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Regulatory Reform in Today’s Industry

Regulatory Reform in Today’s Industry. Presentation by Frank J. Fahrenkopf, Jr. President and CEO American Gaming Association. GLI University’s 11th North American Roundtable March 7, 2012. American Gaming Association.

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Regulatory Reform in Today’s Industry

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  1. Regulatory Reform in Today’s Industry Presentation byFrank J. Fahrenkopf, Jr.President and CEOAmerican Gaming Association GLI University’s 11th North American Roundtable March 7, 2012

  2. American Gaming Association • National trade association for the commercial casino segment of the U.S. gaming industry • Consists mostly of members that are publicly held casino and gaming manufacturing companies • Created in 1995

  3. Agenda • Industry commitment to regulation • The case for regulatory reform • 2011: AGA taskforce & white paper • 2012: sustained education & outreach efforts; making regulatory reform a reality

  4. AGA’s Commitment to Regulation • Recognize strong regulatory framework is essential to industry • Proud of existing framework • Deeply appreciative of regulators’ efforts • Understand collaborative industry-regulator relationships critical to continued success

  5. The Case for Regulatory Reform • Technology has moved faster than regulatory reform • Games are more complex • Payment systems are technologically advanced • Business operations and communications more efficient • Business organization/structures have evolved • Industry began as private companies solely regulated by gaming boards • Now most are publicly owned, causing parallel regulation

  6. AGA’s Regulatory Reform Taskforce • Created in 2011 to identify necessary regulatory reforms and to determine practical opportunities for change • Consisted of compliance officers, lawyers and other industry experts – including former regulators – from the AGA membership • Produced “Improving Gaming Regulations: 10 Recommendations for Streamlining Processes While Maintaining Integrity”

  7. Common Sense Regulatory Reforms • License terms should be indeterminate or extend for at least five years • Use of uniform license applications • Allow waiver for institutional investors holding less than a 25 percent ownership of a licensee • Extend the use of “shelf approvals” for debt transactions and public offerings • Require no more than registration of outside directors

  8. Common Sense Regulatory Reforms • Eliminate unnecessary regulatory filings • Update licensing procedures and practices • Eliminate prescribed Minimum Internal Control Standards (MICS) • Eliminate prior-notice or pre-approval of the shipment of electronic gaming machines • Reduce the number of pre-approvals for electronic gaming machines

  9. Keys to Modernizing Regulation • Reform regulation of gaming machines • Pre-approval procedures for shipping complicate shipments and create tens of thousands of unnecessary notifications • Different states require different notices within different time periods, thus complicating the coordination of machine shipments • Recommend a post-delivery notice when a machine has been installed

  10. Keys to Modernizing Regulation • Modify or eliminate unnecessary red tape and reporting requirements • Foreign reports, loan reports and quarterly contract reports serve duplicative or arcane purposes and are no longer necessary • Using technology to retain records for background checks and ending the practice of licensing non-gaming workers will free up resources for operators and regulators • Minimum Internal Control Standards (MICS) only micromanage and slow operators down

  11. Keys to Modernizing Regulation • Update licensing procedures and practices • Technology can eliminate duplicative licensing burdens • Electronic fingerprints should be used because they are transferable • Video conferencing removes the burden of travel for executives and managers • These interviews can also be saved/archived for future licensing requirements

  12. Keys to Modernizing Regulations • Simplify financing procedures • Raise the ceiling for regulatory exemption • Promote the use of “shelf approvals” that remain in effect for up to 5 years • “Shelf approvals” would provide flexibility to act quickly and take advantage of favorable marketing conditions • Still protect a licensee’s solvency without compromising regulatory oversight

  13. Making Regulatory Reform a Reality • Introduced white paper at G2E • Distributed recommendations to all regulators • New Jersey and Nevada have already taken up regulatory reform

  14. Moving Forward • Working with state associations and member companies to establish priorities • The AGA recently launched a new section of our website dedicated to regulatory reform • Materials on the current regulatory framework • Charts comparing regulatory requirements across jurisdictions • A glossary of terms relating to regulation • Proposals for making regulations more efficient • Considering creation of national regulators forum

  15. AGA Regulatory Webpage www.americangaming.org/regreform

  16. Online Poker

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