COMMERCIAL IN CONFIDENCE Public Hearings: National Gambling Legislation Presented by: Pramodh Munbodh Compliance Director Aristocrat Technologies Africa (Pty) Ltd Wednesday, 11 November 2009

Company Profile Holder of National Manufacturer License (Section 37 – NGA). Distributor and maintenance provider of electronic gambling machines and casino monitoring and control system products. Subject to regulation by national and provincial gambling Acts, Rules and Regulations. Location in industry structure given in the next slide.

Current Industry Structure PROVINCIAL GAMBLING BOARD (x9) Casino Horseracing Manufacturers Bingo Bookmakers NATIONAL GAMBLING BOARD National Regulator For Compulsory Specifications Accredited Test Laboratories Limited Payout Route Operators

National Gambling Legislation - Applause National Licenses – manufacturer and key employee. Saves on time and money in getting the company and its key employees licensed. This creates efficiencies and reduces resourcing requirements. Choice of licensed testing agents. Previous National Gambling Act (1996) only allowed compliance testing to be performed by SABS. Resulted in bottlenecks and severe delays in product entering the marketplace. Now, independent testing agents provide choice to manufacturers.

National Gambling Legislation – Current Challenges 1. Financial Intelligence Center Act Section 37(2)(b) NGA (2004). 5.1 of written comments. Research by FIC, NGB and Aristocrat yielded that FICA was not designed for companies of the type Aristocrat is. Likelihood of business encountering suspicious or terror financing transactions highly unlikely. Recommendation Section 37(2)(b) amended to reflect exemption from compliance to FICA by nationally licensed manufacturer. NGA will offer better clarification on compliance to license holders.

National Gambling Legislation – Current Challenges 2. Certification and Approval of Gambling Machines and Devices Clause 24 and 25(2) NGA (2004); Preamble NGA (2004) 5.2 of written comments. Limited to just one certification authority for risk assessment. Have to apply to nine provincial gambling boards for approval of the same product.

Product tested by testing agent. Product certified by NRCS Manufacturer prepares 9 applications to 9 provincial gambling boards for approval

National Gambling Legislation – Current Challenges Recommendations Clause 25(2) to be amended to allow for multiple certification agencies, not just NRCS, as long as they are accredited to ISO/IEC 17020, General Criteria for the Operation of Various Types of Bodies Performing Inspection. Clause 24 amended to allow ISO/IEC accredited testing agents to be certification agencies as well. Introduction of National Gambling Equipment Approval for gambling equipment and devices used throughout the country. Can exist in parallel with provincial approval requirements.

National Gambling Legislation – Envisaged Scenarios Product tested and certified by testing agent to SANS 1718 standards National Gambling Equipment Approval or provincial gambling equipment approval issued by a provincial gambling board. Product tested by testing agent to SANS 1718 standards. Product certified by any accredited ISO/IEC inspection body. National Gambling Equipment Approval or provincial gambling equipment approval issued by a provincial gambling board.

National Gambling Legislation – Current Challenges 3. Movement of Gambling Machines and Devices Clauses 19 – 23 NGA (2004); Preamble NGA (2004). 5.3 of written comments. Have to register gambling machines and devices on national register + apply to different provincial gambling boards for transportation approvals to move gambling equipment and devices. Duplication of work for the same set of information.

National Gambling Legislation – Current Challenges Recommendation Clauses 19 – 23 of NGA (2004) to be amended to allow gambling machines and devices to be registered and through which distribution approvals, or distribution notifications, by manufacturers are done via the same process. Will avoid duplication at national and provincial level and eliminate duplication of administrative processes. Product enters market much easier for manufacturer.