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Mobile and Social Gaming

SBWA+ 2019Lagos, Nigeria

Devon Dalbock

2019Celebrating Our 30th Anniversary as the World’s

Leading Independent Testing Lab

1996 20012002

GLI Europe B.V. Opens in The Netherlands

2009GLI Asia® and GLI Austria®

Open

GLI Africa® Opens in South Africa

• GLI Opens Las Vegas Service Center in 2001

• Las Vegas office becomes the

Gaming Standards

Association’s first official SAS

test protocol test lab in 20021998 2007

2016

• GLI becomes a recognized CRA testing lab in 2009 with the status of SRTL

(Singapore Recognized Test

Lab)• First checkoff created in March

2009• First request received in June

2009• From 2009 –present, GLI has

issued nearly 1,400

certifications

GLI achieves 2.5 million

gaming machine,

device, and system testing

milestone

CRA Recognizes GLI Australia and GLI Europe

2011

GLI achieves 3.2 million

gaming machine,

device, and system testing

milestone

20181994

GLI Australia®Opens

Celebrating Our 30th

Anniversary as the World’s Leading

Independent Testing Lab

2019

30 years of global industry experience

23 global locations

475 worldwide jurisdictions

More than 100 CasinosMore than 135,912 equipment certifications annually

Over 1,200 Employees

On 6 continents

Services available 24/7

We consistently have more than 1,000 submissions, and 1,000 transfer requests in the queue. Turnaround time of fewer than 4 weeks

30

23

475

100

1200

6

24/7

1000

EmployeesExperience

Jurisdictions

Exclusive Markets

Global Continents

Services

Submissions and Transfers

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Mobile & Social Gaming

What’s the Difference?•Whilst these forms of gaming share similarities, there are also some key differences between them…

Mobile Gaming

Social Gaming

Mobile Gaming•On a high level, can be broken down into two types of offerings:• Internet Gaming• Mobile On-Premise Gaming

Internet Gaming (iGaming)•Internet based gaming which can take place on PC’s, mobile phones, tablets, etc.•Currently illegal in South Africa, but available in most other African countries•No African jurisdictions have legislation or regulations to address iGaming•Regulatory focus of overall system heavily dependent not just on certification testing, but also operations control and recurring financial/security audits•Different regulatory approach required compared to land-based casino market

Mobile On-Premise•Similar system architecture to iGaming•Potential to offer mobile versions of slot machine and Bingo games•For Slot Machine operations, ability to offer gameplay which creates new revenue streams without investing in new machines•Can be open to player’s mobile devices, or controlled to use devices distributed by the property

Social Gaming•Utilises same medium as iGaming and Mobile Gaming (internet connected devices)•Viewed as playing for fun and not classified as gambling in most markets•Some social element typically present (leaderboard, playing against or with others)•Either free-to-play or players are provided free credits or virtual currency up front to play and can purchase more at a later time

6.

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Mobile Gaming

Mobile Gaming: What we have seen in the Lab?•Market Analysis•Bingo Games (Class II)•Slot Games (Class III)•Shared Traits

Key Numbers – New Trends•The global online gambling market is anticipated to generate revenues of more than $74 billion by 2023•Vendors are leveraging AI and VR technologies in online casinos to introduce a host of new features, best elements of live gaming and software with VR add-ons and overlays to make a more engaging experience for their customers•Collection of data points during game play can be used to help enhance user experience and offer focused game types to the player

On-Line Gambling Market 2009 to 2020

Bingo (Class II Mobile)•Hand held BINGO devices (typically tablets assigned out by a property)•BINGO or Pull-Tab games which can be played on property owned tablets or over your phone• Funding accounts, loading content and retrieving wins must be on a Casino

property

Slot Games (Class III Mobile)•Type 1:• Using your mobile device as an extension of floored machines (RNG and

outcome generation still within the physical EGM)

•Type 2:• Slot based content, playing with and for real money on your mobile device• Locations available to play depending on legality from jurisdiction• Creation of accounts and funding/retrieving funds can be done remotely or in

person depending on jurisdiction

Shared Architecture•Server locations, secure line of communications• Platform• Random Number Generator (RNG)• Player Account Management (PAM)

• Remote Game Server (RGS)• Math / Paytables• Game Themes / Skins

• Know Your Customer (KYC) controls• Geolocation solutions• Secure funds transfer• Terms & Conditions

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Social Gaming

Social Gaming: What’s Out There? •Market Analysis•Differentiating Factor•Different Social Gaming Methodologies•Kater vs. Churchill Downs

Key Numbers•In 2015 there were an estimated 173 million gamers worldwide•Mobile social casino generated US3.46 billion in 2017, and that figure is expected to reach US$5.89 bullion in 2022•In July 2018, there were 8 social media casino titles in the Top 20 iOS Games in the USA. Showing the continuing popularity of the social casino genre•Social Casino accounts for 40% of Top USA iOS titles•In the USA, there are 61.2 million gamers, who play at least one franchise across all devices•Across the USA, UK, and Australia, 37% of PC and Mobile players play casino games such as Slots, Poker, Bingo, Blackjack, Roulette, and Baccarat. Slots emerge as the most popular type of social casino game, played by 53% of social casino players

Legal Definition of Gambling

•In order for the activity to be considered gambling, it must contain three separate elements. These are consideration, chance, and a prize. If one or more of these elements is not present, then gambling is not taking place

Different Implementations•Some social casinos offer free play with actual prizes of virtual currency.•Other social casinos offer play with virtual chips that cost real money, but you can only win virtual chips which have no real world value outside of the virtual casino.•Other social games include real money buy-ins and prizes, but the game being played is purely skill based against other players; this is considered a tournament and not gambling•Most markets have not considered social gaming/social casino games as gambling as gambling utilizing implementations as listed above.

Kater vs. Churchill Downs•April 17, 2015: Cheryl Kater filed a class action lawsuit to recover the money she had lost playing Churchill Downs’ Big Fish Casino smart phone app•Lawsuit alleges Big Fish Casino game constitutes illegal gambling in violation of RCW 4.24.070•Despite the fact that these chips cannot be redeemed for actual money, Kater alleges that they are nonetheless valuable because they can be used to continue playing or be sold to other players•Kater alleges that Churchill Downs’ game amounts to gambling as defined by statute and that she is entitled to recover the money she lost playing•The trial court dismissed the case for failure to state a claim

Kater vs. Churchill Downs•In February 2018, Reversal of District Court decision stating that all online or virtual gambling is illegal in Washington•Big Fish Casino’s virtual chips have no monetary value and could not be exchanged for cash, but Big Fish Casino did contain a mechanism for transferring chips between users, which could be used to “cash out” winnings•The panel held that the virtual chips extended the privilege of playing Big Fish Casino, and fell within Washington Revision Code 9.46.0285’s definition of a “thing of value” and because of this concluded that Big Fish Casino fell within Washington’s definition of an illegal gambling game.•The panel held that plaintiff Cheryl Kater stated a cause of action under Recovery of Money Lost at Gambling Act where she alleged that she lost over $1,000 worth of virtual chips while playing Big Fish Casino, and she could recover the value of those lost chips from Churchill Downs

What have we seen in the lab, and how do we test these things?•Mobile Gaming•Social Example

Mobile Extensions: What is the lab evaluating?•Is this functionality allowed in the market, and what technical requirements should we be evaluating against (GLI-26)?•Security of machine locking down and unlocking when expected•Confirming RNG calls are occurring on the Electronic Gaming Device and not the tablet/phone•Verifying communication channels are secure and not able to be listened into•Confirming gameplay can only exist where warranted (Geo-fencing via Bluetooth or RFID beacons)

Mobile Gaming: What is the lab evaluating? •Is this functionality allowed in a market, and what technical requirements should we be evaluating against (GLI-19)?•Know Your Customer (KYC)•Secure Payment Methods•Geolocation• Local with BlueTooth / RFID Beacons / LAN• State-wide: WiFi, Cellular, GPS, etc.

•Network Security•Change Management Process•Required Reports

Mobile Gaming: What is the lab evaluating?•Integration of multiple components•RNG evaluation• Cryptographically strong?

•Math / Paytables•Player Facing Information• Game Artwork and Rules of Play• Terms and Conditions

•Game Recall•Determining Controlled Components• Remote verification means

Social Gaming: What is the lab evaluating?•Does linking to Casino player account work as expected?• Are earned points transferred over correctly?

•Is the app functioning as advertised?• Example: Is 1 point awarded for every $10 spent?• Example: Is their a maximum of 100 points per day?

•Is communication to the Player Tracking System working correctly?• Review of API’s to ensure a clear understanding of functionality

•Not a Certification, but rather a Functional Evaluation