Overview

1. The Path to Regulatory Best Practice in Europe with GSA StandardsHow GSA standards are affecting governmental monitoring requirements in Europe John Purcell

2. Overview • Introduction • The European Gambling Industry • European Legislative Background • The Advance to Standards • The Problems & Solutions • GSA by Stealth; Adoption by default • GSA – Template for Sustainable Gambling Industry • Case Studies & Market Specific Information

4. Introduction • The European Gambling Industry • Revenues in the EU27, €84bn in 2011 • €9.3bn online with annual growth of 14.7% • Online estimated to grow to 14.2% by 2015, €13bn • Very low online substitution of offline revenues • Proven in CAGR of offline gambling continuing to increase • Market Segmentation • Lotteries 43.7% (24% US) • Casino Gaming 15.9% (58% US) • Machine Gambling outside casinos 18.3% (5% US) • Betting 17.3% (5% US) • Bingo 4.8% (5% US)

5. Introduction • European Legislative Background • EU Policy for Gambling • Compliance of national regulatory frameworks with EU law • Enhancing administrative cooperation • Protecting consumers and citizens • Preventing fraud and money laundering • Safeguarding the integrity of sports and preventing match-fixing

6. Diversity? The EU is a broad and diverse patchwork of differing laws, rules & regulations. Majority now using the Italian model as they were early adoptors.

7. The Advance to Standards • Which standards to choose? • EN, ISO, ISACA, COBIT, ITIL, TickIT & of course GSA • ‘Traditional’ technology standards did not suffice for gambling industry • Commercial testing labs could not dictate jurisdictional policy • Commercial vendors adoption of GSA principles facilitated open standards satisfactory to governments in many jurisdictions • Early Adoptors include; • UK, Italy, Greece, Germany, Austria

8. The Problems & Solutions • Regulatory Problems • Why choose one method over another? • Do I choose largest ‘live’ methodologies as best practice? • How do I safeguard my jurisdiction? • How do I consider other non gambling laws in my jurisdiction? • Finance/Tax, Public Expenditure, Local Government • How do satisfy the three pillars of regulation? • Keep gambling free from crime • Keep gambling fair and open • Protect the vulnerable

9. The Problems & Solutions • Solutions • Find a method being adopted internationally as best practice • Map best practice standards to existing regulation • Reciprocal symbiosis – regulation also influenced by standards as a result • Ensure communication of standardisation to internal market • Ensure strict data management policies for accurate data to affect public policy • Draft • Rules of operation, manufacture and usage • Publication of standards to be adhered to • Procedure(s) for ensuring compliance using standard(s)

10. GSA by Stealth; Adoption by default • GSA? What is GSA in Europe? • In Europe, GSA is the EU body for SatNav management? • S2S, G2S, GDS • The adoption and implementation by vendors and operators of GSA standards has driven jurisdictional analysis to compare technology usage to GSA standards as a ‘yardstick’ • Adopted as ‘accepted practice’ in Italy, UK, Germany, Norway, Sweden, Holland, Spain • Adopted as legal standard in Austria and Albania

11. GSA – Template for Sustainable Gambling Industry • What is a sustainable gambling industry? • Sustainable business - Only with corporate responsibility can market economies survive. • Partnered governance • Governance of these markets needs to be tackled collectively and co-operatively. Companies innovate to create sustainable practice and reduce public health costs. • Performance Based Regulation • Incentivisedperformance based regulation rather than a prescriptive system which cannot possibly keep pace with the speed of technology and product development. • Licensing • Operating licences in new jurisdictions where gambling harms are a big consideration for policy makers and regulators.

12. GSA – Template for Sustainable Gambling Industry • If the gambling industry can be measured it can be controlled • How does one measure it? • Standardise the modus operandi (GSA) • Adopt and implement best practice (GSA) • Permit public policy to evolve in a sustainable gambling industry with metrics for decision making provided by standards based systems management (GSA)

13. Case Study - Austria Tender granted by BRZ GmbH for central monitoring system nationwide to ComTrade Management of 15,000 gaming machines/VLT’s and 33 licensees (Standardisation of data collection with GSA compliance) G2S defined as requirement standard for machines to central control system

14. Case Study - Albania Tender competition live until 20th June Management of 10,000 gaming machines, betting terminals, lottery system and more than 25 licensees (Standardisation of data collection, protocols and integration with GSA compliance) 1 casino, 1100 plus gaming halls, new lottery system

15. GSA Adoption in Europe • Italy (Regulator – AAMS) – 12 VLT operators, almost 60,000 machines adopting GSA standards (among others) with most of EU adopting Italian methodologies (one of few jurisdictions to report monthly) • Germany – Over 42,000 machines in Gausselman and related companies, Spielo (formerly Atronic), Apex, Amatic, AGI and more. • Spain – Primary GSA recognised standards being adopted as EU wide supply chain becomes more in tune such as Codere progressing standardisation, R. Franco, Metronia – Est 40,000+ machines but could be as high as 60,000 • UK – 20,000+ FOBT’s, 30,000+ Slots plus numerous digital bingo, slots and casino systems using GSA protocols in operators such as Gala, Rank, Praesape • Greece – Hellenic Lottery leader, Intralotutilises GSA protocols (as well as ISACA’s COBIT 5) in over 100,000 devices globally

16. GSA Adoption in Europe • Albania – already mentioned, 10,000+ devices • Kosovo – exploring national monitoring, GSA underpinned • Macedonia – as above, live now • Romania – as above, live now • Ireland – initial explorations of standards for new legislation in draft • France – operators already utilising GSA but unknown numbers, estimate as many as 50,000 devices GSA compliant • Rest of EU27 – shallow pool of suppliers <50, 75% use GSA standards already in a market of c.500,000+ devices.

17. GSA Adoption in Europe • By inference, GSA is recognised and used or planned to be used in; • More than 500,000 machines • All EU27 EUROSTAT countries, plus accession and candidate countries (7-10 others) • Drafting procedures for managing methodologies in high technology gambling industry in at least 8 major EU markets • Drafting procedures for administration of national networks in at least 7 countries • Tenders live or in draft for national monitoring systems in 4 countries

18. GSA in Europe? • Yes and will continue to increase its pivotal role in gambling technology implementation • Wish List from EU (not just for GSA) • Regulatory standards for technology usage offline and online • Information resource(s) to assist regulators (aside from P&A) • ‘Templates’ for best practice in technology market analyses to compare to GSA • ‘Templates’ for national monitoring system(s) to ensure open standards and best of breed solutions • …not much to ask for really!

19. QUESTIONS? John Purcell Managing Director Purcell & Associates 16/17, South Terrace, Cork, Ireland. T: +353 (0) 21 431 6776 E: jpurcell@purcellassociates.net one of the leading sources of consultancy expertise in the gambling industry.