Recent Global Developments In Player Pre-Commitment Policies To Reduce Problem Gambling

1. Recent Global DevelopmentsIn Player Pre-Commitment PoliciesTo Reduce Problem Gambling Phillip Ryan Chief Executive Officer Responsible Gaming Networks Melbourne, Australia NCPG CONFERENCE, INDIANAPOLIS, INDIANA. JUNE 2009

2. Topics • What is Pre-Commitment? • What is its rationale? • How is it evolving? • What is the current state-of-play around the world? • What are the challenges for Pre-Commitment? • The technologies of Pre-Commitment • The new public policy driver within the USA • Pre-Commitment as a dynamic public policy solution RESPONSIBLE GAMING NETWORKS

3. What is Pre-Commitment? • Addresses the definition of problem gambling: • “problem gambling is characterized by difficulties in limiting money and/or time spent on gambling which leads to adverse consequences for the gambler, others, and for the community” . RESPONSIBLE GAMING NETWORKS

4. What is Pre-Commitment? • Addresses the definition of problem gambling: • “problem gambling is characterized by difficulties in limiting money and/or time spent on gambling which leads to adverse consequences for the gambler, others, and for the community” . • Based on academic research: • Rational consumer purchasing decisions in gambling • Professor Mark Dickerson et al. • Players set money and time limits PRIOR to gambling RESPONSIBLE GAMING NETWORKS

5. What is Pre-Commitment? • Addresses the definition of problem gambling • “problem gambling is characterized by difficulties in limiting money and/or time spent on gambling which leads to adverse consequences for the gambler, others, and for the community” (1). • Based on academic research: • Rational consumer purchasing decisions in gambling • Professor Mark Dickerson et al. • Players set money and time limits PRIOR to gambling • Focus on the player: • Beyond the venues (hours of operation etc.), machines (spin rate, max bet etc.) and ATMs (cash withdrawals etc.) RESPONSIBLE GAMING NETWORKS

6. The Rules of Pre-Commitment • Player Pre-Commitment: • Players set limits away from the gambling environment. RESPONSIBLE GAMING NETWORKS

7. The Rules of Pre-Commitment • Player Pre-Commitment • Players set limits away from the gambling environment. • Pre-commitment limits: • Player monetary loss limits – daily, weekly, monthly, annual. • Player time limits – daily, weekly, monthly, annual. RESPONSIBLE GAMING NETWORKS

8. The Rules of Pre-Commitment • Player Pre-Commitment • Players set limits away from the gambling environment. • Pre-commitment limits: • Player monetary loss limits – daily, weekly, monthly, annual. • Player time limits – daily, weekly, monthly, annual. • Gambling must stop when limits reached. RESPONSIBLE GAMING NETWORKS

9. The Rules of Pre-Commitment • Player Pre-Commitment • Players set limits away from the gambling environment. • Pre-commitment limits: • Player monetary loss limits – daily, weekly, monthly, annual. • Player time limits – daily, weekly, monthly, annual. • Gambling must stop when limits reached. • Players set their own limits voluntarily with cooling-off period. RESPONSIBLE GAMING NETWORKS

10. The Rules of Pre-Commitment • Player Pre-Commitment • Players set limits away from the gambling environment. • Pre-commitment limits: • Player monetary loss limits – daily, weekly, monthly, annual. • Player time limits – daily, weekly, monthly, annual. • Gambling must stop when limits reached. • Players set their own limits voluntarily with cooling-off period. • Players have a mandatory ID access device connected to their limits in order to play (e.g. plastic card, smart card or some other smart technology). RESPONSIBLE GAMING NETWORKS

11. The Rules of Pre-Commitment • Player Pre-Commitment • Players set limits away from the gambling environment. • Pre-commitment limits: • Player monetary loss limits – daily, weekly, monthly, annual. • Player time limits – daily, weekly, monthly, annual. • Gambling must stop when limits reached. • Players set their own limits voluntarily with cooling-off period. • Players have a mandatory ID access 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 access device. RESPONSIBLE GAMING NETWORKS

12. Evolution of Pre-Commitment • Crown Casino, Melbourne, Australia - 2002: • Introduced player-pre-commitment money limits on their 2,500 poker machines (first casino in the world to introduce). RESPONSIBLE GAMING NETWORKS

13. Evolution of Pre-Commitment • Crown Casino, Melbourne, Australia - 2002: • Introduced player-pre-commitment money limits on their 2,500 poker machines (first casino in the world to introduce). • However, play did not stop when limits reached. • Players did not have to carry ID card to play.

14. Evolution of Pre-Commitment • Crown Casino, Melbourne, Australia - 2002: • Introduced player-pre-commitment money limits on their 2,500 poker machines (first casino in the world to introduce). • However, play did not stop when limits reached. • Players did not have to carry ID card to play. • Nova Scotia, Canada - 2006: • Player ID registration and card required to play. • Trialled pre-commitment money and time limits on VLTs in two towns. (video clip) • Rolling out across all of Nova Scotia later this year. RESPONSIBLE GAMING NETWORKS

15. Today’s Developments • Singapore Casinos : • Marina Bay – Las Vegas Sands ($5 billion +) • Sentosa Island – Genting International ($5 billion +). • Pre-Commitment limits mandated by Government of Singapore. Limits will apply across all forms of gambling – slots, tables etc. Limits will apply to residents and tourists. Will my personal limits apply across both casinos? RESPONSIBLE GAMING NETWORKS

16. Today’s Developments • Singapore Casinos : • Marina Bay – Las Vegas Sands ($5 billion +) • Sentosa Island – Genting International ($5 billion +). • Pre-Commitment limits mandated by Government of Singapore. • Limits will apply across all forms of gambling – slots, tables etc. • Limits will apply to residents and tourists. • Will my personal limits apply across both casinos? RESPONSIBLE GAMING NETWORKS

17. Today’s Developments • Singapore Casinos : • Marina Bay – Las Vegas Sands ($5 billion +) • Sentosa Island – Genting International ($5 billion +). • Pre-Commitment limits mandated by Government of Singapore. • Limits will apply across all forms of gambling – slots, tables etc. • Limits will apply to residents and tourists. • Will my personal limits apply across both casinos? • Entrance fees for locals (s$100 = us$70/visit , s$2000 = us$1400/year). • Strict self exclusion and third party exclusions • Welfare recipients & bankrupts • Family exclusion • 28,000 people identified so far – expect 55,000. • Convergence of Pre-Commitment, Exclusion and Access systems. RESPONSIBLE GAMING NETWORKS

18. Today’s Developments • Singapore Casinos : • Marina Bay – Las Vegas Sands ($5 billion +) • Sentosa Island – Genting International ($5 billion +). • Pre-Commitment limits mandated by Government of Singapore. • Limits will apply across all forms of gambling – slots, tables etc. • Limits will apply to residents and tourists. • Will my personal limits apply across both casinos? • Entrance fees for locals (s$100 = us$70/visit , s$2000 = us$1400/year). • Strict self exclusion and third party exclusions • Welfare recipients & bankrupts • Family exclusion • 28,000 people identified so far – expect 55,000. • Convergence of Pre-Commitment, Exclusion and Access systems. RESPONSIBLE GAMING NETWORKS

19. Marina Bay – June 2009

20. Marina Bay – Final Outcome

21. Resort World Sentosa-Model

22. Today’s Developments • Norway : • VLTs removed due to concerns with problem gambling. • All private owned machines taken over by state-owned Norsk Tipping. Player ID registration introduced. Machines returning with player pre-commitment. Plus Government pre-commitment limits:(us$75/day (K400); us$342/month (K2200); cooling off period after 1 hour continuous play ). 1,600 out of 6,500 machines returned to date. RESPONSIBLE GAMING NETWORKS

23. Today’s Developments • Norway : • VLTs removed due to concerns with problem gambling. • All private owned machines taken over by state-owned Norsk Tipping. • Player ID registration introduced. • Machines returning with player pre-commitment. Plus Government pre-commitment limits:(us$75/day (K400); us$342/month (K2200); cooling off period after 1 hour continuous play ). 1,600 out of 6,500 machines returned to date. RESPONSIBLE GAMING NETWORKS

24. Today’s Developments • Norway : • VLTs removed due to concerns with problem gambling. • All private owned machines taken over by state-owned Norsk Tipping. • Player ID registration introduced. • Machines returning with player pre-commitment. • Plus Government pre-commitment limits:(us$75/day (K400); us$342/month (K2200); cooling off period after 1 hour continuous play ). • 1,600 out of 6,500 machines returned to date. RESPONSIBLE GAMING NETWORKS

25. Today’s Developments • Australia: • State Government of Victoria: • By 2013 all new machines must have pre-commitment. • Abolished role of private operators in the industry value chain (TABCORP and Tattersall’s). • Pre-Commitment specifications to be released later this year. Australian Ministerial Council on Gambling: “Pre-commitment a priority area to reduce harm from gambling” Analysis of Gambler Pre-Commitment Behaviour, June 2006 Gambler Support for Pre-Commitment 7 out of 10 slot players support compulsory pre-commitment limits 8+ out of 10 slot players support voluntary pre-commitment limits RESPONSIBLE GAMING NETWORKS

26. Today’s Developments • Australia: • State Government of Victoria: • By 2013 all new machines must have pre-commitment. • Abolished role of private operators in the industry value chain (TABCORP and Tattersall’s). • Pre-Commitment specifications to be released later this year. • Australian Ministerial Council on Gambling: • “Pre-commitment a priority area to reduce harm from gambling” • Analysis of Gambler Pre-Commitment Behaviour, June 2006 • Gambler Support for Pre-Commitment: • 7 out of 10 slot players support compulsory pre-commitment limits • 8 out of 10 slot players support voluntary pre-commitment limits RESPONSIBLE GAMING NETWORKS

27. Today’s Developments • State of Queensland Trial of Pre-Commitment : • Two venues (clubs) - Redcliffe and Sandgate. • Players not required to have ID to play = leakage. • ID card loaded with digital cash = problematic. • Player losses reduced by $25/day, possible state-wide rollout RESPONSIBLE GAMING NETWORKS

28. Today’s Developments • State of Queensland Trial of Pre-Commitment: • Two venues (clubs) - Redcliffe and Sandgate. • Players not required to have ID to play = leakage. • ID card loaded with digital cash = problematic. • Player losses reduced by $25/day, possible state-wide rollout • State of South Australian Trial of Pre-Commitment: • Four venues (hotels). • Re-configuration of J Card loyalty system. • Players not required to have ID to play = leakage. • Play does not stop when limits reached = no control. • Industry attempting to re-position pre-commitment. RESPONSIBLE GAMING NETWORKS

29. Tomorrow’s Developments • Canada: • All Canadian Operators • 2009 Study on Global Pre-Commitment • Report to be released in next few weeks • Atlantic Lottery Corporation: • Its four jurisdictions watching Nova Scotia developments • Ontario Lottery & Gaming Corporation • Introducing biometric facial self-exclusion later this year in response to court class actions • Lotto Quebec • Reviewing pre-commitment for next generation machines.

30. Pre-Commitment Technologies • Plastic cards • Smart cards • USB Keys RESPONSIBLE GAMING NETWORKS

31. 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

32. Old Technologies RESPONSIBLE GAMING NETWORKS

33. 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 (Aust .Govt. KPMG Report on Problem Gambling 2002) • Professor Mark Griffiths “Suspension of Judgment” RESPONSIBLE GAMING NETWORKS

34. Nova Scotia Trial Findings • International Gaming Institute, University of Nevada: • Players “beat” the system – via card sharing • 37% of panelists shared cards. • Card sharing occurred for periods up to one week at a time. • Card sharing correlated to PGSI score (i.e. PGs shared the most). RESPONSIBLE GAMING NETWORKS

35. Nova Scotia Trial Findings • International Gaming Institute, University of Nevada: • Players “beat” the system – via card sharing • 37% of panelists shared cards. • Card sharing occurred for periods up to one week at a time. • Card sharing correlated to PGSI score (i.e. PGs shared the most). • “Should pursue measures to address this specific problem” • Biometric ID solution required (fingerprint, facial etc) for pre-commitment solutions RESPONSIBLE GAMING NETWORKS

36. 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

37. Fingerprint Biometrics RESPONSIBLE GAMING NETWORKS

38. Fingerprint Biometrics RESPONSIBLE GAMING NETWORKS

39. USB Player Protection Key RESPONSIBLE GAMING NETWORKS

40. USB Player Protection Key • Electronic Key – unique for each player • Biometric identification of owner • Eliminates sharing of ID amongst players • On-board fingerprint scanner & storage • No central storage of player biometrics RESPONSIBLE GAMING NETWORKS

41. USB Player Protection Key • Electronic Key – unique for each player • Biometric identification of owner • Eliminates sharing of ID amongst players • On-board fingerprint scanner & storage • No central storage of player 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

42. USB Player Protection Key • Electronic Key – unique for each player • Biometric identification of owner • Eliminates sharing of ID amongst players • On-board fingerprint scanner & storage • No central storage of player 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 (64 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. • Read/Write 100 times faster than a smartcard system RESPONSIBLE GAMING NETWORKS

43. USB Player Protection Key • Players at venues still use real cash in machines • No cost to player for device • Provided by Government or operator(s) • Ideal self-exclusion mechanism • Extensive player database for researchers and regulators RESPONSIBLE GAMING NETWORKS

44. Biometric Gaming Standards • Regulators - Nevada Gaming Commission • Biometric technical standards established for gambling • “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 slot machines globally. RESPONSIBLE GAMING NETWORKS

45. Player Protection Key • Already internet compliant • USB connectivity for all computers • Universal connectivity standard RESPONSIBLE GAMING NETWORKS

46. Internet Gambling Industry • Globally: • 700 million internet users globally • 2,500 internet gambling sites • $16 billion of player gambling losses last year • 50% of loss attributed to US residents • 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

47. 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

48. 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

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

50. 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