Phillip Ryan Chief Executive Officer Responsible Gaming Networks Melbourne, Australia NCPG CONFERENCE, INDIANAPOLIS, INDIANA. JUNE 2009

Phillip RyanChief Executive Officer

Responsible Gaming NetworksMelbourne, Australia

NCPG CONFERENCE, INDIANAPOLIS, INDIANA. JUNE 2009

TopicsWhat is Pre-Commitment?What is its rationale?How is it evolving?What is the current state-of-play around the

world?What are the challenges for Pre-Commitment?The technologies of Pre-CommitmentThe new public policy driver within the USAPre-Commitment as a dynamic public policy

solutionRESPONSIBLE GAMING NETWORKS

What is Pre-Commitment?Addresses the definition of problem

gambling: “problem gambling is characterized by difficulties in

limiting money and/or time spent on gambling which leads to adverse consequences for the gambler, others, and for the community” .

RESPONSIBLE GAMING NETWORKS

What is Pre-Commitment?Addresses the definition of problem

gambling: “problem gambling is characterized by difficulties in

limiting money and/or time spent on gambling which leads to adverse consequences for the gambler, others, and for the community” .

Based on academic research:Rational consumer purchasing decisions in

gamblingProfessor Mark Dickerson et al.Players set money and time limits PRIOR to

gamblingRESPONSIBLE GAMING NETWORKS

What is Pre-Commitment?Addresses the definition of problem gambling

“problem gambling is characterized by difficulties in limiting money and/or time spent on gambling which leads to adverse consequences for the gambler, others, and for the community” (1).

Based on academic research:Rational consumer purchasing decisions in gamblingProfessor Mark Dickerson et al.Players set money and time limits PRIOR to gambling

Focus on the player:Beyond the venues (hours of operation etc.), machines

(spin rate, max bet etc.) and ATMs (cash withdrawals etc.)


The Rules of Pre-CommitmentPlayer Pre-Commitment:

Players set limits away from the gambling environment.


The Rules of Pre-CommitmentPlayer Pre-Commitment


Pre-commitment limits: Player monetary loss limits – daily, weekly, monthly,

annual. Player time limits – daily, weekly, monthly, annual.






Gambling must stop when limits reached.






Gambling must stop when limits reached.Players set their own limits voluntarily with cooling-

off period.







off period.Players have a mandatory ID access device

connected to their limits in order to play (e.g. plastic card, smart card or some other smart technology).







off period.Players have a mandatory ID access device

connected to their limits in order to play (e.g. plastic card, smart card or some other smart technology).

Gambling can only take place using an access device.


Evolution of Pre-CommitmentCrown Casino, Melbourne, Australia - 2002:

Introduced player-pre-commitment money limits on their 2,500 poker machines (first casino in the world to introduce).




However, play did not stop when limits reached.Players did not have to carry ID card to play.



However, play did not stop when limits reached.Players did not have to carry ID card to play.

Nova Scotia, Canada - 2006:Player ID registration and card required to play.Trialled pre-commitment money and time limits on

VLTs in two towns. (video clip)Rolling out across all of Nova Scotia later this year.


Today’s DevelopmentsSingapore Casinos :

Marina Bay – Las Vegas Sands ($5 billion +) Sentosa Island – Genting International ($5 billion +). Pre-Commitment limits mandated by Government of Singapore.Limits will apply across all forms of gambling – slots, tables etc.Limits will apply to residents and tourists.Will my personal limits apply across both casinos?



Marina Bay – Las Vegas Sands ($5 billion +) Sentosa Island – Genting International ($5 billion +). Pre-Commitment limits mandated by Government of Singapore. Limits will apply across all forms of gambling – slots, tables etc. Limits will apply to residents and tourists. Will my personal limits apply across both casinos?



Marina Bay – Las Vegas Sands ($5 billion +) Sentosa Island – Genting International ($5 billion +). Pre-Commitment limits mandated by Government of Singapore. Limits will apply across all forms of gambling – slots, tables etc. Limits will apply to residents and tourists. Will my personal limits apply across both casinos? Entrance fees for locals (s$100 = us$70/visit , s$2000 =

us$1400/year). Strict self exclusion and third party exclusions

Welfare recipients & bankrupts Family exclusion 28,000 people identified so far – expect 55,000.

Convergence of Pre-Commitment, Exclusion and Access systems.



Marina Bay – Las Vegas Sands ($5 billion +) Sentosa Island – Genting International ($5 billion +). Pre-Commitment limits mandated by Government of Singapore. Limits will apply across all forms of gambling – slots, tables etc. Limits will apply to residents and tourists. Will my personal limits apply across both casinos? Entrance fees for locals (s$100 = us$70/visit , s$2000 =

us$1400/year). Strict self exclusion and third party exclusions

Welfare recipients & bankrupts Family exclusion 28,000 people identified so far – expect 55,000.

Convergence of Pre-Commitment, Exclusion and Access systems.


Marina Bay – June 2009

Marina Bay – Final Outcome

Resort World Sentosa-Model

Today’s DevelopmentsNorway :

VLTs removed due to concerns with problem gambling.

All private owned machines taken over by state-owned Norsk Tipping.

Player ID registration introduced.Machines returning with player pre-commitment.Plus Government pre-commitment limits:

(us$75/day (K400); us$342/month (K2200); cooling off period after 1 hour continuous play ).

1,600 out of 6,500 machines returned to date.
















Today’s DevelopmentsAustralia:

State Government of Victoria: By 2013 all new machines must have pre-commitment. Abolished role of private operators in the industry value chain

(TABCORP and Tattersall’s). Pre-Commitment specifications to be released later this year.

Australian Ministerial Council on Gambling:“Pre-commitment a priority area to reduce harm from gambling”

Analysis of Gambler Pre-Commitment Behaviour, June 2006Gambler Support for Pre-Commitment

7 out of 10 slot players support compulsory pre-commitment limits

8+ out of 10 slot players support voluntary pre-commitment limits


Today’s DevelopmentsAustralia:

State Government of Victoria: By 2013 all new machines must have pre-commitment. Abolished role of private operators in the industry value chain

(TABCORP and Tattersall’s). Pre-Commitment specifications to be released later this year.

Australian Ministerial Council on Gambling: “Pre-commitment a priority area to reduce harm from gambling”

Analysis of Gambler Pre-Commitment Behaviour, June 2006 Gambler Support for Pre-Commitment:

7 out of 10 slot players support compulsory pre-commitment limits 8 out of 10 slot players support voluntary pre-commitment limits


Today’s DevelopmentsState of Queensland Trial of Pre-Commitment :

Two venues (clubs) - Redcliffe and Sandgate.Players not required to have ID to play = leakage.ID card loaded with digital cash = problematic.Player losses reduced by $25/day, possible state-

wide rollout


Today’s DevelopmentsState of Queensland Trial of Pre-Commitment:

Two venues (clubs) - Redcliffe and Sandgate.Players not required to have ID to play = leakage.ID card loaded with digital cash = problematic.Player losses reduced by $25/day, possible state-

wide rolloutState of South Australian Trial of Pre-

Commitment:Four venues (hotels).Re-configuration of J Card loyalty system.Players not required to have ID to play = leakage.Play does not stop when limits reached = no

control.Industry attempting to re-position pre-

commitment.


Tomorrow’s DevelopmentsCanada:

All Canadian Operators 2009 Study on Global Pre-Commitment Report to be released in next few weeks

Atlantic Lottery Corporation: Its four jurisdictions watching Nova Scotia developments

Ontario Lottery & Gaming Corporation Introducing biometric facial self-exclusion later this year in

response to court class actionsLotto Quebec

Reviewing pre-commitment for next generation machines.

Pre-Commitment TechnologiesPlastic cardsSmart cardsUSB Keys


Old TechnologiesLimitations of plastic cards with PIN

Cards have very low storage capacity (<1k)

Cards & PINs can be swapped between gamblers

Cards can be easily copied/skimmed Cards require an additional card reader Cards operate on different proprietary

standards Cards limited to a single gambling

network



Old Technologies

Old TechnologiesSmart cards with PINPlayer loyalty systems with convenience

expenditure Cards have minimal storage capacity (32k) Cards & PINs can be swapped between gamblers Cards require an additional expensive card reader Cards operate on different proprietary smartcard

standards Cards limited to a single gambling network Smartcards use problematic digital cash

Players lose connection with the use of real money Increased risks for problem gamblers (Aust .Govt.

KPMG Report on Problem Gambling 2002) Professor Mark Griffiths “Suspension of Judgment”


Nova Scotia Trial FindingsInternational Gaming Institute, University of

Nevada:Players “beat” the system – via card sharing

37% of panelists shared cards. Card sharing occurred for periods up to one week at a

time. Card sharing correlated to PGSI score (i.e. PGs shared the

most).


Nova Scotia Trial FindingsInternational Gaming Institute, University of

Nevada:Players “beat” the system – via card sharing

37% of panelists shared cards. Card sharing occurred for periods up to one week at a

time. Card sharing correlated to PGSI score (i.e. PGs shared

the most).“Should pursue measures to address this specific

problem” Biometric ID solution required (fingerprint, facial etc)

for pre-commitment solutions


New Technology SolutionsBiometrics

Unique characteristics of every human being.Eyes, fingers, voice, handwriting etcCannot be easily exchanged between humans

Most developed biometric is fingerprintsDeveloped by FBI in 1920’sRecognized and accepted globallyLowest cost biometricNew technologies have digitized fingerprint

biometrics


Fingerprint Biometrics


Fingerprint Biometrics


USB Player Protection Key


USB Player Protection Key Electronic Key – unique for each player Biometric identification of owner

Eliminates sharing of ID amongst players On-board fingerprint scanner & storage No central storage of player biometrics




Plug-and-Play Device – no batteries Connects directly into all USB outlets Eliminates need for a card reader On board microprocessor = multi-venue




Plug-and-Play Device – no batteries Connects directly into all USB outlets Eliminates need for a card reader On board microprocessor = multi-venue Massive storage capacity (64 Gigabytes)

Coverage across multiple gambling operators Coverage across all channels of distribution:

Off line venues, Internet, Kiosks, TV Coverage across all forms of gambling - gaming,

lotteries, wagering, sports, spread betting. Read/Write 100 times faster than a smartcard

systemRESPONSIBLE GAMING NETWORKS

USB Player Protection Key Players at venues still use real cash in

machines No cost to player for device

Provided by Government or operator(s) Ideal self-exclusion mechanism Extensive player database for researchers

and regulators


Biometric Gaming StandardsRegulators - Nevada Gaming Commission

Biometric technical standards established for gambling

“Mobile Gaming System Policies”May 2006Two Factor authentication (device & biometrics) for

player IDEstablished standards for:

Cryptographic protocols Encryption algorithms

Machine Manufacturers - Gaming Standards AssociationUSB now adopted as Gaming Device Standard – GDS –

for all slot machines globally.


Player Protection Key Already internet compliant USB connectivity for all computers Universal connectivity standard


Internet Gambling Industry Globally:

700 million internet users globally 2,500 internet gambling sites $16 billion of player gambling losses last year 50% of loss attributed to US residents

New Zealand: 75% of NZ population use the internet 50% of NZ children use the internet daily

12-17 year olds in NZ use the internet as often as the heaviest adult users

NZD$2 billion spent on terrestrial gambling Will result in an emerging digital problem


Internet Gambling ModelsOld Internet Models:

1. Ban access to all local internet casinos 2. Allow open access to all internet casinos globally

Both regulatory models increase player risks around: casino authenticity lack of financial regulatory controls consumer protection underage gambling problem gambling.


Internet Gambling ModelsOld Internet Models:

1. Ban access to all local internet casinos 2. Allow open access to all internet casinos globally

Both regulatory models increase player risks around: casino authenticity lack of financial regulatory controls consumer protection underage gambling problem gambling.

New Internet Model Allow access to approved list of casinos


INTERNET PORTAL

CASINO B

CASINO A

CASINO C

CASINO D

CASINO E

USBPlayer Protection

Key


New Internet Model

INTERNET PORTAL

CASINO B

CASINO A

CASINO C

CASINO D

CASINO E

USBPlayer Protection

Key


New Internet Model

Player Pre-Commitment and

Authentication

Government Taxation

Casino Authentication & Regulatory Supervision

New Internet ModelPlayer Benefits:

One registration process for the player across all operators.

One set of pre-commitment limits across all operators.

One self-exclusion registration across all operators.Consumer protection from locally regulated

operators.


New Internet ModelPlayer Benefits:

One registration process for the player across all operators.

One set of pre-commitment limits across all operators.One self-exclusion registration across all operators.Consumer protection from locally regulated operators.

Government Benefits:No risks of under-age gambling.Reduces risks of increased problem gambling.State-of-residence player identification.Allows for better regulation & taxation of the industry.


New USA Public Policy DriverPresident Obama has promised tax-cuts to middle

America.USA in a recession with declining taxation revenues.$1.5 trillion federal deficit likely (before tax cuts) in

2008/09.Democrats control both Houses and Presidency.Corporate tax hikes and new taxes on the agenda.


New USA Public Policy DriverPresident Obama has promised tax-cuts to middle America.USA in a recession with declining taxation revenues.$1.5 trillion federal deficit likely (before tax cuts) in 2008/09.Democrats control both Houses and Presidency.Corporate tax hikes and new taxes on the agenda.Most Democrats support internet gambling.Internet Gambling is a major source of new taxation revenues.Regulated internet gambling is coming with built-in protections:

Underage gambling controls.Problem gambling controls.With strict controls to eliminate the mediocre internet operators

Only 1 in 3 internet operators conform to standards – NAGS December 2008

Potential for US Government Problem Gambling funding


New US Internet Gambling PolicyPresident Obama has promised tax-cuts to middle America.USA in a recession with declining taxation revenues.$1.5 trillion federal deficit likely (before tax cuts) in 2008/09.Democrats control both Houses and Presidency.Corporate tax hikes and new taxes on the agenda.Most Democrats support internet gambling. Internet Gambling is a major source of new taxation revenues.Regulated internet gambling is coming with built-in

protections: Underage gambling controls. Problem gambling controls such as pre-commitment. With strict controls to eliminate the mediocre internet operators

Only 1 in 3 internet operators conform to standards – NAGS December 2008

Potential for US Government Problem Gambling fundingRESPONSIBLE GAMING NETWORKS

Pre-Commitment’s Real ValueIsn’t that it only places the focus and

protection on the gamblerBut also stops exploitation of the player by any

party in the industry value chainTherefore creates a “Dynamic” public policy

solution to future technological evolution.


protection on the gamblerBut it also stops exploitation of the player by

any party in the industry value chainTherefore creates a “Dynamic” public policy



protection on the gamblerBut it also stops exploitation of the player by

any party in the industry value chain; andTherefore creates a “Dynamic” public policy


Value Chain Exploitation Risks:


OPERATOR

SLOT

PLAYER

Player Exploitation Risks:


SLOT

PLAYER


EXAMPLECBC TV NEWS Report

Konami


SLOT

PLAYER

Pre-Commitment Protection


VENUE

PLAYER

OPERATOR



VENUE

PLAYER

OPERATOR

Player Exploitation Risks:EXAMPLE

CBC TV NEWS ReportAtlantic Lottery Corporation Agents


VENUE

PLAYER

OPERATOR



BANK

PLAYER



BANK

PLAYER



Value Chain Exploitation Risks:


BANK VENUE

EGM

PLAYER

OPERATOR

Pre-Commitment Protection:


BANK VENUE

EGM

PLAYER

OPERATOR

Pre-CommitmentRapid Diffusion into Public Policy over last 12

months.


months.New global installations will drive increased

adoption.



adoption.New technologies will aid adoption.



adoption.New technologies will aid adoption.New technologies will converge access, exclusion

and pre-commitment systems.




and pre-commitment systems.These new technologies will be applied on-line &

off-line.





off-line.Governments will re-structure industry value

chains to protect their gambling revenues.





off-line.Governments will re-structure industry value

chains to protect their gambling revenues as it is introduced.

USA has the potential to take global leadership in on-line gambling protection mechanisms.

Questions?Contact

Phillip Ryan Chief Executive Officer Responsible Gaming Networks Melbourne, Victoria. Australia [email protected] Mobile + 61 417 313 726


Documents

Phillip Ryan Chief Executive Officer Responsible Gaming Networks Melbourne, Australia NCPG CONFERENCE, INDIANAPOLIS, INDIANA. JUNE 2009