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CoGHS CONFERENCE. “Working from the Inside, Out Phillip Ryan Managing Director Responsible Gaming Networks Melbourne, Australia. RESPONSIBLE GAMING NETWORKS. Focus. Working on the Inside Learnings Issues lifecycle & implications Government regulatory phases The new solution

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Coghs conference

CoGHS CONFERENCE

“Working from the Inside, Out

Phillip Ryan

Managing Director

Responsible Gaming Networks

Melbourne, Australia

RESPONSIBLE GAMING NETWORKS


Focus

Focus

  • Working on the Inside

  • Learnings

  • Issues lifecycle & implications

  • Government regulatory phases

  • The new solution

  • Value chain exploitation

  • Player Protection Key

  • Victorian case study

  • Internet & iTV gambling

RESPONSIBLE GAMING NETWORKS


Working on the inside

Working on the Inside

  • Executive General Manager, Corporate Affairs, Tattersall’s, 2001& 2002

  • Operates half of the 27,500 Hotel and Clubs Poker machines across Victoria

  • Operates other national and international gambling licences

  • One of the ‘three demons’ of the Australian gaming industry – Tattersall’s, TABCORP, PBL.

RESPONSIBLE GAMING NETWORKS


Working on the inside1

Working on the Inside

  • Responsibilities

    • Member of the Executive Management Team

    • Government relations

    • Media management

    • Pressure group management

    • Community relations

    • Issues management

    • Employee communications

    • Corporate image

    • Monthly Board presentations

RESPONSIBLE GAMING NETWORKS


Learnings

Learnings

  • Hold your ground

  • Create decoys

  • Slow down the opposition

  • Exploit the market

  • Nothing happens by accident

RESPONSIBLE GAMING NETWORKS


Coghs conference

Learnings

  • Hold your ground

  • Create decoys

  • Slow down the opposition

  • Exploit the market

  • Nothing happens by accident

  • 20-year licences generate arrogance

  • Let the Government take the heat

RESPONSIBLE GAMING NETWORKS


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Learnings

  • Hold your ground

  • Create decoys

  • Slow down the opposition

  • Exploit the market

  • Nothing happens by accident

  • 20-year licenses generate arrogance - safe

  • Let the Government take the heat

    • Business Model not sustainable

RESPONSIBLE GAMING NETWORKS


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Issue Lifecycle & Responses

Issue Lifecycle & Responses

INTENSITY

TIME

RESPONSIBLE GAMING NETWORKS


Issue lifecycle responses

Issue Lifecycle & Responses

Issue Lifecycle & Responses

INTENSITY

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


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Issue Lifecycle & Responses

Issue Lifecycle & Responses

INTENSITY

MEDIA COVERAGE

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


Coghs conference

Issue Lifecycle & Responses

Issue Lifecycle & Responses

INTENSITY

PUBLIC DEBATES

MEDIA COVERAGE

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


Coghs conference

Issue Lifecycle & Responses

Issue Lifecycle & Responses

INTENSITY

GOVERNMENT UNDER PRESSURE

PUBLIC DEBATES

MEDIA COVERAGE

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


Coghs conference

Issue Lifecycle & Responses

Issue Lifecycle & Responses

INTENSITY

GOVERNMENT PRIORITY

GOVERNMENT UNDER PRESSURE

PUBLIC DEBATES

MEDIA COVERAGE

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


Coghs conference

Issue Lifecycle & Responses

Issue Lifecycle & Responses

INTENSITY

GOVERNMENT PRIORITY

GOVERNMENT UNDER PRESSURE

PUBLIC DEBATES

MEDIA COVERAGE

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


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Issue Lifecycle & Responses

Issue Lifecycle & Responses

TIPPING POINT

INTENSITY

GOVERNMENT PRIORITY

GOVERNMENT UNDER PRESSURE

PUBLIC DEBATES

MEDIA COVERAGE

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


Coghs conference

Issue Lifecycle & Responses

Issue Lifecycle & Responses

TIPPING POINT

GOVERNMENT YIELDS

INTENSITY

GOVERNMENT PRIORITY

GOVERNMENT UNDER PRESSURE

PUBLIC DEBATES

MEDIA COVERAGE

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


Coghs conference

Issue Lifecycle & Responses

Issue Lifecycle & Responses

TIPPING POINT

GOVERNMENT YIELDS

INTENSITY

GOVERNMENT PRIORITY

GOVERNMENT UNDER PRESSURE

PUBLIC DEBATES

MEDIA COVERAGE

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


Coghs conference

Issue Lifecycle & Responses

Issue Lifecycle & Responses

TIPPING POINT

GOVERNMENT YIELDS

INTENSITY

GOVERNMENT PRIORITY

GOVERNMENT UNDER PRESSURE

PUBLIC DEBATES

MEDIA COVERAGE

WA

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


Coghs conference

Issue Lifecycle & Responses

Issue Lifecycle & Responses

TIPPING POINT

GOVERNMENT YIELDS

INTENSITY

GOVERNMENT PRIORITY

GOVERNMENT UNDER PRESSURE

PUBLIC DEBATES

TAS

MEDIA COVERAGE

WA

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


Coghs conference

Issue Lifecycle & Responses

Issue Lifecycle & Responses

TIPPING POINT

GOVERNMENT YIELDS

INTENSITY

GOVERNMENT PRIORITY

GOVERNMENT UNDER PRESSURE

NSW

QLD

PUBLIC DEBATES

TAS

MEDIA COVERAGE

WA

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


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Issue Lifecycle & Responses

Issue Lifecycle & Responses

TIPPING POINT

GOVERNMENT YIELDS

VIC, SA

INTENSITY

GOVERNMENT PRIORITY

GOVERNMENT UNDER PRESSURE

NSW

QLD

PUBLIC DEBATES

TAS

MEDIA COVERAGE

WA

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


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Issue Lifecycle & Responses

Issue Lifecycle & Responses

TIPPING POINT

GOVERNMENT YIELDS

VIC, SA

INTENSITY

GOVERNMENT PRIORITY

GOVERNMENT UNDER PRESSURE

NSW

QLD

PUBLIC DEBATES

NZ

TAS

USA

MEDIA COVERAGE

WA

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


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Issue Lifecycle & Responses

Issue Lifecycle & Responses

TIPPING POINT

NOVA SCOTIA

GOVERNMENT YIELDS

VIC, SA

INTENSITY

GOVERNMENT PRIORITY

GOVERNMENT UNDER PRESSURE

NSW

QLD

PUBLIC DEBATES

NZ

TAS

USA

MEDIA COVERAGE

WA

VOCAL MINORITY

TIME

RESPONSIBLE GAMING NETWORKS


Implications for lobbying

Implications for Lobbying

  • Strategic Focus to Achieve Change

    • Sustained pressure required

      • Success is within reach in three major jurisdictions NOW!

      • Concentrate lobbying resources into these susceptible regions

      • Other jurisdictions will roll-over and follow very quickly

    • Leverage national and international opportunities

      • Share knowledge from the three jurisdictions with your local networks

      • Spread the news on the progress of global change with key local stakeholders (media, MPs etc)

    • Local education programs

      • Build lobbying programs around your own local lifecycle stage

RESPONSIBLE GAMING NETWORKS


Government regulatory phases

Government Regulatory Phases

  • First Phase - Venues

    • Operating hours

    • Lights, clocks

    • Advertising

    • ATM access

      • No major impact

  • Second Phase - Machines

    • Bet limits, spin rates, number of machines, bank note acceptor limits etc

      • No major impact

RESPONSIBLE GAMING NETWORKS


The new agenda

The New Agenda

  • Third Wave of Reform – Pre-Commitment

    • Focus on player Pre-commitment limits

      • Player loss limits – daily, weekly, monthly, annual etc

      • Duration of play limits – hours per day, week etc.

    • Machines must stop when limits reached

    • Players initially set their own limits voluntarily

    • Players set limits away from the machines

    • Players carry an ID device connected to their limits in order to play (e.g. plastic card, smart card or some other smart technology)

    • Machines only operate using an ID device.

    • Machines still use coins and notes as usual


Australian context

Australian Context

  • Australian Ministerial Council on Gambling

    • Research Program on Pre-commitment

    • Analysis of Gambler Pre-Commitment Behaviour, June 2006

    • Player Support for Pre-Commitment

      • 77% of Victorians support compulsory pre-commitment limits

      • 88% support voluntary pre-commitment limits

    • Stage 2 Tender just released last few weeks

      • Gaming machine designs which support/undermine pre-commitment

      • Venue activities/features which support/undermine pre-commitment

RESPONSIBLE GAMING NETWORKS


Australian context1

Australian Context

  • South Australia

    • Concerned about lack of national progress

    • Ministerial Working Party established November 2006

    • Reporting this year on how to implement pre-commitment

  • Victoria

    • Current Gaming Industry Structure Review

    • Kirby Report October 2006

      • “Support for exploiting the monitoring system to develop harm minimization measures”

      • “a universal system of pre-commitment will possibly be more effective than a range of other proposals for enhancing responsible gaming”


Global context

Global Context

  • Global Leadership - Nova Scotia, Canada

    • Responsible Gaming Device (RGD) trial 2006

    • Plastic Card with ‘voluntary’ capability to set limits

    • Trialled across two towns - Windsor & Mount Uniacke

    • Players required to use a card to play machines

    • News Report of trial

    • Recent tender for entire province issued April 2007

    • Short listed companies in May 2007

    • Final decision later this year

RESPONSIBLE GAMING NETWORKS


Nova scotia trial findings

Nova Scotia Trial Findings

  • Significant database of player activities

    • Analysis now possible by independent researchers

  • Unfortunately some players ‘beat’ the system

    • Plastic cards shared amongst players

    • One third of players shared their card with someone else

    • Sharing of cards extended for up to a week

    • Card sharing increased with increased PG score

  • International Gaming Institute, University of Nevada, Las Vegas Report, February 2007

    • Biometric ID solution required (fingerprint, facial etc)

RESPONSIBLE GAMING NETWORKS


Biometric gaming standards

Biometric Gaming Standards

  • Nevada Gaming Commission

    • Biometric technical standards established

    • Mobile Gaming System Policies

    • May 2006

    • Two Factor authentication for player ID

      • Cryptographic protocols

      • Encryption algorithms


Benefits of pre commitment

Benefits of Pre-Commitment

  • Individual solutions for individual players

    • Set dollar loss limits

    • Set playing time limits

    • Ideal self exclusion

    • Integrate with problem gambling counsellors

  • A dynamic public policy solution

    • Players protected from value chain exploitation


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Player Exploitation Risks

EGM

PLAYER


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Player Exploitation Risks

EGM

PLAYER

EXAMPLE

CBC TV NEWS Report

March 2007

Konami – 2 minutes - Update


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Pre-Commitment Protection

EGM

PLAYER


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Player Exploitation Risks

PLAYER

VENUE

OPERATOR


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Player Exploitation Risks

EXAMPLE

CBC TV NEWS Report

April 2007

Atlantic Lottery Corporation Agents

2 Mins - Update

PLAYER

VENUE

OPERATOR


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Pre-Commitment Protection

PLAYER

VENUE

OPERATOR


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Player Exploitation Risks

PLAYER

BANK


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Pre-Commitment Protection

PLAYER

BANK


Value chain exploitation risks

Value Chain Exploitation Risks

RESPONSIBLE GAMING NETWORKS


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Dynamic Public Policy Solution

RESPONSIBLE GAMING NETWORKS


Learnings1

Learnings

  • The focus is moving to a third wave of reform

    • Pre-Commitment

    • Individual solutions for individual players

  • The vast majority of players support pre-commitment

  • Pre-commitment offers a dynamic public policy solution to avoid value chain exploitation from industry participants.


Responsible gaming networks

Responsible Gaming Networks

  • Safety Net Solution

  • Pre-Commitment

  • Player Protection Key

  • Next Generation technology solution

  • Solution for all types of gambling

  • Solution for all channels of distribution

  • Integrated with problem gambling counselling


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Player Protection Key

RESPONSIBLE GAMING NETWORKS


Player protection key

Player Protection Key

  • Electronic Key – unique for each player

  • Plug-and-Play Device – no batteries

  • Connects directly into USB outlets

  • Eliminates need for a card reader

  • Massive storage capacity (8 Gigabytes)

  • One Key for all channels of distribution

    • Physical gaming machines, PCs, PDAs, interactive TVs.

  • One Key for all multiple forms of gambling

    • Slots/Poker machines, Wagering, Lotteries

  • RESPONSIBLE GAMING NETWORKS


    Player protection key1

    Player Protection Key

    • Biometric identification of owner

      • Eliminates sharing of ID amongst players

        • On-board fingerprint scanner

        • On-board storage of biometrics

    • On-board storage of pre-commitment limits

    • On-board storage of all gambling activity

    • On-board microprocessor & data encryption

    • On-board multiple digital certificates

    • No charge to Player or the Government

    RESPONSIBLE GAMING NETWORKS


    Card systems

    Card Systems

    • Disadvantages of Cards

      • Cards can be easily copied/skimmed

      • Cards & PINs can be swapped between gamblers

      • Cards require an additional card reader

      • Cards have very limited storage capacity

      • Cards operate on proprietary standards

      • Cards limited to a single gambling provider’s network

    • Disadvantages of Smartcards

      • Smartcards use dangerous digital cash

      • Like using a credit card

      • KPMG Study for Australian Government 2002

    RESPONSIBLE GAMING NETWORKS


    Learnings2

    Learnings

    • “Smart technologies” provide a player tracking solution, not just “smartcards”

    • There is a new and improved product now available:

      • Player Protection Key


    Case study

    Case Study

    • Victorian Gaming Licence

    • 2007 Review of 20 year licences

    • Incumbents want status quo

    • Government under pressure

      • Close to the tipping point

    • Call for Public Submissions

    • Nexus between problem gamblers and taxation revenue


    Public submissions

    Public Submissions

    • Minimal Industry submissions

      • No machine manufacturers

      • Only one technology supplier

    • Our Submission to Industry Review

      • Focused on a reduction in player loss

      • Player pre-commitment

      • Structural efficiency

      • Protection of government revenue

      • Creation of a single operator model

    RESPONSIBLE GAMING NETWORKS


    Problem gambling revenue

    Problem Gambling & Revenue


    Creative solutions

    Creative Solutions


    Justifications

    Justifications

    • Department of Treasury and Finance Report (2000)

      • $300 - $500 million ‘super profits’ of the current two operators

    • Briefings to Financial Analysts

      • “The Real Truth”

        • Continuous Disclosure to the Market

        • Examples

          • Labor efficiency increases

          • Revenue efficiency increases


    New channels of distribution

    New Channels of Distribution

    • Internet Gambling

    • Interactive TV Gambling


    Internet gambling

    Internet Gambling

    • Nielsen//Net Ratings

      • Major global study – November 2006

      • 6.9% of adults gamble in a casino

      • 8.1% of adults gamble online

      • Online gambling most popular among households with lower incomes

    • Nielsen//Net Ratings

      • Earlier December 2005 results (18 months ago)

      • Household survey


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    It’s big…

    Source: Nielsen//NetRatings NetView Home & Work data (ES, CH, JAP & BR home data only), September 2004-2005


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    However, it’s most popular in France…

    • E.g. 1 in 4 French surfers visit gambling sites compared to 1 in 13 online Brazilians

    Source: Nielsen//NetRatings NetView Home & Work data (ES, CH, JAP & BR home data only), September 2005


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    …and its growing fast

    • Spain’s online gambling audience has tripled over the last year

    Source:Nielsen//NetRatings NetView Home & Work data (ES, CH, JAP & BR home data only), September 2004-2005


    And driven by high speed access

    …and driven by high speed access


    And its not limited to the home

    …and its not limited to the home

    • Age April 2007 “Gaming, Porn Rife at Work”

    • More than 1 in 7 Australian workers accessed online gambling sites at work

      • Websense study of 52,000 workers


    And federal government is ignorant

    …and Federal Government is ignorant

    • Current Government policy

    • Minister’s recent remarks on the issue

    • The political race for broadband

    • Massive explosion in usage by 2009

    • Economic and social consequences

    • Problem Gambling Counsellors

      • Need to be on the look out right now


    Current regulatory response

    Current Regulatory Response

    • Australia:

      • Bans Australians gambling on internet casinos operated by Australian companies

      • Allows Australians to gamble on all overseas internet casinos

      • No Australian regulatory oversight on overseas internet casinos

      • No player protection for Australian players using overseas sites

      • Allows all wagering, lottery & sports gambling operated by anyone


    A better model

    A Better Model?

    • A local regulated industry model is far safer for Australian players

      • e.g. United Kingdom

    • Operator licensing, regulation and supervision

    • ISP blocking of all non licensed and unregulated operators

      • e.g. Italy, China, South Korea, Israel, Singapore

    • Player Pre-Commitment limits mandatory


    Interactive tv gambling

    Interactive TV Gambling

    • Foxtel introducing early 2008

    • Supplier – Two Way TV

    • 5 year agreement with Foxtel and TABCORP

    • Multi million dollar deal

    • 2,000,000 households

    • Already available in USA and Europe


    Questions

    Questions

    • Contact

      • Phillip Ryan

        • Managing Director

        • Responsible Gaming Networks

        • Melbourne, Victoria

        • [email protected]

        • Mobile 0417 313 726


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