2011.02 - IntergamingI

2011 Issue 1

LAND-BASED TO ONLINE TO MOBILE The gaming industry becomes more remote

l What’s hot at ICE l European legislation round-up l Interactive, IGT interview

CONTENTS

ISSUE 1/2011 Comment 2) Jenni Shuttleworth looks retrospectively 30) Phil Clegg on ICE Totally Gaming

News Round-Up 4) 2011 critical for operators 5) GameAccount ready for Italian opening 6) Online gaming a hot topic at G2E

P22 - European legislation round-up

Column 7) A debut year for OpenBet 8) The RGA’s 2011 wish list 10) Playtech looks at the heart of regulation

Features 13) Responsible play with Gambling Therapy 16) Keeping things moving with mobile gaming

P16 - Mobile gaming

P28 - ICE preview

22) European legislation round-up

Interviews 11) Gideon Bierer on IGT’s new division 20) Sportech CEO Ian Penrose talks acquisitions

Profile 26) In the zone with Buzz Sports

Shows 28) Preview: What’s hot at ICE 2011 31) Calendar: iGaming Super Show moves to Dublin

P13 - Responsible play

Charts 32) Most visible gaming websites Q3 2010

iNTERGAMINGi Issue 1 2011 | 01

COMMENT

ISSUE 1/2011

Editor Jenni Shuttleworth [email protected] Editor-in-Chief Phil Clegg [email protected]

Jenni Shuttleworth, Editor

Occupational hazard It is probably as a result of working in this industry that looking retrospectively isn’t something I am used to doing any more. Online gaming is such a fast-paced and forward-thinking sector that it feels as if I am going against the grain to talk about anything other than what we can anticipate. As I said, it’s an occupational hazard, but for the sake of it being the New Year, I will hazard a shot! For the online gaming industry, the past year has been characterised mainly by legal battles not only across US states, but also across Europe too. France may have opened its doors to online gaming in May 2010 for example, but the market is now more strictly controlled than anyone predicted or even wanted. On the positive side, 2010 saw a wave of regulation which has begun to open markets that were previously closed to egaming. Establishing online gaming in these markets will be a complicated process but at least the ball is rolling. Turn to page 22 for a comprehensive round-up of online gaming legislation from across European member states. As for developments in the US last year, the situation to me has at times resembled a game of Snakes and Ladders – storming ahead only to drop back to square one again. A slight exaggeration possibly as progress has been made over the course of the past year, but it often feels that things in the US are happening at a painstakingly slow pace. Then again, maybe the industry’s benchmark pace is faster than the average. Last year also saw consistent growth for mobile gaming and 2011 is expected to see the sector grow further. A sign of how the gaming industry has become and is becoming increasingly remote. Turn to page 16 for iNTERGAMINGi’s mobile gaming feature, which includes comment from IGT, Spin3 and Zukido. Moving forward and looking ahead (finally!), there is a lot to be expected from 2011 and there is a lot that this year can offer the industry. This issue features columns from OpenBet, the Remote Gambling Association and Playtech (pgs 7, 8, 10), in which they look back and then ahead to what this year will hopefully bring. The start of the year also signals one of, if not the, biggest igaming event on the global show calendar. ICE Totally Gaming 2011 will see iNTERGAMINGi and InterGaming distribute a printed show daily newspaper, which will feature news, photos and company announcements from the show. This is a first for ICE and a first for the InterGame team, so if happen to you catch me running around the exhibition floor, then be sure to let me know your news. See you there!

Publisher Christine A. Butterworth [email protected] Publisher’s Assistant Michelle Lyon [email protected] Staff Reporters Helen Fletcher [email protected] Simon Liddle [email protected] Production Manager Simon Fowles [email protected] Designer Melissa Douglass [email protected] Sales Executive Natalie Farrell [email protected] Circulation & Subscriptions Michelle Lyon [email protected] Annual Subscriptions - (4 issues) £50 (includes full website access and digital versions) Advertising/subscription information InterGame Ltd. Office Block 1, Southlink Business Park, Hamilton Street, Oldham, Lancashire OL4 1DE United Kingdom Tel: +44 161 633 0100 Fax: +44 161 627 0009 www.InterGameOnline.com InterGame Ltd. accepts no responsibility for loss or damage to any materials submitted for publication. Copyright: No part of this magazine may be reproduced without the written permission of the publishers. iNTERGAMINGi is published quarterly by InterGame Ltd.

Visit us online at: intergameonline.com Printed by Buxton Press, Derbyshire, UK.

02 | Issue 1 2011 iNTERGAMINGi

NEWS

Round-Up

Mobile gaming set to grow in 2011 MOBILE this year is set to become a much more important part of an egaming company's offering. Last year was good for mobile gaming, with consistent, strong growth in the sector and, according to head of Spin 3 and Spiral Solutions Matti Zinder, 2011 is going to be an even better year. Talking to iNTERGAMINGi, Zinder highlighted five key trends that all reflect on the mobile gaming side - mobile social, app store, mobile banking, smartphones and application segmentation. "In principle, all of these trends apply to and affect gaming," said Zinder. "The app store side is definitely an influencing factor and I believe as we go into the future and as more markets regulate, we're going to see more gambling applications on app stores across countries with egaming regulation; there's no doubt in my mind about that." Talking about the mobile social trend, Zinder commented: "People are interacting with each

other with a lot of different features and placing play for fun applications on Facebook and other social platforms. A possibility to convert to play for real is a strong trend as well. It's happening now and it's going to become an even stronger thing." He added: "These are all trends that are taking place and were very influential throughout 2010." Throughout 2010, these five major growth and development factors resulted in a huge pick up in overall mobile usage, advanced application usage, interaction with people with their mobile

2011 critical for operators THIS year will be critical year for operators to be innovative or they risk losing out. Either it's the chance for operators to build by being different, get swallowed up, or fade away, according to commercial director at Zukido, David Sargeant. “The more solid regulatory boundaries that are emerging in Europe will only reinforce this trend as the cost to market greatly increases,” Sargeant told iNTERGAMINGi. Looking back on last year, Sargeant cited 2010 as the year of the connective device, stating: “The Google v Apple battles for smartphones and internet TVs will be ones to watch this year and this should help drive the innovative ends of the gaming industry.” He also went on to talk about sports betting carrying on the trend of in-play as a core rather than a fringe product. “Even in Vegas there isn't a successful sports book that isn't wall to wall in-play any more.” He continued: “Now that inplay is a must-have everyone is looking for the next thing in sports betting - and everyone is still talking social, community and multi-player. The social networking figures are astronomical but no-one has managed capture this market yet. With the amounts being invested in social gaming, 2011 will surely reveal some innovative new products.”

04 | Issue 1 2011 iNTERGAMINGi

devices, all of which have affected mobile gambling quite positively. "The opportunity for gambling has never been bigger; there has been very, very strong revenue growth," said Zinder. The UK is still currently the largest market for mobile gaming, but according to Zinder, when Italy and Denmark regulate with casino games, that will shift. Looking ahead, Zinder believes that we will see the development of mobile gaming mirroring the developments that are taking place in the regulated egaming markets. "You'll see growth in most of the new regulated markets. That's going to be a very strong trend, I'm sure of it. We're already starting to see initial signs of that and I think we'll see continued growth in mobile." He continued: "I think mobile in 2011 will actually become a much more important part of an egaming company's offering. And I think those companies that don't embrace mobile in a very strong way are going to be left out."

California casinos in favour of online poker CALIFORNIA'S casinos are in favour of legalising online poker, arguing that a new bill put forward by State Senator Lou Correa will create new opportunities for land-based operators. The California Gaming Association, which represents 75 per cent of licensed card rooms throughout the Golden State, has voiced its support for Senate Bill 40, which seeks to authorise online poker. "Senate Bill 40 will help revitalise the state's economy while protecting players," said Rob Ross, the CGA's executive director. "This bill is an opportunity for licensed card clubs to participate in a new and rapidly evolving technology, should they elect to do so." Unlike current federal legislative proposals, the bill aims to keep revenues generated by online poker in California and

would not allow revenues to be lost to foreign-based online gaming sites. According to Ross, SB 40 contains provisions that the association believes are key elements in establishing a safe and secure option for online poker in California. Strict regulation of operators, it said, will ensure that the two million Californians who play poker online each week will be protected from various forms of fraud and theft. Senator Correa, who represents Orange County, welcomed the CGA's support. "The growing support for this legislation shows that now is the time for California to engage by creating a legal and safe environment for our residents who play online poker while also generating new revenues and jobs for our state," he said. California is currently struggling under the weight of a record US$28bn deficit and an unemployment rate of 12 per cent.

NEWS

Round-Up

Jersey to open its doors to online gambling

GameAccount Network ready for Italian opening

THE Channel Islands - already with one internet gambling jurisdiction in Alderney - is about to get another. Jersey, the largest island, will open its doors as a destination and operational base for internet gaming companies from all over the world this year. Graham White, chairman of the Jersey Gambling Commission, who has spent two years assisting the island's lawmakers towards the conclusion of new gaming legislation, confirmed that it was likely the last steps would be taken early this year. “We are almost there,” he said. “All of the necessary infrastructure has been put into place, including essential elements such as telecommunications and disaster recovery. We believe that Jersey as a place to do business will be highly competitive. We have looked carefully at what other jurisdictions can offer and summarised their most competitive elements; we think that we have incorporated all of them into the package which we will be able to offer operators.” White was speaking to iNTERGAMINGi at EiG in Copenhagen in October. He added: “We fully intend that Jersey will be at the EiG show in Milan this year, though market conditions will decide whether we need our

SOFTWARE developer of skill and casino games GameAccount Network is opening its proprietary internet gaming system to third party content developers. This announcement came ahead of the Italian Government's decree to regulate cash play casino and slots, a market analysts estimate at up to €20bn annually. The company has supplied Italian operators, starting with SNAI and followed by Lottomatica, Sisal, Intralot Italia, Eurobet Italia and Cogetech, since 2008. In November, it launched a suite of free casino games specifically optimised for the Italian market with SNAI. These preparatory steps are towards the launch of real money casino games and the company has announced an open door policy to partners with best-of-breed gaming content. Integration with some European third party content platforms and the selection of localised casino games is now under way, with the first partnerships set to be announced early this year. "Our mission in 2011 is to bring our licensees in the emerging Italian market, and indeed for all markets, best-ofbreed casino games," commented Dermot Smurfit, managing director of GameAccount Network.

own stand.” The former chief inspector of the British Gaming Board felt that there was no problem with Jersey going into competition with one of its neighbouring islands. “We will work together and Jersey entering the market will only strengthen the resilience found across the whole of the Channel Islands.” Is there room in the market for another jurisdiction? “The cynics will argue that the pie has already been sliced up - in fact that the pie has all been eaten! What people tend to forget is that there are new operating companies setting up in different parts of the world all of the time and they will want to register themselves somewhere with the right kind of foundations to support their activities. There are also those who are dissatisfied with the degree and quality of service that they currently receive from their operating base. These are the clients for Jersey in the future.”

Victor Chandler launches Livelogic BETTORLOGIC has launched its unique in-play technology, Livelogic, with Victor Chandler. Integrated directly into Victor Chandler’s in-play football platform, Livelogic will offer VC's customers relevant ‘reasons to bet’ on any of around 30,000 live football matches

every year. Livelogic generates around 40 inplay prompts per match, identifying the most interesting betting opportunities in real-time. It has proven to be a big success since its launch, increasing in-play market performance by over 300 per cent during the World Cup.

First regulated poker network in Canada LOTO-Quebec's Canadian poker network is now live and taking real money wagers. Presented by Loto-Québec on its new igaming site, the Canadian poker network features poker software operating on a number of networks in Europe but will be open only to residents of the province of Quebec. GTECH G2 will host its Canadian Poker Network operations in Canada. The system will be housed in its Montreal data centre. Operations will be based in the National Operations Centre in Moncton, New Brunswick. The agreement with this WLA lottery operator is a fiveyear operating contract with two two-year extensions.

Sports betting under the spotlight THE sports betting industry needs to have a greater focus on more markets, more choice and improved technology. Speaking to iNTERGAMINGi, chief operating officer of UK and online at Sportech, Ian Hogg, said that the focus for betting companies in the future needs to be about product, simplicity and education. "There is so much competition out there that if you can offer customers the best products in a simple format with good levels of information and education you will retain them as well as attracting new ones. We all need to be faster, quicker, slicker and embrace the lessons learnt from other sectors."

Hogg cites saturation as a major issue facing the sports betting industry. "The market is more crowded than ever with more and more new companies entering an already crowded space. Consolidation is going to play a big part within the industry as businesses struggle to compete in the current climate and, of course, we have already seen some significant mergers and acquisitions." He continued: "The government is yet to really play its hand in the betting industry, but there is obviously a danger that under current UK taxation law, more firms will look to move offshore, while the sale of the Tote is also a development we at Sportech are watching very closely."

iNTERGAMINGi Issue 1 2011 | 05

NEWS

Round-Up

Scientific Games awarded contract in the Netherlands SCIENTIFIC Games Corporation announced at the end of December that the company has been awarded a contract to supply instant tickets and cooperative services to Dutch lottery operator De Lotto. The contract, which is anticipated to begin in April, has an initial term of four years and includes additional contract extension options. Under the terms of the contract, Scientific Games will be consulting on marketing and game design and providing field sales support, in addition to printing and distributing tickets. Revenues to Scientific Games will be based on a percentage of instant ticket retail sales. "We see growth potential for instant tickets in the Netherlands, as De Lotto's instant ticket sales in 2009 represented roughly 20 per cent of lottery sales, compared with almost 60 per cent of lottery sales in the US," said Scientific Games chairman and CEO Lorne Weil. "We believe we can expand instant ticket penetration through both the addition of our co-operative services and by working with De Lotto to implement best practices."

Betsson establishes software base in India IT was announced in late December that Swedish online gaming operator Betsson has established a software development company in India. The company will develop software both for Betsson's current markets in Europe as well as for new B2B ventures in Asia. According to Betsson, the new software development company in India will help the company to target markets outside of its core markets in Europe through Betsson's B2B division, Betsson Business Solutions. The new B2B strategic focus in new markets has already led to Betsson signing a contract with an as yet unnamed Asian customer, which began generating revenues for Betsson immediately. "Betsson sees, outside our core markets in the Nordic countries, several markets with good potential," said Betsson CEO Pontus Lindwall. "We want to establish ourselves through B2B collaboration with local partners. It is satisfying that our efforts in the B2B segment are paying off."

Online gaming a hot topic at G2E THE topic of online gambling proved to be one of the most talked about at G2E in November. As interest around the US continues to build surrounding efforts to legalise online poker and establish online gaming regulatory controls, gaming executives were eager to learn more about igaming at G2E. The all-new iGaming Congress was one of the most popular events at G2E 2010 and the igaming sessions not only appealed to existing offshore online gambling operators, but also to commercial and native American casinos and gaming equipment manufacturers. "The internet has been a game-changer for our industry and internet gambling has grown from a small cottage industry into a multinational, multi-billion dollar business during the past decade," said Frank J Fahrenkopf Jnr, president and CEO of the AGA. "As it's evolved, issues related to internet gambling have been thrust into the spotlight, raising myriad questions and spurring vigorous debate among international gaming industry leaders, regulators and legislators. Therefore, we felt it was important to showcase igaming at G2E 2010," he continued. The one-and-a-half day iGaming Congress addressed the potential impact of online gambling legalisation in the US

and advised the gaming market on how to take advantage of new opportunities and react to the changing industry. It also provided information regarding the players, resources, legislative framework and other topics that are important to those working in the online gambling sector or those looking to enter it. "While G2E always has addressed igaming as part of its comprehensive coverage of industry issues, G2E 2010 provided attendees with a unique opportunity to advance their understanding of the complex and intricate issues affecting this sector," said Courtney Muller, senior vice president at Reed Exhibitions, co-organiser of G2E with the AGA. "With 18 sessions on the topic and nearly 500 participants at the iGaming Congress, this growing industry segment proved to be of particular interest to conference attendees." In addition to the iGaming Congress, G2E 2010 offered an igaming conference track and the show floor incorporated a new igaming pavilion that included online gaming software products to support online games such as poker, sports betting and bingo. The pavilion - which featured igaming suppliers for the first time since G2E 2006 - also featured support systems including marketing tools, live gaming software, payment technologies, plus more.

New portal for French consumers SPIRAL Solutions announced in December that it has partnered with social games marketing agency Virtuadz to launch a new, free-to-play online games portal for the French market. The new portal, La Ruée vers L'or, brings state-of-the-art games to French consumers and aims to capitalise on the huge demand for free

06 | Issue 1 2011 iNTERGAMINGi

online games and the explosion of social and casual gaming on Facebook. The site will launch with four free-to-play flash games aimed at young adults. The games also connect to Facebook where best scores and progress will be shared via the newsfeed. Spiral Solutions aims to promote consumer

understanding and appreciation of online games and entertainment in France. The integration of social media elements within the games reflects the growth in popularity and significance of social networking trends and illustrates its expertise in social gaming. The launch of Larueeverslor.fr is designed to deepen its penetration into the French market.

COLUMN

A debut year A name change in 2010 means that OpenBet is now focusing on new directions and strategies. CEO David Loveday explains further IF business is about thriving under changed circumstances, then OpenBet is a good example. Most glaringly, after 14 years successfully trading under the name Orbis, we decided to change things around and name ourselves after our most successful platform. This isn’t about mere window dressing; the company’s OpenBet platform provides the backend to some leading sports betting and gaming companies, including Ladbrokes, William Hill, Paddy Power and SkyBet. As OpenBet Technologies, we are now focusing on new directions and strategies that we hope will be setting new standards in the years to come. In our company, DNA is the determination to keep pushing new boundaries in online gaming and betting technology and furthering our reputation as a market leader in sportsbook software.

David Loveday

CEO OpenBet

is the perfect example of what we believe we offer our clients that is exceptional. The new system allows our operators to pick games from whichever source or supplier they wish and simply plug in to their OpenBet-driven system. This is true integration. It is an access all areas solution that is new to OpenBet this year and allows operators to

“The new brand identity reinforces our reputation for market leadership and better reflects the nature of the business. One particularly important aspect is that first word in our name open. Our systems are not exclusive our operators can develop, innovate, add third-party games and let their own offerings evolve how they want” The new brand identity reinforces our reputation for market leadership and better reflects the nature of the business. One particularly important aspect is that first word in our name – open. Our systems are not exclusive - our operators can develop, innovate, add third-party games and let their own offerings evolve how they want. This approach is typified by an unsung development this year - the launch of our remote gaming interface or RGI product. The RGI

seamlessly integrate games from other providers, with all the games being treated in the same way as our own fixed odds games. We join the dots for our customers, giving them the necessary single wallet and seamless user experience that gives them the immersive experience they now demand. We are continually pushing the technological boundaries, and back in February 2010, for example, we upped the ante in the live betting arena with the launch of LiveServ

and LiveOdds. The increase in the popularity of in-running betting and the fast pace of market and price changes makes dynamic sites all the more important. LiveServ pushes data directly to client systems and is flexible enough to be used for any purpose that would benefit from live updates. Alerting customers to a change in a selection price or betting status had previously relied on a web page refresh. With OpenBet’s new LiveServ product, when a price or status change occurs the LiveOdds application will immediately update the customer view with no waiting or refreshing required. LiveOdds can monitor all markets – not just those in-running – and creates messages from any relevant change – status, price update, displayed, etc. LiveOdds can be easily incorporated into all areas of a site – from the homepage, to market pages, to the betslip. The key to live-betting is usability; making sure the interface is consumer-friendly, easy to understand and navigate, and doesn’t scare away new players. A major element of this – particularly when it comes to live betting – is

making sure the consumer can get through to their bet as quickly and seamlessly as possible. Trust is once again the bedrock. This is key to another major area of development over the past year – the move into brand new online gaming markets in France and Canada as B2G continues to be a key area of growth. In France, OpenBet provides the sportsbook backend to the Pari-Mutuel Urbain and Paddy Power combination, while in Canada OpenBet is the casino and games provider to two leading lottery providers, British Columbia Lottery Corporation and Loto Quebec, a network that is likely to see more Canadian lotteries joining in due course. We worked closely with our partners to make sure the system behind the new backend offering was reliable and scalable. France is an example of how other markets in Europe are likely to open up, as each country individually looks to adapt their betting markets but crucially protect both their gambling publics and the incumbent lottery and ex-monopoly operators. But this process isn’t happening just in Europe – it’s also taking place in North America. All this, and without yet mentioning our major slice of M&A action this year when we bought Alphameric Solutions in May, now renamed as OpenBet Retail. As a number one end-to-end technology provider to thousands of UK-based high street bookmakers together with our online expertise, the deal was a hand-in-glove fit. We look forward to unveiling our first of a series of product launches at ICE 2011. 2010 was a great ‘debut’ for OpenBet; this year will be even more exciting.

“The key to live betting is usability; making sure the interface is consumer-friendly, easy to understand and navigate, and doesn’t scare away new players” iNTERGAMINGi Issue 1 2010 | 07

COLUMN

2011 wish list The Remote Gambling Association’s chief executive, Clive Hawkswood, takes a retrospective look at 2010 and tells iNTERGAMINGi about the group’s hopes for 2011 AS I write, it is nearing the culmination of the festive period, and by the time you read this article most of you will very likely have received a mixed bag of presents: the predictable; the welcome surprise; and the unwelcome one. For the RGA, that probably sums up our year in 2010, which as usual was a challenging one for the remote gambling industry, and where the chips continue to be stacked against us, albeit that we are making ground, usually through costly court cases. Predictably, the usual misinformation and market protectionism dominated the arguments against the application of the single market in the EU, with vested monopoly interests and some member states desperately trying to cling on to outdated and technologically defunct legislation. The new French law also proved to be predictably unviable for almost everyone except the incumbent monopolies. It arrived all wrapped and neatly presented, but with a rather burdensome delivery charge. The law is a rather acquired taste, and for most commercially-minded operators it is quickly discarded. More April Fools one suspects than Merry Christmas and a Happy New Year. Nevertheless, some welcome news was announced in early 2010, with the new European Commission’s intention to launch a Green Paper (as I write, we expect this in early 2011) – a welcome surprise, and we hope something to look forward to, if of course the Commission and member states are truly committed to an evidencedbased discussion and the promotion of trade, innovation and competition. If that was welcome, the continuing lack of impetus from the Commission with regard to the numerous infringement proceedings was not – we are now in a Justified Slow Progress procedure. Private operators and their staff are not party to the protected fiscal

08 | Issue 1 2011 iNTERGAMINGi

Clive Hawkswood

Chief executive of the Remote Gambling Association

position certain jurisdictions continue to provide to their monopoly operations. It will be a failure of the Green Paper and the EU’s commitment to the single market if it does not address this issue head on. In the difficult economic period we find ourselves in, we should be reducing unnecessary bureaucracy and fiscal burdens on businesses, and encouraging inward investment and trade across the EU. Instead, it continues to be stifled. For the RGA, the key aims in 2011 will be to continue to open up sustainable and viable markets, notably in Spain and Greece. Denmark also looks set to bring its recent legislation into force and we will be lobbying hard in Germany as there is a realisation that the provisions of the State Treaty are

neither compatible with EU law nor any longer appear to be the preferred legislative framework of many German states. Further afield, we will of course be watching events closely in America and seeking to lobby where it has the most impact. The sporting sector will again be rehearsing its woolly and misleading ‘fair return’ argument in the hope that repetitive rhetoric will win out over evidence and facts. The sports right in France, championed by sports, is not showing any meaningful returns and still has some legal hurdles to cross before it could be seen as secure. In any event, it is not applicable to the UK market (any new state aid would need to be notified to the European Commission and would be challenged). And on the issue of

“For the RGA, the key aims in 2011 will be to continue to open up sustainable and viable markets, notably in Spain and Greece. Denmark also looks set to bring its recent legislation into force and we will be lobbying hard in Germany as there is a realisation that the provisions of the State Treaty are neither compatible with EU law nor any longer appear to be the preferred legislative framework of many German states”

state aids, any wish list for 2011 would have to include a firm UK Government commitment to scrap the outdated and legally dubious horserace betting levy system – the announcement on the levy determination should have been made by the time you read this. The UK Government’s decision following its remote gambling consultation is also expected early in 2011. As with the levy, any extension of the licensing system to capture off-shore operators would clearly be a financially motivated policy - there is no significant evidence of social harm that would justify it in EU law terms but we remain ready to work with the government to address any genuine concerns that it might have. Those that have lobbied for regressive isolationist policies would put inward investment in jeopardy, with the distinct possibility that the British economy and its consumers would be worse off as a result. Consumers in restrictive countries like France can only dream of the opportunities available to their British counterparts. Apart from deterring investment, I have no doubt that operators would be giving very serious consideration to challenging any restrictive action. The RGA also very much hopes that the results of the British Gambling Prevalence Study, expected in February, are not used and misused as an excuse to beat the industry around the head again. The Gambling Commission is undertaking an internal review and we understand that the government is pushing them for some meaningful reforms. Clearly there is only ever so much meat on the bones to be cut, but in the current climate it would be hugely disappointing if some ways could not be found to make the lives of licensed operators easier without the regulatory objectives being undermined. Indeed, a reduction in licence fees and the overall regulatory burden would be the most welcome present for the industry.

COLUMN

The heart of regulation Peter Cercone, VP compliance at Playtech, talks to iNTERGAMINGi about how and why regulation can only enhance the online gaming industry 2010 saw substantial progress towards regulation of the online gaming industry, particularly in a number of major European countries. Governments are increasingly realising the potential benefits that regulation will bring and this is a trend that looks set to gain greater momentum. Hand-in-hand with the benefits of tax revenue generated and the ability to greater control gaming activity that regulation brings, there is a strong desire for better methods for player protection. Regulators typically focus on three key areas of protection: the provision of a fair and transparent gambling environment, the protection against fraud and organised crime, and the protection of minors and compulsive users. Over the past few years, notable progress has been made with

Peter Cercone

Vice president compliance at Playtech

becoming a mainstream leisure activity in the regulated markets. Technology is playing a major part in advancements in this arena. As one of the largest software developers in the industry, Playtech has been focused on providing a suite of products that comply with

“Playtech’s quest for innovation and advancing best practice ensures that its operators are equipped with the most current tools to monitor and control a full range of responsible gaming protocols. This scalable set of tools is centrally operated, works across all products and platforms, and is dynamic to enable the integration with existing systems or third-party interfaces” regards to prevention of fraud and organised crime, and the regular review and approval of software and RNG engines ensures a fair gambling environment. There is a need for constant vigilance over new threats to both operators and players, and this is an ongoing campaign that impacts the offshore and regulated markets alike. The issue on the minds of many going into this year is that of enhancing the tools for responsible gaming, particularly as online gaming continues its progress towards

10 | Issue 1 2011 iNTERGAMINGi

the highest standards of gaming safety, security and fair play. Moreover, Playtech’s quest for innovation and advancing best practice ensures that its operators are equipped with the most current tools to monitor and control a full range of responsible gaming protocols. This scalable set of tools is centrally operated, works across all products and platforms, and is dynamic to enable the integration with existing systems or third-party interfaces. These typically include governmental agencies, operator

back offices, and across online, mobile and land-based channels. While player-focused and integrated technology has been a philosophy at the cornerstone of Playtech’s platform throughout the past 10 years, it is one which is also very much in tune with the recent trends in regulation and responsible gaming. In particular, there is an increasing regulatory focus on consistency across all gaming products, the convergence of landbased and online gaming, and the identification and engagement with the player on an individual basis. A good example of this focus in practice is the recently launched online gaming service for the Finnish state monopoly, Rahaautomaattiyhdistys (RAY). RAY has a 70-year history of providing landbased gaming in Finland within a highly controlled and regulated environment. Central to RAY’s requirements for an online gaming partner was the ability to be fully-aligned and consistent with its land-based operations. This would ensure the integrity of its high standards for responsible gaming as it moved into the online space. Playtech’s innovative approach to these challenges, as well as the logic and technology behind the responsible gaming tools themselves, was noted by RAY as one of the key attractions of its partner. Such tools included functionality for strict age and

identity verification linked in to the state's social security database, a range of session and loss limits, support for self-exclusion and much more. Since the agreement in May 2010, the companies have worked together to develop an online platform that would answer the requirements of Finnish regulation and comply with RAY’s strong philosophy of responsible gaming; this was launched at the end of November. Looking more widely, another characteristic of the newlyregulating markets has been the gradual legislation of products, as has been the case in Italy, with poker being followed by bingo, and casino games expected early this year. This requires a technology architecture that supports the easy integration of new products as and when they become regulated, with responsible gaming protocols applied consistently and effectively across all channels. For an operator like RAY, this capability has proven essential, ensuring players are subject to the same limits and protection as they move between its poker and casino offerings and between land-based and online. Finland takes a highly advanced and holistic approach to socially responsible gaming, at a state level, raising challenges that will only become more familiar to operators and software providers as the regulation of global markets continues. Elsewhere, operators will need to demonstrate to forward-thinking regulators that they have the capacity to monitor player behaviour and responsible gaming seamlessly across all products and platforms. As with RAY, much of this will be down to the capabilities of the technology driving the operator’s platform. It is a challenge the industry is likely to increasingly face, as part of the price of social acceptance and regulatory approval. But if only for those reasons alone, it is a price worth paying.

INTERVIEW

A new division The online gaming industry is constantly evolving and IGT is no exception. Gideon Bierer, executive vice president Interactive, IGT, talks to Jenni Shuttleworth about its new division

the interactive industry via our WagerWorks and Million-2-1 acquisitions. We are one of very few companies in the world that has a meaningful presence in both land and interactive markets, and our name should reflect that. We are also aligning with our customers - they want a holistic, strategic approach from their key partners that fits with the way they think about their players and their businesses.

CAN you give some information on the new interactive division that IGT announced the creation of recently? Interactive is a new division within International Game Technology and is the new name of the online and mobile businesses collaborating together under the IGT umbrella. It is a single global division – headquartered in San Francisco, California – merging IGT’s WagerWorks and Million-2-1 groups. What was the decision behind merging the online and mobile business units under the IGT brand? We are dedicated to building upon the strengths that IGT already enjoys in the online and mobile gaming markets – areas of the business that have seen rapid growth over the past Gideon Bierer, executive vice president, Interactive, IGT few years. We continue to provide unique products and services achieve this more effectively. that our customers and players have come to expect from What does this merger WagerWorks and Million-2-1. mean for IGT? This change will further increase Merging our online and mobile business units under the IGT IGT's visibility in, and connection to, the interactive market. brand will solidify our position in In addition, we are also interactive gaming. IGT is embracing interactive as a core enhancing our land-based products to help our customers part of the business, not as a maximise all opportunities in the standalone, independent entity. multi-channel market of the Many of our customers don't know that we have a total of 18 future. Merging the online and mobile businesses helps us to years combined experience in

“We are dedicated to building upon the strengths that IGT already enjoys in the online and mobile gaming markets”

Which of WagerWorks' games are the top performing and why do you think this is? The games within our portfolio have a multitude of roles and have a variety of performance drivers. Famous brands like Monopoly and Elvis Presley are loved by millions of people, so these branded games often lead to strong player acquisition. Many games derive from a pre-existing land game. These games benefit from high player recognition and have proven high quality game play, maths and visual appeal. Good examples are Cleopatra and Kitty Glitter. Innovative features also aid game performance and create a unique and sustainable player experience. One of our current examples that is doing very well is Da Vinci Diamonds, which includes IGT’s unique tumbling reels feature. How important are branded games? It depends on the brand in question and how you bring that brand to life via a slot game. The right brands can bring great value to online and mobile gaming and when great brand licences meet great game mechanics and proven mathematical models, magic can happen. Players are drawn to the product, entertained and rewarded, but, while there are many brands, there are only a few great ones that can work

iNTERGAMINGi Issue 1 2011 | 11

INTERVIEW

for slots by supporting great game play with a great brand. Creating a winning game using licensed content is not as simple as pinning the brand on the front end. There are countless examples of big brand games with terrible performance as many operators have unfortunately found out to their cost. If it is based on a popular board game like Monopoly, then it must recreate the physical playing experience of the original game. It is important to remember what the brand means to people, its values and how that can be recreated. How does IGT plan to keep up with advances in technology and evolving markets? Our products have a global market so we work hard to keep on top of technology and market evolution on a global basis. We are fortunate that we have a global presence, and genuine scale. We have 60 plus offices in dozens of countries and thousands of engineers in many of the 'right places', from the UK to Silicon Valley to China to Nevada. So we are plugged into what is going on

“Regulation has always shaped all aspects of the gaming industry and I doubt this will end in our lifetimes. Obviously we are entering a new era of regulation with legalisation of a significant batch of large and medium size countries coming over a two to threeyear period”

and have the ability to act on the important trends we see. We invest heavily in technology, both internally and externally created, and try to maintain a long-term outlook - we actually have a team whose focus is solely on new technologies five plus years out. Finally, we focus on consumer trends via market research and direct consumer response to our products on a global basis. Do you have your eyes on any new territories? If so, which ones and why? Our focus remains on legalised, regulated markets, but in the short term we are looking towards Continental Europe and Canada. In the medium term, our eyes are focused on the US. IGT’s view, and that of most of our customers, is that US legalisation will eventually happen. As you would expect, we are close to the legislative processes, and, like most

industry participants, are making plans to ensure we are prepared in order to act quickly and decisively. What is the importance of incorporating mobile gaming into an operator's offering? Mobile is still relatively small but is a major growth area. Sports betting is leading the way. Smart phone migration is creating an unstoppable wave of mobile internet usage. We are fortunate to have been an early mover in mobile – as a result we are seeing phenomenal growth in this side of our business as more and more operators get into mobile. I'd add that mobile is also an important channel for marketing and for land operators' convergence strategies. How is regulation shaping the online gaming industry? Regulation has always shaped all aspects of the gaming industry and I doubt this will end in our lifetimes. Obviously we are entering a new era of regulation with legalisation of a significant batch of large and medium size countries coming over a two to three-year period. The effects are profound: rapid market expansion, new barriers to entry, entry of land operators, national ringfencing of liquidity, new tax regimes and a reshaping of the relationships between B2C and B2B participants are just some of the more important impacts. IGT believes we are 'on the right side of history' as legalisation gathers pace globally. How do you anticipate the online gaming industry changing in the next few years? We don't have a crystal ball but we're expecting rapid legalisation, large scale entry of land operators, acceleration of mobile, crossplatform convergence, continued product innovation with the wager world borrowing much more from the 'non-wager' online world in areas like social media, applications and user experience. It's going to be fun. What initiatives does IGT have for the future? We will be looking to grow our interactive business significantly by serving our customers and playing to our strengths. We will be bringing interactive into our core, acting as one company with one message - a global leader in games and systems.

12 | Issue 1 2011 iNTERGAMINGi

FEATURE

Responsible play As egaming companies are operating in a growing number of countries, working with organisations like Gambling Therapy has never been more important. Jenni Shuttleworth talks to director Andrew Poole and discovers more about the service GAMBLING addiction, compulsive gambling and pathological gambling are all terms we have become familiar with and which are used to describe the negative or harmful consequences of gambling. Although more care should be taken when applying any one of these terms, what is fair to say is that the internet has made gambling more accessible, and for that reason alone, it is expected that the number of people gambling and the frequency with which they gamble will rise. Director of Gambling Therapy Andrew Poole spoke to iNTERGAMINGi: “While we may not see great changes in the percentage of problems, we should accept that more people will equal more problems.” For those who do come into difficulty with gambling, the generally accepted ‘problem gambling’ is a little more all-encompassing and allows us to include those people who, though experiencing some negative impact, would not necessarily be considered ‘addicted’ by accepted clinical assessments. “Problem gambling often describes the urge to continue to gamble irrespective of the negative outcomes,” said Poole. “Speaking anecdotally, we see a lot of people who use the Gambling Therapy online service having developed problems through a lack of awareness about how gambling works; about odds and payouts for instance, who will lose significant sums of money in a short space of time and will stop playing only because they have exhausted their available funds. In many cases, some early interventions and well-timed education messages could go a long way to helping avoid, or minimise, the extent of the harm experienced. It’s not simply the case that everyone with a gambling problem has an addiction to gambling or that they necessarily need the assistance of a counsellor or therapist.” Launched in 2004, Gambling Therapy - part of UK Charity the Gordon Moody Association (GMA) - was the very first internet-based help service for people affected by a gambling problem. It was initially launched to provide outreach support to people who had used GMA’s residential problem gambling programme. “It became quickly apparent that many problem gamblers, and indeed their friends and family, felt more comfortable accessing help online and so the service continued to develop and today provides support in approximately 30 languages to problem gamblers worldwide,” said Poole. Although the company name may evoke images of an association committed to being at odds with the very thing that the online gaming industry does, an increasing number of companies are recognising that proper working

Left to right: Andrew Poole, director, Ian Semel, clinical director, Duncan Ward, senior advisor/IT coordinator

“It became quickly apparent that many problem gamblers, and indeed their friends and family, felt more comfortable accessing help online and so the service continued to develop and today provides support in approximately 30 languages to problem gamblers worldwide”

partnerships with Gambling Therapy help to serve their business objectives. “Whether in terms of achieving regulatory compliance, improving customer experience and retention or building brand confidence, it makes sense that to demonstrate an active commitment to responsible gambling is so much more effective than going through the motions and ‘ticking boxes’,” said Poole. When iNTERGAMINGi spoke to the Gambling Therapy team at EiG in October, they were keen to promote their new site – the more userfriendly named Responsible Play – which went live on December 1. Gambling Therapy will continue to operate as it does today and will continue to build on its range of multilingual services, but Responsible Play is a new site, intended for anyone that chooses to gamble, to help them understand the importance of a responsible approach and to reinforce messages to help them stay in control. It will also be a

iNTERGAMINGi Issue 1 2011 | 13

FEATURE

place to build awareness about how the industry meets its own commitments to responsible gambling and to talk about how they help to minimise problems too. “Responsible Play will be about helping people to keep their gambling fun,” said Poole. “We work hard to build relationships with the industry and to demonstrate that we are very much not anti-gambling. We hope that through Responsible Play we can continue on the same path and work closely with the industry towards more widely adopted standards for best practice. We think it’s long overdue that the industry be supported to recognise and benefit from the positive business outcomes to be had through responsible gambling,” he added. A growing number of gambling operators support Gambling Therapy and through doing so are able to provide access for their customers to the company’s help and support should they need it. Responsible Play will work the same way. “We’ll enable our supporters to include links to the site. Best practice (and often formal regulation) now requires gambling companies to make sure that proper help and support is available and that responsible gambling is properly promoted and encouraged. We believe in making that as simple as possible; by giving gambling customers all the information they need, just a couple of clicks away from the gambling site they are using,” said Poole. Despite the potential for the number of cases of problem gambling to increase, Poole believes that it isn’t actually as big an issue as some might have thought or expected. “That isn’t to say that there isn’t still a very real and ongoing job to do to minimise problem levels,” he commented.

14 | Issue 1 2011 iNTERGAMINGi

“There was some expectation that the emergence of internet gambling would create a significant surge in the prevalence of problems, but I haven’t seen that evidenced yet”

“There was some expectation that the emergence of internet gambling would create a significant surge in the prevalence of problems, but I haven’t seen that evidenced yet. Certainly, the British gambling prevalence surveys haven’t shown that gambling online has exaggerated gambling problems – prevalence seems to have stayed roughly steady at just below one per cent.” He added: “I would imagine that maybe as many or even a few more again in addition to the one per cent experience some level of problem, or negative impact, though not severe or sustained enough to register in the surveys.” What Poole can’t subscribe to is the idea that gambling online is any more potentially harmful than most other forms of gambling. “While it no doubt has its own unique characteristics that make it appealing to long-term play, and certainly the absence of ‘real’ money being passed in online transactions may remove a sense of reality,

most of this is inherent to so much that we do online and not exclusive to gambling. If anything, the regulation we have seen, both formal and through localised best practice, has shown gambling companies to be more involved in consumer protection than very many other industries operating online,” he remarked. For Poole, there will always be more that can be done to refine best practice and improve responsible gambling. “In many respects, online gambling is still in its infancy. However, as many have done already to good effect, a high standard of staff training and awareness, particularly among customer service teams, and a proper player protection programme are arguably the foundations of harm minimisation. Beyond that, and without wishing to sound self-serving, it’s very important that the industry continues to support the further development of proper help and support services for people affected by a problem.” In short, as companies operate in a growing number of countries, they need to ensure that their customers can access services like Gambling Therapy should they need them. “It is no good to simply accept that others will fund them; these services need to be representative of industry growth or they are at risk of being overwhelmed,” said Poole. The Responsible Play team will be introducing some innovative early intervention tools for people who are concerned that they may be gambling more than they are comfortable with, to help them evaluate their behaviour and make more informed decisions, as well as assisting in staff training and policy development for those wanting to implement robust responsible gambling programmes.

FEATURE

Keeping things moving The mobile gaming sector has seen strong growth recently, with a number of operators incorporating the offering into their mix. Jenni Shuttleworth talks to IGT, Spin3 and Zukido about why mobile and online work so well together OVER the past few years we have seen a maturing of the mobile gaming market. The pace of change, especially over the past six months, has been dramatic. “For years, mobile has been playing catch up to online. Significantly, we have now reached a point where mobile is on a par in terms of the quality of the games and the playing experience,” said Matti Zinder, head of Spin3. People are increasingly turning to their mobile phones for entertainment as well as organisation and communication. Mobile gambling gives people popular play-for-real games they are familiar with on their mobile device and that thrill of gaming wherever they are and whenever they want to play. Mobile gaming’s compatibility with the lifestyle of the modern consumer is a key reason why the popularity of the sector has surged. “People have become accustomed to doing many things at once, in almost any location. They don’t want to be tied to a desktop PC in their bedrooms – mobile gaming allows for massively increased social interaction,” Oliver Lofthouse, director and general manager of Interactive, IGT, told iNTERGAMINGi. IGT has an eight-year history in the mobile business, with a broad product portfolio including mobile slot, table and SMS games, mobile marketing, and platform and lottery products across all major mobile technologies. “The key strategy for us is to see the same content available across the interactive spectrum. Technology nowadays allows development to be modular so that we can use the same foundations then tailor slightly for optimisation on one platform or the other,” said Lofthouse. The last few years have been both progressive and exciting as mobile has edged closer towards online in terms of its igaming capabilities. This process has accelerated throughout the years and now smartphones are the catalyst that can see the final boundaries broken down. “During this time, the convergence between mobile and online has also stepped up, with the differences between products on each platform being far less pronounced. As the segregation continually diminishes, players will move freely between online and mobile. This certainly reflects our attitude when it comes to the interactive space and contributed heavily towards the decision to merge the separate companies of WagerWorks and Million-2-1 under the IGT brand,” said Lofthouse. Strong trends from 2010 together create real reason for optimism for the mobile gambling industry. Head of Spin3 Matti Zinder spoke to iNTERGAMINGi: “We have seen the proliferation

16 | Issue 1 2011 iNTERGAMINGi

Oliver Lofthouse, director and general manager of Interactive, IGT

“During this time, the convergence between mobile and online has also stepped up, with the differences between products on each platform being far less pronounced. As the segregation continually diminishes, players will move freely between online and mobile” of advanced smartphones that deliver a rich mobile gambling experience. At the same time, the distribution of content has evolved with the growth in apps and app stores. People are using their mobile in more advanced ways - for banking and social networking. With new markets on the horizon thanks to a wave of regulation, these trends give us every reason for optimism in 2011.” Spin3 has a heritage of industry ‘firsts’, including the first play-for-real blackjack app on the Apple app store. Since its inception, the company has been working to develop the industry through innovation, both in terms of the mobile games and technology, and through the full package of business and marketing services it

provides to its clients. “Mobile is still a relatively new platform for the industry, and egaming brands need support to manage a successful mobile gambling offering,” said Zinder. A traditional misconception is that mobile and online compete with one another, but the reality is that they sit extremely comfortably as part of an integrated egaming solution. “The target markets for both are very different as they are both consumed in completely different ways,” said Zinder. Simply put, mobile fills the gap when people are away from their PCs, on the bus, or waiting for an appointment. People are unlikely to play blackjack on their mobile phone screen when they have a perfectly good monitor sat in front of them. “People who like games and gambling can enjoy the same quality of experience from their chosen egaming operator whether they are playing on their PC or on their iPhone. At the same time, customers can play on both platforms using the same account details, logins and payment processes. There’s no need for duplication and the casino or brand is familiar and easy to use. Mobile is an extension of the online space and owes much to its success,” Zinder continued. Lofthouse too believes that mobile and online complement each other perfectly. “Increasingly, as the divisions are reduced, consumers are expecting, demanding and, perhaps soon they will be preferring their mobiles to perform the same tasks that they would undertake on any other device with online capabilities.” For the commercial director at Zukido, David Sargeant, the major change to the mobile gaming

FEATURE

sector in the past few years has been the blurring of the lines between mobile and online devices. “Laptops, netbooks, PDAs, tablets and smart mobile all cross the boundaries of the mobile and online channels. The arrival of connected TV adds to the potential of new smart devices,” he said. Zukido is a publisher of integrated in-play products. “Mini-games form an important part of this product suite both in terms of casino product cross-selling and direct revenue generation. We are now porting all our minigames into the mobile sphere, both as standalone casino smart phone applications and embedded mobile web games. We are also exploring the new connected TV markets,” said Sargeant. The reach of brands across channels is important. Users with a new device will look for the brands they know and if they aren't available will turn to new brands. Having a gaming product set that is available and usable across all channels is now essential. Of course mobile gaming is now available on a number of platforms, but smartphones like the iPhone and affordable Andoid-based smartphones represent the greatest opportunity for the mobile gambling industry. “With rich graphics, fast processors, robust internet access and touchscreen controls, smartphones deliver the richest mobile gaming experience. They are essentially pocket-sized computers and deliver a gaming experience that is on a par with online,” said Zinder. Smartphones became the standard for mobile phones in 2010, with sales now accounting for around a fifth of worldwide mobile device sales

and this is growing at a fast rate. “In countries with more developed telecoms, this is even more pronounced. Look in your pocket right now and you’re more than likely to find one,” said Zinder. According to Sargeant, smartphones are ideal for the new generation of mobile gaming products, and Android and iPhone are leading the way with Blackberry following. He also believes that tablets will replace laptops for many users. Lofthouse told iNTERGAMINGi: “Smartphones and iPads are the most popular as they are particularly suitable with their amplified speed and functionality. They allow people to manage all their needs on a single mobile device and as the prices fall the boom will continue.” Familiar games and products are reported to perform best among players, with brands that are trusted. Having products across channels that have a complementary user experience work very well too. “Mobile casino games are a ‘content snack,’ providing bite-size entertainment to fill spare moments in our lives,” said Zinder. “As a result, mobile games have to be extremely simple and intuitive. The faster players can progress in the game itself and the quicker the game play, the better the experience. At the same time, games need to be really compelling,” he added. “The speed, simplicity and our general familiarity with casino games like blackjack make this genre a real hit on mobile. We have also seen, in recent times, a real uplift in sports betting on mobile. Ladbrokes, for example, took more than 100,000 mobile bets during last year’s

Football World Cup. This was more than four times more mobile bets than it took during Euro 2008. Mobile sports betting is a really hot area and will help to further propel mobile gambling into the mainstream this year,” said Zinder. Slot games also perform well on mobile platforms. “Despite the convergence we are seeing, mobile and online do retain certain idiosyncrasies and one is that, understandably, mobile sessions tend to be shorter – on average they are in bursts of approximately eight to10 minutes. Products and games that lend themselves to this trend of ‘snacking’ are successful. Poker and table games have so far proven a little less popular as they require a longer sitting,” said Lofthouse. For Spin3’s Zinder, Italy has the potential to be one of the hottest markets in the egaming space. The past year has seen a wave of egaming regulation that began to open up what were previously closed markets. And while France is limited to online poker, Italy is open to a broader games offering that will include online as well as mobile platforms. “Italy offers a perfect environment for mobile gaming. The mobile market is highly saturated with a mobile penetration rate far above the European average. Mobile broadband services are commonplace and Italy’s large population is tech savvy and hungry for new technologies. For mobile gaming, this represents a terrific opportunity,” he told iNTERGAMINGi. “At the same time, don’t discount Denmark. It is also on the road to reform, and mobile will likely play a key role and a major

iNTERGAMINGi Issue 1 2011 | 17

FEATURE

differentiator in its emerging egaming market,” Zinder continued. Markets like Brazil, Mexico and India could become important to IGT. “My perspective here is that one of the things we may see in the future is the so called ‘technology skip’ in areas where the broadband penetration is relatively low,” said Lofthouse. “As the mobile 3G networks expand, this infrastructure could well become the technology of choice in such areas, superseding broadband. If that proves to be the case, then these markets will become very important to us,” he added. We all use mobile technology in our personal lives but launching and operating a consumerfacing mobile offering is different to any other business; mobile is an unknown platform for many online or land-based operators. Operators who are considering embracing mobile gaming into their offering should assess their needs and identify any gaps in their knowledge. “The surest way to find success is to find a qualified and experienced advisor and provider,” said Zinder. “Mobile technology is such an important part of our work and social lives today that consumers have come to expect a mobile service from their favourite online casino. For egaming brands, it is important to meet the demand of your customers. Through mobile, they can reach their customers in a way and at times that no other platform can; literally placing their brand in their punters’ pockets. Not only will they be able to sell more, they can use mobile to strengthen their brand and grow player loyalty. Mobile gambling makes a compelling case,” Zinder continued. An operator’s strategy must be carefully considered. What is the expected return and how is it going to benefit the player in a competitive market? “Mobile must not be viewed as a bolt-on merely for the sake of it,” said Lofthouse. Mobile gaming may be growing at a rapid pace but like any sector, there are still issues to face. “From a developer’s point of view, there is the vast number of handsets on offer today and consumer-wise there is perhaps a lack of awareness at what some of these phones can actually do – and what is already on offer from operators,” said Lofthouse. “Connectivity is another factor, as speed and access is not uniform yet, but that will continue to improve,” he added. It is no surprise that legislation is also at the forefront of the minds of operators and developers: “The opportunity of a new market like Italy is tempered when you consider that the egaming laws and environment are new and untested. Establishing the industry in new markets is a complicated process and a key issue we are faced with currently,” said Zinder. Another issue to consider for Zinder is the

18 | Issue 1 2011 iNTERGAMINGi

“Increasingly, as the divisions are reduced, consumers are expecting, demanding and, perhaps soon they will be preferring their mobiles to perform the same tasks that they would undertake on any other device with online capabilities” way that Android-based smartphones have exploded into the market. “While Android has significantly helped to place affordable, highquality mobile phones in the hands of consumers, it is not without its challenges. The beauty of the iPhone is that its operating system is standardised across all iOS devices. Android harks back to the recent days of Java – a fragmented technology that makes developing difficult and costly. Android’s many versions and flavours means that delivering the bespoke, state-of-the-art games across all handsets is a challenge.” Zinder feels

that Spin3 has managed to overcome this challenge. However, a standardisation of Android – as the fastest growing mobile segment – would help to open up the market and encourage the further development of the igaming industry. Zukido’s Sargeant voiced his concerns: “The expansion in the number of devices with different screen sizes and resolution, different technology sets, and different user interfaces mean it can be costly to develop specialist applications for every device. Therefore the ability to make usable applications and mobile web products that cope with the most devices greatly reduces your cost to market. The ability to cover both the app stores and the mobile online markets with a good marketable product is the challenge.” Undoubtedly, the mobile gaming sector is an exciting and fast-paced sector, and the opportunity within it is abundant. “It is transformational, and as mobiles become an everbigger part of everyday life there are immense marketing cross-over opportunities for the online gaming sector,” said Lofthouse. The main issues that face the sector at the moment may all be surmountable in time. However, mobile gambling will only grow as fast as the investment from B2C brands will allow. According to Zinder: “If they really invest in the platform in terms of marketing and support, 2011 will be the year of mobile gambling.”

INTERVIEW

A great result Having recently acquired Scientific Games Racing, Sportech is now focusing on the development of its enlarged business. Sportech CEO Ian Penrose talks to Jenni Shuttleworth about the acquisition SPORTECH has been turned around dramatically over the last few years. The acquisition of Scientific Games Racing, now renamed Sportech Racing, has enabled the company to transform Sportech to create a successful international pools and tote betting company, operating in over 30 countries and processing US$13bn of bets annually. As part of the acquisition, lottery systems provider Scientific Games Corporation and Playtech have become significant shareholders in the enlarged Sportech Group. The acquisition has also seen a number of board changes take place, including the appointments of Lorne Weil (chairman and CEO of Scientific Games Corporation) and Shmuel Weiss (COO of Playtech) as non-executive directors, and Ian Hogg (COO – UK and online) and Brooks Pierce (president of Sportech Racing) as executive directors. Speaking to iNTERGAMINGi, Sportech CEO Ian Penrose said: “As a result, we have an international footprint, a board from several countries with extensive gaming and technology experience, and a Sportech CEO Ian Penrose strategic position in several highlyregulated markets. A great position from which to build.” He added: “The company has been transformed by this acquisition and we will build upon these firm foundations.” The enlarged Sportech business operates across two of the world’s most popular betting sports - football and horseracing - which gives a strong product base. The group also now has a significantly broader product offering covering both B2C and B2B, as well as land-based and online operations, providing a strong base from which to develop its offering to customers. The acquisition also builds on Sportech’s existing history of integrity and desire to operate in the highly regulated markets. “We went through a significant regulatory approval process both in the US and the Netherlands, and the approvals mean that we are one of the very few European businesses to be licensed to operate and process gaming activities in certain states in the US,” said Penrose. At the moment, the online gaming industry is

“We went through a significant regulatory approval process both in the US and the Netherlands, and the approvals mean that we are one of the very few European businesses to be licensed to operate and process gaming activities in certain states in the US”

20 | Issue 1 2011 iNTERGAMINGi

monitoring the US very closely and Sportech is no exception. “The US has a population of over 300 million people, many of whom are avid sports fans. However, sports betting is currently illegal with the primary exception being that of tote betting on horseracing. In this context, we provide systems that process half of all betting on horseracing, which amounts to over $7bn every year,” said Penrose. “In addition, we operate all off-track betting on horseracing in Connecticut under an exclusive licence in perpetuity,” he added. Sportech now has a broad reach, with a presence in more than 30 countries across the world. It runs the world’s biggest football pools on British football, as well as processing 17 per cent of all tote bets on horseracing worldwide, so there are many markets that are important to the company. “The UK market continues to be very important to us as the home of our Football Pools business, where over 500,000 customers play every week, and we also operate our egaming activities in the UK. “The US market is also important, as we have a 50 per cent share of all US horseracing tote betting, direct to consumer off-track betting operations through managed venues, and telephone betting across selected states. We also have strong distribution for our Sportech Racing business across South America and Europe, as well as our innovative sports prediction and fantasy gaming business in the emerging market of India,” said Penrose. Aside from emerging markets, tax and government regulation on an international scale are uppermost in the minds of leading gaming executives at the moment, which, according to Penrose, “need close monitoring and upholding the highest operational standards.” But for now, having only recently completed its acquisition of Scientific Games Racing, Sportech’s focus remains on integration and development of the enlarged business. “Our developments enable us to offer a suite of exotic pools and tote betting products, at no risk, and a guaranteed margin to our gaming partners. This provides complementary and margin enhancing products,” said Penrose.

FEATURE

European legislation round-up iNTERGAMINGi rounds up the latest on online gaming legislation from across Europe

BELGIUM The amended law on games of chance that entered into force on January 1, 2011, now also covers sports betting and all media games. Only lotteries are still subject to a separate piece of legislation. A number of implementing Royal Decrees still need to be adopted, including those related to the online licences. As a result, it is not expected that the online provisions in the new Act will effectively enter into force before June. The Act of January 10, 2010, makes the provision of online gaming legal, albeit only for land-based operators who acquire an additional online licence. The new legal regime for online gambling constitutes a so-called “licence plus” system, whereby only the operators with land-based operations can obtain a licence to provide their games online. The law also requires that the operator’s server is located on Belgian territory in order for an operator to be able to offer games of chance online. Phillippe Vlaemminck, advocaat at Vlaemminck & Partners, told iNTERGAMINGi: “The challenges for the online gambling industry in Belgium are big but at the same time exciting. With the new law on games of chance, the entire legal framework for online gambling is redrawn. Where, previously, online casino games were absolutely illegal, a legal online gaming market will now emerge. “And where online sports betting operators previously did not need a licence from the Belgian Gaming commission, they will need one now. The struggle for the necessary licences will be one of the biggest issues facing the Belgian online gambling industry.” While some EU member states have opted for a controlled opening of their national gambling market by granting licences to new operators on the online market, and thus maintaining quite a liberal approach, Belgium has opted for a very cautious approach by only granting licences to operate online to landbased operators. Such an approach proves to be in line with the precautionary principle, which applies specifically in the games of chance sector. According to Vlaemminck, if any legal change can be envisaged in the future, and more specifically in the European legal framework, it would probably be the result of a Green Paper on gambling services.

22 | Issue 1 2011 iNTERGAMINGi

IRELAND There is no specific legislation in Ireland directed at the regulation of remote gambling. Instead, remote gambling is governed by legislation of general application to both online and offline activity. Irish law recognises three principal categories of gambling: gaming, lotteries and betting. Statutes governing these activities are all over 50 years old and are generally recognised as being ill-suited to regulating remote gambling. However, reform of Irish gambling laws is on the government's agenda. In December 2010, the Department of Justice and Law Reform published a paper on the Options for Regulating Gambling in Ireland. The long-awaited policy document is intended to provide a "roadmap" for the Irish legislature in devising a modern regulatory system for the regulation of gambling (including remote gambling) in Ireland. In relation to remote gambling, the policy document proposes that remote operators who are not established in Ireland and have no presence there will have to be licensed in order to service Irish residents. Likewise, remote gambling operators who are operating their businesses from Ireland, but don't have Irish resident customers, will need to obtain a licence. The objective of any new licensing regime will be to ensure that remote gambling is conducted in a highly "regulated environment" aimed at protecting consumers. Although the policy document is to be welcomed as a step in the right direction, it is clear that significant work remains to be done before the proposed legislation can be introduced. Earlier in December 2010, the Irish Minister for Finance announced in his budget speech that the government intends to impose a tax on all bookmakers taking bets from Irish customers, which was understood to be a signal that the application of betting duty would be extended to cover bets placed online. However, it is difficult to see how the payment of a tax on online bets could be properly enforced before a comprehensive licensing system is put in place. Pending reform, the absence of a regulatory framework for online gambling in Ireland is the single biggest issue facing the industry. However, it hasn't deterred operators from establishing support services for their gambling operations in Ireland. Even in the absence of a regulatory framework, the authorities have allowed online gambling operators who have established parts of their operations in Ireland to

get on with their businesses, and there has been little, if any, regulatory engagement with those businesses. Maire Conneely, senior associate at A&L Goodbody, told iNTERGAMINGi that the report of the Casino Regulation Committee, published in July 2008, pointed to a "window of opportunity" for Ireland vis-à-vis the regulation of remote gaming. The Committee expressed the view that if Ireland managed (within a limited timescale) to address the regulatory challenges posed by remote gaming, and to provide a socially responsible and secure arena for the development of remote gaming based in Ireland, it could position itself as a gaming friendly centre of excellence. It remains to be seen whether or not the "window of opportunity" is still open. However, if the government proceeds in the near future with the reforms proposed in its recently published policy paper, this would likely result in opening the gambling market in Ireland.

DENMARK Under the present system, the gaming industry in Denmark is regulated by the Ministry of Justice and the Danish Gambling Authority, which is itself part of the Ministry of Taxation. Denmark's new gaming law, which was supposed to come into effect on January 1, has stalled following complaints filed with the European Commission by the Danish Slot Machine Association and several land-based operators. Following the reforms, all legislation was to be unified into one gambling act and all regulation was to be undertaken by the DGA. "The gambling reform will open the gambling market for multiple licensees offering betting and online casino games," explained Morten Ronde, head legal advisor of the DGA. "The provision of lotteries will be kept in the monopoly," he added. The new law, which was introduced to the Danish Parliament in March last year, was intended to open up the gambling market to online operators. However, land-based casinos were unhappy when it was revealed that the online gaming tax rate would be set at 20 per cent on gross win, compared with a rate of up to 75 per cent that is levied against their own earnings. Arguing that this constitutes a form of state subsidy, the land-based group called on the Commission to investigate whether the new legislation violates European state aid rules. The

FEATURE

Commission announced on December 14 that it would be launching a formal investigation, which could take months, despite suggestions that it would side with the Danish Government given the amount or tax revenue at stake. There is hope that if the Commission reaches a favourable conclusion, there will at least be parity between the rates of taxation for both the online and the land-based sectors.

SWEDEN Because it is not illegal to offer gaming services to Swedish customers from other jurisdictions in the EU, there is fierce competition between start operators such as Svenska Spel and primarily Unibet and Betsson. Although operators in other member states are permitted to offer services, they are prohibited from marketing these in Sweden. In the past, newspapers and magazines that have done have been prosecuted, despite a recent ruling from the ECJ that stated member states cannot discriminate against EU gaming operators. Ola Wiklund, partner at Swedish law firm Wistrand Advokatbyra, commented: “What will be the outcome of the court cases regarding advertising in Swedish newspapers and how will the market respond? The income from gaming adverts is crucial for several media.” According to Wiklund, there are no legislative changes anticipated in Sweden the near future. “A licensing regime is in the pipeline, but stuck. Maybe in three years. There seem to be no

strong political incentives for change.” Over the next few years, it is expected that online casinos will be successful and that private operators will gradually take market share from the state operators.

SPAIN Although it is growing at a fast rate, the online gambling market is not currently regulated in Spain. The absence of any regulatory frame has produced some insecurity in the operators based abroad at the time of developing its products in Spain. On the other hand, the permissive attitude on this subject shown by the authorities in charge, until now, helps us to understand why the market is rapidly growing year on year. Fortunately, this situation is starting to change and the sector is anticipated to be regulated in the next two years. Talking to iNTERGAMINGi, Santiago Asensi, partner at Asensi Abogados, said: “From my perspective now, the main issue to be faced is to establish within the draft of the new regulation a taxation system that satisfies all agents in the industry. In this sense, the Spanish Administration needs to understand that the only way to complete an attractive regulatory model for the main operators of the industry mainly lies on tax matters. If the government sets up a tax regime that attracts the big companies to being granted with a Spanish licence, it would be indirectly achieving a big, positive effect on responsible gaming, since these operators are the first ones

interested on this issue. On the other hand, an unattractive tax regimen would only happen as a consequence of the lack of interest from the big portals and users would find a way to play in non-recommended sites out of any control by the authorities.” Hopefully, the Spanish market will start to grant its first licences by the end of 2011. This is the current intention of the Spanish Government anyway, which passes for approval of the law in Congress around June 2011. This may sound ambitious, however is possible as long as the final text being sent to the EU Commission obtains a green light. Spain is now in a position to evaluate similar experiences in other EU jurisdictions in order to build a better regimen. Asensi continued: “Online gaming must be harmonised at EU level, but the current trend is local legislative regimes. Obviously we are still far away from that result, but the upcoming EU Commission Green Paper must be considered as an achievement towards that main legislative target. It will still take many years until we reach that point but big battles are never easy to win.”

ITALY “The online market in Italy can be described as regulated, open and competitive,” Stefano Sbordoni, partner and CEO at Sbordoni WH Law, told iNTERGAMINGi. “Within the EU - apart from the UK - there is no other regulated online market like the Italian, and for this reason, some other member states are

iNTERGAMINGi Issue 1 2011 | 23

FEATURE

following. For example: France has started, Denmark is on the row, Spain to come next. “The main issue in my opinion will be the maintaining of the balance between a positive approach by the government and market trend. A balance that has been reached up to now and that shall not be affected by the fear of all those who (politicians first) had no clue of the gaming market before, and are now scared of its size and numbers.” Sbordoni continued: “The legislative changes have already been prepared and will be launched very shortly. I do not foresee other changes in the near future, there will probably be more understanding of the impact of online gaming on a market that historically and geographically has been offline orientated. “The scarce culture of the web economy and regulation could play a negative role though, and if the fear of cybercrime (like money laundering, tax evasion, illegal financing, etc) will prevail over the trust in the competence of structured operators, there could be some restrictions to come, especially on the technical side of the business.” Sbordoni believes that the Italian market will grow steadily. “The entering of new operators, especially those belonging to other sectors of the industry, will bring a more interesting competition and have interesting effects on connected markets, such as telecommunications, broadcasting and entertainment. In conclusion, the whole gaming market, including offline, will mature with a wider and more international ambition.”

UK The UK is a huge target market for online gambling operators, with over £1bn of revenue generated annually by UK players. The market is growing year on year and part of this growth is due to an increase in people playing the National Lottery online. The Gambling Act 2005 came into force on September 1, 2007, offering for the first time the opportunity to become licensed for remote gambling in the UK. However, the Act also permits operators based in European Economic Area states and whitelisted jurisdictions to advertise their services in the UK. Although the Gambling Act 2005 has been in force for just a few years, the UK Government has been considering changes to the current regulatory regime for the last year. In January

24 | Issue 1 2011 iNTERGAMINGi

2010, proposals to introduce a requirement for all operators targeting the UK to hold a UK licence were announced and a public consultation was held. If these proposals are implemented, operators would require a UK licence in order to advertise their services in the UK and also in order to accept deposits from UK residents. Melanie Ellis, a solicitor at Harris Hagan, told iNTERGAMINGi: “A UK licence requirement would generate significant tax revenues for the government. The tax benefits are not considered in the consultation document, rather the rationale given by the government is that of ensuring UK customers have a consistent level of protection when gambling online, by bringing all operators under the remit of the Gambling Commission.” To put these proposals into effect, the government would need to amend the 2005 Act itself, introducing new offences of advertising to, and accepting deposits from, UK residents. One barrier to implementing the changes is a lack of legislative time, which makes it unlikely that any amendments will be made within the next year or so. In any event, it appears that the new coalition government, which came into power since the proposals were initially put forward, does not have an appetite for amending the UK’s gambling legislation at this time. Responses to the consultation from large, white-list based, UK facing operators argued against introducing a licence requirement. While the substantial tax revenues that the licence requirement would generate would no doubt be welcome in the current economic climate, the indications are that the proposals to amend the UK’s gambling legislation have been put on the back burner for the time being. Ellis continued: “We do not envisage that the UK will move to a system where all operators require a local licence in the immediate future. However, the proposals are still under consideration by the government and may well be adopted in the medium-term, particularly in light of the fact that other European jurisdictions are increasingly moving towards licensing online gambling operators to target their local market.”

GERMANY The German gambling market is split into several sectors, each with its own regulatory regime. Online gambling is subject to federal state regulation, however any national law must be compliant with

European law and in this context, particularly with the freedom of establishment and the freedom of services. In an attempt to secure the state monopoly, the federal states enacted the Interstate Treaty and thereby introduced a prohibition of online gambling, claiming that the monopoly and the online ban was necessary to combat gambling addiction. However, economic reality is completely divergent from this regulatory framework. Dr. Joerg Hofmann and Matthias Spitz of Melchers law firm told iNTERGAMINGi that the attempt of the federal states to wall in national customers and keep foreign operators and investors out has failed. In fact, many operators battled national regulators before the administrative courts of the federal states. On September 8, 2010, some of the sports betting operators succeeded before the ECJ, to which some national courts had submitted the cases for preliminary ruling. Although the harsh regulation of the federal states failed in suppressing the rendering of online gambling services in the relation between national customers and foreign operators, it has successfully blocked the development of a national online gambling industry. Market analysts state that, at an increasing rate, the German online market is controlled by foreign companies – up to 94 per cent in the betting sector. With regard to these pre-conditions, cooperation between prestigious land-based operators in Germany and established online operators arguably will rather be successful than any attempt of a domestic company to reclaim shares in the online market single-handedly in the event of an opening of the online market. Hofmann and Spitz believe that a year of legal challenges lies ahead for those online gambling operators who intend to establish a lawful and long-term presence in the German market. It is intended that the prime ministers of the federal states will choose the final draft of a new Interstate Treaty on gambling in a conference on March 10, 2011. The 16 parliaments of the federal states will have to debate on that draft afterwards, because a new Interstate Treaty requires their consent by a federal state law. According to Hofmann and Spitz, liberalisation in sports betting and casino games by introduction of a licensing model appears more likely than a continuation of the monopoly in these sectors, as several federal states have announced pursuant intentions. It appears as though the gambling wall in Germany may be falling (although not entirely), and that those online sports betting and casino companies who made preparations just in time, will be able to access the German market.

FEATURE

FRANCE The topic of regulation of the online gambling industry in France has more questions than answers. Despite the criticism expressed regarding the application of the Law 2010-476 of May 12, 2010, on the opening up to competition and regulation of the French online gambling market, it has been argued that the French Government has attained its goal of not only opening up to competition of the French online gambling market but also fighting money laundering, gambling addiction and unlawful online gaming. The Act of May 12, 2010 provides that only three sectors are opened to competition on the online gambling market: sports betting, horse racing and poker. According to Thibault Verbiest, Valérie Achache and Lise Breteau, lawyers from law firm Ulys, it took only a few weeks for the newly-created National Regulatory Authority, entrusted with the task of regulating the online gaming market in France (the ARJEL), to show its effectiveness in the smooth enforcement of the Act and its implementing regulations. The ARJEL has been described as “a real partner” by some licensed operators, which seems to suggest that a genuine, trustworthy relationship is in the process of being built between the latter and the former. Furthermore, the results generated by the fight against unlicensed online gaming operators are conclusive, even though French courts contribute to it to a significant extent. After just a few weeks, the ARJEL conducted the scrutiny of more than 25 licence application forms submitted by online gaming operators (some of them containing more than 5,000 pages to review!). In this context, mindful of the deadline of the football World Cup in June 2010, 17 licences were initially issued to 10 operators; subsequently, 47 licences have been issued to 33 operators. The Act does not impose a numerus clausus principle or a call for tender process. The French Competition Authority has decided to issue an ex officio opinion analysing the competition issues likely to arise in the online gambling sector. After a preliminary analysis, the French Competition Authority decided to consider in its review: • Conditions for assessing the market and in particular the question of organising agreements relating to the negotiable right to bet with sports events organisers. To this end, the review will consider the distortion of competition that can be created within this framework, including procedures for determining the remuneration of the right to organise bets; • The impact on competition of remaining

monopoly activity (notably on networks) or the questions raised by the existence of vertically integrated operators; • Tariff policy of the operators, for example tiein discounts or loyalty discounts. On November 15, 2010, the French Competition Authority organised a first meeting with the main gambling market players to start this phase of talks. This resulted in the publication of a book whose goal is the standardisation of national online gambling laws and the creation of a harmonised European licence by the European Commission. Specialist advisory boards were set up to lay the foundations of the ARJEL’s contribution to the "review clause”, pursuant to article 69 of the Act, the first one in relation to the impact of opening the market, the second one in relation to the impact of opening the market on the industry and the third one in relation to the ARJEL‘s regulation tools and procedures. Verbiest, Achache and Breteau told iNTERGAMINGi that too many questions remain unanswered, slowing down the initial rhythm, which was due to the calendar requirements of the World Cup. In the frame of the aforesaid review clause that establishes a revaluation of the Act, the government will have to provide legal solutions to the browsing on gambling websites via smartphones and also take a stand on a possible revision of taxation and player return ratio, as well as a possible extension of the Act to games of chance (slots machines, etc.) or skill games (such as backgammon).

FINLAND Finland has a regulated gambling market with state licensed gambling monopolies. The Lotteries Act constitutes the basis for this structure. Companies wanting to operate in Finland must be granted a licence as operating without one is considered illegal. In 2008, the Finnish Government proposed changes to the Finnish Lotteries Act and Penal Code. All of the proposed changes came into force on October 1, 2010. Both the new provisions in sections 14b, 62-62c, as well as the amended and extended definition of marketing (including indirect advertisement) in section four of the Lotteries Act, grant the Finnish Board of Police increased competence to decide on questions regarding prohibitions and injunctions as to gambling organised without a gambling licence according to section 11 of the Lotteries Act. By also introducing stricter penalties for

lottery offences in the Penal Code – such as fines and imprisonment for up to two years – the authorities are trying to create a more effective system for keeping online gambling operators and media companies that market unlicensed gambling in Finland outside the Finnish market. John Eriksson, associate lawyer at Widman & Co Attorneys at Law, told iNTERGAMINGi that it may be concluded from a statement made by the Administration Committee of the Finnish Parliament and a statement made by the Constitutional Committee of the Finnish Parliament, that the mere existence of a foreign or land-based lottery website in the Finnish language is not considered as marketing unless the site contains other material that promotes participation of lotteries in Finland. It is also not considered as an illegal marketing measure if a hallmark for an unlicensed lottery or someone organising an unlicensed lottery appears in a foreign publication or television broadcast, as long as the main purpose of the publication or the broadcast is not to promote unlicensed lotteries in Finland or to receive compensation for promoting unlicensed lotteries in Finland. The Finnish Government in October 2010 issued a new proposition to the Parliament regarding further changes to the Lotteries Act. According to the proposition, the proposed changes should come into force on January 1, 2012. The main purpose of the proposed changes is to establish the government gambling associations’ monopoly position directly in the Lotteries Act and to adjust the regulation of the government gambling associations in accordance to the European Court of Justice ruling in C203/08. The proposition does not recommend or include PSP or ISP blocking, but the Finnish Ministry of the Interior is of the opinion that provisions regarding PSP and ISP blocking should be included in the Lotteries Act. At the moment, the Finnish Government gambling associations provide every kind of games apart from online casino games. According to an investigation made by the Finnish Ministry for Social Affairs and Health in 2008, the government gambling associations together have a market share of 45 per cent of the total online gambling market in Finland. The total turnover for the government gaming associations regarding online games for 2009 was €440.9m. In January 2010, the Finnish Government also permitted RahaAutomaattiyhdistys (the monopoly holder in Finland as to casino games) to organise casino games online and it is now preparing to launch its online casino games. According to Eriksson, it seems likely that the markets share and the turnover for the Finnish Government gaming associations will increase even more.

iNTERGAMINGi Issue 1 2011 | 25

PROFILE

In the zone Talking to Ted Robinson about the ZonePlay sports betting system, Simon Liddle discovers why this new platform from Buzz Sports is generating, well, a buzz

HAVING seen Robinson’s product turn heads at November’s G2E Las Vegas, the company’s chief operating officer has been gearing up for the London show where he says this “revolutionary” new product will receive its big launch. “We don’t talk about odds, we don’t talk about percentages because we know from the focus groups we’ve done that non-bettors find that confusing,” he told iNTERGAMINGi. “What we’re trying to do is to appeal to people who don’t normally bet; people who would never dream of having a Betfair or Bet365 account. This is entertainment for people who go to the pub to watch a game and say ‘I bet you they score from this corner.’” ZonePlay is a ‘what happens next’ product that works in real time on live sports. The system’s interface provides the player with 10 to 12 zones - whether it’s a football pitch or any of the array of sports currently available or under development - allowing players to bet on what happens next from a corner in football. In a typical football match, this creates more than 60 opportunities to bet. Both the stake and potential winnings are displayed clearly, without bombarding the player with confusing odds or percentages. Although Buzz Sports is aiming to install ZonePlay terminals in retail outlets, Robinson believes it is truly suited to the internet and mobile gaming. “It allows people to play ZonePlay wherever they are watching the game, whether they are watching it at home or in the pub. ZonePlay is very much an internet and mobilebased product because of the way the interface works.” Based around BEToptions’ WAGERPlayer system, an Australian wagering system used by a number of large gaming groups, ZonePlay has been designed to enable Buzz to settle around 10,000 bets a second, while the opening and closing of markets can be completed in equally impressive time. This technical infrastructure, Robinson asserted, was a great starting point for further development. Behind the scenes, the company has a team of statisticians designing the various sporting models and traders who open, close and settle markets in real time. “Obviously what makes ZonePlay work is the statistical model,” Robinson continued. “You then put in the odds of that particular game and then you have the traders actively trading. The trader has the skills and technology to be able to tweak the model in real time. That means that if we have a particular problem in a game - let’s say its Real Madrid vs Barcelona and in the first half

26 | Issue 1 2011 iNTERGAMINGi

Ted Robinson

Real have two players sent off - it allows them to tweak the model so if Real were favourites, they’re not favourites any more.” Trials of the retail terminals conducted in Belgium have shown that when it comes to football, users bet throughout the game rather than simply at the beginning and towards the end of a match. They can choose to bet on scoring from a corner or, as with every sports model, the long-odds option, which in football is a goal scored at the opposite end. “What you have to bear in mind is that this is small stakes stuff,” he said. “This, combined with being able to open and close markets a few

seconds before an event takes place, means you only need 10-15 seconds of the market to be open to place the bet because it is so intuitive. What we’re seeing people do in Belgium and in our focus groups is make not just one selection but a number of selections each time. You don’t have to be a tennis fan or a cricket fan to do it, you can very easily get a feel for it without being a huge fan.” The company launched its internet and mobile sites for the UK and Ireland at the end of last year, initially as play-for-fun to enable users to become familiar with how ZonePlay functions. “We’re being very, very careful to ensure that we’re only putting it in places where we are allowed to,” Robinson explained. “We’re certainly not going to be North America-facing, it’s very much a clean approach.” That’s not to say the sporting models being developed are solely for the UK and Irish markets. Such is the strength of the product, that it lends itself to a variety of sports. Additional sports models are currently under development and, having been rigorously tested, will be made available to the retail and internet markets. The football model has been completed and is already being traded, cricket and tennis will be released in the coming months and baseball and American football are in the early stages of design. Basketball is also in high demand, not just from potential US customers but from those in Europe too. Australia is being catered for with AFL and rugby, while an ice hockey model is being developed with Canada in mind. “ZonePlay is what in-play betting is all about,” Robinson added, “but it isn’t just about betting – it’s entertainment.”

SHOW

Preview

What's hot at ICE OPENBET NOW in its 15th year, OpenBet is the trusted partner of some of the biggest global betting operators including William Hill, Ladbrokes, Paddy Power and Sky Bet. As a rapidly expanding company with technical excellence and product innovation in betting technology, some key developments that have taken place over the past year include live betting and telebetting. OpenBet developed its LiveServ product, a highly scalable and flexible ‘push’ server that enables the delivery of live messages and data directly to the customer’s browser. Another introduction was the new browser-based telebetting application. OpenBet now also boasts a strong retail division, OpenBet Retail, following the acquisition of Alphameric Solutions. As a leading end-to-end technology provider for betting shops in the UK and Ireland, OpenBet Retail will launch the next generation of betting promotion display software at ICE 2011. OpenBetPromote will offer a number of new benefits and is set to enhance the betting shop experience aimed at increasing revenue opportunities in high street betting shops. Designed for major and independent bookmakers, OpenBetPromote is a software only solution, giving bookmakers the flexibility to select their own PC hardware and support their own estates independently. It has been designed to display pictures and promote betting opportunities on up to 255 separate displays, which can be flexibly mapped across up to 40 physical high-definition screens. Without restrictions on screen location, layout, content or style, it is a flexible and dynamic screen system. Join OpenBet on Tuesday, January 25, at ICE Totally Gaming (stand number 5165) for the product launch of OpenBetPromote and learn more about its award winning products and new technology.

GREENTUBE DEVELOPER and provider of gaming solutions Greentube will once again be participating at ICE in London. The company will present a wide variety of casino, poker, bingo and skill game innovations with a special focus on the latest casino products. Among them are numerous Novomatic slots such as Book of Ra, Bullionbars, Power Stars, Lord of the Ocean and many more. Greentube offers a wide range of gaming solutions. Internationally best selling games such as Sizzling Hot deluxe, Lucky Lady’s Charm deluxe, Book of Ra deluxe, Dolphin’s Pearl deluxe, Columbus deluxe, Reel King and further Novomatic games add value to the comprehensive Greentube slots portfolio. The Novomatic Remote Gaming System (NRGS) was integrated into the existing Greentube systems and contributes to the game portfolio’s success. NRGS is a simple turnkey solution that delivers instant and seamless integration on a robust and stable medium that permits a smooth, uninterrupted gaming experience. Following the success of the first Novomatic slots, Greentube is now rapidly extending its casino portfolio with a special focus on mobile casino solutions. Apart from numerous slot games, the Greentube casino portfolio will include baccarat, sic bo, roulette and blackjack – the latter being the most popular of international casino games, especially in the online sector. This popularity of the game, together with a high quality realisation and maximum gaming fun, is the secret of Greentube’s success. Find out more about the latest online slots and turnkey gaming solutions on booth number 5420.

28 | Issue 1 2011 iNTERGAMINGi

SHOW

GLOBAL BETTING EXCHANGE ICE is the one event of the year where the international betting and gaming fraternity all meet under one roof,” Global Betting Exchange spokesperson Shane McLaughlin told iNTERGAMINGi. “It’s invaluable whether in terms of following the conference programme, looking at new, innovative ideas or making new contacts and seeing old, friendly faces. It is for these reasons that the exhibition is held in such high regard and is therefore a date that is firmly circled in the Global Betting Exchange calendar.” As a leading provider of technology to the online betting industry, GBE sees ICE as an opportunity to showcase its B2B exchange betting platform that has been developed over the past 10 years and which it prides itself on. The company’s primary reason for attending the event is to use it as a vehicle to present the GBE Sports Betting Solutions. “We have a solution that offers both a unique exchange betting platform as well as an online fixed odds sportsbook solution, which is fully integrated into our exchange. “Our exchange solution, xBroker, is the only exchange commercially available that comes with a complete 24x7x52 event management and settlement service. Furthermore, it brings access to established liquidity of more than US$1.5bn weekly in over 6,000 markets. Our fixed odds sportsbook, iBroker, is a complete turnkey betting exchange backed platform that can be used to operate a full service internet sportsbook without the requirement for round-the-clock operations. Our platform is designed to deliver low technology costs and virtually unlimited scalability.” McLaughlin continued: “Having a stand at Earl’s Court gives us the ability to add the personal touch and to answer a range of questions from delegates. It is also a perfect opportunity to meet with prospective partners, in particular the many international partners that make the trip to London for the event.” Visit Global Betting Exchange on stand 6118.

PARSPRO THIS is the fourth time that Parspro will be exhibiting at ICE. This year will see the company showing its complete gaming suite including: Parspro TOTO — a fully automated sports book incorporating a fixed payout and providing full control of risk management, odds recalculation, event closure, results and payouts. Parspro Juliet — a live betting platform that features advanced automation to drive down operator costs. This is achieved by integrating fully automated live streams from a third party, while simultaneously enabling individual bookmakers to oversee multiple events using a single interface. This ensures high availability of events at any given time and provides operators with tools to manually control events when required. Parspro Eitri — a predictive in-play client for iOS and Android mobile devices. Eitri combines advanced user profiles with a neural network to predict preferred sporting events and preferred market types on a mobile device. Parspro Elektra — the latest addition to the Parspro gaming portfolio, this management information system provides a real-time, mobile overview of all in-play events. Parspro Elektra is designed for use with the Apple iPad and Parspro Juliet, and can be accessed worldwide. Parspro Cassandra — bringing live sports betting to the global social network, Cassandra is Parspro's in-play tournament system with full Facebook integration. Parspro Cordelia — a full service horse and greyhound pari-mutuel betting solution. While scalability, reliability, flexibility and security are key features of Parspro gaming products and solutions, automation is fundamental to driving down operator costs. Working at the forefront of web-based technology, Parspro is on the threshold of providing operators with an integrated set of tools and services necessary for operating a successful online gaming experience. “Our ever-expanding range of innovative, cost-effective solutions is expressly designed to increase value for our customers. This enables them

Preview

YOYOUSOFT DEDICATED to egaming business in Asia and Europe, YoYouSoft’s business lies in online application and software development. iNTERGAMINGi spoke to Kevin Li from YoYouSoft: “ICE provides a fantastic market place for gaming companies to meet their potential customers and suppliers. Also, it is the leading expo in the world to demonstrate the most innovative gaming technologies and services.” The company is exhibiting at the show in order to meet its clients and learn about industry trends. For Li, established brands and full coverage of gaming products and services is what makes ICE one of the best online gaming shows. Li is most looking forward to seeing brand new products and services at the show and is looking forward to exhibiting YoYouSoft’s set of new games. “Trade shows provide the opportunity to meet people face to face and conduct businesses,” said Li. Visit YoYouSoft at stand 6005.

to confidently grow their business in a secure, reliable and stable environment,” Thorvar Hafsteinsson from Parspro told iNTERGAMINGi. “ICE is without a doubt the most important show of the year,” said Hafsteinsson. “We have had a great experience at the show – a lot of new leads and full action from the first minute to the last.” Hafsteinsson is most looking forward to meeting new and existing clients at the show this year and told iNTERGAMINGi that the opportunity to meet potential customers from all over the world and from all sectors of the gaming business is what makes it such a massive event. “ICE is the event to attend for all professionals in the gaming business - online and land-based.” Parspro will be exhibiting on stand 5290.

iNTERGAMINGi Issue 1 2011 | 29

COMMENT

continued from page 29

ISLE OF MAN "SHOWS such as ICE continue to be an important platform for us to promote ourselves as an approachable, flexible and well regulated jurisdiction," Garth Kimber, head of egaming development, department for economic development Isle of Man Government, told iNTERGAMINGi. "At ICE this year we will have 14 companies, supporting the government team, offering an even greater range of services than before, including software provision, data hosting, B2B platforms and white label solutions. "We will be looking to attract more business to the island from an everincreasing diverse range of companies. We will also continue discussions with a number of large operators on how we can work with them and adapt Isle of Man legislation in the coming 12 months to ensure it fits with modern business methods. "We also expect that there will be on-going discussions at ICE about the European scene. Many of the conversations we have with prospective businesses will be around explaining how Isle of Man-based operators have access to Europe and that we have operators holding licences in France and Italy already. "Marketing services is another area in which the island has made significant strides this year. Expertise in social and digital media for any gaming business is now a 'must have', not least because return on investment is far greater and more measurable than traditional marketing methods. It is really exciting therefore for us to be able to make introductions now to local companies and individuals with genuine expertise in these areas. With this in mind, it seemed appropriate for us to demonstrate our forward thinking approach and showcase some of the new technology available in the ICE campaign this year. Visitors to our stand (5530) will be able to experience first hand some of the latest techniques that Isle of Man companies can deliver."

Phil Clegg, Editor-in-Chief

Online sector transforms the London show It has been amazing to watch the online gaming part of the London ICE show expand rapidly over the past few years. What started off as a smattering of online players with small stands has become a major part of the overall event, reflecting the rapid growth of the sector as a whole. And this is part of the reason why I now believe ICE Totally Gaming to be the most important gaming event in the world. The only area in which it cannot compete with Las Vegas' G2E is overall size, but part of the reason for that is the space limitation imposed by the Earls Court venue. In every other area it is now a superior show and that is mainly down to the vast improvement in the online and remote gaming content. Granted, the situation in the US regarding online gaming is difficult, so that doesn't help. But this year the London show promises to live up to its new name completely. For the show to expand in the future, however, it will need a new venue. If that happens, the way things are going I can see the online section of the exhibition eventually overtaking the land-based element. That's a long way off, but I think it will happen. The first London show I attended was in 1975, when it was simply the Amusement Trades Exhibition and held in the rather quaint Alexandra Palace. It was mainly amusement products with a little bit of soft gambling stuff thrown in, but from that acorn the ICE Totally Gaming oak tree has grown.

Daily news service The InterGame, InterGaming, iNTERGAMINGi editorial team will be even more busy than usual at Earls Court this year. We are producing daily publications that will be distributed to all visitors on each of the three days of the show. This will provide the event with an unprecedented and extremely informative news service as it unfolds.

30 | Issue 1 2011 iNTERGAMINGi

SHOW

Calendar

Online gaming events Q1 2011 March 1-3, 2011

May 23-26, 2011

What: i-Gaming Asia Congress 2011 Where: Grand Hyatt, City of Dreams, Macau. Contact: Beacon Events, 20/F Siu On Center, 188 Lockhart Road, Wanchai, Hong Kong T: +852 2219 0111 F: +852 2219 0112 E: [email protected] W: www.igamingasiacongress.com About: i-Gaming Asia Congress will return to Macau for another year of learning, networking and entertainment. The event provides the ideal opportunity for bringing together Western technology and experience with the market knowledge of those doing business in Asia. Delegates can expect to meet global and regional gaming operators, gaming regulators, gaming and content providers and more. i-Gaming Asia Congress gives delegates the opportunity to discover which jurisdictions have the most potential and determine their strategy for entering and succeeding in those markets, and to meet content and distribution partners who have the networks to access the Asian gaming market.

What: iGaming Super Show 2011 Where: Dublin, Ireland Contact: iGaming Business, 33-41 Dallington Street, London, EC1V 0BB, UK T: +44 20 7954 3417 F: +44 20 7954 3511 E: [email protected] W: www.igamingsupershow.com About: The iGaming Super Show is returning, but this year the event will be held in Dublin, Ireland. There will be one exhibition room with two zones and more than 150 stands, conference tracks, networking events and more than 2,500 delegates, from operators to affiliates. Free for all delegates to attend, the aim of the iGaming Super Show is to provide a meeting place for the whole industry, whether a vendor, media, affiliate, operator or regulator. Last year’s event saw over 2,000 attendees, from CEOs of the leading operators through to payment services, regulatory boards and some of the biggest affiliates in the sector. Whether starting out as a marketing executive or a veteran in the igaming industry, this show is inclusive for every job role.

January 24-25 What: Legal Gaming in Europe Summit 2011 Where: Millennium Gloucester Hotel, London UK Contact: Louisa Spiteri, Bullet Business, 7-9 Fashion Street, London, E1 6PX, UK T: +44 20 7375 7245 W: www.bulletbusiness.com/gambling-conference January 24-27 What: ICE Conferences Jan 24 - International Casino Conference Jan 25 – Combating Cybercrime, Mobile Gaming; Jan 26 – Monetising Social Games, Payments for Gaming Jan 27 – CRM & Retention in Gaming, Mergers & Acquisitions in Gaming Where: Earls Court Exhibition Centre, London, UK. Contact: Clarion Gaming, Earls Court Exhibition Centre, Warwick Road, London SW5 9TA, UK T: +44 20 7370 8560 F: +44 20 7370 8562 E: [email protected] W: www.clariongaming.com January 25-27 ICE Totally Gaming, Earls Court, London, UK Contact: Clarion Gaming, Earls Court Exhibition

Centre, Warwick Road, London SW5 9TA, UK T: +44 20 7370 8560 F: +44 20 7370 8562 E: [email protected] W: www.clariongaming.com January 27-30 What: London Affiliate Conference (LAC) & iGB Affiliate Awards Where: London, UK Contact: iGaming Business, 33-41 Dallington Street, London EC1V 0BB, UK T: +44 20 7954 3417 F: +44 20 7954 3511 E: [email protected] W: www.londonaffiliateconference.com February 21 What: Online Gambling in Spain Where: Madrid, Spain Contact: Awedacity Ltd, 4 Craneford Close, Twickenham, London TW2 7SD, UK T: +44 7967 337305 F: +44 20 8711 6711 E: [email protected] W: www.awedacity.co.uk May 22-24 What: IMGL Spring Conference Where: Napa Valley California, US

Contact: Melissa Lurie, IMGL, 3288 St Vincent Place, Boulder, Colorado, CO 80301, US T: +1 303 449 9955 F: +1 303 449 9977 E: [email protected] W: www.gaminglawmasters.com/conference/ July 5-7 What: World Gaming Executive Summit 2011 Where: Eurostars Madrid, Madrid, Spain Contact: Bianca Geldenhuys, Terrapinn Ltd, Wren House, 43 Hatton Garden, London, EC1N, 8EL, UK T: +44 207 092 1224 F: +44 207 242 2320 E: [email protected] W: www.terrapinn.com/2011/wges September 14-16 What: IMGL Autumn Conference Where: Vienna, Austria Contact: Melissa Lurie, IMGL, 3288 St Vincent Place, Boulder, Colorado, CO 80301, US T: +1 303 449 9955 F: +1 303 449 9977 E: [email protected] W: www.gaminglawmasters.com/conference/

iNTERGAMINGi Issue 1 2011 | 31

CHARTS

Top 60 most visible gaming websites for Q3 2010 Source: Greenlightsearch.com

1 888.com

16 Bingo.WilliamHill.com

31 CasinoChoice.co.uk

46 FreeBingoHunter.com

2 Ladbrokes.com

17 Poker.WilliamHill.com

32 EurosportBET.co.uk

47 PartyPoker.com

3 WilliamHill.com

18 VictorChandler.com

33 InterCasino.co.uk

48 kerchingcasino.com

4 bet365.com

19 sportingbet.com

34 bingoport.co.uk

49 MrGreen.com

5 Betfair.com

20 bwin.com

35 ToteSport.com

50 TastyBingo.com

6 wikipedia.org

21 williamhillcasino.com

36 stanjames.com

51 BlueSq.com

7 Jackpotjoy.com

22 Casino.Ladbrokes.com

37 cheekybingo.com

52 SkyBingo.com

8 PaddyPower.com

23 betfred.com

38 galabingo.co.uk

53 GameVillage.com

9 PokerStars.com

24 pokerlistings.com

39 dealornodealbingo.com

54 RedBusBingo.com

10 FoxyBingo.com

25 888Ladies.com

40 costabingo.com

55 oddschecker.com

11 WinkBingo.com

26 888poker.com

41 SkyVegas.com

56 pokerjunkie.com

12 SkyPoker.com

27 Poker.888.com

42 SingBingo.com

57 pkr.com

13 FullTiltPoker.com

28 Poker.bet365.com

43 CaesarsBingo.com

58 online-betting-guide.co.uk

14 MeccaBingo.com

29 PoshBingo.co.uk

44 Boylesports.com

59 pacificpoker.com

15 Bingo.bet365.com

30 Tombola.co.uk

45 BingoHollywood.com

60 pokerroom.com

41

20

54

49

32 | Issue 1 2011 iNTERGAMINGi

26

44

5

18