Canadian Gaming Business Magazine

Canada's Premier Gaming Industry Magazine

PM 40063056

Vol. 12 No. 2

www.CanadianGamingBusiness.com

Summer 2017

PASSING THE TORCH

Bill Rutsey and a legacy of leadership at the CGA

CanadianGamingSummit.com June 19-21, 2017 Vancouver, B.C. Canadian Gaming Business | 1

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Summer 2017

Volume Number 12 No. 2

Publisher

Chuck Nervick chuckn@mediaedge.ca 416.512.8186 ext. 227

Editor Sean Moon seanm@mediaedge.ca

contents 8

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Canadian Gaming Business is published four times a year as a joint venture between MediaEdge Communications and The Canadian Gaming Association To advertise: For information on CGB’s print or digital advertising opportunities: Chuck Nervick 416-512-8186 ext. 227 chuckn@mediaedge.ca Copyright 2017 Canada Post Canadian Publications Mail Publications Mail 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 $40* 1 yr, $70* 2 yrs. USA $65 yr, $120* 2 yrs. International $90* 1 yr, $160* 2 yrs. *Plus applicable taxes.

Postmaster send address changes to: Canadian Gaming Business Magazine 5255 Yonge Street Suite 1000, Toronto, Ontario M2N 6P4

Official Publication of the Canadian Gaming Summit

5

EDITOR’S NOTE

6

MESSAGE FROM THE CGA

8

Innovation: Underrated or overused?

12

Passing the Torch: A look back at the 25-year career of industry leader Bill Rutsey

FEATURE STORY COVER STORY Cover Photo Credit: Eduardo Martins, Portrait Boutique

14 INDUSTRY Q&A

Lottery Evolution: Online lotteries prepare for the future 18

21

EXECUTIVE PROFILE Kevin Taylor, President of Operations at Société des casinos du Québec

INDUSTRY SPOTLIGHT

Cash and Currency Automation: Keeping up with the changes

24

Cascades Casino Penticton

26

Educating the Industry: National Education Initiative Report Card

28

Jackpot Digital — Ground-breaking innovation in electronic table gaming

FACILITY PROFILE INDUSTRY UPDATE CORPORATE PROFILE

Canadian Gaming Business | 3

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©2017 Association of Gaming Equipment Manufacturers (AGEM). Membership list current as of May 2017.

editor'snote

Exploring the Rapid Pace of Change WELCOME TO THIS SPECIAL EDITION of Canadian Gaming Business as delegates from across the country gather at the Vancouver Convention Centre for the preeminent event in the Canadian gaming industry — the Canadian Gaming Summit. As the largest industry event in Canada each year, the Summit features a virtual who’s-who of industry leadership for three intensive days of gaming education, exhibitions and entertainment. The Summit delivers face-to-face interaction between attendees from all gaming sectors, disciplines and regions within Canada and beyond, and is the leading provider of information and education to the Canadian gaming community.

The Summit’s top-notch educational program, expansive exhibition floor and enjoyable social events provide an invaluable and memorable learning and networking experience.

Our theme this year is “The Rapid Pace of Change” which effectively represents a number of developments that have continued to occur inside the gaming industry in Canada and globally.

With all that the Summit has to offer, we hope you’ll also have time to dive into this latest exciting issue of CGB. Much as the Summit itself, our summer issue provides a wide-ranging look at our vibrant and growing industry. From our feature story on the importance of innovation to an update on the latest developments in the online lottery sector to a profile of CGA President and CEO Bill Rutsey, who shares some of the highlights of his many years in the Canadian gaming industry as he prepares to hand over the reins to new Association leadership.

As an added bonus, you’ll also f ind the summer edition of Canadian Gaming Lawyer magazine, where editor Michael Lipton has provided an extraordinary lineup of comprehensive articles from experts and colleagues within Canadian gaming law community.

And if you’re in Vancouver and out exploring the Summit floor, don’t forget to say hello to CGB Publisher Chuck Nervick and Show Operations Manager Brad Moore. They’ll be happy to answer your questions and discuss upcoming editorial and promotional opportunities. And if you have any feedback or future story ideas, please feel free to drop me an email at seanm@mediaedge.ca.

Until next time, enjoy the issue and enjoy the Summit!

Sean Moon Managing Editor, Canadian Gaming Business

Canadian Gaming Business | 5

messagefromtheCGA

Time for an attitude adjustment

BY BILL RUTSEY, PRESIDENT AND CEO OF THE CANADIAN GAMING ASSOCIATION

THE GAMING INDUSTRY has a communications problem that is particularly acute here in Canada. In addition to being regulated, gaming in Canada is “conducted and managed” by provincial governments, including in some cases owning and operating properties, as well as online.

This co-mingling of the roles and responsibilities of oversight, regulation and management has led to a tentativeness of governments to demonstrate the value of the gaming industry, and worse, ceding the field to those espousing strong anti-gaming sentiments that allows fears, misapprehensions and out-and-out falsehoods to be presented as unchallenged “facts.” Or, as Kellyanne Conway would put it “alternative facts.”

We’ve all read and heard “tax on the poor,” trap for the addicted,” “magnet for loan sharks, prostitutes and organized crime,” and the like. Worst is the conf lation of the severe and real effects that compulsive gambling cause for the very few so affected as being community wide.

If a defense is mounted at the political level, it is lukewarm at best. To quote a former premier – “There is no doubt about it, we have come to rely on gambling revenues. Perhaps in a better world we wouldn’t.”

What a great message for the more than 128,000 people directly employed in good paying jobs across the country, including the people working in the crown agencies.

6 | Summer 2017

These are hard working upstanding people supporting families and contributing to their communities.

It’s time for gaming to be de-stigmatized, much like alcohol was. There was a time when the purchase and consumption of alcohol was regarded as unsavory and a moral failure. Now that’s all changed. Alcohol is seen as an integral part of adult social activities. What it’s all about now is taking personal responsibility, and if you drink, don’t drive. We need to foster the same sort of public attitude and opinion towards gaming.

A nd that starts with the politicians. They have to stop apologizing for what is a legitimate and popular form of entertainment that raises very signif icant nonta x revenues to fund key government programs and charitable programs and initiatives. They need to catch up with their constituents who see it as an entertainment option analogous to going to a hockey game or the theatre and dinner. They need to realize that people who enjoy gaming are their friends and neighbours, not moral failures.

It’s time to change the political strateg y – to shake off the Victorian attitudes and opinions and embrace the reality of a robust entertainment industry that does immeasurably more good than harm, and communicate the facts.

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featurestory

INNOVATION Underrated or overused?

BY DOUG REED AND HAI NG

Are you tired of reading about innovation? Is it as important as all the hype would lead us to believe?

According to Merriam-Webster, innovation is defined as the introduction of something new, such as an idea, method, or device. If you look at the use of the word “innovation” in English books according to Google Books Ngram Viewer, there has been a dramatic rise in the use of the word — an increase of 506 per cent from 1900 to 2008. So, what happened?

There are a number of “bizspeak” words that are either overused or, like other industry jargon, just unnecessary when plain English will make you sound like a person and not a corporate institution.

Clearly the use of the word “innovation” has grown to a point you could argue it is overused. The more important question may be: Is innovation, in fact, pointless?

Ask yourself: If we never changed the business we are in over the past 30 years, would it be thriving? Surviving? Hanging on?

Or dying?

INNOVATE OR DIE

Well, we won’t pretend to know your answer, but our guess is 8 | Summer 2017

most businesses that have thrived and led their industry over the last few decades have made significant changes or innovations. If a company still does business exactly the same as was done 30 or 40 years ago, it is likely no longer a leader in the field, and may even be on the road to extinction.

Why is innovation, changing, or making something new so important? There are many reasons.

Forty years ago, competition was more local, not global; customers’ expectations today are higher. There is at least a perception, if not fact, that things are changing more rapidly.

Perhaps change and innovation occurs more rapidly today due to technology, or perhaps it just seems that way because we are

featurestory living it, and now more aware of it due to 24-hour news and the technology we carry with us every waking minute.

CONSUMER EXPECTATIONS RISE

Our expectations align with the perception; more competition gives consumers more choice, and their expectation of more frequent change therefore accelerates — which is par t of the reason customers’ expectations have sky rocketed.

There a re numerous companies that have both succeeded and failed.

According to the A merican Enterprise Institute comparing the Fortune 500 firms from 1955 versus 2016, only 12 per cent remain on the list that were there in 1955. There are many failed companies and many new rising stars. According to Forbes from 1920 to 2013 the lifespan of a company on the Fortune 500 list has dropped from 67 to 15 years.

Where are Blackberry and Nokia compared to Apple or Samsung? What about Blockbuster contrasted to Netflix?

Amazon versus Borders? Polaroid, once an “innovative” company did not see the digital future. Do you remember MySpace and their fast rise and fall? Even Yahoo has fallen from number one to four in online advertising revenue behind Google, Facebook, and Microsoft. The apparent conclusion is that companies that innovated were the rising stars and survivors in their industry.

Clearly, what is necessary and vital for business success is to evolve, change, innovate, launch, or introduce something new.

CHANGE IS CONSTANT

The gaming business is no different, and is certainly changing like any business going through the product life cycle, facing new challenges, or having to adapt to new technologies. Like other industries, gaming must innovate and make something new to survive.

According to the University of Nevada Las Vegas (UNLV) Center for Gaming Research, gaming revenue as a percentage of total revenue in Nevada has declined from 61.95 per cent in 1984 to 42.64 per cent in 2016. On the Las Vegas Strip, the decline over the same years was from 58.63 per cent to 34.24 per cent1.

Clearly, the gaming industry changes their revenue model and experiments with new products all the time. What if Nevada had to rely only on the old business model?

For example, we can look at one segment of the market and why creating something new (innovation) is important: How will Millennials' needs and expectations change the gambling industr y, and who will innovate to meet the new needs and expectations?

THE PERENNIAL MILLENNIAL

Many are talking about the Millennials like it is a new species. Think back to your youth — apart from advances in technology and a change in environment, is it that really that different from the one Baby Boomers or GenXers were raised in?

Most of us, no doubt have parents of a different generation. (Do you think they didn’t question your behaviors and lifestyle?)

No doubt many of us are parents of Millennials. That means nothing more than people and times are changing and will continue that way.

The environment and activities you participated in while growing up influenced your behavior and what you do today.

It’s no different with today’s Millennials, and therefore, expect them (much like you when you were young) to behave and enjoy different lifestyles from past generations.

We did not grow up with video games, virtual reality, drones, the Internet, and a computer in our pocket 24 hours a day, but like Baby Boomers, the Millennials are an attractive market with needs.

Change may be the only constant. Robotics, avatars, machine learning, artificial intelligence, self-driving vehicles, quantum control, new work environments/lifestyles, and more will change our business, jobs, and the needs of customers.

A book copywritten in 1994, entitled “Competing for the Future,” by Gary Hamel and C. K. Prahalad, still has a number of applicable messages about remaining competitive and innovative.

CUSTOMERS + NEED = OPPORTUNITY

It is still about needs and customers. It is hard to see a need and innovate ways to fill those needs when you’ve been a part of one business or industry too long. “Whole industries become vulnerable to new rules when all the incumbents accept, more or less, the same industry conventions. An industry full of clones is an opportunity for any company that isn’t locked into the dominant managerial frame.”2

1. Dr. David G. Schwartz, University of Nevada Las Vegas, Center for Gaming Research, “Nevada Casinos: Departmental Revenues, 1984-2016, http:// gaming.unlv.edu/reports/NV_departments_historic.pdf (accessed on May 11, 2017) 2. Gary Hamel & C. K. Prahalad, “Competing For The Future,” Harvard Business School Press, 1994, pg. 58 Canadian Gaming Business | 9

featurestory Being able to innovate and anticipate changing needs is a form of sustained competitive advantage. When you form a culture that can continuously implement change, experiment, and introduce new products, you have a chance to compete.

Your competition surely is not standing still. Your competition may not even be in the gambling industry currently. For example, look what Apple did to the cell phone industry beginning in 2007.

Many managers are risk adverse, which is surprising when you think that many of those managers are in the gambling industry! Leaders often worry about incremental savings or costs and thus avoid risk. Cost-control, while still important, is a defensive strategy. Coupled with the common asymmetric management styles that punish failure more than rewarding success, the typical corporate environment discourages change and innovation in favor of the status quo.

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Innovation is an offensive strategy. Those that have breakthrough innovation are not afraid to experiment and take calculated risk. They are not afraid of failure. The only people that don’t make mistakes are the ones that don’t do anything. There are many changes and experiments that lead to change. Some are incremental and others, like the Internet, are disruptive (yet another fancy buzzword for what we used to call revolutionary). The idea in business is to create a customer, and there are many new ones where innovation can intersect opportunity.

Innovation is not solely about new products. It can include many other aspects of an industry such as functions, logistics, and the experiences offered. Another myth about innovation is it takes a special type of person or a lot of creativity. Often, innovation simply involves many people interacting, and evolves when the environment is receptive and rewarding to innovate—don’t wait until you have to innovate out of necessity.

For example, one new market garnering much press is eSports.

Is there a perfect model to follow if you want to participate in this emerging market? No, but those experimenting and trying will be those with a competitive advantage as the market matures.

It really doesn’t matter if you think the word innovation is overused. Change is one constant, so if you’re tired of innovation, you can certainly use other words like, rebuild, reform, reinvent, change, make new, usher in, launch, or unveil. Let’s just be sure your business is focused on keeping up with change and is innovative! It is vital to competitive advantage and in some cases survival.

You might start by challenging everyone in your organization with the question: “If something new was possible…” Something new is not a bad start to innovation for your organization. Make innovation, or whatever you call it, part of your strategy. Make the first step by innovating management.

Doug Reed, principal at Racing, Gaming & Entertainment LLC(RGE), a consulting firm with an emphasis on operations, strategy and innovation, has 40 years’ experience in racing, gaming and education. He is also director emeritus and former director of the University of Arizona Race Track Industry Program. His current focus includes eSports/iGaming, strategic operations and innovation for change. For further information email: dougreed27@gmail.com Hai Ng is co-founder of Neomancer, a unique technology consultancy and advisory firm. Hai applies an anthropologically pragmatic approach when using technology to solve problems. Hai Ng is also co-founder of Spawn Point whose mission is to build and produce solutions to integrate Esports and Gaming. Hai tweets on matters of IGaming as @HaiOnGaming.

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coverstory

PASSING THE TORCH A look back at the 25-year career of gaming industry leadership with CGA President and CEO Bill Rutsey

BY SEAN MOON

Canadian Gaming Association President and CEO Bill Rutsey has played a major industry role from the earliest days of casino gaming in Ontario to create a 25-year legacy of leadership and achievement that will pave the way for an enduring and prosperous future for Canada’s gaming industry. As he prepares to pass the CGA leadership torch, Rutsey recently discussed his extensive career and shared his vision for what the future holds.

When Rutsey was asked in 2005 to create and lead the CGA by Duncan Brown, then-CEO of Ontario Lottery and Gaming, he had already amassed well over a decade of both private and public sector gaming industry experience, including assisting in the creation of gaming policy and casino development in Ontario and Nova Scotia. As Practice Leader of the Coopers and Lybrand Gaming Consulting Practice in the late 80s and early 90s, he advised numerous private and public sector clients, including the Ontario government (authoring the Ontario Casino Market and Economic Impact Study – the blueprint for the Ontario casino gaming industry), Windsor Casino (Caesars Windsor), the Chippewa of Rama First Nation and the Halifax Hilton Hotel (resulting in casinostyle gaming approval in Nova Scotia).

As CEO of private sector companies including Multigames Inc. and RPC Gaming Inc., Rutsey planned, developed and managed gaming businesses in 12 | Summer 2017

Ontario, Las Vegas and internationally, and has been licensed by gaming regulators in both Nevada and Ontario. He has also been a frequent commentator on gaming issues in media and before government.

SUCCESS RUNS IN THE FAMILY

Despite his notable success in a wide range of industry roles, Rutsey wasn’t always focused on a career in the gaming industry. Growing up with two brothers who had chosen clear paths towards their futures (one brother, John, was a founding member of legendary Canadian rock band Rush while his other brother, Mike, became an acclaimed baseball writer), Rutsey’s first job after finishing school was writing commercials for a rock’n’roll radio station. From there he was steered to try accounting by an uncle responding to his mother’s pleas to counsel her wayward son from his 70’s hedonistic lifestyle. He soon discovered he was more suited to consulting, noting that “accountants count

the beans one at a time, consultants count them by the handful.”

“I got into the gaming industr y completely by accident ,” Rut sey recalls. “I was running a consulting practice at Coopers and Lybrand (later PricewaterhouseCoopers) where I worked on a number of large public infrastructure projects, including with many professional sports teams on new stadium and arena projects, like SkyDome, the United Center in Chicago and GM Place in Vancouver.

“After the Bob Rae government in Ontario put out an RFP exploring the possibility of casinos, I put together a response with people from our U.S. offices who had gaming experience.

And we won — a fact for which Lyle Hall will never forgive me,” Rutsey says with his easy chuckle. “He was at K PMG at the time and couldn’t believe that someone who didn’t know anything about the industry actually won the assignment.”

coverstory

“I think it is very important to continue to work towards changing the public attitudes and opinions towards gaming — including the politicians who are responsible for it.” - Bill Rutsey

KEY INDUSTRY ROLE

As CEO of the CGA, Rutsey has seen a lot of challenges as well as been instrumental in some meaningful accomplishments as the association has helped guide the industry over the last 12 years.

“Right at the beginning, our challenge was to create space for us in the industry and to garner some initial recognition that we were a legitimate organization, and respect for what we were doing,” Rutsey recalls. “We went from people asking, ‘who the heck are these guys?’ to, ‘Oh, yeah, these are good guys who know what they are doing.’ We did great research and became one of the principal go-to organizations for the media and others for industry-related issues.”

The CGA has indeed created a reputation for leadership and expertise throughout the gaming industry. Whether it has been compiling extensive research or publishing comprehensive studies on key industry issues, including reports on VLT gaming, national economic impact studies, meta-analyses of problem gambling and a survey of community leaders attitudes and opinions towards the development of gaming facilities in their communities, the Association has become a preeminent resource.

And while Rutsey is proud of all of those accomplishments, he derives great satisfaction from having been able to help raise the profile and image of the gaming industry with the general public and politicians alike.

“One of the most personally rewarding aspects of having a leadership role has been working to advance the agenda of the industry — whether with provincial and municipal governments and crown agencies regarding the introduction or expansion of gaming, or sponsoring research that provides the facts to respond to the misunderstandings and misapprehensions often raised by opponents.”

PASSES THE TORCH

The list of accomplishments that both Rutsey and the CGA have achieved continues to grow, and Rutsey knows he is leaving the organization in good hands with a clearly defined path towards future success. During the leadership transition he will be assisting VP Paul Burns (who is to be appointed Interim CEO) with specific projects and be a resource to the Board going forward.

“I’m going to be concentrating on moving our national education initiative forward,” says Rutsey. “I think it is a tremendous project. The needs assessment proved there is substantial support for it and I am really looking forward to getting the initiative some traction, including getting content sourced and created and being accessed by people from across the country. And, we’re right in the middle of the strategic renewal process Paul Burns is leading. What I’d like to see is closer co-operation on a more day-to-day basis with the crown agencies across the country

that manage and regulate gaming. I’d also like to see the Association renew some of its seminal research such as the national economic impact analyses we’ve done.”

LOOKS TO THE FUTURE

Although stepping down from his role as CEO will certainly free up more time to enjoy favourite pursuits like tennis, music and wine, Rutsey plans to stay involved in the industr y in different capacities, as well as devote time and energy to the not-for-profit and charitable sectors. His greatest goal for the industry going forward is to change the public and political perceptions of gaming in Canada.

“I think it is ver y impor tant to continue to work towards changing the public attitudes and opinions towards gaming — including the politicians who are responsible for it. Too many people in this country have a very Victorian or moralistic view and we need to work on that.

Gaming is a form of entertainment and recreation for the overwhelming majority of people who participate.

R at e s o f pr o blem g a m bl i n g a r e v e r y l o w a n d h a v e n’t c h a n g e d meaningfully in 20 -25 years. The expansion of gaming does not create more problem gamblers. Changing this perception is probably the most important thing the Association and the industry at large can accomplish in the short and medium term.”

Canadian Gaming Business | 13

LOTTERY EVOLUTION From innovative technology to demographic shifts, online lotteries prepare for the future Canadian Gaming Business recently spoke with leading suppliers and provincial lottery operators to get their view on what’s new in online lotteries and how organizations are preparing to meet the changes and challenges ahead. Here is what they had to say. . .

14 | Summer 2017

industryq&a Participants:

Monica Bohm Vice President of eGaming British Columbia Lottery Corporation

Sean Cheop Product & Operations Manager eGaming and Casey Van Den Bosh Program Manage eGaming Manitoba Liquor and Lotteries Corporation

WHAT ARE SOME OF THE BIGGEST CHALLENGES FACING THE ONLINE LOTTERY INDUSTRY AND HOW IS YOUR ORGANIZATION POSITIONING ITSELF TO BEST DEAL WITH THESE CHALLENGES? Monica Bohm: A big challenge is the rapid pace of change in technology and customer expectations. Options in the online space are just one click away. This means we need to be customer obsessed and focused on making sure our products and delivery of gaming entertainment meet player expectations, and appeal to new and different demographics. On PlayNow.com, the primary key focus is on mobile and integrating the mobile experience across our retail lottery, sports and casino business. In some cases, this will be custom experiences only available on mobile devices.

In other cases, mobile is a complement to existing experiences with the goal of providing a connected experience across all channels. An example is the Lotto App we launched in December 2016, where you can check the lottery tickets you bought at retail on your mobile.

Sean Cheop and Casey Van Den Bosh: One of our biggest challenges

is targeting our online lottery to appeal to potential new customers whose needs and interests are wide-ranging without forgetting about or alienating our current player base. Our customer expectations vary widely, and technology is constantly evolving; the ability to align technology with those expectations is like shooting at two moving targets. We set our priorities with our partners and vendors, but we also emphasize that while setting priorities is important it is equally important to be able to quickly modify them when our needs change.

Wendy Montgomery: There’s no question that keeping pace with technology is the one of the most pressing challenges of our business. The growth in the mobile universe has been exponential and we’re competing in a hyper-paced global environment. The digital experience—and therefore customer expectations— evolves very quickly. At one time, a lottery purchase offered a unique break from the day-to-day—a chance to dream for a few minutes. Today, there are myriad options for mini-breaks. For all of us in this industry, we now have to be incredibly agile, just to keep up. We have to improve our analytics so that we can better understand our customers and meet their current interests.

Giuseppe Portoricco: Regulation of interactive online lottery within each individual province, relevancy for the next generation of lottery players and convergence of all gaming operations are the biggest challenges. There is a need for a more modern delivery of lottery games and products that support the traditional products

Wendy Montgomery Senior Vice President (acting) Lottery, Ontario Lottery and Gaming Corporation

Giuseppe Portoricco VP of Player Account Platform and iLottery, IGT

and channels in place. It is often difficult for regulations to evolve but lottery customers, particularly the next generation of lottery players, are expecting lotteries to provide products in the same fashion as less regulated industries are doing via newer technologies like mobile. From systems like IGT Command™, a player account management system that consolidates data from all gaming operations to PlaySpot™ IGT’s mobile gaming solution for retail operations, IGT is creating iLottery solutions that support lotteries in multiple regulatory environments using modern technology that is relevant to all players.

WHERE DO YOU SEE THE GREATEST GROWTH OPPORTUNITIES FOR ONLINE LOTTERY ORGANIZATIONS IN 2017 AND BEYOND? MB: The retail landscape is changing rapidly, and the adoption

of online and mobile platforms for shopping, services and entertainment is affecting our business. We are well set up to address some of these changes and have built a powerful, worldclass digital transactional platform in PlayNow.com, along with best-in-class games. We know that our one-stop-shop for lottery, casino and sports betting is meeting customer expectations for convenience and entertainment with over 300 games we offer today. We are also looking for opportunities to partner with other lottery organizations to deliver exciting and innovative online content, and scale our operations.

SC and CVDB: Growth has been steady but opportunities are there

for online lottery organizations that succeed in delivering products that appeal to younger customers. Online lottery organizations are well-positioned to attack these opportunities head on, perhaps with exclusive online products and experiences. Opportunities for additional customer engagement and incremental sales also exist in the realm of second chance lottery games and flexible lottery subscriptions.

WM: In Canada, one of the greatest growth opportunities is sports. With a nation of passionate sports fans, there is considerable interest in sports betting. The sports business attracts a different, more diverse customer than we’ve engaged before, so that’s certainly a positive. We’re also seeing a lot of interest in products such as e-instants (digital scratch cards). People are looking for immediate breaks—a quick bit of entertainment. The other key area is omni-channel.

Customers want a retail product and they also want to access it online. So, we’re no longer just launching new products in single business lines, we’re seeking to engage customers across channels.

Canadian Gaming Business | 15

industryq&a GP: One of the greatest areas of growth for online lottery organizations is to use mobile as the key access point to deliver content that connects retail to the online world, offer new content with new experiences and use gamification concepts from the world of social media to interest and engage a younger audience.

For example, offering instant win games to customers that give players new entertainment experiences but follow traditional instant ticket math. Or making lottery draws and games available through mobile devices that have the most advanced responsible gaming supports and controls but add gamification concepts to make the experience more social and enjoyable.

WHAT DEVELOPMENTS ARE IMPACTING THE INDUSTRY AS A WHOLE AND WHAT NEEDS TO TAKE PLACE FOR THESE OPPORTUNITIES TO BE OPTIMIZED? MB: Technology continues to push the boundaries for the gambling industry whose operations remain primarily rooted in the traditional brick-and-mortar model. We are working hard to enable improved connectivity and integrations between our gaming systems, data and customer value propositions to meet evolving customer expectations. We are embracing new ways to leverage technology to enable amazing new experiences and customer insights.

SC and CVDB: Customer expectations for lottery purchases do

not currently align with regulatory requirements for registration.

Customers expect a simple, quick purchase experience. An online purchase is simple but only after the player creates an account.

Online lottery organizations need to be able to move to a shopping cart-style purchase experience, or alternatively examine reduction of registration requirements for lottery products in order to attract new players. Experiential game mechanics bring a great deal of opportunity to evolve lottery product. The casino world has begun to evolve to focus on creating a richer customer experience.

Lottery can evolve to provide a more robust experience for those customers who crave it. Online provides an ideal way to consistently deliver these sorts of extended experiences.

WM: The National Research Council of Canada, Deloitte Canada

and KPMG are all doing research on disruptive technology—the seismic change across the economy—demonstrated for example by developments in entertainment. Cameras, music and television are all being replaced by our mobile phones. Our industry is also seeing disruptive change. There’s no question that technological changes have an enormous impact on our ecosystem—as do operators at the edges. LottoLand, for example, is an industry disrupter, offering discount tickets to other lotteries. At the same time, low-tech innovations are also occurring in pockets of the industry, such as Chase the Ace. We have to pay attention. In addition to acknowledging that there is considerable action at the periphery, we also need to communicate with each other more, explore collaboration, share information.

GP: The aspects changing lottery are mobile technology, shifting

attention to the needs of a younger demographic, and the pace of regulatory changes. Mobile technology is the primary technology that touches every aspect of our lives. Canadian lotteries need to

16 | Summer 2017

interact through mobile to stay relevant with consumers but need options to do this that fit into the regulatory framework they have in each individual province. It is important to have options in terms of mobile lottery and find ways that mobile can help support traditional lottery models and offer new ways to grow.

WHAT KIND OF AN IMPACT WILL NEW TECHNOLOGY, THE INTERNET AND SOCIAL MEDIA CONTINUE TO HAVE ON THE DEVELOPMENT OF ONLINE LOTTERIES? MB: The future is digitally enabled and connected and it’s already here. We see it with the rapid growth in participation on our online and mobile channels. This is an opportunity for BCLC and other lottery jurisdictions to enhance the relevance of what we offer, and work across lines of business and channels to deliver amazing and innovative customer experiences. BCLC is disrupting traditional models of entertainment and retail that crosses all demographics and industries. Our sports business is already operated from an enterprise perspective, and our lottery business is going through a transformation that will create a digitally enhanced and integrated retail experience. In our casino business, we are sharing products and now have progressive jackpots shared across online and land-based facilities.

SC and CVDB: We can’t forget that traditional lottery sales channels

are also evolving. Online sales can complement traditional lottery by providing quick and convenient sales opportunities. Online sales enhance a customer’s experience and help to grow the overall player base by appealing to new customer groups. Increased emphasis on social media as both a marketing tool and a potential sales channel means we will need to increasingly focus on high quality interactions with our customers. Social media brings opportunities to deliver brand messages directly to our customers without relying on a retail channel to carry the brand message.

WM: Social media provides a perfect opportunity for the lottery business. We know that our customers find stories about other customers winning experience very compelling. Winners’ stories are very popular; they generate incredible traditional— and social—earned media coverage. In large communities, it’s the very large wins that garner the most attention, but in smaller communities a win of over $1,000 is a widespread feel-good moment. Social media is a vehicle for conveying and amplifying those stories to broader audiences.

GP: New technologies will create new access points that require adaptation for consumer adoption. Mobile has been the most influential technology that has truly reshaped our everyday lives.

It has changed expectations and how we interact with each other and our environment. New technologies like augmented reality (AR) and virtual reality (VR) or even Bluetooth and higher speed wireless technologies hold the same ability to completely reshape our world and expectations. Social media has the potential to do the same — learning from the speed, reach and influence social media has. A small event can reach the entire world through social media in an instant and therefore it too will force changes in how lotteries relate to players and other public sectors. Additionally, social media has opened many new concepts that can be used to improve player engagement and interest in lottery offerings.

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executiveprofile

KEVIN

TAYLOR

President of Operations, Société des casinos du Québec Kevin G. Taylor has held many different positions since he began his career in the hotel, tourism and gaming industries over 25 years ago. He has been the restaurant director of several major hotels in the Montréal region and in New York. His diploma in hotel management from the Institut de tourisme et d’hôtellerie du Québec allowed him to quickly climb through the ranks and by 1995 led him to the Casino du Lac-Leamy.

FROM 1995 until his appointment as President of Operations at the Société des casinos du Québec (SCQ) in 2016, Taylor has held a number of senior leadership positions in the Quebec hospitality and gaming industries including executive director roles at the Hilton Lac Leamy, the Casino du Lac Leamy, and the Casino de Mont-Tremblant. In 2013, Taylor was named Chief Operating Officer of the Société des casinos du Québec, and in 2015 took over the direction of the Casino de Montréal, maintaining his role as COO. Created in 1992, the SCQ now employs some 4,700 employees in its casinos located in Gatineau, La Malbaie, Mont-Tremblant and Montréal, as well as staff working for the online gaming site Espacejeux.com and at the head office in Montréal.

WHAT AREAS OF YOUR ROLE AT SCQ ARE THE MOST CHALLENGING FOR YOU PERSONALLY AND WHAT ARE YOU MOST LOOKING FORWARD TO ACCOMPLISHING IN THE NEAR FUTURE?

My main challenges were to adapt to my new role as a leader, and to maintain a balance between work, family and recreation. Having been in this job for a little over a year, I think it was a success, although there are still some challenges every now and again. One thing is sure: I really like my job.

I have a stimulating role and there’s nothing routine about it. Furthermore, I am very fortunate to be surrounded by a 18 | Summer 2017

qualified and resourceful team and I’m looking forward to what the coming years have in store for us. One of our most important and continuing tasks is the development of open, two-way communications with our employees. We have almost 4,700 employees, and I believe that maintaining their trust and paying attention to what they and their unions have to say is of utmost importance. Our employees are the first line of contact with customers and ensure that operations run smoothly.

WHAT ARE THE MOST PERSONALLY REWARDING ASPECTS OF WORKING IN A LEADERSHIP ROLE IN THE CANADIAN GAMING INDUSTRY AND WHY?

It’s gratifying to be part of the Canadian gaming industry – it’s a great place to work. As I’m sure you’re aware, the industry brings in almost $8 billion in revenues annually.

In Québec alone, our establishments generate 8,200 direct, indirect and spin-off jobs, and contribute $600 million to the province’s GDP. They are major drivers of their respective region’s economy and contribute to community development at various levels. I’m also very proud to work in a customercentric industry that focuses on making dreams come true and exceeding expectations. We provide award-winning customer service, and I couldn’t hope for a more skillful and devoted team to run our casinos.

executiveprofile

IN WHAT WAYS HAS YOUR PAST EXPERIENCE PREPARED YOU FOR YOUR ROLE AT SCQ?

You’d think that many years of experience prepare you to take on a position like this one, but there are always some sur prises! That being said, I believe that my background and relationships I’ve built over the years have provided a good basis for this job. I started in the Casino du Lac-Leamy’s bar and, over the years, took on various jobs, climbed the ladder and earned lots of practical and strategic experience. I also did my best to maintain good relationships with my co-workers, as they were instrumental in helping me grow as a manager and as a person.

WHAT’S YOUR VISION FOR THE FUTURE OF THE SCQ AND ITS ROLE IN THE GAMING COMMUNITY IN THE PROVINCE AND CANADA?

Together with our colleagues, partners and suppliers, the Société des casinos du Québec is currently developing its vision for 2020-2026. We want to continue the shift undertaken a few years ago, specif ically to turn our establishments into integrated entertainment complexes that offer everything under one roof: Gaming, restaurants, shows, emcees, golf, spas, etc. We want to provide our customers with a unique, detail-oriented experience, from the moment they step through the door to when they leave.

WHAT DO YOU BELIEVE ARE THE GREATEST GROWTH OPPORTUNITIES FOR GAMING IN CANADA AND WHY?

I believe that bringing together in-casino and online gaming, also known as Brick’n’Click, will produce a treasure trove of exceptional growth opportunities. We hope to give our online players an in-casino experience, and allow in-casino players to continue gaming online with the same level of excitement and fun. We know that Canadians are playing online at an increasing rate, and our stats show that. For 2016 2017, revenues from our Espacejeux online platform grew by 29.8 per cent compared to the previous year, a total increase of 343 per cent since the 2011-2012 launch. We therefore intend to capitalize on that fact and develop a more attractive, fluid and entertaining product that will showcase casino products.

WHAT ARE THE GREATEST CHALLENGES FACING THE CANADIAN GAMING INDUSTRY TODAY AND HOW DO YOU THINK THEY SHOULD BE ADDRESSED?

The gaming industry is facing several interesting challenges, with the main two being the renewal of our clientele and illegal online gaming. New generation customers are less attracted to casinos and have different gaming habits than

their elders. We needed to adapt our offerings to capture their attention. While we’ve made great progress since then, there’s still much work to do, particularly with regard to our slot machine experience.

WHAT HAVE BEEN SOME OF THE SCQ’S MOST RECENT DEVELOPMENTS AND HOW DO YOU THINK THESE DEVELOPMENTS WILL IMPACT THE GAMING INDUSTRY IN QUÉBEC AS A WHOLE?

We have updated our infrastructures and offerings over the past few years in order to present trendy establishments that compete well in the market. We integrated entertainment offerings with gaming, and gaming with entertainment offerings. That attracted a new clientele and positively influenced the general public’s opinion of casinos. We also work closely with tourism partners in each region and establish strong ties with that industry in order to develop joint marketing approaches. Tourists account for 44 per cent of casino visits, and that’s why we need good cooperation between the gaming industry and tourism partners.

WHAT’S YOUR PHILOSOPHY FOR ENSURING THE BEST AND SAFEST GAMING EXPERIENCE FOR THE GAMING CONSUMER, GOVERNMENT STAKEHOLDERS AND THE GAMING COMMUNITY?

Since 20 09, we have maintained the World Lotter y Association’s Level 4, which is the highest responsible gaming certification and, year after year, we have demonstrated that the WLA’s seven principles of responsible gambling are integrated in our daily operations, particularly the protection of vulnerable customers and groups, cooperation with stakeholders as well as player and public education.

Responsible commercialization is a business priority for us, as it is the basis for maintaining operational and industry credibility. Our product promotion efforts are geared towards acquiring more customers and players, not only drawing people who play more.

ANY OTHER INFORMATION OR INSIGHTS THAT YOU WOULD LIKE TO SHARE WITH OUR READERS?

We will need to take up many challenges over the coming years and have several projects in the pipeline. Our priority, however, will be to ensure that customer service remains high quality. Each action we take is centred on customers, and we constantly seek to exceed their expectations. Each Société des casinos du Québec employee has a role to play in the customer’s experience with us. By doing our best and paying attention to detail, each of us contributes to making the customer’s visit unforgettable. That philosophy of excellence in costumer’s service will make our vision a reality.

Canadian Gaming Business | 19

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industryspotlight

CASH AND CURRENCY AUTOMATION Keeping up with the changes

To find out what’s happening in the world of cash and currency automation for the North American gaming industry, Canadian Gaming Business recently asked several leading industry suppliers to weigh in with their insights.

Participants:

Joe Pappano Managing Director Vantiv Entertainment Solutions (VES)

Omer Sattar Co-Founder and Executive Vice President of Strategic Initiatives Sightline Payments

WHAT ARE SOME OF THE MOST IMPORTANT CHALLENGES FACING CASH AND CURRENCY AUTOMATION IN THE NORTH AMERICAN GAMING INDUSTRY? Joe Pappano: It can be a challenge to educate the two highly complex eco-systems within gaming – the payment ecosystem and legislative component. Payments are moving at a very brisk, rapid pace – we have new innovations popping up quite frequently in how consumers can pay. Yet in gaming, you have to have succinct, very disciplined changes to move through the environment. The industry is starting to understand the benefits that come with modernized, frictionless payments. But, unfortunately on the regulatory side, they don’t have the appropriate resources, just yet, to move at a very brisk pace and incorporate many of these innovations.

Omer Sattar: We are engaged in several facets of educating the industry – both regulatory and legislative-wise. Perhaps one of the biggest challenges facing the industry, which is also an opportunity, is the convergence how a player interacts with games and the payments involved with them. If you look at the Canadian gaming market, for example, in British Columbia – there are lottery games, brick and mortar casinos, online gaming and bingo parlors. Within all of these elements, players are doing several of these activities. It is essential that payments keeps pace with their activities, meaning

Darren Simmons, SVP, Payments Solutions, Everi.

that players are able to pay for several activities using a singular and seamless platform.

Darren Simmons: Gaming operators work with a substantial amount of cash generated by their gaming floor, entertainment, food and beverage and retail locations. Being able to manage this cash in a way that is operationally efficient, secure and cost effective is an opportunity operators are looking for. Using automated cash handling devices such as Everi’s RecyclerXchange and CageXchange devices, opportunities for theft and fraud are significantly reduced, counting and recounting are eliminated resulting in reduced labor costs and a quick and positive return on investment.

WHERE DO YOU SEE THE GREATEST GROWTH OPPORTUNITIES FOR CASH AND CURRENCY AUTOMATION IN 2017 AND BEYOND? JP: Looking as a specific market, there is tremendous opportunity in

the lottery space in North America. In the U.S., for example, there are now 45 state lotteries and many jurisdictions now have or are in the process of implementing cashless solutions. By “electronifying” this space, you are encouraging growth and convenience. This trend will soon certainly apply to Canada as the lottery industry is becoming more and more unified as one. In the U.S., where average tickets were totaling $7 to $9, we’re now seeing $28 to $32 Canadian Gaming Business | 21

industryspotlight a ticket and upward. To drive the next generation and the bottom lines of so many in this industry, we must “electronify” the various elements.

OS: Cash doesn’t necessarily need to be fully removed from

the ecosystem, nor does the industry need to be 100 per cent electronified. But, there is tremendous opportunity when it comes to user experience – how a user buys in, cashes out and has a seamless experience across all platforms, whether they are playing on a mobile phone, buying a lottery ticket, interacting with a kiosk and then going out in the world and using their funds.

Also, removing cash – where possible – has its financial benefits.

You potentially have more money in play, increased loyalty (by implementing a rewards program), an increased lift and decreased expenses. Cash can be costly.

DS: Cash recyclers and dispensers that are integrated with a casino’s existing payments and cash access infrastructure will prove to be the area with the greatest financial and labor cost savings benefit to casinos. Everi is working through options for integration between payments products and third-party systems that, when completed, will allow our casino partners to offer a solution to their staff that is flexible enough to grow and mature as technologies are enhanced.

WHAT NEW PRODUCTS OR RESEARCH CAN YOU SHARE WITH OUR READERS WHEN IT COMES TO CASH AND CURRENCY AUTOMATION?

OS: At Sightline Payments, we’ve been excited about the success of Play+ and its deployment in the U.S., from running cashless ecosystems to tying together brick-and-mortar and online.

That ecosystem will soon be brought to and adapted to in the Canadian marketplace. We’ve seen a number of properties doing different things with this technology. We have MGM incorporating the technology with mobile wagering and racing as is William Hill. The Golden Nugget (N.J.) has partnered with us with online gaming. The Mohegan Sun is running a cashless brick-and-mortar casino. And we have many others coming on board. We have different operators coming in at different points in the lifecycle depending on their needs.

Eventually, we want to see casino ecosystems in which a patron can come in and seamlessly do what they want to do while eliminating the cash friction points.

DS: Everi has recently introduced our RecyclerXchange and

CageXchange automated cash handling devices to the gaming market. Everi’s RecyclerXchange cash recycler removes the need for cashiers and tellers to count and verify currency, allowing staff to focus more time on customer service.

Everi’s CageXchange cash dispenser speeds up transactions, reduces exposed cash, and improves the casino’s overall customer experience. CageXchange is integrated with Everi’s CashClub™ solution and helps improve cage accuracy while securely storing cash. Using either of Everi’s automated cash handling devices, casinos have noticed their average cash handling productivity is increased by up to 60 per cent and cost per transaction is reduced by up to 40 per cent.

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22 | Summer 2017

Partners in Success

industryspotlight

Vendor partnerships key to meeting innovation goals

By Harry Patrinos The Canadian gaming industry is in the midst of significant change as casino operators and suppliers attempt to take advantage of new global growth opportunities, adapt and respond to new online competitors, innovate to reach new audiences and develop features to enhance the player experience.

To ad d re s s t h e s e t re n d s , c a s i n o operators are being tasked with embracing many new or updated forms of technology.

Whether on the gaming floor or in the count room, technology holds the key to delivering a more engaging customer experience, streamlining transactions and eliminating inefficiencies. Fostering relationships with forward-thinking partners can turn thoughts of innovation into reality.

Seizing First-Hand Innovation In their efforts to innovate, casino operators should not overlook vendor relationships as a key tool for meeting their technology goals. By choosing vendors who invest in research and development (R&D) and possess strong patent portfolios, gaming organizations can reap some of the rewards of that innovation first-hand and more quickly accomplish their own goals.

While many in the gaming industry acknowledge that technology holds the key to overcoming current business challenges, others acknowledge that the gaming industry has been slow to welcome technological changes over fear of alienating their existing customer base.1 Individual casinos typically do not have the staff or resources in place to fulfill all of their own technology goals.

However, innovation-focused vendors feature large teams of engineers that are continually looking to develop the next big invention while enhancing current products to offer more features or make them more customer-centric.

Gaming and hospitality companies rely heavily on customer feedback, as that data can be used to tailor products, improve customer experience and spot trends earlier.

Likewise, it’s critical that these companies share this feedback with their vendor partners to influence the development, design and engineering of new products. By doing so, properties can quickly and efficiently respond to new challenges and are often delighted by solutions that have a significant impact on customer satisfaction.

Technology on All Fronts Looking to technology to improve security, efficiency and customer satisfaction has already paid dividends for the gaming industry, as casinos have embraced ticket technology and loyalty/customer tracking efforts. We are already seeing properties add features to slot machines to make them multi-line profit centres capable of interfacing with smartphones via Bluetooth, vending and redeeming lottery tickets and race and sports betting, conducting real-time currency exchanges, and streamlining tax form processing.2 While new customer-facing innovations are important, casinos must also seek to become more productive in the back of the house. Innovative solutions for processing tickets and currency continue to be developed and refined by partner companies, greatly improving productivity a nd cu t ting c o sts . B y st re a m linin g processes with advanced technology, operations can be positively impacted in the forms of increased speed and accuracy and a higher level of service, both internally and to customers.

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With the high volumes of tickets and cash that trade hands in casinos every day and zero room for error, the task of choosing vendors and purchasing equipment that saves time, eliminates errors and delivers extremely high availability takes on an extreme level of importance.

Navigating Your Vendor Options With many vendor choices available, how can casino executives be sure that the companies they’re working with truly foster innovation and that they’re not purchasing outdated technology? The biggest clue can be to examine how much each company invests in research and development. By comparing R&D investments, examining patent ownership and looking at industry recognitions for innovation and product efficiency, casino operators can find trusted partners who can help position them for long-term success.

With innovation at top-of-mind for all Canadian gaming properties, it’s important to remember that vendor partnerships can be an incredibly valuable tool, and this cooperative relationship can greatly aid casinos in meeting their goals.

Harry Patrinos is Managing Director, Cummins Allison Canada. For more information, visit http://www.cumminsallison.ca Sources: 1. Las Vegas Review-Journal, “Technology changes rise to the forefront at this year's G2E” http://www.reviewjournal.com/columnsblogs/inside-gaming/technology-changes-rise-the-forefront-years-g2e 2. Las Vegas Review-Journal, “Here are some takeaways from entertaining, educational Global Gaming Expo” http://www. reviewjournal.com/business/casinos-gaming/here-are-some-takeaways-entertaining-educational-global-gaming-expo

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facilityprofile

CASCADES CASINO

PENTICTON Gateway Casinos celebrates the opening of new entertainment destination

Penticton, in the heart of British Columbia’s South Okanagan, has a spectacular new entertainment destination – Cascades Casino Penticton.

LOCATED AT THE South Okanagan Events Centre (SOEC) complex, the new Cascades Casino Penticton features 45,000 square feet of premium entertainment space, offering an array of exciting slots and table games, dining and entertainment options to suit any taste.

It also features the first rooftop patio at Gateway’s signature MATCH Eatery & Public House.

“The SOEC is the perfect home for the newest addition to the Gateway family of gaming and entertainment properties,” said Tony Santo, CEO of Gateway Casinos & Entertainment. “I know this facility will provide patrons with an experience that is second to none.”

24 | Summer 2017

IMPROVES CUSTOMER EXPERIENCE

Central to Gateway’s success has been the development of signature casino and restaurant brands that have dramatically improved the gaming customer experience while generating important new customer segments. With the opening of Cascades Casino Penticton on April 5, 2017, Gateway succeeds once more in creating a first-class gaming and entertainment destination right in the heart of Penticton.

Through a substantial investment of over $25 million, Gateway has shown they are fully committed to Penticton and the South Okanagan for years to come. This project not only helped boost the local economy during construction

CASCADES PENTICTON AT-A-GLANCE • Cascades Penticton will employ over 300 people, which creates more than 150 new positions for people in the community. During construction, almost 200 construction jobs were created.

• The new 45,000 square-foot property will offer guests more dining and entertainment options, including two restaurants and space for live entertainment. The 32,500 square-foot gaming floor offers 400 slot machines and 11 table games.

• MATCH Eatery & Public House has combined the welcoming and social traditions of a neighborhood pub, with the high-energy of a lively sports bar.

The Buffet is an occasion to indulge in a feast for your senses. An ever-changing menu highlights cuisine from around the globe and serves up something for every age and every appetite.

• Gateway Casinos & Entertainment operates 28* gaming properties, over 6,155 employees, 9,882 slots machines, 286 tables, 57 restaurants and 272 hotel rooms. (*after the Ontario North and Southwest Gaming Bundles are fully transitioned and developed.)

facilityprofile

with increased purchasing and use of local suppliers and businesses but will continue to generate economic benefits through job growth, increased revenue to the city, and increased local spending.

In addition to the long-term and ongoing investment, construction saw an injection of 200 person-years of construction employment to the region and resulted in an additional 150 new permanent jobs, bringing their existing team of local employees to over 300 people.

BOOSTS LOCAL ECONOMY

T h is projec t represent s a not her important success in Gateway’s ambitious redevelopment and growth strategy that continues to overhaul the customer experience. Since launching their growth strategy Gateway has invested significantly in the communities where they operate in Western Canada, including, $40 million to construct Cascades Casino in Kamloops and over $32 million on the new Grand Villa in Edmonton. This has also created 1,500 new jobs in those communities – an increase to their work force of 55 per cent since 2013. The objectives of this strategy are clear: Invest in new and redeveloped properties to dramatically improving both the customer experience and the employee experience.

It is this approach that has led us to Cascades Casino Penticton, a premium

entertainment space, inspired by the idea of “Play,” Cascades is casual, approachable and offers a place where customers can have fun, relax, and play.

Gateway’s capital investment of $25 million, much of which went to local suppliers throughout the design and build phases, is only one aspect of their local contribution to the Penticton community.

Gateway always strives to be a good corporate neighbor - working closely with community leaders to ensure they are taking an active role in supporting economic development as well as supporting important community and charitable initiatives through Gateway Gives, their charitable giving and community engagement program. In Penticton alone, they contributed over $55,000 last year to more than 25 local organizations and the team gave over 90 hours volunteering throughout the community.

Not a company to rest on its laurels, up next in the continued evolution of Gateway is the expansion of their footprint into Ontario. In May, they completed the transition process of nine locations in Southwestern and Northern Ontario.

For more information please visit http:// cascadescasinopenticton.com/. Also, follow Cascades Casino Penticton on Facebook www.facebook.com/CascadesCasinoPenticton/ for the latest news and promotions.

GATEWAY NOW CANADA’S LARGEST GAMING AND ENTERTAINMENT COMPANY WITH ONTARIO EXPANSION Gateway Casinos & Entertainment Limited has signed a 20-year Casino Operating and Services Agreement (COSA) with the Ontario Lottery and Gaming Corporation (“OLG”) and has purchased the business and assets of the Southwest Gaming Bundle. Under the agreement, Gateway was scheduled to take over the day-to-day operations effective May 9. The expansion into Ontario represents the next exciting chapter in Gateway’s successful growth strategy making Gateway Canada’s largest and most diversified gaming company.

“Today is a very exciting day and an important milestone for Gateway as we expand our footprint into Ontario with the completion of the transition process in Southwestern Ontario. We thank the OLG for the hard work throughout the transition process and we look forward to our long-term partnership,” said Tony Santo, Gateway’s Chief Executive Officer.

Gabriel de Alba, Gateway’s Executive Chairman, said, “Gateway’s growth strategy and focus on a superior customer experience revolves around investing in the company’s unique gaming properties and creating a broader attraction across numerous demographics. Our success has resulted in significant job creation across the communities where we operate in Western Canada. We are bringing this same approach to Southwestern Ontario with a planned investment of over $200 million to revitalize and enhance the gaming and entertainment landscape.”

Expands Presence In December 2016, Gateway was selected by OLG as the successful service provider in the Southwest and North Gaming Bundles. The Southwest Gaming Bundle includes a casino in Point Edward and slots in Woodstock (at Woodstock Raceway), London (at the Western Fair District), Clinton (at Clinton Raceway), Dresden (at Dresden Raceway) and Hanover (at Hanover Raceway). The North Gaming Bundle was scheduled to transition to Gateway in late May 2017 and includes casinos in Thunder Bay and Sault Ste. Marie, slots in Sudbury (at Sudbury Downs) and two planned casino builds in Kenora and North Bay. Central to Gateway’s success has been the development of signature casino and restaurant brands that have dramatically improved the gaming customer experience while generating important new customer segments. With the transition complete, Gateway will now focus on plans to invest over $200 million in Southwestern Ontario communities to introduce the proprietary casino and restaurant signature brands.

Canadian Gaming Business | 25

EDUCATING THE INDUSTRY National Education Initiative Report Card

BY BILL RUTSEY, CEO, CANADIAN GAMING ASSOCIATION

As part of our mandate, the Canadian Gaming Association (CGA) initiated dialogue with various parties regarding the feasibility of developing a national approach to industry training and education. Out of those initial conversations came the plan to undertake a national needs assessment, which was communicated to the industry at large at the 2016 Canadian Gaming Summit in Gatineau/Ottawa. The purpose of the needs assessment was to identify challenges and determine whether or not there was an appetite for a more cohesive and centered approach to training for the Canadian gaming industry.

TO UNDERTAKE the assessment CGA partnered with the Sault Ste. Marie Education Partners (Sault College, Algoma University and Sault Innovation CenterSSMEP), and engaged Marinelli and Flynn Gaming Advisors (MFGA) to conduct it.

CGA and MFGA together developed the methodology and approach, including developing a questionnaire and identifying key organizations and individuals to be interviewed.

D u e t o t h e l a r g e nu m b e r o f organizations and individuals involved in gaming in Canada (the Canadian gaming industry employs over 128,000 employees across the country), not every province or organization within a province was approached. The criteria for selecting an organization was that it had to be large enough to provide a representative view of the education needs within its geographical area. Ontario, British Columbia and 26 | Summer 2017

Quebec were assessed separately, Alberta, Saskatchewan and Manitoba as Western Canada, and Nova Scotia, Prince Edward Island, New Brunswick and Newfoundland as Atlantic Canada.

Certain regulators (Gaming Policy Enforcement Branch – BC; Alberta Gaming and Liquor Commission – Regulator Division; Alcohol and Gaming Commission of Ontario; Justice and Public Safety – New Brunswick; Alcohol, Gaming, Fuel and Tobacco – Nova Scotia) also received questionnaires specifically focused on the regulatory perspective.

Questionnaires were sent to identified individuals, followed up by interviews with those individuals and others in the organizations. A total of 20 interviews with gaming professionals were conducted and 24 questionnaires were received.

KEY FINDINGS OF THE NEEDS ASSESSMENT

The top-line result is that there is that there is substantial support for a national approach to gaming training and education.

Other findings include: The preferred method for delivering

industryupdate training/education is online and in an interactive way that incorporates mobile platforms where feasible. The online/ mobile approach was preferred because of its capacity to reach employees anywhere and at any time, its cost per student, and the ability to easily update course material. Rigorous tracking of students’ progress will be a requirement due to the regulated environment in which gaming organizations operate.

Some site training will be necessary because of specific site or gaming vertical requirements, as well as the related benefit of having employees from a specific area undergo training together.

Examples include management training, sur veillance, cage and coin, and customer support centers.

A central location, for instance, the Canadian Gaming Summit, could be used for executive and management training that is not organization specific, such as risk management, legislative and regulatory, technology trends, marketing programs, and industry challenges. A central location could also be used to recognize the graduates of a national gaming program.

Because provinces do not adhere to identical regulations, variations will occur in common courses, for example, Responsible Gambling and Anti Money Laundering.

Human Resources divisions within some organizations have established training and education programs. While this may cause challenges (owing to proprietorship of the existing education and training programs), all organizations expressed a willingness to share training materials for a national program.

Curriculums from the CGA acquired Canadian Gaming Centre of Excellence, Thompson River University, University of Nevada, Las Vegas, and learning frameworks from organizations such as SaskGaming already exist and are being further developed, which can be incorporated into the national education program.

Organizations such as the Canadian Partnership for Responsible Gambling and the Responsible Gambling Council need be consulted to create a national responsible gambling education program or a responsible gambling professional certification.

Land-based gaming has the largest education and training needs, as it is

dependent on its large employee base to deliver its services and products.

Constant staff turnover (approximately 10% annually), new site developments, such as Ontario modernization, together with continuous change in product (e.g. social, eSports, fantasy sports, machine racing) creates an almost continuous demand for employee training.

Refresher courses mandated by provincial regulators, and national anti-money laundering requirements also create constant demand for training and education.

Subject areas identif ied include responsible gambling, regulatory compliance, communications skills, customer service, technical skills (slot and tables), management skills, project management, contract management, risk management, analytics (player and game), business acumen, security/ surveillance, cultural/diversity and office technology training (e.g. MSOffice).

A n o t h e r o p p o r t u n i t y t o b e investigated is lottery retailer training.

However, this training cannot be offered nationally due to differing provincial regulations and types of terminals in use in each province.

OUR NEXT STEPS

Our f irst nex t step is to develop governance and operational frameworks and agree them with our primar y partners that include crown agencies and gaming property owner-operators.

Other key steps include: Communicating the results of the needs assessment at the Canadian Gaming Summit, in Vancouver and soliciting feedback from Summit participants on a governance structure a nd how to fu r t her a n at ion a l education and training program.

Investigating the implementation of an online interactive application/platform for the mobile deployment of education, including short videos followed by questions, training gamification, and synchronous learning concepts. This will require meeting with regulators across the country to discuss the requirements for tracking students and the certification of courses.

Pursuing strategic relationships with global lottery and gaming educational leaders such as UNLV PLUS Center.

Ensuring future Summit sessions feature technology enablers from other

industries that can be applied to gaming (e.g. financial services), common issues across Canada (e.g. conduct and manage in an online world), gaming best practices in analytics, marketing, risk assessment and designing entity level controls, and best practices in contract management.

Investigating leadership/management training that ca n be g iven a nd certificates awarded at the Summit.

Investigating a national approach to training employees across Canada on responsible gambling and anti-money laundering, in addition to creating a responsible gambling professional certification.

Investig ating the creation of a P rofe s sion a l C er t i f ic at ion for Responsible Gambling in consultation with the Responsible Gambling Council and the Canadian Partnership for Responsible Gambling.

Tracking emerging gaming trends and suppliers for training requirements, such as fantasy sports, eSports, skill-based and social games.

Investigating how existing employee training can be applied towards accreditation, as all organizations contacted indicated an interest in obtaining some form of credit towards a diploma or certification for programs already completed.

CONCLUSION

I would like to thank the Sault Ste. Marie Education Partners for funding the needs assessment and Marinelli and Flynn Gaming Advisors for their meticulous work conducting it. I also thank the gaming organizations across Canada and their staff that participated in the Education Needs Assessment, and I am confident that a national education program can be developed in partnership with the gaming operators and regulators across the country.

I look forward to accomplishing our next steps to bring this need to reality.

Canadian Gaming Business | 27

corporateprofile

JACKPOT DIGITAL INC.

Ground-breaking innovation in electronic table gaming

Vancouver-based Jackpot Digital Inc. is pioneering new advances in electronic table gaming through a dedication to innovation and technology. A leading electronic table games manufacturer and mobile gaming provider for the cruise ship and regulated casino industries, the company specializes in multiplayer gaming products which are complemented by a robust suite of backend tools for operators to control and optimize their gaming business.

JACKPOT DIGITAL WAS founded in 1999 as an iGaming operator and software developer, but since 2015 has focused on development and manufacturing of electronic table games (ETG). Originally known as Las Vegas from Home.com Entertainment Inc., Jackpot Digital rebranded in 2015 to reflect the company’s new focus and bright future.

28 | Summer 2017

The c o m p a n y ’s d e d i c a t i o n t o innovation led to a recent feature on Innovations with Ed Begley Jr., an award-winning television series on Fox Business Network dedicated to highlighting innovative companies across a wide variety of industries.

Speak ing with Jackpot Digital’s President and CEO Jake Kalpakian,

it becomes clear that the company is looking to break new ground in the gaming industry.

“Our company has a long history in electronic gaming, as an iGaming operator, software developer, and now as an ETG manufacturer,” says Kalpakian. “We’ve applied our varied experience and skills to our new ETG product, Jackpot Blitz™,

PROUD TO SUPPORT THE CANADIAN GAMING SUMMIT. WE’RE ONTARIO’S LOTTERY & GAMING AND WE’RE ALL FOR HERE.

Canadian Gaming Business | 29

corporateprofile

which has the potential to transform our industry and bring table gaming back to the forefront of casino entertainment.”

JACKPOT’S QUANTUM LEAP

In 2014, Jackpot Digital launched a new era of growth by signing an agreement with Carnival Cruise Lines to deploy their suite of HTML5-based mobile games on Carnival’s ships. Carnival’s Mobile Casino provides a host of best-in-class poker, slot, and table-game content for their guests to play while in international waters. Jackpot’s poker and casino games quickly found their place amongst Carnival’s top earning games. This was a huge development for the company, generating new revenue and opening Kalpakian’s eyes to potential synergy with an ETG product from PokerTek, Inc. that was also showcased on Carnival ships.

Kalpakian, a veteran of the gaming industry, saw the potential of ETGs to transform traditional table gaming through new technologies and expanded game offerings. So, in 2015, Jackpot purchased PokerTek’s assets with the goal of developing the next generation of ETGs. Since the 2015 acquisition, Jackpot Digital has operated more than 100 PokerPro and ProCore ETG units in casino locations worldwide, including on more than 75 ships in the Carnival Cruise Lines fleet.

In a July 2015 company press release, Kalpakian stated that the PokerTek acquisition would allow the company to “build unique features and products that synergize between the electronic tables and mobile games, leading to a superior user experience and ultimately increased revenues for the Company.” He followed this up by initiating the development of a multi-functional ETG system to deliver the most technologically advanced social gaming experience on the market.

After nearly two years of research and development, Jackpot Digital will be launching their next generation ETG product, Jackpot Blitz™, at the 2017 Canadian Gaming Summit in Vancouver.

Jackpot Blitz™ is a unique and revolutionary new ETG platform that combines the social aspects of live table gaming with the most advanced technology on the market.

“The ETG market is rapidly changing, and Jackpot Blitz™ represents the evolution of electronic table games,” says Kalpakian. “Our product features best in class technology and innovative features, 30 | Summer 2017

making it a must-have for traditional and electronic gaming operators worldwide no matter the size of their operation. Our product makes table game operations faster, more efficient, more fun, and more profitable.”

TECHNOLOGY LEADING GROWTH

“Historically, innovation and technology have been the catalyst for change in the gaming industry,” says Kalpakian. “While slot machines were the new rage in the 70s and 80s, today’s gaming industry is driven by the need to use new technology to draw Millennials into casinos. Jackpot Blitz™ combines the most advanced technology with traditional casino games to provide fast-paced and innovative social entertainment.”

The company has designed Jackpot Blitz™ to be the most advanced and flexible ETG product on the market; its adaptable software interface allows a single Blitz table to play poker (Texas Hold’em, Omaha, and video poker), blackjack, baccarat, roulette, and other casino games. Blitz tables feature 10 player seats and a modular design that allows multiple house banked games to be played simultaneously on a single Blitz table – five players can play Hold’em while the other five play blackjack. The ETG platform will also feature mini-games, where players can play a hand or two of blackjack against the house while they wait for their next hand to be dealt in a ring game or tournament.

Jackpot Blitz™ also features a massive 84-inch, 4K resolution touchscreen with more than 100 sensitive touchpoints to perfectly replicate a traditional live table gaming experience. This state-of-the-art touchscreen led to the development of gesture-based gameplay, in which players use traditional poker hand gestures (e.g. cupping your hands around your cards, tapping the table to check) to control the Jackpot Blitz™ touchscreen and direct their gameplay.

EFFICIENCY LEADS TO PROFITABILITY

Today’s casino operators are looking to

reduce costs while increasing efficiency and profits. ETGs eliminate the dealer, providing secure operations, fast-paced gameplay and profits at a fraction of the operational cost of traditional live table games.

Jackpot’s comprehensive back-end management system on Jackpot Blitz™ allows operators full access to a secure mobile application for table, tournament, and customer management from any desktop computer or tablet. This system also provides operators with real-time reporting on metrics related to gameplay, financial performance, and customer analytics. Each Blitz table also comes with an electronic player kiosk to automate player deposits, payouts, and registration, eliminating the need for a cashier.

Kalpakian views Jackpot Blitz™ as the link between past and present, tradition and technology. “In the past few years, there has been a general trend across the industry to remove table games in favour of slot machines. Slots have proven to be easier to operate, more profitable per square foot, and they give real-time information on customers and their gaming preferences.

Jackpot Blitz™ has the potential to reverse that trend – it provides the technological advantages afforded by slot machines and the social atmosphere of traditional table games.”

POISED FOR GROWTH

The company is rolling out the first Jackpot Blitz™ units with Carnival Cruise Lines in Q2 of 2017 and intends to have the product ready for deployment in regulated markets in Q4 of 2017.

Kalpakian sees huge potential in the product and is targeting a rapid deployment to brick-and-mortar casinos in 2018.

“We have had fantastic feedback from current and prospective customers about Jackpot Blitz™ and are working on some big agreements in Canada and the USA in the near future. We can’t wait to launch our product at the 2017 Canadian Gaming Summit, it is going to be thrilling to see gaming operators from across Canada playing on our new table and hearing their feedback. This is the culmination of years of hard work, and it is a very exciting time for our company.”

For more information, visit www.jackpotdigital. com or head to the exhibition floor at the 2017 Canadian Gaming Summit.

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