7 th European Conference on Gambling Studies and Policy Issues

1. 7th European Conference on Gambling Studies and Policy Issues “Beyond Smart Cards to Smart Technologies” Phillip Ryan Chief Executive Officer Responsible Gaming Networks Melbourne, Australia RESPONSIBLE GAMING NETWORKS

2. Overview • Player Pre-commitment as the new frontier • Global leadership in Pre-commitment • The constraints of the old technologies • The new technologies for pre-commitment • International Pre-commitment developments • Internet gambling application RESPONSIBLE GAMING NETWORKS

3. Problem Gambling Policy Focus • Phase 1: Focus on venues • Phase 2: Focus on machines functionality • Phase 3: Focus on machine density RESPONSIBLE GAMING NETWORKS

4. Problem Gambling Policy Focus • Phase 1: Focus on venues • Phase 2: Focus on machines functionality • Phase 3: Focus on machine density • The New Agenda: Player Pre-commitment RESPONSIBLE GAMING NETWORKS

5. The New Public Policy Agenda • Player Pre-commitment • Players set limits away from the gambling environment • Focus on players setting pre-commitment limits • Player monetary loss limits – daily, weekly, monthly. • Player time limits – daily, weekly, monthly. • Gambling must stop when limits reached • Players initially set their own limits voluntarily • Players carry an ID device connected to their limits in order to play (e.g. plastic card, smart card or some other smart technology) • Gambling can only take place using an ID device. RESPONSIBLE GAMING NETWORKS

6. Initial Global Leadership • Nova Scotia, Canada • Responsible Gaming Device (RGD) trial in 2006 • Plastic Card with ‘voluntary’ capability to set limits • Trialled across two towns – Windsor & Mount Uniacke • Players required to use a card to play machines • Initiated by the Nova Scotia Gaming Corporation RESPONSIBLE GAMING NETWORKS

7. Nova Scotia Trial Findings • Significant database of player activities • Extended player analysis now possible by independent researchers over time RESPONSIBLE GAMING NETWORKS

8. Nova Scotia Trial Findings • Significant database of player activities • Extended player analysis now possible by independent researchers over time • Unfortunately some players ‘beat’ the system: • Plastic cards shared amongst players • 37% of players shared their card with someone else • Sharing of cards extended for up to a week • Card sharing increased with increased PGSI score RESPONSIBLE GAMING NETWORKS

9. Limitations of plastic cards with PIN Cards have very low storage capacity (<1k) Cards & PINs can be swapped between gamblers Cards can be easily copied/skimmed Cards require an additional card reader Cards operate on different proprietary standards Cards limited to a single gambling network Old Technologies RESPONSIBLE GAMING NETWORKS

10. Old Technologies RESPONSIBLE GAMING NETWORKS

11. Old Technologies • Smart cards with PIN • Player loyalty systems with convenience expenditure • Cards have minimal storage capacity (32k) • Cards & PINs can be swapped between gamblers • Cards require an additional expensive card reader • Cards operate on different proprietary smartcard standards • Cards limited to a single gambling network • Smartcards use problematic digital cash • Players lose connection with the use of real money • Increased risks for problem gamblers • KPMG Study for Australian Government RESPONSIBLE GAMING NETWORKS

12. Nova Scotia Trial Findings • International Gaming Institute, University of Nevada, 2007 Report: • Players “beat” the system – card sharing • Should pursue measures to address this specific problem RESPONSIBLE GAMING NETWORKS

13. Nova Scotia Trial Findings • International Gaming Institute, University of Nevada, 2007 Report: • Players “beat” the system – card sharing • Should pursue measures to address this specific problem • Biometric ID solution required (fingerprint, facial etc) for pre-commitment solutions RESPONSIBLE GAMING NETWORKS

14. New Technology Solutions • Biometrics • Unique characteristics of every human being. • Eyes, fingers, voice, handwriting etc • Cannot be easily exchanged between humans • Most developed biometric is fingerprints • Developed by FBI in 1920’s • Recognized and accepted globally • Lowest cost biometric • New technologies have digitized fingerprint biometrics RESPONSIBLE GAMING NETWORKS

15. Fingerprint Biometrics RESPONSIBLE GAMING NETWORKS

16. Fingerprint Biometrics RESPONSIBLE GAMING NETWORKS

17. Player Protection Key RESPONSIBLE GAMING NETWORKS

18. Player Protection Key • Electronic Key – unique for each player • Biometric identification of owner • Eliminates sharing of ID amongst players • On-board fingerprint scanner • On-board storage of biometrics RESPONSIBLE GAMING NETWORKS

19. Player Protection Key • Electronic Key – unique for each player • Biometric identification of owner • Eliminates sharing of ID amongst players • On-board fingerprint scanner • On-board storage of biometrics • Plug-and-Play Device – no batteries • Connects directly into all USB outlets • Eliminates need for a card reader • On board microprocessor = multi-venue RESPONSIBLE GAMING NETWORKS

20. Player Protection Key • Electronic Key – unique for each player • Biometric identification of owner • Eliminates sharing of ID amongst players • On-board fingerprint scanner • On-board storage of biometrics • Plug-and-Play Device – no batteries • Connects directly into all USB outlets • Eliminates need for a card reader • On board microprocessor = multi-venue • Massive storage capacity (8 Gigabytes) • Coverage across multiple gambling operators • Coverage across all channels of distribution: • Off line venues, Internet, Kiosks, TV • Coverage across all forms of gambling - gaming, lotteries, wagering, sports, spread betting. RESPONSIBLE GAMING NETWORKS

21. Player Protection Key • Players voluntarily set personal limits • Encouraged to set affordable limits • Limits set outside gambling environment • Ideal self-exclusion mechanism • No central storage of player biometrics • No cost to player for device • Extensive player database for researchers RESPONSIBLE GAMING NETWORKS

22. Player Protection Key • Internet compliant • USB connectivity to all computers RESPONSIBLE GAMING NETWORKS

24. Biometric Gaming Standards • Regulators - Nevada Gaming Commission • Biometric technical standards established • “Mobile Gaming System Policies” • May 2006 • Two Factor authentication (device & biometrics) for player ID • Established standards for: • Cryptographic protocols • Encryption algorithms • Machine Manufacturers - Gaming Standards Association • USB now adopted as Gaming Device Standard – GDS – for all EGMs globally. RESPONSIBLE GAMING NETWORKS

25. Nova Scotia Today • November 2007 announcement: • “Informed Player Choice System” to be introduced: • Across the entire province of Nova Scotia • Across all machines • Player’s to have the capability to establish loss and time pre-commitment limits across all machines • Implementation within 18 months • Cost of CAD$3 - $4 million per annum • But haven’t addressed the key card sharing issue. RESPONSIBLE GAMING NETWORKS

26. Recent Global Developments • Australia – April 2008 • Government has announced player pre-commitment on 27,500 machines • Funded by gambling industry value chain re-structure • Norway – July 2008 • Player pre-commitment • Universal government pre-commitment • Singapore • Player pre-commitment in two new casinos • Across all forms of gambling – slots, cards, roulette. • Self exclusion, family exclusion, government exclusion

27. Responsible Gaming Networks • Socially-responsible Australian-based consortium • Focused on eliminating problem gambling from: • Wide area gaming machines • Internet gaming • Using Player Protection Key and Safety Net system to provide: • Reliable identity access for all players using biometrics • Safe play using player pre-commitment protection • Consortium of USA, European and Australian technology partners RESPONSIBLE GAMING NETWORKS

28. Internet Gambling Industry • Globally: • 700 million internet users globally • 2,500 internet gambling sites • $16 billion of player gambling losses last year • ‘10 times’ the prevalence of off-line problem gambling • New Zealand: • 75% of NZ population use the internet • 50% of NZ children use the internet daily • 12-17 year olds in NZ use the internet as often as the heaviest adult users • NZD$2 billion spent on terrestrial gambling • Will result in an emerging digital problem RESPONSIBLE GAMING NETWORKS

29. Internet Gambling Models • Old Internet Models: • Ban access to all local internet casinos • Allow open access to all internet casinos globally • Both regulatory models increase player risks around: • casino authenticity • lack of financial regulatory controls • consumer protection • underage gambling • problem gambling. RESPONSIBLE GAMING NETWORKS

30. Internet Gambling Models • Old Internet Models: • Ban access to all local internet casinos • Allow open access to all internet casinos globally • Both regulatory models increase player risks around: • casino authenticity • lack of financial regulatory controls • consumer protection • underage gambling • problem gambling. • New Internet Model • Allow access to approved list of casinos RESPONSIBLE GAMING NETWORKS

31. New Internet Model CASINO A CASINO B INTERNET PORTAL CASINO C USBPlayer Protection Key CASINO D CASINO E RESPONSIBLE GAMING NETWORKS

32. New Internet Model CASINO A CASINO B INTERNET PORTAL CASINO C USBPlayer Protection Key CASINO D CASINO E Player Pre-Commitment and Authentication Government Taxation Casino Authentication & Regulatory Supervision RESPONSIBLE GAMING NETWORKS

33. New Internet Model • Player Benefits: • One registration process for the player • One set of pre-commitment limits across all operators • Consumer protection through regulated operators • Government Benefits: • No risks of under-age gambling • Reduces risks of increased problem gambling • Place-of-residence player identification • Allows for better regulation & taxation of the industry RESPONSIBLE GAMING NETWORKS

34. Questions • Contact • Phillip Ryan • Chief Executive Officer • Responsible Gaming Networks • Melbourne, Victoria. Australia • p_ryan@responsible.com.au • Mobile + 61417 313 726 RESPONSIBLE GAMING NETWORKS