Canadian Gaming Business February 2007

Canada's Premier Gaming Industry Magazine

Vol. 1 No. 4

February 2007

Responsible Gaming Canada leads the way

Inside: Problem Gambling Should Supervisors Share in Dealer Tip Pools?

Synthetic Surfaces at Racetracks April 25-27, 2007 - please visit www.canadiangamingsummit.com for details

February 2007

Volume 1 Number 4

Publisher

Chuck Nervick

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

Editor

Fred Faust

ffjr@swbell.net

Advertising Sales

Amit Kumaria

Philip Soltys

contents 5

philips@mediaedge.ca

Senior Designer

Annette Carlucci

annettec@mediaedge.ca

Designer

Ian Clarke

ianc@mediaedge.ca

Production Manager

Denise Macharacek

Responsible gaming, the sharing of tip pools between dealers and supervisors, and new racetrack surfaces.

7

amitk@mediaedge.ca

Editor’s Note

Message from CGA

Bill Rutsey calls for a change in the federal government’s tax treatment of Canada’s horse racing and breeding industry.

9

Gaming News Roundup

Fascinating charts from HLT Advisory illustrate data on gaming in Canada, major changes are coming to Ontario’s charitable bingo industry, and other gaming news.

denisem@mediaedge.ca

12

HORSES POUNDING THE POLYPROPYLENE FIBRES

Circulation Manager

Jennifer Hustler

Racehorses and their riders are safer on new synthetic tracks, but replacing the turf is not cheap.

jenniferh@mediaedge.ca

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

16

GAMING PERSONALITY

Philip Arnal of IGT Canada started at the bottom, as a change attendant. That experience helps him now as he sells slot machines and related systems.

19

DEAL THEM IN?

The treatment of tips earned by dealers at table games raises major issues for management, especially when it comes to sharing the tips with frontline supervisors.

22

PROGRESS IN RESPONSIBLE GAMING

Provinces are trying all kinds of methods to help people enjoy gaming in a responsible manner.

28

TAKING THE PROBLEM OUT OF PROBLEM GAMBLING

Problem gambling rates are declining in Ontario, but not among teens and young adults.

33

VLT GAMING – ARE CARD-BASED PROGRAMS THE ANSWER?

Bill Rutsey discusses Nova Scotia Gaming Corp.’s test of a program using cards in VLTs to give players “informed choice.”

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

35

FACILITY FOCUS

Casino Regina thrives on live entertainment and live poker.

37

CHEF SPOTLIGHT

Jerry Blumhagen manages a staff of 32 to feed hungry patrons at Elbow River Casino in Calgary.

38

LOTTERY AND GAMING CORPORATION HIGHLIGHTS

The latest news from British Columbia, Saskatchewan and Manitoba.

Volume 1 No. 4

Canada's Premier Gaming Industry Magazine

Vol. 1 No. 4

February 2007

Responsible Gaming Canada leads the way

Inside: Problem Gambling Should Supervisors Share in Dealer Tip Pools?

Synthetic Surfaces at Racetracks

Official Publication of the Canadian Gaming Summit

April 25-27, 2007 - please visit www.canadiangamingsummit.com for details Canadian Gaming magazine Februar1 1

On the Cover Provincial governments are focusing on responsible gaming, and some of their initiatives appear to be working.

2/28/07 10:50:39 AM

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editor'snote

Editorial Advisory Board Howard Blank, Vice President Media & Entertainment / Marketing & Promotions, Great Canadian Gaming Corporation Lynn Cassidy, Executive Director Ontario Charitable Gaming Association Robin Drummond, Senior Director Spielo, GTECH Nick Eaves, Vice-President Woodbine Entertainment Group Art Frank, President Niagara Casinos Brian Fraser, Marketing Manager IGT Canada Jordan Gnat, President & Chief Executive Officer Boardwalk Gaming Muriel Grimble, Executive Director Gaming Products & Services Alberta Gaming & Liquor Commission Lyle Hall, Managing Director HLT Advisory Inc. Zane Hansen, President & Chief Executive Officer Saskatchewan Indian Gaming Authority Brad Johnson, Vice President Marketing Aristocrat Technologies Inc. Ron Kelly, Executive Vice President Arrow Games Michael Lipton, Q.C., President, International Masters of Gaming Law and Partner, Elkind & Lipton LLP Eric Luke Eric R. Luke and Associates Alan Lyman, Senior Regional Director Scientific Games Margaret McGee, Vice-President of Prevention Programming and Public Affairs Nova Scotia Gaming Corporation Jovica Perovic, Director Casino Product Development & Facilities British Columbia Lottery Corporation Michael Randall, Vice President Corporate Responsibility & Communications Atlantic Lottery Corporation George Sweny, Senior Vice President Lotteries OLG Monique Wilberg, Chief Operating Officer Gateway Casinos

Responsible Gaming, Sharing the Tip Pools, and New Racetrack Surfaces We devote quite a bit of space in this issue to responsible gaming, a topic that certainly merits the attention. Many efforts to address this concern are underway across the provinces.

Stanley Sadinsky takes a look at the various programs (page 22). Michael Lipton and Chad Finkelstein focus on Ontario and on the alarming increase in gambling by young people, especially at online poker sites (page 28). And Bill Rutsey comments on Nova Scotia’s initiative with a unique card-based program for its VLT players (page 33).

Sadinsky and Lipton/Finkelstein make repeated references to the Responsible Gambling Council. This group is doing wonderful -- and often very creative -- work in this area, particularly with teenagers. Perusing the Council’s website, www.responsiblegambling. org, is time well spent. You can also sign up for free newsletters there.

Personally, I was struck by a quote from Jon Kelly, chief executive of the RGC, in a Toronto Star story in January. Commenting on research about the gambling habits of kids aged 15 to 17, Kelly said that teens whose parents don’t know that they are gambling have a problem gambling rate that is five times higher than those teens whose parents do know.

I played cards for money as a teenager, and it’s a diversion that I still enjoy. But my parents knew what I was doing, because most of the games were in our basement. My father even sat in on some of our poker hands, until a profusion of wild cards made the games too silly

(anyone remember Dr. Pepper or Baseball?).

But of course that was decades before the Internet made poker available 24/7. As a teen, I was often frustrated by my inability to corral five or six friends for a game.

In Deal Them In? (page 19), I write about whether supervisors should share in the tips that dealers earn at table games. This became a hot topic in Las Vegas last year when Steve Wynn changed the traditional practice, by giving his supervisors a cut of the tip pool. For an occupation in which so much of the annual income is derived from tips, the handling of the tip money – pooling, sharing, administering – is a major concern, let’s say headache, for management.

We don’t have a Steve Wynn in Canadian gaming, and nothing here is on the scale that it is in Las Vegas. But as our industry grows, the tip pools will grow, and the accompanying issues are likely to grow as well.

On a lighter note, Lisa Kopochinski examines new racetrack surfaces (page 12), such as the one at Woodbine. These promise fewer injuries for both horses and riders, and cheaper maintenance. Unfortunately, like many innovations, the synthetic surfaces are also expensive.

Fred Faust Editor fredf@mediaedge.ca 866-216-0860 ext. 271

E-mails to the Editor Policy Canadian Gaming Business welcomes e-mails to the editor. E-mails should include the name of the sender, business or professional affiliation, and city and province of the sender’s office or home. A phone number should be included for contact purposes; the phone number will not be published. We reserve the right to edit e-mails for purposes of brevity and clarity.

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messagefromCGA

Canada’s Racing and Breeding Industry Deserves Equal Treatment

By Bill Rutsey, President and CEO

Canada’s oldest form of legalized gaming is often given short shrift. Horse racing and breeding is one of the country’s most important agricultural industries, contributing $2.3 billion to GDP, more than $1 billion in tax revenue to all levels of government and paying $1.8 billion of wages to over 100,000 trainers, drivers, jockeys, exercise riders, grooms, and racetrack employees. Racing and breeding has evolved into a very sophisticated industry comprised of almost 40,000 horse owners and breeders – principally small business owners and entrepreneurs.

Provincial governments across Canada have long recognized the importance of racing and breeding to both rural and urban economies and have initiated programs of support, including the installation of and revenue sharing from EGDs (electronic gaming devices – slots or video lottery terminals) at many tracks – resulting in higher purses.

What hasn’t kept pace is the federal government’s tax treatment of the industry’s small business owners and entrepreneurs, for whom breeding and racing are significant businesses and important sources of income.

In essence what the regulations do is limit the tax-deductible amount of their breeding and racing business losses against other forms of income to $8,750, regardless of the actual amount. This limit was introduced almost 60 years ago in 1952 as a $5,000

cap for what was then termed “part-time farmers,” and increased only once, in the 1980’s, to $8,750.

This has served to choke off investment -even the most dedicated horse breeder thinks twice about the risk/reward equation before investing in additional or higher-quality breeding stock in Canada. It also creates a competitive disadvantage for Canadian-bred horses racing against American-bred horses on Canadian racetracks. American breeders benefit from a tax system that encourages investment in their industry.

This, together with an unintended consequence of the provincial EGD revenue sharing programs, has led to a disturbing trend at Canadian racetracks.

American-bred horses are winning an increasing number of races in Canada and a great deal of the additional purse money created by the EGD programs.

Money that was intended to support the Canadian racing and breeding industry is instead flowing south of the border.

This is not to say that anyone in the Canadian industry objects to foreign-bred horses racing at Canadian tracks. Horse racing is one of the original free-trade industries. Owners of race horses will traditionally enter their horse wherever the largest purses are offered. The introduction of EGD revenue sharing programs at Canadian racetracks resulted not only in top Canadian horses being repatriated back to

Canadian racetracks from the U.S., but also increased the number of American horses entering races in Canada.

Rather, what is needed is for the federal government to provide a level playing field for racing and breeding, just as it does for other Canadian industries. The Feds should either eliminate the cap on tax-loss deductibility for horse breeding and racing or at the very least simply adjust for inflation the original $5,000 cap set in 1952. This would increase the cap to about $50,000. It’s just the right thing to do.

The theme of this issue of CGB is Corporate Social Responsibility (“CSR”).

Developing and demonstrating a coherent national response to the issue of problem gaming is the defining CSR element for our industry. There’s a lot being done across the country that the industry just isn’t getting the credit for that it deserves, principally because of the uncoordinated manner in which the programs have been initiated. To this end the Canadian Gaming Association has commissioned independent research to comprehensively compile and synthesize the responsible gaming initiatives by the industry across Canada. I expect to be able to present the research results at the Summit in Toronto and in a future edition of CGB.

Canadian Gaming Business |

gamingnewsroundup  



Source: HLT Advisory Inc. based on various provincial governments/entities annual reports and Statistics Canada Annual



Demographic Statistics (2001-2005).



Note:

 

 

 









1. Win per Adult – Total gaming win divided by adult population.

2. A dult population – 18 or 19 years old



depending on individual provincial laws.

3. Gaming Win – All legal forms of gaming



that occur within an individual province.



4. No adjustment has been made to account



for inflow/outflow of gaming win to/from

  



 







Canada. Accordingly, the win per adult level may be overstated or understated.

Fun with numbers HLT Advisory, the Toronto consultancy that  manages the difficult task of compiling and interpreting data about gaming in Canada, prepared the accompanying charts for Canadian  Gaming Business. The first shows the gaming  win per adult for the entire country, annually  from 2001 through 2005. The second – the  bar chart – shows the 2005 win per adult by  province and by gaming sector.  “Win” of course means gaming revenue.  It’s the money the house keeps after paying  off winning players. It’s not profit, because  from the win the gaming operators must pay            salaries, rent, utilities and other expenses. EGD  is electronic gaming device, either video lottery       terminals or slot machines.

Note 4 is especially important. For both  charts, HLT added the win reported by  March 31, 2005, and calendar year 2005 are chunk of Newfoundland’s total than in any the     various gaming entities and divided that total labelled 2005.” other province. Ontario has the largest per capita      by the adult population. These charts cannot So after consideration of the methodology, expenditure on pari-mutuel races, but Prince account, for example, for the gaming revenue what do the charts show? The first one shows Edward Island ranks second in that category. acquired from Americans who visit Ontario’s a modest growth in nationwide win per adult, 9 Saskatchewan leads the country in bingo. two large border casinos. As Rob Scarpelli of per cent from 2001 through 2005. The second “Every province seems to have its favourite HLT put it, “There’s no way to account for shows that Albertans like to gamble! Alberta form of gaming,” Scarpelli said.

Canadian spending within other provinces, has the highest win per adult, but it also has the Canadian spending outside of Canada, and largest number of casinos and is blessed with a Changes coming to Ontario bingo American spending inside of Canada.” booming economy.

Ontario’s charitable bingo business – the Also, HLT states the following boilerplate As Scarpelli points out, however, the total country’s largest with about 100 halls and an about the problem of calendar years vs. fiscal dollar amounts are not the most significant estimated $750 million in annual wagering – is years: “The majority of Canadian gaming aspect of the second chart. Rather, the preparing for major changes. The regulator, the win data is collected on a fiscal year-end components of each bar reflect the gaming Alcohol and Gaming Commission of Ontario basis, with year end being March 31. Pari- activity in each jurisdiction, and how different (AGCO), began an extensive review of the mutuel and some bingo and other charitable provinces accept different forms of gaming. For business in late 2005. The agency retained HLT gaming (raffles, break open tickets, etc.) data example, the win per adult is smaller in British Advisory to conduct a financial analysis of the are collected on a calendar year-end basis. Columbia, at least in part, because it does not bingo industry and make recommendations for For the purposes of the following charts, allow VLTs. Lottery sales represent a bigger a new revenue model. 

               

Canadian Gaming Business |

gamingnewsroundup

HLT submitted its report last fall. Rob Scarpelli, a managing director of HLT, called his company’s analysis “the most comprehensive review of bingo in one jurisdiction in Canada.” The AGCO has accepted most of the recommendations and has held numerous meetings with affected parties to work out the details of implementation.

“There was recognition by all parties that the operational costs for the private sector have increased over the years without financial adjustments,” said Lynn Cassidy, executive director of the Ontario Charitable Gaming Association, which represents the charities that benefit from bingo in the province. “Many bingo centres have closed in recent years and there are currently a number of businesses at financial risk.”

Cassidy summarized the highlights of the HLT recommendations as follows: “The new model will be a provincial direction and not require individual negotiations among charities, operators and municipalities.

“All games will be considered as one pool of games that charities and operators can choose from. This will mean that provincial games no longer have to be “in conjunction with” regular bingo games. As a result, the current licensing processes will change. License fees will remain at the current levels but no longer be tied to prize board. The whole licensing process and structure is yet to be determined.

“Prize payouts will be mandated across the province to 70 per cent or less – for all combined bingo games – over what time period still needs to be worked out.

This approach of controlling payouts is consistent with other jurisdictions across the 10 | February 2007

country. The current prize cap of $5,500 will be removed.

“Marketing will be a very important component of the new model with increased funds set aside for marketing (10 per cent of win). Marketing plans will be developed by the operator and charities.

“The new model will be based on ‘all in revenue’ (food, beverage, other products, bingo, break open tickets) with prizes and 10 per cent for marketing off the top. Charities and operators will split the net – 55 per cent for operators (out of which all staffing and all operational costs must be covered) and 45 per cent for charities (out of which license fees, all administration and bona fide members’ expenses are covered).”

Cassidy noted that many details of implementation still need to be decided. The AGCO hopes to be ready for implementation

by May 1, she said.

Meanwhile, the Ontario government announced Feb. 2 that it was expanding its eBingo pilot program. With electronic bingo, players have the choice of using touch screens or traditional paper bingo cards. The pilot also includes the creation of more attractive bingo hall environments and more emphasis on customer service and promotion of the benefiting charities.

The first phase of the pilot covered sites in Barrie, Kingston, Peterborough and Sudbury.

The government said that “initial results are encouraging with revenues exceeding targets, but more testing is required.” The next phase will include Windsor and possibly five other locations. “Additional pilot sites will allow OLG to assess eBingo under different market conditions including competition from cross border venues, different regional conditions and varied market sizes,” the government said in its release.

Also on Feb. 2, the government said bingo hall operators will be allowed to sell and serve liquor on their premises, as a pilot project until Sept. 30, 2009.

Competition Bureau complaint A complaint has been filed with the Competition Bureau alleging that electronic gaming machines “are highly

deceptive and contravene the Criminal Code of Canada and the Competition Act.” The Competition Bureau is an independent, federal law enforcement agency that is based in Gatineau, Que. The complaint, signed as required by six Canadian citizens, charges that the machines “deliberately display a representation of the odds of winning that do not reflect the true odds of winning and that are intended to entice excessive play based on illusions of favourable odds and near-misses of prizes.”

The complaint concedes that “each play is really a random event with a clear win or loss outcome,” but says the machines contain “concealed processes” that “distort players’ perceptions of the probability of winning that make it impossible to make rational and informed decisions while playing EGMs [electronic gaming machines], effectively facilitating excessive play and unintentional and excessive loss of money.”

In a cover letter dated Dec. 18, Roger Horbay of Elora, Ont., states that “police and gaming regulators in provinces, like Ontario, have consistently refused to investigate our concerns . . . .” He offers to document the “police refusal to investigate.” Horbay signs the letter, which he copies to the federal Minister of Justice, as president of Game Planit Interactive Corp. and gaming technology advisor to Canada’s Gambling Watch Network.

That organization, in a release dated Jan. 15, endorsed the complaint and demanded an investigation into “how and why misleading and deceptive EGMs, that are no better than cheating carnival games, could possibly have been approved in Canada.” The release also referred to “the high standards for game fairness and honesty that is applied to casino table games.”

Canadians suffer from U.S. attack on Internet gambling The ferocious attack by U.S. prosecutors on non-American officials of companies involved in, or having anything to do with – or even formerly having anything to do with – Internet gambling has taken its toll on Canadian companies and their employees.

Two Canadian entrepreneurs are the latest victims of the American legal assault:

gamingnewsroundup Under an agreement between the province and the Federation of Saskatchewan Indian Nations, SIGA is the sole operator of First Nations casino gaming in the province. There are four SIGA casinos, with two more under development.

Hansen is from the Waterhen Lake First Nation and formerly held financial positions with tribal councils in Saskatchewan. He joined SIGA in January 2005 as acting CFO. He has a Bachelor of Commerce degree from the University of Saskatchewan and the CMA designation from the Society of Management Accountants.

No impact, yet, from U.S. passport rules John Lefebvre, of Saltspring Island, B.C., and Stephen E. Lawrence, formerly of Calgary, were both arrested in the U.S. on Jan. 15. In 1999, they co-founded Neteller, the online payment transfer service that specializes in transferring funds to and from Internet gambling sites.

Although neither man is currently an officer or director of Neteller, both were charged with conspiring to transfer funds “with the intent to promote illegal gambling.”

Lefebvre and Lawrence face 20 years in jail if they are convicted. Federal authorities in New York have until March 16 to file an indictment.

Neteller started in Calgary, but later moved its headquarters to the Isle of Man and secured a listing on the London Stock Exchange.

The company is authorized and regulated by Britain’s Financial Services Authority.

The arrests made headlines across Canada.

They were denounced by the Globe and Mail in an editorial on Jan. 19: “While the U.S. authorities would like to paint the two as criminal masterminds, the fact is that they have broken no laws in either Canada or Britain, where their company is based. Instead, they have run afoul of the hypocritical U.S. desire to restrict gambling on the Internet while allowing it to flourish at home, where it produces billions of dollars in tourism and tax revenue. . . .

“In other words, gambling is not only permitted but encouraged when it takes place at a racetrack, lottery office or casino somewhere in the United States, but becomes a heinous crime when it takes place on the Internet.

The absurdity of that position makes a

mockery of the law the U.S. authorities seem so eager to enforce.”

A few days after the arrest, Neteller withdrew from the U.S. market. The company later said the U.S. government had seized up to $55 million of its funds that were in the process of being transferred to or from U.S. customers. In February, Neteller announced the elimination of 220 jobs at its Calgary call centre.

The Vancouver Sun reported Feb. 14 that ESI Entertainment Systems, a Burnaby, B.C., firm, has also been damaged by the U.S. attack on Internet gambling. An ESI subsidiary, Citadel Commerce Corp., offers payment processing services, like Neteller, for online gambling sites. Until recently, most of its customers were American.

The Sun said ESI has laid off more than a third of its Burnaby work force. Its stock, which sold for $3 a share when the company went public in March 2006, fell to 58 cents in recent trading.

Hansen gets SIGA top job Zane Hansen has been appointed president and CEO of SIGA, the Saskatchewan Indian Gaming Authority. Hansen had served as acting president/CEO since Edmund Bellegarde resigned in January 2006.

Last fall, the SIGA board hired the Catena Company to conduct a confidential search for the position. Catena Company, a Native American-owned executive search firm based in Marietta, Georgia, produced a short list of candidates, who were interviewed in January by a committee of the SIGA board.

Two major border casinos reported no measurable impact from the change in U.S. policy regarding passports. Effective Jan. 23, all travelers arriving in the U.S. by air had to carry passports. But as representatives of Casino Windsor and Niagara Fallsview pointed out, most of their customers come by car, not by air.

“The impact at this point is just confusion about when a passport is needed,” said Holly Ward, communications director at Casino Windsor. “The biggest challenge is just clarifying for our customers that to travel by land, a passport is not required. We’re producing direct mail, flyers, etc. Also we’re educating our employees, so they can correctly answer questions from customers.”

“The challenge is in the perception,” agreed Steve Wolstenholme, vice-president of operations at Niagara Fallsview. “We continue to educate, mostly by direct mail.”

Sometime between Jan. 1, 2008, and June 2009, travelers entering the U.S. by land and sea will also need more documentation than currently required. The U.S. hasn’t decided the precise date or the precise form of i.d., whether it will be a passport or an enhanced driver’s license, for example.

It’s easy to see why the U.S. wants tighter procedures. According to a federal official quoted by the New York Times, more than 8,000 styles of birth certificates are issued by government bodies in the U.S. But such changes can hurt border casinos, and other tourist destinations, in Canada. “In general terms, whatever issue affects the border is always on our radar, given that 80 per cent of our customers are American,” Ward said.

Canadian Gaming Business | 11

Horses leave the gate at Woodbine's first race on the Polytrack surface, Aug. 30, 2006.

Horses Pounding the Photo credit: Woodbine Entertainment

By Lisa Kopochinski

Synthetic surfaces, in use at Woodbine and at two U.S. racetracks, promise fewer injuries than traditional turf for both horses and riders, and less maintenance. But they cost a pretty penny.

12  |  February 2007

Early last year, the California Horse Racing Board decreed that all major tracks in that state “must install a synthetic surface by December 31, 2007” or have their racing licenses revoked.

While there are no current plans by Canadian regulators to require racetracks to switch to synthetic surfaces, there’s little doubt in many minds that the future of horse racing in North America is headed in this direction.

Toronto’s Woodbine took the leap last summer and installed its new “Polytrack” racing surface at a cost of $10 million. A synthetic material comprised of polypropylene fibres, recycled rubber, carpet fibres and silica sand covered in a microcrystalline wax coating, Polytrack has a high shock absorption rate and low elasticity repulsion rate. It also has a firmer footing than natural dirt and can be much safer for horses and riders.

Tracks lacked consistency Said Jim Ormiston, Woodbine executive vicepresident, “Woodbine Entertainment has been at the forefront of innovation in horse racing for many years. The traditional sand-based racing surfaces utilized throughout North America lack consistency. One day they are hard, the next day deep, and the next day sloppy in the event of rain. This results in inconsistent racing results.”

This lack of consistency was also resulting in an unacceptably high rate of injuries to horses which, in turn, was adversely affecting Woodbine’s field size. That’s why Woodbine began to seriously consider a synthetic racing surface and chose Polytrack.

Polytrack was first created in the 1980s by Martin Collins of England, who rode and trained jumpers for horse shows until he

became interested in racing surfaces. His big breakthrough in the U.S. came when Keeneland in Lexington, Kentucky, installed Polytrack on a training track.

Essentially, Polytrack makes up the top six inches of the racing surface and requires an extensive drainage system before it is applied.

The existing dirt surface is removed first and a system of pipes is installed. Crushed rock comes next, then a layer of porous macadam, followed by the synthetic.

At Woodbine, Ormiston said the main benefit so far is how well Polytrack is being received by stakeholders. “Our owners and trainers are very positive, with an excess of 90 per cent of all horses on the grounds training exclusively on the new surface,” he said. Expenses have also been significantly reduced as the Polytrack surface requires less routine maintenance.

Polypropylene Fibres Photo credit: Turfway Park

Hooves hit the Polytrack surface at Turfway Park in Kentucky, the first North American track to use Polytrack for racing.

Canadian Gaming Business | 13

Demi Song winning the first race at Woodbine on the Polytrack surface.

All weather protection Woodbine had lofty expectations for the product before it decided on Polytrack, having conducted a detailed review of synthetic surfaces in North America and the UK. “We experienced deterioration in racetrack performance when temperatures dropped to and below freezing,” Ormiston explained.

“This issue is expected to be resolved by our supplier this year by slightly modifying the components of the Polytrack material. Even considering the deterioration last November, the Polytrack racing surface was a vast improvement over the traditional racing surface in similar weather conditions.”

With a dirt track, it must be graded by a tractor-drawn harrow — an agricultural device with discs for breaking up and levelling ground. This is then followed by a water truck after morning workouts and before every race.

Conversely, Polytrack only needs be “evened out” two or three times daily. With proper maintenance, Polytrack should only need to be refreshed every five to seven years. This will vary, however, on frequency of track use and whether the facility is indoor or outdoor.

At Kentucky’s Turfway Park (the first American track to offer racing on Polytrack), the surface was installed in August 2005 to increase safety. In the year before Polytrack was installed, Turfway reported 24 fatal breakdowns on the track during racing. In the first year of racing on Polytrack, that figure dropped dramatically, to three breakdowns. The track owners were also impressed with Polytrack’s all-weather surface.

In creating Polytrack, Martin Collins Surfaces and Footings LLC reported that a typical amount of rainfall will simply drain through the Polytrack surface. The unique structure of the track and base allows water to flow vertically through the surface materials to a specially 14 | February 2007

designed drainage system that carries the water away. Prior to its North American introduction, Polytrack was tested in Europe and remained consistent in temperatures as high as 100 degrees C. and as low was 14 degrees C. Snow removal is the same as for a conventional dirt track; it is plowed from the surface.

European scientists deem the ingredients used in the Polytrack safe for horses. However, over an extended period of time, manure will break down the surface and dry out the wax coating. Therefore, it is recommended that manure be removed from the surface.

Recouping costs While the cost to install Polytrack at Turfway was US$5 to $6 million (the track would not divulge the exact figure), Turfway expects to recoup those costs within four years.

Meanwhile, Woodbine’s payback on its Polytrack investment is dependent on three factors: how the Polytrack material holds up in Woodbine’s unique environment (a long racing season with 167 race dates and heavy daily training involving 1,700 to 1,800 horses per day; how much wagering will increase due to improved field size, fewer instances of “off ” track conditions and fewer cancelled race dates; and operating savings due to the reduced requirements for water and for daily maintenance.

In Irvine, California, Hollywood Park chose to install “Cushion Track,” which is manufactured by Equestrian Surfaces of Burnley, England. Mike Mooney, Hollywood Park’s director of publicity, said Cushion Track was selected for its consistency.

Though the cost for installation was US$8 million, Mooney said the main benefit has been an overwhelming endorsement by trainers and owners. “The Hollywood Park stable area was

Photo credit: Woodbine Entertainment

booked to capacity for the 2006 autumn meet and remains booked during the off-meeting,” he said. “Field size at the 36-day autumn meet averaged 8.5 horses per race, a 13 per cent increase, reversing a seven-year decline.”

While Cushion Track has increased field size, Mooney added that the intent was to do the right thing for the horse, rather than focus on the investment in a monetary sense. While early indications are that Cushion Track has reduced injuries, a true determination cannot be made until Hollywood Park runs its two 2007 meetings — the 63-day Spring/Summer Meet (April 25-July 16) and the 32-day Autumn Meet, which begins Nov. 7.

Woodbine’s Ormiston concurred: “It’s too early to make a firm determination regarding injuries to horses. At the end of the 2007 Woodbine race meet, we will properly evaluate the relative safety of Polytrack. Only time will quantify the impact.”

As for the future of horse racing, Ormiston said Woodbine believes that synthetic racing surfaces will become the norm in North America. “As we speak, synthetic surfaces are being installed at all racetracks in California, and likely at Arlington in Chicago. The early results from Woodbine, Turfway, and Keeneland have been positive.”

What about those smaller tracks in Canada, though, such as Assiniboia Downs in Winnipeg?

Darren Dunn, director of operations for Assiniboia Downs, said there are no plans to install a synthetic surface there. “The main prohibiting factor at this point would be the cost,” he said, adding that it would appear there will be a continued expansion of synthetic tracks in North America. But he is not aware of any plans to require racetracks in Canada to do this.

“The fallout would be tough to gauge,” Dunn said. “I cannot speak for other racetracks.

However, for our racetrack, it would simply be very difficult to move forward with live racing at the levels currently offered for overnight and stake purses and the number of live race days. The millions of dollars required for the installation would have to come from somewhere.”

Lisa Kopochinski is a freelance writer based in Sacramento, California.

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gamingpersonality

Philip

By Anakana Schofield

Arnal

Senior account executive, IGT Canada

Fortunately for the Manitoba Lotteries Corp. and more recently for International Game Technology Canada, Philip Arnal, 43, took a left turn when pursing a law career.

At age 29, having returned to university to take pre-law courses with a focus on business, he needed a part-time job to finance his education. A visit to Las Vegas coupled with a love for cards inspired an interview at the old Crystal Casino in Winnipeg for a position as a blackjack dealer, but training classes conflicted with his university courses. He went home without a job, but was subsequently invited back as a change attendant.

Arnal’s career – he’s always been based in Winnipeg – included stints as a slot attendant, slot manager and acting assistant manager at Crystal Casino; and acting slot manager and casino slots manager at McPhillips Street Station, another Winnipeg casino operated

by Manitoba Lotteries, which closed Crystal Casino in July 1999.

In December 2000 Arnal was hired as operations manager by Hi-Tech Gaming, which at the time distributed IGT products in Canada. He moved into sales and was later promoted to senior account executive.

IGT bought the assets of Hi-Tech Gaming, which was based in Moncton, N.B., in January 2005.

IGT Canada may or may not be surprised to hear that in Arnal it has a perfectly satisfied employee. “I am planning to stay with IGT until I retire,” he said. “They treat their employees very, very well. For such a large company to treat us the way they do is, in my opinion, exceptional.”

Arnal, who was born on a farm in 16 | February 2007

Fannystelle, Manitoba (population 100), wholeheartedly endorses the idea of young people seeking a career in gaming.

“Absolutely,” he said, ‘it is a dynamic industry that continues to grow and therefore the opportunities for people getting into the industry are substantial.

It is also exciting in the fact that the technology is constantly changing.”

Technological change may be exciting, but it also presents challenges for the Canadian gaming industry, in Arnal’s view.

“We have the brightest and best engineers out there, but because gaming is highly regulated, we have a tendency to move slower than other industries,” he said.

“Software companies that supply product to unregulated markets can write a new program and start selling it. But when we write a new program, it needs to go through testing, retesting, certification, quality assurance labs. It takes a long time to get through the process.”

His daily fight is for a piece of the pie: “How do I structure a sale such that it meets all the needs of my customer, so that I can get maximum value for the company I work for? I want the most market share of course, but it’s got to work for our customer.”

Arnal thinks maturing of the industry is needed in order to address responsible gaming, but he’s unequivocal in his own vision of how people should relate to casinos in a healthy manner: “What I want is to see everybody who is of legal age go to a casino once a month, once every two months or whatever they like, but somewhat regularly and spend $20 to $50. Not ‘lose’ but ‘spend’ it. Go there as a form of entertainment.”

In discussing the need to continue to develop the games that will attract new casino players -- the younger generation that grew up on Nintendo and Sega games -- he talks eagerly about “community gaming,” which he terms the new buzzword for his industry.

The goal, he said, is to “create a more social slot environment, rather than just me and this box. Community gaming involves multiple people playing independently, but somehow, at some point, they can have the interaction of playing against each other.”

One concept that IGT is developing involves players at a bank of slot machines.

When one player wins the top prize, everyone else playing at that bank wins a subsidiary prize.

Arnal’s career path is a reminder of the value of time spent by gaming industry executives among their players. Asked about the influence on his present job of those early years in his career, he said: “It’s huge. I spent eight-plus years working on casino floors, a lot of time talking to players and watching how they play. Just knowing the games and how they operate and what it is that appeals about a game helps enormously.”

Arnal discusses topics like the strategic placement of slots on the casino floor with an enthusiasm akin to an NHL fan debating the home team’s power rankings.

“It’s about more entertainment,” he concludes. “If I can entertain you more, you are more likely to come back and visit me.”

Anakana Schofield is a freelance writer based in Vancouver.

18 | February 2007

Deal Them In?

By Fred Faust

Steve Wynn created controversy last year when he ordered table game dealers to share their tips with first-level supervisors. That’s not the practice at most Canadian casinos. But policies relating to dealer tips and supervisors raise major issues for management.

The legendary and visionary Las Vegas mogul Steve Wynn made a bold move in human resources last year. He reorganized the management structure of the table games department at Wynn Las Vegas, and decreed that, effective Sept. 1, first-level supervisors would share in the dealers’ tip pool. The new policy was apparently unprecedented for a major Strip casino.

Dealers were outraged, because their annual pay was effectively cut by about $10,000. They complained to Nevada gaming regulators, and they filed a lawsuit. The regulators upheld Wynn, and a judge dismissed the suit. The dealers have organized some protests, but they are not represented by a union and lack the clout to force a return to the traditional practice of sharing tips only among themselves.

Wynn and his managers argued that change was necessary because supervisors were earning less than the dealers they supervised. Thus it was difficult to persuade dealers to accept promotions to supervisory positions. Wynn Las Vegas attracts a huge share of high-roller business. That translates into large tips, which pushed dealer earnings to $100,000 a year and more. The starting salary for supervisors was $60,000.

“It’s such an aberration that, in this business, frontline workers make more than their

supervisors,” said Jeff Simpson, a gaming reporter for the Las Vegas Sun. But even if Wynn’s reforms have removed that aberration, Simpson doesn’t expect the dealers to depart: “If Wynn’s dealers are still the highest paid in Las Vegas after taking a 10-15 per cent cut, it’s pretty hard for them to quit and say they’ll go elsewhere.”

Simpson told Canadian Gaming Business that no other major casinos in Las Vegas have followed Wynn’s example, but he added, “I’d be surprised if no one else has copied this move in another year and a half.” It would only be the higher-end properties that would be likely to do so, he said, because dealers at low-roller or even midlevel casinos don’t earn enough tips to elevate their earnings above those of their supervisors.

U n l i k e t h e d e a l e r s , t h e Wy n n supervisors don’t get a full share of the tip pool. The blackjack pit supervisors, for example, who are now called “casino service team leaders,” receive a 40 per cent share. Combined with a raise of $5,000 to $10,000, most are now earning about $100,000, an increase of $40,000.

At that rate, Simpson said Wynn expects to lure supervisors from other casinos.

He’ll need more supervisors when he opens Encore, a sister property to Wynn Las Vegas, late in 2008.

Policies in Canada At most Canadian casinos, table game dealers do not share their tips with supervisors. That’s the policy in Ontario and in Alberta. Stephanie Francis of the Alberta Gaming and Liquor Commission said, “Our guidelines say that tips are for dealers only. This policy helps ensure the separation between a dealer and a pit boss. Pit bosses are there to make decisions. This helps protect the integrity of the game.”

In Saskatchewan, managers used to get a percentage of tips. But Angela Gordon of the Saskatchewan Gaming Corp. said that policy changed in 1998. Workers at the casinos in Regina and Moose Jaw are represented by unions, and only the workers covered by the collective bargaining agreement now share in the tip pool.

At the four casinos operated by the Saskatchewan Indian Gaming Authority (SIGA), the dealers decide who shares the tips.

Vern Acoose, vice-president of casino operations for SIGA, said any hourly employees – which include first-level supervisors – are entitled to participate in the tip pool, subject to a vote of the dealers. “But it’s not a real big deal here,” he said. “Tips probably average about $2 an hour.”

Manitoba dealers do not share tips with supervisors. “There is sufficient distance, wagewise, between the dealers and the supervisors to make the consideration of tip sharing a Canadian Gaming Business | 19

non-issue,” said Jackie Beaton of the Manitoba Lotteries Corp. “The MLC administers the tip distribution on behalf of the union and the employees, but it is the union and the employees who determine who should share in the current tip arrangement. This practice has been in place for many years.”

Until April 1999, Loto-Québec prohibited tips to dealers at its three casinos, setting their salaries higher to compensate. Then it began a guaranteed tipping formula of $6.50 per hour.

In February 2003, the policy was changed again to permit dealers to keep all tips. Supervisors do not share in the tip pool.

Two provinces – Nova Scotia and British Columbia – leave such decisions up to the casino operators. Andrew Williamson, table games specialist for the British Columbia Lottery Corp., said the policy focuses on which types of employees cannot accept tips, but does not specify which ones should share in the pool.

“We go into the roles of security and surveillance officers and casino managers, that they’re not allowed to be in tips,” he said. “But we don’t prohibit dealers or dealer supervisors from accepting tips. I believe that all of our service providers [i.e. casino operators] here allow the dealer supervisors in the tip pool. I believe it’s always been that way in B.C.” While BCLC gives operators a lot of latitude, it does restrict the size of tips that come in the form of a bet. Players everywhere are free to tip dealers

20 | February 2007

directly with cash or chips, but many prefer to give tips in the form of bets. If the player wins the bet, so does the dealer. Superstitious players like the idea that the dealer shares their interest in the outcome of the game. In Las Vegas, the size of a bet “for the dealer” is restricted only by the house betting limits, which is one reason tips are large at high-end casinos. But BCLC limits bets for the dealer to $25. Loto-Québec also limits tip bets, to 10 per cent of the maximum bet allowed at the table.

Great Canadian Gaming operates casinos in both Nova Scotia and British Columbia.

Howard Blank, the company’s vice-president for media and entertainment, said Great Canadian doesn’t get involved in policies on tip pools, instead letting the dealers make all decisions regarding the distribution of tips.

“There are tip committees that handle that,” Blank said, “and we specifically have no say in any of that for obvious reasons, because that’s something amongst the dealers and something we don’t want to delve into at all. The staff committee decides who shares in tip pools, and that varies from location to location. The staff committee appoints people who handle the tip distribution and the tip counting, calculations, etc. It’s strictly autonomous from us and our corporation in any way.”

He said that dealer supervisors usually share in the pools, but “not management.”

Gateway Casinos is the other major operator in B.C. At the company’s Lake City Casinos, dealer supervisors share in the tip pool.

But tip committees that are elected by the employees make all decisions involving shares and maintain the pools and all of the records. The only role the company plays is that of security: the tip committees are allowed to store the tip funds in a casino vault until distribution.

Acoose said that SIGA also assists its dealers with security for managing their own tips. “We allow them to do their count

under camera, and help them if there are any problems,” he said. “The system works well.”

In Québec, the tips are pooled and redistributed by casino management to dealers, who belong to a union, as part of their paycheques.

One of the many thorny issues involving tips, especially when they are managed and distributed by employee committees and thus are not part of the casino operator’s accounting system, is taxes. The Canada Revenue Agency expects employees to declare all of their tips, and sometimes audits the returns of casino employees, looking for undeclared tip income.

Gateway’s Lake City Casinos have had a dispute since 2000 with the CRA, which argued that Lake City Casinos owed the employer’s share of payroll taxes – for the Canada Pension Plan and Employment Insurance -- on tips received by employees. Lake City Casinos’ position, that it never had possession of the tip money and didn’t distribute it to employees, was upheld last year by a lower court. The CRA has appealed to the Federal Court of Appeal in Ottawa, which has yet to set a hearing date.

Cop or goodwill ambassador?

One could argue, as some of the angry Wynn dealers have, that if management wants supervisors to earn more money, it should simply just give them bigger raises. But while Wynn Las Vegas clearly makes good money on table games, generally these departments are not as profitable as they used to be. In many North American casinos, 80 per cent of the gaming revenue – and probably an even higher percentage of profit -- now comes from slot machines.

“With so many table games departments struggling in today’s gaming world, the ability to give supervisors pay raises is getting tougher and tougher,” Vic Taucer wrote in an article posted on Urbino.net last month. Taucer is president of Casino Creations, a Las Vegas training and consulting firm. His article was supportive of Wynn’s “experiment.”

Acoose said the four SIGA casinos, which are small properties located in sparsely populated areas, generally lose money on the tables.

They’re kept as a service to customers, he said.

That’s undoubtedly true for many casinos.

Part of what Taucer and others see reflected

in, and encouraged by, the new Wynn policy is a changing role for table game supervisors, with less emphasis on security and more expectations for customer service.

“This isn’t purely a management job,” Taucer quotes a Wynn executive as saying.

“They’re welcoming guests to the table, they’re introducing themselves, they’re initiating ratings, they’re administering credit, and they’re making sure cocktail service is timely. They’re establishing a rapport with that guest.”

BCLC’s Williamson concurs. “The way the industry’s been changing over the last 10 years,” he said, “there’s been a lot of technology, with some really advanced digital security systems, stuff in the pit now with casino management systems, RFID chips, electronic shoes. Primarily the dealer supervisor’s role, if you go back to the beginning of gaming in North America, was focused on game security and game protection.

With much of this technology, their focus is going to change.

“And with many of those dealer supervisors, their primary function in Las Vegas is player tracking, tracking wagers and buy-ins. Again, there are systems now that are automating and helping in that process. So they can focus their efforts a lot more on customer service, working in partnership with the dealers to make sure that the players have a better experience at the table, as opposed to being silent men in suits in the back of the pit who just pace backwards and forwards and don’t make eye contact with the players and concentrate on game protection.”

One Canadian casino executive, who requested anonymity, disputed the idea of less emphasis on the security role. “There have always been periods when the industry tells itself: ‘We’ve got the technology now’ to prevent the latest scams,” the executive said.

“But anybody in this business will tell you that where there’s a will, there’s a way. Technology in the table games area has helped somewhat, but the supervisor’s role must continue to be that of policeman.”

Monique Wilberg, chief operating officer of Gateway Casinos, comes down on the security side of this discussion: “Supervisors must have the undivided loyalty to maintain the integrity of the game, that’s their role,” she said.

Impediment to recruiting supervisors?

Canadian gaming operations don’t have the

need for the sheer numbers of table game supervisors that Wynn has and will have with his expansion. And they don’t have dealers with six-figure incomes who refuse to be promoted to supervisor. Beaton of Manitoba Lotteries, for example, said, “We have no difficulty getting interested employees (dealers) to apply for supervisor positions when posted.”

But some officials worry that as the industry grows here, persuading dealers with sizable tip income (it can exceed $25 an hour in some of the larger Ontario casinos) to move into the ranks of management, where they may start with less income, could become a problem. For one thing, they say, a casino cannot, or at least

“This [the Wynn reforms] is going to encourage that natural progression that any corporation would have, where staff come in at the entry level position – the dealer level – and have a good reason and good encouragement to learn and progress through the ranks. So it should benefit not only player customer service because they’ll have new, fresh dealing staff and the turnover will be quicker, but also all the way through it should benefit the industry by dealing with some stagnant roadblocks that have historically been there.

“You need to have engaged, motivated employees that learn a particular role. With a dealing job, even on the hardest game, like

With a dealing job, even on the hardest game, like craps, it’s a two to three-year job and you’ve pretty much got that sorted out.

–Andrew Williamson, BCLC should not, go outside to hire someone with supervisory experience in another industry and simply train them to supervise table games.

“To efficiently and effectively supervise table games, you have to have dealt,” one executive said, “because it’s all about prediction, predicting the next moves based on your experience, the storehouse of knowledge that you’ve built up over your time of being a dealer. Also, how do you get the respect of your employees if you’ve never done the job?”

Williamson believes that a sound gaming organization depends on dealers who are motivated to move into various management roles. “If there’s a large wage discrepancy between the dealer [in favour of the dealer] and the dealer supervisor, pit boss and so on,” he said, “then from a management and HR perspective, you end up having people in that dealer capacity for a long time. There’s no incentive for them to progress through the corporation. That creates its own issues, because it’s hard to get the right people in the right jobs. Also, on your frontline dealer jobs, you end up with people who have been dealing for 10, 12, 15 years, which is not a very healthy situation.

craps, it’s a two to three-year job and you’ve pretty much got that sorted out. If that person sits in that role for another five or 10 years, then they’re not learning, not advancing, not moving forward. You need to have those people that are young and keen and want to move through that and become a dealer supervisor, and a pit boss, and a floor manager and so forth.”

Steve Wolstenholme, vice-president of operations at Niagara Fallsview, doesn’t share Williamson’s concerns. Supervisors do not participate in dealers’ tips at his property, and he conceded that “the difference in salary between a veteran dealer and a starting supervisor is fairly small.” Both earn in the high $40,000 range, he said, with about one-half of the dealer’s earnings coming from tips.

Wolstenholme does not worry about dealers who are not motivated to move into management.

“If you want to remain a dealer, that’s fine with us,” he said. “We just want you to be the best dealer you can be. We’re quite comfortable with the current situation.”

Canadian Gaming Business | 21

Progress in Responsible

22 | February 2007

n e Gaming An overview of recent developments around the country

By Stanley Sadinsky, Q.C.

All Canadian provinces that conduct and manage gambling facilities trumpet their commitments to curbing problem gambling and promoting responsible gaming practices. Indeed some provinces have made important changes by reducing the number of electronic gaming devices (EGDs), altering the design of video lottery terminals (VLTs), developing codes of social responsibility and marketing, developing information centres and beginning a process for addressing the problems of online gamblers.

What follows is an overview of some of the recent developments across the country in the area of responsible gaming.

Nova Scotia has introduced improvements in most of these areas. This relatively small Atlantic province articulated the following two leading-edge principles in its report, A Better Balance: Nova Scotia’s First Gaming Strategy, in April 2005 – Put social responsibility first: Gaming will be offered in a socially responsible way meaning that there is a focus on education and awareness and a commitment to the responsible design, delivery, promotion and use of products. The end goal is to reduce the incidence of high-risk and problem gambling in the province.

Make revenue a secondary priority: Growth in revenue will occur only if it is responsible growth, meaning that it is not generated from an increase in the overall prevalence of problem gamblers. New forms of gambling will be assessed and introduced only if they pass this test.

This is consistent with ensuring the viability of gaming through effective and efficient management.

No other jurisdiction in North America has made these commitments. Not surprisingly, Nova Scotia leads the way in introducing some of these new responsible gaming initiatives and in improving on existing ones already in place.

Reducing the number of EGDs and altering their design In accordance with an announced plan to reduce the number of VLTs in the province, Nova Scotia began to remove 800 machines from bars and restaurants in late 2005 and eliminate a further 200 machines by attrition.

The overall goal was to eliminate 1,000 (30 per cent) of the machines in the province, leaving a total of about 2,235. This reduction followed the government’s commitment to put social responsibility ahead of revenue generation. The overall total removed to date is 939 machines.

In addition, Nova Scotia reduced the hours of operation of the machines, slowed the rate of play and eliminated the “stop button,” which gave players the Canadian Gaming Business | 23

illusion that they had some control over the outcome of the spin. Initial results indicate that these changes have had an overall positive effect on the behaviour o f V LT p l a y e r s . Fo r d e t a i l s o f t h e preliminary research, see the Nova Scotia Video Lottery Program Changes Impact Analysis, July, 2006, at http://nsgc.ca.

The Saskatchewan Liquor and Gaming Authority retained the Responsible Gambling Council (RGC, a non-profit agency in Toronto) to conduct research and advise on the impact of initiatives similar to those undertaken by Nova Scotia. It is expected that the Saskatchewan report will be released later this year. Interestingly, an Alberta government-funded preliminary study had suggested that features introduced on VLTs to assist patrons in controlling their play were not having much effect.

But this has not deterred Alberta, Manitoba and Quebec from experimenting further with various features on VLTs that are designed to promote responsible gaming. A range of such features includes on-screen display of numbers of credits expressed as dollar amounts, setting time limits of play with mandatory cash-out options to provide breaks in play, onscreen time-of-day clocks, ticket-in ticket-out technology and responsible gaming messaging.

Newfoundland has also altered some of the features on its VLTs, notably removing the “stop buttons.” It also has begun a program to remove 80 machines each year until there are approximately 400 fewer in the province. That will leave about 2,300 in play.

Quebec has taken steps to reduce the number of locations that offer VLT gambling. By the end of this year, Quebec plans to cut over 1,100 locations, which will also have the effect of eliminating a substantial number of VLTs. It stands to reason that fewer machines and a reduction in the hours of play reduces both accessibility and revenue. What is less certain is the long-term effect that altering the features of the machines will have on the incidence of problem gambling.

Codes of social responsibility and responsible marketing The Nova Scotia Gaming Corp. has promulgated a Social Responsibility Charter, which outlines the nature of the province’s social responsibility commitment to the public, 24 | February 2007

to the industry and to its operators and retailers.

The key element of the Charter is responsible gaming and prevention and awareness programming. NSGC’s partners – the Atlantic Lottery Corp. and Great Canadian Gaming Corp. – have bought into the principles of the Charter, thereby ensuring that all decisions relating to gambling will reflect the commitment to responsible gaming.

Quebec and Ontario have developed codes of responsible gaming and marketing.

Quebec’s code is primarily directed to video lottery site operators, who must now have at least one person on the premises who has completed specialized training that is designed to help them understand problems related to excessive gambling behaviour. Training is being expanded to include in excess of 10,000 employees who work in video lottery sites. They are being trained to present a personalized approach to patrons who appear to be vulnerable to gambling problems.

Ontario has developed a Code of Responsible Gaming Conduct, and Ontario Lottery and Gaming has charged its chief marketing officer with the responsibility of ensuring that the delivery of all OLG products -- including those located in commercial casinos, charity casinos and at their slots-atracetracks facilities -- is done in a socially responsible manner.

British Columbia has developed Responsible Gambling Standards for the British Columbia Gambling Industry. These standards include specific provisions regarding advertising and promotion, requirements to ensure that players make informed choices and an obligation to respond to players by providing information from trained personnel.

Information centres Information centres, usually located in casinos, offer patrons ready access to staff that can provide assistance with problem gambling issues and information on responsible gaming practices. The RGC helped to make Canadian jurisdictions aware of such a centre located in Melbourne, Australia. This led to the introduction of centres in many Canadian jurisdictions, some on a pilot project basis.

There are now 13 information centres operating in eight provinces: British Columbia, Alberta,

Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia and Prince Edward Island.

Information centres are tailored to the specific priorities and needs of each jurisdiction and are capable of providing a range of services.

Staff can offer both crisis and general support for problem gamblers and referrals to treatment and self-exclusion programs. Patrons can access education and awareness programs that are available on-site that will help them assess their own gambling practices, set spending limits and goals, understand how EGDs work, and familiarize themselves with the odds of winning at various games and the myths surrounding techniques of play that suggest that the player can increase the chances of success.

Some centres, such as those located in Nova Scotia and Alberta, also provide training for casino staff on problem gambling and responsible gaming issues. In Manitoba, which established the first centre in Canada, staff also offer assistance to patrons in accessing financial counselling services.

It is too early to assess the impact of information centres on the incidence of problem gambling. However, surveys conducted on behalf of Casino Nova Scotia indicate a high acceptance rate (85 per cent) for its information centre as a valuable resource. More than 50 per cent of players who visited the centre indicate that they manage their play better as a result of receiving information from the centre.

Much of the success of information centres will depend on a number of variables including their location and appearance within gambling facilities. The centre in the Casino de Montréal is front and centre on the gaming floor. Both it and the centre in the Niagara Fallsview Casino are near the main entrance. The centres located in some other venues are less visible. The design of the centre is also important. If not appropriate, the design could inhibit patrons wishing to avoid being identified as “problem gamblers” from paying a visit.

Social marketing of problem gambling awareness and responsible gaming practices Overall, very little mass media marketing of problem gambling awareness and responsible gaming practices has taken place in Canada. If one was to compare the media initiatives of the Mothers Against Drunk Driving (MADD) in

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co-operation with the Liquor Control Board of Ontario, for example, with the experience in the gambling milieu, one can only be dismayed by the lack of will and resources devoted to bringing problem gambling to the attention of the general public.

While there have been efforts in British Columbia, Manitoba, Ontario, Quebec and Nova Scotia to provide some media marketing, there has been no consistent attempt to utilize radio and television to raise the level of public awareness.

Recently, the RGC developed two social marketing campaigns that have targeted the

friends4friends has been launched in Nova Scotia as well as Ontario. Both campaigns are available to other jurisdictions as well.

Online gambling and problem gambling initiatives While it is arguably illegal in Canada for citizens to engage in online gambling at off-shore sites located in Antigua, the Caribbean, Great Britain and elsewhere, no one doubts that tens of thousands of Canadians, many of whom are teens and young adults, are doing just that.

While Ontario has recently taken steps to ban the advertising of these sites in Ontario, no

The Council is also working o n t h e d eve l o p m en t o f an i n t e r ac t i ve D V D t h at w i l l h e l p e x p l a i n t h e c o nce p t s u n d e r l y i ng ga m b l i ng , particularly randomness and house advantage. friends and families of young people with gambling problems. The first, friends4friends, is directed at young people who may have friends with a gambling problem. The campaign uses a website, posters located in bars and on school campuses, transit ads and television and cinema advertising to reach the age group of 19 to 29.

Ads dealing with playing poker on Internet gambling sites are particularly effective. One ad depicts a young person refusing to socialize with his friends or address his school work because of absorption with playing Internet poker. They have run during the televising of Texas Hold ’em Poker Tournaments on sports channels and at movie theatres.

The second campaign, Gambling and You, is designed to deal with the needs of spouses and partners of Ontario people with gambling problems. It raises awareness of the help that is available and provides guidance on how to broach the issue with a person with a gambling problem. This campaign utilizes English and French radio spots, transit shelter posters, mail flyers and magazine ads.

26 | February 2007

concerted efforts are being made to deal with this enormous issue.

Canadian governments appear to ignore Internet gambling rather than legalize and regulate it, and use potential tax revenue from it for government services. Regulating online gambling would also provide governments with the opportunity to identify and assist those who have gambling problems or are likely to develop them.

Fortunately, promoters of responsible gambling programs are addressing the problem, albeit in a modest way. In addition to the RGC’s ad campaign directed at young teens and adults, most Canadian jurisdictions are targeting youth with some of their responsible gaming education programs. These messages will reach some of the online players. Nova Scotia has developed a content-blocking program that can be installed on a home computer. This program provides parents and caregivers with a tool to assist them in monitoring the unhealthy behaviour of their children.

The Responsible Gambling Council The RGC is developing a number of new programs that will likely be adopted by at least some Canadian jurisdictions. One is a short animated computer program that will allow players to see the potential outcomes of their betting patterns in several games.

This entertaining program creates a unique, interactive demonstration of patterns of wins and losses that are mathematically based.

The Council is also developing a portable, programmable, interactive player information kiosk. This program will provide gamblers with awareness and prevention information embedded in a variety of engaging activities and games. The portable feature will permit the program to be set up in an unlimited number of locations, such as shopping malls, educational institutions, workplaces and conferences.

Finally, the Council is also working on the development of an interactive DVD that will help explain the concepts underlying gambling, particularly randomness and house advantage.

The DVD incorporates an entertaining concept that invites the viewer to the “back of the house” in order to provide insights into a variety of casino games. The program focuses on the game chosen by the viewer, utilizing a format that simulates a casino security room.

During the past year, progress has been made in Canada in advancing responsible gaming. As noted above, Nova Scotia has been the most pro-active province in dealing with a variety of problem gambling and responsible gaming programs. But all provincial governments appear to be more and more aware of the need to concentrate on this subject. They are realizing that such programs are essential to sustaining the long-term viability of their respective gambling enterprises and to discharging their social obligations to their citizens.

Stanley Sadinsky, Q.C. is the former chair of the Ontario Racing Commission and the former chair of OLG. Based in Kingston, Ont., he provides advice to governments and the private sector on gambling law, gambling policy, and problem gambling and responsible gaming practices.

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Taking the Problem out of Problem Gambling Problem gambling rates in Ontario are dropping.

But young adults, succumbing to the glamour of TV and Internet poker, are a high-risk group.

By Michael D. Lipton, Q.C. and Chad Finkelstein

28  |  February 2007

Good news for gamblers: the problem gambling rates across the province of Ontario are dropping. That is, unless you are a young adult playing online poker. Recent statistics have indicated that fewer people are gambling than they were just five years ago; however the prevalence among youth gambling, particularly online where underage restrictions seemingly do not exist as barriers, is cause for concern.

The Responsible Gambling Council (RGC), a nonprofit agency based in Toronto, is involved in several effective initiatives to combat problem gambling patterns, but perhaps more effort needs to be directed towards the younger and more vulnerable demographic who are exposed to the glamour of playing and winning every time they turn on the television.

The statistics paint a picture of a population substantially no more or less at risk to gambling problems than a decade ago, save for the advent of online poker. Overall gambling rates in Ontario have changed very little since 2001. In fact, while problem gambling remains steady at 6.9 per cent among young adults, the problem gambling rate for adults over 50 has dropped by more than 2 per cent.1 The broad patterns must be viewed in conjunction with gambling rates specific to poker to accurately gauge what the effects of this online trend have been. Sixty per cent of Ontarians gamble in one form or another, with 52.4 per cent comprising the largest number of gamblers, those who play in ticket lotteries. This is compared to 5.5 per cent who gamble online as of 2005.2 While this number may not seem significant, it is noteworthy because only four years earlier, the number of people gambling online was 1.4 per cent.3 And frequency is significant: 25 per cent of Internet gamblers are gambling weekly, while 12.7 per cent are gambling daily.4 Interestingly, only 4 per cent of Ontarians who play poker are playing at a bar or casino, while more than

half of the province’s poker players never play in a casino at all.5 Eighteen per cent are spending more time online playing poker, compared with 50 per cent playing the same amount, and 17 per cent playing less online poker than they were two years ago.6 Of course, it should come as no surprise that young adults 18 to 34 years old are the individuals more likely to be playing.

To be precise, 49 per cent of the young adult poker-playing population are more likely to be playing more poker these days.7 Poker playing is touted on television, in movies and in print virtually around the clock as not only a likely avenue by

which to earn money, but also a glamorous one. Tournament poker players have gained a Hollywood-like status as their celebrity is geared towards a younger audience more than ever before. And with online poker more accessible than ever, the number of underage gamblers participating online is staggering.

participation rates. Most people who are gaming for entertainment are spending 1-2 percent of their annual income on it. Anything above that range should start setting off some alarms.12 Given that approximately 60 per cent of Ontarians gamble at some point, the fact that 3.8 per cent have a moderate to severe

While most youth recognize that gambling can create problems, most have a general lack of knowledge of probability.

A 2003 study of youth between the ages of 9 and 16 showed that while 10 per cent of 1116 year-olds reported betting on the Internet, almost 95 per cent of those betting reported that the sites they were on did not even require credit cards.8 The prepaid credit cards offered by gaming websites have reduced spending barriers for the underage population. There is also a major issue with perception. The inescapable exposure to gambling has begun to create social pressures among an already impressionable demographic. One quarter of youth feel that gambling is “cool” and one third agree that it is “fun”.9 The youth who describe themselves as popular are the ones who are more likely to gamble and take risks, and this has created the sense that it is imperative to be knowledgeable and experienced in gambling in order to fit in. However, the knowledge ends there. While most youth recognize that gambling can create problems, most have a general lack of knowledge of probability. Four per cent of Ontarians believe they could earn a living as a poker player10, while 10 per cent agree with the statement that “poker is a good way to earn extra money.”11

Realistic expectations and awareness of risk Clearly, the accessibility of Internet gambling is a leading factor contributing to its high frequency rates. It is critical, therefore, that players, especially young adults, understand realistic expectations and the risks that gambling entails. Fortunately, the statistics seem to indicate that most do, as the rates of “problem” gamblers are significantly lower than the overall 30 | February 2007

gambling problem makes the issue much more manageable to tackle.13 A “problem gambler” is considered to be any person “whose ability to resist the impulse to gamble has been compromised, disrupted or damaged personal, family or vocational pursuits.”14 In 2001, this number was at 4.8 per cent of the Ontario population, so we are seeing a decrease in these compulsions.15 However, it is staggering that the rate of problem gambling among 18 to 24-year-olds is at 7 per cent, which is nearly twice the general average.16 Again, perception is an issue. A recent study showed that less than half of those subjects who scored as having a moderate to severe gambling problem reported having difficulties related to their gambling.17 There is a large disconnect here and the fact that 78 per cent of youth have received messages from the television or Internet promoting gambling compared to the meagre 12 per cent who have seen advertising for responsible gambling further illustrates the need not necessarily for increased gambling awareness messages but certainly better targeted ones.18 So what more can be done? Ontario Lottery and Gaming (OLG) and RGC have

made their websites particularly user-friendly with easily accessible links to problem gambling information; signs to indicate a gambling problem; hotlines with trained employees; myths and facts; and links to credit counselling resources. The RGC has initiated high school and university drama and program tours, and prevention programs which span many Ontario communities.

New studies are commenced on a regular basis in the hopes of garnering more government support for these initiatives, as well. The RGC also has its widely publicized social marketing campaigns, friends4friends and Gambling and You, which target the family and friends of potential problem gamblers. While the success of these programs is yet to be determined, the RGC, in its advertising efforts on public transit, on television and in movie theatres, is certainly taking the appropriate steps by appealing to those individuals who can motivate a problem gambler to take action.

The success of these initiatives, and the prevalent gambling rate among youth, indicate the most likely successes will come from targeting youth and their perceptions of gambling. Adolescents will always be persuaded to act in a way that is “cool” to their peers so that they will feel accepted. No amount of problem gambling marketing will change this psychology. However, through print ads, television ads and school programs the youth lack of understanding should be targeted. These individuals need to learn the randomness of the game they have chosen.

Poker arguably involves a fair amount of skill when sitting at a table next to a competitor. But these same abilities to read people do not apply to the online context, where a keen intuition to observe the player next to you is not necessarily applicable. Future effort should focus on the arbitrariness of the cards and the unlikelihood of winning in a game left to so much chance.

T h e R G C h a s i n i t i at e d h i g h school and university drama and program tours, and prevention p r o g r a m s w h i c h s pan m an y Ontario communities.

The casinos, themselves, provide gamblers with the opportunities to combat their disorders, although perhaps more could be done in this regard. For instance, according to the OLG website, all gaming facilities must install clocks in all restroom areas.19 While this may be moderately helpful for the gambler, it would be a much more progressive step to actually install clocks on the casino floor at strategic locations.

It is unlikely that this would have any remotely noticeable effect on gambling revenues.

Provinces could do more The provinces, as well, may be able to do more to expressly recognize problem gambling.

Nova Scotia is the only province that specifically states in its legislation that one of the purposes of the Gaming Control Act20 is to “minimize the opportunities that give rise to problem gambling and other illness” and disruption.21 Under its Regulations, casino operators are prohibited from permitting certain individuals to play games of chance, including “individuals who appear to be addicted to gambling” and the

Hospitality

casino operator shall implement policies and procedures to identify individuals evidencing a gambling problem.22 Ontario’s only similar acknowledgement is in the Regulations to the Gaming Control Act23 where it states that an operator is required to implement a program to identify problem gamblers but only if so ordered by the Registrar of Alcohol and Gaming.24 Ontario, however, does arrange for a percentage of the gross revenues from its casinos and racetrack slot operations to be used to fund research and prevention of problem gambling, including the Ontario Problem Gambling Helpline.

Another method to deal with problem gambling is the OLG’s Voluntary Self-Exclusion Program. This written request by a person who recognizes his or her gambling problem excludes that individual from entry into a casino for an indefinite term. However it contains no commitment by the gaming venues to actually use best efforts to block entry and purports to shield operators from liability should that individual fail to comply with the ban.

Leisure

Certainly the limited efforts to fight problem online gambling leave something to be desired.

Prepaid credit cards make it easy to play and, aside from warnings about age restrictions and the promise of a loss of winnings if underage play is uncovered, do little to dissuade determined players from participating.

The OLG and casino operators would be prudent to start implementing the existing initiatives to sway problem gamblers and target their families and friends more rigorously.

Recent jurisprudence has led to the possible application of host liability to the problem gambling context.25 In a decision last fall involving lottery fraud, it was found that nothing in the governing legislation exempted the OLG from liability to the gambling public.

The Ontario court rejected the notion of unlimited liability to an unlimited public as it related to lottery ticket holders in holding the OLG accountable, and it could therefore do the same in regard to problem gamblers. Given the appropriate context, it is foreseeable that this precedent could one day be applied to casino

Tourism

Lyle Hall and Robert Scarpelli have been providing consulting and advisory services to the Canadian and International hospitality, leisure and tourism industries for over 15 years.

Areas of specialization: Gaming Lodging Attractions

Travel and Tourism Public Assembly Venues Recreation and Sports

HLT Advisory Inc. 384 Adelaide St. W. Suite 200 Toronto, ON M5V 1R7 (416) 924-7737 www.hlta.ca Please contact us: lylehall@hlta.ca robertscarpelli@hlta.ca Canadian Gaming Business | 31

operators and obligate them to uphold a duty of care to its known problem gamblers.26 Around the world, some of the efforts of other countries to combat problem gambling are admirable but unrealistic to apply in a Canadian context, and certainly not necessary given this country’s problem gambling rates.

Panama’s proposed bill to restrict entry into casinos based on income27 and South Africa’s attempt to close casinos for at least six hours a day28 would never achieve support here.

However, building on the existing gambling help centres currently in casinos, the systems that photograph patrons and automatically identify unwelcome guests, and the revenue contribution from casinos that the government uses for research and treatment of problem gambling are positive steps in a realistic and practical direction. Ensuring that the youth population is as aware of the dangers of gambling as they are the dangers of smoking, for example, will be even more effective in

combating problem gambling and allowing for everyone else to responsibly enjoy this type of entertainment.

1. R esponsible Gambling Council, News Releases & Announcements, “Ontario Study Shows Internet Gambling is on the Rise Responsible Gambling Council Releases 2005 Prevalence Study” (19 September 2006) <http://www.responsiblegambling. org/en/media/news_details.cfm?ID=37&media=1>.

2. Ibid.

3. Responsible Gambling Council, News Releases & Announcements, “One-in-Five Ontarians Play Poker for Money” (7 November 2006). <http://www.responsiblegambling.org/en/media/news_ details.cfm?ID=38&media=1>.

4. Supra. note 1.

5. “Around the World”, Newslink (Fall/Winter 2006), an online and print publication of the Responsible Gambling Council, at 3.

6. Ibid.

7. Ibid.

8. Jamie Wiebe & Agata Falkowski-Ham, “Understanding the Audience: The Key to Preventing Youth Gambling Problems” (Responsible Gambling Council, November 2003). <http://www. responsiblegambling.org/articles/understanding_the_audience_ youth_2003.pdf>.

9. Ibid.

10. Supra. note 3.

11. Supra. note 4.

12. Supra. note 3.

13. Responsible Gambling Council, “Research & Information – FAQ’s”, online: Responsible Gambling Council <http://www. responsiblegambling.org/en/research/faqs_details.cfm>.

14. William V. Sasso & Jasminka Kalajdzic, “Do Ontario and its Gaming Venues Owe a Duty of Care to Problem Gamblers?”, (Report submitted to the Ontario Problem Gambling Research Centre, February 2006) at 4.

15. E. Single, J. Wiebe, A. Falkowski-Ham (2001) “Measuring Gambling and Problem Gambling in Ontario”. Toronto: Canadian Centre on Substance Abuse and Responsible Gambling Council cited in Ibid.

16. Responsible Gambling Council, News Releases & Announcements, “The Responsible Gambling Council’s New TV Ad Targets Young Adults” (15 February 2006). <http://www.responsiblegambling.org/en/media/news_details. cfm?ID=34&media=1>.

17. Supra. note 1.

18. Supra. note 8.

19. OLG, “Responsible Gaming Practices”, online: Ontario Lottery and Gaming Corporation <http://www.olgc.ca/about/responsible_ gaming/practices.jsp>.

20. 1994-95, c.4.

21. Ibid., s. 2(c).

22. N.S. Reg. 40/95 as amended up to O.I.C. 2005-559 (Dec. 15, 2005), N.S. Reg. 226/2005, s. 20(1)(c).

23. S.O. 1992, c.24.

24. O.Reg. 385/99, s. 32(3).

25. Edmonds v. Laplante et. al., Superior Court of Justice court file number 02/CV-226280.

26. Supra. note 14 at 25.

27. Supra. note 4 at 15.

28. “Around the World”, Newslink (Summer/Fall 2003), an online and print publication of the Responsible Gambling Council, at 14.

32 | February 2007

Michael D. Lipton, Q.C. is a senior partner and head of the Gaming Law section of Elkind & Lipton L.L.P. in Toronto and the current president of the International Masters of Gaming Law. Chad Finkelstein is an associate with Elkind & Lipton L.L.P. and a member of the Gaming Law section.

Nova Scotia Takes Next Step on Informed Player Choice System for VLTs On Feb. 8, the Nova Scotia Gaming Corp. (NSGC) announced a Request for Proposal, “asking technology suppliers in the gaming sector to create an Informed Player Choice System for Video Lottery Terminals (VLTs) in the Province.”

NSGC said this step followed two years of research “on the impact of adding interactive responsible gaming features to VLTs.” A field test consisted of adding the features to every VLT in two N.S. towns for six months. Anyone using one of these devices had to insert a player card that gave the player access to personalized information about his/her gambling behaviour, including time spent playing and amounts won or lost. The cards also enabled the player to set limits on expenditures and to establish self-exclusion periods.

NSGC reported that Focal Research Consultants Ltd., which NSGC hired to analyze the field test, found the following “key research findings”: V 71 per cent of all regular players tried the features (Account Summary, Live Action, Money Limits, Play Limits, 48-Hour Cool Down).

V Half of all regular VLT players continued using the features on a regular basis – which is considered to be a high adoption rate.

V Players who used the features played longer but spent less because they made better decisions about when to stop.

V The most positive impacts were on players at the lower end of the risk scale, which researchers believe is the right target audience for effective prevention.

The research project cost about $430,000. Details of the research can be found at www.nsgc.ca/reDevice.php.

VLT Gaming –

Are Card-based Programs the Answer?

By Bill Rutsey Nova Scotia Gaming Corp. is to be commended for its recently released research study results on card-based player management tools for VLTs. The tools are about providing information to players so that they can make informed decisions and choices. The research has and will fuel discussion about gambling generally and in particular, VLTs, responsible gambling and problem gambling. Here’s some information and questions that need to be part of that discussion.

Experts agree that providing relevant information to players allows them to make informed choices about their play – this is the key element of responsible gambling. They also agree that there is not now and never will be a “magic bullet” that can be aimed at the 1 to 2 percent of the population suffering from problem or compulsive gambling. There are too

many different situations (often including multiple morbidities) that require fresh and individual approaches. What is common to success is the admission of the problem(s) and the willingness to accept treatment and change.

Nova Scotia has been among the leaders in making changes to its video lottery program, with card-based player management tools being the latest effort.

More information to help players manage their play is clearly a good thing. But there are also some key questions that might be asked during the next stage of consultation before going down the road to a full-fledged card-based program: V I s there a better model or a better way to organize the existing video lottery program?

V What role can the people on the ground – the bar owners and staff – play?

V Would stricter standards for site holders

make a difference?

V Is there a way to improve these licensed

establishments and the VLT program as a whole – to make it better managed and presented, including information and access to resources for at-risk or problem gamblers?

It’s also important to step back and look at the big picture – to balance the need to improve the program for the vast majority of players who don’t have a problem with doing what is reasonable and practical to help those at-risk.

Gaming is a very popular entertainment option that can become a real problem for a small minority of us. Canada is very proactive in the study and treatment of problem gambling – allocating more funding for education, research and treatment than any other jurisdiction Canadian Gaming Business | 33

in the world (currently in excess of $75 million annually). Canada is a world leader and model in balancing gaming entertainment with ensuring that responsible gaming programs and treatment are available to those in need.

Gaming is a major industry employing more than 50,000 Canadians and contributing significant non-tax revenues to government, totalling in excess of $7 billion annually nationwide.

Specific to Nova Scotia, using the latest published Provincial budget estimates, the annual revenues contributed by NSGC would fund the combined annual program costs of the Ministries of Agriculture, Energy, Environment and Labour, Finance, and Tourism, Culture and Heritage.

Nova Scotia is one of eight provinces in Canada that has a video lottery program.

Common to all these programs are: V R esponsible gaming programs and on-terminal features that include a permanent on-screen clock, display of amount wagered, mandatory cash-

34 | February 2007

out and problem gambling helpline numbers.

V Restriction to age-controlled establishments.

V Training programs to help staff recognize signs of problem gambling – with

approximately 2,600 bar owners, managers and staff being trained in Nova Scotia alone.

V The number of VLTs capped, periodically reviewed and adjusted, including reductions in the number of VLTs and sites.

V No credit offered to patrons.

V VLTs are independently tested (hardware and software) before put into operation.

(This is to ensure high standards are met and the payout percentage identified on each game is accurate.)

(Source – VLT Gaming in Canada, HLT Advisory Inc., March 2006) A regulated and responsible industry must continually protect the public, which includes offering safe gaming environments to consumers who choose this form of entertainment. Nova Scotia’s VLT program has come a long way since the government took control of it in 1991. At the time, machines were readily available in corner stores and laundromats. Government quickly restricted the terminals to age-controlled locations and subsequently introduced education, awareness and responsible gaming programs, as well as reducing operating hours and removing machines.

Nova Scotia is to be commended for looking at innovative solutions. However, decisions should never be made in isolation; and understanding the big picture is essential to finding the right balance.

Bill Rutsey is president and CEO of the Canadian Gaming Association.

facilityfocus

Casino

Regina

By Albert Warson

People who haven’t been to Regina, marooned out on Saskatchewan’s vast prairie, might well assume that the provincial capital (population 200,000) is a boring place. It isn’t. The Queen City has as much culture, recreation, sports and diversion at hand as any small Canadian city.

And it has something else: Casino Regina, in a splendidly renovated former railway station in a great location downtown. Its restored stained glass windows and woodwork antiquity blend easily with big name entertainment in what is promoted as a Las Vegas style.

Entertainment is in fact so important to the city, and its citizens so engaged in going out to enjoy it, that two Rolling Stones’ concerts staged at Regina’s Mosaic Stadium last October were the top grossing concerts in Canadian entertainment history, according to a music trade publication. Not in Toronto or Montreal, in Regina.

James Brown, the “Godfather of Soul” music, was booked for an early January concert at the casino’s popular Show Lounge, but died of heart failure last Christmas morning.

The casino has nearly 800 slot machines and 35 table games, and operates seven days a week from 9 a.m. to 4 a.m.

Poker events have been used effectively

by Casino Regina to maintain a sense of excitement. Some of its poker tournaments, which started in 1997 with about 90 players, have had the biggest prize pools in Canada.

One event, held over two days in July 2005, attracted about 1,000 players, not just locals but players from across Canada and a few from the U.S., vying for a prize pool of more than $1 million.

Poker is so popular that recent renovations to about 12,000 square feet of space at the casino include a new poker tournament room, carved out of a former special events space, which will accommodate 120 players, according to Angela Gordon, Saskatchewan Gaming Corp.’s director of corporate affairs.

“We’re also going to launch a charity poker program,” she said, “where the hosts, such as local branches of the Canadian Mental Health Association and Canadian Cancer Society, will get the proceeds.

“Other renovations are an upgraded coffee shop, new bar and express restaurant where guests can have a quick bite on the way to the gaming floor, new box office, player relations office, staff technical training room, and renovations to washrooms and office space.”

It wasn’t the first time the train station, built in 1912 and expanded in 1931 at a cost of $1.25 million, was renovated. In 1984, Via Rail bought the station and spent $300,000 on refurbishments, only to stop running passenger trains to Regina six years later.

SGC bought the building in 1995 and spent $37 million creating Casino Regina, which opened Jan. 26, 1996. SGC operates the Regina and Moose Jaw casinos under the regulatory authority and supervision of the Saskatchewan Liquor and Gaming Authority.

Gordon said 100 per cent of the profits from both casinos are returned to communities throughout the province – 50 per cent back into the general revenue fund to help pay for hospitals, building roads and other government responsibilities; 25 per cent to non-profit community arts, culture, sports and similar organizations; and the rest to a First Nations

Trust fund. There are four other casinos operated by the Saskatchewan Indian Gaming Authority in other parts of the province.

During the SGC’s 2004-2005 fiscal year ending March 31, 2005, revenue for Casino Regina, combined with that of Casino Moose Jaw -- which opened in 2002 with more than 200 slots, three table games and thrice-weekly poker games -- was $97.7 million, operating expenses were $58.2 million and average daily attendance was 5,723 guests.

During the most recent fiscal year ending March 31, 2006, revenue dipped to $94.6 million, operating expenses increased to $65.3 million and average daily attendance was up by about 1,000 guests to 6,714.

By the end of the third quarter of this 20062007 fiscal year, revenue stood at $81.6 million and expenses at $49.7 million. The year 2006 was significant in both casinos’ history because it was the first full year a smoking ban was in effect.

G o r d o n s a i d : “ We h a d p r o j e c t e d decreased revenue but we’re rebounding faster than we thought.” The western habit of resilience and perseverance may be at work. Or people are simply getting used to gaming while not smoking.

Gordon reports that over the first 10 years of Casino Regina’s existence, more than 16 million guests walked through the door. Roughly half the number of players are local and the rest come from other parts of Saskatchewan, neighbouring provinces, the rest of Canada, and some from the United States. Minot, North Dakota, is a four-drive from Regina. Players coming from that distance or farther tend to use chartered buses.

Albert Warson is a freelance writer based in Toronto.

Canadian Gaming Business | 35

Ch e f Sp o t l i g h t

Jerry Blumhagen, Elbow River Casino, Calgary

S

Staying one step ahead of the game is important for Executive Chef Jerry Blumhagen and with three busy restaurants under his supervision at Elbow River Casino, he has a lot to stay ahead of.

His is a case of a small-town boy finding success in the big city. Blumhagen was born in the southwestern Saskatchewan town of Maple Creek, population 2,500. He spent most of his childhood in Medicine Hat, Alberta, about 100 kilometres away.

He did his culinary training at the Northern Alberta Institute of Technology in Edmonton before switching to Calgary’s Southern Alberta Institute of Technology where he graduated in 1999.

But whether north or south, his career as a chef began at age 15 when he was part-time dishwasher and prep cook at Hats Chinese restaurant in Medicine Hat. “I just kind of fell into it,” Blumhagen, 32, said. “The job was there, and the owners were friends of the family.”

The fall had a pleasant landing, and Blumhagen has been a chef ever since: Medicine Hat Lodge, downtown Edmonton hotels, and Fantasyland Hotel in the West Edmonton Mall.

He has also cooked at the Sheraton Cavalier Hotel Calgary and the Inn on Lake

Photo Credit: Elbow River Casino

By Andrew Coppolino Bonavista. He eventually became executive chef overseeing four popular Calgary pubs.

The breadth of this experience — cooking for six at private functions and up to 600 at banquets — has served him well. Although this is his first assignment cooking in a casino setting, Blumhagen guides a staff of 32 and has quickly gotten a feel for the gaming industry.

“Here, you really need a good understanding of how much product you go through. This is by far the busiest operation I’ve worked in,” Blumhagen said.

Elbow River Casino Food and Beverage Director Craig Milliken-Smith said that “Jerry’s background complements our goals, as it includes extensive experience running multi-unit and pub-style kitchens.”

The casino’s restaurants include Jester’s Court which offers a gourmet buffet with a show lounge and Jester’s Sports Lounge which provides a break from the action on the gaming floor.

Jester’s Deli has fresh delicatessen items, including fried chicken and a popular Vietnamese sub, served on crispy French baguettes. Blumhagen says these are unlike any other sub sandwich in the area.

This is where strategy is important; he says the deli menu is static and only gets “tweaked a little bit” every year. “It’s important that the food customers want is always available and that change here is moderate. They like our Vietnamese subs, and we won’t change them a whole lot,” Blumhagen said.

The buffet runs seven days a week featuring Western and Asian fare, and it is these items that change daily, depending on what ingredients

have been purchased and the kitchen’s inclination at the moment.

“We don’t want to get stagnant with our buffet,” Blumhagen said. He characterizes it as including “high-end fish, pastas, that type of thing. It’s comfort food in a way. Good homecooked food is what we’re looking for.”

Chinese cuisine is very popular at Elbow River Casino. It’s served in all of the food outlets, and accounts for more than half of all food sales. Some of the Chinese menu items are the purview of Jimmy Wong, a member of Blumhagen’s staff. Milliken-Smith said the hot line of the buffet is basically divided in half, with Chinese cooks manning the Chinese side.

Usually at work by 7 a.m., Blumhagen’s days are full, starting with a quick check of scheduling and a walk-through of the casino and its restaurants. With such a large volume of food, he estimates that he spends three days a week just placing orders and getting the lay of the land with regard to upcoming banquets.

To tackle that volume, Blumhagen has organized his kitchen staff into a brigade system, designating certain cooks for certain stations, right down to the responsibilities of the dishwasher. Calgary is Alberta’s largest city, and the booming provincial economy means that his kitchen is likely to stay on a fast pace.

“I don’t anticipate the market slowing down a whole lot,” Blumhagen said.

“Calgary is growing quickly, and I can’t see us changing what we’re doing right now. Our level of food, quality, and consistency remain top priorities.”

Andrew Coppolino, andrew@tablescraps.ca., is a freelance writer based in Kitchener, Ont. Canadian Gaming Business | 37

60 1946-2006

Years of Excellence

Lottery and Gaming Corporation Highlights The following summaries of news and activities were submitted by the provincial lottery and gaming corporations. Because Canadian Gaming Business is now publishing every other month, we will not be able to include all of the provincial corporations in each issue.

Each one will be invited to participate in every other issue.

British Columbia Lottery Corp.

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Email: info@accro-acmechrome.com

305 McKay Avenue, Winnipeg, Manitoba R2G 0N5

Since 1946

Proudly Canadian

Interac Online BCLC became the first lottery jurisdiction in Canada to implement Interac Online when it introduced the payment method on its PlayNow website in December.

Interac Online provides registered PlayNow players with a payment choice in addition to online bill payment, VISA and MasterCard.

Players must have access to web banking at a participating financial institution. Because Interac Online is a web banking system, no new passwords or accounts are necessary. Consumers don’t provide financial details, card numbers or log-in information to the online merchant. $64,900 Shopping Spree There were only nine minutes remaining on the clock when the winner of the Lotto 6/49 Shopping Spree Contest and his wife topped off their experience by purchasing matching diamond rings. They planned to engrave 6/49 Shopping Spree inside the bands.

The restaurant owner and chef entered the contest with the purchase of a $10 Lotto 6/49 ticket. On Jan. 17 at 11:30 a.m., he embarked on

38 | February 2007 Accro_Gaming_1_3v_Feb07.indd 1

2/28/07 12:20:12 PM

his mission to spend $64,900 in the required six hours and 49 minutes in Burnaby’s Metrotown at Metropolis.

He did his homework and made his first priorities new appliances, double-paned windows and other home renovation items. He also had a little fun, buying a 46-inch, flat-screen TV and a couple of iPods.

Women’s Poker Classic BCLC and Gateway Casinos have again partnered to host the second annual Women’s Poker Classic when it returns to Cascades Casino Feb. 22-25. With a sold-out capacity of 600 entrants, there is $165,000 in prize money available for this Canadian Poker Tour event.

Once again, Gateway Casinos is donating $50 per participant to the Canadian Breast Cancer Foundation, BC/Yukon Chapter, resulting in a $30,000 contribution to directly benefit breast cancer initiatives.

The prize pool for each event comprises the buy-in fees and will be distributed to players who finish in the top 10 per cent, according to a predetermined placement ratio. The Limit Texas Hold ’Em event takes place Feb. 23 and the NoLimit Texas Hold ’Em main event Feb. 24-25.

fundraising goal of $16,051, coming in with an outstanding $29,876.13. SGC contributed fifty cents for every dollar raised through staff events such as a silent auction and steak nights, as well as a payroll deduction program.

VT his fall, Casino Regina added an illuminating feature to its entertainment experience, with the launch of the Casino Regina Sky Lights. The outdoor light show is a spectacular display of LED lights that are programmable to change to the rhythm of music. With over 16 million possible colour combinations, the sky’s the limit for the Sky Lights!

Ride with Keno Keno’s biggest contest yet is offering players a chance to win a custom-made Orange County Chopper™ worth nearly $100,000.

From Feb. 15-March 31, players will receive one entry when they purchase $5 of Keno or Keno/Keno Bonus or three entries with a $10 purchase. Entries are submitted online at bclc.com.

Slot Highlights VS GC continued its tradition of pioneering advancements in slot technology, as Casino Regina became the first casino in Canada to introduce downloadable games to the gaming floor. The games, among the latest product offerings from IGT, are controlled electronically by a single PC, and games can be changed with the push of a button.

The technology opens up a brand new variety of product offerings and will, in the future, allow customized gaming for guests.

VC asino Regina is the site of the first WMS test bank in Canada, which will be used to collect data to assist WMS in designing games, concepts, and themes for future products. The test bank will be on the floor for one year, and game themes and concepts will change regularly to gather data and player preferences. Test data will be used across North America, and will be incorporated in future game designs.

VR ounding out SGC’s slot highlights for the winter was the introduction of the Monopoly slots – the first community gaming concept in Canada. Players play on individual stations, until one player qualifies for the bonus round, at which point all players on the six stations become part of the bonus experience.

Newest Chances location BCLC and Duncan Dabber Bingo Society will host the February opening of Chances Cowichan community gaming centre, the fifth Chances location to open in B.C. Chances Cowichan will offer touchscreen bingo and traditional paper bingo, slot machines, lottery products, and food and beverage services.

Saskatchewan Gaming Corp.

Manitoba Lotteries Corp.

Team up with MEI and be assured: • Improved slot floor performance • More enjoyable player experiences • New currency support when you need it • On-site training for your staff

www.meigroup.com

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Casinos of Winnipeg VC lub Regent Casino’s new nightly entertainment venue Jaguars, located in the Amethyst Room, opened in

MEI builds lasting relationships. Helping you, the casino owner, achieve one specific goal: MAKING MORE MONEY.

ON

Casino Highlights V Casino Regina underwent extensive renovations over the fall and winter to enhance product offerings and improve office and meeting room space. The changes include renovation of the CPR Bar to incorporate a sports theme; addition of the CR Express Food Kiosk, which offers quick, easy meals and snacks; a new coffee shop; new Player Relations office; new Box Office and the newly-expanded Coach Room, equipped to host larger weekly poker tournaments and charity poker events. Renovations were completed in February.

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Share the Dream SportsFunder Share the Dream Instant Win, a $3 ticket with top prizes of $50,000, is offering special features of Share the Dream prizes and a Team Bonus Contest. Players have the opportunity to win $10,000 and share the dream by giving $10,000 to an amateur sports organization of their choice.

Every Share the Dream ticket has a bonus code that enables the player to vote online for their favourite B.C. amateur sports team.

The team that garners the most votes by the contest closing date of April 15 wins $10,000.

To qualify, teams must be affiliated with Sport BC.

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©2007 MEI. All rights reserved.

Canadian Gaming Business | 39

February. Jaguars will operate Wednesdays through Saturdays, offering a variety of live entertainment concepts. Customers may dance and enjoy outstanding food and beverages in a dynamic atmosphere.

VT he Casinos of Winnipeg have begun a 12- to 15-month replacement initiative for their electronic/paper bingo and class III gaming systems. The current system will be replaced with a more customer service-friendly slot and bingo-based GTech gaming system, which will provide our customers with enhanced bingo and electronic gaming options.

VT o improve customer service and provide a convenient alternative for our guests, self-serve Ticket Redemption Terminals were installed at both Casinos of Winnipeg in December 2006. The terminals are user-friendly, highly secure, located in strategic positions, provide messaging about MLC programs such as Responsible Gaming, and have no automatic banking features.

Responsible Gaming VM anitoba university students were invited to learn more about ways to avoid gambling-related problems by participating in Know the Score, a program developed by the Responsible Gambling Council and brought to Manitoba by MLC and the Addictions Foundation of Manitoba. The interactive awareness program visited the University of Winnipeg, Brandon University and the

University of Manitoba throughout January and February, dispelling some common myths about gambling, informing students where they could get help in their community with gambling-related problems and suggesting ways to limit their risks.

Sustainable Development V I n 2006, MLC was awarded the Government Finance Officers Association (GFOA) Award of Excellence for integrating sustainable development into business decisions. This award recognized MLC’s practical approach to embedding sustainable development principles into business planning, purchasing and surplus item disposal policies.

Community Support VM LC continues to reach out to our communities with support and sponsorship of over 460 worthwhile events, including: VC lassic Canadian Open of Curling (January) VP rairie Theatre Exchange (season sponsors) VM anitoba Theatre Centre – Educating Rita Regional Rural Tour (February) V Festival du Voyageur (February) V t he World Women’s Hockey Championship (April)

A Winning Philosophy.

The fundamental goal of the Canadian Gaming Association is to create balance in the public dialogue about gaming in Canada.

Our members are the largest and most established gaming operators, suppliers and gaming equipment manufacturers in Canada, including provincial lottery corporations, casino and race track operators, and makers of slot machines and other related equipment.

Our mandate is to create a better understanding of the gaming industry through education and advocacy. Visit our web site at www.canadiangaming.ca and find out more about who we are and what a CGA membership can do for you.

www.canadiangaming.ca

40 | February 2007

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HLT Advisory

hlta.ca

31

IGT Canada

igt.com

IFC

MEI

meigroup.com

39

OLG

olg.ca

32

Progressive Gaming

progressivegaming.net

OBC

Scientific Games

17

Strategic Gaming Innovations

42

stratgamin.com

WMS 42 | February 2007

15

Arrow Games Corporation and Bazaar & Novelty Limited are Canadaâ&#x20AC;&#x2122;s leading suppliers of charitable and social gaming products. These proud Canadian companies operate manufacturing, sales and disribution facilities across seven Provinces.

ARROW GAMES CORPORATION 37 Woddyatt Drive Brantford, ON N3R 7K3 ph: 519.770.4621 / fax: 519.770.4872 toll free phone: 800.387.7621 toll free fax: 877.392.7769

BAZAAR & NOVELTY LIMITED 6199 Don Murie Street Niagara Falls, ON L2E 6X8 ph: 905.354.7300 / fax: 905.354.5662 toll free phone: 877.983.7300 toll free fax: 877.983.7301

WEâ&#x20AC;&#x2122;RE ALL ABOUT WIN-WIN. We continue to expand our product lines on a daily basis to provide the largest selection of creative and custome gaming solutions that excite players and keep them coming back for more.

www.arrowgames.com