Social Gaming Considerations

1. Social Gaming Considerations

2. Casino Gaming Technology Advances

3. Casino Gaming Technology

4. Unregulated Gaming Timeline • Introduction of modern video game consoles led to decline in video game arcades in the late 1980's. • Introduction of Gameboy handheld in 1989. • Sony Playstation introduced CD-ROM technology in 1995 along with 64-bit technology that would lead to modern gaming experience with games like Madden and Guitar Hero. • Mobile phone gaming began to emerge in 1997. • In 2001 Microsoft introduces Playstation and we begin to see console gaming interacting via the Internet. • Japanese culture spawned the first wave of mobile phone gaming applications that quickly spread to U.S. and Europe.

5. Unregulated Gaming Technology

6. Social Gaming Convergence One recent study by a mobile analytics company found out of 780 million active participants of social games, a sizeable 90 million of those are playing casino-style games.

7. Social Gaming Convergence That same study noted that during 2011, the use of casino-style social games increased by 60% while players of other social game types increased by 13%.

8. Social Gaming Convergence • Current estimates suggest approximately 200 million people play social games on social networking sites at least once a day. • By 2019, nearly 400 million people will play social games on a daily basis.

9. Social Gaming Convergence 54 milliondaily active players 23 million monthly active users

10. Social Game Characteristics • Played for entertainment • Played through social networks • Players may play at little to no cost • Many games are designed with social interaction and competition among players in mind.

11. Business Models Generally, there are two business models employed in the social games industry: • Up-front cost for the game or application • Buy the application like Angry Birds • Free game or application with in-game purchases available to enhance the entertainment experience • IGT’s Double Down poker allows you a fixed amount of free chips per day with the option of buying more chips for money.

12. UK Office of Fair Trading • Information on costs • Material information on the game • Contact details and complaints handling • Commercial intent of the game • In-game purchases must not appear necessary unless they are • No use of commercially aggressive strategies • No direct exhortations aimed at children • No unauthorized payments

13. GLI Voluntary Social Gaming Standard • Focus on player protection • Uses a tiered audit model • Game transparency • Security for: • Player accounts • Payment processing • Game play • Network security • 3rd Party verification of: • Game functionality • Responsible gaming measures • Payment processing • Age verification (if any) • Parental monitoring tools

14. Is the Mobilization of Gaming Content "Expansion" or "Modernization"? • The Internet has become a critical delivery channel for almost all forms of commerce • Movies • Banking • Insurance • Retail • It has created new industries • Monetization of social relationships • Communications • Does is make gaming more dangerous or safer? • What are the future economics of gaming?

15. In the meantime, the games will continue.

16. Questions? Thank You! Kevin Mullally Vice-President of Government Relations and General Counsel Gaming Laboratories International (702) 236-9508 k.mullally@gaminglabs.com