2. Overview  Introduction  The European Gambling Industry  European Legislative Background  The Advance to Standards  The Problems & Solutions  GSA by Stealth; Adoption by default  GSA – Template for Sustainable Gambling Industry  Case Studies & Market Specific Information

4. Introduction  The European Gambling Industry  Revenues in the EU27, €84bn in 2011  €9.3bn online with annual growth of 14.7%  Online estimated to grow to 14.2% by 2015, €13bn  Very low online substitution of offline revenues  Proven in CAGR of offline gambling continuing to increase  Market Segmentation  Lotteries 43.7% (24% US)  Casino Gaming 15.9% (58% US)  Machine Gambling outside casinos 18.3% (5% US)  Betting 17.3% (5% US)  Bingo 4.8% (5% US)

5. Introduction  European Legislative Background  EU Policy for Gambling  Compliance of national regulatory frameworks with EU law  Enhancing administrative cooperation  Protecting consumers and citizens  Preventing fraud and money laundering  Safeguarding the integrity of sports and preventing match-fixing

6. Diversity? The EU is a broad and diverse patchwork of differing laws, rules & regulations. Majority now using the Italian model as they were early adoptors.

7. The Advance to StandardsThe Advance to Standards  Which standards to choose?  EN, ISO, ISACA, COBIT, ITIL, TickIT & of course GSA  ‘Traditional’ technology standards did not suffice for gambling industry  Commercial testing labs could not dictate jurisdictional policy  Commercial vendors adoption of GSA principles facilitated open standards satisfactory to governments in many jurisdictions  Early Adoptors include;  UK, Italy, Greece, Germany, Austria

8. The Problems & SolutionsThe Problems & Solutions  Regulatory Problems  Why choose one method over another?  Do I choose largest ‘live’ methodologies as best practice?  How do I safeguard my jurisdiction?  How do I consider other non gambling laws in my jurisdiction?  Finance/Tax, Public Expenditure, Local Government  How do satisfy the three pillars of regulation?  Keep gambling free from crime  Keep gambling fair and open  Protect the vulnerable

9. The Problems & SolutionsThe Problems & Solutions  Solutions  Find a method being adopted internationally as best practice  Map best practice standards to existing regulation  Reciprocal symbiosis – regulation also influenced by standards as a result  Ensure communication of standardisation to internal market  Ensure strict data management policies for accurate data to affect public policy  Draft  Rules of operation, manufacture and usage  Publication of standards to be adhered to  Procedure(s) for ensuring compliance using standard(s)

10. GSA by Stealth; Adoption by default  GSA? What is GSA in Europe?  In Europe, GSA is the EU body for SatNav management?  S2S, G2S, GDS  The adoption and implementation by vendors and operators of GSA standards has driven jurisdictional analysis to compare technology usage to GSA standards as a ‘yardstick’  Adopted as ‘accepted practice’ in Italy, UK, Germany, Norway, Sweden, Holland, Spain  Adopted as legal standard in Austria and Albania

11. GSA – Template for Sustainable Gambling Industry  What is a sustainable gambling industry?  Sustainable business - Only with corporate responsibility can market economies survive.  Partnered governance  Governance of these markets needs to be tackled collectively and co-operatively. Companies innovate to create sustainable practice and reduce public health costs.  Performance Based Regulation  Incentivised performance based regulation rather than a prescriptive system which cannot possibly keep pace with the speed of technology and product development.  Licensing  Operating licences in new jurisdictions where gambling harms are a big consideration for policy makers and regulators.

12. GSA – Template for Sustainable Gambling Industry  If the gambling industry can be measured it can be controlled  How does one measure it?  Standardise the modus operandi (GSA)  Adopt and implement best practice (GSA)  Permit public policy to evolve in a sustainable gambling industry with metrics for decision making provided by standards based systems management (GSA)

13. Case Study - Austria  Tender granted by BRZ GmbH for central monitoring system nationwide to ComTrade  Management of 15,000 gaming machines/VLT’s and 33 licensees (Standardisation of data collection with GSA compliance)  G2S defined as requirement standard for machines to central control system

14. Case Study - Albania  Tender competition live until 20 th June  Management of 10,000 gaming machines, betting terminals, lottery system and more than 25 licensees (Standardisation of data collection, protocols and integration with GSA compliance)  1 casino, 1100 plus gaming halls, new lottery system

15. GSA Adoption in Europe  Italy (Regulator – AAMS) – 12 VLT operators, almost 60,000 machines adopting GSA standards (among others) with most of EU adopting Italian methodologies (one of few jurisdictions to report monthly)  Germany – Over 42,000 machines in Gausselman and related companies, Spielo (formerly Atronic), Apex, Amatic, AGI and more.  Spain – Primary GSA recognised standards being adopted as EU wide supply chain becomes more in tune such as Codere progressing standardisation, R. Franco, Metronia – Est 40,000+ machines but could be as high as 60,000  UK – 20,000+ FOBT’s, 30,000+ Slots plus numerous digital bingo, slots and casino systems using GSA protocols in operators such as Gala, Rank, Praesape  Greece – Hellenic Lottery leader, Intralot utilises GSA protocols (as well as ISACA’s COBIT 5) in over 100,000 devices globally

16. GSA Adoption in Europe  Albania – already mentioned, 10,000+ devices  Kosovo – exploring national monitoring, GSA underpinned  Macedonia – as above, live now  Romania – as above, live now  Ireland – initial explorations of standards for new legislation in draft  France – operators already utilising GSA but unknown numbers, estimate as many as 50,000 devices GSA compliant  Rest of EU27 – shallow pool of suppliers <50, 75% use GSA standards already in a market of c.500,000+ devices.

17. GSA Adoption in Europe  By inference, GSA is recognised and used or planned to be used in;  More than 500,000 machines  All EU27 EUROSTAT countries, plus accession and candidate countries (7-10 others)  Drafting procedures for managing methodologies in high technology gambling industry in at least 8 major EU markets  Drafting procedures for administration of national networks in at least 7 countries  Tenders live or in draft for national monitoring systems in 4 countries

18. GSA in Europe?  Yes and will continue to increase its pivotal role in gambling technology implementation  Wish List from EU (not just for GSA)  Regulatory standards for technology usage offline and online  Information resource(s) to assist regulators (aside from P&A)  ‘Templates’ for best practice in technology market analyses to compare to GSA  ‘Templates’ for national monitoring system(s) to ensure open standards and best of breed solutions  …not much to ask for really!

19. QUESTIONS? John Purcell Managing Director Purcell & Associates 16/17, South Terrace, Cork, Ireland. T: +353 (0) 21 431 6776 E: jpurcell@purcellassociates.net one of the leading sources of consultancy expertise in the gambling industry.