1. MODERATOR: CHRISTIAN KALB (CK CONSULTING) PHILADELPHIA – 29 OCTOBER 2014 INTERNET GAMBLING SESSION

2. Peter DeRaedt, President, Gaming Standards Association (USA) Richard Guay, Member, Quebec Provincial Online Gambling Working Group (Canada) Edward Lalumbe, Chief Operating Officer, Gauteng Gambling Board (South Africa) Katrina Nepomuceno, Legal Counsel, First Cagayan Leisure and Resort Corporation (Philippines) Jamie Nettleton, Partner, Addisons (Australia) SPEAKERS IAGR CONFERENCE - 29 October 2014

3. Challenges on Internet gambling in different regions of the world Liberal gambling or prudential policy? Main issues regarding consumer’s protection The future of the Internet gambling market OBJECTIVES OF THE PANEL IAGR CONFERENCE - 29 October 2014

4. 1. PRESENTATION OF THE INTERNET GAMBLING MARKET

5. TOTAL WORLDWIDE GAMBLING MARKET: AROUND US$ 400bn (Gross Win – 2012) Source : H2 Gambling (2013) IAGR CONFERENCE - 29 October 2014

6. INTERACTIVE GAMBLING ONLY REPRESENTS 10% OF THE GAMBLING INDUSTRY Source : H2 Gambling IAGR CONFERENCE - 29 October 2014 Interactive Gambling Gross Win as a percentage of Total Gambling

7. EUROPE LEADING THE INTERACTIVE GAMBLING WORLD THANKS TO REGULATIONS Source : H2 Gambling IAGR CONFERENCE - 29 October 2014 Interactive Gambling Gross Win by player region as a percentage (2012)

8. LEADING 10 COUNTRIES (INTERACTIVE GAMBLING) Source : H2 Gambling / CK Consulting IAGR CONFERENCE - 29 October 2014 Percentage of each country in the total interactive gambling gross win (2012)

9. BETTING TO ATTRACT CUSTOMERS CASINO TO MAKE PROFITS Source : H2 Gambling IAGR CONFERENCE - 29 October 2014 Interactive Gambling Gross Win by product as a percentage (2012)

10. MOST OF THE INTERACTIVE GAMBLING IS OFFSHORE Source : H2 Gambling IAGR CONFERENCE - 29 October 2014 Onshore Interactive Gambling as a percentage of total interactive gambling (Gross Win)

11. OFFSHORE GROSS WIN IS IMPORTANT OFFSHORE SALES (TURNOVER) ARE HUGE EXAMPLE OF SPORTS BETTING Source : Sorbonne University (2014) IAGR CONFERENCE - 29 October 2014

12. 2. GAMBLING REGULATORY POLICIES

13. A TRADITIONAL QUESTION: WHAT IS THE BEST REGULATORY POLICY?

14. ANOTHER QUESTION: FOR WHO ? IAGR CONFERENCE - 29 October 2014 FOR SOCIETY? FOR GAMBLERS? FOR THE STATE? FOR OPERATORS?

15. ANOTHER QUESTION: WHAT IS THE STATE’S MAIN OBJECTIVE ? IAGR CONFERENCE - 29 October 2014 Chanel gambling and fight illegal gambling (Example : Belgium, France / Online) Protection public and social order (Example: Canada, Finland, Morocco, Singapore) Money for the State (Example: Cagayan, Italy, Malta) Employment (Example: Antigua, UK in 2001) Some countries have no clear objectives !

16. A FIRST TENDENCY: LIBERAL OR PRUDENTIAL ? IAGR CONFERENCE - 29 October 2014 EU / Gambling havens: Liberal betting Africa/America/Asia: Prudential policy Oceania: The balance ?

17. A SECOND ANSWER: WHAT FIGHT AGAINST ILLEGAL GAMBLING ? IAGR CONFERENCE - 29 October 2014 No or weak fight: Gambling is treated like a “classical” sector Strong fight: Black lists, ISP and payment blocking, work with search engines, etc.

18. MAPPING OF STATE’S ATTITUDES TOWARDS GAMBLING IAGR CONFERENCE - 29 October 2014 Priority n°1 = Competitive online gambling market Priority n°1 = Protection of public and social order risks Strong fight against illegal gambling Weak fight against illegal gambling AUSTRALIA UK SOUTH AFRICA USA ALDERNEY CHINA GERMANY CANADA BELGIUM AUSTRIA SPAIN DENMARK COSTA RICA SOUTH KOREA FRANCE ISLE OF MAN MALTA ITALY JAPAN PHILIPPINES MEXICO RUSSIA CZECH REPUBLIC POLAND SWITZERLAND SWEDEN CAGAYAN Source : Sorbonne University (2014)

19. What kind of interactive regulation ? Prohibition, monopoly, small number of licences, authorisation regime What level of taxes ? What online requirements to fight social risks ? (stake limits, limitation of payment methods) What requirements to fight money laundering ? (KYC, obligations to report) What requirements to fight match fixing? (national platform, international convention, risky bets, alerts) OTHER IMPORTANT ISSUES REGARDING INTERNET GAMBLING IAGR CONFERENCE - 29 October 2014

20. THREE REMARKS TO FINISH

21. THERE ARE OTHER WAYS OF THINKING THAN THE EUROPEAN ONE IAGR CONFERENCE - 29 October 2014 Source : Sorbonne University (2014)

22. FOR BIG COUNTRIES, OPEN MARKETS DON’T ALWAYS RAISE MONEY (Case study: sports betting in Italy) IAGR CONFERENCE - 29 October 2014 ITALY (in €m)199720112011/1997 Sales (sports betting)€ 2,000m (Totocalcio) € 4,000m (mainly fixed odds) +100% GGR (sports betting)€ 1,000mAround € 800m-20% Level of betting taxes36% of sales2 to 5% of sales (*) Sports betting taxes€ 720mAround € 140m - 81% (*) Funny thing : the level of betting taxes might reach 20% of GGR in the future What will happen: pay out rates increase, more risks for society and a new potential decrease of betting taxes ! And then more and more slot machines…

23. WHAT KIND OF GAMBLING CUSTOMERS DO WE WANT ? IAGR CONFERENCE - 29 October 2014 Recreational customers: Play for “Fun” Professional customers: (Including traders, problem gamblers, money launderers, match fixers, criminals) Gambling: 10% of the customers represent 70 to 95% of Gross Win

24. 3. PRESENTATION BY THE SPEAKERS

25. 4. 4. Discussion topic n°1: Liberal Internet gambling vs. prudential policies

26. Up to 2012, many stakeholders were in favor of “open” gambling markets, in particular in Europe. Today, some States are reconsidering this situation. What do you think ? Various surveys show that Internet Gambling is correlated with development of organized Crime and money laundering. Do you think it is possible to fight against this situation and how ? Gambling operators generally lobby to reduce taxes/gambling duties. What is the point of view of the regulators on this issue ? DISCUSSION 1 IAGR CONFERENCE - 29 October 2014

27. 5. 5. Discussion topic n°2: Main issues regarding the consumer’s protection

28. Is the consumer’s protection a priority on your continent? What level of priority (from 1 = low to 5 = very high) for addiction risks, money laundering, sports integrity and consumer’s identification? Anonymity of Internet customers and modern electronic payment means create new risks for society. How do you tackle these risks? A small number of online gamblers “make” the market and realize up to 90% of the revenues of the gambling companies. Some of theses gamblers operate in a grey area. As a regulator, can you accept these “risky” people? DISCUSSION 2 IAGR CONFERENCE - 29 October 2014

29. 6. 6. Discussion topic n°3: The future of the Internet gambling market

30. The poker market has now been decreasing tremendously for a few years. Do you think that it is possible to change this tendency ? The online gambling market entered a “merging” step. Do you think this phenomenon will continue ? Fight against illegal gambling with efficient tools becomes a key issue for many States who want to protect society. Will your country act in that way? DISCUSSION 3 IAGR CONFERENCE - 29 October 2014

31. 7. INTERACTIVE SESSION