The image part with relationship ID rId2 was not found in the file.

company confidential company confidential

New Regulations in Europe

Cyril LEVY, Director Market Development Europe October 2012

company confidential

The image part with relationship ID rId2 was not found in the file.

bmm compliance

BMM Compliance is the longest established and most experienced private independent gaming certification lab in the world. BMM offers product compliance insight and engineering expertise for gaming regulators, manufacturers and operators.

company confidential

The image part with relationship ID rId2 was not found in the file.

highlights: bmm 30 years

BMM is the oldest gaming industry test lab in the world BMM has 30 years of dedicated testing experience in the gaming industry BMM was the first ISO-accredited gaming test lab in the world BMM has been testing server-based and downloadable gaming systems since 1990 BMM was selected to consult and subsequently test for the world’s largest gaming monitoring system of over 100,000 connected slots in over 3,000 locations BMM tests gaming devices and systems for the world’s top 15 gaming equipment manufacturers worldwide

company confidential

The image part with relationship ID rId2 was not found in the file.

240 employees

Las Vegas • Mexico City • Lima • Barcelona • Rome • Graz • Midrand • Macau • Singapore • Busan • Sydney • Melbourne

bmm: global locations

company confidential

The image part with relationship ID rId2 was not found in the file.

bmm: a global regulatory gaming expert

regulatory services

• Consulting for regulatory models

• Development of technical standards

• Consulting for economic development

• Consulting for funding strategies

• Industry development services

• Education & training services

• Technical support

• Managing testing & certification

• Managing inspection services

• Technology assets for compliance management

• Technology assets for licensing management

company confidential

The image part with relationship ID rId2 was not found in the file.

Regulators

bmm: supporting gaming manufacturers

manufacturer services • Consulting for technical compliance

• Managing testing & certification

• Hardware testing

• Operating system software testing

• Game content testing

• Peripheral device testing

• Mathematical model analysis

• Casino Management system testing

• Central Monitoring system testing

• Expert witness

company confidential

The image part with relationship ID rId2 was not found in the file.

Regulators

bmm: supporting gaming operators

operator services • Consulting for technical compliance

• Forensic evaluation

• System & related audits

• IT System security

• Education & training services

• Technical support

• Manage testing & certifications

• Technology assets for compliance management

company confidential

The image part with relationship ID rId2 was not found in the file.

Regulated Markets in eGambling

company confidential

The image part with relationship ID rId2 was not found in the file.

New challenges for e-Gambling operators

Most  of   the  )me   these  groups  are   launching  a   combina)on  of  both  change  management   programs   for   their   IT   infrastructure   as   well   as  reshuffling  of  their  exis)ng  strategy  for  each  market  assessed.      Before   e-­‐Gaming   laws   are   enforced,   leading   groups   are   always  lobbying   governments   for   legisla)on   that   both  meet   the   needs   and  desires  of  the  regulators  (Tax  &  Technical  Guidelines)  whilst  remaining  commercially  aFrac)ve  to  ensure  that  regulated  companies  are  not  at  a  significant  disadvantage  to  unregulated  companies.      

company confidential

The image part with relationship ID rId2 was not found in the file.

Main challenges for local regulators

Governments  are  op-ng  for  different  tax  levels  and  market  rules,  but  most  of  the  -mes  their  security  guidelines  are  very  similar.      Regulators  are  in  charge  of  the  protec)on  of  players,  by  checking  that  websites  are  not  vulnerable  and  that  an)-­‐fraud  and  an)-­‐collusion  processes  are  in  place  in  every  licensed  operator.      Regulators  are  also  in  charge  of  checking  tax  payments  are  ok,  of  figh)ng  against  Money  Laundering  and  Financing  of  Terrorism.  These  tasks  require  an  autonomous  access  to  gaming  transac)ons  data  

company confidential

The image part with relationship ID rId2 was not found in the file.

European Tax Benchmark

Tax on Poker Tax on Casino Tax on Sports Betting Gaming Transactions Warehousing

Cou

ntrie

s re

cent

ly re

gula

ted

and

with

Hig

h C

ontr

ol o

f G

ames

France 2% of stakes non opened 9% of stakes

A certified Electronic Safe to warehouse a copy of all gaming

transactions is to be purchased by every Operator.

Denmark 20% of GGR

Germany * 20% of GGR

Spain 25% of GGR

Greece 30% of GGR

Italy 20% of GGR 20% of GGR 3% or 5% of stakes Electronic Safe purchased by the Regulator

* Schleswig-Holstein Lander only

company confidential

The image part with relationship ID rId2 was not found in the file.

Regulators challenges

 a.  Market  intelligence    

 i.  Where  are  currently  playing  your  residents  ?  ii.  Can  you  compete  with  illegal  licenses  ?  

   

b.  Establish  a  clear  roadmap  with  poli)cal  authori)es,  with  2  major  risks  :      

i.  Schlewig-­‐Holstein  and  Netherlands.  Avoid  any  collision  with  elec)on  dates  !  ii.  Establish  a  clear  objec)ves  list    

   

company confidential

The image part with relationship ID rId2 was not found in the file.

Regulators challenges  c.  Reques)ng  the  right  level  of  security,  2  risks:                      i.        Absolute  Poker  scandal  in  Kanawakee  regula)on                    ii.      And  some  European  regulators  that  will  get  no  access  to  interconnected  poker                                    

   rooms  markets  between  Italy,  France  and  Spain.      d.  Establish  a  consistent  authorized  game  list:      

i.  if  tax  incomes  forecast  are  high,  then  this  game  list  should  be  aFrac)ve  and  include    casinos  games  and  interna)onal  liquidity  opened  for  poker  operators.  

 ii.  Simplify  the  games  terminology  and  avoid  any  lack  of  clarity  in  the  list,  like  in  Italy.  In  

 general  adopt  the  same  game  list  adopted  by  in  other  countries.      iii.  Don't  include  games  that  can  be  easily  frauded  like  Chess  in  Italy.  In  general,  only                              

 Mul)  players  Cards  games  are  safe  from  what  is  called  today  Social  Games:  Casual    games  are  too  much  different  from  one  version  to  another  to  be  regulated,  RPG  are    not  adapted.  

company confidential

The image part with relationship ID rId2 was not found in the file.

Regulators challenges  e.  Bring  equality  between  players:      

 If  an  operator  is  already  ac)ve  before  the  opening  of  the  market,  the  regulator  should  not    let  him  use  the  same  commercial  name  for  online  ac)vity.  This  issue  appeared  in  France    with  the  na)onal  horse  be^ng  company  using  its  name  in  adver)sing  campaigns  before    the  opening  of  the  market.  

   f.  Control  operators,  even  if  their  pla_orm  is  already  ok    

i.  automated  controls  systems  (like  eVault  solu)ons),  ii.  Specific  aspects  from  each  type  of  game  :  in  horse  be^ng,  frauds  come  from  )me  

 fixing  and  double  accounts  on  same  credit  cards  iii.  Shareholders  respectability    

   g.  Work  hand  in  hand  with  experts  like  security  ones  and  test  labs.  

company confidential

The image part with relationship ID rId2 was not found in the file.

contact

Cyril LEVY Director  Market  Development  Europe  ���cyril.levy@bmm.com Gsm : +33 6 23 61 48 75

Jasna Drnda Radovanovic Business  Development  Consultant  jasna.drnda@bmm.com Gsm : +34 605 988 291