses on one particular game they are likely to grow disenchanted, so it’s important to have an appealing alternative available in good time. Montgomery said OLG is doing well with instant games, with sales running 30 per cent ahead of last year. She attributed this success to many factors. “That’s due to a new prize payout strategy, the re-design of tickets, more price points, and the success of licensed games like Deal or No Deal and Hold ’Em Poker,” she said. Most of OLG’s games had a top price of $10. But Montgomery said the lottery offered a $20 game called Quest for Gold that’s proven very popular. This is OLG’s own proprietary game. A final important element of a successful scratch card is what Kennedy calls the fullline view. “All games live in a fairly complex environment of technical and physical logistics and accounting,” he explained. “You’re not really done with the transaction until the winner brings the ticket back for evaluation.” Bradley Vallerius is a freelance writer based in St. Louis, Missouri.

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Fishing and the

Paralysis By Joe Witterschein and Paul Girvan

The paralysis of analysis is one of those 21st-century catchphrases that, when tossed around the water cooler, always seems to emit snickers from the marketing department and childlike jubilation from the accounting department. One man’s pain is another man’s joy. Or in the case of the gaming industry, an evil necessity. Admit it. Today’s casino operators analyze everything. Win per unit, revenue per room, hands per hour, pro formas that point out incremental this and incremental that. We have convinced ourselves as operators that an exhaustive review of our past will somehow predict the future, but too often all we get is that glassed-over look as finance and marketing staff churn out and absorb yet another spreadsheet. To keep the paralysis out of analysis, take a good hard look at exactly what you are analyzing. Have you included a thorough database review in your ongoing analysis schedule? Do you know who qualifies for what offer and what those players return to your property? Knowing that your marketing program is beyond a shadow of a doubt as cost effective and dynamic as possible — that your budget for player incentives and rewards is in fact delivering back to you value, recency and frequency —is the best cure for paralysis. At minimum on a monthly basis, you should be taking a hard look at your player demographics, player values and player reinvestment. This “research hat trick” will ensure that your direct mail offers are aligned in such a way that you are treating best players best. This disciplined approach to database analysis includes the all-important component of understanding the where of your best players: i.e., knowing which 22 | August/September 2007

postal codes are supplying you with the best players. Comparing and contrasting each postal code by total numbers of players and including key metrics such as theoretical win, coin in, ADT (Average Daily Theoretical), and average player days will highlight those top geographical areas of performance for your property. This supports the theory of “fishing where the fish are,” allowing you to confidently test mail into areas that have provided you with a steady stream of better players.

Mapping out your database We have found it surprising that few casinos utilize GIS (Geographic Information System) software in tandem with their database. This is like going to war without a map of the battlefield, or, if you will, “fishing without a fish finder.” Mapping out your database by visits, theoretical, and frequency is critical to effective analysis, especially when done in tandem with underlying demographics and lifestyle segmentation data that can be purchased at the postal code level along with the GIS software. This spatial method allows you to map the degree of market penetration within your market area and to analyze the demographics of postal codes where market penetration is high. Contrasting this with the demographics of low-penetration postal codes, the analyst can isolate the demographic variables that influence visitation, leading to a number of useful and potentially profitable analyses. Identifying low-penetration postal codes that have all the demographic markers of high-quality gamers makes prospecting for new customers via direct mail more effective. Such geographic targeting can reduce direct mail costs and increase response rates.

There is, however, another often neglected aspect to the “where the fish are.” The angler will often follow the lead of others, following them to their favourite fishing spots. Let’s assume we have a competing casino 100 kilometres away. Somewhere in between there should be a boundary zone where both casinos compete on a more or less equal basis for gamer visits. In a mature market the competition for these gamer visits can be intense, and shifting this market share may be the only way to grow revenue. The GIS database method can be used to identify the boundary zone, and how your property is performing in it. It can also help you to selectively target highpotential postal codes, comparatively underrepresented in your database, for direct mail offers. These can be identified based on demographics and/or by mapping inactive players in your database. The goal is to create cost-efficient programs, on a test basis, to determine if there is the potential to shift market share in your favour. These programs could range from direct mail to strategically located billboards. In essence, this is “fishing where the other fishermen are,” and offers strategic direction for shifting market share on a geographic basis. Yet another way of using GIS is to map the database in six-month increments and to look at any changes that may have occurred geographically over that time. This is a useful tool to keep on top of any encroachment into your market by competitors. It can also identify geographic areas that may deserve some added attention.

Understand revenue by segment It is also equally important to understand your gaming revenue by each segment of your database — the who — aligning them by a range

of Analysis How to Improve Database Analysis.

of ADT tiers, say from $500 and up all the way down to under $10. Similar to the geographic profile, digesting and understanding your database in this fashion allows you to see the forest from the trees, giving you an often harsh peek at where segments of underperformance might be and where those diamonds in the rough might be hidden. Too much or too little representation in your database of any one segment could be the result of under-reinvestment or the dreaded over-reinvestment in your players. Make sure you calculate a table within each of your player value segments that indicate the percentage of active players. Regularly looking at this type of analysis will serve as that “3,000-mile oil change” for your players club, helping you understand what elements of your marketing plan needs to be tweaked and what needs to be abandoned. And as long as you are at it, set up your monthly analysis by age segment as well, with the usual cast of indicators (number of players, days, theoretical, coin in, active percentage, average theoretical, ADT) showing you how the seniors are doing versus the Baby Boomers versus Generation X. As many a casino industry finance director has said, the numbers will tell the story. To complement the where and the who of your monthly database analysis there is the what and the when. As in what do your players respond to and when do they respond best. This involves tracking the date-sourced list of best days of carded or tracked coin in. Knowing which days the most and best players have been on your gaming floor is a key piece of information for any casino operator. A simple list of dates in ranking order based on number of players active, with total theoretical and coin-in figures thrown in for good measure, will do wonders.

Not only is this a great tool for staffing purposes but it will help your marketing team avoid “loading up” the promotional calendar on days that history shows your best players are coming anyway. You may also discover a number of dates that were under your radar, but flew high in motivating visitation from key players. Call this accidental success.

based upon average daily theoretical win. • Use well-targeted promotions to create new “best days.” Nothing prevents a bad case of paralysis of analysis more than a joint venture between marketing and finance that delivers, on a regular basis, numbers that tell the story. The Innovation Group has mapped the databases of hundreds of casinos over the

THE ONE THING THAT WE FIND REPEATEDLY IS LETHARGY CREATED BY OVER ANALYSIS Another attribute of the science of what is to keep a running list of your complimentary offers ranked by player popularity and redemption— valet parking, free show tickets, buffet comps, etc. Make sure you know with certainty how many players have redeemed coupons or comps and what is the theoretical associated with each offer, the cost and the reinvestment percentage. All this goes a long way when it comes to that annual budget-building time of year.

Monthly analysis pays off If you are diligent every month in producing an honest and accurate analysis of your database you will be setting yourself up for a successful and profitable ROI for your operation. • Use a GIS system with your database to understand the spatial relationships within your market and more effectively target customers. • Continue to build your database by sending things people care about and getting them to respond. • Develop programs to treat “best players best” based on value. • Use your direct mail offers to build visitation

years. While these are all protected under strict confidentiality agreements, we are experienced in recognizing the spatial patterns that result and can often identify, at first glance, where potential lies. The one thing that we find repeatedly is lethargy created by over analysis. For analysis of the database to be effective, it must be transferable into actual operating results. That requires using the proper analysis and creating a program for real measurement of results. These must be dynamic and should evolve with the property and the market. Without that, “paralysis of analysis” will continue to be a feature of the industry.

Joe Witterschein is vice-president for marketing services and Paul Girvan is managing director of The Innovation Group, which provides consulting services for the leisure and hospitality industry. The company, whose headquarters is in Denver, has extensive experience with large-scale, multi-faceted gaming market assessments and in providing financial feasibility analyses. Canadian Gaming Business | 23

consultingser vices

Canadian Gaming Business invited the following companies to submit descriptions (350 words maximum) of their services to the gaming industry. We have edited the submissions only to conform to our style. Company: AchieveGlobal Canada Headquarters: Toronto Founded: 1999 Contact: contactus@achieveglobal.ca, 800-706-9364 Since slot machines, roulette wheels, and poker tables are essentially the same, what differentiates the entertainment at one gaming establishment from the entertainment at others is how each organization defines and delivers on each guest experience. From high-salary middle executives and managers who convert your broad objectives into action plans to the hourly frontline employees on the casino floor, insufficient employee training at any level of responsibility within the enterprise can be detrimental to success. Ill-prepared supervisors and floor managers can easily erode the motivation of the employees who report to them, and add to self-inflicted voluntary retention losses. The greatest opportunity and profitability in the gaming industry belong to those organizations whose managers, supervisors, and frontline employees can convert a strong brand message into a successful brand experience for their guests through excellent product knowledge and customer service skills. The positive impact on revenue created by successful team member/guest interactions makes the level and quality of employee training a significant market differentiator within the gaming industry. AchieveGlobal helps organizations translate business strategies into results by improving the performance of their people. Clients rely on AchieveGlobal’s proven expertise in leadership development, customer service, and sales effectiveness. By implementing research-based learning solutions, AchieveGlobal empowers clients to successfully develop leaders and acquire, grow and retain profitable customer relationships. AchieveGlobal is currently working with the Saskatchewan Gaming Corp. and other casinos and hotels across North America. 24 | August/September 2007

To learn more about how AchieveGlobal can help your organization, please visit www. achieveglobal.ca. Company: Agilysys, Inc. Headquarters: Boca Raton, Florida Founded: 1963 Contact: Tanya Kash, tanya.kash@agilysys.com, 800-241-8768 Agilysys is one of the leading technology providers in the worldwide hospitality market. We offer proven software, services, hardware, and consultation for hotels, casinos, destination resorts, condominiums and conference centers to streamline operations and enhance guest satisfaction while maximizing profitability. Agilysys Consulting Services operates with a committed understanding of the business challenges facing our clients and skilfully leverages a vast array of services, capabilities and resources available in any of our global offices to address your toughest hospitality challenges. From technology planning and system design to integration and ongoing maintenance, our experienced consulting team is innovative, fast and dependable with the ability to integrate into your culture and adapt quickly to the needs of your organization. Agilysys has more than 25 years of experience and knowledge in hotel and casino management, including reservations operations, contract compliance, help-desk management, and consulting services. Our consultants are certified Project Management Institute (PMI) members and know what it takes to ensure a project is timely and profitable. Our accomplished project management professionals have extensive technical knowledge and experience managing technology installation projects. We work closely with your property team, communicating on a timely basis and providing the necessary knowledge and resources to successfully meet the project’s milestones. Agilysys provides expert project management consulting, supported with consistently high

standards of quality, to ensure your project’s success. Agilysys has developed an industryleading suite of hospitality solutions, including property management, inventory & procurement, point-of-sale, data analytics, self-service, and much more. We have additional expertise in compliance, credit-card processing and forms tools, and our system interfaces have allowed us to become knowledgeable in many casino and resort programs including casino, financial, hotel, and help-desk support applications. The success of any technology integration in a casino or resort operation is directly related to the people involved, the process being implemented, and the technology utilized. This ensures that the project proceeds smoothly, on time, and within budget. Agilysys provides our customers with solid professional experience, leading products from top manufacturers, project leadership, and a single point of responsibility. Company: Blau & Associates Headquarters: Las Vegas Founded: 2002 Contact: Elizabeth Blau, elizabeth@elizabethblau.com, 702.256.1665 Blau & Associates is a strategic restaurant planning and development company that specializes in providing clients with fresh, creative and sound business advice needed to create exceptional food and beverage concepts from start to finish. Blau & Associates offers strategic planning for all aspects of the hospitality industry including: Strategy Assessment, Concept Development, Tenant Search and Selection, and Project Management. Clients include Wynn Resorts in Las Vegas and Macau, China; MGM Mirage Resorts in Las Vegas and Biloxi, Mississippi; Trump Entertainment Resorts, New Jersey; Mohegan Sun Hotel & Casino, Uncasville, Connecticut; Enoch River Cree Hotel & Casino, Edmonton; and Edgewater Casino, Vancouver.

Company: Bristol Headquarters: Halifax Founded: 1976 Contact: Jennifer MacIsaac, jmacisaac@bristolgroup.ca, 902-491-2548 Bristol has been a leading marketing communications company for over 30 years. With offices in Atlantic Canada and Qatar, Bristol brings to clients more than 130 professionals, and leadership in advertising, public relations, events, online, business consulting and marketing research, plus a 65-person customer-contact centre, to help clients reach their audiences with measurable results. Bristol has a deep knowledge of and experience working with the gaming industry in Canada. This experience crosses several geographic and disciplinary boundaries. It includes work for governments, industry associations, gaming retailers and suppliers, lotteries, casinos and entertainment centres. Bristol’s gaming experience includes providing strategic advice to industry leaders; shaping and communicating government policy; researching perceptions and attitudes; launching, promoting and marketing lottery products; raising the profile of industry associations and awareness of issues; and creating a campaign focused on maintaining regulated gaming during a provincewide referendum. Specific offerings include strategic planning, crisis management, issues management, government relations, media relations, media training, writing, media monitoring, website development, public opinion research, focus groups, branding, advertising, and event management and planning. For more information, please visit www. bristolunexpected.com. Company: Casino Amusements Canada Headquarters: Richmond Hill, Ontario Founded: 1974 Contact: Aubrey Zidenberg, Aubrey@CasinoAmusementsCanada.com, 800-567-2121 Casino Amusements Canada offers experience in working with both the private sector and governments with regard to the commercial gaming industry, including horse racing. CAC has consulted on matters such as project development, operations, marketing and player development, internal controls and regulatory compliance for over 30 years. Aubrey Zidenberg, President and CEO,

is a ga m i n g i n d u s t r y s p e c i a l i s t w i t h extensive experience in the development, implementation and operation of international gaming, tourism and entertainment projects since 1974. As company president, he sat on the board of directors of the Responsible Gambling Council of Ontario for 10 years and the RGC of Canada since its inception. Throughout his career he has been approved and sanctioned suitable by the Nevada Gaming Commission, New Jersey Casino Control Commission, the Gaming Board of the Bahamas, the Alcohol and Gaming Commission of Ontario and other international gaming regulatory bodies. Casino Amusements Canada has consulted in the past to Summa Corporation (Howard Hughes’ gaming company), Harrah's Entertainment, Playboy Casinos, Trump Organization, Carnival Hotels and Casinos, Penn National Gaming, the Falls Management Company and many other international gaming companies throughout the Bahamas, Caribbean, Central America, Europe and Africa. Aubrey Zidenberg was responsible for crea ting the Carnival Hotel and Casino Canada company that won the management contract to operate Casino Rama and retains a financial interest in the operating company. In addition he is the developer and producer of the award winning Degree Canadian Poker Championship and its national liaison. Casino Amusements Canada is the exclusive International Junket Marketing Office for the Niagara Fallsview Casino Resort in Niagara Falls, Ont. This program operates under the guidance of Debra Zidenberg, a 20-year specialist in the operation of casino junket marketing, having worked with gaming resorts in Las Vegas, Atlantic City, Bahamas, Europe and Africa. The program currently has 35 junket marketing representatives covering over 45 Canadian and American cities. Among other honours, in 2007 Aubrey received an Honorary Doctorate of Laws degree from Assumption University of Windsor for his contribution to the development of the gaming industry in Canada and his community service focused on human rights. Company: CIBC World Markets Headquarters: Toronto Founded: 1997 Contact: Jacques Cornet, jacques.cornet@cibc.ca, 212.885.4381

CIBC World Markets is a leading provider of advisory and financing solutions with expertise across the gaming industry, lodging and leisure industries. With over 20 years of experience, the Gaming, Lodging & Leisure ("GLL") Group at CIBC World Markets has extensive industry expertise and offers a global commitment of resources focused on the sector. The GLL Group is comprised of 11 dedicated industry professionals in the United States and Canada, and provides a wide variety of products and services to the gaming, lodging, and leisure industries, with a particular emphasis on gaming that includes: • Mergers and acquisitions advisory and financing • New equity issues, private placements and equity structured products • Debt origination, syndication, sales and trading, research and advisory The GLL Group draws extensively from investment banking professionals across North America, Europe, Asia, and Australia to deliver solid execution of services and products for existing and prospective clients. CIBC World Markets is the wholesale and corporate banking arm of CIBC, providing a range of integrated credit and capital markets products, investment banking, and merchant banking to clients in key financial markets in North America and around the world. It provides innovative capital solutions and advisory expertise across a wide range of industries as well as topranked research for corporate, government and institutional clients. For more information, please visit www. cibcwm.com. Company: Classic Winner Headquarters: Toronto Founded: 2004 Contact: James Moshonas, James@assetBI.info, 416-838-8929 Classic Winner provides software solutions for significantly improved asset management of gaming equipment such as slot machines, and other assets. One solution involves the use of a handheld, bar-code scanner and computer. The handheld device is used to scan bar codes and allow the inspector, auditor, or repair technician to log information quickly, consistently, and reliably. This process eliminates the use of a pen, paper, and clipboard and also eliminates paper log books for tracking things such as which parts were replaced on each gaming machine. Canadian Gaming Business | 25

consultingser vices

The asset information is quickly uploaded to the main database which allows management and planners to see the findings within 24 hours or minutes, depending on when the device is synchronized. The asset information and specifics on condition allow for much improved capital planning, not just based on revenue, but also on other factors such as reliability, repair frequency, age, etc. There are capital planning reports based on life cycle facts and reports on which parts are replaced most often, etc. Consulting services will allow the solution to be customized to the specific site’s needs. The handheld computer is easy to learn, very robust, and can handle one- and two-dimensional bar codes for greater flexibility in dealing with the site’s specific needs. The computer is compact and very tough. It is used to quickly record facts using the stylus, touch screen with fingers, the keyboard, etc. The device can also handle handwriting and printing, drawing sketches, etc., which makes the tasks easier for the repair technician, the stock inventory person, or for the inspector or asset manager. The database can be delivered with training to allow the site staff to develop additional reports on their own. The payback period for the software and hardware solution is very short. Company: Hill & Knowlton Canada Headquarters: Toronto Founded: 1980 Contact: Troy Ross, troy.ross@hillandknowlton.ca, 416-413-4641 Provincial governments play a dual role in the gaming industry in Canada; they are involved in the operation and regulation of the gaming sector. The involvement of provincial lottery corporations as well as regulators can present unique challenges for gaming-related businesses. For some companies the challenge is lobbying for changes to strict gaming regulations. For others it may be responding to lottery corporation procurement opportunities. Still for others it is expanding their existing business in Canada. Whatever the obstacle, one critical requirement is partnering with a company that understands these unique challenges for gaming-related businesses in Canada. Hill & Knowlton’s Gaming Practice can help you realize your business objectives. Hill & Knowlton is Canada's leading government relations, public affairs and strategic communications firm with 26 | August/September 2007

offices across the country in Vancouver, Victoria, Calgary, Edmonton, Toronto, Ottawa, Montreal and Quebec City. We also offer international expertise in 40 countries around the world. Hill & Knowlton’s Gaming Practice is led by the former manager of policy for the Alcohol & Gaming Commission of Ontario. The practice is comprised of a nation-wide team of public affairs and communications professionals. Our team has helped gaming industry clients develop and execute effective public affairs, public relations and corporate communications strategies across Canada, and around the world. Our gaming clients range from; casino operators, technology companies, horse racing associations, bingo hall operators, equipment manufacturers and provincial lottery corporations. In conjunction with our Atlantic partner, Bristol, Hill & Knowlton is proud to be the agency of record for the Canadian Gaming Association. Hill & Knowlton provides a wide range of services including: • Government relations • Corporate communications • Corporate social responsibility • Regulatory and policy issues • Business to government sales • RFPs and procurement • Aboriginal affairs • Digital communications • Community relations • Public relations • Crisis and issue management • Media relations and media training For more information, please visit www. hillandknowlton.ca. Company: HLT Advisory Inc. Headquarters: Toronto Founded: 2005 Contact: Lyle Hall, lylehall@hlta.ca, or Robert Scarpelli, robertscarpelli@hlta.ca, 416-924-7737 HLT Advisory is the largest consulting and advisory firm in Canada focusing on the hospitality, leisure and tourism industry. Our seven full-time professionals provide a full range of services to the Canadian and international gaming, lodging, travel/tourism, recreation, sport, entertainment and public assembly sectors. The firm is led by Lyle Hall and Rob Scarpelli, two seasoned professionals together offering more than three decades of consulting experience. Lyle and Rob have played a significant role in the growth and development of the Canadian gaming industry. Through HLT (or

previously as national partners-in-charge of the Canadian gaming practices of two international accounting/advisory firms), they have been involved in one fashion or another with almost every major gaming development in every region of Canada. Since inception in 2005, HLT has undertaken casino, bingo, charitable gaming, racino, First Nation and related gaming projects in eight Canadian provinces. Our clients include privatesector gaming service providers, the investment community, provincial gaming corporations, regulatory bodies, and the Canadian Gaming Association. HLT focuses on: Business decision support • Market/financial analysis • Business case • Policy options • Contract negotiations Transaction support • Due diligence • Debt/equity raise • Acquisitions/divestitures • Financial modeling Industry support • Economic impact • Strategic planning • Project facilitation • Position papers HLT professionals invest considerable time and resources keeping abreast of industry trends and tracking industry performance. For the past two years we have presented a summary of Canadian gaming supply, revenue, and associated growth forecasts at the Canadian Gaming Summit. A summary of this information is available at www. hlta.ca. HLT is currently undertaking a benchmark economic impact assessment for the Canadian Gaming Association, the preliminary results of which may also be found at www.hlta.ca. Company: The Innovation Group Headquarters: Denver Founded: 1990 Contact: Stephen J. Szapor, Jr., Szapor@ theinnovationgroup.com, 303-798-7711 The Innovation Group is the premier provider of consulting and management services for the gaming, hospitality, leisure and entertainment industries. Services include market assessments, feasibility studies, market research, operations and marketing advisory services, strategic and financial planning and legislative support for clients throughout Canada, the U.S. and the world. The Innovation Group has a keen familiarity with the people and the geography of Canada and has done numerous projects and studies across the country. We have worked in Alberta, British Columbia, Nova Scotia and Ontario, as well as

worked with First Nation tribes. We have a keen understanding of the geography of the country, gaming policy and regulations and population bases. We have also produced the Bear Sterns World Gaming Almanac, which covers 34 states and four Canadian provinces. The Innovation Group’s unique mix of talents allows us to take a multi-disciplinary approach to evaluating operations, implementing turnarounds, managing properties and developing strategic business and marketing plans. For many of our clients, we’ve offered cost-effective and reliable ways to improve operating efficiencies and profit margins. Our depth of expertise in a wide array of analytical tools helps make strategic planning as reliable as it can be. From market assessments to evaluate a location to market research to determine the optimum mix of amenities to management advisory services to keep everything running at peak efficiency, we undertake each assignment with extreme accuracy and attention. To date, The Innovation Group reports have been responsible for more than $30 billion in investment decisions. The Innovation Group is a member of The Innovation Group of Companies, which also includes Innovation Capital, LLC, an investment bank with a practice focused on the gaming industry; Innovation Marketing, a full-service marketing, advertising and public relations firm; and Innovation Project Development, an owner’s representation, project management ser vices company capable of providing consulting advice or total development oversight. Collectively, The Innovation Group of Companies advises, raises capital, builds and markets developments. Company: Mackay|Wong Strategic Design Headquarters: Toronto Founded: 1992 Contact: Gordon Mackay, gmackay@mackaywong.com, 416-341-2348 Mackay|Wong is a Toronto-based, international design practice delivering award-winning design solutions, comprehensive project management and forward-thinking strategies to businesses tha t compete in today’s fast-paced hospitality and entertainment marketplace. The Mackay|Wong team designs and manages each concept as an expression of its client’s key interests and investments,

anticipa ting the demands of its target market. Mackay|Wong first entered the Canadian gaming scene in 1999 with several small-scale food and beverage projects at Casino Rama. Eight years later, the firm has carved a niche for itself in the industry as a strategic partner, vital to the branding and logistics required to develop a new gaming facility. Presently, Mackay|Wong is a major player in the conversion of Casino Windsor into a Caesars property. Even before the Caesars licensing agreement was signed, Mackay|Wong was assigned the task of designing a 750-seat buffet, and was later hired to create an upscale lounge and lobby bar called The Rotunda. The youthful and dynamic team at Mackay|Wong combines the talents of graduate architects, interior designers, and graphic designers backed by a seasoned construction and administrative management group. This multi-disciplined group assures a strategic design response that will deliver immediate impact and lasting results. Satisfied clients include various casinos, racinos, and off-track betting lounges, including Ajax Downs, Caesars Windsor, and Casino Rama. For more information about Mackay|Wong, please visit: www.mackaywong.com. Company: Mayfield Hospitality Headquarters: Calgary Founded: 1944 Contact: Jason Pechet, info@mayfieldhospitality.com, 403-695-3461 If you are looking for one company to handle a new casino or hotel project from concept to completion, Mayfield Hospitality is that company. Mayfield is truly unique, offering a diversified and integrated blend of services; everything from soup to nuts, from opportunity analysis to operations management, in the development and operation of exceptional resort destinations and entertainment complexes. Headquartered in Calgary, Alberta, Mayfield Hospitality is a full-service company with over 60 years experience of successfully pioneering, owning and operating casinos, hotels, food and beverage outlets and even theatres. They own and manage Canada’s most successful dinner theatre chain -- Stage West Theatre Restaurants -- with locations in Calgary and Mississauga. The Stage West All Suite Hotel, a luxurious suite hotel and theatre complex in Mississauga, was named

Hotel of the Year in 2003 by the Greater Toronto Hotel Association. Mayfield also owns and manages the popular Medicine Hat Lodge in Alberta, a property which boasts a casino and a suite hotel with an indoor/ outdoor water park, meeting and convention facilities and a range of food and beverage outlets. Mayfield will almost double its casino space this year, providing 30,000 square feet of gaming room. Other properties include Alberta’s newest entertainment and hospitality destination -- the Camrose Casino Resort, featuring a 26,000square-foot casino and resort hotel, meeting facilities and food and beverage outlets. The casino opened in May and the hotel will open this summer. The Stoney Nakoda Resort Casino, set in the foothills of the majestic Canadian Rockies near Canmore, will celebrate its casino opening in February 2008, with the resort opening to follow by the summer. Everyone in the casino business certainly knows of the River Rock Resort and Casino in Richmond, B.C. Mayfield Hospitality worked with Great Canadian Casinos to open and manage the magnificent resort hotel, as well as managing the food and beverage operations at all of the GCC properties throughout Canada. Mayfield Hospitality offers unique hospitality and entertainment experiences with a wealth of knowledge and experience as full-service developers, owners and operators of resort destinations and entertainment complexes. Their success story speaks volumes! Company: Phoenix Group Headquarters: Regina Founded: 1982 Contact: Pam Klein, pklein@thephoenixgroup.ca, 306-585-9500 Phoenix Group is a leading ad agency in the Canadian gaming industry, with over a dozen years of continuous training and casino experience. From branding, to marketing, to advocacy, we’ve learned how to improve your odds in a field that has expanded beyond tables and slots, to tourism and entertainment destinations. That’s why major players like B.C. Casinos (British Columbia Lottery Corp.), Casinos Regina and Moose Jaw, St. Eugene Golf Resort and Casino, Elbow River Casino, Nova Scotia Gaming Corp. and Lake City Casinos consider a partnership with Phoenix Group a sure thing. Canadian Gaming Business | 27

Lottery and Gaming Corporation Highlights The following reports were submitted by the provincial lottery and gaming corporations. OLG (Ontario Lottery and Gaming) Corporate On June 18, OLG provided its first quarterly report to the Ombudsman of Ontario regarding lottery integrity and security. The report is an update on the progress of the implementation of the Ombudsman’s recommendations and the recommendations made by management firm KPMG to strengthen prize integrity and customer service at OLG. OLG reported that major progress has been made on the 20 recommendations from the Ombudsman and 40 recommendations from KPMG. Work on 36 of the recommendations out of a total of 60 has been completed, 19 of which are undergoing a final review by OLG Quality Assurance teams prior to full implementation. Substantial progress has also been made on the remaining 24 recommendations from the Ombudsman and KPMG. Major accomplishments to date include the installation of more than 8,500 ticket checkers, a new ongoing consumer public-awareness campaign which has reached 80 per cent of adult Ontarians, a new 24-hour, 7-day-a-week customer complaint program, enhanced prize investigation procedures, customerfacing video screens at online lottery retailers and a “freeze” of the lottery terminal when a major prize is validated. OLG has also actively supported the implementation of a new lottery regula t o r y p r o g r a m b y t h e A l c o h o l and Gaming Commission of Ontario (AGCO). The AGCO is responsible for 28 | August/September 2007

enforcing new regulations and ensuring compliance by retailers and OLG. Effective July 1, all lottery retailers in Ontario must register with the AGCO and comply with new rules of conduct and with the revised contract with retailers. Retailers will be required to register with the AGCO by January 1, 2008, and follow specific terms and conditions in order to sell lottery products in Ontario. These new regulations will strengthen the integrity of OLG’s lottery system and protect the public and the reputation of honest retailers.

Loto-Québec Loto-Québec Dealt a New Hand -The Era of Continuous Growth Is a Thing of the Past For the fiscal year spanning April 1, 2006 to March 31, 2007, Loto-Québec posted consolidated revenues of $3.799 billion and net income of $1.468 billion. These results translate into respective declines of 5.4 per cent and 9 per cent vis-à-vis the previous fiscal year. The Lottery, Casino and Bingo sectors succeeded in maintaining their revenues at levels essentially comparable to those of the past few years. The Corporation’s overall drop in earnings is attributable instead to the Video Lottery sector, which saw its sales drop by $200.9 million, or 15.5 per cent, from fiscal 2005-2006 levels. One of the two factors that serve to explain this decline is the reconfiguration of the video lottery terminal (VLT) network, which consisted of 217 fewer sites than during the previous reporting

p e r i o d . At M a r c h 3 1 , 2 0 0 7 , L o t o Québec’s VLT network was comprised of a total of 2,905 sites. In addition, the legislation prohibiting smoking in bars that came into effect on May 31, 2006, accounted for a significant reduction in revenues within this activity sector. Ludoplexes — Providing an Original New Gaming Experience Loto-Québec’s new gaming centres, bearing the commercial name of Ludoplexes, are innovative places of relaxation and entertainment reserved exclusively for adults. They offer an opportunity to enjoy playing video lotteries and get together with friends in an animated, contemporary and friendly atmosphere. Located adjacent to the Trois-Rivières and Québec City hippodromes, two gaming centres will open their doors this fall and will offer 200 and 335 video lottery terminals respectively. In the case of these sites, a 22 per cent commission on the revenues generated by the units will be paid to Attractions Hippiques Québec, the owner of the racetrack establishments. Work is well underway on the centre scheduled to open in the summer of 2008 in Mont-Tremblant, a major tourist destination in the Laurentians. This site, which is not linked to a hippodrome, will offer 300 video lottery terminals. Loto-Québec’s overall game offerings will not be increased with the establishment of these new gaming centres. A portion of the VLTs withdrawn from bars over the past few years as part of the reconfiguration initiative will be transferred to these controlled sites.

New Poker Games at Québec Casinos The Casino de Montréal, Casino de Charlevoix and Casino du Lac-Leamy in Gatineau are preparing to offer their patrons this fall a selection of new poker games, including the highly popular Texas Hold ’Em. Increased Payout Rates for Instant Lotteries Having obtained the authorization of the provincial government, Loto-Québec will be able to increase the payout rate of instant lotteries as of this fall. Previously limited to a maximum of 55 per cent, the new maximum payout rate could reach 75 per cent. This change reflects current trends within the North American gaming industry. The maximum payout rate for the Corporation’s online games and sports betting has been fixed at 75 per cent for several years.

Loto-Québec La donne a changé à Loto-Québec -- l’ère de la croissance continue est révolue Au terme de son dernier exercice financier, soit du 1er avril 2006 au 31 mars 2007, Loto-Québec a réalisé des revenus consolidés de 3,799 milliards de dollars et un bénéfice net de 1,468 milliard de dollars, correspondant à des baisses respectives de 5,4 pourcentage et de 9 pourcentage par rapport à l’exercice précédent. Les secteurs des loteries, des casinos et des bingos ont essentiellement maintenu le même niveau de revenus que celui des dernières années. Le recul du chiffre d’affaires est plutôt le fait du secteur des loteries vidéo, dont les ventes ont chuté de 200,9 millions de dollars (-15,5 pourcentage) par rapport à l’exercice précédent. Deux facteurs expliquent cette baisse. La reconfiguration du réseau d’appareils de loterie vidéo qui s’est traduite par 217 sites de moins qu’à la fin de l’exercice précédent. Au 31 mars 2007, notre réseau dénombrait 2 905 sites. De plus, l’interdiction de fumer dans les bars, en vigueur depuis le 31 mai 2006, a grandement contribué à la diminution des revenus de ce secteur d’activité. Les Ludoplex, une expérience de jeux inédite Les salons de jeux, portant l’appellation

commerciale de Ludoplex, sont des lieux de détente et de divertissements inédits, réservés aux adultes, où ceux-ci pourront jouer aux appareils de loterie vidéo et vivre des moments de plaisir entre amis, dans une atmosphère animée, branchée, conviviale et colorée. Adjacents aux hippodromes de Trois-Rivières et de Québec, deux Ludoplex ouvriront leurs portes dès cet automne. Ils compteront respectivement 200 et 335 appareils de loterie vidéo. Dans le cas de ces deux sites, une commission de 22 pourcentage des revenus des appareils sera versée à Attractions hippiques Québec, propriétaire des établissements de courses de chevaux. Quant à celui situé à Mont-Tremblant – une ville à caractère essentiellement touristique de la région des Laurentides – les travaux vont bon train et l’ouverture est prévue pour l’été 2008. Ce site, qui n’est pas lié à un hippodrome, accueillera 300 appareils de loterie vidéo. Avec la mise en place des Ludoplex, l’offre de jeu ne sera pas augmentée. En fait, une partie des appareils de loterie vidéo récupérés dans les bars au cours des années précédentes sera transférée dans ces sites contrôlés. Nouveaux jeux de poker dans les casinos québécois Les casinos de Montréal, de Charlevoix et du Lac-Leamy (à Gatineau) se préparent à offrir à leurs clientèles, dès cet automne, de nouveaux jeux de poker, dont le populaire Texas Hold ’Em. Augmentation du taux de retour des loteries instantanées Ayant obtenu l’autorisation du gouvernement du Québec, Loto-Québec pourra augmenter le taux de retour de ses instantanées, à l’automne 2007. Présentement limité à un maximum de 55 pourcentage, le taux maximal pourrait atteindre 75 pourcentage. Ce changement reflète les tendances constatées dans l’industrie nord-américaine. Le taux de retour maximal des jeux sur terminal et des paris sportifs est fixé à 75 pourcentage depuis plusieurs années.

Nova Scotia Gaming Corp. Rebuilding confidence in Nova Scotia’s lottery system Since the retailer wins issue made headlines throughout Canada in March 2007, NSGC

has been working hard to restore public confidence in the Nova Scotia lottery system by doing things like buying ticket checkers for all lottery retail locations in Nova Scotia. NSGC is also leading a broad-scope review with the four Atlantic provinces that will carefully examine all lottery games operated by Atlantic Lottery Corporation (ALC). This review, which is being conducted by KPMG Forensic Inc., will be comprehensive in nature and will determine if controls are in place to ensure that players receive the prizes due to them, prizes are as advertised, and players have the information necessary to make informed decisions. Giving back to the community - an important part of what we do In May 2007, NSGC, with its ticket lottery operator, ALC, launched a new suite of Support 4 Sport lottery tickets where 100 per cent of profits go to amateur sport in Nova Scotia. Tickets include: Nova Scotia Special Edition Crossword, “Joe Fit” Breakopen, and Super 7 Twist. NSGC also launched the Support 4 Sport Program website, which includes a special interactive magazine feature and all information related to the Support 4 Sport Program (www.support4sport.ca). The Support 4 Sport Program is expected to raise at least $2 million in 2007-08, which will be used to buy sports equipment, create and enhance recreation/participation programming for all ages, support performance training programs for competitive athletes, and hire coaches at all levels. A focus on social responsibility During this period, NSGC successfully completed the second run of the friends4friends social marketing campaign in Nova Scotia. Developed by the Responsible Gambling Council (RGC) in Ontario, friends4friends is the first problem gambling prevention and awareness campaign in Canada targeting young adults. NSGC also completed the 2006-07 run of Know the Score, an interactive peer-led awareness program that visited 18 community college and university campuses throughout Nova Scotia. W i t h i t s o p e r a t o r, C a s i n o N o v a Scotia, NSGC also introduced MARGI (Mobile Access to Responsible Gambling Information) in the Halifax and Sydney Canadian Gaming Business | 29

casinos. This interactive player-information kiosk provides players with problem gambling awareness and prevention information through an array of engaging activities and games. MARGI was developed by RGC and is being pilot-tested in Nova Scotia.

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Atlantic Lottery Corp. ALC’s stakeholder confidence program is about providing customers with the tools they need to Play with Confidence, retailers with the tools they need to Sell with Confidence, and employees with the information they need to Speak with Confidence. Changes related to buying and checking tickets • Ticket checkers are already available at 1,300 locations. By September, they will be installed at all retail locations where ALC draw and sports lottery tickets are sold. • T-Bars, customer-facing LED screens designed to show players information about their ticket as it is validated, were installed in all retail locations in June. • Since June, ALC has provided a signature line on the front of all draw and sports tickets. This provides a clearly marked place for customers to sign their tickets. • As well, ALC requires that only signed tickets be validated for a prize. Retailers have been instructed to refuse to check a ticket unless it is signed. • The last four digits on both the ticket and validation slip have been made bigger and bolder. This allows players to easily match the validation slip with their signed ticket and to confirm whether or not the ticket was a winner and the amount of any win. • Retailers are required to return all non-winning tickets and the corresponding validation slips to players. • Beginning in August, two validation slips will print when a winning ticket is validated. Retailers are required to return all winning tickets (marked as PAID) and one of the corresponding validation slips to players. Retailers may keep the second validation slip for their records. Changes to call handling and investigations • In early June, ALC established a customer-concern hotline (1-800561-1715) and a dedicated customer-concern email system. • All concerns from the hotline or dedicated email are forwarded directly to ALC’s Security and Compliance department and are logged and resolved by that group. • ALC’s Security and Compliance department investigates all major wins of $10,000 and greater, as well as all non-arms-length wins of $1,000 or greater. • All wins by retailers or retail employees of $10,000 and greater are automatically subject to a 30-day prize claim investigation period. • A new winners’ database and new rules around the maintenance and retention of physical prize files have been implemented. Changes for retailers • Background checks will be required for anyone who opens a new ALC retail location or who, through a change of ownership, becomes the new owner of an existing ALC retail location. • The issue of retailer play is still under review.

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