Phillip Ryan Chief Executive Officer Responsible Gaming Networks Melbourne, Australia NCPG CONFERENCE, INDIANAPOLIS, INDIANA. JUNE 2009

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

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

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

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

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

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

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

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

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

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

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

Evolution of Pre-Commitment Crown Casino, Melbourne, Australia : 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.

Evolution of Pre-Commitment Crown Casino, Melbourne, Australia : 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 : 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

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

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

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

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

Marina Bay – June 2009

Marina Bay – Final Outcome

Resort World Sentosa-Model

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

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

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

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

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

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

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

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.

Pre-Commitment Technologies Plastic cards Smart cards USB Keys 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 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 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

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

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

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

USB Player Protection Key RESPONSIBLE GAMING NETWORKS

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

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

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

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

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

Player Protection Key Already internet compliant USB connectivity for all computers Universal connectivity standard 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 50% of loss attributed to US residents 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 Models Old Internet Models: 1. Ban access to all local internet casinos 2. 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

Internet Gambling Models Old Internet Models: 1. Ban access to all local internet casinos 2. 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

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

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

New Internet Model Player Benefits: One registration process for the player across all operators. One set of pre-commitment limits across all operators. One self-exclusion registration across all operators. Consumer protection from locally regulated operators. RESPONSIBLE GAMING NETWORKS

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

New USA Public Policy Driver President Obama has promised tax-cuts to middle America. USA in a recession with declining taxation revenues. $1.5 trillion federal deficit likely (before tax cuts) in 2008/09. Democrats control both Houses and Presidency. Corporate tax hikes and new taxes on the agenda. RESPONSIBLE GAMING NETWORKS

New USA Public Policy Driver President Obama has promised tax-cuts to middle America. USA in a recession with declining taxation revenues. $1.5 trillion federal deficit likely (before tax cuts) in 2008/09. Democrats control both Houses and Presidency. Corporate tax hikes and new taxes on the agenda. Most Democrats support internet gambling. Internet Gambling is a major source of new taxation revenues. Regulated internet gambling is coming with built-in protections: Underage gambling controls. Problem gambling controls. With strict controls to eliminate the mediocre internet operators Only 1 in 3 internet operators conform to standards – NAGS December 2008 Potential for US Government Problem Gambling funding RESPONSIBLE GAMING NETWORKS

New US Internet Gambling Policy President Obama has promised tax-cuts to middle America. USA in a recession with declining taxation revenues. $1.5 trillion federal deficit likely (before tax cuts) in 2008/09. Democrats control both Houses and Presidency. Corporate tax hikes and new taxes on the agenda. Most Democrats support internet gambling. Internet Gambling is a major source of new taxation revenues. Regulated internet gambling is coming with built-in protections: Underage gambling controls. Problem gambling controls such as pre-commitment. With strict controls to eliminate the mediocre internet operators Only 1 in 3 internet operators conform to standards – NAGS December 2008 Potential for US Government Problem Gambling funding RESPONSIBLE GAMING NETWORKS

Pre-Commitment’s Real Value Isn’t that it only places the focus and protection on the gambler But also stops exploitation of the player by any party in the industry value chain Therefore creates a “Dynamic” public policy solution to future technological evolution.

Pre-Commitment’s Real Value Isn’t that it only places the focus and protection on the gambler But it also stops exploitation of the player by any party in the industry value chain Therefore creates a “Dynamic” public policy solution to future technological evolution.

Pre-Commitment’s Real Value Isn’t that it only places the focus and protection on the gambler But it also stops exploitation of the player by any party in the industry value chain; and Therefore creates a “Dynamic” public policy solution to future technological evolution.

Value Chain Exploitation Risks: RESPONSIBLE GAMING NETWORKS OPERATOR

SLOT PLAYER Player Exploitation Risks: RESPONSIBLE GAMING NETWORKS

SLOT PLAYER Player Exploitation Risks: EXAMPLE CBC TV NEWS Report Konami RESPONSIBLE GAMING NETWORKS

SLOT PLAYER Pre-Commitment Protection RESPONSIBLE GAMING NETWORKS

VENUE PLAYER OPERATOR Player Exploitation Risks: RESPONSIBLE GAMING NETWORKS

VENUE PLAYER OPERATOR Player Exploitation Risks: EXAMPLE CBC TV NEWS Report Atlantic Lottery Corporation Agents RESPONSIBLE GAMING NETWORKS

VENUE PLAYER OPERATOR Pre-Commitment Protection RESPONSIBLE GAMING NETWORKS

BANK PLAYER Player Exploitation Risks: RESPONSIBLE GAMING NETWORKS

BANK PLAYER Pre-Commitment Protection RESPONSIBLE GAMING NETWORKS

Value Chain Exploitation Risks: RESPONSIBLE GAMING NETWORKS OPERATOR

Pre-Commitment Protection: RESPONSIBLE GAMING NETWORKS OPERATOR

Pre-Commitment Rapid Diffusion into Public Policy over last 12 months.

Pre-Commitment Rapid Diffusion into Public Policy over last 12 months. New global installations will drive increased adoption.

Pre-Commitment Rapid Diffusion into Public Policy over last 12 months. New global installations will drive increased adoption. New technologies will aid adoption.

Pre-Commitment Rapid Diffusion into Public Policy over last 12 months. New global installations will drive increased adoption. New technologies will aid adoption. New technologies will converge access, exclusion and pre- commitment systems.

Pre-Commitment Rapid Diffusion into Public Policy over last 12 months. New global installations will drive increased adoption. New technologies will aid adoption. New technologies will converge access, exclusion and pre- commitment systems. These new technologies will be applied on-line & off-line.

Pre-Commitment Rapid Diffusion into Public Policy over last 12 months. New global installations will drive increased adoption. New technologies will aid adoption. New technologies will converge access, exclusion and pre- commitment systems. These new technologies will be applied on-line & off-line. Governments will re-structure industry value chains to protect their gambling revenues.

Pre-Commitment Rapid Diffusion into Public Policy over last 12 months. New global installations will drive increased adoption. New technologies will aid adoption. New technologies will converge access, exclusion and pre- commitment systems. These new technologies will be applied on-line & off-line. Governments will re-structure industry value chains to protect their gambling revenues as it is introduced. USA has the potential to take global leadership in on-line gambling protection mechanisms.

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