International Gambling Conference New Zealand 2008 “Beyond Smart Cards to Smart Technologies” Phillip Ryan Chief Executive Officer Responsible Gaming Networks Melbourne, Australia RESPONSIBLE GAMING NETWORKS

Speaker’s Profile EGM Corporate Affairs, Tattersall’s Operator of half 27,500 EGMs in Victoria Member of EMT, Government relations, media relations, issues management GM Global Communications, NAB. Led creation of Australia’s first bank account for the disadvantaged Government & community relations Bachelor of Science MBA and MMktg RESPONSIBLE GAMING NETWORKS

Overview Pre-commitment Global leadership in pre-commitment The constraints of the old technologies The new technologies for pre-commitment Australian developments in pre-commitment Internet gambling application RESPONSIBLE GAMING NETWORKS

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

Problem Gambling 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

The New Public Policy Agenda Pre-commitment Focus on player pre-commitment limits Player monetary loss limits – daily, weekly, monthly. Machines must stop when limits reached Players initially set their own limits voluntarily Players set limits away from the machines Players carry an ID device connected to their limits in order to play (e.g. plastic card, smart card or some other smart technology) Machines only operate using an ID device. Machines still use coins and notes as usual RESPONSIBLE GAMING NETWORKS

Global Leadership Nova Scotia, Canada Responsible Gaming Device (RGD) trial mid-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

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

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 PG score RESPONSIBLE GAMING NETWORKS

Old Technologies 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 venue’s network RESPONSIBLE GAMING NETWORKS

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 standards Cards limited to a single gambling venue’s network Smartcards use digital cash Players lose connection with the use of real money Increased risks for problem gamblers KPMG Study for Australian Government Problem Gambling – ATM/EFTPOS functions and capabilities 2002 RESPONSIBLE GAMING NETWORKS

University of Nevada, Las Vegas International Gaming Institute, University of Nevada Commissioned to review Nova Scotia trial February 2007 Report Players “beat” the system – card sharing Should pursue measures to address this problem

RESPONSIBLE GAMING NETWORKS University of Nevada, Las Vegas International Gaming Institute, University of Nevada Commissioned to review Nova Scotia trial February 2007 Report Players “beat” the system – card sharing Should pursue measures to address this problem Biometric ID solution required (fingerprint, facial etc) for pre-commitment solutions

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

Fingerprint Biometrics RESPONSIBLE GAMING NETWORKS

Fingerprint Biometrics RESPONSIBLE GAMING NETWORKS

Player Protection Key RESPONSIBLE GAMING NETWORKS

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

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

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 all forms of gambling - gaming, lotteries, wagering, sports, spread betting. Coverage across all channels of distribution – EGMs, Internet, Interactive TV, Kiosks. Coverage across multiple gambling companies RESPONSIBLE GAMING NETWORKS

Player Protection Key Players set personal dollar loss limits Encouraged to set affordable limits Limits set outside gaming room No central storage of biometrics EGMs only operate with key used by its owner Extensive player database for researchers No cost to player RESPONSIBLE GAMING NETWORKS

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

Responsible Gaming Networks Socially-responsible Australian based consortium Focused on eliminating problem gambling from: Wide area gaming machines Internet gaming Using latest technology and Safety Net system to provide: 1. Reliable identity access for all players using biometrics 2. Safe play using player pre-commitment protection Consortium of USA, European and Australian technology partners RESPONSIBLE GAMING NETWORKS

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 Players will be unable to swap identities Implementation within 18 months Cost of CAD$3 - $4 million per annum RESPONSIBLE GAMING NETWORKS

Australian Developments Australian Ministerial Council on Gambling Federal and State Ministers for Gambling Research Program on Pre-commitment Analysis of Gambler Pre-Commitment Behaviour, June 2006 Player Support for Pre-Commitment 77% of Victorians support compulsory pre-commitment limits 88% of Victorians support voluntary pre-commitment limits Stage 2 Tender has been issued with a focus on: Gaming machine designs which support/undermine pre- commitment RESPONSIBLE GAMING NETWORKS

Australian Developments Victoria Current Gaming Industry Structure Review Kirby Report October 2006 “Support for exploiting the monitoring system to develop harm minimization measures” “a universal system of pre-commitment will possibly be more effective than a range of other proposals for enhancing responsible gaming” South Australia Concerned about lack of national progress on pre-commitment Ministerial Working Party established November 2007 Reporting later this year on how to implement pre-commitment RESPONSIBLE GAMING NETWORKS

Australian Developments Victoria Current Gaming Industry Structure Review Kirby Report October 2006 “Support for exploiting the monitoring system to develop harm minimization measures” “a universal system of pre-commitment will possibly be more effective than a range of other proposals for enhancing responsible gaming” South Australia Concerned about lack of national progress on pre-commitment Ministerial Working Party established November 2007 Reporting later this year on how to implement pre-commitment RESPONSIBLE GAMING NETWORKS

Internet Gambling Industry Globally: 700 million internet users globally 2,500 internet gambling sites $16 billion of player gambling losses last year New Zealand: 75% of NZ population use the internet 50% of NZ children use the internet daily 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

Internet Gambling Industry Globally: 700 million internet users globally 2,500 internet gambling sites $16 billion of player gambling losses last year New Zealand: 75% of NZ population use the internet 50% of NZ children use the internet daily 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

It’s big… Source: Nielsen//NetRatings NetView Home & Work data (ES, CH, JAP & BR home data only), September

…and its driven by high speed access RESPONSIBLE GAMING NETWORKS

Internet Gambling Models Old Internet Model: Ban onshore internet casinos Allow offshore internet casinos Risks with casino authenticity, lack of regulatory controls, consumer protection, underage gambling & problem gambling. RESPONSIBLE GAMING NETWORKS

Internet Gambling Models Old Internet Model: Ban onshore internet casinos Allow offshore internet casinos Risks with casino authenticity, lack of regulatory controls, consumer protection, underage gambling & problem gambling. New Internet Model: Provide a safe regulated local market with full range of player protection safeguards. Eliminates the risks Allows for government taxation. RESPONSIBLE GAMING NETWORKS

RGN INTERNET PORTAL CASINO B CASINO A CASINO C CASINO D CASINO E USB Player Protection Key RESPONSIBLE GAMING NETWORKS New Internet Model

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

Internet Gaming Invitation Academics/Researchers on the journey Australian Internet Gambling trial in 2008 Pre- and post- evaluation Impact on attitudes and behaviours Tracking over time Player Panel Database evaluation & reporting. RESPONSIBLE GAMING NETWORKS

USB Key and Biometrics Multi channel solution: Multiple venues (Hotels, Clubs, Casinos, TABs) Internet channel Self service kiosks Interactive TV Eliminates identity sharing RESPONSIBLE GAMING NETWORKS

Questions Contact Phillip Ryan Chief Executive Officer Responsible Gaming Networks Melbourne, Victoria. Australia Mobile RESPONSIBLE GAMING NETWORKS