Gaming Business Winter

Canada's Premier Gaming Industry Magazine

Vol. 9 No. 4

www.CanadianGamingBusiness.com

Winter 2014/2015

THE COLLABORATION EFFECT PM 40063056

Working together in the global gaming industry

Security Solutions Northern Exposure Charitable Gaming Revitalization

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CanadianGamingSummit.com June 16-18, 2015 Caesars Windsor

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Winter 2014/2015 Publisher

Volume 9 Number 4 Chuck Nervick chuckn@mediaedge.ca 416.512.8186 ext. 227

contents 18

www.CanadianGamingBusiness.com

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Editor Sean Moon seanm@mediaedge.ca Advertising Sales Chuck Nervick chuckn@mediaedge.ca Senior Designer

Annette Carlucci

annettec@mediaedge.ca

Designer

Jennifer Carter

jenc@mediaedge.ca

Production Manager

Rachel Selbie

rachels@mediaedge.ca

Circulation Manager

Gill Daniels

circulation@mediaedge.ca

Proudly owned and published by:

5

EDITOR’S NOTE

6

MESSAGE FROM THE CGA

8 COVER STORY

The Collaboration Effect – Regulatory leaders working together

14

SECURITY AND SURVEILLANCE

16

CHARITABLE GAMING

18

FOOD AND BEVERAGE

Canadian Gaming Business is published four times a year as a joint venture between MediaEdge Communications and The Canadian Gaming Association

20

GAMING INNOVATION

To advertise: For information on CGB’s print or digital advertising opportunities: Chuck Nervick 416-512-8186 ext. 227 chuckn@mediaedge.ca

22 INDUSTRY Q&A

The rewards and challenges of entering the Canadian market

President Kevin Brown

President & CEO Bill Rutsey

kevinb@mediaedge.ca wrutsey@canadiangaming.ca

Senior Vice President Chuck Nervick

Vice President, Public Affairs Paul Burns

chuckn@mediaedge.ca pburns@canadiangaming.ca

Copyright 2015 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

Security Solutions – Addressing the new AML reality

Charitable Gaming Revitalized – An environment in need of change

Casino Hospitality – What’s on the menu for Canadian casinos?

The latest in printers, validators and cash handling technology

24

CORPORATE PROFILE

26

FACILITY PROFILE

30

RESPONSIBLE GAMBLING

32

EMPLOYEE DEVELOPMENT

Pure Canadian Gaming – “Making good things happen”

Casino du Lac-Leamy

New Horizons Conference 2015

Your Best Bet – Onboarding new employees

34 MARKETING

Marketing with a Purpose 37 GAMING TRENDS

Major influences on casino seating design 40 FINANCE

A Time for a Change – What is the best option for your organization?

Official Publication of the Canadian Gaming Summit

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NOVOMATIC TO COME

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editor'snote

The Spirit of Collaboration

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DURING THE LAST 12 MONTHS, the gaming industry experienced a number of significant events, both here in Canada and around the world. Keeping up with the rapid pace of change in this industry is an ongoing challenge and we at Canadian Gaming Business will continue to offer our readers a comprehensive look at what’s happening with gaming in Canada, where things are headed in the coming months as well as staying on top of the issues that are important to you.

In 2014, we saw a flurry of consolidation activity, with Amaya Gaming’s acquisition of PokerStars and Scientific Games’ acquisition of Bally Technologies being the most notable.

Of course, these developments can have a domino effect on many sectors of the industry, including gaming legislation and regulation. In response to changes such as these, the world regulatory community is becoming increasingly collaborative.

Our cover story, The Collaboration Effect, features an in-depth discussion by leaders in the international regulatory community and how this new spirit of co-operation will affect all gaming jurisdictions in the months to come. In addition, author Brad Desmarais of the Gaming Security Professionals of Canada examines the issue of collaboration in the context of addressing the new AML reality in light of recent changes to such factors as FINTRAC legislation.

As usual, we also tackle several other influential themes and topics including: • A look at which gaming manufacturers are gaining a new foothold in the Canadian market and how these suppliers are addressing the unique challenges in doing business north of the border; • A feature by Peter McMahon of the Commercial Gaming Association of Ontario on the revitalization of the charitable gaming industry in Canada; • The latest products and trends in casino printers, validators, cash handling systems and casino seating, and; • An overview of the food and beverage landscape at Canadian gaming facilities by Joe Moore of Caesars Windsor Finally, along with insightful columns on changes to financial reporting standards and marketing strategies for 2015, you’ll also find a spotlight on Canadian corporate success story, Pure Canadian Gaming.

As we turn the corner towards another exciting new year, we look forward to serving all of our readers with continued in-depth coverage, news and analysis on whatever is happening in the Canadian gaming industry and beyond.

Wishing you a prosperous and successful 2015!

Cheers for now, Sean Moon Managing Editor, Canadian Gaming Business

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messagefromtheCGA

Adam Silver Says – The Emperor Has No Clothes

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

CONGRATULATIONS TO NBA commissioner Adam Silver for pointing out the obvious – hundreds of millions of people are betting hundreds of billions of dollars annually on sports (overwhelmingly on single games and events), and that if you really care about combatting match fixing, you need to know who is betting how much on what.

Mr. Silver has called out every North American sports organization, just like the little boy did the Emperor with no clothes. Gary Bettman, Bud Selig, Paul Beeston and a host of others with their heads buried firmly in the sand keep insisting that legalizing sports betting would lead to attempts to fix the outcomes of games, which could be true if no sports betting was currently taking place – but we all know that isn’t the case. They have a point in saying that criminal elements have in the past attempted, and continue to attempt, to tamper with the outcome of games. What they fail to understand, or more likely, concede, is that bringing the betting above ground and regulating online gaming sites brings to light unusual and questionable betting patterns (even single bets) that are then investigated.

Sports betting is a massively popular international pastime that is open, transparent and regulated almost everywhere else in the world but North America. International sports organizations like the IOC have long supported Mr. Silver’s position. By way of example, what he is advocating for currently happens in Great Britain, Europe, and Australia, where sports organizations, governments, regulatory agencies, betting operators, and local and international law enforcement organizations share information to identify irregular and illegal betting.

This is exactly how match fixing over the last few years has been detected. Other than Mr. Silver, the professional leagues have been mute on this topic, offering no alternatives or solutions. The leagues also seem to prefer to ignore the volume of wagering already occurring on their games, whether legally permitted (as in Nevada) or not.

Here in Canada, people have been legally betting on sports for decades but are currently only permitted to make parlay bets (wagering on the outcome of three or more events). Canadians love sports and they wager almost $500 million annually on parlay bets with provincial sports lottery products. However, Canadians are also illegally wagering more than $14 billion annually on single sporting events, mostly through offshore Internet betting sites or local bookmaking operations predominately controlled by organized crime.

To allow Canada to catch up to the rest of the developed world and redirect that $14 billion back into the economy and out of the hands of criminals Bill C290, a simple amendment to the Criminal Code to permit wagering on the outcome of single sporting events, was formulated. The bill was passed with all party support in the House of Commons more than two years ago. Since then it has languished in the Senate, held up by a few Senators morally opposed to gaming, and for other issues unrelated to the Bill. This legalization will allow for regulation and transparency, as well as bettor protections and controls such as age restriction. It’s time for the Senate to open their eyes to reality and pass the Bill.

CLARIFICATION:

Included in the Fall 2014 edition of Canadian Gaming Business was the feature article The New Normal on the subject of the new AML reporting rules. The article header contained a misleading statement suggesting that “money laundering is rampant in many Canadian casinos,” which is not true.

Canadian casinos are highly regulated environments with prescriptive rules on everything from how games are played to how cash and chips are handled.

All Canadian casinos employ rigorous systems of internal controls, employee training and communications to ensure that all transactions required by regulation are reported to FINTRAC (the federal agency charged with combating money laundering) and moreover that any suspicious transactions of whatever size or activities of whatever nature are also documented and reported. Casinos are uniquely set up to do so in a very effective fashion given their extensive and sophisticated security and surveillance systems. In fact, it is often said by those in law enforcement that only stupid criminals would attempt to launder money in a casino, where their every movement is recorded on camera.

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coverstory

THE COLLABORA Regulatory leaders discuss the trend towards increased collaboration in the global gaming industry

The international regulatory community is currently experiencing an increase in collaboration during a period of rapid globalization of the gaming industry and gaming-related risks. At the Canadian Gaming Summit in Vancouver this past June, a panel of senior executives from several major regulators in Europe and North America gathered to discuss their views on the growing collaboration among the world’s regulatory community.

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coverstory

RATION EFFECT

Moderated by Rob Scarpelli, Managing Director of HLT Advisory Inc., this plenary session featured a comprehensive discussion on many of the aspects that will be affecting the international regulatory community for the months and years to come. Panelists for the Summit Plenary included: Jean Major, CEO, AGCO

Kevin O'Toole, Executive Director, Pennsylvania Gaming Control Board

Claire Pinson, Executive Managing Director of Legal Regulation and International Affairs, L’Autorité de régulation des jeux en ligne (ARJEL)/French Online Gaming Regulatory Authority

Jenny Williams, UK Gambling Commissioner

Andre Wilsenach, Executive Director, AGCC

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coverstory Rob Scarpelli: The gaming industry is dynamic – it is in a constant state of change. While these changes vary from jurisdiction to jurisdiction, there appear to be a number of common themes across jurisdictions: • Consolidation of gaming suppliers and operators • Convergence of technology and platforms • Significant shift in how internet gaming is regulated and to what extent it is regulated • Increased focus on other public policy issues, including: Responsible gaming, anti-money laundering and fraud detection and prevention • Expansion of gaming in new markets, in particular parts of Asia (Macau), where North American and European regulators have limited access Historically, North American and European regulators have developed different regulatory models based on the legal, economic and cultural backgrounds of their jurisdictions and the history or evolution of gambling in those jurisdictions.

Gaming suppliers, accustomed to one model have sometimes found adjusting to another model to be more time consuming

and expensive than anticipated. In addition, there also appears to be a developing convergence towards a more risk-based approach to regulation.

A n overarching factor in this back g round is the internationalization of gaming. While each jurisdiction has generally permitted gaming suppliers from other countries to provide goods or services, the consolidation within the industry, the convergence of technology and the prevalence of the internet have raised the importance of inter-jurisdictional collaboration. This collaboration has, in the past, been based on the sharing of information with respect to licensure.

Currently, a greater emphasis appears to be developing with respect to other areas, including: • Standards for gaming products • Consistency in eligibility assessments or due diligence investigations • Anti-money laundering • Joint investigations • Protection of privacy.

Now, let’s hear what our panelists have to say:

GAMBLING – BOTH LAND- AND INTERNET-BASED – IS EXPANDING AND GLOBALIZING AT A HISTORICALLY RAPID PACE. WHAT IS THE SINGLE GREATEST OPPORTUNITY THAT THIS TREND OF INTERNATIONALIZATION HAS CREATED FOR THE GLOBAL REGULATORY COMMUNITY? WHAT METHODS OF INTER-AGENCY COLLABORATION AND COOPERATION ARE BEING DEPLOYED BY REGULATORS IN ORDER TO ADVANCE SUCH OPPORTUNITIES?

Jean Major: When we started our casinos in 1993 the only other large centres for gaming in North America were Las Vegas and Atlantic City. I know that having developed and worked in developing the framework for gaming in Ontario at that time that the risks to the AGCO (the Gaming Control Commission at the time) were rather insular to the province. I didn’t think about Macau or what’s going on in Singapore with respect to gaming at that time. I was thinking about what was going on within the province’s borders. Because the risks were there, they were defined and easily identifiable. Today, I do think about what’s happening in Singapore and Macau, the evolution, not only of the marketplace but the risk factors Rob touched on earlier: money laundering issues, the increased awareness and sensitivity to social responsibility matters and responsible gaming, the rapid and complex evolution of the technology that we’re all facing are all factors that have in their incremental manner changed the way we’re regulating the business.

I do want to emphasize the incremental component of that because we recognized some time ago that we needed to change the way we were regulating and the business has been facing significant changes, a significant amount of competition and the globalized nature of the industry has forced us to be more proactive in how we operate.

As for the benefits or opportunities that come as a result of globalization, there are some that are obvious and those are the efficiencies. I say “obvious” and I don’t use the word “easy” because collaborating between jurisdictions on efficiencies seems rather simple but is extremely complicated to administer.

And so we have initiated, through the lead from Manitoba a couple of years ago, national standards. Wouldn’t it be nice if all the operators could fill out just one application form in Canada?

Wouldn’t it be nice if we had one set of technical standards for electronic gaming machines? Wouldn’t it be nice if we had one

investigation for an operator instead of 10 different investigations and 10 times the cost? Those are objectives that all the regulators are aligned with. (For example) I went to Singapore not too long ago to talk to our counterparts there and guess what?

Same issues. And they’re relatively new to the gaming business — only two years and they have a fairly impressive regulatory framework but they have the same problems, same issues, same challenges. So there are some real impediments to the kind of collaboration that’s required even within our province, never mind nationally or internationally. But that by itself should not be an obstacle to at least trying to make some progress on the collaboration front. From a global perspective, it’s more management of the risks. Regulators pretty much have the same mandate from a public interest perspective. Our approaches might differ and certainly our opinions on issues might differ.

We need to better understand where different regulators are coming from and what their issues are. Which is why central to our long-term strategy in Ontario is to foster and develop those relationships and those partnerships with other regulators.

Kevin O’Toole: Today it’s so much easier to effectively develop best practices because there are a lot of regulators to choose from (and) there are a lot of different jurisdictions to obtain information from about how they handle common issues.

Nowadays, most of associations that you can join start with the word “International.” (As an example of international cooperation) the International Association of Gaming Regulators held their first webinar just last week and the topic was very timely: Identity Verification and Age Verification in Interactive Gaming. They had over 100 registered participants in that webinar from 21 different countries. So people really are taking advantage of the opportunities to learn from others.

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coverstory HISTORICALLY, NORTH AMERICAN AND EUROPEAN REGULATORS HAVE DEVELOPED DISTINCT REGULATORY MODELS. WHAT ARE THE KEY DISTINCTIONS BETWEEN THE REGULATORY MODELS OF CANADA, THE UNITED STATES AND EUROPE? HOW DO THESE DIFFERENCES IMPACT THE ABILITY OF YOUR AGENCIES TO COLLABORATE AND COOPERATE, PARTICULARLY WITH RESPECT TO THE REGULATION OF INTERNET GAMBLING?

Andre Wilsenach: I should preface what I’m saying emphasizing that my comments should first of all be seen in the context of regulating the online industry. The second thing is that when you talk about cultural and socio-economic differences and how that impacts cooperation around the world, one has got to emphasize that as regulators we are all creatures of statute.

And those difference are very often differences that were introduced by governments around the world rather than by regulators. The extent to which those differences impact on our coopration and collaboration is not necessarily the fault of the regulator. There are inherent differences in the way that jurisdictions legislate and regulate. As mentioned, there are a number of drivers for collaboration — consolidation, conversion, etc. I think something which has become a major driver for collaboration is the opening up of new markets.

In the last 12 years that I’ve been regulating online gaming, we’ve seen an enormous growth in interest from jurisdictions from around the world. We started a small working group within the IAGR around 2003-04, and I can remember at that first meeting we were about six people around the table.

Since then every year it has grown exponentially to the extent to where we have to now go and rent a specific room to accommodate the meeting. At those meetings, it’s very much focused on sharing experiences and knowledge. Having said that we’ve got to admit that there are distinct differences. For example Australia in the late 1990s came up with excellent online gaming legislation. Before introducing it, the federal government intervened and place a moratorium on online gaming, as a result of which today you have huge leakages of revenue to foreign operators around the world. If you look at the reason for the moratorium, the argument was there’s too much gambling in Australia. You could maybe agree with that but if you’re going to prohibit online gaming in a jurisdiction such as Australia because there’s “too much gambling” you’re not going to stop people from gambling online.

And that brings me to perhaps one of the most interesting phenomena when it comes to explaining how different we are around the world. If you just look at how different jurisdictions legislate and approach the licensing of online gaming there are two scenarios. The one is certain jurisdictions will introduce a restricted product that would either be poker or betting, but it would be a restricted offering that would ban or block operators from outside. Very often, if you look behind the scenes, you’ll see that those jurisdictions come from a long background of state monopolies where gambling for many years has been in the hands of government organizations and they tend to protect those interests. In other jurisdictions you would find just the opposite where they open the market, make as many products as possible available and banning or blocking is not that big an issue because the player has access to all of the products that are available in the illegal markets around the world. It’s these sorts of differences where you find jurisdictions approaching online gaming which I find fascinating…It makes it quite hard for regulators to cooperate constructively in the sense that you’ve got to get over those boundaries.

Claire Pinson: We opened the French market four years ago according the principles of a reality where the French player was playing online and the whole offer was illegal. The French government made the decision to open the French online market to competition and to find an equilibrium between the desires of the consumer and the objective of the law and scope of the offer.

There is always the concern that the offer has to be attractive, but if you open up on a very wide scale, what is the quality of your legal offer? Does it fulfill your legal objectives to protect the consumer?

Many of us have the same objectives but we have different means to fulfill them so there are specific issues according to social, cultural, political and religious considerations. That’s why cooperation is possible, not only in formal shape but it can be informal cooperation as well and it works very well.

THE CASINO INDUSTRY IN CANADA, THE U.S. AND THE EU HAS BEEN OBLIGATED TO COMPLY WITH ANTI-MONEY LAUNDERING LAWS FOR MANY YEARS NOW. CAN YOU PROVIDE AN UPDATE ON AML INITIATIVES IN YOUR JURISDICTION, INCLUDING HOW AML REQUIREMENTS ARE BEING APPLIED TO INTERNET GAMBLING OPERATORS?

Jenny Williams: In the U.K., the regulated sector only applies to the online industry but we have money laundering/proceeds of crime legislation that applies to all gambling operators. So although the online industry doesn’t need to have its own money laundering regulator, they are still obliged to report suspicious transactions as part of the effort to keep crime out of gambling. But there is a move at the moment in Europe to replace the third or fourth money laundering directive where the general intention is to expand the scope of that to cover all gambling, something which is under discussion as to whether the member states will be able to carve out certain low-risk forms of gambling. We expect the fourth money laundering directive to come into place within two years and

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it will certainly cover all online gambling and probably cover a lot of the non-remote gambling as well… It is very much in the commercial operator’s interest to keep close tabs on what the players are doing and what sort of transactions are going on. There is a lot of strong commercial money laundering interest.

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coverstory

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Kevin O’Toole : A ML issues have been ver y topical in the States. The director of FinCEN (Financial Crimes Enforcement Network), which enforces AML legislation in the States, gave a keynote presentation at a bank secrecy act conference in Las Vegas just t wo weeks ago. It was anticipated by the industr y and they showed up in very good numbers. Without being particularly specif ic, she did indicate to all of the operators in the room that current existing regulations in the States require a casino operator to know the source of funds of its gamblers. For anybody that’s been a regulator or in the industry, that seems to be somewhat of an expansion of obligations. But she also indicated that she expected casinos to comply with A ML laws with a risk-based process, which is very similar to the FATF (Financial Action Task Force) recommendations that cover so many countries internationally. If you apply that risk-based approach to her concept of knowing the source of funds of your gamblers then you can kind of conclude that in all likelihood it’s your substantial gamblers that you have to determine the criteria for.

Ver y recent ly t here h a s b e en a h ig h le vel of consolidation within the gaming industry, marked by a number of high-prof ile mergers and acquisitions.

In a number of these cases, consolidation has been closely linked with the convergence of the worlds of land-based gambling and internet gambling. W hat are the implications for regulatory cooperation and collaboration around the world?

Jean Major: It is essential, actually critical, that we reach out to all of our fellow regulators around the world when these mergers and acquisitions take place.

They still have to go through a due diligence process which is typical — I don’t think any jurisdiction would abdicate their own responsibilities to do their own due diligence — part of the goal here is to get all of the same information…. The good news for suppliers is that there is a lot more dialogue and discussion than I’ve ever seen in my career in gaming, so your regulators are working closer together. The bad news is also that regulators are working closer together.

For the complete plenar y session video, visit www.canadiangamingsummit.com.

12 | Winter 2014/2015

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securityandsurveillance

SECURITY SOLUTIONS

Collaboration is key in addressing the new AML reality

BY BRAD DESMARAIS

Gaming in Canada is at an interesting turning point – with the recent changes to FINTRAC regulations, the industry now has new obligations to conduct enhanced and continuous monitoring of business relationships, to meet increased regulatory reporting requirements and to know our customers better than ever before.

W E C O U L D P E RCEI V E T H E S E new obligations as adding to the existing compliance workload; however, I believe these changes present a new opportunity.

From a security perspective, the better we know our customers, the better we can identify risks and understand which customers to engage with further. From a business perspective, the more we know our customers, the better positioned we will be to meet their needs and deliver the gaming experience they’re looking for.

DISPELLING THE MYTHS

The notion that casinos are overrun with criminals laundering money is a popular misconception, spurred on by inaccurate media repor t s.

Many members of the public do not understand what money laundering is (defined as taking the proceeds of crime and making them appear legal or having come from a legitimate source),

nor do they appreciate that although many patrons prefer to play with cash, this does not automatically make them a criminal. In fact, the high levels of security and surveillance present at gaming facilities make casinos less desirable locations for criminal activity.

Lawyer Christine Duhaime, a leading ex pert in anti-money laundering, considered the potential for money laundering in all sectors and has said, “studies show that deposit-taking institutions (e.g. chartered banks, credit unions, caisse populaires and trust companies) and not casinos present the greatest money laundering risk and outnumber all other laundering vehicles combined.”

As an industr y, we need to help the public, players and policy makers understand the gaming compliance and regulator y programs in place across Canada.

COLLABORATIVE APPROACH

The Gaming Security Professionals of Canada (GSPC) is made up of individuals who are committed to ensuring the safety, security and integrity of the industry. One responsibility for the GSPC is to share best practices and advocate on behalf of all jurisdictions required to comply with antimoney laundering legislation. As Chair of the Anti-Money Laundering Committee; I have been a part of many conversations on this topic in recent months and I am excited to share the national perspective.

Gaming regulators, operators and FINTRAC must work together. We are all part of the solution to prevent and help detect activities that may be linked to money laundering. FINTRAC plays a very important role in compiling, analyzing and reporting on data collected from reporting institutions, such as banks, businesses and casinos. Using this data, FINTRAC works with law enforcement to provide information for investigations into money-laundering, offences that may generate the proceeds of crime and terrorist financing. FINTRAC is not responsible for prosecuting criminals – rather, it plays a key role in working with the police so they have the information they need. As a former police officer who was focused on organized crime investigations for more than 30 years, I used FINTRAC information aid in the identification, arrest and prosecution of numerous

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securityandsurveillance to g aming mana gement and law enforcement needs. It will allow BCLC and law enforcement to work together to proactively ban individuals from our facilities if they have engaged in criminal offences which generate the proceeds of crime, are a reasonable threat to the public or belong to an organized crime group.

PROACTIVITY NEEDED The regulators and gaming operators So far, as a result of this information, across Canada each have a role to play we have banned 40 individuals from in changing the conversation about gambling facilities in B.C. money laundering at gaming facilities.

We must be proactive in sharing the ENHANCING INDUSTRY INTEGRITY realities of the situation – explaining The GSPC understands that antithe safeguards already in place, the money launder ing ef for t s a re a s work done to promote cash-free important as any other security and alternatives and the enhancements and surveillance activities on the casino improvements to existing programs f loor. The Anti-Money Laundering that are currently being rolled out.

Committee is dedicated to enhancing It is paramount that the gambling the integrity of gaming and working jurisdictions take our role seriously. with all jurisdictions and FINTRAC to For example, at BCLC, where I am the advocate for the strong AML safeguards Vice-President of Corporate Security and rigorous procedures at gaming and Compliance, we have assembled facilities across Canada. a dedicated Anti-Money Laundering The A ML Committee has been team with robust analytical capacity. working to identify issues, develop We use the Justice Institute of B.C. strateg ies and communicate best Investigative Aptitude Selection tool as part of the screening process for new team members and our security team is in the process of being certified with industryrecognized gold standard training from the Association of Certified Anti-Money Laundering Specialists. persons engaged in offences related to organized crime. Without complete, accurate and thorough disclosures from reporting entities, many of the successful investigations I was involved in would not have occurred.

practices since it was formed in 2011 and will continue to focus on driving a coordinated, effective and eff icient response to money laundering concerns and evolving regulatory requirements.

As industry leaders, the GSPC wants to ensure that the reputation of gaming in Canada is understood and the opinions of the public are based on facts. Together, we can move the dial on the reputation of the gambling industry and help create awareness that Canadian gaming facilities are among the safest and most secure and that our AML procedures in place across the country are second to none.

Brad Desmarais is the Vice-President of Corporate Security & Compliance and the Interim VicePresident of Human Resources at BCLC. He is also the current Chair of the AML Committee with the Gaming Security Professionals of Canada (GSPC). Brad has over 33 years combined service with the Vancouver Police Department and the RCMP. Most recently he served as Inspector in Charge of Major Crimes with the VPD. For more information, please visit www.gspc.ca.

THE ROLE OF TECHNOLOGY

Technology will also help us combat money laundering. BCLC has signed an agreement with a leading provider of business intelligence software to some of Canada’s major banks. This software is currently being customized to meet the needs of the gaming industry. Once rolled out, BCLC will have an automated solution that alerts staff of suspicious situations based upon pre-programmed scenarios. The software will monitor patrons by name and date of birth against global watch lists and will verify and track business relationships. The solution will help BCLC meet FINTR AC requirements, but will also help us better understand our players, with the same analytical capacity as a small financial institution – well positioned to determine those players who pose the greatest risk.

In addition, BCLC has signed an information-sharing agreement with law enforcement which allows for the exchange of information relevant

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charitablegaming

CHARITABLE Gaming REVITALIZED An environment in need of change

BY PETER MCMAHON

The Revitalization of Charitable Gaming (Bingo) was created through a backdrop of a group of industry leaders recognizing the need to either re-position charitable gaming within Ontario or just stand by and watch the slow decline and eventual disappearance of this important sector.

IN 1992 THERE WERE 214 bingo centres in Ontario which, at the time, represented the largest bingo market in North America.

All of those centres were trading successfully. The bingo sector generated more than $1 billion in revenues and provided a platform for 7,000 local charity and non-profit groups to raise valuable dollars for their communities. At that time, it was one of three key gaming platforms in the province, the other two being horse racing and lottery.

It is fair to say the bingo sector was not organized effectively, either from a commercial operator or charity group perspective, to present an effective advocacy platform on the sector’s behalf, which would highlight and communicate the tremendous value and contribution each centre made to the local charity groups, the municipality and the local economy. Change was definitely required, but getting all of the stakeholders aligned was going to be a challenge.

Fast forward to 2014. We now have 60 bingo centres and continue to provide a platform for 2,800 local charity and nonprofit groups.

SETTING A STRATEGIC DIRECTION

During the course of the 1990s the gaming landscape in the province began to change. The charity bingo sector tended to focus on consolidation. While there was some need for this at the time it masked the real challenges of the business. In 1996-97 the commercial operators began to explore a successful game from the U.K. (National Game) where, during the evening session, all of the bingo centres linked together for one provincial game, offering a unique and premier prize. The commercial operators, under the then RGSO (Registered Gaming Suppliers of Ontario), began working with the AGCO (Alcohol and Gaming Commission of Ontario) on how this might be implemented in Ontario. This led to our first formal partnership with OLG (Ontario Lottery and Gaming) and resulted in the charities being organized under the then Provincial Bingo Charitable Activities Association (PBCAA). This was a significant learning experience

and showed the value of co-ordination and co-operation. In 1997 the industry, through and with the OLG, launched the successful SuperStar Bingo game.

In 2005-06 two main initiatives were undertaken. The first was the conversion to c-Gaming in six pilot centres around the province, thus marking the first time that a centre would be fully converted to 207:1:a under the criminal code. The second initiative was through the AGCO, under the Modernization of Charitable Gaming, where the revenue model was re-configured to better position the sector to deal with the challenges facing the industry — primarily enhanced gaming facilities at racetracks, casinos and the impact of the newly introduced non-smoking legislation. In both cases these achievements were made possible by working together and creating a plan for change.

In 2009, with the number of bingo centres continuing to decline, the industry approached government directly to seek a mandate for change and support. Through tremendous hard work and communication of the value of the sector, a consensus for support was reached and duly granted under the Revitalization of Charitable Gaming (Bingo).

CREATING BROADER PARTNERSHIPS

A key element of this initiative has been the option of choice. This was not a mandated initiative. It was designed to ensure that those who opted in did so knowing full well it would require a longterm commitment and it wouldn’t be an easy road.

Thus a ‘partnership’ approach was required from the commercial operator, centre charity association, municipality, Crown corporation (OLG) and AGCO. Every one of these five groups needed to be aligned or, quite simply, it could not go forward.

As with any new partnership framework there were cultural changes to accommodate the different needs of the partners and to establish their respective roles within the new framework.

COMMITTING TO INVESTMENT

The commercial operators had to agree to a baseline investment

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package for the initiative to be activated. The majority of commercial operators have gone beyond that baseline investment level and we are beginning to see innovative elements introduced around the province. The minimum requirement of investment is $450,000 which, given that most commercial operators are small business owners, has focused everyone’s mind on success. This investment level, known as phase one, has also generated additional employment opportunities in the centres, which is another good news story. It is about creating a more enjoyable social environment for the consumers where they can enjoy their leisure time with friends.

SUPPORTING THE KEY BENEFICIARIES

The Revitalization of Charitable Gaming (Bingo) is about securing the valuable platform for our charities and non-profit groups by enabling them to continue raising and deploying funds in real time in their communities.

There has been a tradition dating back over 40 years of this community engagement and the enrichment of those communities through the hard work and dedication of the numerous volunteers. The more successful the revitalization initiative can be, the more we can collectively support the charities and non-profit groups.

UNDERSTANDING THE KEY DRIVER

As we move forward, the understanding is that the key driver is the customer and obtaining a greater understanding and awareness of their behaviours, needs and wants is going to be critical. Through our partnership with the OLG, the c-Gaming team has undertaken comprehensive research into the bingo/ social gaming customer with some interesting results.

Offering an engaging social experience is the key, creating and delivering an enhanced service experience that is delivered in the most efficient manner. The expectations of the customer are evolving as society is changing in general. No company or service has remained static for 20 years and survived. Charitable gaming is no different.

and incremental local employment opportunities generated. To date it is estimated that $72 million has been raised for charity and non-profit groups, which are deploying these funds in their local community under the guidance of the municipality.

And this is just the beginning. We have, in phase one, 37 centres to convert — a goal that is likely to be reached by mid to late 2015.

The pace of these conversions has been tremendous but it is the beginning of the process. We still have a long way to go to maximize and leverage the opportunity before us.

AN INITIATIVE THAT MAKES A DIFFERENCE

This initiative is remarkable in that it has five different partners all working towards the same goal but all with a different point of reference. This keeps the initiative balanced and in tune. It is generating investment, employment, immediate local funds and a place for social interaction between friends. This is the main differentiator between charitable gaming (bingo) and other forms of gaming.

We want to make a difference. We want to strengthen and build on what has been achieved and through constructive partnership and working together to overcome challenges collectively, we are beginning to see the seeds come to fruition. Although there is a long road ahead, we remain optimistic for the future.

Peter McMahon is CEO of the Commercial Gaming Association of Ontario. For more information, visit www.cgao.ca

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A BALANCED APPROACH

As with all gaming environments, regardless of the channel, we need to be mindful of the need to balance development with responsible gaming practices. This initiative has engaged the Responsible Gaming Team at OLG to bring in resources and knowledge of this complex area into our centres. Specifically, accessible Responsible Gaming kiosks are sourced from and staffed by the Responsible Gambling Council of Ontario, a highly regarded organization in this field.

The regulatory framework has also been enhanced and updated, focusing on a risk-based approach that is linked to a set of standards that are clearly defined and cover the broader range of gaming environments from resort casinos to lottery kiosks.

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CASINO HOSPITALITY

What’s on the F&B menu for Canadian casinos?

BY JOE MOORE CUSTOMER SERVICE, CUSTOMER EXPECTATIONS, customer service standards and cost management are the foundation a traditional food and beverage operation is built on. The ability to maintain and build on this foundation is even more essential in a casino food and beverage operation as the main focus is to provide support to the gaming offering. As the focus of casino F&B operations shifts from being an expense to the company to a profit centre and integral component of the entertainment experience, maintaining focus on the foundation is even more critical. The gaming patron is becoming a savvier customer in search of a complete entertainment experience and value for the money spent in the outlets away from their favorite games. Their money comes with expectation of excellent service and quality products which meet or exceed their expectations. Unlike mainstream F&B operations, casino-based F&B operations typically have a higher level of frequency based repeat customers who are very eager to make their expectations clear.

While a regular is a great comment to the operation, they also require operations to be more in tune to what the focus is and to keep offerings fresh; some are guests multiple times each week.

AN EVOLVING MARKET

The Canadian gaming market has evolved in many different aspects, moving away from tokens to paper, from waiting for a beverage server to slot machines equipped with automated drink order applications for customers. Gaming customers have evolved to be more service and value driven when deciding how to spend their entertainment dollar, regardless of the level of player they are. As with any company or business, customers want the best quality possible at a minimal cost to them.

Suppor t in g t he ent er t a in ment experience requires F&B operations to continually look at what is being offered and evaluating the way in which we are serving our patrons. While casinos are located in different parts of the country, there are common challenges faced by

all. In some instances these challenges are becoming more of a concern, especially as patrons’ expectations evolve.

The operation must also evolve — what was good yesterday will need to be revamped to meet the expectations of tomorrow.

Questions to ask on a regular basis are: • Does the staff in place have the skills and ability to meet expectations and are the best hiring practices in place?

• Are the services and products provided done so in the most financially effective manner?

• Does our service and product meet the expectations of the patron?

• Is the operation adding to the overall experience?

All markets have their own unique customer demands and expectations while the mainstays for all casino F&B operations are similar if not the same. Patrons are looking for healthier foods that are made with the freshest quality ingredients while paying what they feel is a fair price. To meet the price requirements, how does the delivery system stack up? With the increase

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foodandbeverage What better way to recognize the us. There are definite differences between importance of food and beverage in the locations and provinces with regards to casino and to build resources for this shift such aspects as compliance, marketing than to launch an F&B segment at the opportunities and product availability.

Canadian Gaming Summit at Caesars However, there are many similarities and Windsor next spring? There have long constants that can and will assist in the been food and beverage components at growth of deserved recognition of food international gaming shows and there is and beverage in a casino. a need for one focused on the Canadian market. Bringing professionals from across Joe Moore is Director, Food and Beverage, Canada allows for healthy discussions and Caesars Windsor. For more information visit THE IMPACT OF TECHNOLOGY For example, is the technology used in sharing of ideas for topics affecting each of www.caesars windsor.com. the operation optimizing the efficiencies while producing service and products customers want? Technology in casinos has grown and changed exponentially with the introduction of “E” games, electronic roulette and state-of-the-art slot In our game, machines to challenge and entertain the winning gamer. However, little time has been spent numbers have on bringing technological advances into nothing to do F&B due to cost. Food and beverage, like with luck. any business, benefits from technology enhancements and can show a return on the investment. Many feel that technology will take away human contact and reduce For 18 years, we’ve helped build brands the experience of our patrons. If not for 21 different casinos across North integrated into the operation and setup to America. From advertising, to social meet specific requirements of each location this can happen. However, it does not media to developing new technology, need to. Installing an automated beverage when it comes to reaching your players dispensing system not only controls product delivery, it enhances portion and driving your business, no one knows control and allows for customization for casino marketing and advertising better different locations inside one building. than us. We’ve got game.

Food and beverage has many different parts in a casino environment, and with today’s technology what once was thought to be To get in touch, visit marshall-fenn.com cost prohibitive can now be accomplished to enhance profitability. or call Jim Kabrajee at 416-962-3366. in wages and raw product prices, what steps can or are being taken to provide a great F&B experience while managing the costs?

Looking at the product part of the operation only will result in short-term possibilities requiring more attention in a shorter period of time than if this had been reviewed in conjunction with another aspect of the operation such as technology.

18 Years 21 Casinos 11 Jurisdictions

MULTIPLE OPPORTUNITIES

As casino F&B is becoming more of a draw than in the past, there are two markets to be satisfied: the Gaming and NonGaming patron. While they represent two distinct markets, their expectations are becoming more and more similar with the same expectation of quality and service excellence, and require a shift in the way traditional casino F&B offerings fulf ill the entertainment experience of both. There is a new focus of bringing the mainstream operation into the casino environment to not only keep the gaming patron in house but to bring in the non-gamer to property as potential future business. This shift has been gathering momentum, posing the challenge of how to make this happen in our own locations.

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Managing the Money

The latest innovations in casino printers, validators and cash-handling technology When it comes to meeting player and owner demands for the most effective cash-handling, printing and validating technology in Canadian casinos, today’s manufacturers are staying at the leading edge of product innovation. Canadian Gaming Business recently asked leading suppliers about their latest offerings and here is what they had to say. . .

JCM GLOBAL

This is an exciting time for new developments at JCM Global, in both their printer and v a l id at ion d i v i sion s.

With their acquisition of Fut ureL og ic this p a s t S e p t e m b e r, t h e c o mp a n y a d d s t o a n exceptional line of peripheral component products, including printers, bill validators and digital media.

The acquisition adds FutureLogic printers to JCM’s existing line, which includes the PayCheck 4® thermal printer, which is one of the fastest and longest-lasting printers on the market.

Operators across Canada have come to know and trust FutureLogic printers, such as the GEN2® and GEN3®.

Currently, out of approximately 35,000 VLTs, 88 per cent have FutureLogic printers, and out of 60,000 slots in Canada, FutureLogic again holds 88-per-cent market share.

On the validation side of JCM’s business is their new bundled enhancement tools, or D y namic Net work Applications (DNA™). DNA was originally built on the company’s iVIZION® bill validator’s foundation of intelligent validation. Now DNA is being further built to work with printers from other manufacturers as well as JCM validators.

DNA is a vibrant new tool for operators, empowering them with real-time reports, alerts, diagnostics etc. with

real-time health and event monitoring of all peripheral components used inside an EGM, utilizing either a wired or wireless connection to a local server. Peripherals that DNA can monitor are practically limitless and include bill validators, table game validators, ticket printers, card readers, digital displays and coin acceptors.

DNA pa ssively monitors the SA S line, prov ides diagnostics, analytics and value-added features that can all be managed through DNA’s user-friendly mobile dashboard. The dashboard was specif ically designed for platform f lexibility and can easily be used on a PC, a tablet or a mobile phone. Additionally, DNA gives f lexibility of information the user chooses to use/see for reports etc.

DNA also further enhances other FutureLogic products that are now in the JCM portfolio, including couponing and ticket printing solutions, such as Ticket2Go™, TableXchange® and PromoNet® systems products.

For more information, visit www.jcmglobal.com.

CUMMINS ALLISON

Whether in the cage area, soft count room or the frontof-the-house, investing in the latest currency and ticket handling technolog y can minimize time-consuming ha ndling processes. W ith the r ig ht tech nolog y in place, casinos can dedicate more time and resources for customer-facing and revenue-generating activities.

Likewise, all-inclusive currency and ticket processing solutions enable casinos to make more productive use of employees’ time. By improving efficiency, employees

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s p e n d l e s s t i m e c ou nt i n g mone y, w h ich helps t hem end shifts on time, reducing overtime expense and improving employee morale.

Cummins Allison’s JetScan i F X® i4 0 0 is a h ig h ly conf ig urable, multi-pocket currency sorter with casino ticket bar code recognition.

Casinos can realize substantial t ime sav ing s by using this single, innovative device that can now process and sort mixed tickets and bank notes, including Canadian polymer, on a desktop multi-pocket sorter at a rate of up to 1,000 documents per minute; 39 per cent faster than the closest competitive unit. The JetScan iFX i400 model is capable of processing Canadian dollar, Euro and U.S. dollar, allowing Canadian, U.S. and international casinos to process multiple currencies.

The only multi-pocket sorter that can process mixed tickets and currency, the JetScan iFX i400 improves count room productivity and efficiency. It is the smallest, fastest and most f lexible multi-pocket sorter and can have as few as three to as many as nine pockets and can be built in a horizontal or vertical configuration – all in the same 76.2 cm x 45.7 cm footprint. The JetScan iFX i400’s unique design utilizes 54 per cent less space and effectively providing a high-volume, multi-pocket sorter in a footprint barely larger than a desktop sorter.

For more information, visit w w w.cumminsallison. com.

CPI (CRANE PAYMENT INNOVATIONS)

CPI looks beyond the slot f loor to help operators become more prof itable and eff icient. Recently, E ASITR A X Web and PPM Advance were added to a portfolio of modular extensions for the SC family of note acceptors – a l low i n g op er at or s t o customize, conf igure and control their investments to increase cash management ef f ic ienc ie s t h rou g hout their operations.

E A S I T R A X We b i s a new sof t w a re ex t en sion

of the EASITRA X Soft Count system, which leverages SC note acceptors to drive newfound cash management eff iciencies from the slot f loor to the back room. Data collected in the SC acceptor head can still be used to streamline the drop process, facilitate asset evaluation a nd conduct prevent at ive ma intena nce prog ra ms.

EASITR A X Web simply makes it easier for operators to import that data, and convert it into reports, from anywhere in the world with secure intranet access – and those reports can now be customized to highlight the most important metrics: • Acceptance rate • Active assets • Cashbox full incidents • Percentage of denominations accepted by asset • Drop status • Jam occurrences • Rejection types • And software versions across the estate.

Now, the eff iciencies that have routinely led to a payback in less than one year are stronger than ever.

The introduction of PPM Advance further lowers the cost of ownership associated with SC note acceptors by simplifying software management and performance monitoring. W hereas PPM (portable prog ramming module) was a one-button Flash tool, PPM Advance is a portable version of MEI’s STS (support and test systems) software. It features a display screen and menu navigation buttons, allowing technicians to perform quick and easy in-f ield updates for currency data, conf iguration data and software, performance diagnostics and audit data reporting.

Increased memory to store multiple variant firmware and an ability to function under multiple languages make the PPM Advance a more powerful, customizable tool.

PPM Advance can also sense the host unit – whether SC Advance or CASHFLOW SC – and ensure the right software is downloaded. Operators no longer have to update their slot f loor separately, freeing up resources and generating labor savings.

Additionally, the PPM Advance offers a Bluetooth functionality option that enhances communications to the user through an Android phone and tablet app. This enables operators to download software remotely and add EASITRA X asset numbers.

For more information, visit www.CranePI.com.

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industryq&a: canadian expansion

NORTHERN EXPOSURE

New gaming manufacturers are gaining a foothold in the Canadian market

With more U.S. and international-based gaming companies eyeing the Canadian market, Canadian Gaming Business recently spoke with two leading gaming manufacturers about the challenges and opportunities of expanding their business north of the border.

Participating in our discussion were:

WHAT ARE SOME OF THE BIGGEST CHALLENGES WITH MOVING YOUR BUSINESS INTO THE CANADIAN MARKET AND HOW ARE YOU ADDRESSING THOSE CHALLENGES? K A : I think the f irst challenge we have is creating the infrastructure so that we can really maintain a good customer support network in Canada. Obviously, as a new manufacturer we have little infrastructure in Canada but we’re doing a really good job of creating it so that as we continue to launch into new provincial markets we’re well suited to provide the superior customer service that the Canadian market deserves.

Kelcey Allison Chief Operating Officer Aruze Gaming

Phil Sherwood Vice President Sales Canada MultiMedia Games

PS: Since this is our first foray into the Canadian market, simply understanding the rules and regulations of the market and learning customer preferences is the biggest challenge. We have a great compliance team, though, which has worked tirelessly to make sure our product meets the high standards of the Canadian regulators, while at the same time, choosing games we think will be most successful in this new market. For example, our Player HD® Gaming Cabinet is currently undergoing multiple field trials in Ontario, and early indications are that our games are being well received.

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WHAT ARE SOME OF THE MAIN ADVANTAGES OF EXPANDING INTO CANADA AND HOW DO YOU ANTICIPATE THEY WILL HELP TO GROW YOUR BUSINESS?

making sure that everyone is on the same playing field.

The industry’s done an excellent job at maintaining their integrity on these issues.

KA: We’re currently in about 50 per cent of the market in North America. With the Canadian market expanding, that shoots us up to about 65-70 per cent of the market in North America that we’ll be doing business in. Naturally that gives us more overall market share and we’re very excited about that.

PS : Consistency and uniformit y would be of a great benef it to us. We spend quite a bit of time completing gaming applications for multiple gaming jurisdictions that request similar information, but aren’t exactly the same.

And although all jurisdictions work to the same goal of consumer protection, machine and game requirements vary from jurisdiction to jurisdiction.

PS : Canada is a robust market that offers us a great opportunity to grow internationally. With over 4,100 TournEvent® slot tournament machines operating in the U.S., it makes sense now to cross the border and expand our offerings in Canada. A nother thing we’re really looking forward to offering our customers in Canada is our National Tournament of Champions® campaign, which is run on our award-winning TournEvent slot tournament system.

THERE HAS RECENTLY BEEN A GREAT DEAL OF CONSOLIDATION AND COLLABORATION IN THE NORTH AMERICAN AND INTERNATIONAL GAMING INDUSTRY. HOW DO YOU SEE THIS AFFECTING THE CANADIAN GAMING MARKET AND HOW IS YOUR COMPANY POSITIONING ITSELF FOR THIS? KA: Of course, it’s hard to tell the future, but I would say the consolidations for us would be quite unusual in the fact that we are a single owner and we probably won’t be participating in any mergers or acquisitions in the foreseeable future. I think we actually have the advantage of being better prepared to address customer service while the other companies are busy pursuing the acquisitions. Sometimes it’s easy to take your eyes off the ball when you’re shuffling the paperwork associated with these kinds of mergers and acquisitions. For us, it gives us a unique advantage where we can really focus on what we do best and that is provide entertainment to our customers.

PS: Although we are seeing a lot of consolidation among the slot manufacturers, we have also seen growth in new companies entering the market. Competition is as keen as ever, with our customers benefiting from stable pricing and a greater variety of new and innovative slot products.

WITH LEGAL AND REGULATORY CHALLENGES UNIQUE TO EACH PROVINCE, STATE AND COUNTRY, WHAT NEEDS TO BE DONE BY BOTH THE COMPANIES AND REGULATORS TO HELP THINGS RUN AS SMOOTHLY AS POSSIBLE? KA: Globally, I think we probably need to look at adhering to some type of standard regulation going forward. But I think in the North American market, we do a very good job of looking at the jurisdictions and regulators and

WHAT ARE SOME OF THE NEW DEVELOPMENTS FOR YOUR COMPANY IN TERMS OF EXPANSION INTO CANADA? HOW WILL THESE BENEFIT THE CANADIAN CUSTOMER AND THE COMMUNITIES IN WHICH YOUR BUSINESS WILL EXPANDING? K A : One of our fundamental philosophies that our chairman and founder K azuo Okada instilled in this company is that we really focus on the entertainment value of what the Canadian customer is looking for. We look at things like time on device and engagement with the players, as well as some of the math models to make sure that their discretionary money lasts them a little longer than some other manufacturers would. We don’t do any branding of games, rather we brand within our own company. For example, we have Paradise Fishing — which we’re very excited about for the Canadian market — which is a communal six-pack game that encourages play with other players. We have another business sector that is focused on electronic table games that is a really good launching pad for novice players who are not familiar with table games. Usually from a younger demographic, they can come in learn and play a craps game by playing our (electronic) game and then graduate to the live table environment and have an entertaining experience. So we can be very confident that the Canadian market will be very receptive to our games as they are in the United States and we’re looking forward to it.

P S : We’re re a l l y e x c it e d ab out br i n g i n g ou r slot tournament system Tourn Event to both casinos and players in Canada. We delivered our f irst TournEvent system to Casino Rama in Ontario and are look ing for ward to starting our f ield trial shortly. With this system, the ease in which an operator may switch from in-revenue g aming to out- of-revenue tournaments through our user-friendly control center allows for more frequent tournaments and provides players with more opportunities to participate in a tournament. The unique interactive features of our tournament games will also provide a new tournament experience to the players, which we think will increase return visits and business for our Canadian casinos.

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corporateprofile

PURE CANADIAN GAMING:

Committed to “making good things happen”

The world of gaming is an exciting and risky business. In order to be a market leader, organizations must have something that the other competitors do not possess. Pure Canadian Gaming is a market leader within the province of Alberta, and maintains this position by focusing first and foremost on the guest experience and ensuring exceptional service delivery.

Many organizations claim to care about their guests and players, but that is not always a realit y. W hen you speak with George Goldhoff, Pure Canadian Gaming’s passionate P r e s i d e nt a n d C E O, a b o u t t h e sig nif ica nce of customer ser v ice a n d t hei r m i s sio n s t at em ent t o “Make Good Thing s Happen for Other People”, you soon realize that this is not just a key focus for the organization, but a true impassioned tenet of the company’s culture.

Pure Canadian Gaming, the largest gaming company in Alberta, started its rich histor y as Casino ABS (Alberta Bingo Supplies). The company was founded in 1973 by Hei n z Old a ch , a pione er i n t he Western Canadian gaming business, opening Edmonton’s first permanent, privately operated charitable casino.

In 2013, Casino ABS was rebranded

as Pure Canadian Gaming with its new name promoting a vision of the company's future.

PLENTY OF VARIETY

Of the 27 casinos within the province, four of the largest are owned and operated by Pure Canadian Gaming.

Between the four, Casino Edmonton, Casino Lethbridge, Casino Calgary and Casino Yellowhead, they offer over 100 table games, 50 poker tables, 3,000 slot machines as well as associated food, beverage and entertainment facilities.

The company's casinos reflect their Western Canadian origins. “They have their own style,” says Goldhoff. “We are not Las Vegas. We consider ourselves to be an entertainment company, but we differ from what you would see in Nevada or even Ontario. Canadians are typically slightly more modest, but they do enjoy their entertainment and they

expect us to focus on the one-on-one relationships that we create with our players and guests.”

One way that Pure Canadian Gaming has been creating relationships with the gaming public and its loyal players and guests is through Pure Rewards, its player loyalty card program. One of the key focuses when the brand was launched in 2013, was getting the player loyalty program right for guests.

CREATING LOYALTY

“There was a player loyalty program previously w ith A BS but nobody really understood it,” says Goldhoff.

“It was really confusing. Most casinos in Alberta were operating with player loyalty programs, but they did not provide value for the players. Our goal was to create a program that would reward our guests and players for frequenting and playing at PCG

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properties and to generate return visits through offers provided by the program.”

Membership is free to all guests, and the card provides discounts on food, beverages and merchandise, exclusive offers and the richest point accumulations in the province. Points are awarded simply for visiting and, of course, for playing. In the first month after the launch on the April 02, 2013, there was a 500-per-cent increase in new card signups and player card use.

Pure Canadian Gaming is currently in the midst of completing renovations in all of its casinos, including the addition of new luxuriously appointed High Limit gaming rooms, a future hotel, and a number of new restaurants. Any aspect that touches the guests or enhances their experience has been upgraded or looked at as possible renovation opportunities.

New chairs in all the properties will ensure comfort at slot machines and the tables. Among many additions there are also new tables, felts, rails, gaming chips, lights, sound systems, carpets and wall coverings.

NEW F&B OFFERINGS

New restaurant concepts such as pizza delis, noodle bars and new lounges and entertainment venues have been added as a response to our guest’s requests. In the Lethbridge casino, a snack bar has been converted into a pizza deli, after market research was undertaken, showing that city residents were looking for a quick lunch alternative and there were opportunities to offer nearby hotels with delivery services.

In Lethbridge, there was also some underutilized land adjacent to the casino and as the hotel/casino combination benef its the casino, the company is currently planning a full service hotel with banquet facilities for the site. While it is still in the preliminary planning stages, the hotel will be attached to the casino for a seamless guest experience and should be between 125-140 rooms and reminiscent of a Marriott standard. While convenient for casino guests, the hotel will function as a self-sustaining business on its own.

At Casino Yellowhead, the shift in entertainment offerings has been even more dramatic. Revitalizing the entire property with extensive renovations

including the build of brand new table games and slots areas, as well as a beautifully designed new High Limit and VIP room including private gaming tables, it also houses a new showroom entertainment concept for the Edmonton market featuring burlesque and variety shows in the recently renovated Cherry Bar & Cabaret. Still to come is a complete refresh of the deli and restaurant dining spaces.

FOCUS ON EMPLOYEE DEVELOPMENT

Despite the huge undertaking of renovating all of its properties, the primary focus of recent changes has to do with the employees. Pure Canadian Gaming employs some one thousand people and Goldhoff admits that the company had fallen a bit behind the competition in investing in its people, but major training and development initiatives over the last two years have catapulted it back to the top.

“I can put all the Persian rugs, gold plated doorknobs and crystal chandeliers in our casinos, but none of that will make a difference unless we invest in our employees. We have spent hundreds of thousands of dollars on development, and our employees are better trained, happier and friendlier. Our guests are the beneficiaries of that.”

With a strong community involvement focus at all sites, the company’s teams are consistently and regularly participating in local events and charitable initiatives with the goal of building team unity and providing a lasting positive impact, further supporting their mission to “Make Good Things Happen for Other People.”

When asked where he sees the company in ten years, Goldhoff says, “I would hope to have a company that is three times our present size. There will always be growing pains when you change, but if the change is communicated effectively – and you involve your team members – people get really excited about it and become enthusiastic. I believe that you need to be receptive and open to constant change. If you don't then you become irrelevant.”

For more information, visit www.purecanadiangaming.com Canadian Gaming Business | 25

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facilityprofile

Casino du Lac-Leamy

Building Tomorrow’s Casino

BY CATHERINE SCHELLENBERG

The Casino du Lac-Leamy is one of four casinos in the province of Québec owned and operated by the Société des casinos du Québec (SCQ). Established in 1992, the SCQ’s mandate was to create jobs, add attractions to Québec's tourism industry and generate new income for the provincial government. These casinos are now well-established attractions that provide a unique gaming and entertainment experience and attract more than 10 million visits annually. They are characterized by their exceptional customer service and by the beauty and quality of their sites. The addition of hotel and entertainment services has helped increase the number of clients from outside the province and to stimulate tourism.

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facilityprofile

employees and clients alike informed of slot machine and other equipment and service relocations was among the challenges in the early phases. The first step consisted of preparatory work and demolition of the interior fountains and water features, the panoramic st airca se a nd Ba r 777, which took approximately six months to complete.

RESPONSIBLE DISPOSAL OF CONSTRUCTION MATERIALS

IN ADDITION to paying substantial div idends to the Gover n ment of Québec, the casinos generate economic spin-offs for the province, maintaining more than 10,000 direct and indirect jobs. They also purchase goods and services from more than 2,300 suppliers in the province.

The Casino du Lac-Leamy resort complex, which opened in 1996, is the top attraction in the Ottawa / Gatineau region. In 2001, it opened the 349-room Hilton Lac-L eamy hotel, convention centre and theatre.

It includes several bars and awardw inning restaurants, as well as a brand-new nightclub.

I n Ju n e 2 012 , t he C a si no du L ac-L ea my a n nounced it would invest $47 million in renovations

that would g ive the casino a compet it ive edg e in t he rapidly evolving market. The plans were designed to improve the f low of the physical environment, favour social interaction among clients, update the décor and enhance the overall customer experience. The project is managed by Casiloc, a subsidiary of Loto-Québec, in collaboration with the casino’s project team.

FIRST STEPS

Work began in fall 2012 and will be completed in early 2015. One of the key challenges throughout the project has been to keep the ca si no open a nd r u n n i n g wh ile maintaining its established standard of customer ser v ice. Keeping

In keeping with their waste management policy, used equipment t h a t w ou l d o t h er w i s e b e s ent t o the trash is g iven to org anizations specializing in mater ials recover y.

Electronics and computer equipment a re sent to a local factor y that specializes in the rec ycling of communications and IT waste, textiles are shredded and reused as insulation, metals are melted down and dangerous substances and chemical products are sent to a company cer tif ied by the Ministère du Développement durable, de l'Environnement, de la Faune et des pa rcs, where t hey a re t reat ed and recycled in an environmentally respectful manner.

Some creative thinking was needed, however, to dispose of the three-storey high bamboo plants that had been growing in the atrium since 1996. The facility transported them to Park Safari in Hemmingford, Québec, where they were offered as a treat to supplement t h e d i e t s o f s o m e o f t h e p a r k ’s herbivore resident s. Th is unusua l disposal method made for some very happy chimps, giraffes and elephants.

NEW HIGH ROLLER LOUNGE

Renovation of the high roller lounge was completed in April 2014. The new design features intimate seating areas and a redesigned bar.

THE CENTRAL HUB: A FOCAL POINT

In April 2 013, constr uction of the central hub began. This structure is centrally and strategically located on the gaming f loor, serving as a transition point between the gaming f loor and Canadian Gaming Business | 27

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facilityprofile the upper level restaurants. The hub is a striking structure and important focal point, with its curved exterior su r f a c e covere d i n i l lu m i n at e d metallic “fish scales.” The new Bar 7, located on the lower level of the hub, opened in the spring of 2014, a nd A L É A nig htclub opened on October 31.

ALÉA NIGHTCLUB: REDISCOVER THE NIGHT

A key step in the renovation plan, the Casino du Lac-Leamy’s spectacular new nightclub is located in the upper levels of the central hub and has a capacity of more than 200 people.

ALÉA is the crown in the jewel of a unique entertainment experience in

the heart of the casino’s gaming area.

This intimate, exclusive venue caters to young professionals who are in tune with the latest trends. The nightclub’s luxurious decor includes several VIP sections.

The opening night part y featured iconic American DJ and producer Erick Morillo, resident DJ at the trendiest nightclubs on the planet, including LiFE (at the SLS in Las Vegas) and Miami’s Space. November featured legendar y French house music star Bob Sinclar, whose many international hit s include the ir resistible “L ove Generation.”

ALÉA is equipped with a powerful sound system and st ate- of-the-ar t tech nolog y to showca se loca l a nd international DJs who feature electronic dance music including house, Top 40 as well as rhythm and blues. A team of VJs and lighting engineers concoct immersive multimedia environments that are projected as “living” wallpaper on the 13-metre wide video wall that overlooks the dance f loor.

A REDESIGNED MAIN ENTRANCE

More than a transaction.

A connection.

From the moment that currency touches our bill validator, we are responsible for providing an effortless, accurate transfer of cash into play. We are your representative on your casino floor.

This philosophy has earned JCM its position as the industry leader, with more bill validators and printers in play than all other brands combined. And now, we will show you how a simple buy-in can lead to a level of player engagement that goes beyond the transaction. We’ll help you make connections.

The fourth and f inal phase is under way a nd nea r ing complet ion. The c a s i n o ’s m a i n e n t r a n c e w i l l b e redesigned to provide an immediate view of the gaming area and to provide more eff icient g uest ser vices. This phase also includes construction of the multimedia ribbon, a striking visual element onto which they will project multimedia productions, providing a c on s t a nt elem ent of a n i m at ion throughout the space. This innovative system has been tested successfully at the Casino de Charlevoix.

W hen complete, the new environment will provide an added dimension of intensit y to the customer’s entertainment experience, and deliver a clear vision of tomorrow’s casino.

For more information about Casino du LacLeamy go to www.casino-du-lac-leamy. com. For information about our renovations, visit www.lacleamycasinooftomorrow.com.

To learn more about Québec's casinos, go to www.casinosduquebec.com.

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ABACUS SOLUTIONS AD TO COME

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responsiblegambling

NEW HORIZONS 2015 Experts gather for annual responsible gambling conference Responsible and problem gambling industry leaders and experts from around the world will soon gather in Vancouver to discuss mitigation strategies for harm reduction and new treatment approaches.

THE 3RD ANNUAL New Horizons Conference in Responsible Gambling takes place February 2-4, 2015 at the Vancouver Convention Centre. The annual conference is meant to facilitate discussions on new treatment approaches, show how to use player data to customize responsible gambling messages and how to mitigate gambling-related harm, and to facilitate face-to-face dialogue with the brightest in the industry.

“This conference prov ides an innovative, insightful opportunity to connect with the brightest minds in the fields of responsible and problem gambling,” says Jim Lightbody, interim President and CEO, BCLC. “Attendees hear firsthand what responsible gambling means to players and learn best practices from colleagues and professionals across the industry.”

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responsiblegambling

New Horizons in Responsible Gambling Conference

February 2–4, 2015 Vancouver, B.C.

Top 3 reasons you should join us at the New Horizons in Responsible Gambling Conference this February: • We’ll talk Big Data • We’ll hear about new methods of customizing RG messaging • You’ll enjoy two full days of networking Follow us on twitter @HorizonsRG for updates and visit HorizonsRG.com to register.

See you there!

New this year, the Canadian Consortium for Gambling Research will host a workshop to explore approaches in recruitment and retention; research methods for small samples; ethics of research within small populations; and implications for communicating research results.

The 2015 New Horizons Conference in Responsible Gambling features 29 guest speakers, including keynote speaker, K risten Berman, who co-founded Irrational Labs in 2013 to help companies understand behavioral economics – how and why people make the decisions they do. Her presentation, The Behavioural Science Behind Addictions and Proposals for Prevention, focuses on understanding the gambler’s mindset to help shape prevention strategies.

A complete list of speakers, online registration and conference details are available at www.horizonsrg.bclc.com.

presented by

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employeedevelopment

YOUR BEST BET Onboarding new employees

BY JUDITH HAYES AND DAYNA HINKEL

The Canadian gaming and casino industry comprises a large percentage of the hospitality, tourism and entertainment sector in Canada. This particular world is becoming more competitive in the recruitment of top talent. How do you ensure that the employees you hire are successful, committed and productive in their new roles with your organization?

A C C O R D I N G T O T H E C on fer enc e Board of Canada (Bringing New Hires Up to Speed: How Structured Onboarding Can Help, 2011), successful organizations are investing in their people through a strategic approach called onboarding.

Onboarding consists of a lot more than simply having employees complete the required corporate paper work and compliance training on their first day of orientation, fitting them with a uniform and introducing them to co-workers. It is a structured approach over a period of time, transferring organizational, team and job-specific knowledge to new employees, based on the goals of increasing productivity and engagement, and decreasing turnover.

Onboarding makes sense. Gaming

is complex and the more comfortable employees feel navigating the casino culture with its countless policies and procedures, the better equipped they will be to provide the high level of customer service required.

T he C on ference B oa rd repor t identif ies f ive key components for successful onboarding: 1. Acclimating the new hire to the organizational culture 2. Making use of technology where appropriate 3. Involving individuals both inside and outside the HR function 4. Us i n g m e t r i c s t o a l i g n t h e onboarding process with business goals 5. Using a phased-in approach

Many casinos in Canada either use, or are transitioning to, this new approach by integrating these five components as they bring new talent into their workforce in a timely fashion.

SaskGaming recently re-designed its onboarding program so it takes place over a one-year period. Due to shift work in the gaming workplace, they found it difficult to schedule classroom sessions that would accommodate the various schedules of new employees. They also recognized there were overlaps in the delivery of information between human resources and other departments.

The first component of SaskGaming’s onb o a rd i n g pro c e s s i s a n on l i ne orientation, developed by the Learning & Development unit. In addition, a cohesive, consistent departmental onboarding

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employeedevelopment program was designed to be delivered by designated trainers in the respective departments. Over time, employees have the opportunity to attend classroom ‘core’ training programs in addition to regular coaching and feedback conversations with their manager. Lisa Arlint, Manager of Learning says, “We find that a blended learning approach works very well to accommodate shift workers and eLearning allows us to provide more accurate reporting for compliance training initiatives.”

PROVIDE EXTENSIVE SUPPORT

SaskGaming’s Learning & Development Unit is responsible for the creation of onboarding program content, materials and learning activities, plus a series of ‘train-the-trainer’ classroom sessions for helping to guide new employees through the onboarding process. As well, Learning & Development has created onboarding workbooks/packages for new employees, a manager’s guide to onboarding, and materials for departmental trainers. These materials include checklists, job aids and a variety of different activities to facilitate the information.

At Manitoba Liquor & Lotteries (MBLL), effective orientation and onboarding has had a significant impact on employee productivity, engagement, and retention. When employees learn early about their work roles and responsibilities and the support resources available to them, they are better equipped to provide the high level of customer service and consumer experience that is valued by the casino customers.

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Onboarding at MBLL is structured into three phases: Orientation, Onboarding Phase II and Onboarding Phase III. The Orientation phase includes a checklist to assist the new employee and the manager in working collaboratively to better integrate the employee. The Onboarding process for new employees combines classroom delivery, virtual delivery, eLearning, and other tools and resources that cover a broad spectrum of topics to help employees with their orientation into Manitoba Liquor & Lotteries, whether a new full-time, part-time, or casual employee.

Recruiting and training new employees is costly investment. An effective onboarding program helps gaming management monitor how successfully those new hires are integrating into the operation and providing a positive impact on the business. How are you welcoming new employees to ensure they are a best bet?

If you would like to join the National Gaming Training Advisory Committee and share strategies from your casino property, please contact Canadian Gaming Centre of Excellence.

Judith Hayes is Director (Judith.hayes@mbll.ca) and Dayna Hinkel is Business Manager (dayna.hinkel@mbll.ca) of the Canadian Gaming Centre of Excellence, a subsidiary of Manitoba Liquor & Lotteries. For more information visit www. gamingcentreofexcellence.ca.

Canadian Gaming Business | 33 14-06-16 9:44 AM

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marketing

MARKETING WITH A PURPOSE The keys to planning an effective marketing strategy for 2015

BY PAUL SPEIRS-HERNANDEZ

As a turn of the calendar approaches, it is natural for us to think about our goals and aspirations for the New Year. This is typically accompanied by a deal of introspective thinking and questions – What were my goals for this year?

Did I accomplish them? Why or why not? How could I improve? What do I want to accomplish in the New Year and what can I realistically accomplish?

THIS LINE OF introspective thought and questioning is also ex tremely useful for businesses. As companies review the year drawing to its close and turn their eyes to a new year of revenue potential, it is important for companies of all sizes to carefully consider their marketing strateg y, approach and budget for 2015 with the same probing questions that we would a sk ourselves. W hat were our marketing goals? What are our new marketing goals? What can we realistically accomplish as we plan an integrated marketing strateg y, and how are we measuring our successes and ROI? T he k e y word i n t h at l i ne of questioning is “strategy.” Too often companies skip the strategy and go straight to tactics. Tactics are the fun part – seeing the print ads, seeing our name in print in a magazine or e-zine from a press release, counting our social

media “likes.” However, what is the strategy that unites the tactics across all mediums? If we think of each tactic as a paragraph and each month as a chapter, what is the strategy or overarching story that we are telling in the novel that spans five years?

A successful communication plan must begin with solid strateg y and bra nd of fou ndat ion. W hen wa s the last time you had a third-party audit of your brand? When was the last time you audited your brand communications internally to ensure all employees are on the same brand communications pa ge across the company or across the operation?

Once the strategy is finalized, we can turn our attention to the tactics.

These might include print ads, digital ads, public relations/press outreach, direct and e-direct mail and social channels, and each comes with its own important questions.

PRINT ADS

P r int ads c a n b e a ver y ef fe c t i ve me a n s of com municating with the target audience. In B2B communications, the gaming industry is lucky to have a finite list of trade publications across the geographical spectrum. In B2C, the challenge can be greater as the number of publications increases; however, the key questions remain the same: What story am I telling to this audience, and is a particular print publication the right choice? Are the rates competitive? Am I getting ROI on my investment and how is the publication helping me measure that ROI? One key thing to keep in mind with today’s consumer is that print ads function very much like billboards – we have a very compressed time to communicate our message and deliver a call to action. That means indulging in copy will not effectively communicate the message because typical consumers (B2B or B2C) are acting with limited attention spans.

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marketing

BANNER ADS

Banner ads are the billboard of the electronic superhighway, so we have to ask: Is our message clear, concise and compelling with a call to action? Fortunately, the very nature of the medium allows for better metrics and tracking for ROI, so what is the media outlet doing to help you track and adjust and maximize your ROI? PUBLIC RELATIONS

Studies have shown consumers (B2B and B2C) place three times more trust in a story about a product than in an ad about a product, so how are you bringing your company’s message to the press or public? Is that message compelling, consistent and helping to increase your SEO? If we think of search engines as hungry zombies, they are only interested in the “food” in front of them right now, so what are we doing to continuously feed the machine with useable, interesting content that speaks to our brand strategy?

SOCIAL ENGAGEMENT

The same can be said for social channels, and we have to ask ourselves similar questions – what content is most relevant to our target audience, and how are they most likely to engage with our brand online? Is Instagram a better fit for us than YouTube? Facebook over Twitter? And are we simply pushing

our message onto consumers in these areas or are we truly engaging with them as social channels allow us to?

CSR

Many times, marketers overlook a company’s corporate social responsibility (CSR) initiatives, simply relegating the tasks to HR, and not taking full advantage of the power well-structured CSR prog rams can have on external and internal audiences. CSR initiatives and outreach should be done in concer t w ith HR and marketing to ensure this side of the company’s story is woven into the overarching strategic messaging across all mediums, externally and internally.

Seeking answers to these questions will help guide your communication planning, and they should be frequently revisited throughout the year to help ensure your st rateg y is on t rack a nd your bra nd remains relevant and compelling.

Paul Speirs-Hernandez is President, Steinbeck Communications, a leading marketing communications firm for the gaming industry.

Prior to founding Steinbeck Communications, he was publicist for Luxor Las Vegas and Excalibur Hotel/Casino. Contact him by email at paul@steinbeckcommunications.com or visit www. steinbeckcommunications.com for more information.

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Professional performer, controlled conditions. Do not attempt.

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Gasser chairs occupy that lofty perch where fashion sense and common sense intersect. Incorporating a stylish flair for design with a fanatical devotion to detail, Gasser chairs don’t merely perform, they dazzle.

Visit Gasser at Canadian Gaming Summit Booth 804 gasserchair.com | 800.323.2234 Featured Chair: Coltrane

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gamingtrends

SEATING DRIVERS Comfort, customization major influences on casino seating design

It may be an occasionally overlooked component of casino operations, but ensuring player comfor t while they are seated for extended periods of time at slot machines and table games can have a pronounced effect on revenue. After all, if a player is not comfortable while enjoying his or her favourite game, they may be more likely to move on and curtail their gaming activity.

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gamingtrends

WITH THIS IN MIND, Canadian Gaming Business asked two leading casino seating manufacturers about the latest trends, developments and issues when it comes to seating and chair design. Here’s what Skip Davis, President, Gary Platt Manufacturing and Roger Gasser, Sales Manager, Gasser Chair Company, had to say: WHAT ARE SOME OF THE RECENT DEVELOPMENTS IN CASINO SEATING OPTIONS? Skip Davis: We are seeing design trends that feature and enhance the local theme of casino properties. We often work with operators and design teams to understand their overall vision. Specific colors, upholstery patterns and new innovative f inishes all work hand in hand to create a memorable design. As a manufacturing leader of interactive seating, we continuously work closely with game suppliers to offer the latest in sound, lighting, and movement to maximize the customer’s experience.

Roger Gasser: We find gaming customers want options on seating selection. This includes various back, seat and base styles. They also request custom-made units for high-limit areas. Gasser can adjust to the customers’ requests since we are a manufacturer and can adjust our standard designs. Gasser also has an engineering department that can take customers designs and produce a finished product.

WHAT ARE THE MAJOR ISSUES WHEN IT COMES TO DESIGNING OPTIMAL CUSTOMER SEATING? Skip Davis: The primary challenge always remains the same for seating manufacturers: To design seating that will be comfortable for the wide variety of customers seated at a specif ic game. This, along with an endless selection of game cabinets, placement of touch screens and buttons, various heights and widths of table games, all combine to create an opportunity for our team to design and manufacture seating that satisfy the majority of players. Creating the r ight bala nce of com for t, ser viceabilit y, design and durabilit y has always been extremely important to us.

Roger Gasser: Customers are concerned about comfort and durability. Gasser molds its own seat and back cushions.

This allows us to adjust cushion shapes and the firmness of cushions. Once the seating is in use, the customer will need maintenance parts from daily wear. Gasser is able to supply these parts since we are a manufacturer and not an assembler who must wait for third parties to fulfill parts requirements.

WHAT TO DO YOU SEE AS SOME OF THE MOST EXCITING THINGS ON THE HORIZON FOR THE CASINO SEATING MARKET? Skip Davis: Excitement in many cases is created through our partnerships with slot and game manufacturers. The next new and exciting interactive chair is always in development and ideas are brought to our team regularly. We are recognized

as the leader in comfort and innovation, which is why the overwhelming majority of slot manufacturers turn to Gary Platt as a partner. For the casino direct market, we recently introduced the next generation of X-tended Play Seating, the X-2 series. We are widely recognized as the leader in ergonomically designed casino seating and this X-2 series continues and enhances this popular line.

Roger Gasser: Casinos are facing increased competition for players. They need a product with an attractive price point for budget. There is also high demand for ergonomic design for player comfort and a quality of products that will handle 24/7 use. Gasser’s new Quantum Series fills all of the requirements for slots, table games, and poker seating.

WHAT ARE THE BIGGEST CHALLENGES WHEN IT COMES TO DESIGNING AND MANUFACTURING CASINO SEATING? Skip Davis: Ensuring safety, serviceability and longevity, while maintaining pleasing designs and comfort. Our entire team is dedicated to providing this delicate balance for our customers and it shows by the popularity of our X-tended Play Seating line, interactive seating and our new X-2 line. Our goal remains the same: To satisfy operators/ owners, design teams and ultimately the customer, hence the player sitting at the game. If we keep each vital part of this in mind, we are conf ident we will continue to provide the ultimate casino chair.

Roger Gasser: Ergonomics will continue to be of interest for player comfort. Management is also concerned about movement of slot stools by players and staff. Gasser offers a new Halo circular patented base. The Halo’s round “f loating” disc base is designed with edges slightly raised off the f loor so it doesn’t dig into the carpet and a proprietary finish that actually glides over carpet for easy movement.

WHICH INTERNATIONAL MARKETS OFFER THE BIGGEST OPPORTUNITIES FOR BUSINESS EXPANSION FOR SEATING COMPANIES AND WHICH ONES HAVE THE BIGGEST COMPETITION? Skip Davis: In the last several years, we have partnered with some of the f inest distributor groups in several international markets including Canada, Europe, South America, Australia and others. We’ve experienced robust growth in every market we have entered and consider all of them a valuable part of our business as we compete for additional market share.

Roger Gasser: The Asian market offers opportunities due to continue increases in player activity. The competition is ver y active in Asia. The casino operator has many manufacturers to choose from and the customer needs to investigate the quality of products and service being offered.

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Summ

2014 “CGA @ G2E”

ANNUAL CANADIAN GAMING INDUSTRY NETWORKING EVENT THANK YOU TO OUR SPONSORS:

HOSTED BY:

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A TIME FOR CHANGE With new revenue standards on the way, what is the best option for your organization?

BY LESLEY LUK

Earlier this year, the International and United States accounting standard boards (IASB and FASB) published a new joint revenue recognition standard. This new standard will impact the revenue recognition of organizations and replaces most of the currently existing revenue recognition guidance under US Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) – IFRS 15.

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finance AS MANY COMPANIES now take on the process of assessing the extent of the impact this new standard will have on their operations and reporting, it is important that they also develop a n a c t ion pl a n t o en su re t h at a successful transition is achieved in a timely manner. In doing so, one of the f irst things companies should analyze is the transition process.

TRANSITION REQUIREMENTS

The new standard is effective for a n nu a l per io ds beg in n in g on or after January 1, 2017 for companies applying IFRS. For public business e nt it i e s a p pl y i n g U S G A A P, it i s e f fe c t i v e fo r a n nu a l p e r i o d s beginning after December 15, 2015.

Early adoption is permitted only under IFRS. A company can approach the new standard through the application of three different transition methods: • Full retrospective approach: Companies may choose to apply a ll of t he requi rement s of t he new standard to each comparative period presented in accordance w ith the requirements on accounting changes – i.e., a full ret rospect ive approach. Under this approach, the entit y adjusts it s f ina ncia l st atement s for a ll contracts, including those closed under legacy GAAP. • Retrospective w ith practical expedient approach: Companies may elect to use one or more of the optional practical expedients. Any practical expedients that are elected are applied to all contracts in all comparative repor ting periods.

The company w ill also need to disclose the practical expedients t h at h ave been used a nd must provide a qualitative assessment of the estimated effect of applying each expedient; or • Cu mu lat ive Ef fe ct Met ho d: Companies may choose to apply the new standard as of the date of i n it ia l appl ic at ion, w it h no restatement of comparative period amounts. Companies w ill need to record the cumulative effect o f i n it i a l l y a p pl y i n g t h e n e w standard as an adjustment to the opening balance of equity at the date of initial application. Under the cumulative effect method, the

Summary of transition options Approach

Pre-adoption

Comparative(s)

Year of initial application

Date of equity adjustment

Full retrospective – no practical expedients

Legacy GAAP

Legacy GAAP

New GAAP

January 1, 2016*

Retrospective with practical expedient(s)

Legacy GAAP

Mixed requirements

New GAAP

January 1, 2016*

Cumulative effect

Legacy GAAP

Legacy GAAP

New GAAP

January 1, 2017*

* If an entity with a calendar year-end provides two years of comparatives, the date of equity adjustment will be January 1, 2015. See Section 5.4 for considersations specific to SEC registrants

provisions of the new standard apply only to contracts that are open (i.e., not complete) under previous GA A P at the date of initial application. In addition, the requirements on accounting changes require companies to disclose: • T h e a m ou nt b y w h i ch e a ch f inancial statement line item is affected in the current period as

a result of the entity applying the new standard; and • A n ex pla nation of the sig nif ica nt changes between the reported results under the new standard and those under legacy GAAP. I n det er m i n i n g wh ich t r a n sit ion opt ion is most suit able, compa n ies s h o u l d c o n s i d e r a n d e v a lu a t e t h e following factors:

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Canadian Gaming Business | 41

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• Significance of changes in accounting: Companies will need to assess the impact of the new standard on reported revenues as compared to legacy GAAP. If the impact of the new standard is high, then the cumulative effect method may significantly affect trend data. In this circumstance, companies may consider using the retrospective method to enable users of the financial statements to better understand the revenue and profitability trends on a consistent and comparative basis.

Companies — including those in the lottery and gaming industry — must keep in mind that the selection of the most appropriate transition option will have a significant impact on the extent and timing of this change.

• Availability of historical information: Companies • Comparability of information: The comparability should consider the availability of information needed of information from one period to another will be to transition to the new standard. Some factors may important for both internal and external stakeholders. include, but are not limited to, whether the information I n a dd it ion , compa n ies shou ld con sider wh ich is generated from existing systems or manual processes, transition option their peers are planning to select as it any previous changes to the systems, processes to collect may be important to follow the industry norm. data and whether new information is required.

Companies — including those in the lottery and gaming industry — must keep in mind that the selection of the • Contract structure and volume of contracts: The most appropriate transition option will have a significant transition option selected will be directly impacted by impact on the ex tent and timing of this change. In the number of open contracts, the average duration of order to ensure that the transition is implemented in an each contract and the degree of consistency in contract efficient and effective manner, companies should start terms and conditions. assessing which transition option would be most suitable for their operations given the impact of the quantitative • Disclosure requirements: Companies will apply the and relevant qualitative factors. disclosure requirements of the new standard to all periods presented. If an entity elects to apply the retrospective GETTING READY method, it will apply the new disclosure for the initial year of While the new standard officially takes effect in January application and all comparative periods.

2017, preparers must remember that early preparation, including an effective implementation and stakeholder • Systems and processes: Regardless of the transition engagement plan, is the key to successfully operating option, companies will need adequate processes and under this new framework. controls to ensure that the information used to comply w ith the t ra nsit ion requirement s is complete a nd To learn how to ensure your organization is prepared to meet accurate. Companies may also want to consider the the new guidelines for revenue recognition, contact Lesley Luk cost and time frame for designing and implementing (lluk@kpmg.ca), Senior Manager, Technology, Media & t hese pro cesses a nd cont rols when a ssessi n g t he Telecommunications (TMT), KPMG and visit www.kpmg.ca transition methods. for more information.

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© 2014 GTECH UK Interactive Limited and/or its affiliates. All Rights Reserved. All trademarks and logos noted herein are trademarks owned by, or licensed to, GTECH UK International Limited. © 2014 Electronic Arts Inc. Plants vs. Zombies and PopCap are trademarks of Electronic Arts Inc.

finance

© 2014 GTECH UK Interactive Limited and/or its affiliates. All Rights Reserved. All trademarks and logos noted herein are trademarks owned by, or licensed to, GTECH UK International Limited. © 2014 Electronic Arts Inc. Plants vs. Zombies and PopCap are trademarks of Electronic Arts Inc.

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