The Path to Regulatory Best Practice in Europe with GSA Standards

How GSA standards are affecting governmental monitoring requirements in Europe

John Purcell

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

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)

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

Diversity?

The EU is a broad anddiverse patchwork of

differing laws, rules &regulations.

Majority now using the Italian model as

they were early adoptors.

The 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

The 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

The 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)

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

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.

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)

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

Case Study - Albania Tender competition

live until 20th 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

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

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.

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

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!

QUESTIONS?John Purcell

Managing Director

Purcell & Associates16/17, 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.