INFORMATION, INSIGHT AND ANALYSIS FOR THE BUSINESS OF INTERACTIVE GAMING

.
ISSUE 87 JULY/AUGUST 2014

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CONTENTS
Editor’s Letter 07
Amaya and PokerStars, 08
the biggest deal we have 10
seen to date in the iGaming
space. But this deal isn’t 13
just interesting because
16
of its scale, this is the most talked about and
most speculated upon deal since the listing of 19
PartyPoker. Will this sanitise PokerStars for US
20
licensure? Did Amaya overpay? Should PokerStars
have sold for more? Will the deal really go through 22
in September? What will the debt structure mean for
the business? What will happen to PokerStars’ grey
24
market operations? The list goes on and on. 28
One thing is certain, this is a bold move by Amaya, 30
and it is certain to force several of PokerStars’
competitors to respond. In an industry that has been 31
anticipating accelerated M&A activity, I just wonder if
36
this is the catalyst that starts the chain reaction?
41
Michael Caselli, Editor in Chief
49
63
66
67
70
72
76
79
82
94
110 Marketplace
Managing Editor: Michael Caselli, michaelc@igamingbusiness.com
Editor: Stephen Carter, Stephen@igamingbusiness.com
Section Editor (Legal): Hilary Stewart-Jones
Section Editor (Legal): Stephen Ketteley
Section Editor (Management): Anton Kaszubowski
Section Editor (Technical): Justin Bellinger
Section Editor (Finance): Melissa Blau
Designers: Sharon McGoldrick, Stewart Henson
Production & Studio Manager: Craig Young, craig@igamingbusiness.com
Publisher: Alex Pratt, alex.pratt@igamingbusiness.com
Head of Operations: Shona ODonnell, shona@igamingbusiness.com
Sales Manager: Ian Larcombe, ian@igamingbusiness.com
Subscriptions: info@igamingbusiness.com
Events Calendar
British Remote Reforms: The Business End
Germany: Waiting For Certainty
Malta: The New Policies
Shape Up Or Ship Out: NJ’s New Affiliate Guidelines
When Is A Right Not Right?
Gambling Advertising: What Really Matters
How Will POCT Impact Affiliates?
The Evolution, Use And Impact Of Social Games
Online Still The Future For Lotteries
Laymen Become Preachers: Mobile Development in 2014
Round Table: The Future Of Mobile Payments
Feature: Can Amaya Deliver Stars To The Promised Land?
Amaya-Stars: A New World Order?
Live Dealer Focus 2014
WSOP Enters New Online Era
The Isle Of Man: iGaming’s True VC Hub
CIS: Opportunities And Risks
Social Casino Q1 Update
The Global iGaming Index
Upholding California’s Competitive Edge
US Operators Face Staffing Challenges
Jurisdictions 2014
Data Centre, including Cali, NY and Pennsylvania numbers
Print: Printed in the UK by Pensord Press, www.pensord.co.uk
Published by: iGaming Business Ltd, St. Mark’s House, Shepherdess Walk, London N1 7BQ
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iGamingBusiness | Issue 87 | July/August 2014 | 3
Editor profiles
Law & Legislation: Hilary Stewart-Jones
Hilary has extensive experience in the betting and gaming sector, including international betting and gaming compliance as well as
new betting and gaming products, particularly online. Hilary was in-house counsel with Ladbrokes for five years. Her experience in this
sector also extends to mergers and acquisitions, intellectual property, software licensing, joint venture and broadcast activity.

Law & Legislation: Stephen Ketteley

Stephen Ketteley is a partner at DLA Piper, a major international law firm with over 75 offices, spread through 30 countries.
Stephen is noted in legal directories as one of the Leading Individuals advising the gambling sector and described in the Legal 500 as “a
real expert in the online gambling industry”. He also manages the Gambling UK Group on LinkedIn. stephen.ketteley@dlapiper.com.

Technical: Justin Bellinger

Justin is Head of Professional Services for Cable & Wireless, Channel Islands & Isle of Man. He has been integral in driving forward the
company’s global iGaming strategy and has a portfolio of clients including some of the biggest brands in the sector. Justin has over a
decade of experience in the telecoms industry and is a Certified Information Systems Security Professional (CISSP). Justin is a regular
presenter and media commentator who has spoken on security related topics for the British Computer Society and at CA World.

Management & Marketing: Anton Kaszubowski

Anton Kaszubowski is Director of eGaming for the pan-European operator, Stanleybet International. Anton has worked as a senior executive in the
iGaming sector since 2002, advising and investing through his company, Greenlaw Limited, as well as serving as Managing Director of AIM listed
FUN Technologies Plc and then as CEO of Pitchgaming.com. Prior to 2002, Anton specialised in providing mergers & acquisitions and financing
advice to media, technology and leisure companies for Jefferies & Co, BancBoston and JP Morgan Chase. anton@greenlawlimited.com.

Business & Finance: Melissa Blau

Melissa Blau has been in the online gaming sector for eight years as both an operator and advisor. In her current capacity, Melissa is an advisor focused
on bridging US and European interests. Through her consulting company, iGaming Capital, she has been advising mainly land-based companies in
developing their online gaming strategy as well as informally advising on M&A opportunities and capital raising. Prior to the iGaming industry, Melissa
co-managed Constellation Ventures, a $450 million media technology venture capital fund.  Melissa has a BA from the Wharton School, University of
Pennsylvania and an MBA from Harvard University. Melissablau@iGamingcapital.com.

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 Law and Legislation

British remote reforms:

the business end
in which they do not hold a licence. This
How to justify sources of revenue derived from certain markets to the has, undeniably, been a wake-up call for
Gambling Commission is proving the main issue for operators and suppliers many of the industry’s operators and their
looking to secure a remote gambling licence at the earliest opportunity, suppliers who have, hitherto, never actually
reveals Stephen Ketteley of DLA Piper’s gambling team. assessed their jurisdictional breakdowns in
any meaningful way.
It was on 13 July 2011 that John Penrose, issue operators and suppliers are finding Operators and suppliers will only really
a minister in the British Government’s the most difficult to deal with, namely how understand the legality of all the business
Department of Culture, Media and to justify their sources of revenue. We also they generate if someone has made them
Sport, announced that remote gambling reflect on how operators are adapting their do their homework. So, for example, those
regulation in Britain would businesses to cope with the new British operators that have listed on various Stock
fundamentally change. system and how the changes to British Exchanges, those operators that seek bank
He said the Gambling Act should be regulation are an indicator of what the finance, those that seek US licensure and
amended so that remote gambling was industry may face in the future. those that have been involved in significant
regulated on a “point of consumption mergers/acquisitions may have been
basis, such that all operators selling into A fundamental shift through such a procedure. They would
the British market, whether from here or Insofar as an operator is regulated and have done so because they were made
abroad, will be required to hold a Gambling compliant in one of the major “offshore” to by a bank, a broker, a listing authority
Commission licence”. This was swiftly licensing hubs, the chances are they or a regulator. However, those that have
followed by a statement from the Treasury would have be close to compliant with remained privately owned, never sought
saying that they would “review the taxation a licensing regime of an “onshore” debt, never aspired to enter the United
of gambling to ensure that it was in line jurisdiction before the get-go (albeit they States and have grown organically, may
with John Penrose’s proposals”. may need to establish additional, local, never have had the need to look at the
Now, some three years later, the remote procedures and processes). legality of their revenue. While they will
gambling industry is preparing itself for A significant difference between what have blocked certain territories, this would
the resulting seismic shift as the most has gone before in terms of regulatory have been on the basis of contractual
developed (and saturated) online gambling requirements and what is now being requirements imposed on combination of
market of them all undergoes a complete espoused by the Commission is the payment providers and software supplier.
regulatory overhaul. The legislation requirement to ensure that remote So, many operators arriving into the
received Royal Assent on 14 May 2014, gambling operators understand, in British regulatory environment for the first
thereby beginning a countdown to, what is significant detail, the legality of the time have never had to look at the legality
for many operators, the most challenging business they generate. They must be in a of revenue derived from popular gaming
period they have ever faced position to be able to demonstrate to the jurisdictions such as Canada, Australia
This article looks at the challenges the Commission why they feel it is justifiable to and Russia, and it can be somewhat of a
industry faces, and focuses on the main derive material revenue from jurisdictions surprise as to the true legal position. Once

8 | iGamingBusiness | Issue 87 | July/August 2014


operators understand the legal position,
they then need to ascertain whether or not,
in accordance with their own appetite for
and attitude to risk, it is business they are
willing to continue undertaking. What has
become very clear in recent weeks is that
the Commission’s stated aim of ensuring
that operators that apply for licences are
operators of “integrity” and “suitability”,
is likely to be achieved. A number of
operators are closing jurisdictions down or
assessing the way in which they transact
with certain jurisdictions to ensure that
they minimise any attendant risk. Not only
do operators want to ensure that they are
capable of following the Commission’s
guidelines in ensuring that they can
represent in their business plans the legal
basis for the business that they undertake,
operators have taken the opportunity to
reflect on their operations to future-proof
them independently of the British licensing
application process.
Compliance and disclosure
It is worth touching on the Licence
Conditions and Codes of Practice (LCCP),
the cornerstone of British gambling
regulation, which sets out the various
conditions that operators need to adhere
to and also links to a variety of other
documentation including the Remote
Technical Standards which set out, in more
detail, the technical requirements for a
remote gambling operation.
The LCCP underwent a consultation
and consequential renovation earlier
this year, which saw many provisions
updated and introduced a whole new
layer of information sharing and
bureaucracy to an industry already
drowning under the weight of regulations.
So many of the industry’s carefully
considered comments and suggestions,
flowed through to the Commission during
the consultation, were ignored, and as
such, the cost of compliance has risen
considerably whilst its effectiveness
remains largely unchanged.
One example of this is the sheer
increase in the amount of information
the Commission requires operators to
disclose, on an ongoing basis, about their
business operations. How much of this
information will genuinely be assessed by
the regulator as it struggles to cope with
the sheer volume of data it has demanded
operators supply? Best estimate suggests
an additional 150 licensees will apply to
the Commission for regulation, and each
of those requires significant overseeing to
ensure that the licensing objectives are met.
That said, the LCCP is clear in its
requirements and, as such, operators
and suppliers are generally left with no
illusions as to what is required of them to
comply. But it is that compliance with the
requirements that will begin to take their
toll in the coming months and, particularly
when a number of smaller gambling
suppliers obtain licences in the Autumn
and Winter (in advance of the 30 January
2015 deadline), we may find that a number
of applicants simply drown under the
weight of regulation.
Why the wait?
At the time of writing this article (mid
June), we have yet to receive details of
the implementation process and the
requirements that need to be fulfilled
by any operator seeking to apply for
a “continuation licence” from the
Commission, which will allow it to
Law and Legislation
continue operating in the British market
on a transitional basis whilst its
application is processed.
The Commission had always stated that
the licensing window for continuation
licence applications would open two
months after Royal Assent which, based
on Royal Assent being 14 May, will be mid
July. The industry was also consistently
told that the licensing window would be
open for one month, then closed for a
week, and then would swiftly be followed
by full implementation of the amended
legislation. As such, under current
timetable the industry has been looking
at a 1 September implementation date.
However, on the day this article
was written, the Government and the
Commission each received letters written
on behalf of the Gibraltar operators.
These letters before action could lead
to a judicial review process, with as yet
unknown consequences.
In the meantime, the licensing process
may well rumble on. By the time you read
this article, the consequences of these
actions may be known. Or, the Statutory
Instrument which will finally confirm
the timetable may have been published,
confirming the Government’s intentions. 
The industry is currently left in a holding
pattern. Things will become clearer
eventually and then we will see if John
Penrose’s stated ambitions to regulate
the industry on a point-of-consumption
basis as a means to further protecting
consumers, will become a reality.
If you want to know more about the British licensing
process, contact Stephen.ketteley@dlapiper.com or
Ashley.averill@dlapiper.com.
iGamingBusiness | Issue 87 | July/August 2014 | 9
 Law and Legislation
Germany: Waiting
for Certainty
The CJEU’s recent decision in the Digibet case has only served to create more
legal uncertainty around the German licensing process, writes leading gaming
lawyer Martin Arendts.
The situation in Germany at the moment
with regard to sports betting and
gambling increasingly resembles a scene
in Waiting for Godot, the absurdist play
by Samuel Beckett. The licensing process,
which began two years ago, is becoming a
neverending saga, and one can now
imagine Vladimir and Estragon discussing
how perfect the situation might be if
licences had finally arrived.
The Court of Justice of the European
Union (CJEU), in its recent Digibet
decision, also did nothing to resolve legal
uncertainties, but made legal predictions
even more intricate. The CJEU did not dwell
on the proportionality of the restrictive
provisions of the Interstate Treaty on
Gambling, which, however, will be a topic of
a new referral from Germany (Ince case).
The background
In 2012, Germany decided to abandon its
strict state monopoly system with regard to
sports betting (after the CJEU, in its decisions
of 8 September 2010, held the sports betting
monopoly to be inconsistent with EU law).
The German states (Länder) amended the
Interstate Treaty with an experimentation
clause in section 10a and started a licensing
procedure to grant up to 20 licences.
However, after two years and after several
court decisions (with even more to come),
not a single licence has been granted. It is
quite obvious that the whole procedure
does not fulfil the criteria of the CJEU.
There is no factual reason for the maximum
amount of 20 licences (there are rumours
10 | iGamingBusiness | Issue 87 | July/August 2014
this number might be increased to 40 to
meet the expectations of the remaining
applicants). The fact that the detailed
licensing criteria have not yet even been
published is even more significant.
The State of Schleswig-Holstein at first did
not follow the other 15 German states, and
opted for a more liberalized system (without
a maximum amount of licences, also
allowing online casino games and poker).
However, after state elections in 2012, which
led to a new state government, Schleswig-
Holstein joined the Interstate Treaty. The
Schleswig-Holstein Gambling Act ceased to
be in force with effect from 9 February 2013,
shortly after the referral of the Digibet case
by the Federal Court of Justice to the CJEU
in January 2013 . The authorisations, issued
before to operators, remain valid.
The Hessian Ministry of the Interior
was appointed to organise the sports
betting licensing procedure under the
experimentation clause, and to issue the
licenses on behalf of the newly created
gambling board (Glücksspielkollegium).
The tender for the 20 sports betting licences
was published in the Official Journal on 8
August 2012. More than 100 applications
were filed with the ministry. After the
second step, however, the procedure came
to a standstill, while first legal battles
were fought in 2013 (until the Hessian
Administrative Court of Appeal, in its
BetVictor decision of 28 June 2013, decided
that applicants first would have to wait for
a final decision to ask the court for legal
remedy and interim protection).
In November 2013, in a letter to the
remaining 41 applicants, the ministry (as
instructed by the gambling board) declared
that none of the applicants, not even the
state operators which had applied, fulfilled
the minimum requirements (contrary to the
representation of the ministry in the court
cases which stated that 14 applicants had
fulfilled the requirements of step two). In
January 2014, the applicants were requested
to submit additional information and
documents by 14 March 2014.
In the meantime, state-owned ODS
ODDSET Deutschland Sportwetten GmbH
(ODS), had asked the Administrative Court
of Wiesbaden to be granted a licence. In
its interim decision of 20 December 2013
the Administrative Court of Wiesbaden
requested the Hessian Ministry of the
Interior to accelerate the licensing
procedure and decide on the application of
ODS within three months. It held that the
ministry had to decide on the application
within reasonable time and that there was
no comprehensible reason why the ministry
could not do so. However, the Hessian
Administrative Court of Appeal now
repealed this decision, arguing that ODS
had to wait for a final decision.
The court of appeal pointed to the fact
that applicants could bring an action
for failure to act (Untätigkeitsklage). In a
partial judgment for a private operator , the
Administrative Court of Wiesbaden already
had decided that ministry had to decide
on the application within three months.
However, the court allowed for an appeal to
clarify the procedural situation.
An end to the legal dispute is not near.
If the ministry will eventually decide to
issue licences, and not to re-start the whole

procedure, it first has to send out rejection
letters, and to wait for two weeks to finally
send out licences. In the meantime, most
rejected applicants will certainly ask for
interim legal protection. I also expect
that licence-holders will file suits against
incidental provisions of their licences,
regarded to be to restrictive.
The Digibet decision
The CJEU, in its recent Digibet decision of
12 June 2014, did not help to clarify the
legal situation in Germany. This case was
heard by the Third Chamber (not the Grand
Chamber as the previous referral cases
from Germany). After an oral hearing on 2
April 2014 and without an opinion of the
Advocate General, the CJEU only answered
some questions of the Federal Court of
Justice. It reiterated that it is the obligation
of the national court to verify whether
the restrictions satisfy the conditions of
the Court´s case-law concerning their
proportionality. So the Federal Court of
Justice, if taking this remark into account,
would have to refer the case back to the
trial court to determine the facts (and
whether these are compatible with the
freedom to provide services). Unfortunately,
the CJEU did not further dwell on the
proportionality requirements and did not
develop more practicable criteria.
With regard to the consistency
requirement, the CJEU held that even
assuming that the more liberal legislation
in Schleswig-Holstein may have
undermined the consistency of the policy
of prohibiting games of chance in the
other Länder, the application of that more
liberal legislation was limited temporally
to less than 14 months and geographically
to a single Land. Thus, the existence for a
limited period of more liberal rules does not
seriously affect the appropriateness of the
restrictions on games of chance applicable
in all the other Länder to achieve the
legitimate public interest objectives pursued.
Thus, the Court of Justice observes that the
other 15 Länder were not required to change
their legislation in that field simply because
a single Land had followed a more liberal
policy for a limited period.
So, would the CJEU have decided
differently, if the two different sets of rules
would have co-existed for two years or if
two Länder had opted for a liberal policy?
It also does not help national courts, if the
CJEU tries to distinguish the Digibet case
from its previous Carmen Media decision,
also a preliminary ruling on a referral
from Germany. I fear that the consistency
requirement becomes largely inoperative,
if you have to distinguish between vertical
consistency (Land and Federal authorities)
and horizontal consistency (relationships
between the Länder). Should there really
be no consistency requirement in the
“horizontal relationship” between the
Länder? As the Schleswig-Holstein
example proved, an Internet ban is
clearly not proportionate, as there is no
overriding requirement in the public
interest, as less restrictive measures seem
to work better and more effectively.
Operators and authorities tried to
interpret the Digibet decision in their
interests. The attorney for WestLotto, the
plaintiff in the Digibet case, argued that
the CJEU confirmed the consistency of
the Interstate Treaty with EU law (which
it clearly did not). Politicians of the former
Schleswig-Holstein government, on the
Law and Legislation
other hand, tried to interpret that the CJEU
held the Schleswig-Holstein Gambling Act
to be in conformity with EU law (which
the CJEU also did not do). In referral cases,
the CJEU also refrains from declaring
national law as inconsistent with EU law. So,
practical guidance for the national courts is,
from my point of view, essential to support
the functioning of EU law.
With regard to the current sports betting
licensing procedure in Germany, a new
referral in a criminal case could prove
interesting. In the Ince case, the District
Court of Sonthofen inter alia has asked the
CJEU to clarify the criteria for a licensing
procedure, namely: “When are the selection
criteria to be published?” In the quite
detailed referral questions, the court also
points to several inconsistencies, including
the fact the same law firm advises the
Hessian Ministry and the lottery operators,
the ministry first accepting 14 applications
then later arguing that the minimum
requirements have not been fulfilled, and
that state operator ODS does not fulfill the
obligation of separation between organised
sport and the operation of sports bets. We
await the ruling with interest.
Martin Arendts is one of the
leading gaming lawyers in
Germany. He is a General Member
of the International Masters of
Gaming Law and regularly writes for national and
international legal publications. Recently, he dealt
with several administrative law, constitutional law,
criminal law, unfair competition law and trademark
proceedings in connection with sports betting,
lotteries and poker.
iGamingBusiness | Issue 87 | July/August 2014 | 11
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Malta: the new policies
Maltese regulator the LGA recently introduced several “quick win” policy
changes aimed at removing unnecessary red tape and burdens on licensed
operators. Joseph Borg, James Scicluna and Robert Zammit of WH
Partners provide a summary.
The LGA is on a mission to ‘future proof’
the Malta online gaming regulatory regime,
and has decided to divide this project in a
number of phases. Earlier this month, the
LGA issued a list of what the Executive
Chairman defined as ‘quick wins’, a series
of policy modifications that do not require
any legislative intervention. It is expected
that a second series of policy changes and
actions will be announced later on this
year. In the meantime, we understand that
the LGA is also embarking on a project to
draft a detailed proposal to the government,
suggesting specific legislative interventions
with the aim of retaining the attractiveness
of the Maltese jurisdiction in a time
when most other European jurisdictions
are regulating gaming through national
authorisation regimes.
It is no secret that with the advent of new
national authorisation regimes all over
Europe, the so called dot.com jurisdictions
such as Malta, Alderney, Gibraltar and the
Isle of Man have lost some of their appeal.
However, the reputation of the Maltese
regulatory regime, and the fact that Malta
is a member of the European Union, have
kept the jurisdiction relevant in the current
regulatory context. In fact, in recent months
we have noticed a fresh flow of operators
moving their operations to Malta and start-
ups choosing Malta as the ideal jurisdiction
from where to operate and offer their
services. Some operators have also chosen
Malta as their base because it simplified
their entrance into new jurisdictions,
particularly those that have opted to set up
national authorisation regimes.
The “quick wins”
The “quick wins” announced by the
LGA this month are aimed at removing
unnecessary ‘red tape’ and burdens on
Malta-licensed operators, without in
any way affecting the integrity of the
Maltese regulatory regime’s reputation.
The policy modifications issued by the
LGA include the following:
LGA Zone is no longer required for
operators wishing to host servers
overseas
The Authority has removed the need for
the operator to replicate its transaction
database on equipment that is marked
as LGA Zone, within the same datacenter
in which the main equipment is hosted.
This means that an applicant/licensee is
not required to have a separate replication
server set-up hosted overseas, unless there
are exceptional situations where this
would be required. This should result in
reducing capital expenditure for new
licence applicants, as well as running costs
relating to the hardware and development,
allowing the operators to invest those
savings in other parts of their business.
However, it is important to note that
the LGA is not removing the requirement
to replicate the transaction database in a
server/s situated in the Maltese territory.
Simultaneous log-in of players from
separate devices
Until May 2014, operators were obliged to
implement technical measures not to allow
players to be simultaneously logged on
through separate devices. This requirement
is being removed, and players can now
log on through their mobile devices while
they are still logged on from their laptop, as
long as they are made aware of their status
and are given the option to log-out of any
one device. The LGA has recognised that
Law and Legislation
simultaneous log-in does not necessarily
result in any breach of security or a lesser
level of player account security, and that
as long as the player is made aware of the
situation, a player can be allowed to be
logged in simultaneously via more than
one device. There has been no indication
on whether a device limit would apply.
The LGA is, however, also hinting that it
may publish further guidelines at a later
stage in order to impose further limits to
this concession.
Simplification of audit requirements
Operators with multiple licences of the
same class will be required to perform only
one combined system and/or compliance
audit, covering all licences concerned. The
applicable fees for the combined audits
will remain unchanged, but may be subject
to review in future. To date, operators in
possession of multiple licences are required
to perform a system audit prior to obtaining
a licence and a compliance audit within
the first year of operation, as well as upon a
licence renewal. The LGA’s change of policy
will enable operators to reduce a significant
administrative burden without having an
impact on the quality of the audit or the
level of oversight which the LGA has on its
licensees. Additionally, licence application
timeframes are likely to be reduced. It is not
yet clear whether operators holding multiple
licences which are subject to renewal at
different times would also benefit from this.
Poker and bingo may be operated on
the same licence
Applicants/licensees offering both bingo
and poker may offer such games with the
same Class 3, provided they have the same
B2B software platform provider. On the
other hand, B2B software platform providers
may also operate bingo and poker under the
same Class 4 licence.
Previously, operators wishing to offer
various “player to player” games, such as
iGamingBusiness | Issue 87 | July/August 2014 | 13
 Law and Legislation
bingo and poker, have been required to
obtain separate licences for each product,
even though both products fell within the
same licence category, and even if both
were provided by the same software
supplier. As a result of this “quick win”,
operators wishing to offer “player to player”
games will only require one Class 3 licence
and no longer be required to obtain 2
separate licences (one for bingo and one for
poker), when the products are provided by
the same platform provider. It remains to
be clarified, whether operators that offer or
wish to offer other ‘Class 3’ games such as
pool lotteries and betting exchanges shall
benefit from this change.
Servers will no longer be sealed
In order to keep track of current hardware,
the Authority is introducing the concept of
‘tagging’ instead of ‘sealing’ of servers. For
several years, sealing of all components of
the hardware used by operators has been
the LGA’s preferred way of keeping track of
the equipment utilised by operators under
their remote gaming licences. However,
the sealing process has been criticised
by key stakeholders as being impractical,
time consuming and a process which does
not provide the LGA with any additional
comfort or security. The LGA has now
decided to do without the sealing of each
component and to require solely the tagging
of each piece of hardware with an inventory
number. The hardware will also be sealed to
the rack. Resealing or re-tagging will only be
required if the hardware is moved or if new
hardware is installed.
Updates to incident reporting
requirements
As an ancillary to the previous measure, the
Authority has updated its recently published
procedure for “Incident Reporting, Addition
and Decommissioning of Hardware” to
reflect the LGA’s policy change with respect
to the tagging of equipment. This document
14 | iGamingBusiness | Issue 87 | July/August 2014
has been most welcome by the industry as
it clearly identifies what the LGA requires
from a Key Official when adding and/or
decommissioning hardware.
Role of key official
The Authority is planning to launch Key
Official training and certification. The LGA
shall be publishing further details in the
coming weeks.
An open mind towards ‘cloud’
environments
The Authority will with immediate effect
start to accept hosting of servers in a cloud
environment on a case-by-case basis and
after carrying out a risk assessment. Until
last year, the LGA was highly sceptical
about the use of “cloud”, which it generally
considered to be a high risk environment.
Operators were only allowed to use a cloud
environment for static information. The
LGA has now recognised that with the
latest technological advancements, a “cloud
environment” can be considered for data
which is not static. Since the LGA said that it
will take a risk based approach and consider
each request on a case-by-case basis, we
understand that requirements may vary,
from one business model to another.
Next steps
Are these “quick wins” enough? Certainly
not! Are they a step forward in the right
direction? Yes, and they have been welcomed
by the stakeholders at large. Gaming is
perhaps one of the most dynamic industries
in the modern economy, and regulatory
regimes require continuous adapting and
updating to remain relevant and achieve
their goals of protecting vulnerable persons,
keeping crime out of gaming and ensuring
fairness without imposing unreasonable
burdens on the industry.
While some further ‘quick wins’ that
do not require legislative intervention are
on the agenda, the industry is impatiently
waiting for the LGA to take the next step and
propose amendments to the law that can
render the regulatory regime more relevant,
effective and attractive. The LGA should also
start looking at more effective collaboration
with jurisdictions in and outside of Europe,
providing added value to the Malta online
gaming licence.
Joseph F Borg is currently a
Senior Advisor to WH Partners, a
law firm specialising in Gaming,
Corporate, IT, Telecoms and
Intellectual Property Law. He also
lectures Gaming Law at the University of
Malta. Before joining WH Partners he occupied the
post of Chief Regulatory Officer of the Lotteries and
Gaming Authority - Malta.
Dr. James Scicluna is a Partner
at WH Partners in Malta. He is a
dual-qualified Maltese advocate
and English solicitor and General
Member of the International Masters
of Gaming Law and the International Bar
Association. He is ranked in the top 50 global
gaming & gambling lawyers by Chambers &
Partners.
Dr. Robert Zammit is a Senior
Associate at WH Partners,
specialising in regulatory,
licensing and litigation law. His
principal areas of expertise are
licensing of gambling businesses and
regulatory compliance in the area of gambling,
intellectual property, information security, privacy
and data protection.
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 Law and Legislation
SHAPE UP OR SHIP OUT:
NJ’s NEW AFFILIATE GUIDELINES
The New Jersey regulator’s revised affiliate guidelines are an important
step towards helping bolster its struggling iGaming market and should set
precedence for other states, writes Rachel Hirsch of Ifrah Law.
Earlier this month, the New Jersey
Division of Gaming Enforcement (DGE)
issued revised guidelines, clarifying its
laws for online gaming affiliate marketers
working with New Jersey-licensed
operators. The revised guidelines follow a
recent cease-and-desist letter sent by New
Jersey’s Assistant Attorney General George
Rover to six affiliates, demanding these
affiliates immediately remove any online
gaming links that are not authorised under
federal or state law under threat of civil
and criminal sanctions. While the revised
guidelines are intended to combat these
types of affiliates, they are only the first
step in a long road to bolstering New
Jersey’s struggling intrastate online
gambling market.
In order to understand the DGE’s
concerns regarding affiliate marketers,
consider the following: An uneducated
consumer, learning for the first time that
online gaming is legal in New Jersey,
searches Google using the search terms
“online gaming.” This search, however,
generates results from affiliate marketers
and offshore online gaming companies.
The entire first page of the Google search
does not even generate a single result for
a licensed New Jersey operator. To further
complicate matters, the uneducated
consumer has no idea that the sites
generated as a result of the search are
unregulated and unlicensed. For New
Jersey regulators, this scenario is common
and is exacerbated by a combination of
factors – uneducated consumers in a
16 | iGamingBusiness | Issue 87 | July/August 2014
market dominated by offshore operators,
where licensed operators are paying fees
to regulators but are losing out to their
unlicensed counterparts, who also drive
tax revenue away from New Jersey. Affiliate
marketing has of course always been
a cornerstone of how online gambling
operators acquire new players.
New Jersey’s Affiliate Licensing
Requirements
New Jersey, as a licensed online gaming
jurisdiction, takes oversight of affiliate
marketers very seriously. However, even in
the regulated New Jersey online gambling
market, how operators utilise the efforts of
affiliate marketers has been somewhat of a
grey area from inception. In a letter issued
earlier this month, the DGE clarified its
existing guidelines for affiliate marketing.
The DGE requires online gambling affiliate
companies to be licensed under one of two
distinct categories – “vendors” and “ancillary
casino service industry enterprises”
(Ancillary CSIE). Because there are
different models within affiliate marketing,
depending on the agreement between the
affiliate marketer and operator, the type of
licence that must be applied for depends on
which model an affiliate employs. There are
only two acceptable ways in which affiliates
may operate in New Jersey.
Vendor Registration
The first way is by applying for, and
receiving, a vendor’s permit issued by the
DGE. The revised guidelines clarify that
affiliates who are paid a flat fee to direct
traffic to a gambling website – which
includes “cost per click (CPC) and “cost-
per-view” (CPV) – should apply for a licence
in the “vendor registration” category. CPC
compensation means that an affiliate earns
a fee every time a visitor clicks on a link or
banner that takes the visitor to an operator’s
website. CPV refers to an agreement where
the affiliate receives payment each time a
unique visitor views an advertisements.
Also in this category is the affiliate
compensation model defined as “flat
rate cost-per-action,” where the affiliate
receives a fee each time a visitor signs up
for a gaming site or downloads its software,
for example. Companies that engage in
sponsorship deals with online gaming
companies are also required to become
Vendor Registrants.
Affiliates being licensed as Vendor
Registrants must submit their Vendor
Registration Form to a casino, which will
then submit to the DGE. Affiliates must
also submit a supplementary form
themselves to the DGE.
Ancillary CSIE
The second way in which affiliates can
become eligible to work with New Jersey’s
online gaming operators is by receiving
an ancillary license. The process to receive
what’s called an Ancillary CSIE license
is far more comprehensive than vendor
registration. Under the revised guidelines,
affiliates that fall under the Ancillary CSIE
licensing category are those that employ the
form of “cost-per-action” (CPA) marketing
that entitles them to a percentage of the
customer’s deposit or a percentage revenue
share of the customer’s lifetime spend at the

site. Thus, an Ancillary CSIE is required if
the affiliate marketer is paid based upon
how much money a player deposits or the
total number of bets the player makes, if
there is a revenue-share agreement between
the affiliate and the gaming operator, or if
there is a hybrid revenue-share agreement
based in part on how much money the
player deposits or bets.
According to the DGE, master affiliates
will need to acquire an Ancillary CSIE
license if they have a revenue share deal in
place with their sub-affiliate(s). However, if
the master affiliate and sub-affiliate only
deal in flat-fee structured compensation
plans, only a Vendor Registration is required.
In addition, the revised guidelines detail
compensation models for Refer-A-Friend
deals, in which an i-gaming website pays
a flat rate to a user for each referral. No
licence is required if the user receives less
than $2,500 in fees during a calendar year.
Regardless of the compensation
scheme, DGE’s latest guidance provides
that the DGE will require all affiliates to
produce a monthly report detailing all
compensation, and all compensation
must be based on the contract that the
affiliate provides to DGE. Further, affiliates
may not receive compensation for business
gained through contracts that are based
outside of New Jersey.
New Jersey’s Crackdown on Rogue
Affiliates
The revised guidelines follow a cease-
and-desist letter sent by the DGE in April
to various poker affiliate sites, warning
them, in no uncertain terms, that the
advertising of offshore poker sites that
offered games to New Jersey players would
not be tolerated. The letter was signed by
New Jersey Assistant Attorney General
George Rover and was sent to some of the
most well-known affiliate websites in the
industry: CardsChat.com, PokerSource.
com, RakeBrain.com, Pokersites.com,
RaketheRake.com, and one unnamed site.
The letter to RaketheRake.com, for example,
cited Bovada Poker, Merge Gaming, Black
Chip Poker, and America’s Cardroom as
poker sites which are being promoted by
the affiliate. None of those sites are based
in the US, and none are approved by the
DGE. According to the DGE, the advertising
of unregulated online gaming sites taints
legitimate sites by associating them with
illegal ones, and conversely may lend
the appearance that the illegal sites are
somehow affiliated with authorised sites.
The continued presence of unlicensed
poker rooms in states like New Jersey has
put a major strain on licensed online poker
rooms, which operate under a regulatory
scheme that places them under certain
constraints. Unlicensed online poker rooms,
however, are not subject to the same rules as
their licensed counterparts, allowing them
to divert traffic to their sites from legitimate
operators. For example, unlicensed rooms
have a simpler sign-up process, which does
not require a player verification check, the
surrendering of a Social Security Number,
or geo-location. Unlicensed rooms can also
accept all types of payment options and are
under no compunctions about miscoding a
credit card transaction. Unlicensed online
poker sites do not have to vet promotions or
new games with regulators and have access
to players beyond New Jersey, giving them
far more liquidity than licensed rooms.
And, more importantly, unlicensed rooms
Law and Legislation
do not have to pay taxes, meaning smaller
operating costs and more revenue.
New Jersey’s efforts to regulate affiliate
marketers, through its cease-and-desist
letters and revised guidelines, may help
to bolster its struggling online gambling
market, which suffered a decline in revenue
over the past couple of months. In May, New
Jersey’s regulated online gambling market
generated $10.5m in revenue, a 9% drop
from the previous month’s total of $11.4m
and the second straight month of declining
revenue since the market launched in late
November 2013. Online casino revenue
fell by $600k to $8.2m while poker revenue
dropped over $300k to $2.3m. For the
year-to-date, New Jersey’s online market has
earned $53.5m, with casino accounting for
$38.9m and poker generating $14.6m.
In a regulated online gambling market
such as New Jersey, continued oversight of
affiliate marketers is essential to help steer
traffic to New Jersey’s licensed sites and
away from unregulated offshore companies.
While there are still some kinks to work
out – for example, how to manage and
regulate “super-affiliates” – this move by
New Jersey’s DGE should set precedence
for other states to follow, once they pass
i-gaming legislation of their own.
Rachel Hirsch is an attorney at the
Washington, D.C-based law firm
of Ifrah PLLC. Ms. Hirsch focuses
her practice on complex litigation and
transactions, with a particular emphasis on
iGaming and Internet marketing and advertising.
Her clients have included PokerStars, Full Tilt
Poker, and Microgaming. Ms. Hirsch graduated
with honors from the University of Maryland
School of Law and practiced at Venable LLP prior
to joining Ifrah Law. Email: rhirsch@ifrahlaw.com.
iGamingBusiness | Issue 87 | July/August 2014 | 17
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2014_06_20_igaming.indd 1 20.06.14 09:00


When a Right is not Right
The EC’s Asser Study finally tells the truth in relation to sports organisers’
rights and the French betting right, argues Brian Wright of the Remote
Gambling Association.
When the European Commission launched
the Asser Study on sports organisers’
rights in January 2013, a cynic may have
dismissed it as yet another paper shuffling
exercise at EU level, designed to kick
around various gambling questions, but
with little intention of providing any
definitive answers or guidance. One only
has to perform a brief internet search on
the Commission’s approach to infringement
procedures since 2008 for evidence of their
ability to prolong a debate like no other.
However, right from the start, something
felt very different about the workshop
approach taken by its authors, the TMC
ASSER Instituut and IVIR (University
of Amsterdam), which encouraged
genuine constructive dialogue, debate and
cooperation among all the interested parties.
Therefore, when the European
Commission published the 230-page
report at the end of April, it was greatly
anticipated, with real hope it would provide
both much-needed clarity to issues around
the existence of a “sports betting right”,
and an objective assessment of the wider
disinformation spread by sports in recent
years, linking its funding to integrity.
Thankfully, it did not disappoint, and
found that there is no legal basis or rationale
for an EU-wide “sports betting right”. For
obvious reasons, this conclusion has not
come as good news to the various sports
federations which, through hope rather than
expectation, have maintained the line that
because the betting industry makes profits
from offering betting on sports, it should
require their prior approval and pay a fee
to them for the privilege. Despite the lack of
proof to support their claims, this was often
accompanied by the secondary argument
that betting also encourages match-fixing,
and deprives sports of a substantial source
of income to fight corruption or ensure
sustainable financing of the grassroots.
Unfortunately for them, the Asser Study
had more bad news, concluding that the
“costs associated with the administering of
the right to consent to bets will always be
considerable” and “there is no evidence for a
link between the financial return stemming
from a right to consent to bets and the
financing of grassroots sport.”
Frankly, the Asser Study conclusions
will not have come as a surprise to any
reasonable person, since the motives of
certain sports to pursue a “sports betting
right” have always been commercially
driven. It is completely understandable
that sports would want to try and maximise
revenues from all potential sources, but
references to integrity and grassroots sport
tend to be red herrings, and little if any
mention is made of the significant funds
that already flow to sports from the betting
industry via various levies and a range of
truly commercial deals.
The Asser Study also concludes that the
French sports betting right, whereby sports
betting operators must obtain the consent
of sports organisers to offer bets, is not an
effective mechanism for financial
distribution to sport or as an integrity
instrument against match-fixing. If France
is the example that sports tend to point to as
the model they would like to see replicated
elsewhere, then the Asser Study does not
exactly give it a glowing reference.
While sports bodies and the French
authorities unsurprisingly continue to
promote a betting right, the Asser Study
quite rightly highlights that no other
Member State has properly implemented
legislation similar to that existing in France
and that most other jurisdictions have
“instead opted for alternative mechanisms
Law and Legislation
to collect and allocate revenue derived
from gambling to sport.” It is also important
to note that whilst the French system has
subsequently been presented as an integrity
provision, the application of the model is
not predicated on sports demonstrating they
have put in place integrity measures, merely
that they “intend” to do so.
It should never be forgotten that the
gambling industry has no inherent link
with grassroots sport and there is no logical
reason why it should provide additional
funding for that purpose. This of course
is not true of the National Lottery in the
UK or numerous state lotteries in the EU,
which were largely established and given
preferential positions in the gambling
industry precisely so that they can help
fund projects of this kind.
I am sure that politicians, governments,
and regulators have all grown tired of
hearing gambling industry spokespeople
stating that the whole notion of a “sports
betting right” is just plain wrong. This
is especially true against a backdrop of
opinion formers routinely seeing sports
as the good guys and the betting industry
as no more than an inexhaustible cash
cow. Therefore, the great benefit of the
Asser Study is that we finally have a
comprehensive, objective and definitive
document that can be used to tell the
truth in relation to sports organisers’ rights.
The authors should be congratulated for it
and we trust that the European Commission
will heed its words.
Brian Wright has been a
Director of the Remote Gambling
Association (RGA) since it
became operational in 2005,
and takes the lead on all sports
betting-related issues. Prior to working
for the RGA, he was a policy advisor at the UK
Department for Culture, Media and Sport (DCMS)
and project managed the passage of the Draft
Gambling Bill from 2002/03.
iGamingBusiness | Issue 87 | July/August 2014 | 19
 Law and Legislation
Gambling Advertising:
What Really Matters
A new report on gambling advertising highlights the real opportunity for
operators to follow Ladbrokes’ lead and address public concerns through their
creative, argues Tom Grant of Harris Hagan.
A new report called “Betting on Digital” has
been published, which examines some of
the challenges the gaming industry faces in
ensuring its marketing activities effectively
and accurately target the right audience.
The report is based on research carried
out by IgnitionOne, a digital marketing firm,
and ComRes, a polling organisation.
The research polled 2,000 people and
carried out interviews with 11 senior marketers
at various gambling organisations. Given the
relatively small sample, one could argue that
some of the claims should be taken with a
pinch of salt, not least the statement that two
thirds of “the British Public” are concerned
about the amount of advertising of online
gambling. As David Letterman, the renowned
American chat show host, once quipped “a
new survey showed that three out of every four
people make up 75% of the population.”
The report does, however, raise some
interesting conclusions from its interviews
with gaming industry marketers, which
are as follows:
1. An increased focus on mobile
products – not only are consumers using
devices more frequently but this presents
increased opportunities for location-based
marketing activity;
2. The importance of quality over
quantity in respect of customer acquisition
– given the brand promiscuity of gaming
customers, it is no longer a simple land grab
but there is now a more profound quest
amongst operators to align all of the key
ingredients to be a market-leader;
3. The growth of new media channels
available requires a re-evaluation of
priorities, as gaming companies place
greater emphasis on their social gaming
strategy whilst re-examining the value and
effectiveness of traditional TV advertising.
What is particularly striking is that the
20 | iGamingBusiness | Issue 87 | July/August 2014
marketers’ views are not always consistent
with the consumers that were surveyed.
Whilst the consumer responses inevitably
placed a high value on matters such as user
experience, game quality and discount offers,
there is an interestingly high stock placed on
reputation, regulation and overall corporate
social responsibility. Not all of the marketers
felt, however, that consumers cared about
whether or not a company donates to related
causes. A snapshot of some of these findings
makes interesting reading:
• 40% of those surveyed said that they
would be more likely to place a bet
with a company that they knew were
acting responsibly and making financial
contributions towards research, education
and the treatment of addicted gamblers;
• 77% of those surveyed agreed that online
gaming companies should pay taxes in the
countries in which they operate;
• Only 26% of those surveyed agree
that online gambling makes a positive
contribution to the UK economy.
One of the headline outcomes of the
research is that 67% of those surveyed are
concerned about the amount of advertising
for online gambling companies. Whilst the
survey revealed that TV is still considered
to be a powerful tool, the ever multiplying
number of gambling adverts may be a concern
for regulators. OFCOM published a report
earlier this year which revealed a staggering
increase in the number of gambling adverts
on TV In the UK from 152,000 in 2006 to 1.39
million in 2012. There are, of course, various
factors at play here – such as cost and channel
proliferation – but the key concern relates
to the number of “impacts” (i.e. the times an
advert was seen by viewers) on children which
increased by 272% during that period. It
remains to be seen whether either the OFCOM
report or the “Betting on Digital” report will
lead to a reconsideration of the existing
advertising codes, particularly bearing in mind
that the existing BCAP Code is well policed by
the ASA and is supplemented by the industry’s
own code of practice which reinforces the
scheduling constraints.
The new report demonstrates that there are
two key forces at work here: on the one hand,
we see the growth and power of social media
as gaming organisations naturally gravitate
towards an accessible and price-competitive
means of reaching wider audiences; on
the other hand, the current age of austerity
has understandably given rise to a mood of
national cynicism. The gaming industry does
not stand alone here as the likes of Starbucks,
Apple and Amazon have faced a tremendous
public backlash in relation to their tax affairs.
It will be interesting to see whether gaming
companies will continue unabated in their
quest to dominate acquisition through social
media or whether there is an opportunity
here for a gaming organisation to buck the
trend in their approach. There is a compelling
argument that both gambling advertising and
the products itself have become somewhat
generic. Without necessarily boring the
consumer, there may be an opportunity for
an operator to zone in on some of the more
serious issues that consumers appear to care
about – namely, spending limits, financial
contributions towards research and education
and paying its UK taxes. The irony is that all
gambling companies do these things already
(or, in the case of taxes, are about to) but do
not seem to feel that they are worth shouting
about. Ladbrokes have, however, started to
lead the way with their ‘responsible gambling’
centric “Mr Brightside” advert. It is well known
that perception is everything and gambling
operators would do well to recognise that this
applies to the public as well as to regulators.
Tom Grant is a partner at Harris Hagan
and specialises in commercial law
with a particular focus on gaming
related products and services.
 Law and Legislation
How will POCT
impact affiliates?
Many affiliates will need to adapt their business model and redesign
their websites in order to remain compliant under the UK’s new point-of-
consumption licensing model, as gambling law expert Peter Wilson explains.
Affiliates mostly escape legal developments
that cause sleepless nights for gambling
operators. After the passing of the Unlawful
Internet Gambling Enforcement Act 2006
which overnight turned the US from a
grey to a black market for operators, many
affiliates carried on as before. As mere
advertisers, their legal position was more
defensible. The industry also adapted when
the Gambling Act 2005 made it illegal to
advertise foreign (i.e. non EEA, non-whitelist)
gambling in Britain. Poker affiliates even
survived, albeit with heavy damage to
revenues, following the second withdrawal
from the US market after the prosecution of
Full Tilt etc. Inevitably, other poker operators
stepped in to fill the vacuum.
Apart from having to remove operators
from their sites from time to time in
response to these and other legal changes,
affiliates have largely avoided the onerous
day-to-day compliance duties faced by
licensed gambling operators. That is likely
to change dramatically for those advertising
in the British market when point-of-
consumption (POC) licensing takes effect.
The anticipated dated for the
implementation of the Gambling (Licensing
and Advertising) Act 2014 (“the 2014 Act”) is
1 September 2014, having recently received
royal assent, meaning it officially became a
new law, on 14 May. A regulation is soon to
be published that will confirm officially the
commencement date of the new regime. At
the same time it should set out the process
for EEA and whitelist operators who wish to
apply for transitional licences to continue
trading lawfully pending the determination
of their full licences, which would otherwise
22 | iGamingBusiness | Issue 87 | July/August 2014
not be completed in time given the
bottleneck of expected applications.
What the 2014 Act will mean for affiliates
is that they would commit a criminal offence
if they advertise a non-British licensed
gambling operator to persons in Britain. It
is a new era for the British gambling market
and it will no longer be of any relevance
whether an operator is regulated by Malta,
Gibraltar, an EEA country, or a white list
territory (Alderney, Isle of Man, Antigua or
Tasmania). Either they will have a British
licence to access the British market lawfully
or they will not be able to legally advertise or
allow their services to be used in Britain.
The 2014 Act is brief and effective. It
simply repeals the offence of advertising
foreign gambling (section 331), thereby
sweeping away the privileged position of
the whitelist and EEA-regulated operators.
As a consequence, the existing offence of
advertising unlawful gambling (section 330)
will have a much wider application than
before and will apply to the advertisement
of any facilities for gambling used or likely
to be used in Britain where the operator
does not have a British licence. For example,
it will be a criminal offence to advertise a
Gibraltar-licensed website to the British
market, unless that operator also holds an
applicable operating licence issued by the
British Gambling Commission and also
conducts their operation in compliance with
the terms and conditions of such licence.
The word “advertising” is widely defined
in the 2005 Act and includes doing anything
to encourage someone to take part in any
gambling or to increase their use of any
facilities for gambling. This can range from
direct adverts by gambling websites (online or
print) to the display of gambling brand names
and sponsorship. Where the advertising is
remote (e.g. links on webpages or clickable
banners) it includes providing information
intending to come to the attention of one
or more persons in Britain, or making
data available in circumstances such that
it is likely to be accessed by a person in
Britain. On one view, this means that almost
every English language affiliate website is
advertising to the British market unless it
makes it clear that British players are not
permitted to access its non-British licensed
operators and it would probably need to have
IP blocking in place to back up its assertion.
What about advertising a mix of
operators, some British licensed and others
not? This should be possible provided it is
made clear which sites are licensed to accept
British players and which are not; the latter,
as stated, should be blocked from access by
British players. This reasoning follows the
new licence condition on display of licensed
status which says that British licensees “may
also display on screens accessible from
Great Britain information about licences …
they hold from regulators in … jurisdictions
outside Great Britain provided it is made
plain on those screens that the licensee
provides facilities for gambling to persons
in Great Britain only in reliance on their
Gambling Commission licence(s).”
Thus if a British-licensed operator can
include foreign licensed sites on his website,
an affiliate should be able to do so. If any
of the British licensed operators consider
that any of their affiliates are breaking the
law, they will be obliged to terminate their
arrangements with the affiliate and report
him to the Commission.
The content of any advertising or
marketing must also comply with British

law. It has been the case for a long time
now that affiliates advertising in to the
British market must make sure that their
advertising material complies with the
Committee of Advertising Practice (CAP)
or Broadcast CAP codes, as applicable, in
addition to the Gambling Industry Code
and the marketing provisions in the Licence
Conditions and Codes of Practice (LCCP)
that apply to all licensed operators. One
of the existing LCCP obligations on an
operator is to include in his terms of trading
with affiliates a right to terminate an affiliate
contract promptly, should the affiliate
breach the advertising codes.
The recent amendments to the LCCP
appear to take the position much further and
place an onerous burden on the licensee who
must now ensure that the terms on which he
contracts with any third party who provides
an aspect of the licensee’s business does so
in accordance with the LCCP, otherwise,
the licensee must terminate the contract.
There is no express exclusion for affiliates
who are dealing with marketing on behalf
of an operator. Therefore, if say a marketing
affiliate runs a marketing programme or
loyalty scheme for a British licensed operator,
it must comply with the LCCP provisions
relating to such programmes. Affiliates will
need to start learning the relevant parts of
the LCCP if they want to avoid problems
in promoting to the British market. There
will also need to be greater communication
and cooperation with the compliance team
in the operator’s business. For example, if a
customer self-excludes with the operator, it
appears that the affiliate must also ensure
that he takes all reasonable steps to prevent
any marketing material being sent to the
customer otherwise, again, he may find
that his client operator is obliged to terminate
the contract with him.
The content of advertising and marketing
will be under increased scrutiny in the
coming months as CAP/BCAP and the
Commission review gambling advertising
rules, partly as a result of an increase in
complaints about gambling adverts over the
last three years. The results of the review
will be published in the autumn of this year,
with implementation by the end of the year.
The Commission has also appointed one of
its Commissioners to carry out a review of
social responsibility in gambling. It would be
optimistic to the point of delusional to think
that the outcome of these two reviews is
going to present operators and affiliates with
greater artistic licence in advertising.
If a marketing affiliate goes further
than mere advertising and has some
greater involvement in the administration
or operation of the gambling such as a
branded skin, and say, he is responsible
for registering players and/or receiving
payment from them, then he may require
his own operating licence. This was not
something that needed to be considered
under the existing law, where the test for
whether online (remote) gambling was being
provided in Britain was simply whether
there was at least one piece of remote
gambling equipment used in providing the
facilities for gambling located here. Now
there is an additional test and one simply
has to ask whether, regardless of where the
equipment is located, are the facilities used
in Britain? If the answer to that is “yes” then
you must work out whether your activity in
Britain constitutes providing facilities for
gambling, the definition of which (in section
5 of the Act) is as broad as it is unclear and
means any person who “(a) invites others to
gamble in accordance with arrangements
made by him; (b) provides, operates or
administers arrangements for gambling by
Law and Legislation
others, or (c) participates in the operation or
administration of gambling by others”.
It should be obvious by now that POC
licensing is not something that can be
ignored on the assumption that everything
will continue as before. It is not even a
question of encouraging affiliates to
review their business relationships and/
or making sure that they will comply with
the new law. If you are an affiliate in the
British market and are not addressing the
forthcoming changes yet, you may find
that your client operators will soon come
knocking and ask you for assurances that
you are adapting your business model and
redesigning your websites to make them
compliant. Having invested time and money
in getting licensed under the new regime,
operators are not going to put their new
licences at risk for the sake of any affiliate
who does not toe the line.
Peter Wilson is a regulatory
lawyer who runs his own niche
law firm, Peter Wilson Legal LLP,
specialising in gambling law and
business investigations. His gambling practice has
been recognised for many years in both Chambers
UK and The Legal 500. He is a member of the
International Masters of Gaming Law, International
Bar Association (Business Crime and Leisure
Sections), the Tax Investigation Practitioners
Association, the Proceeds of Crime Lawyers
Association, the Association of Regulatory and
Disciplinary Lawyers, and the Fraud Advisory
Panel. He regularly publishes articles on gambling
and other regulatory legal developments and is a
frequent speaker at gambling conferences both in
the UK and abroad. www.peterwilsonlegal.com.
iGamingBusiness | Issue 87 | July/August 2014 | 23
 Law and Legislation
The Evolution, Use and
Impact of Social Games
The International Social Games Association decided last October to fill the
research gap on social gaming. The ISGA’s Luc Delany provides an overview
of its findings and conclusions
In 2013, the ISGA was formed by
merging the membership of the ISGC
with those of the SGA, founded by
iGaming Business editor-in-chief Michael
Caselli. The newly combined group now
includes leading social games companies ,
whose goal is to explain to the public,
policy makers and regulators what the
social games industry does, how it works
and the value that it generates, both for the
people who enjoy playing social games as
well as for the digital economy.
Board members of the ISGA include
Zynga, Slingo, Plumbee, Playtika,
PlayStudios, MGM, IGT, High 5 Games,
Gamesys, Big Fish Games, Bally
Technologies, Aristocrat, Akamon and
Abzorba Games. Over 300 million players
play our members’ games worldwide.
Since inception, we have been pro-actively
involved in upholding industry standards.
An integral part of this work has been the
formulation of our Best Practice Principles
for social games operators and developers,
which we released last October.
Regulators and industry alike have
recognised the principles as an important
first step, which we have been committed
to building upon as new research, policy
and regulatory developments and our
overall understanding of the reception
of social games amongst consumers
develops and improves.
A new and under-researched industry
As with any entertainment media, it’s self-
24 | iGamingBusiness | Issue 87 | July/August 2014
evident that social games have a cultural
and social impact. They are enjoyed by
hundreds of millions of people daily and
have brought game play to the pockets of
anyone with a smart phone.
Like any new form of mass entertainment,
especially one that has grown so rapidly,
social games have generated much
discussion. This discussion has largely
been based on anecdote, experience,
assumption and hypothesis, principally
due to a lack of research.
Last October, the ISGA decided to fill
the research gap by commissioning a
comprehensive and independent study
aimed squarely at the evolution, use and
impact of social games. Our aim was to
bring a new perspective on social games and
add more of an evidence base to the debate
surrounding key issues of concern.
Harvest Research, an Australian-based
consulting and research firm specialising
in the areas of public policy and consumer
behaviour, undertook the project. Dr Rohan
Miller, senior lecturer in marketing at the
University of Sydney, led the social games
team, with the assistance of internationally
recognized academics, including from the
London Business School.
Released last month, the final report
reviews both existing academic literature
and data surrounding social games, and
conducts a new survey of consumer
behaviour and perceptions from thousands
of respondents across three continents in
Australia, the UK, France and the US.
The following is a just a brief overview of
some of the report’s detailed findings and
conclusions. Please visit i-sga.org/research to
see the report in full.
The natural evolution of games
In their 1959 cross-cultural classic Games
in Culture, the anthropologists John Roberts,
Malcolm Arthur and Robert Bush (1959)
delineated a three-tier classification for
games based on physical skill, strategy and
chance as a way of studying the role of game-
play across different societies and cultures.
Using their model as an analytical
framework, Dr Miller demonstrates how
those three tiers remain at the core of games
played on tablet and mobile devices. In
other words, he shows us that there is a
continuing link between the ancient chance
and strategy games like Tarot and Macal
and the video games of today.
The report’s observation is that much of
the extensive academic study of game-play
has been left out of the discussion on social
games and their impact. Understanding
that social games are simply a natural
continuation in a long history can surely
help prevent kneejerk or sensationalised
responses to the industry.
The shift towards free-to-play
From the arcades of the 70s to the early
PC games of the 80s, technological change
has driven video game development. The
rise of the internet in the 90s paved the way
for games like Doom, which pioneered the
first online communities of gamers. The
continuing expansions of mobile technology
and social networks have been the core
drivers of social games.
 THE HOFF © 2013 Hoffworld, LLC.
THE HOFF and DAVID HASSELHOFF are
trademarks of Hoffworld, LLC and are registered in
the United States and other foreign nationals. Used under
licence from MX Digital, LLC. All rights reserved.

The free-to-play or “freemium” pricing
model is itself inherently intertwined with
these changes in mobile and internet
technology. The ease of online digital
distribution, the reluctance of users to
pay for content (as well as piracy) and the
demand for more flexible mobile gaming
experiences are all reasons why it
dominates today’s app stores.
As a hot topic, the freemium model has
been discussed extensively in relation to
in-app purchases. Yet as Harvest observes,
there has been little or no consideration by
the media and regulators of the underlying
forces behind it.
Gambling and social games -
no evidence of a connection
It’s fair to say that the assumption that
casino-style social games are a form or cause
of gambling, or at the very least linked to
gambling, has been fairly widespread among
regulators and gambling studies researchers.
However, the report’s review of the
academic analysis highlights the absence
of evidence that social casino games are
converting people to real-money gamblers.
Despite the absence of conversion evidence,
the allegation that free-to-play games, social
casino or otherwise, could be an active cause
of gambling has had some currency. Yet as
Harvest point out, it is striking that the prolific
rise of the social games industry has actually
coincided with a decline in problem gambling
rates in both the UK and Australia.
Some gambling studies academics have
attempted to frame them as a “gambling
like” activity – for Dr Miller that is a
dangerously imprecise basis upon which
to formulate policy.
Money, and particularly winning money,
is integral to any definition of gambling.
Social casino games do not enable people
to win money and most players do not pay
to play. Categorisation as a form of
gambling is simply inaccurate.
Gambling conceptual frameworks,
Dr Miller argues, are simply not helpful
when trying to analyse the impact of the
social games, which are played or and paid
for differently. Social games are being played
for fundamentally different reasons such as
relationship building across social networks,
competition and simply hanging out friends.
This analysis is backed up by Harvest’s
consumer behaviour survey. Consumers
were asked the extent to which they could
differentiate between social games and
gambling – figures were consistently high
for understanding the difference.
Getting a good deal
The consumer behaviour survey
consistently indicates that people are
getting a good deal from free-to-play
social games. Less than one in 10 players
spent money on a social game on their
last playing occasion.
Out of those that do pay, expenditure
on the last purchase occasion is typically
less than one unit of local currency: 87%
of French transactions were less than
€1.00, 90% of UK transactions were less
than £1.00, 91% of Australian transactions
were less than A$1.00 and 86% of US
transactions were less than US$1.00.
Even the more advanced upgrading
features within game playing are on average
priced competitively with other forms of
entertainment, such as renting or buying a
movie. Only between 1% and 3% of in-game
expenditure exceeds $13.
Benefiting the mind
Another interesting section of the report
is its review of a wealth of psychological
studies. Many show the positive potential of
playing video games – a counter to clichés of
disconnected and antisocial gamers.
Benefits range across the spectrum,
from mood management, helping the
development of memory and attention skills
Law and Legislation
to the capacity of social games to function as
a positive vehicle for social interaction.
The ability of games to motivate, allow
for creativity and enable collaborative
learning mean they are a growing feature of
education curricula.
A platform for further engagement
The place of social games in the digital
economy is increasingly prolific. Social
games are projected to reach $7bn in
revenue by 2015 and it is expected that
34% of the total Internet population will be
playing social games.
As the cultural and social relevance of
social games continues to grow, we hope
that our report will function as a resource to
help educate and inform policy makers and
the public alike.
At the same time, we believe strongly
that our research should not be a one-off
endeavour. As part of our commitment to
on going research we are commissioning
a follow-up study specifically focused on
issues surrounding youth game-play.
We are also working on a second version of
the Best Practice Principles that we released
last October. These reflect an increase in
knowledge about social games thanks to
our research alongside ongoing regulatory
developments from around the world.
It is imperative that we keep developing
our understanding of the impact and
reception of our industry. The reason
is straightforward. An evidence-based
approach makes for better policy from
industry and policy makers alike.
Luc Delany is CEO of the
International Social Games
Association. He is a former policy
executive at Facebook and Google. He
is an external advisor to the University of
Maastricht and a fellow of the British American Project.
iGamingBusiness | Issue 87 | July/August 2014 | 27
 Management & Marketing
ONLINE STILL THE
FUTURE FOR LOTTERIES
Internet lottery sales may have got off to a slower-than-expected start, but the
potential of the channel to capture fresh demographics and revenues remains
undiminished, writes Michael Jones of the pioneering Illinois Lottery.
Internet lottery sales are a work in progress
in Illinois and other pioneering US lottery
states. While there is no disputing that
Illinois’ Internet lottery sales have been
below expectations since the 2012 launch
of web-based sales here, one should not
assume the lackluster performance to-date
is indicative of long- or even mid-term
potential. Some in the lottery industry have
argued that Internet sales will remain
incremental at best in the US market. That
kind of analysis fails to fully grasp the
immense potential of the internet, repeatedly
demonstrated in several waves of research
asking about who would buy lottery tickets
for large grand prize games through a
consumer friendly lottery interface.
Despite the slow start, Illinois’ Internet
lottery test represents the opportunity to
discover a way to capture the young, elusive,
tech- and time-savvy demographic that
lotteries throughout the world have long
been courting, as their core player base
ages and is impacted by recession. While
research suggests that the potential market
for Internet lottery sales is huge, tapping
into it requires extensive planning, creative
abilities, and marketing savvy.
It was a mixed blessing that Illinois
launched its Internet sales portal in March
2012, just as the Mega Millions game was
approaching its highest-ever jackpot of
$656m. As a result, the Lottery portal was
deluged by Illinois residents seeking to
participate in the drawing by buying
tickets through the Lottery’s first-in-the-
nation interface. Beyond the difficulties
inherent in a cumbersome design, the portal
couldn’t keep up. Many potential customers
turned away after failing to set up a user
account, which required surrendering
sensitive data including one’s social security
28 | iGamingBusiness | Issue 87 | July/August 2014
number. Others blanched at the initial
requirement that winnings be applied to a
debit card that contained unwanted user
fees. But, most—the number is unknown—
just came and saw and went, without
registering or buying a ticket.
Illinois Internet-only sales amounted
to just $6.5m in FY13, the first full year
of I-sales. Internet sales during the first
two years in Illinois reached $36.9 million
(includes subscription sales). Total sales
and market penetration are far short of the
$100 million projected for Internet sales—
or the 600,000 to 800,000 new lottery
players expected. To date, less than 200,000
registered, most of those during the first two
weeks for the $656m prize, from a potential
adult base of some nine million people .
The logistics of the test have worked
well: comprehensive responsible-gaming
provisions were developed as part of
the Internet launch in Illinois; security
safeguards are vitally important and are
working as designed. Similarly, geo-location
technology to ensure customers are
located in Illinois when making Internet
purchases (as required by law) is in place
and working; age and identity verification
systems are state-of-the-art--and are also
working as designed. To promote responsible
play, daily, weekly and monthly purchase
limits have been enacted, to limit purchases
that could otherwise be excessive ($150 per
day purchase limit).
A recent article by Melissa Blau in Public
Research Institute Magazine suggested
several other contributing factors that
have hindered US Internet lottery sales
from really taking off. Perhaps the most
telling of Blau’s observations is the lack of
competition/services available to most US
lotteries in selecting the talent charged with
designing a state-of-the-art Internet portal.
As was the case in Illinois and elsewhere,
the company charged with designing the
Internet portal was, contractually, the same
company responsible for delivering the land-
based Lottery sales system.
The Lottery’s private manager recently
launched a mobile app that features
shopping cart functionality and allows for
multiple ticket purchases. Successful mobile
apps are a key component of most consumer
product Internet interfaces. While the
Lottery’s mobile app was late to the game,
and initial reviews were somewhat mixed,
we appear to be headed in the right direction
in Illinois, with over 150,000 downloads
to date. The percent of I-sales through the
mobile app is increasing slightly over time,
another trend that bodes well for the future.
The road to US lottery Internet sales
began more than five years ago, when the
Illinois General Assembly approved an
Internet pilot program that eventually began
in March of 2012. All profits generated
through Internet sales go toward building
roads and bridges throughout Illinois—an
apt metaphor. As a pioneer in US Internet
sales, we expected and experienced many
bumps along the road. If we’ve learned
anything from our experience to date, it is
this: a gaming possibility does not trump the
absolute need for your iGaming venture to
be as easy, fun, secure and—dare I say it—
cool…like the best consumer Internet apps
and interfaces in any other industry.
Michael Jones is the Director
of the Illinois Lottery. In that
capacity, he is charged with
maximizing lottery profits in an
ethical and socially responsible
manner, and overseeing and
regulating the private firm hired to manage Illinois’
lottery operations.
Technical
Laymen become preachers:
mobile development in 2014
With the review mechanism now increasingly determining whether or not your
app is placed above your competition, it’s now impossible for mobile developers
to ignore their customers’ voices, writes Rory Mudie of Redbox Mobile.
As each and every day goes by with
technologies and essential tools from
the past constantly being replaced with
something faster and more fabulous in my
pocket, I’m never ever in doubt as to the
absolute affirmation that the smartphone is
truly the world’s greatest innovation.
I am constantly astounded by new and
exciting ways in which the creative brains
of the industry impress their ideas and
developments upon the congress of listeners
and learners of new mobile tech. The very
nature of the app operating ecosystems
is such that there is pressure to launch
new and more impressive updates to the
products and toolsets on a bi-annual basis.
This pressure for new updates on its own
drives the innovation and the cogs of the
technology wheel that turn at the heart of
what is a virtuous circle of mobile evolution.
I am however, yet to be surprised at the
predictable merry-go-round of David taking
on Goliath, beating Goliath, becoming Goliath
(or being bought out by Goliath) and getting a
kicking from a new David in the coming year.
When I open up the FT and read that
FaceSnap, FlappyChat, InstaBook or
AngryTweets has been bought by the latest
Social Media Gazillionaire, I don’t gasp at
the price of the acquisition. I say, “Well done,
they’ve listened to their customers
and grown their business to the point that
they’ve become a serious threat.”
We are now so connected to our
customers it should be impossible to
ignore their voices. The app ecosystem is
driven in part by the review mechanism
that determines whether or not your app is
placed above your competition.
Who goes on a holiday without reading
what someone has had to say about the
destination? Does anyone buy anything
30 | iGamingBusiness | Issue 87 | July/August 2014
without checking online to see if it’s any
good? Apple’s iOS 8 update in the fall will
itself focus on making sure the most popular
and searched for apps shine brighter
than the rest by changing how apps are
discovered. What Apple customers “Search”
for will soon start to determine which
apps rank the highest with the “Near me”
tab being replaced with the trending apps
appearing in the all new “Explore” tab. No
longer will it be as easy to manipulate the
store algorithms to rank highly.
Smartphones connect businesses to
customers in ways that no other channel
ever has. Customers get to have a say in how
businesses are run…they drive the innovation.
It is no longer the case that the minority
rules the majority, in effect, the so-called
layman has become the preacher, and whilst
it would be dangerous, and very expensive
to alter your strategy based on the voices of
just a few disgruntled protagonists, it would
be damaging to your business to ignore the
choir of reviews they turn into. Reviews are
so important for apps, they both determine
how highly the app ranks, as well as how
your brand appears to new customers. Again,
this is all part of the virtuous circles of app
stores and mobile ecosystems where demand
is driving improvements and enhancements
to ameliorate the lives of the customers who
have an insatiable hunger for new capability.
With the relatively obvious now stated,
keeping your customers happy makes for a
happy business, what though is to be said
about the customers of tomorrow? Most
three-year-olds can pick up a smartphone
and post a picture on the Internet, yet
industry executives with decades of
experience still struggle with tasks our
children deal with easily by playing. So how
fast I ask you, do we the mobile industry
need to move to satisfy the demand of
today’s three year olds who are customers of
tomorrow? Generation Z are already doing
work placements, how fast must we move to
placate them, is it a “Gazillion” fast?
Some innovations from this year will
surely help us, like the Black Phone,
Samsung’s Galaxy S5 & Gear Fit as well as
flourishing open source OS’ like Firefox,
Ubuntu and Android… a gentle segue to a
more closed company? Apple, who have
been fairly inconspicuous with an absence
from the Mobile World Congress and a
relatively uninspiring iOS 8 outlook
bringing its capability closer to Android,
they aren’t exactly struggling, are they, and
I’d expect to see their finger recognition and
iBeacon BLE offerings develop into far more
secure and fluid mobile payments solutions.
Nokia and Microsoft’s seemingly dogmatic
refusal to fall out of the smartphone market
sees them actually pushing and driving the
duopoly of Android and Apple, so the future
is very bright indeed.
A final thought though. You don’t have
to listen to the preachers. As we’ve seen,
doing your own thing can be as effective
as improving something someone else has
done, but make sure you focus on solving
problems that need to be fixed. If you do
that, you won’t go far wrong.
Rory Mudie is CEO of
Redbox Mobile. Following a
successful career which saw
him consistently ranked in
the top ten performing sales
executives at Capital Radio, launch
SMS advertising campaigns in 16 different countries
with Zed and regularly achieve targets of over £30m
a year as a Senior Business Development Manager
with Vodafone, Rory was well placed to create his own
business, Redbox Mobile, in February 2013. Redbox
offers a diverse range of mobile and location based
marketing services and providing highly detailed mobile
insight on how to achieve a better performing business
for its customers.
 Technical

Round Table
The future of mobile payments
With mobile fast becoming the dominant channel, payments providers are can be fragmented and have a negative
under pressure to deliver fast solutions that meet the expectations of the affect on conversion. However, for those
famously impatient iGaming consumer. iGB Affiliate spoke to Ben West of that are optimised, the user experience can
Worldpay, Jon Prideaux of Boku and Rory Mudie of Redbox Mobile to be excellent, requiring significantly less
discuss how this is progressing. data entry than a typical card form –
a positive for fiddly touchscreens.
Roughly what share of digital can deliver an excellent mobile experience
payments are now being transacted which in turn encourages more play. This Jon Prideaux: There is a massive change
via mobile, and how does the is not to say that card payments through taking place and it is happening at an
gambling sector compare to mobile are completely frictionless yet. One astonishing place. Consumers are moving
others? When can we expect to of the largest barriers in a card payment towards the use of mobile devices, both
see mobile payments on a par with journey is 3D Secure, which can have smartphones and tablets. The world has
conventional methods?
“Some top-tier providers are seeing over 50%
Ben West: In the mobile gambling sector,
parity has been reached by some leading of their revenue delivered through their mobile
operators, especially when looking at digital
revenues. With the growth of mobile-only
channels. When comparing this to the UK
customers, some top-tier providers are ecommerce average of just 15%, it is clear that
seeing over 50% of their revenue delivered
through their mobile channels. When
the gambling sector is leading the charge in
comparing this to the UK ecommerce mobile revenue generation.”
average of just 15%, it is clear that the
gambling sector is leading the charge an impact on conversion. On a mobile long since passed peak PC. Those that
in mobile revenue generation. Payment device this effect is amplified due to the remain are mainly being used as work
trends typically mirror player betting/ lack of mobile optimisation, creating an devices, for leisure, consumers are using
gaming behaviour. The introduction of even larger blocker. For countries where mobile. The best data that I have shows
always-connected, mobile devices means Alternative Payment Methods (APMs) are that mobile devices account for about
players can play more often, wherever dominant there are similar challenges. a third of total sales, with desktop web
they are. In countries with established, Unlike card payments, where the operator basically flat and mobile growing faster
reliable connectivity, such as the UK, the can host the page and optimise the than tablets. On this trend, mobile will
opportunity has ramped up significantly. experience, the vast majority of APMs match desktop towards the end of this
Coupling this with the relatively simple require a redirect. Each APM provider is at year or early next. Some operators will
payment requirements (market dominated a different stage of mobile readiness. For undoubtedly be seeing more than half of
by cards and PayPal), gambling operators those that aren’t optimised, the experience their transaction on mobile already.

iGamingBusiness | Issue 87 | July/August 2014 | 31

Technical
“Entering a card number, expiry date, CVV2 and
your address on a smartphone is gruesome. And
as for 3-D Secure? If it’s a pain on the desktop,
it’s total nightmare on a mobile.”
Rory Mudie: I have no data about the
proportion of payments going though
mobile and how gambling is different,
but gambling is clearly a relatively high
value sector. Most bookmakers are already
reporting that between 30% and 50% of
their betting turnover is on mobile, so that
is worth hundreds of millions of pounds
in bets per annum. At the moment, that is
almost completely done through debit and
credit cards. Very few alternative payment
methods are available on mobile sports
betting sites. They only just have started
to introduce systems such as Skrill and
Neteller on mobile. In mobile casino, the
payment methods are also predominantly
credit/debit card. Many will accept
premium SMS for initial and subsequent
deposits, but then work to convert the
player to card deposits. Mobile casino is not
quite as big a deal as sports betting yet, but
it has also started to grow fast.
The take-up of mobile payments
in gambling has long been seen as
inextricably tied to consumer trust.
Is this still the case, and if so, how
can the tipping point be achieved
more quickly in terms of getting
more players to trust and embrace
the mobile channel?
Ben West: In a face-to-face world, there is
a definitely a challenge around consumer
32 | iGamingBusiness | Issue 87 | July/August 2014
trust and adoption of mobile payments
due to the new interactions involved in
the payment process. However, it could
be argued that this challenge is not so
present in the online world, especially in
the gambling sector.
Online/in-app mobile payments are
really an extension of eCommerce – a
payment experience most digital gamblers
will be comfortable and familiar with. In
addition to this, customers who choose
to use APMs have already extended
their trust to this payment provider
when they first enrolled in the payment
method. By offering recognised payment
methods which require a redirect to a
secure, familiar page, gaming operators
may actually find an increased level of
confidence is given to their end users.
It could even be argued that gaming
customers, by their nature, may be
more receptive to new technology and
experiences and are therefore not so
apprehensive about trust. As long as they
have enough trust in the operator’s brand,
then making payments through their
mobile device might not be too much of a
concern, especially those customers who
have migrated from the provider’s desktop
experience to their mobile channel.
Jon Prideaux: I don’t think that there are
any particular trust issues related to mobile
- it’s a convenience issue. Entering
a card number, expiry date, CVV2 and
your address on a smartphone is
gruesome. And as for 3-D Secure?
If it’s a pain on the desktop, it’s total
nightmare on a mobile. In my view, the
only payment methods that will truly
get traction are those that can deliver a
simple one-tap solution, preferably without
having to register. Amazon and eBay
get a disproportionate share of mobile
commerce because they are able to use the
cards that they have on file to simplify the
consumer’s life. The same is true of Apple
with iTunes. Big gambling companies,
by definition, have a huge measure of
consumer trust – storing card details to
enable convenient 1-Tap transactions may
not be such a big deal for them, but smaller
ones, without the brand recognition, may
struggle to gain traction. My company is
one of those that helps to get consumers
across the threshold by making that all
important first transaction really simple.
You pay using the phone number, which
most of the time can be detected. You don’t
have to register.
Rory Mudie: Trust is extremely important,
and players are getting nervous about
entering credit card details on their phones,
due to worries over security. Alternative
payment systems will have to be trusted,
easy to use, quick and of no cost to the
player. They will also have to be low cost
to the betting operators to be attractive.
Seamless integration with mobile apps and
web-apps is also key, so that the user flow
is not broken. This means that a mobile
payment service will have to be deeply
integrated into the mobile solutions of the
gambling operators.
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Technical
Transactions need to be compliant
and secure, but iGaming customers
are hardly known for their
patience here. How far away is a
payments process that meets their
expectations?
Ben West: Players ultimately want
something that is fast, secure and non-
invasive regarding payments. It’s fairly
obvious that no-one is signing up to
gaming operators because they enjoy the
payment experience; it’s merely a means
to begin playing. The more invisible the
payment process can become the better. For
card payments, storing the end user’s card
for future one-click payments can reduce
friction in the checkout. Operators should
be aware there are strict, and sometimes
cumbersome, restrictions about how card
information can be stored so it is advisable
to use tokenisation to reduce their burden.
Different types of players will have different
expectations around their payments
processes. There are those who want to use
the same payment types for all their online
activity, whether it be gambling, grocery
shopping or downloads. Unfortunately,
not all APMs support the gambling sector
which will drive these customers to enrol
in another payment mechanism. There are
others who may intentionally elect to use
a different method for gambling; this may
be due to perceptions of additional security
or increased anonymity. For the cross-
device customer, they will likely expect
parity of payment options regardless of
which channel they are using at that time.
As highlighted earlier, this is not always
so easy to deliver for those APMs which
are not yet optimised. The challenge for
operators is understanding their unique
player base and the needs of their
34 | iGamingBusiness | Issue 87 | July/August 2014
customer segments, optimising the overall
experience for their demographics,
regardless of channel.
Jon Prideaux: To be honest there’s not
much different between implementing
compliant solutions in the mobile world
and on the desktop. The rules are the
rules and we all have to meet know your
customer (KYC) and anti-money laundering
(AML) requirements. For the operators this
is pretty much business as usual and for
the punters it’s a degree of inconvenience
if the automated tools can’t verify them
quickly. Obviously there are still issues
relating to data entry on a touch screen,
but this is the same convenience problem
that I referred to earlier. In a world in
which consumers are looking to bet as
quickly as possible, compliance can
certainly hold things up: lots of companies
are trying to address this problem.
Allowing punters to pay in a single tap
without having to pre-register is something
we offer now. With respect to fraud control,
in some respects the phone does allow
there to be a higher level of security than
the desktop. The phone, as a device, can be
validated in a way that a PC can’t, which
should lead to fewer disputes for those
operators using the right tools.
Rory Mudie: Speed is absolutely of the
essence in mobile payment solutions for
gamblers. The vast majority of bets are
placed just prior, or during, a sporting
event. This means that odds are relatively
volatile, and if bets are missed, or placed
at worse odds because of payment delays,
it will negatively impact the customer’s
perception of the app, as well as the
payment solution. The gambling operators
will also need to be convinced of speed,
Ben West is Senior Product
Manager – Mobile, for
Worldpay. Ben has over seven
years experience in the online
payments industry, with the
last three specifically focused on
the role of mobile in online payments.
Using his experience from previous technical and
commercial roles, Ben is currently focused on
delivering Worldpay’s mobile strategy for global
ecommerce card payments and transactions via
alternative payment methods.
Jon Prideaux is Chief Business
Officer for Boku. Jon has been
changing the way that people
pay for nearly a quarter of a
century. As an early employee at
Visa in Europe, he was responsible
for lots of different things as the Visa
business grew exponentially. His successes include
the roll out of Chip and PIN across Europe; Visa
Cash was a failure. After leaving Visa, Jon went to
SecureTrading, one of the UK’s largest independent
Internet payment service providers where he helped
to grow the business substantially, before leading
a management buy in at Shopcreator, a leading
ecommerce platform provider, where he remains as
chairman. He joined Boku in 2012.
Rory Mudie is CEO of Redbox
Mobile. Following a successful
career which saw him
consistently ranked in the top
ten performing sales executives
at Capital Radio, launch SMS
advertising campaigns in 16 different countries with
Zed and regularly achieve targets of over £30m a year
as a Senior Business Development Manager with
Vodafone, Rory was well placed to create his own
business, Redbox Mobile, in February 2013. Redbox
offers a diverse range of mobile and location based
marketing services and providing highly detailed
mobile insight on how to achieve a better performing
business for its’ customers.
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Feature
Can Amaya deliver Stars
to the promised land?
The Amaya-PokerStars transaction is groundbreaking for the sector in several important respects, writes leading gaming
consultant Melissa Blau, but to what extent can it deliver on its promise to expedite Stars’ entry into regulated US iGaming
markets such as California?
Upon first hearing the rumour that publicly
listed Amaya Gaming was acquiring
global giant Pokerstars, it would be fair to
say that most industry insiders thought to
themselves: “Oh God, please not another
insane story with no legs looking to
manipulate the stock market”.
It was Industrial Alliance Securities
analyst Neil Linsdell who first alerted
the world on May 20, issuing a report
stating that Amaya may be eager to “‘trade
up to a larger poker platform.” Noticing
an odd run-up in Amaya’s share price
which coincided with Lindsdell’s report,
CalvinAyre.com’s Steven Stradbrooke
broke the news and went digging. What
the writers at CalvinAyre.com uncovered
was more shocking then anyone could
have expected, their well-informed sources
indicating that Amaya had an agreement
in place to acquire the giant Pokerstars.
Following Amaya’s attempt to dispel
the rumours, which failed to deny that
discussions could have transpired, two
weeks of speculation ended on June 13,
when it was finally confirmed that this
seemingly incredible rumour was in fact
true. Amaya had, with a lot of help from
private equity and investment bankers,
garnered the capital to acquire the poker
giant’s parent company Oldford Group for
an enormous $4.9bn in cash.
The transaction
So just how does a company with a
market capitalisation of less than $1bn,
debt of $370m and cash on hand of only
$233m buy a company for $4.9bn? The
simple answer is debt – a lot of it -
coupled with a big dose of investor
36 | iGamingBusiness | Issue 87 | July/August 2014
confidence (see Figure 1).
Source: Eilers Research
Figure 1 revenue streams to offer assurity of the
With this transaction, Amaya has managed company’s ability to cover the interest
to do something no online gaming company expense. Given online gaming’s fairly fluid
has done before: instill enough confidence revenue and player base, this is the first
in numerous sizable financial institutions in time we have seen an acquisition, large or
order to attract new capital into the sector. small, using debt as the primary source of
In 2006, I wrote an article for iGaming capital (see Figure 2).
Business entitled Going Private, which
highlighted why there was so little private
equity and hedge fund capital invested in
the online gaming sector. Sure, a few names
have occasionally popped in support up
over the years, but overall, the online gaming
industry has suffered from a lack of capital
for a variety of reasons. Amaya’s coup of
attracting several new large institutional
investors to the online gambling sector
deserves to be seen as nothing less than Figure 2
a stroke of genius. Blackstone Group, However, at a rate of 10% plus Libor, a
Deutsche Bank, Macquarie and Canaccord moderate decline in revenue going forward
have all been huge supporters of the could leave the combined giant in a tricky
land-based gaming sector, but it is rare spot as the company is currently just
that they have backed an online company, covering their interest expense if using last
particularly one with a controversial history. year’s combined EBITDA run rate.
Another aspect of this transaction
that makes it truly groundbreaking is the The valuation
use of debt, so rarely used for online The $4.9bn valuation, while at a slight
gaming transactions. The use of debt premium relative to its peers, seems to
requires companies to offer fairly stable be very fairly priced. In 2013, Rational
1. EV or Enterprise Value is defined as Market Capitalization [Equity] plus Debt less Cash and EBITDA defined as Earnings Before Interest,
Taxes, Depreciation and Amortization is the best back of the envelope proxy for cash flow.

Group generated $1.1bn in sales netting
approximately $420m in EBITDA .
According to the joint press release and
analyst reports, Amaya paid 11.1x 2013 EV/
EBITDA for Rational, which is an 8.8%
premium to its peers. Considering Pokerstars’
well-entrenched market leading position
in online poker, this premium is more than
justified. Pokerstars and Full Tilt have a
combined registered player base of 86
million players commanding a 50% global
market share (inclusive of regulated markets,
in some of which the brands are precluded
from participating). Unlike casino and bingo,
where players are notoriously fickle, poker
players have remained loyal to PokerStars
and Full Tilt for the past six to eight years,
since Pokerstars assumed the position of lead
operator when PartyPoker exited the United
States market in October 2006. Since then,
PokerStars has continually reinvested in its
platform and operations, further distancing
itself from its competitors, which with the
notable exception of 888, have continued to
struggle to stem the ongoing hemorrhaging
of the poker vertical. In all regulated
European dot.country markets, including
Italy and Spain, Pokerstars managed to
remain the dominant player, with France
being the solitary exception. Some say it’s
largely a result of the company stealing
market share by being able to overpay
for players due to their formerly lucrative
position in the United States, which it was
finally forced to relinquish in April 2011
following the DoJ’s crackdown on offshore
poker sites, known as Black Friday.
During the near five-year period
between the signing of UIGEA and Black
Friday, it has been estimated that
PokerStars reaped $1.5m - $2m of revenue
per day, with a vast share of this in the
early days being generated from the US,
before it began diversifying and building its
“Blackstone Group, Deutsche Bank, Macquarie and
Canaccord have all been huge supporters of the
land-based gaming sector, but it is rare that they
have backed an online company, particularly one
with a controversial history.”
business into other markets.
With an estimated 50% net profit during
this time, it is easy to see why the company
had the resources to invest heavily in
its platform and into marketing in new
territories, while others struggled. Regardless
of how it was achieved, there is no doubt
that Pokerstars has created a sustainable
competitive advantage which has proven
nigh on impossible to erode.
The rationale
According to an email sent to
PokerStars employees by CEO Mark
Scheinberg, subsequently published by
OnlinePokerReport.com (OPR), the two
parties had been in discussions for over six
months ahead of the deal being announced.
Amaya CEO David Baazov also admitted
he had approached the company close
12 months earlier, regarding the prospect
of forging a combined entity. OPR’s
Chris Grove intuitively pinpointed the
commencement of discussions to the days
following New Jersey Division of Gaming
Enforcement public announcement that it
had suspended Pokerstars’ application for
a supplier licence for the struggling Resorts
Casino Hotel for up to two years.
The timing of this two year-suspension
could not have been worse. With legislation
for online poker heating up in California,
the two year-period coupled with a ten year
preclusion as a ‘Bad Actor’ in Nevada,
was nothing short of a noose around the
Feature
neck of Pokerstars’ US ambitions.
California is the next likely state to regulate
on a poker-only basis, and if PokerStars
were to have any chance of getting into
California at the opening, they would need
to resolve their ‘Bad Actor’ image ahead of
the two-year moratorium.
Until recently, the Golden State had
been ineffective at moving legislation
forward, as several politically influential
constituents were at odds over a number of
important issues. In particular, two of the
most influential gaming tribes, Pechanga
and San Manual, did not agree on the
number of ‘skins’ or brands each licensee
would be allowed. However, the past
several months has seen that issue resolved,
with the compromise currently standing
at two skins per licence. Interestingly,
one topic that both San Manuel and
Pechanga did actually agree on from the
beginning was the definition of the ‘Bad
Actor’ clause in proposed Californian bill
language, which is frankly the Achilles
Heel of the investment thesis for the
Amaya – Pokerstars transaction.
It is of course a well-known fact that
PokerStars and Full Tilt remained in the
United States iGaming market post-UIGEA.
When others such as 888, PartyGaming,
and supplier Playtech’s numerous operators
pulled out, Pokerstars and its subsequent
closest competitor remained in the US
online gaming market for a total eight years,
until the US government cracked down on
iGamingBusiness | Issue 87 | July/August 2014 | 37
Feature
them and other companies, seizing their
URLs. Company founder Isai Scheinberg
and several other company officials were
indicted with money laundering charges,
forcing both Stars and Tilt to quickly pull
out of the US. While the indictments against
the individuals still stand, the company
‘cleansed’ itself by settling with the US
government, paying $731m in fines and
reimbursements to players.
The leading premise behind PokerStars
father and son founders, Isai and Mark
Scheinberg, selling their ownership in
what has definitively become the best
online poker company in history is Amaya’s
perceived ability to expedite PokerStars’
ability to get licensed in the regulated US
market, a market which is far from easy to
break into. Unlike Europe where a supplier
is required to go through a minimal, if any,
licensing exercise, the US, with its land-
based gaming roots historically tied to some
rather nefarious characters, has evolved
into an extremely strict licensing regime,
requiring every supplier, and even supplier
to a supplier, to go through arduous and
expensive licensing processes in each state.
As a result, the so-called Bad Actor clause,
aimed at prohibiting companies which
stayed in the market after 2006 from acting
as a supplier or operator, has become a bone
of contention in almost all regulating states.
The Bad Actor clause in Nevada’s AB114
iGaming bill which legalised online poker
in the state, added in the latter stages of the
legislative process, prohibited any ‘covered
asset’ or ‘covered person’ from participating
in the regulated Nevada iGaming market
for a period of 10 years from passage of the
legislation. By explicitly using the words
‘covered asset’, legislators included not only
the management and key decision makers,
but also all of the intellectual property itself,
including the code of the software.
New Jersey, however, took a very different
approach. With the assistance of lobbyists
and highly regarded influencers, the Bad
Actor clause was eliminated from bill
A2578 just before Governor Christie signed
it into law. Unlike Nevada, those who were
and were not found to be suitable was left
38 | iGamingBusiness | Issue 87 | July/August 2014
“Whether Caesars decides to act in cooperation
or as competition in this developing situation
could be the deciding factor for the success of the
Amaya–Pokerstars relationship.”
up to the interpretation of the regulators.
To date, the New Jersey Division of Gaming
Enforcement has retained a very open
approach toward the online gaming
community as part of efforts to conquer
the very steep learning curve of online
gaming. While still retaining a strict regime,
their approach towards the definition of a
Bad Actor has centered more around the
integrity of the individuals managing the
company at the time the so-called Bad Actor
behaviour occurred, not on the underlying
software assets and IP. Accordingly, Amaya’s
acquisition of Pokerstars could very likely
help Pokerstars enter the New Jersey poker
market ahead of the two-year moratorium,
currently due to expire in November 2015.
But, pointing out the obvious, this deal is
mainly about California, where the situation
on the ground and its current bill are
entirely different to New Jersey’s. With the
San Manual and Pechanga tribes recently
issuing a joint statement defining the terms
of their mutual agreement, similar to Nevada,
the definition of a Bad Actor includes both
the individual as well as the intellectual
property. Unlike Nevada, however, there is no
discussion of a year’s limitation, implying the
ban will likely remain in perpetuity. The only
major hitch to the San Manual–Pechanga
position (and not to forget this also includes
11 other important tribes), is Morongo, the
sole dissenter of Indian country in California.
The Morongo, along with three of the largest
card clubs in California, is opposed to the
current language of the Bad Actor clause
in California. The reason? The tribe and
the three largest card clubs announced a
software and marketing agreement with
PokerStars in April 2014. If PokerStars
was willing to invest $10m to re-develop
Resorts’ poker room in New Jersey, I can only
imagine the price for California. The open
question as it stands now is will Morongo, in
conjunction with the three card clubs, have
enough political influence to derail the plans
of San Manuel, Pechanga and the 11 other
tribes? It doesn’t appear so….at least not at the
moment. Legislators have until August 30th
to pass a bill if online poker in California is to
become a reality in the next 12-24 months.
Caesars: Friend or Foe?
So where does Caesars sit in all of this
mayhem? The US gaming giant occupies
quite the interesting position. Amaya is
one of Caesars’ primary vendors for online
casino in New Jersey. It’s also no secret
that Caesars has been one of the most
formidable adversaries of PokerStars, with
this erupting into very public bickering over
PokerStars’ attempts to become licensed in
New Jersey. Whether Caesars decides to
act in cooperation or as competition in this
developing situation could be the deciding
factor for the success of the Amaya–
Pokerstars relationship. Caesars’ political
influence is fierce. Their support has proven
critical for 888’s US ambitions and strategy
in the past. They are not a company easily
defeated. Amaya would be well advised to
tread carefully down this path.
Melissa Blau has been in the
online gaming sector for eight
years as both an operator and
advisor. In her current capacity,
Melissa is an advisor focused on
bridging US and European interests.
Through her consulting company,
iGaming Capital, she has been advising mainly land-
based companies in developing their online gaming
strategy as well as informally advising on M&A
opportunities and capital raising.
Melissablau@iGamingcapital.com.
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Amaya-Stars:
a new world order?
Amaya has pulled off an audacious coup in convincing high-profile financial
organisations to stump up $3.5bn to help it buy the world’s leading iGaming
brand, but do its listed rivals really have that much to fear? Analyst Nick Batram
of Peel Hunt explains why there’s still much to play for.
The proposed acquisition of PokerStars/
Full Tilt by Amaya Gaming would not only
be the biggest deal the online gaming world
has seen in financial terms, but it could also
have seismic repercussions for the structure
of the industry as a whole.
Before we dive into the main issues the
transaction raises, let’s congratulate David
Baazov and his team for being on the verge
of pulling off such an audacious deal. We
haven’t spoken to a single investor, advisor
or competitor that hasn’t reacted in awe
at what Amaya is trying to do. Buying the
world’s leading online gaming brand is one
thing; persuading high-profile financial
organisations as Blackstone, Barclays,
Deutsche Bank and Macquarie to stump
up over $3.5bn in financing is an incredible
achievement in its own right.
Ok, so down to the meat of the deal.
This transaction is happening because
the world’s largest online gaming brand
is finding it difficult to join the regulated
party in the US. It may also be happening
because, structurally, the poker market
globally is under pressure, something that
will eventually catch up with PokerStars,
even if it hasn’t thus far. The gamble is that
by breaking all ties with the past in terms
of ownership, PokerStars’ entrance into the
regulated US market will then be expedited.
David Baazov may argue that it isn’t much of
a gamble because, even if the US regulatory
door doesn’t open, he is acquiring a mega
brand, generating substantial cash flow,
with enormous product potential beyond
poker. At just over 11x historical EBITDA,
the price for a leading global brand doesn’t
look overly expensive.
Turning to the US, there is a view that
the banks would not have stumped up for
the deal unless there was a considerable
confidence that PokerStars will be able to
enter the market, sooner rather than later.
Competitors wishing to keep the brand
out of the US will undoubtedly argue that
“While unregulated earnings may have previously
frightened off the land-based casinos, Amaya’s
deal may lead to a higher appetite for deal risk.”
simply changing the ownership doesn’t
address the fact that a significant proportion
of PokerStars’ value was created from its
continued operation in the US post-UIGEA.
That is, any bad actor clause should apply
as much to an asset as it does to a company.
However, whichever way your moral
compass points, should other operators
really fear PokerStars?
We recently met an executive from a
European leisure group that has a dominant
position in several markets. When asked
about the threat from new competitors
entering these markets, he said he welcomed
this. From his experience, markets with two
or three strong operators were almost always
healthier than those with little competition.
He would rather have a smaller share of
Feature
a stronger, larger market than dominate a
weaker, smaller market.
If we look at the regulated online New
Jersey market, its performance thus far
has been anaemic. While payment
processing and geo-location issues have
been blamed, could it be that it is lacking a
brand of the scale of PokerStars? We have
no doubt that if PokerStars were in New
Jersey, the market would be bigger than it
is today. It may mean that the other
operators lose market share, but they may
end up with a bigger business as a result. It
may also lead to fewer operators, but this
will only be an acceleration of a process
that will ultimately happen anyway.
888 has been able to grow its poker
business in several markets, despite being
a distant second behind PokerStars. We
would also argue that one reason 888
has such a strong proposition in poker is
that PokerStars has set the bar so high (it
is often overlooked that other businesses
operated in the US post UIGEA; part of the
reason PokerStars was so successful is that
it has an awesome platform). Of course, not
all operators have reacted as positively to
competition as 888, and this is likely to be
the case in the US as well.
What the Amaya deal has done is create
uncertainty for other operators, and markets
hate uncertainty. It is no coincidence that
the share prices of 888 and bwin.party
have been hit hardest by the news of the
iGamingBusiness | Issue 87 | July/August 2014 | 41
Feature
PokerStars deal; the value of their respective
US ‘options’ have effectively disappeared
overnight. In our opinion, what bwin.party
and 888 will have to decide is whether to
continue with a twin B2B and B2C strategy,
or simply follow one route to market.
The land-based casino operators will
also have to decide how they intend to play
the market post any PokerStars entry. One
possible strategy is to wait for Amaya to do the
hard work, and then look to buy the enlarged
group. Alternatively, 888 and bwin.party could
become potential targets. While unregulated
earnings may have previously frightened off
the land-based casinos, Amaya’s deal may
lead to a higher appetite for deal risk.
What is certain is that standing back and
crying foul over any PokerStars entry into
the US is not a strategy that any operator can
afford to adopt as its sole response to the deal.
What are the implications for the online
gaming market beyond the US?
Part of the stated rationale behind the
acquisition is to exploit the PokerStars (and
to a lesser extent Full Tilt) brand across
other gaming products, such as casino and
sportsbook. Perhaps not surprisingly at this
stage, detail is a bit thin on the ground. As
far as sportsbook is concerned, this could be
achieved through acquisition, as opposed to
organic growth. However, there is the little
matter of paying down some of the $2.9bn
debt before further major corporate deals
are considered. Full Tilt has already moved
into casino, but it is early days. Whatever
PokerStars does, it is a competitor to be
respected, but we don’t see other online
casino and sportsbook operators running
for the hills in panic.
What will be interesting is how post the
deal Amaya marries a B2B strategy with
the world’s leading B2C operation. It is one
thing to have a B2B business when you have
42 | iGamingBusiness | Issue 87 | July/August 2014
“Those proclaiming the demise of all other
operators may prove to be premature. Sure, life
could become tougher in certain markets; but the
likes of 888 and bwin.party have taken knocks
before, not least UIGEA, and have bounced back.”
a relatively small B2C operation; but when
you are the owner of PokerStars, prospective
customers might just be a little nervous about
potential conflicts of interest. However, the
reality is that in the grand scheme of things,
B2B is unlikely to be a major driver of the
enlarged group’s valuation.
We’ve spoken about the opportunities
for the expanded Amaya and the potential
impact on the industry; what we haven’t
covered is deal risk.
During the investor conference call that
accompanied the deal announcement,
David Baazov was keen to stress that
customers would notice no change and it
would be a smooth transition. However, it
remains to be seen just how many senior
people will leave PokerStars as part of the
transaction. Also, taking on $2.9bn of bank
debt and $1bn of convertible debt doesn’t
leave much room for error and will bring
added pressure on management. One
question that David Baazov was unable/
unwilling to answer on the investor call was
what proportion of PokerStars revenue was
unregulated. What happens if a market such
as Russia becomes closed off to PokerStars?
Does Amaya have sufficient management
bandwidth to digest such a substantial
acquisition, and will it be able to deliver its
stated strategy? Every deal carries transaction
risk, no matter how simple it appears to be.
Undoubtedly the most urgent
discussions will be happening in operator
boardrooms with US regulatory exposure
or ambition. Maybe some of the operators
already have a Plan B; if they haven’t, they
need one now. However, there are likely to
be repercussions beyond the US. Operators
in the UK are already faced with the
pending point-of-consumption tax and
the number of sales memoranda in
circulation is increasing. Further industry
consolidation is likely but, as bwin and
PartyGaming have shown, marriages don’t
always go as smoothly as hoped.
Amongst all the uncertainty, the one fact
is the online gaming industry is never dull.
Amaya’s acquisition of PokerStars will be a
game-changer, irrespective of whether the
US market opens up for the world’s leading
poker brand. But those proclaiming the
demise of all other operators may prove to be
premature. Sure, life could become tougher
in certain markets; but the likes of 888 and
bwin.party have taken knocks before, not
least UIGEA, and have bounced back.
Nick Batram is a leisure & gaming
analyst with Peel Hunt. He has
been involved in the investment
industry for over 25 years,
during which time he has worked
on numerous transactions, including the
Playtech IPO. Nick was recently voted the number
one analyst in the Leisure & Gaming sector in the
Extel UK Small & Midcap survey by corporates. Peel
Hunt are brokers to Rank plc.
The Future of Social:
Gaming, Gambling and Betting

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Virtual Goods and Currencies: Analyse how a digital trophy or gift can
have satisfying value to customers.
Convergence and Consolidation: Discover how many operators are
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Platforms and Networks: Find out which platforms are currently driving
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To ask for your free executive summary, or to order the report, email reports@iGamingBusiness.com or call +44 (0) 207 954 3489 and quote 14FSocial1.
Feature Interview
Ory Weihs, CEO, XLMedia
XLMedia became the first major iGaming affiliate business to float on the
London Stock Exchange in March. CEO Ory Weihs spoke exclusively to
iGaming Business about the landmark IPO and his plans from here.
You have always maintained a low
profile for your business, and now
you are heading up a PLC, with
all the exposure and publicity that
brings. Why did you decide to list?
We were always on par with the other big
affiliates, but we were not obvious about
what we did. But now those days are
obviously gone, nothing to hide these days!
Back then we were working hard, making
money and growing, but just keeping it
under the radar. That was the approach
back then. We had two main reasons for
listing. Raising funds for expansion, with
this being more acquisition-focused, as we
have been quite cash-flow positive before,
as well as more transparency and legitimacy
going forward in regulated markets like
the US and others. We feel being a listed
company will make it easier for us to work
with local land-based operators. On top of
that, the option of doing transactions with
shares as payment is an advantage.
How did you get started in the
iGaming affiliate industry?
I’ve been in the industry since 2002, I feel
like one of the dinosaurs already! I started
off as a marketing-slash-affiliate manager
for an online casino in Cyprus. After about
a year, I decided to move back to Israel and
use the skills I learnt. I ran a third party
affiliate programme that I developed, and
I was working with a lot of the big names
back then, PartyGaming, 888 and so on.
Because I was spending quite a lot of time
in Scandinavia, I started getting to know all
the big Scandinavian players. Back then, it
was not even Betsson then, it was more Net
Entertainment, Casino Euro, these kinds of
brands, and Unibet were just starting. What
triggered my interest was that any time I
would watch TV in Sweden, I saw tons of
gambling advertising, which was a new
thing to me. It kind of opened my eyes to the
44 | iGamingBusiness | Issue 87 | July/August 2014
possibilities of the Scandinavian market,
so I started focusing more of my time there
on a few of the top leading brands of the
time, and further developed my affiliate
programme. During the process, I started
understanding more what my affiliates
were doing. I began buying out some of
them and also developing content and
search business.
When did the business start to develop
into the company we see today?
In 2008, I met the other two co-founders,
who were running a company also focused
on acquisition for gambling, but more on
pay per click advertising for gambling on
Google and Bing, and some campaign
optimisation. We started to merge our
businesses and that’s when the really rapid
growth started. The numbers we published
[for investors] are basically back from that
point. We were the typical basement start-up
with an underground office, eating a lot of
takeout and spending 19 hours a day in the
office, and then five hours a day working
from home. Then we grew from three, four
people in the basement to close to 135 people
with offices in Cyprus and Israel, and prior
to going through the listing, we went through
two private equity investment rounds.
How is the company structured
across the different business areas?
Content and search is currently around
50 people. Then we have the media team,
which is about 25 people. They run any kind
of paid media advertising, pay-per-click,
mobile, social. We are a very active media
buyer. The affiliate team is in Cyprus, they
run the third party affiliate programme.
Then we have all the support staff, with
about 17 people in finance, which sounds
like quite a lot, but when you grow in
revenue and towards becoming a listed
company, you have to make sure you have
good financial control. We also have a
dedicated tech team of about 12, including
web developers, statistical systems, campaign
optimisation, and of course marketing,
content, social marketing, and a design studio
as well. We are very self-sufficient.
An enhanced ability to make
“synergetic acquisitions” was one of
your major reasons for listing. How
much cash is available?
Our current cash balance is not in the
public domain, as we haven’t published
our half year. But I will answer this in a
diplomatic fashion, and say we are very well
funded. The IPO raised US$69.5m, of which
approximately US$15m was old money, a
sell down by existing shareholders. This was
not something we planned, our intention
going into this process was to raise only
new money. However, as you have probably
seen, it was quite over subscribed. This was
something that came as a demand from the
market for more liquidity.
Your admission document says
you have “identified a pipeline of
potential acquisition opportunities.”
What kinds of businesses are you
targeting and when can we expect the
first announcement?
My goal is to announce at least one big
acquisition by the end of this year. I
would hope we would have small bolt-on
acquisitions as we go, but we are a business
that grows organically very well, and that
the main reason investors had faith in us
is because we have shown growth over the
years. It’s very tempting when you have a bit
cash pile to go out and buy anything that
looks attractive, but that’s not what we are
here for. We are being very diligent with
every acquisition discussion we have, and
are reviewing these thoroughly. I want to be
very sure and to give myself, as well as my
investors, as high a degree of confidence
as we can in every acquisition before we
do it. In terms of types of acquisition, we
are looking for bolt-ons within our core

“You can see from our shareholder roster that we have many of the
big institutional names there, BlackRock, River & Mercantile, Standard
Life, Slater. They feel that the regulatory environment we work with is a
positive one, and not going towards some kind of prohibition.”
markets, for content and search, as well as
for new territories. We are always happy
to look at successful affiliates with proven
businesses. We are looking also in different
verticals, because historically we were
more focused in casino. Social gaming is
very interesting for us, we would also like
to expand our footprint in sports betting,
and of course poker, mainly for Europe,
but more with some kind of US upside,
as going forward we see the US being
predominantly being a poker market. We
are also looking into companies that offer
very interesting media opportunities for us,
particularly any company that does mainly
mobile and social advertising in a very
good way. We are very active in these fields,
but we can always get better and we are
looking for companies with a unique edge
in the media buying field. And of course,
technology companies. We mainly develop
our campaign optimisation technology in
house, but if somebody came along with
some unique tool or know-how we needed,
we would look into it.
XLMedia is also targeting “country
specific joint ventures with
operators”. How would these
work and which markets are you
considering?
This is more relevant for our markets that
have been regulated already. We would
look into, for example, maybe running
acquisition for a certain regulated operator,
or doing some kind of joint venture white
label with an operator in a market that is
mainly closed. As a general rule of thumb,
we don’t want to alienate our clients by
becoming an operator, hence we are not
looking to buy any operators. With our
cash balances and position in the market,
there’s quite a few operators we cold have
bought, but that would change the company
completely, and I think that will not serve
Feature Interview
the best interests of the investors, because this affect your ability to attract
they invested in us and not in an operator. significant institutional investment?
They believed in our business model, still First of all, this trend has been going on
do, so we don’t want to become an operator. for a while. When we went on the road a
But in closed markets - New Jersey springs few months ago, we met with a very wide
to mind, or Belgium which has a very limited spectrum of institutional investors, and you
amount of operators that are effectively tied can see from our shareholder roster that we
down to the land based operators – these are have many of the big names there. We have
territories where we may be a little got BlackRock, River & Mercantile, Standard
more flexible. Life, Slater and so on. They feel that the
regulatory environment that we work with
After a stellar opening which saw it is a positive one, and not going towards
rise to over 70p, the share price has some kind of prohibition. In addition, we are
fallen back of late. How would you proving our business in other territories as
explain this trajectory? well. We are
First of all, there has been some early profit
taking, mainly the retail market. We are not
seeing the sell down from our institutional
investors. They are more long term investors.
There was also big hype in the beginning,
some articles that came out, and the stock
did go up. Some were a little confused
regarding the expectations for the full
year 13, even though it was a great year, a
record-breaking year in all aspects, and it
was exactly in line with analyst expectations.
2014 is on track and going very well. I’m
very positive. I think people might have
been a little more diligent with reading the
admission document, and then they could
have extrapolated quite easily. There is also
a general tech sell-off going on. If you look
at companies like Rockafeel, that really
took a hit in the last year, the Matomy Media
IPO that got cancelled at the last minute,
and a few others put theirs on hold. But
the core of what we do remains the same.
As long as we grow and expand our
business, both in technology and in
revenue, as planned, we’re fine.
This business has been
built on a dot.com model in
markets such as Finland,
Sweden and Norway. Will
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showing strong growth in German-
speaking and English-speaking countries,
although obviously not the non-regulated
US, and we are deploying the business
model across other countries such as
Greece, and some others, of course only
with regulated operators. Denmark is a
very interesting market for us, because
it’s regulated, so we will be putting more
focus on Denmark going forward as
well. So while our business model will be
slightly different with the various operators
we work with and there may be slightly
different methodologies in regulated
markets, it effectively stays the same, and
the need for the product that we deliver is
still there. I would say in the regulated and
saturated environment that this is even
more the case, because the fight for market
share becomes even more difficult when
you work within a regulatory environment
and have to pay more taxes.
Was your pull out from Turkey in
October of last year dictated by your
imminent listing in London?
That was part of it, but I would say we would
probably do that regardless of the listing, It
was a strategic decision to focus on more
forward-facing markets. Turkey is probably
not gong anywhere positive. All of us,
both founders and shareholders, we
value our freedom and want to be able
to travel anywhere(!).
Ex-Ladbrokes CEO Chris Bell is your
chairman. How did this come about,
and what particular attributes do you
feel he brings to the table?
It’s a combination of being very
knowledgeable in the field and very up-to-
date, even though he’s been with Ladbrokes
before 888 even existed. He’s very up to
date with trends, he knows what’s going
on, he has a lot of interesting questions
which make us think. He also potentially
introduces us to a lot of people, as he has
quite a few connections, so I think he’s a very
good chairman to have on board.
You have mentioned the applicability
of the business’ skill set to other
verticals. Which do you feel offer the
most potential for XL?
Social gaming, because I wouldn’t even
go as far as calling it a different vertical,
it’s basically a different product within
the gaming scene. I think financial spread
betting, CFDs, forex, binary options, these
kind of things are very relevant. We’ve done
and we still do tests in other fields as well,
we’ve tried dating, we’ve done web hosting,
all kinds of products. The idea is not so
much to diversify but to keep some kind of
operational tension, to reconfirm this theory
that we can use our skills for other things.
And every time we do this, and reach an ROI
positive and a sales gain, we can just scale
this up or go back to gaming, and we always
go back to gaming. This is where we see it
going forward in the near future.
Your admission document mentions
control of some 2,000 domains but
these were not made public. Why
was this?
First of all, we don’t want our business
to be measured by one site or another,
because our model is not based on this. If we
were a company that operates just one site, or
five big sites, and all the revenue comes from
those, that would be a very interesting and
relevant KPI for our investors. But when we
run a combination of many, many different
sites with targeted media buys, what we do
with each affiliate, each site, or even a group of
sites is not a relevant KPI. Second, if you look
at 2,000 sites, not all of them are big 5,000-
page sites. You have a lot of small support sites
that play specific roles, to help the ranking
and traffic driving, I don’t think this would
add any more value to the analysis of potential
investors. Plus, we are public now, so people
know about us, they see our numbers, I think
if we were to be too straightforward as to
what properties we own, you could imagine
there are trends of negative SEOs, using
questionable search engine tactics against
other sites, so we would potentially have a lot
to lose. So I don’t think it’s in our best interest
to be too straightforward about this. But the
main reason remains the first one, that we
don’t want to be measured on one site, or a
specific cluster of sites.
Feature Interviews
You are already working on a fixed-
fee basis in New Jersey with 888 and
WSOP.com. When can we expect to
see you licensed there?
Myself and a colleague met with the
Department of Gaming Enforcement in
New Jersey, and they were happy to see
us, not because it was us specifically, but
affiliates generally don’t come there to
meet them. We believe we will apply finally
for the casino ancillary service licence
quite soon, we have all the forms in place.
However, the listing changed the ownership
structure of the business significantly,
so in the beginning, they wanted every
shareholder holding above 3% to fill in the
form, I told them, “Guys, I’m not going to go
to Blackrock, Mercantile, and ask them to
fill in your due diligence forms. They are
not an active partner in the business.” Then
we entered some kind of negotiation with
the Department of Gaming Enforcement,
which is still going on, we are working with
them on which executive needs to fill this in.
I think this will be resolved and quite soon,
and hopefully in a few months we will have
the licence. We see New Jersey as the first
step in the door. We are also in discussions
about getting a licence in Nevada. If you
are licensed in Nevada and New Jersey, it
will be much easier for us going forward to
get a licence in any other state. Of course,
I think the fact we are a PLC does help
our case. It’s much easier for an American
regulator to look and say, “Oh, they’re a
public company, I can find out anything
about them on the internet.”
Having been through the IPO, what
advice would have for other affiliates
considering this route?
I’m happy that this succeeded because we
worked so hard, but also because I think this
might open the door to similar companies
in our business. Affiliates, historically, have
been, shall I say, very camera shy. I think
many affiliates or marketing companies,
in the gaming scope especially, do have the
potential to go public or to become large
established operations. If in some way
we helped some of them cross the barrier
towards that, I would be very happy.
iGamingBusiness | Issue 87 | July/August 2014 | 47
INTELLIGENCE CENTRE

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 2014

supported by

The latest developments

and innovations in live-
streamed casino games

Mobile is
the future
for live dealer
Ian Dunning of EntwineTech explores the main factors driving the rapid
development of live dealer games on mobile devices for iGaming Business.
One of the drivers of the current growth
of live dealer and a massive opportunity
for the future is the development of live
dealer solutions specifically for mobile.
This growth will be driven by a number
of converging factors. Firstly, the recent
increase in the number of high-end
smartphones hitting the market has
changed the customer experience of live
dealer on mobile. Traditionally, live dealer
games have required more processing
power than what had previously been
available on mobile devices, however
now there are an increasing number of
smartphones hitting the market with a
high end processor and lots of RAM. A
number of smartphones now possess
quad-core chips and up to 2GB or more
of RAM. As a consequence, the time
has arrived when mobile devices have
advanced enough to be able to handle the
workload imposed by these games.
Secondly the user experience of live
dealer games has improved, caused
predominantly by the increase in screen
sizes of mobile phones and the roll out
of 3G and 4G broadband. In particular,
4G networks now enable customers to
view high definition game play seamlessly
and this experience is driving demand
for the product. Thirdly, the cost of high
end smartphones in real terms has been
falling to the point that a smartphone that
can deliver a good live dealer experience
“A smartphone that can deliver a good live
dealer experience can be purchased for around
$100, thus massively increasing the numbers of
potential customers.”
can be purchased for around $100, thus
massively increasing the numbers of
potential customers. The potential can
be seen in the trends for broadband
connectivity. In 2005, there were 170m
fixed device (PC) broadband connections,
by 2015, this number is expected to reach
550m. Compare these numbers to those
of mobile broadband-connected devices.
In 2005, there were a negligible number
of mobile connected devices, by 2015 it
is estimated that there will be 2.1 billion
mobile devices connected to broadband.
In recent years, the growth in the
2014
number of mobile broadband connected
devices has gone hand hand with the
growth in mobile betting and gaming.
Sports betting sites were the early
adopters, focusing on sports such as
football with big in-play opportunities.
However, casino and live dealer casino
product suppliers and operators quickly
followed, to the point some operators are
seeing up to 80% of their total revenues
coming from games played on mobile
devices. The last 12 months have been
particularly impressive for the growth of
mobile betting, with many operators
seeing a doubling or tripling of their
mobile business. Mobile has become
such a significant part of the landscape
that some start-ups are ditching web
completely and going straight to mobile.
While the availability of good
broadband connectivity and the major
advances in hardware have played a big
part in the growth of mobile, another
iGamingBusiness | Issue 87 | July/August 2014 | 53
 2014
major factor has been the growth in
consumers use of native app stores and
the ease of identifying a suitable app and
the downloading it. However the industry
is not totally sold on native apps as they
come with a number of disadvantages,
the major ones being:
1) Cost
a. separate development needed for
each operating system
b. Commission on sales to Google
or Apple
2) Availability
a. Google or Apple can and do restrict
the content available in their app stores,
often to the detriment of betting and
gaming companies
The alternative to developing native
apps is to develop content for mobile
using HTML5. The advantages are that
development costs are lower, no controls
from Apple or Google on downloads,
and no revenue share. Increasingly,
both IOS and Android based browsers
are supporting HTMLS features, which
makes developing HTML5 based app
more attractive. One of the problems
with developing HTML5 based mobile
applications is the very fact that so many
mobile users are conditioned to search
for apps using either the Apple App store
or Google Play, consequently distributing
54 | iGamingBusiness | Issue 87 | July/August 2014
The freedom HTML5 gives operators from the
controls on distribution that the app stores can
impose, combined with the reduced costs of
development, will be key reasons why most live
dealer developers go down this route.
HTML5-based content is difficult.
Companies are starting to find ways
around this by using development tools
that ‘wrap’ HTML5 in native code so they
can be accessed form the relevant app store
– these are called hybrid apps.
The table below compares the
advantages of developing Native and
HTML5 apps:
HTML5 Native App
Rich user experience Winner
Development costs Winner
Control over distribution Winner
Available development resource Winner
Security Winner
Ease of distribution Winner
While native apps have advantages such
as better user interfaces, are faster and
have better security features, HTML5 will
be the longer-term winner, as it becomes
more ubiquitous with developers and
security improves. The freedom HTML5
gives operators from the control on
distribution that the apps stores can
impose, combined with the reduced costs
of development, will be key reasons
why most live dealer developers go
down this route.
For operators, one of the major
attractions of mobile is the fact that
their customers usually have access to
their product wherever they are and at
any time, thus increasing the
opportunities for game play and
revenue generation, a key reason why
mobile is the future for live dealer
supplier and operators.
Ian Dunning is spokesperson
for EntwineTech Live Dealer.
Ian has enjoyed a successful
career spanning over 25
years in the betting and gaming
business, beginning with 13 years
at Ladbrokes in a variety of operational roles. Later,
as MD for Victor Chandler’s Asian businesses, Ian
successfully launched the Chinese sportsbook and a
live dealer product. More recently, Ian worked as CEO
for a subsidiary of Sugal and Damani, one of the main
players in the Indian lottery business, setting up their
online gaming activities in India.
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AS REAL AS IT GETS
 2014
Differentiate or die
Innovation is becoming a critical differentiator as the live dealer casino space
matures, as Mathias Larsson of Ezugi explains.
There is no doubt that iGaming is a highly
competitive marketplace with maturing
markets and product offerings. So how
can operators differentiate themselves in
a homogeneous marketplace, when most
of the products in that market are more or
less the same, with perhaps just some minor
differences in design or front end branding?
Live dealer casino games are a good
example of the question. Firstly, technology
and continued investment by the telecoms
companies in both super-fast fixed line and
the mobile 4G networks and infrastructure
has meant that the bandwidth to support
the deployment of live casino products for
both desktop and mobile network is good
enough in most markets today.
Live casino gaming is being driven by
voracious consumer demand and that of
the operators looking to keep pace with
the needs of their gaming players. The
popularity of live gaming for the player is
the transparency, interaction and emotions,
which replicate the live land-based casino
environment for the player without leaving
the comfort of their home via their desktop
computer or smartphone. However, as the
market and product adoption matures,
players become more demanding.
Innovation therefore becomes more of a key
differentiator for the operators and their live
casino software providers, becoming critical
to driving the creation and execution of new
products, services, and business processes.
For example, most online casinos now
offer live blackjack, live roulette, live
baccarat, live sic bo and live dealer poker,
which are pretty much the standard
product set deployed across desktop and
mobile devices. But that isn’t innovation or
differentiation, that’s merely making your
product accessible by delivery channel. In
the mobile example, it is not good enough
to merely offer a desktop version through a
56 | iGamingBusiness | Issue 87 | July/August 2014
mobile browser. The casino customer and
user experience is central to the engagement
and usage, and therefore must be different
for different devices and platforms. It’s
therefore an omni-channel, multi product-
specific delivery that is required, as opposed
to a one-size-fits-all approach.
UI innovation
Gaming consumers are uber tech savvy
customers looking for instant gaming
gratification, and if you can’t deliver it, they
shall find someone that can. Therefore,
in order to innovate and differentiate,
live gaming solution providers need to
meet these ever-changing user interfaces,
preferences, product delivery pathways and
experiences. In mobile for example, our user
interface (UI) optimisation engineers have
added functionalities including a swipe
feature that leverages the natural behaviour
of the human thumbs on both sides of
the mobile device, which the end user is
already familiar with, which represents both
innovation and differentiation.
Game innovation
The UI, as we have explored, is important both
for innovation and differentiation, but the
actual live game is what captures the hearts,
minds and share of wallet for the operators.
It is therefore critical that operators partner
with providers that are able to design, test and
deploy new games and feature sets into the
market place on a regular basis. But access to
exclusive live gaming content for geographical
market penetration can help make or break
operators’ marketing acquisition or retention
programmes. This component shall become
increasingly central as gaming in general
becomes similar to fashion, whereby you’re
‘hot’ one moment and ‘out’ the next. Coupled
with the decreasing attention spans of
consumers, numerous distractions and desire
to conform or be the first to play a new game,
product marketing of new games shall be a
central differentiator of success.
The gaming experience
Many companies consider innovation and
differentiation in regards to the physical hard
product or the tangible process. However, live
gaming players just don’t buy a mobile phone
because it’s a mobile phone and they can play
the game. It’s what the phone can do for them
and likewise the game – it’s the experience,
the engagement and how it makes you feel.
Live dealer gaming allows players
to confirm that the games are fair and
trustworthy, as you can see and interact with
the dealer, which is one of the reasons for the
rapid growth over RNG games. Live gaming
is like watching your favourite television
show, you wish to be entertained. So I believe
you need to enhance the gaming experience
or entertainment delivery for the player.
Therefore, live gaming providers such as
ourselves need to offer live gaming streams
from different exotic locations. So as against
just offering a stream from one studio, Ezugi
is going to offer streams from different
studios and land-based casinos all around
the world, delivering a true global experience
for both the players and the operators.
Of course, there shall be challenges ahead
over the next 12-24 months. That is why
we as a gaming solutions provider have
taken those requirements into account and
have produced market-ready, feature-led
products for different devices, with gaming
entertainment central to that process for
innovation and differentiation.
Mathias Larsson holds a
Masters in Finance and is
an experienced technology
entrepreneur. With management
roles in live casino gaming, digital
and product lifecycle marketing,
he is Director of Business Development for Ezugi, the
innovative live casino dealer gaming system provider.

What live dealer strategy?
With a growing array of live dealer solutions on the market, selecting the one best
suited to your individual needs can be a confusing process. Helen Hedgeland of
Evolution Gaming summarises the key considerations for operators.
Live dealer casino gaming is still one of
the fastest growing verticals in the gaming
market. Unlike RNG, live dealer offers more
than just games – it’s also a live marketing
channel, so it can be an excellent tool for
cross-selling other products in real time.
However, the last few years have seen a
big increase in the number of live dealer
providers. It’s essential, therefore, for
operators looking to add or extend a live
dealer offering to do their homework.
What are an operator’s main options?
The first choice is whether to outsource to
a live casino provider or to set up your own
in-house live studio and broadcast facility. I
would advise that setting up is the simple part.
However, to operate a market-leading service
24/7 is a big challenge for any operator.
If you go with a provider, a very cost-
effective first solution is shared access
to generic tables. These tables – typically
roulette, blackjack and baccarat as a ‘starter’
offering –should provide you with a good
basic level of branding. Later you can choose
to step up to a dedicated table or a multi-table
environment. These are dedicated areas for a
single operator’s exclusive use and can usually
be branded in any way the operator chooses.
The investment is higher, but Evolution
licensees such as William Hill and 888 have
seen rapid ROI. Our dedicated tables typically
provide very significant increases in GGR,
player acquisition and active player numbers.
Another option offered by Evolution is native
speaking dealer tables such as London
Roulette, Venezia Roulette, Deutsches
Roulette and Svensk Roulette.
Regulations will determine what you
can or cannot do, particularly whether you
are permitted to stream live dealer games
from a live studio located in another
country or whether you must stream from
your own jurisdiction. At Evolution, we
offer streaming from two central studios
(in Latvia and in Malta) as well as from live
studios we create for clients within local,
licensed, land-based casinos.
Of course, an operator can elect to work
with one provider exclusively or build a live
dealer offering using two or more providers.
So, if you offer live dealer already, you can
always look to enhance your offering with,
say, native speaking or VIP tables.
Which factors should operators be
taking into account?
Look for a provider that has a strong track
record and offers a wide choice of tables
(game types and number of standard and
VIP tables) and growth options too. An
operator needs flexibility, in particular
the ability to customise their service. Ask
yourself this: Is the provider offering a
‘one-size-fits-all’ service or are they really
committed to working in partnership to
achieve results and growth via a more
tailored and personalised approach?
How does this vary according to scale,
budget, existing products and markets?
Scale is a major consideration. It can be
advantageous, even if the budget is small, to
select a provider with lots of tables so you can
offer players real choice and drive growth.
“Existing products” is a big topic. What
operators need is a good complementary
fit. Cross-selling is important. For example,
sportsbook does particularly well with live
casino. Promoting live casino on sportsbook
pages has proved to be an effective way to
acquire live casino customers – retaining
players’ sportsbook time but also adding
incremental time at the live tables.
2014
Consider your markets too – customer
types, channels, devices they will want to
play on, and so forth.
With Evolution, operators benefit from a
carefully developed multi-channel offering.
In fact, in the last 12 months we have
attracted a number of mobile-led licensees.
Usually desktop is the primary means of play
and then mobile is added later. Now we are
seeing operators leading their market assault
with a smartphone and tablet mobile offering,
with desktop being a secondary solution.
Also, don’t put online and offline into
different compartments. We are working
more and more with land-based operators
looking to develop a seamless service.
Online live casino doesn’t cannibalise
revenues – it can add incremental revenue
and be used to attract players to the bricks-
and-mortar venue.
What should they expect of the
integration process?
Operators need a fully rounded offering.
Obviously you’ll want a commitment to
a smooth initial integration of live casino
into your operations and a choice of one
wallet or funds transfer. But look further
ahead, too. Look for a commitment
to work collaboratively, as Evolution
does with its licensees, in areas such as
business intelligence and revenue growth
opportunity. As a purely B2B live casino
provider, that is Evolution’s total focus –
not a quick-fix but long-term, sustainable
development of our licensees’ businesses.
Helen Hedgeland is Managing
Director at Evolution UK, a role
that sees her involved across the
full gamut of live casino solution
development and delivery for
numerous leading global gaming
brands and many specialist operators besides.
iGamingBusiness | Issue 87 | July/August 2014 | 59
 2014
The regulatory opportunity
Dot.country regulation undoubtedly has its challenges for the industry, but it
has also provided a host of opportunities and spurred product development in
the live dealer space, as Robert Forrest of BetConstruct explains.
As an increasing number of European
countries elect to follow others and adopt a
dot country model, operators and suppliers
have had and continue to deal with a host
of regulatory issues.
Regulation may be necessary to ensure
market stability and protection from
unlicensed third parties, as well as
shielding the young and vulnerable, but
to many it is often viewed as burdensome,
constantly moving and therefore an
ongoing and difficult to manage element
of running a gaming business.
But as well as posing a threat to many, it
has also created a host of opportunities as
more countries open their borders to new
business and new products. One of the
biggest growth sectors within online and
mobile gaming over the last few years has
been live dealer casino.
BetConstruct identified this early on,
and has invested significant resources into
building its own technology, software and
studios, and developing and hiring the talent
to manage and deploy it across new and
emerging markets. We don’t see regulation
as a divider, but something which has
enabled us to grow our portfolio of partners
to more than 60 across more than 20
countries in Europe, Africa and Asia, with
a surge in the demand for a first-class,
cutting-edge live dealer solution.
Local approach
The biggest effect the ongoing division of
live dealer provision across Europe has
had on the industry is to cause the
proliferation of both market sensitive and
dedicated localised products.
This has had a dramatic effect on the
popularity of live dealer product across
Europe, and made a measurable difference
60 | iGamingBusiness | Issue 87 | July/August 2014
to player acquisition levels, retention and
thus live dealer turnover. It has also had a
huge effect on the operations of the
studios themselves as providers have
had to reorganise production to meet
regulatory, certification, branding and
localised needs, and move away from
large-scale, generic production.
Within content and games provision,
suppliers have had to increasingly look
at widening their games portfolios to
supply market-specific games, therefore
the number of games available to players
from all jurisdictions has vastly increased.
Likewise, providers have had to open
further studios in new territories such as
Spain to meet ongoing and expanding
regulatory requirements.
Ripple effect
Regulation, compliance and tax issues
naturally have certain drawbacks, namely
additional costs. As such, some providers
have been put off from entering various
European markets for these reasons.
One change in particular is set to have a
big impact on arguably the continent’s most
well-regulated market, the UK. Point-of-
consumption tax is due to come into force
at the end of 2014, with the current levy
on where the bet is supplied/operator is
registered making way for a 15% tax on bets
placed within the UK by UK customers. This
could have a ripple effect on the profitability
of live dealer providers, as operators look for
better revenue share deals and, as a result,
we could see a more competitive market.
PoCT will shake up the market but equally
with will come further opportunity for us
and others, with a number of operators likely
to look to switch suppliers and boost their
live dealer offerings.
We have witnessed this in the last 12 months,
with some of the biggest operators offering
content from more than one studio provider.
The challenge is now on gaming and
live dealer suppliers such as ourselves to
take the technological leap into providing
great products in order to attract customers
and more complex and bespoke financial
agreements, to truly work in partnership
with operators.
Several developments over the past year
have caught our eye, including ‘Multi-table
play capability’, allowing players to open
all the games on a single screen, while the
issue of “reliable bet reconciliation” has
finally been overcome. We have also seen a
move towards increasing production values
by taking advantage of advancements in
resolution to bandwidth optimisation, slow
motion and the use of camera software.
Across the entire estate of live casino
providers, we have also seen an increase in the
portfolio of games and a move by the largest
suppliers to upgrade game functionality to
include features such as bonus options and
more player friendly products.
We are constantly on the lookout for new
markets that offer favourable conditions,
or where legislation is on the cusp of
coming into law such as Japan or Korea.
Regulation may constantly change but our
focus remains the same, to remain one
step ahead and see changes in legislation
and new markets opening up as far bigger
opportunities than threats.
Robert Forrest has been in the
gambling industry for 30 years
and has worked for some of the
biggest live dealer suppliers
and iGaming operators, including
Ladbrokes and Gala Coral. He has
been head of live dealer development at BetConstruct
since the beginning of 2014.

repo g
ew in
A n iGam ss
by usine
B
Ask for your free executive summary,
or to order the report, email
reports@iGamingBusiness.com or call
+44 (0) 207 954 3489 and quote 14FMobile1.
Mobile Gambling, Marketing
and Operations 2013 and Beyond:
Understanding the Mobile Paradigm
rt
Over the past three years the growth of mobile gambling has been
explosive and now forms a significant portion of all interactive revenues
for key European gambling operators, arguably led by the likes of
Paddy Power, William Hill and Betfair. Juniper Research released new
projections in early 2013 for the global mobile platform, anticipating
that by 2017 mobile turnover will reach $100 billion.
It is no longer a question of entering the mobile space, but rather how are
you mobilizing your business to push forward and create, rather than react
to, the opportunities the platform affords.
Key Features:
• Insight into the key players in the industry and which business models
are most successful
• An analysis of the different payment methods
• An overview of different devices and their target markets
• A look into the future of mobile development and how many are opting
for a hybrid of HTML5 and App development
• A breakdown of how to turn your company mobile
• Insight into the significant trends occurring in the mobile sector which
may have a profound effect on mobile gambling
• An in-depth look at the new mobile marketing techniques that are
available including affiliate marketing, app marketing, display, email,
location-based marketing, push marketing, search engines – PPC and
natural, SMS, social networks, video and Weve.
www.iGamingBusiness.com
 Feature

PHOTO CREDITED TO JOE GIRON

WSOP enters new online era

This year’s WSOP is the first to be held since regulated online poker got up grinding area where players can play online
and running in the US, spanning several states and multiple operators. We while at the WSOP. Players can also play on
spoke to the organisers, a participating pro and WSOP.com’s head of poker their laptops simultaneously. However, you
to find out how the increasing convergence with the emerging online industry can’t play via mobile or tablet here yet, as we
is transforming the event. still don’t have a regulated product for that.

Seth Palansky, VP, Corporate Comms/
Editor-In-Chief, Caesars Interactive
Entertainment
We have branded the heck out of the WSOP
footprint of the Rio, created a bunch of
exciting promotions and enticements on
WSOP.com to try and attract folks…but time
will tell what the reaction is. We saw great
deposit numbers for WSOP.com on Day 1
from players physically depositing at our
cage at Rio, but I wouldn’t want to use one
day of data to know.
The truth is that the WSOP is much more
than the 65 WSOP gold bracelet events. We
also have 90-100 cash game tables running
daily, 24-hour satellites, plus thrice daily
deep-stack tournaments that themselves
attract about 2,000 entries a day. So we see a
ton of poker play at the Rio.
We’re confident that one way or another,
we’re well positioned and capturing the
lion’s share of poker play throughout the
duration of the event.
I’m not sure what numbers suggest of
how poker play was in the past when there
were sites up and running that Americans
played on, and if online traffic spiked or
decreased during WSOP.
With this being the 45th land-based
WSOP, we are really excited about the
opportunity to extend the brand online
overtop of the WSOP this year. But we’re
honestly not sure if the traffic conversion
comes over the top of the event, or if the
capturing of the player pool while they are
here ends up converting more year-round
play for the remainder of the year.
We are very optimistic about online poker.
We think it has a very bright future in the US
and are very encouraged thus far.
We have a player support room dedicated
to WSOP.com on site, a live cage, a special
Jamie Kerstetter, New Jersey
PartyPoker pro
Regulated online poker in the US has had
an immense impact on me, allowing me
to return from Mexico to make a living in
my home state of New Jersey. But even for
recreational players, regulated online poker
will have a positive effect on them during
the WSOP, regardless of if they play online
themselves. The player pool in NJ WPTs
increased in size and decreased in strength
as many online qualifiers satellited in for a
fraction of the buy in.
The poker economy relies on new
players getting into the game, enjoying their
experience, and returning to try again even if
unsuccessful at first. Online satellites allow
these players to qualify cheaply for every
event from $1ks to the $10k main event,
giving normal people without million dollar
bankrolls a chance at glory and huge prizes.

iGamingBusiness | Issue 87 | July/August 2014 | 63

Feature
Bill Rini, head of online poker,
WSOP.com
We set out to offer a really compelling
promotional schedule for our first WSOP.
It was important for us to showcase the site
and demonstrate how the offline and online
offerings could complement each other.
For instance, we’re running satellites
nearly every night into the next day’s offline
event. The online satellites buy-ins start at
$11 buy-ins which is much smaller than the
offline satellites so it brings the chance at a
WSOP bracelet to many players with
more modest bankrolls.
We’ve also loaded up with Sit&Go
satellites for WSOP seats including a
$5,000 + $100 heads-up satellite for a
WSOP Main Event seat.
The schedule we put out there seemed to
be well received. Both the poker media and
the players commented that we hit all of the
bases. Since we are guaranteeing over $2
million in tournaments over the course of
the WSOP, we branded our summer series
64 | iGamingBusiness | Issue 87 | July/August 2014
as The $2 Million Stacked Summer.
On the tournament side, we kicked
things off with a High Roller series of
tournaments the first week of the WSOP.
A week of higher buy-in ($200 + $15 up
to $500 + $30) tournaments with a $50K
guaranteed main event.
Next week, we’ll kick off the WSOP
Online Championship with $550K in
guarantees. For two weeks we’ll be running
tournaments in both Nevada and New
Jersey with a $200K guarantee main event.
We also have Sit&Go leaderboards
running throughout the WSOP as well
as a cash game promotion called Multi-
Table Madness that rewards players who
play multiple tables.
There’s also a Mini-Fest tournament
series with smaller buy-in events, which
starts up later in the WSOP schedule and a
Last Chance Series for players who missed
their shot to return for the WSOP Main
Event final table in November.
Nightly we also offer a Dinner Break Turbo
PHOTO CREDITED TO JAYNE FURMAN
which allows players to get in on the online
action during the WSOP dinner breaks.
In addition to that, we bumped up our
first time deposit and reload bonuses to
100% up to $1,000 during the entire WSOP.
Prior to the start of the WSOP we had
already awarded over 100 WSOP bracelet
event seats. We’re on pace to award at least
100 more during the WSOP as well. In fact,
we have a 25-seat guarantee on Day 1A of
the WSOP Main Event.
As far as pro sponsorships, we have great
relationships with the pro players. They love
the brand. We have WSOP bracelet winners
and other notable pros playing on the site all
the time. Not because we sponsor them, but
because they’ve chosen to play with us.
As far as our competitors and their
sponsored pros go, we’re neutral on what
patch someone wears. I think we have a
healthy rivalry but anything that’s good for
poker, overall, is good for us so we don’t
draw any hard lines with other sites or
sponsored players.
More than software, we are Team NetRefer.

Book a demo or learn more about our solution @ www.netrefer.com

Unify marketing. Track activity. Deliver performance.

UNIFIED PERFORMANCE MARKETING

sales@netrefer.com | www.netrefer.com
ADVERTORIAL
The Isle of Man:
iGaming’s true VC hub
Bruce Elliott of Boston Ventures gives his perspective on the factors driving
the Isle of Man’s emergence as the pre-eminent licensing and investment hub
for iGaming companies.
With its concentration of legal, fiduciary
and financial expertise, the Isle of Man is
becoming a true hub for venture capital
investing. This fits well with our Chief
Minister Allan Bell’s determination to
re-orientate the financial sector away from
tax-driven solutions to long-term, service-
led and entrepreneurial opportunities for
the Island. While Silicon Valley in the US
and London and Edinburgh in the UK
have vibrant venture capital communities,
Australia, Gibraltar and Jersey are lacking
in an early-stage angel/venture capital
investment culture. The Isle of Man stands
out as a leader in this area, without focusing
on it specifically. There are several  investors per capita in the world. This may
important reasons why the Island is
at the forefront in this area.:
The Island’s highly reputable eGaming
licensing regime partnered with a vibrant
VC investment community experienced in
the sector offers a true differentiator from
many other jurisdictions. The following
description of the third party investment
environment is based on ten years of
experience and attendance at literally
hundreds of presentations by eGaming
entrepreneurs to potential investors. The
high growth eGaming sector is perceived
very positively by local Government,
businesses and investors. This is not the case
in many countries in the world today.
Investors tend to invest in what they
know. It is always easiest to persuade
them to invest in a sector with which
they are familiar, or where they have a
strong network of contacts. Isle of Man
investors have greater awareness of the
online/mobile/social gaming sectors
66 | iGamingBusiness | Issue 87 | July/August 2014
than in many jurisdictions, and the
strong eGaming ecosystem allows for an
efficient and collaborative due diligence
process. Investors can leverage their
contacts in eGaming operations, software
developers, corporate service providers,
family offices, datacentres, affiliates and
payment providers.
The Isle of Man investment community
view is truly global. In 2013, eGaming
companies found success raising venture
funds in the Isle of Man from as far away
as Australia and Asia and as close as the
UK and Ireland. The Island may actually
have the highest percentage of Angel/VC
be partly due to the small total population;
however there is a significant number of
Island residents in the ultra-high net worth,
professional VC and family office client
sectors. Many individuals within these
groups are active in financing new ventures
and have significant expertise in doing so.
In contrast with other offshore
licensing jurisdictions such as Alderney,
Malta and Gibraltar, a vibrant Angel
and VC culture exists in the Isle of Man.
With the close knit nature of the business
community, local investors tend to be more
accessible than in other jurisdictions. There
are also generally fewer companies coming
from elsewhere seeking venture financing
than Angel investors and VC firms in the
major EU countries would see, so investor
interest levels remain buoyant. The growing
number of high net worth investors looking
to participate actively in their investment
portfolios is further fuelling the demand for
quality VC opportunities.
It is interesting to note that the
eGaming community in the Isle of Man
has a depth of expertise in Asia. New
and differentiated Asian-facing ventures
are a welcome category.
The distinction between Angel
investment and VC is a fine one, and
many would argue that Angel finance is
a sub-class of VC. Whilst the term ‘Angel’
is largely reserved for start-up funding,
however, VC takes this in as well the
practice of providing growth finance
for established companies with high
potential, particularly in the IT and bio-
technology industries.
For entrepreneurs new to the Island,
established professionals who are willing
to introduce their network are a good
vehicle to meet the right people in the
investment community. These can take
the form of Angel networks, experienced
intermediaries or those from the
professional services sector.
How can we further leverage the
Island’s position as a leading player in
the venture capital investment sector?
Boston Ventures, our venture capital
investment arm, is seeing success
introducing venture capital projects to
investors to create value. Venture capital
has the potential to become a highly
strategic sector for us and the Island.
Bruce Elliott is Head of Gaming
and MD Boston Ventures. He
oversees Boston’s e-Commerce
and e-Gaming practice, as well
as being responsible for venture
capital investment programmes. 

CIS: opportunities and risks
The emerging iGaming markets of the ex-Soviet Union CIS countries offer
great potential but high risks. Sergei Efimenko, COO of leading local operator
Favbet, provides a guide to the region.
As gambling in many European countries
becomes strictly regulated, restricting
opportunities to a few companies in each
market, more and more companies are
exploring the emerging regions of
Eastern Europe, Africa and South
America for new opportunities.
These regions have several factors in
common. With the potential extra profits
come high risks, as well as specific local
practices and rules you will never find
written down in any law or article, but with
which you will have to deal on a daily basis.
The countries of the Commonwealth
of Independent States, which emerged
from the break up of the former USSR, also
have characteristics which set them apart
from the other developing regions above.
These include a well-developed online
infrastructure, and a high degree of product
competition. Players are also arguably far
more demanding, and each territory comes
with distinct local specifics, all of which
make these markets both accessible yet
difficult to capture at the same time.
The backdrop
Sports betting in an organised form first
came to the CIS countries in the late 90s,
when the business environment became
more stable and regulated after the period
of economic instability which accompanied
the break-up of the former USSR.
The first companies emerged from the
in Ukraine. These included Marathonbet
(now known as Panbet), Favorit (known
as Favbet) and Parimatch. High consumer
demand for their products saw these
companies grow quickly and expand
operations into Russia, Belarus, Kazakhstan
and eventually to other CIS countries.
Companies such as Fonbet and Betcity
subsequently emerged from Russia.
“If you see a customer from Tajikistan, Azerbaijan,
Armenia or Kyrgyzstan registering with a global
bookmaker, you can be sure he went through
all these difficult procedures with some proven
strategy or advantage he is going to leverage.”
The math-oriented basis of education in
the region provided fertile ground for sports
betting in the region, a demanding player
base fueling intense competition among
companies on the volume and range of
pre-match markets. This was and continues
to be reflected in the high number of special
bets (not just in football, but in all sports)
on offer from CIS bookmakers, usually the
highest in the world and far greater than the
number on offer from global bookmakers
(see for example player totals, comparisons,
rebounds, assists, blocks and steals in
basketball, as well as aces, double faults,
serve markets in tennis).
The prohibition of slot halls and land
based casinos in many countries also
helped fuel demand, exerting a strong
influence on the growth of local “quick
sports” based live betting.
Management & Marketing
The CIS customer
The CIS customer is one characterised
by extremes. You get the smartest and the
most naïve, the richest and very poorest,
depending on how your target your product.
By way of example, after years working for
leading European sports betting companies,
I was engaged as a consultant to help
improve a local bookmaker’s live and pre-
match offering. I checked the level of the
local traders, and I was shocked when one
of the best bookmakers in that company
was offering a total of 33.5 points a quarter
in one basketball match, while Bet365/
WillHill/PaddyPower were offering 38.5+
points. I was sceptical, so he offered to show
me the bets being placed, and I was amazed
to see that most people had still been betting
under 33.5. Another reason why I found this
so shocking was because almost all leading
pan-European online betting companies
tend to handle customers from this CIS
country as “hard clients” who win a lot,
but here, in this local company, they had
thousands of very naive and easy customers
who believed in their “strong” opinion and
were indifferent to the market offer.
So how can it be that global giants with
well-designed, competitive products and
professional support end up with the worst
customers in these CIS countries, and small,
iGamingBusiness | Issue 87 | July/August 2014 | 67
 Management & Marketing
local bookmakers get the best ones? The
answer is simple: cash is still “the king” in all
post-USSR countries. The majority still don`t
like to use cards or online payments, mainly
for security reasons. Almost all VIPs in these
countries also don’t want to risk exposing
their financial position, and prefer to send
assistants with bags of cash – often after
having placed telephone bets - to betting
shops instead of using any online payment
methods. Moreover, there is a cluster of
local payment methods that very few people
in West Europe have even heard of, and
these solutions handle a greater volume of
payments in this region than the well-known
popular global brands.
So if you see a customer from Tajikistan,
Azerbaijan, Armenia or Kyrgyzstan
registering with a global bookmaker, you
can be sure that he went through all these
“hard” procedures with some proven
strategy or advantage he is going to leverage.
Nothing would prevent this type of
customer getting a bet on in games where
they have an advantage or can exploit a
trader’s mistake, as they would be able to
lay their hands on any number of passports
from relatives and neigbours, enabling
them to go through any KYC process and
overcome any IP restrictions.
As well as their relatively low level of
average bet, another characteristic of the
CIS customer base is the high number of
VIPs, particularly in Kazakhstan, Moscow,
Kiev. Given the extreme gap between rich
and poor in these countries, the middle class
in post-USSR is practically non-existent. So,
any operator planning on entering any of
these local markets needs to make sure they
you know how to treat VIPs and where to
get them. If they don’t, they should seriously
reconsider starting a business there.
68 | iGamingBusiness | Issue 87 | July/August 2014
“In live betting, we have seen a huge impact from
casino players who, limited by regulations, have
converted to in-play betting, attracted by the fact
they can quickly win and re-bet money.”
Another factor worth bearing in mind is
that there is a highly educated professional
class with strong math and programming
skills. In combination with the low level of
salaries for traditional jobs, making a living
at online betting suddenly becomes a very
attractive option. Therefore, as an operator,
you should think very carefully about how
any promotions, bonuses, free bets or new
product on market you plan to offer could
possibly be exploited, and how you can
protect it from such activity. I’ve seen many
companies lose huge amounts of money as
a result of trying to introduce promotions
which worked perfectly well in the rest of
Europe to CIS countries.
Offer and products
It is important to offer as wide a range of
pre-match special bets as possible in CIS
countries. Obviously, these only provide
incremental revenues, but they are what
bring customers to your site ahead of your
competitors’. In most other parts of the
world, online bettors don’t care much about
these markets, but this is not the case in
CIS countries. In the case of live betting,
we have seen a huge impact from [brick
and mortar] casino players who, limited by
regulations, have in many cases converted
to in-play betting, attracted by the fact they
can quickly win and re-bet money. Which
is why a 30-minute table tennis match
between two unknown Chinese players
often generates more turnover than a
Premier League football event.
Low mobile Internet costs in CIS
countries means that close to 25% of all
bets placed are transacted via mobile
devices. In the Asian countries of the
CIS, this his has also been driven by the
high cost of fixed-line Internet services.
For example, as little as two years ago, a
1MB bundle in Tajikistan cost more than
$1,000, and even these days, 2MB costs
more than €150+ a month.
Marketing and localisation
Due to the anti-gambling propaganda in
place during most of the USSR’s history,
there is no mainstream culture of sports
betting, as there is in countries such as the
UK, with a far smaller percentage of the
population in these countries knowing how
or where to place a bet. Which is why you
need to be also very careful with how you
target your retention activities – as calling
or sending a text at the wrong time can
lead to family dramas, as many men in CIS
countries still choose to hide their gambling
activities from their wives and partners.
At the same time, it’s important to commit
resources to gambling education. It’s also
worth remembering that once you have
managed to convert local players, you will
have a valuable period of grace until they
become more savvy and confident and start
checking out the offers on rival websites.
A key advantage of targeting CIS
countries is that not much localisation is

required. A Russian-language website
and support is generally sufficient, as
most of the CIS populations can still read
and speak Russian.
The affiliate market is still very
underdeveloped across the region.
All the significant commercial media
resources work only on a fixed-fee and
short-term basis. There are however a few
smaller affiliates starting to emerge who
understand how to generate traffic and
make money, and therefore enjoy unique
advantages at this point in time. However,
the majority of potential affiliates among
the local player base don’t even know
about affiliate programmes or how they
can benefit, so again, it’s worth investing
resources in affiliate managers to educate
affiliates and promote affiliate resources.
Country by country
• Russia – offers the most potential
but also the highest degree of risk.
With endless changes in the laws and
regulations, every new law drives sports
betting towards an oligopoly or even a
monopoly, and progressively forces more
and more companies from the market.
As a result, more than 600 betting shops
closed, and lots of online companies
stopped all marketing activities on the
market. There are now some quite large
operators up for sale or closing down their
businesses. Online betting is prohibited,
supported by domain and IP blocking,
soon to be followed by payments blocking.
Offline betting operations are only
generally viable in Moscow, St Petersburg
and the Caucasus.
• Ukraine offers considerable potential
as a gaming market, although the strength
of the local lottery lobby has prevented the
“Lots of online companies have now stopped all
marketing activities in Russia. There are now
some quite large operators up for sale or closing
down their businesses.”
passage of new gambling legislation there.
Frequent changes in gambling policy have
made it too risky and specific to undertake
aggressive marketing in the territory.
• Kazakhstan – a highly promising
market, with a wealthy population and
strong gambling culture. Betting takes
place online and offline around the clock,
mainly on sports, horses and virtual. This
is however a territory which is difficult to
enter without strong connections and local
partners, regardless of your product, brand
or financial backing. This also applies to all
the southern countries of CIS, even if the
legal barriers to entry are quite low. Plus,
you will need to be ready to face intense
strong competition from local incumbents
with strong brands which have been
established in the market for many years.
• Armenia, Georgia, Tajikistan and
Azerbaijan. These are countries with a
lower standard of living than the countries
listed above. Land-based sports betting
is however well developed, and among
the most attractive markets in the region.
Online gambling is underdeveloped
and therefore offers plenty of scope for
opportunity and development. It’s however
worth nothing that in Azerbaijan, sports
betting is effectively monopolised, while
Georgia suffers from heavy regulation,
with every shop requiring a very expensive
license, hence why there are only large
betting shops. Competition on prices is also
fierce in Georgia, companies often offering
Management & Marketing
extremely low margins, considerably
below what pan-European companies
can afford to offer.
• Belarus was once an attractive market,
and on first impression, still appears
so. However, due to huge bureaucracy,
the simplest process can take months to
complete. The government’s outsourced
gambling monitoring system Belatra
also cannot withstand the load
requirements and has too many bugs,
spoiling any acquisition activities. This
can serve to make your whole operation
very difficult, even if you have the best IT
systems in the world.
Sergei Efimenko is Chief
Operating Officer of leading
East European brand Favbet.
He has worked in the
gambling industry for more
than 10 years, starting off as a
bookmaker’s assistant, going on to work
for leading European brands bwin, Expekt and bet365
and as a consultant for CIS companies. He returned
to Ukraine to work alongside CEO Andrii Matiukha to
develop and launch Favbet.com from local market
leader company Favoritbet . Favbet currently offers
sports betting, casino, lotteries, binary options and
virtual sports in 10 languages on four continents, both
online and through a 1000+ network of betting shops.
iGamingBusiness | Issue 87 | July/August 2014 | 69
 Management & Marketing

Social Casino
Q1 update
Adam Krejcik of Eilers Research provides an overview of the social casino
gaming market, tracking market size, revenue estimates and market share for
all the major publishers.
Following results from the some of the
major publicly traded social casino game
publishers, as well as select data from
some private companies, we estimate the
global social casino game market grew by
8.2% in the first quarter of 2014, driven by
+1% quarter-on-quarter (q/q) growth on
Facebook/Web.
Facebook’s total web game business,
reported as ‘payment & other fees’,
declined 2% q/q in the period, while
mobile revenues increased 20% q/q,
driven by favorable secular growth
trends and growing popularity of the
social casino game genre.
Caesars Interactive Entertainment (CIE)
further distanced itself as the largest social
casino game publisher worldwide, with an
estimated 19.1% market share, thanks in
part to its acquisition of Pacific Interactive.
the top-10 list thanks to the strength of
its mobile apps on Google Play Store (#2
social casino publisher worldwide on
Google Play Store in Q1 2014).
social casino apps on iOS this quarter.
Greentube, part of the Austrian Top 5 social casino
Novomatic Group and which operates game publishers in Q1
Pharaoh’s Way, appears to have had a These were as follows:
soft quarter, with mobile revenues 1. Caesars Interactive,
declining double-digits sequentially, 2. IGT/DoubleDown,
which we believe is due to increased 3. Zynga,
competition. Dragonplay also moved into 4. GSN/Bash, and
Figure 1 - Social Casino Game Publishers Market Share - 1Q14
Caesars interactive
19%
Other
34%
Double Down (owned by IGT)
11%

We now estimate CIE will generate over

Dragonplay
$500 million in social casino revenues this
2%
year; we estimate the overall industry will Greentube (owned by Novomatic)
reach $2.6 billion (+31% y/y) in 2014. 2% Zynga (Social Casino only)
Playstudios 9%
2%
Other notable trends High 5 Games
Playstudios grew its revenues an impressive 3%
60% q/q, and has now become the eighth Williams Interactive (owned by SciGames) Big Fish Games GSN + Bash Gaming
5% 5% 8%
largest social casino game publisher
worldwide, due to the success of myVegas, * Includes half-quarter contribution from Pacific Interactive
which was among the fastest growing Source: Eilers Research, LLC

70 | iGamingBusiness | Issue 87 | July/August 2014


5. Big Fish Games.
These five companies accounted for just
over half of all the social casino revenues
generated in Q1 2014, per our tracking.
Comparing Q1 actual
results vs. estimates
Every quarter we compare actual results
from publicly traded social casino game
companies versus our preliminary estimates.
Revenues are reported below are on a
gross basis. For Zynga, we include just
social casino game revenues (management
provides actual revenues for Zynga Poker
and we estimate for other titles).
Caesars Interactive – Reported gross
revenue of $115.7 million vs. our estimate of
$105 million. Upside was driven by greater-
than-expected contribution from Pacific
Interactive (we est. ~$8M for half quarter
contribution – MAUs of 3M and DAUs of
770k in Q1 2014, per 10-Q). Also,
improved monetization rates in
Slotomania and Bingo Blitz (ARPDAU
increased 14% q/q) helped drive record
revenues this quarter.
IGT/DoubleDown – Reported
gross revenues of $68.8 million vs. our
estimate of $65.9 million. Upside was
driven by +19% q/q mobile revenue
growth vs. our estimate of +7% q/q. The
upside on mobile was driven by
favorable industry trends and improved
monetization rates for DoubleDown on
iOS, especially on the iPad version. We
estimate mobile now accounts for 39% of
all IGT/DoubleDown gross revenues vs. 25%
in the prior year period.
Zynga (social casino only) – We estimate
total social casino revenues of $56.2 million;
Zynga reported Poker revenues of $31.7
million ($45.3 million on “gross” basis). We
were forecasting total gross social casino
revenues of $65.9 million; upside was largely
driven by mobile as management noted
that Zynga Poker (mobile) users increased
+19% q/q. The addition of Hit it Rich Casino
(Facebook + mobile) and Riches of Olympus
(mobile only) also helped drive social casino
revenue growth this quarter.
Williams Interactive – Reported gross
social casino revenues of $27.3 million vs. our
estimate of $29.8 million. MAUs and DAUs
were 4.9M and 1.3M, respectively, which were
roughly in-line with our estimates; however
ARPDAU of $0.23 was below our $0.25
estimate. The sequential decline in ARPDAU
was due to reduced marketing & promotional
activities and increasing contribution from
mobile. Specifically, Jackpot Party Casino
continues to perform very well on Google
Play Store; however monetization rates are
lower relative to Facebook & iOS, causing
overall ARPU dilution.
Aristocrat (Product Madness) – Reported
gross social casino revenues of AUD$16.1
million in fiscal first half of 2014 (ending
March 31, 2014), which translates into
US$15 million; we estimate US$9 million
was generated in calendar 1Q14 vs. our
Management & Marketing
prior estimate of $9.9 million. Social casino
revenues were +500% in fiscal 1H14, and
ARPDAU was $0.21 overall and $0.32 for its
top grossing app, Heart of Vegas. Aristocrat
plans to launch its apps on mobile in 2H14.
Outlook
Following 1Q14 results we are maintaining
our industry forecast - we look for the
global social casino game market to reach
$2.6 billion (+31% y/y) in CY14 and exceed
$3.3 billion (+26% y/y) by CY15. We expect
mobile/tablets to help drive the majority
of growth given the favorable secular
trends. We also note the social casino
game genre is relatively underpenetrated
on mobile accounting for less than 10% of
total mobile game revenues versus ~45%
of Facebook game revenues. We also look
for non-English speaking markets to enjoy
accelerated growth over the next few years.
Eilers Research, LLC is a boutique research
firm focused on servicing the gaming equipment,
technology, and interactive gaming sectors within
the global gaming industry. In this article, we provide
highlights from our “Social Casino Tracker – 1Q14 ”,
a quarterly report, which is meant to serve as a useful
tool in determining the market size, revenue estimates,
and market share for the major social casino gaming
publishers. We believe our methodology is unique as
we extrapolate from public data and integrate it with our
own proprietary estimates. Note all revenue estimates
are presented on a “gross” basis (i.e. before platform
fees). For more information about our firm and services
please visit www.eilersresearch.com
iGamingBusiness | Issue 87 | July/August 2014 | 71
Business and Finance

THE GLOBAL IGAMING INDEX

iGaming Business monitors the leading companies with exposure to the iGaming sector. Each company is weighted for the
percentage of their respective business derived from iGaming.

The Index true regardless of what aspect of the sector prior to any seasonal correction from the warm
For the two-month period ending May 31, they operated in. The majority of the strong summer months or reduced poker activity
2014, the iGaming Index ended the period performing companies are either those resulting from the WSOP, which did not kick
down -3.8%, far underperforming the broader companies that typically perform well, such until late May. Any positive momentum right
markets with the S&P 500 and FTSE 100 as Net Entertainment, Optimal Payments now seems to be stemming from the potential
ending up 2.6% and 4.6%, respectively. Since and Playtech, or those fuelled by speculation, of new jurisdictions, including California and
the beginning of the year, the Index has ended such as Amaya (recently linked with Pennsylvania. California’s different interest
slightly down every two-month period, and PokerStars) or Ladbrokes (by the Playtech groups seem to be making solid process,
cumulatively is down over 10% since the relationship). In total, only 11 share prices though not without hiccups. While the various
beginning of the year. advanced, while 19 retreated. factions of tribes now seem to be in alignment,
The financial markets, and the US market With regard to those factors that impact the Morongo and its association with numerous
in particular, have remained incredibly overall Index, good financial news was hard card clubs seem to think that the “bad actor”
strong over the past couple of years, despite to find. It certainly did not emanate from New language, posed by a unified bill, is self-serving.
a mixed economy. While during the period Jersey, with April revenue actually decreasing One does have to question Morongo’s thinking
both Indexes hit all-time highs, the stocks to $11.4m from $11.8m in March. What is on this one… if San Manuel or Pechanga
for the iGaming Index did not. This held worrying is that this flattening of the market is actually thought PokerStars a viable option,

The original iGaming Index was launched on the 1st June 2004 with a base value of 1000. The Index aims to be the most comprehensive indicator and benchmark for the performance of the iGaming sector.

Mkt Cap Share Price (Local Currency)

(in m) Local Close 2-Month Period 52-Week % of % Wtd of

Company Ticker Exchange
29/05/14 Currency 10/03/14 Change % Hi Low 52 wk Hi Index

Playtech Limited PTEC LN $2,004.6 GBP 683.00 6.50 1.0% 836.50 575.00 81.6% 15.0%

Paddy Power PLC PLS DB $2,095.0 EUR 52.45 -5.05 -8.8% 67.95 51.29 77.2% 12.1%

William Hill PLC WMH LN $3,008.0 GBP 345.00 4.00 1.2% 494.50 320.30 69.8% 9.9%

Betfair Group PLC BET LN $1,057.2 GBP 1,007.00 -99.00 -9.0% 1,149.00 812.00 87.6% 7.9%

Bwin.Party Digital Entertainment PLC BPTY LN $978.6 GBP 119.50 -7.10 -5.6% 141.20 108.10 84.6% 7.3%

Betsson AB BETS'B SK $839.7 SEK 230.00 -5.50 -2.3% 247.00 160.00 93.1% 6.3%

Unibet Group PLC UNIB'SDB SK $810.2 SEK 318.50 -6.50 -2.0% 361.00 214.50 88.2% 6.0%

Perform Group PLC PER LN $728.2 GBP 277.00 32.00 13.1% 592.00 180.00 46.8% 5.4%

Optimal Payments PLC OPAY LN $624.9 GBP 387.25 26.21 7.3% 507.45 155.00 76.3% 4.7%

International Game Technology IGT NYSE $1,851.9 USD 12.55 -1.51 -10.7% 21.11 12.22 59.5% 3.7%

Net Entertainment NE AB NET'B SK $479.2 SEK 157.00 3.00 1.9% 164.00 91.75 95.7% 3.6%

888 Holdings PLC 888 LN $442.5 GBP 125.60 -25.10 -16.7% 174.50 124.50 72.0% 3.3%

Zynga Inc ZNGA NASDAQ $1,527.2 USD 3.45 -0.85 -19.8% 5.69 2.71 60.6% 2.4%

Caesars Entertainment CZR NASDAQ $1,570.0 USD 18.23 -0.78 -4.1% 26.47 12.46 68.9% 2.2%

GVC Holdings PLC GVC LN $279.4 GBP 456.50 83.00 22.2% 456.50 272.50 100.0% 2.1%

Churchill Downs Inc. CHDN NASDAQ $919.3 USD 86.17 -5.13 -5.6% 95.84 77.93 89.9% 1.9%

Amaya Gaming Group Inc. AYA V $572.7 CAD 11.46 4.01 53.8% 11.46 5.83 100.0% 1.8%

Ladbrokes PLC LAD LN $1,405.3 GBP 152.60 17.60 13.0% 217.50 129.20 70.2% 1.3%

Lottomatica (GTECH) GTK MI $2,861.7 EUR 20.18 -1.87 -8.5% 29.50 17.99 68.4% 0.6%

MGM Resorts International MGM NYSE $7,547.3 USD 25.75 -0.11 -0.4% 28.39 13.70 90.7% 0.6%

Game Account Network PLC GAME LN $56.4 GBP 102.50 -37.50 -26.8% 178.50 102.50 57.4% 0.4%

NetPlay TV PLC NPT LN $48.8 GBP 16.50 -2.88 -14.8% 23.75 14.88 69.5% 0.4%

32Red PLC TTR LN $42.5 GBP 59.00 -5.50 -8.5% 88.25 49.25 66.9% 0.3%

mybet Holding SE FXXN FF $25.0 EUR 1.27 0.25 25.0% 1.39 0.83 91.4% 0.2%

Scientific Games SGMS NYSE $456.1 USD 8.96 -4.77 -34.7% 19.03 8.96 47.1% 0.2%

Rank Group PLC RNK LN $627.0 GBP 160.50 2.40 1.5% 165.40 128.00 97.0% 0.2%

Bally Technologies Inc. BYI NYSE $1,384.3 USD 59.00 -7.27 -11.0% 82.67 54.83 71.4% 0.1%

Sportech PLC SPO LN $161.7 GBP 78.88 -9.12 -10.4% 99.00 78.50 79.7% 0.1%

Boyd Gaming Corp. BYD NYSE $708.9 USD 10.95 -2.25 -17.0% 14.48 9.20 75.6% 0.1%

Global Cash Access Holdings Inc. GCA NYSE $350.0 USD 8.90 2.04 29.7% 9.99 5.89 89.1% 0.0%

Note: iGaming Business is not licensed to give investment advice. The iGaming Index should not be relied upon as an indicator of the future performance of any company within the index or an indicator of the future performance of the sector.

All Share Price data and Market Capitalization reflected in local currency.
*Index weighting (1) adjusted to reflect exposure to online operations only and (2) all market capitalizations adjusted into US$ at end of the period.

72 | iGamingBusiness | Issue 87 | July/August 2014


wouldn’t they have approached the poker
giant long before this past spring? Regardless,
the Morongo’s antics certainly don’t help
move things forward in California, but it now
seems that’s business as usual in the Golden
State. Many others however think this is just a
temporary issue, and remain hopeful this will
be resolved soon.
While Pennsylvania has made significant
process, it is not without its issues. The State
has held several hearings in recent months
to better assess the prospects of Internet
gambling. At the first hearing, held by the
House Democratic Policy Committee on
May 1, the tone was a bit uncertain with
OnlinePokerReport.com editor, Chris Grove,
noticing a “lot more ‘ifs’ in the Pennsylvania
hearing as opposed to ‘whens’ in the California
hearing”. At a second hearing, hosted by the
Pennsylvania Senate Committee, the topic was
specifically to address the revenue potential
for the state. All of the casino executives in
the state spoke out in favor of the potential for
Internet gaming, calling it a necessity for the
preservation of revenue, with the increased
competition from Maryland and potential of
New York. Well almost all of the executives
were in favor, one cannot forget Andy Abboud,
the SVP of government relations at Las Vegas
Sands, and vocal puppet of Sheldon Adelson.
He claimed that, without basis, the technology
is “not there” to effectively regulate Internet
gambling. He urged caution regarding
poker-only legislation, calling it the “nose of
the camel under the tent.” When asked by the
Republican state senator, Randy Vulakovich,
why Las Vegas Sands’ position differed from
its fellow operators, Abboud called online
gambling a “small market, small opportunity,
but with tremendous liability.” One does have
to question Sands’ thinking here as well. If
online gaming in Pennsylvania is too small for
the big bad Macau operator, then why not just
divest all of your US assets and leave the rest of
us to get on with it. Obviously, it’s not too small
for the rest of your peers. Self-serving hiccups
seem to be the SNAFU of the industry. It is
something that will require some getting used
to though it doesn’t make the process any more
pleasant. It certainly is not doing wonders for
the performance of the share prices of the
publicly listed gaming companies, who seek
to participate and hopefully profit from the
growth in the online gaming market in the
US. These shares are in need of a boost, as
they seem to continually lag in recent months
relative to the broader market.
Index components
(decreasing order of contribution)
Shares in Playtech (+1.0%) still remain quite
volatile this period, once again. In the recent
past, Playtech’s share price has continually
experienced trading outside its support levels,
both to the upside and downside. Factors
affecting the share price included numerous
additional potential taxes imposed by new
and impending regulation, the one-time
unexpected dividend, as well as the surprise
announcement from Playtech Founder Teddy
Sagi that he was selling £326m of his shares.
Playtech’s shares as a result, swung 20-25%
each way in a matter of days. Throughout
April, Playtech’s share price seemed to have
stabilized, with the company completing the
month with very solid Q1 2014 earnings.
Revenues were up 17% quarter-over-quarter,
fuelled mainly by 26% growth in casino. Asia
was also a driver of Playtech’s growth, up 76%,
dwarfing the 3% European revenue growth.
Despite the better-than-expected earnings,
Playtech’s share price didn’t move.
Playtech’s share price demonstrated its
delicate state in mid-May, when it dropped
over a 10% in a matter of two days, with no
reported news to accompany the drop. One
could speculate that Playtech’s decision to pull
out of Belgium could have triggered investor
fears, signaling that Belgium could be the first
of a number of countries that Playtech exits in
its quest to act as the gateway into regulated
markets. With little information from the
company, the brief tumble could also have
been the secondary effect stemming from
the departure of Paddy Power CEO Patrick
Kennedy, which occurred at precisely the same
time as the sell-off.
Paddy Power (-8.8%) William Hill (+1.2%)
and Ladbrokes (+13.0%).
Over the several past months, UK Treasury
has launched a vicious attack on the UK
bookmakers, who face increased taxes on two
fronts, as well as curbs on how they run their
high street betting shops. The grave situation
has created a quite profitable situation for
City hedge funds, which have prospered
Business and Finance
in the wake of uncertainty and volatility by
vastly increasing their short positions on
Paddy Power and William Hill. Short sellers
at hedge funds borrow a security they expect
to fall so they can sell it now, buy back later at
a lower price, then pocket the difference after
returning the shares to the lender.
According to Markit data, by early May,
“interest from short sellers in several British
betting firms has risen over the past two
months, with Ladbrokes shares on loan
climbing to more than 6% of the total available,
up from 4.7%, while William Hill’s shares on
loan have risen to 2.6% from 0.3%.”
On May 1st, the DCMS issued a statement
that saw significant relief to the bookmaker
woes, with the restrictions on the bookmakers
not as bad as initially thought. Most
importantly, there were no changes to what
was potentially the worst-case scenario
of limiting the stakes and prizes on retail
machines, keeping the current £100 max
stake on B2 machines. Rather, the statement
focused on more sensible changes, including
planning consent changes (making it a
requirement for change of class of a high street
shop from a bank, building society or estate
agent to go through planning permission) and
the need for those wishing to wager more than
£50 per stake to use account-based play or
load cash over the counter.
The speculation surrounding the DCMS
had been swirling for about a week prior to
the final announcement, with The Telegraph
leaking the likely outcome the weekend
prior to the announcement. While this was a
significant victory for the bookmakers, from a
share price perspective it was pretty much lost
on City speculators, whose uncovered short
positions could have gone very unprofitable if
the share prices had increased.
And fall they did. The small correction
began on May 13th, which was also the day
of Paddy Power’s Q1 2014 results. The results
were very positive with sports stakes up 20%,
it was news of the departure of Paddy’s long-
time and well-respected CEO, Patrick
Kennedy that may have ignited the mini-
correction. Within three days, Paddy Power
fell 14.4%. Ladbrokes and William Hill fell
8.9% and 7.7% respectively, despite little news
coming from both companies.
The growing interest of shares that are
iGamingBusiness | Issue 87 | July/August 2014 | 73
Business and Finance
shorted is a very public number amongst
City traders, and the increasing short sale of
any company, let alone a sector, certainly acts
an overhang on the share price. The news
of the CEO departure was hardly a surprise.
However, when there is growing consensus
that the share price drop is inevitable,
even the small piece of news can send the
markets spiraling, making the correction a
self- fulfilling prophesy. While William Hill
and Ladbrokes were able to recover from
the mid-May correction, Paddy Power didn’t
bounce back as quickly. This again may be
attributable to the continuing media focus
on Kennedy’s upcoming departure, with no
obvious successor.
Betfair (-9.0%) was not spared in the UK
sell-off this period. With little new news from
the company, the major focus of attention this
period was Betfair’s sizable jump in revenue
and market share in New Jersey. Although the
increase was off of a fairly low-based number,
the results were encouraging, with the market
share doubling from 4.3% to 8.1%. Given the
difficulties of competing with an unknown
brand and no inherent database, the jump in
market size puts Betfair back on the map for
the fight for market share in the state. On the
other side of the pond, the company shared
little news this period. Analysts look to the June
11 preliminary figures and guidance, expecting
the company to focus on cash preservation for
the upcoming months.
bwin.party (-5.6%) shares remained
fairly steady throughout April and halfway
through May, before dropping close to 10%
on May 13, similar to that of the other online
gaming stocks. While the short position on
the stock remains at a medium rating,
according to Markit.com, it was also likely
the contentious battle between the company
and its activist shareholder, Jason Ader that
may have further ignited the sell-off. Ader, a
well-known former gaming analyst,
took a position in the company in the
hopes of creating value for shareholders.
As discussions between the two groups
didn’t materialize as planned, Ader took a
more public and aggressive route,
launching the website Savebwinparty.com.
In early May, tensions increased as Ader
made his intensions of appointing three
board members known, outlaying his
74 | iGamingBusiness | Issue 87 | July/August 2014
rationale in a detailed presentation made
available to the public on the dedicated
website. bwin.party’s share recovered slightly
after the dip, when the company demonstrated
signs of compromising with the activist
shareholder, removing three of prior board
members to pave way for a deal with Ader.
bwin.party’s share price also saw reprieve,
as a result of the company’s executives being
acquitted in France after ten long years of
battle over charges they violated the legal
gambling monopolies in place in France
between 2003 and 2005.
Optimal Payments (+7.3%) saw its share
price recover slightly after losing close to 30%
of value in March. While this may seem like
a big correction, it seems a mere hiccup when
compared to the over 200% increase in the
share price within the last 12 months. Optimal
continues to protect its early stage lead in the
US payments sector, launching their newly
licensed Neteller eWallet in New Jersey with
Borgata and Caesars. In May, Optimal offered
additional investor confidence at their AGM,
stating that trading for fiscal year 2014 is
“materially ahead of market expectations”.
The bullish statement prompted Numis
analyst Ivor Jones to revise forecasts upwards
for 2014, citing management’s laudably
cautious outlook and a recently drifting share
price as reason to purchase the stock. While
Optimal’s share price has yet to break 510
pence since June 2006, Jones believes “the
share price is materially out of step with the
value of Optimal and reiterate our Buy rating
and 600p price target”.
888’s (-16.7% ) share price was unable to
retain its value, dropping-off in mid-May along
with the rest of the sector. At the beginning
of the period, 888 announced solid Q1 2014
results, generating $113.8m revenue, up
11% year-on-year, and ahead of consensus
estimates. While casino was again the star
performer, with a 14% increase in revenue to
$54.3m, it was bingo that stole the show, up 2%
year over year, demonstrating that 888, unlike
many of its closest competitors, had stopped
the downward spiral. According to analyst
Simon French of Panmure Gordon: “The stock
trades on a 2014E EV/EBITDA of 10.3x, but
this still doesn’t adequately capture the group’s
strong trading momentum and attractive US
footprint, in our view. We therefore reiterate
our Buy recommendation and 178p Target
Price.” Morgan Stanley analyst, Vaughan
Lewis, was equally bullish, citing 888 as the
real vehicle to get exposure to the US online
gaming market, given their early dominance in
all three states. Investors obviously didn’t agree.
After seeing its share price gain momentum
over the past few months, Zynga (-19.8%)
lost significant value post-Q1 2014 earnings.
The company underperformed relative to
estimates, generating Q1 revenue of $168m,
down 36% from the corresponding period in
2013. Adjusted earnings came out at $13.8m,
less than half of the $28.7m taken from
Q1 last year. As part of the announcement,
Zynga announced a large-scale management
restructuring, which saw founder Mark Pincus
stepping down from his role as operational
director. Zynga has struggled to build upon
hits like Farmville, Cityville and Words with
Friends. Recent games like Zombie Swipeout,
Slots and Matching with Friends, while well
made, have not proven as popular as previous
titles. In addition, the decline in poker is too
great an event to be offset even by the best new
performing apps such as Hit It Rich!
Amaya’s (+53.8%) share price surged
during the period, closing almost 100% up
on where it stood 12 months earlier. With the
Index period ending before the Amaya-Stars
deal was finally announced on 13th June,
this increase only represented the start of the
sustained run-up in the Canadian company’s
share price which began around 20th May,
coinciding with Industrial Alliance Securities
analyst Neil Linsdell’s issue of a note stating
that Amaya may be eager to “‘trade up to a
larger poker platform.” Puzzled by the 33%
jump in share price from $7.71 to $10.25 in
just four trading sessions and equally puzzled
by the nearly five times spike in share trading
volume on the Friday (May 23rd) following the
US Memorial (Bank) Day, and with no news
from the company capable of driving such an
increase, CalvinAyre.com senior writer Steven
Stradbrooke broke the news that “something
is clearly going on behind the scenes”, and
revealed that their well-informed sources
had indicated that “an agreement is in place
that would see Amaya assume ownership of
the Isle of Man-based online poker colossus,
thereby clearing the way for the Stars brand
to return to regulated US markets.” Amaya’s

2-Month Performance: April-May 2014
1150
FTSE 100 iGaming Index
1100
1050
1000
950
900
850
41736 41743
attempts to dispel any rumours certainly didn’t
deny that discussions could have taken place,
and the stock continued to climb. The day of
the announcement saw a 42% increase to a
record high of C$20 by the close in Toronto, an
almost doubling of the stock price in a week.
The two days leading up to the announcement
also saw traded share volume spike up over
double the previous seven-day session and
share price, jumping 29% over the two-day
period. Clearly, there had been a bad leak from
one of the many institutions participating in
the transaction.
GameAccount Network (-26.8%)
cannot seem to retain investor confidence,
despite announcing earnings this period that
surpassed investor expectations. The company
share’s price starting dwindling down until
April 22, when the company announced an
increase in revenue of 123% year-over-year,
which sent the shares up 11%. The euphoria
was short-lived, as the share began selling
shortly after. It is unclear as to why the lack of
support to the share price, especially because
during the period Betfair, GameAccount’s
operating partner for real-money gaming
in New Jersey, announced a doubling of its
share of the local market. The company also
announced the signing of Osage and Empire
City for its social gaming offering. They will
join Foxwoods in offering a simulated gaming
product to their customers.
Bally Technologies’ (-11.0%) share price
took a small hit on surprise news of another
senior management shuffle, which saw
41750 41757 41764
the return of former CEO Richard Haddrill
at the helm, replacing long-time colleague
Ramesh Srinivasan. According to Deutsche
Bank Analyst Andrew Zarnett, “there will
be considerable speculation around this
move as it is sudden, surprising, and in a
way, somewhat confusing.” According to
Zarnett, in his prior tenure, “Mr. Haddrill
did a tremendous job as the BYI CEO”. His
departed in 2012, “for reasons we never felt
we truly understood, which now make even
less sense in our view.” Analysts at Union
Gaming saw the shakeup as a much-needed
catalyst to ignite the challenged sector. Just
after the period completed, but before time of
writing, Bally finally threw their hat in the ring
to finally join the rest of their major suppliers
in the social casino sector, acquiring Israeli-
Based Dragonplay for $100m in cash, working
capital and earn-out, totalling 5x EBITDA for
the social gaming company.
Global Cash Access (29.7%) fought back
hard, after receiving the blow last period that
they would be losing Caesars Entertainment
as a client for a second time. GCA initially
lost Caesars back in December 2010 as the
payment processing arm for its casino floor.
Within a year, GCA then purchased the assets
of MCA Processing, effectively buying back
50% of the business. In March, however, the
two parties once again severed ties when
GCA refused to accept Caesars’ new payment
terms, demonstrating the business is still
highly price sensitive. The result was negative
on GCA’s share price going into April. Despite
Business and Finance
41771 41778 41785
losing Caesars, GCA defied investor weariness,
announcing better-than-expected earnings,
prompting Deutsche Bank Analyst, Andrew
Zarnett, to issue a positive note titled, A Beat
then a Raise! outlining GCA’s potential upside,
despite recent setbacks.
Looking forward
In the US, we look to New Jersey signs of
growth, as the May figure didn’t pose well.
California and Pennsylvania remain near term
hopes, as the summer sessions come to a close
in the next few months.
Melissa Blau has been in the
online gaming sector for eight
years as both an operator and
advisor. In her current capacity,
Melissa is an advisor focused on
bridging US and European interests.
Through her consulting company,
iGaming Capital, she has been advising mainly land-
based companies in developing their online gaming
strategy as well as informally advising on M&A
opportunities and capital raising.
Melissablau@iGamingcapital.com.
iGamingBusiness | Issue 87 | July/August 2014 | 75
 Management & Marketing
Upholding California’s
Competitive Edge
The amendments to California’s two proposed iPoker bills recently
recommended by 13 tribal leaders fly in the face of players’ rights and
consumer fairness, argues John Pappas of the Poker Players Alliance.
As the debate around regulating online
poker in California progresses into yet
another year, state legislators, consumer
advocates, poker players, casinos and tribal
leaders have all weighed in on how to
implement important consumer protections
while ensuring the state can benefit from a
regulated online poker market.
As an advocate for the game of poker
and an avid player myself, it’s my job to
provide the players’ perspective to ensure any
proposed online poker legislation provides a
fair and safe environment for play. Recently,
13 tribal leaders sent a letter to the authors of
two proposed California online poker bills,
state Senator Lou Correa and Assemblyman
Reginald Jones-Sawyer, to offer their
recommended amendments. While it is
encouraging that all parties are engaging in
the debate, there are specific provisions being
offered by these tribes that simply fly in the
face of players’ rights and consumer fairness.
At the top of the list is the so called “bad
actor” provision, which essentially seeks
to offer a competitive advantage to some
operators by precluding others from even
being considered for a license. Arbitrarily
based on the 2006 Unlawful Internet Gaming
Enforcement Act (UIGEA) as a benchmark
for suitability, the provision is not grounded
in the actual law. Therefore, these “bad
actor” guidelines are baseless as both the US
Department of Justice and the United States
Court of Appeals for the Third Circuit have
offered opinions that UIGEA did not make any
form of gaming illegal.
Digging a little deeper, it is obvious that
the provision mainly seeks to exclude the
popular online poker provider PokerStars
and its California-based partners including
76 | iGamingBusiness | Issue 87 | July/August 2014
The Morongo Band of Mission Indians, the
Commerce Club, the Hawaiian Gardens
Casino and the Bicycle Casino from
entering the marketplace.
Clearly not every online operator deserves
a state license, which is why establishing a
formal licensing process is so important. But
allowing businesses to write into the law
which of their competitors should be excluded
before they are assessed by regulators is a
clear political overreach and will only serve to
unnecessarily de-rail this multi-year debate.
Only state regulators can effectively hold
potential licensees to the highest levels of
accountability and ethics, and for good
reason. Regulators are in the strongest
position to conduct a thorough vetting
of potential licensees and their business
partners, including an audit to ensure their
technology protects the integrity of the game
and against underage and problem gambling.
Regulators are also the most qualified to set
high standards to thwart fraud and abuse of
customers, and enact regulations to prevent
money laundering and ensure tax compliance,
among other standards.
Furthermore, players from across the
state have spoken very clearly that they
want PokerStars as part of the market. A
recent Poker Players Alliance survey of
our members found that more than 95
percent wanted the opportunity to play on a
PokerStars site or platform.
The truth is that competition motivates
companies to improve their services and
meet the needs of their customers. Beyond
establishing a fair marketplace for players,
the potential for economic growth in the state
is estimated to be as high as $845 million in
state revenue to California and an additional
2,657 jobs within five years as a result of an
online poker market. And yet, if legislators
exclude the most preferred online poker
brand, the market will be smaller and so will
revenues and jobs available to the state.
Players are equally concerned about a
provision to penalize Californians playing on
unlicensed websites. Though thousands of
Californians are playing poker on unregulated
websites because the state does not currently
regulate it, they would prefer to have access
to licensed operators. I believe players will
migrate to those licensed websites when they
are available as we have seen most recently in
New Jersey. However, penalizing players for
accessing unlicensed websites is short-sighted,
misdirected and will do nothing to address
the main issue of effectively keeping unlawful
operators out of the state.
Advancements that have led us into the
21st Century have been bolstered by smart
technologies and competition, most of
which was born in the heart of California’s
Silicon Valley. Allowing the state’s online
poker market to be monopolized would only
stifle innovation and expose consumers to
the whims of a few controlling entities. It is
time our lawmakers in California embrace
the state’s innovative nature and take these
important steps toward advancing good
public policy for all residents.
John Pappas is Executive
Director of the Poker Players
Alliance (PPA). John has
been engaged in high-level
policy and political consulting
in Washington, DC. for the last
14 years. He is a regular commentator
for legal and legislative issues related to poker, and
has appeared on FOX News, CNBC, MSNBC, CNN,
FOX Business and numerous local news programs to
discuss and debate Internet gaming policy.
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US operators face
staffing challenges
While the slow start to US iGaming has restricted operators’ hiring budgets,
there are also other factors impairing their ability to recruit and structure
interactive teams, writes Luke Cousins of Pentasia.
With the regulated US market little
more than 12 months old, the process of
structuring and hiring their interactive
teams is still a work in progress for
licensed iGaming operators.
For the majority of the US land-based
casino groups active in Nevada, New Jersey
or Delaware, this is the first time they have
ever had to build interactive teams, whilst
for European operators, they are grappling
for the first time with having to build US
entities in line with regulatory frameworks
and their respective US strategies.
There are however two underlying
factors at work which are making it
challenging for both US casinos and
European operators to hire the required
talent and structure their interactive
businesses on the ground in the US. The
first, and main, issue is that with the vast
majority of existing talent in the regulated
iGaming Industry being based over in
Europe, visa restrictions have created a
log-jam in bringing experienced candidates
to the new market. Secondly, US nationals
have been slow to join a new and still small
industry which is not really in the public
eye outside of New Jersey, where only a
small percentage of hired talent currently
resides. It is in New Jersey where the vast
majority of interactive teams are being
built, for several reasons, the main ones
being the broader regulatory framework
and geographical proximity to Europe.
Here I will examine how these factors,
amongst others, are affecting the hiring
and structuring of US iGaming businesses
across five key areas: executive, marketing,
operations, technical and product.
Executive
The ‘No.1’ hires of the US and European
operators demonstrate the biggest
difference between their respective
requirements. The US casinos have
undertaken lengthy executive search
processes to attract the top European
iGaming talent, because their organisations
lack that previous experience in the
industry. These candidates have been
sourced from the leading brands and
from C-level positions, having had
previous experience of managing large
P+L responsibilities on behalf of
European iGaming businesses. The
successful candidates have come
from strong marketing and product
backgrounds, to ensure their company’s
strategy is being realized across both
divisions. It’s worth bearing in mind here
that five large US casino groups building
interactive divisions are yet to launch
Management & Marketing
in New Jersey, and have recently began
or are in the process of hiring their No.1
interactive employees, in order for us
to be able to effectively analyse wider
recruitment trends in their companies.
As for the European operators, which
already have the product and iGaming
experience in place, they have hired
senior US nationals to give them local
knowledge and an understanding of the
US consumer market. These candidates
have broadly been recruited from large
US media and marketing companies,
and from amongst the few US nationals
with experience of regulated US real-
money and social gaming. It has
proven valuable for these candidates to
understand and have connections to
media and marketing agencies, to assist
their initial marketing strategy.
Across both sections of the industry,
we have seen a large number of
consultants used to manage strategy until
these hires are in place, mainly to help
guide the hiring process and manage
ongoing vendor selection discussions.
Marketing
Marketing has seen the most hiring
activity of any area in the developing US
iGaming sector. With product being the
responsibility of the product partners
and currently being relatively similar
across the licensed operators, the battle
for market share is currently based on the
iGamingBusiness | Issue 87 | July/August 2014 | 79

“With the vast majority of existing talent in the
regulated iGaming Industry being based over in
Europe, visa restrictions have created a log-jam in
bringing experienced candidates to the new market.”
marketing strategies being undertaken by
the various operators.
For European operators, the hiring
strategy reflects the level of marketing
responsibilities they are transferring from
Europe to the US, which is still a gradual
process. The majority of companies now
have their VP Marketing in place, who has
assumed responsibility for building a team.
This has however happened at a slower
pace than these companies previously
forecast, reflecting the slow growth of
the regulated market. Eventually, these
companies plan to have marketing teams in
place including specialists in the following
areas: acquisition, campaign management,
affiliates, media, product, retention, VIP,
brand, digital, social media, analysts
and PR, as well as teams of executives in
support of these roles. However, due to
hiring budgets being limited by the slow
growth of the New Jersey market, marketing
teams for the launched operators currently
consist of between 2 – 12 employees.
However, this is increasing each month.
The US operators have to date been
more cautious with their marketing hires,
and currently have the VP Marketing in
place with very few hires underneath them,
supported by other resources from vendors,
consultants, European partners and their
existing land based talent. This situation
will however develop as they gain more
confidence in the market and have a larger
pool of consumers to approach. When they
do expand further, their teams will follow a
similar size and structure to that previously
outlined for the European operators.
Operations
All licensed operators are required to
have certain number of operational staff
on the ground in New Jersey in line with
the regulation. This involves Fraud and
Risk teams as well as a compliance officer.
The size of teams varies depending on
the volume of depositing players being
generated by the business. The largest teams
can have up to 25 people, the smallest being
five. Companies have varying timelines to get
these people in place depending on when
they received the licence and how much
traffic they are generating. These candidates
have generally come from retail banking
backgrounds, and are a mixture of
Spanish and English speakers.
Many operators are still using
customer service teams through
partnered businesses, whilst they build
their own operations. We see this being
a high level of focus for companies at the
end of 2014, as following the launch of
the products and having achieved a level
of comfort with their marketing structure,
they will want to bring more operational
control in house.
Technical and product
These areas have received the least
attention so far in New Jersey. Operators
currently have limited product offerings in
place as suppliers deliver their interactive
products under their guidance, therefore
apart from the required IT Security staff
of one or two people in the AC Casinos
managing the server requirements, there
has been very limited hiring.
Management & Marketing
There are however signs of recent
development in these areas, and we
have recently experienced the leading
companies initiating searches for project/
client service managers to take ownership
of the third-party relationships to manage
the multiple product integrations, whilst
also ensuring they receive the most
competitive commercial agreements. Once
in place, they will assume responsibility for
detailed competitor analysis.
The recruitment landscape in the US,
and specifically New Jersey, will continue to
reflect the growth of the market, and with
other States presumed to regulate in the
near future, greater opportunities will be
provided for candidates to enter this new
and exciting market.
Luke Cousins is Principal
Consultant for Pentasia (U.S.)
Inc. He joined Pentasia in
October 2008, having spent
the last two years successfully
recruiting for the senior finance market
with Michael Page International. A graduate of Brunel
University, Luke is responsible for placing personnel
into the iGaming and E-Payments industries.
iGamingBusiness | Issue 87 | July/August 2014 | 81
 201
Jurisdictions
Jurisdictions
2014

JU
RI N

S
S DICT IO
ALDERNEY
Type of Company Entity Available for Category 2: B2B Licence Restrictions on Jurisdictions from
iGaming Firms (resident and non-resident): which you can take Wagers
Limited companies. Carry a fixed annual fee of £35,000. There are no restrictions.
Associate certificates (typically for key
Corporation Tax Rate software suppliers) carry a fixed annual fee
0%. of £10,000. Temporary use licenses (typically Contact Details of Government
for disaster recovery purposes) carry a fixed Department or Regulator
Additional Gaming Tax Rate annual fee of £10,000. Robin Le Prevost
No additional taxes. Director of E-Commerce Development
Licence Duration States of Alderney
Minimum Share Capital for an 12 months (rolling). PO Box 1015, St Anne’s
iGaming Company Alderney
£2.00. Do Local Banks Process Online Gaming British Channel Islands
Transactions? GY9 3HT
Security Requirements/Indemnity and Yes. T: +44 [0] 207 993 8564
Ring Fenced Protection for Player M: +44 [0] 7781 109 809
Deposits Bandwidth Type Available
A variety of mechanisms are acceptable All types of bandwidth are available from a
commensurate with the business plan and variety of suppliers.
commercial performance of the operator.
Software Testing Requirements
Licence Fee Yes, Technical standards are published
Category 1: B2C Licence: by the Alderney Gambling Control
The licence fees are based on annualised Commission (AGCC).
Net Gaming Yield (NGY), as follows:
• NGY up to £1m - annual fee £35,000 Reporting Requirements to the
• NGY of £1m to £5m - annual fee of Gaming Regulators and/or Financial
£70,000 Regulator
• NGY of £5m to £7.5m - annual fee of Periodic financial reports are required.
£100,000
• NGY in excess of £7.5m - annual fee of Anti-Money Laundering Policy for
£140,000 iGaming Firms
(In the first year of operation the licence fee is All operators must comply with the AML
£35,000, irrespective of NGY). legislation in force.

82 | iGamingBusiness | Issue 87 | July/August 2014

www.alderneygambling.com

Alderney.
The IT, B2B and
support service hub at
the heart of Europe.
World leading regulation offering a perfect environment from which to offer
eGambling IT services into all major regulated markets. Technical capability without
limits combined with a supportive government and a world class leading commercial
environment. Alderney is the leading choice for the world’s eGambling industry.

PO Box 1015, Alderney, British Channel Islands, United Kingdom GY9 3HT
Phone: +44 (0)2079 938 564 Mobile: +44 (0)7781 109 809
Email: info@alderneygambling.com

TEAM
States of Alderney
HOSTING, TELECOMMUNICATIONS & TECHNICAL
Sure International, Continent8, C5 Alliance, JT, Long Port
LEGAL, FIDUCIARY, RELOCATION & CONSULTANCY
Carey Group, Collas Crill, Fort Group
Jurisdictions
Jurisdictions
2014
Alderney: five licensee promises
Alderney has made a number of pledges to licensees aimed at ensuring its
continued excellence as a jurisdiction. Alderney Gambling’s Robin Le Prevost
runs us through them.
Alderney is a major player in the online
gambling industry and transmits more Internet
eGambling traffic than any other location on
the globe. This English-speaking Channel
Island undertakes more than the combined
activity of its three European offshore rivals.
Alderney, part of the Bailiwick of Guernsey,
is the world’s most progressive jurisdiction
and provides a centre of excellence for
eGambling operators. It has made five
promises to its licensees:
1) We facilitate access to important
markets for operators.
The secret to Alderney’s success is the balance
struck between the business environment
and strong but pragmatic regulatory controls.
Alderney’s regulatory team has an innate
understanding of the risks to players and
the requirements of the operators. Their
unrivalled reputation among other regulators
enables licensees to operate legally within
regulated markets around the world.
Alderney is not a full member of the
EU; its ties are through its association
with the UK. Initially, this was seen as
disadvantageous but the rise in national
licensing has created a more level playing
field for all operators. Increasingly
qualitative standards of regulation are being
applied, rather than geographical location
being the imperative. All of the major EU
economies with national licensing schemes
have now taken this approach.
2) Our trusted jurisdiction has a
reputation for being competitive,
innovative and responsive.
The Alderney Gambling Control
Commission’s unrivalled reputation among
other regulators stems from the standards
it enforces to ensure that all electronic
gambling is conducted honestly and fairly, in
compliance with good governance, remains
free from criminal influence and protects the
interests of the young and the vulnerable.
Alderney’s regulatory standards give
84 | iGamingBusiness | Issue 87 | July/August 2014
players confidence and provide assurance
to investors and other institutions. Licensees
consider the jurisdiction a well-run and
stable regime with a prompt, pragmatic,
flexible, professional approach.
Alderney’s much-admired regulatory
regime has formed the foundation for
many new jurisdictional entrants to online
gambling regulation and Alderney has
more inter-regulatory agreements than any
other jurisdiction.
Alderney was one of the first members
of the OECD White List and long recognised
as a top tier jurisdiction, meeting or
exceeding all OECD, EU and UK standards
on transparency and information exchange.
3) Our operators benefit from the most
competitive tax environment.
Many regulated markets impose their share
of taxes on the eGambling sector. In this
world of multiple licensing authorities and
taxation at the point of consumption, there
are real tax advantages to being based in
Alderney, including the key areas of direct
taxation, indirect taxation, gaming duties and
personal taxation for key employees.
Alderney is outside of the EU and has no
VAT, meaning services provided to licensees
with a Place of Establishment outside the EU
are not subject to VAT or other indirect taxes.
Alderney does not levy gaming duties
on licensees, so does not compete with other
regulated markets that levy duty at the point
of consumption, so Alderney licensees avoid
double taxation. The island has a 0% corporate
tax rate, no capital taxes and low employment
and property taxes. It also has a highly
competitive personal taxation environment,
with no inheritance or capital taxes, 20%
income tax with generous allowances and low
social security contributions.
4) We provide an unrestricted, resilient
and secure technical environment.
Alderney has grown from four licensees in
2004 to well over 100 licensees and certificate
holders, many holding multiple licences. The
technical infrastructure supporting the sector
is located in the neighbouring larger island of
Guernsey and the Bailiwick’s (a term which
covers both Alderney and Guernsey) thriving
finance industry has developed accordingly.
Guernsey is linked by sub-sea cable to
the French power grid however on-island
generating capacity is also maintained to
meet peak demand resulting in an excellent
level of security of supply.
The Bailiwick is at the centre of a network
of unlimited capacity and truly resilient and
secure telecoms links into international hubs,
which are operated by a number of providers
in a competitive liberalised market. All links
are SDH protected with leading edge DDOS
protection embedded both upstream and
at Data Centre levels. Performance of the
links is comparable with onshore facilities
with transmission speeds and latency giving
virtual presence in London or Paris.
5) We guarantee a welcoming and
cost-effective business and lifestyle
environment
The Bailiwick has its own business friendly
legal and taxation regimes and a stable
government that is debt-free.
The Bailiwick has a pool of staff with
eGambling skills, plus the transferable
skills of some 7,000+ staff employed in the
financial services sector and a ready supply
of experienced individuals to undertake
non-executive and advisory roles.
Personnel who relocate will enjoy a
lifestyle with a relaxed, continental flavour
and mild climate, a safe environment for
children, first class education and health
systems, and frequent air and sea links to
the UK and Europe - with London Gatwick a
45-minute commute away.
Robin Le Prevost is Director of eCommerce
Development at Alderney Gambling. Born
in Guernsey and having worked extensively
abroad, Robin joined Cable and Wireless
in 2000, assuming responsibility for the
growing e-gambling community. He was
head-hunted by the Government of Alderney in
2005 to promote the island as the leading Jurisdiction
in the eGambling sector.
Jurisdictions
Jurisdictions
2014
JT launches SOC and cloud
solution for iGaming
Telecoms firm JT Global was recently awarded SOC accreditation and
launched its cloud platform, with particular benefits for iGaming companies.
We spoke to Global Enterprise Account Director Glyn Harris to find out more.
Channel islands-based telecoms firm JT
Global was recently awarded the highly
sought after Service Organisational Control
(SOC) accounting standard. According to
the company, the benefits of SOC 2 & 3 to
the company’s current and future clients is
that it “demonstrates to JT’s client base that
its practices what it preaches.” Unlike some
reports and standards which just select one
day of a trading year, JT was heavily audited
for a whole six-month trading period from 1st
September 2013 to 28th February 2014, and
was able to demonstrate that it had adhered
to its rigorous controls without a single
deviation. This enables clients to host with JT
completely safe in the knowledge that their
data and systems are in very safe hands.
JT’s new SOC accreditation also lends
particular advantages to JT’s recently
launched Cloud Platform (IAAS), providing
reassurance to the company’s clients that JT
has one of the most advanced and flexible
cloud platforms on offer, and that its state-
of-the-art data centres have the systems and
controls in place to house the platform within
the very best physical environment available.
We spoke to JT’s Global Enterprise Account
Director Glyn Harris to find out more about
the benefits to iGaming companies.
Where is your JT Cloud platform hosted?
Our Managed Cloud Platforms (MCPs) are
located in JT’s owned and managed Data
Centres in Guernsey, Jersey, and our partner’s
data centres in London and Amsterdam. We
also have access to our partner Dimension
Data’s Global cloud platforms across the globe.
Tell us why JT Partnered with Dimension
Data (DD) in the cloud space.
86 | iGamingBusiness | Issue 87 | July/August 2014
JT initially looked at manufacturers, like
IBM, HP, to see whether we could buy the
platform outright and create all our own
IP and processes around our own cloud
service. Through the various procurement
evaluations, we assessed the time-to-market
impact and the resources. The partnership
with Di Data, from concept and contract
to go live was 20 weeks. If we had brought
our own platform in, designed our own
governance and process around it, we would
not have been able to achieve a quick-to-
market strategy. The other reason is that
it’s built on enterprise grade carrier class
hardware, and the reference architecture
around the DD globe cloud location is the
same. It allows us to tap into the global cloud
deployment around the world.
Is JT experiencing a high demand for
cloud services?
Yes. Since we launched our cloud services in
December, the interest has been very pleasing.
For an industry which is constantly searching
for high value, speedy and secure investment
returns in technology, the iGaming industry is
now taking cloud services seriously, allowing
companies to access products, applications
and services from any location, at any time.
Operators are able to manage and run the
service themselves, which means they are
able to run faster and more smoothly, without
change control delays due to service provider
contract amendments, thus the cloud is the
perfect system for gaming operators.
Can cloud services really help
reduce infrastructure running costs
and overheads?
In our experience, iGaming companies
traditionally build their systems in our JT data
centres, and such systems and applications
are deployed on their own server assets,
meaning a move to cloud would require
a relocation of applications and services,
which need to be compatible with the cloud
system architecture. One of the benefits of
our cloud platform is that the operator’s
systems engineers get access to a number of
operating systems to ease migration upheaval.
While moving to the cloud does require some
initial investment, based on our experience
and customer feedback, this investment is
mitigated by the overall savings. For example,
traditional operating costs change to benefit
the cloud customer, support and hosting
costs are reduced or removed completely,
and infrastructure support moves away
from the operator’s core IT team to the cloud
supplier, in this case JT. Those organisations
using the JT cloud become more agile and
are able to take advantage by being able to
rapidly bring games to market.
If organisations already have their own
server infrastructure technology, why
not just expand buy and add more?
The real economy of scale of cloud comes in
its expandability. It’s fair to say that a large
number of iGaming operators may have
sufficient server capabilities for normal
operations, but there are times when that’s not
enough, such as event campaigns around big
sporting events and new game promotions.
The JT Cloud responds well to demand due to
the elasticity and on-demand culture we are
seeing. And let’s not forget ageing hardware.
Eventually that server or servers are going
to run out of capacity, If you think about the
cost of replacing that server, you might spend
£5,000 to £8,000 by the time you’re done with
software, support, and so on. That high capex
spend can be converted to services that can
cost as little at £70.00 per month.
Now the Channel Island’s
first and ONLY SOC
Certified data centres

JT is the only Channel Island data centre provider to achieve the

coveted ‘SOC’ quality certification, underlining our role as the Trusted
trusted partner of choice for finance and professional services. Approved
Secure
Worldclass
As the Channel Island’s largest local provider of data hosting
services, this globally renowned certification recognises the
unrivalled standard of JT’s data centre facilities delivered through
continued investment and first class technical expertise.

For more information or to register for a tour of our data facilities

please visit www.jtglobal.com/datacentres/Guernsey
 201
Jurisdictions 2014

JU
RI N

S
S DICT IO
GIBRALTAR
Located at the southernmost tip of Europe, Licensed Operators Gambling Activities
Gibraltar currently licences operators Ladbrokes (International) Plc Fixed-odds
under the Gambling Act 2005. Gibraltar Ladbrokes Sportsbook LP Casino
Fixed-odds
began offering licenses to online gaming
Victor Chandler (International) Ltd Fixed-odds
companies in the mid-to-late 90s. Currently, Casino
the country licences online sportsbooks, Stan James Plc Fixed-odds
online casinos, and online betting exchanges Casino
as well as land-based casinos (Gala Casino). bwin.party digital entertainment Plc Fixed-odds
Casino
Gibraltar primarily licences operators
Spielo International (Gibraltar) Ltd Casino
with a proven track record and those who 32 Red Plc Casino
establish a bricks-and-mortar presence in Fixed-odds
Gibraltar, all of which requires an extensive Digibet Ltd Casino
vetting and due diligence process. For Fixed-odds
Cassava Enterprises (Gibraltar) Ltd (888.com Plc) Casino
fixed-odds betting operations, gaming tax is
Fixed-odds
currently levied as from April 1, 2005, at one Mansion Online Casino Ltd Casino
percent of the turnover up to £42,500,000 of Onisac Limited Casino
annual turnover with the gaming tax capped Prospreads Limited (formerly FuturesBetting.com Ltd) Financial Spread Betting
at £425,000 per annum, with a minimum WHG (International) Ltd Casino
WHG (International) Ltd Fixed-odds
annual tax payable of £85,000.
Hillside (Gibraltar) Ltd (Bet365 Group Ltd) Casino
Betting exchanges are currently taxed on Petfre (Gibraltar) Ltd (Betfred) Fixed-odds
the same basis as fixed-odds operations. Casino
For Internet casinos, gaming tax is currently Gamesys (Gibraltar) Ltd (Entertaining Play Ltd) Casino
levied at one percent of the gaming yield or Approved Betting Products
Probability (Gibraltar) Ltd Casino
gross profit. The maximum and minimum
TSE (Gibraltar) LP (Betfair Group) Betting exchange
cap is the same as for fixed-odds betting. Casino
tombola (International) Plc
Nektan (Gibraltar) Ltd Casino
BetClic Everest (Gibraltar) Ltd Casino
Fixed-odds
Address IGT (Gibraltar) Ltd Casino (B2B)
The Gambling Division Gala Interactive (Gibraltar) Ltd Casino
HM Government of Gibraltar Coral Interactive (Gibraltar) Ltd Fixed-odds
Ministry of Education, Financial Services, Bally Technologies (Gibraltar) Ltd Casino (B2B)
Gaming, Telecommunications and Justice (incorporated SHFL RGL No. 61)
Ongame Network Ltd (Amaya Inc Group) Casino
Suite 771, Block 7, 7th Floor, Europort
EU Lotto Ltd Fixed-odds
GX11 1AA, Gibraltar
Odobo Ltd Casino (B2B)
T: 00350 20064142 Scientific Games (Gibraltar) Ltd Casino (B2B)
F: 00350 20064150 (incorporated WMS RGL No. 068)
E-mail: gamblingcommissioner@gibraltar.gov.gi Realistic Games (Gibraltar) Ltd Casino (B2B)
https://www.gibraltar.gov.gi/remotegambling NE Services Ltd (NetEnt) Casino (B2B)

88 | iGamingBusiness | Issue 87 | July/August 2014

Truly Connected,
State of the Art
Data Centres
www.gibtele.com

FIXED MOBILE INTERNET

 Online
Sports Betting
A Market Assessment and Outlook
Second Edition

t
por
A re aming
iG s
by sines
Bu

Online Sports Betting: A Market Assessment and Outlook (Second

Edition) examines the main issues surrounding the growing digital
sportsbook industry.

Key Features:
• Global betting market overviews by region
• Strategies into areas of opportunity: how you can expand and grow
• Important factors affecting growth in the industry and how to avoid
the pitfalls
• Discover the marketing strategies of online and mobile sportsbooks
• Regulatory issues and the growing role of smartphones and how it’s
affecting sports betting offerings
• Social media and in-play betting

The report will also feature commentary from leading executives in the
digital gaming industry who provide their own expert views on what
is next for sports betting. It will provide case studies of major digital
sportsbook operators, betting exchanges and suppliers and determines
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today quote 14FSport1 and email
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Call +44 (0) 207 954 3489 to order your
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copy of Online Sports Betting today. The leading provider of information for the online gaming industry.

JU
RI
S DICT
ISLE OF MAN
Type of Company Entity Available for
iGaming Firms
An Isle of Man company must be incorporated
in the Isle of Man in order to be licensed.
Corporation Tax Rate
0%.
Additional Gaming Tax Rate
Duty payable on retained gross profits:
• Duty payable on retained gross profits:
• For gross gaming yield not exceeding £20
million per annum: 1.5%
• For gross gaming yield of more than £20
million per annum, but not exceeding £40
million per annum: 0.5%
• For gross gaming yield exceeding £40
million per annum: 0.1%
The exception is football pools which
carries a 15% duty rate.
Minimum Share Capital for an
iGaming Company
By discussion as part of licence
application process.
Security Requirements/Indemnity
for Players Deposits
Operator must demonstrate full protection
of player funds. Legislation ensures a
separate account for player funds will
legally protect them.
Licence Categories
All products (sportsbook, casino, p2p etc) fit
under one licence, no additional classes of
licence required
N
S
IO
Licence Duration
Five years then renewal is required.
Licence Fee
Initial application and 5 year renewal
fee £5,000.
Standard online licence annual fee £35,000.
Sub-licence annual fee £5,000.
Network services licence annual fee
£50,000.
Licence Application Timescale
Within 12 weeks of receipt of application
Operational Requirements
2 x local Directors, MLRO & Designated
Official (all these can be supplied by local
CSPs)
Banking performed in IOM
Players registered on IOM servers
Do Local Banks Process Online
Gaming Transactions?
Yes.
Bandwidth Type Available
Private Circuit and MPLS connectivity
solutions are available and provided over
two resilient fibre optic rings and one
point-to-point cable.
Software Testing Requirements
Certificate from an approved testing
house is required as part of the licence
application process. Details can be
obtained from the Gambling Supervision
Commission.
201
Jurisdictions 2014
Reporting Requirements to the Gaming
Regulators and/or Financial Regulator
Access to the business, its systems and
audited accounts when requested by the
Gambling Supervision Commissioners.
Anti-Money Laundering (AML) Policy
for iGaming Firms
In line with international standards for
money laundering and terrorist financing,
all online gambling licence holder must
adhere to the Money Laundering and
Terrorist Financing (Online Gambling)
Code 2013. Guidance notes can be
found on the Gambling Supervision
Commissioner webiste.
Restrictions on Jurisdictions from
which you can take Wagers
It is the responsibility of the operator
to make these decisions, however; the
Gambling Supervision Commissioners may
ask for confirmation that independent legal
advice has been taken if they have a concern
about a specific target market.
Details of Government
Department or Regulator
Steve Brennan, CEO, Gambling
Supervision Commission
E: gaming@gov.im
T: +44 (0)1624 694331
W: www.whereyoucan.com/egaming
iGamingBusiness | Issue 87 | July/August 2014 | 91

Jurisdictions 2014
JU
RI
S DICT
MALTA
Type of Company Entity Available for
iGaming Firm Remote
Gaming Companies in Malta are regulated
by the Remote Gaming Regulations, 2004
(LN176/2004) under the Lotteries and
Other Games Act, 2001 (LOGA). Licensees
are classified according to the manner they
assume game risk.
Corporation Tax Rate
35% tax on companies with certain
rebate claims.
Additional Gaming Tax Rate
Class 1: €4,658 per month for the first six
months since the ‘go live’ date, and €6,988
per month thereafter.
Class 2: 0.5% on gross amount of stakes
accepted.
Class 3: 5% on real income.
Class 4: Exempted from tax for the first six
months, €2,329 per month for the next six
months and then pay €4,658 per month for
the full duration of the licence.
Class 1 on 4: €1,165 per month since the
‘go live’ date.
The maximum gaming tax payable annually
by one licensee shall not exceed €466,000.
Minimum Share Capital for an
iGaming Company
Classes 1 & 2: €100,000. Classes 3 & 4:
€40,000 The Minimum Share Capital
must be issued and fully paid up.
Security Requirements/Indemnity for
Players Funds
The Remote Gaming Regulations (2004)
92 | iGamingBusiness | Issue 87 | July/August 2014
201
N
S
IO
require that player funds are held
separately in a Client’s Account. The LGA Contact Details of Government
monitors the Accounts monthly and Department or Regulator
reviews bank statements to ensure that the Lotteries and Gaming Authority
funds are covered. Suite 1, Level 3, TG Complex, Brewery
Street,
Licence Fee Mriehel, BKR 3000 Malta
€8,500 annually. W: www.lga.org.mt
E: info@lga.org.mt
Licence Duration T: +356 2546 9000
Five years, this is renewable thereafter. F: + 356 21 316 599
Do Local Banks Process Online
Gaming Transactions?
Yes.
Bandwidth Type Available
Multi-fibre links connected to various
international carriers at Gigabit capacities
such as Cable and Wireless, Telecom Italia
and Interoute.
Software Testing Requirements
RNG test certificate and adequate systems
review processing. A certifier is appointed
by the LGA to audit the process before
granting a licence.
Reporting Requirements to the Gaming
Regulators and/or Financial Regulator
Bi-annual Accounts, Incident Reports,
Monthly Players’ Balances, Clients Funds’
bank statements and Decommissioning of
gaming and control systems equipment.
Restrictions on Jurisdictions from
which you can take Wagers
None.

MALTA REMOTE GAMING COUNCIL
SERVING THE REMOTE GAMING COMMUNITY IN MALTA
The Malta Remote Gaming Council’s
main strategic objective is to create
a dynamic regulatory environment
for Remote Gaming. The Council
was launched in March 2005 and
has operated successfully since.
WHY SHOULD I JOIN?
• More members, more voice!
• Voice your opinion on matters
that affect you!
• You’ll be part of a lobby group
that defends your rights.
The Malta Remote Gaming Council
Tower Business Centre, Tower Street, Swatar BKR3013, Malta-EU
The Malta Remote Gaming Council
is made up of all stakeholders in the
remote gaming industry including
licensed operators, data carriers,
Internet service providers, lawyers
and professional services providers.
• The council listens and presents • Be part of a discussion forum.
a common front.
• Keep up to date with events
and news.
• Stay aware of local legislation.
WE’RE
HERE TO
SERVE!
The Council’s goal is to serve as an
ongoing discussion forum giving
valuable feedback to the Authority
on points raised by the stakeholders
enabling it to keep abreast with the
latest developments in the industry.
• To help promote fair gaming
and build credibility.
info@mrgc.org.mt
www.mrgc.org.mt
 Data Centre

H2 forecasts:
Along with California, New York and Pennsylvania are seen as the next viable intrastate markets in the US. With
iGaming bills in play in both, iGaming Business’ data partner H2 Gambling Capital provides exclusive data and
forecasts based on their current proposals.

New York
NY Senator John Bonacic’s poker-only Delaware and Nevada, applicants would
Washington Times he didn’t intend to
“push it” this year, he said he hoped the
bill would kickstart the conversation
among New York legislators on iGaming.
S6913, introduced in March, proposes not need to hold an existing gaming or Based on this 15% GGR tax scenario, H2
the issue of up to ten licences of ten-year racing licence in the state. H2’s revenue projects that New York state could
duration for a one-off fee of $10m. A near data and forecasts are based on the generate $361m in online poker revenues
identical companion bill was subsequently proposed 15% tax on licensed operators’ in Year 1 post-licensing, rising to $494m
introduced in the Assembly by Gary J. online poker GGR contained within the and11.3% of the state’s gambling market
Pretlow in May. Unlike in New Jersey, two bills. While Bonacic since told the by 2018.

New York Interactive Gambling Gross Win (US$m) New York State % of Gross Win Interactive
12%
1000 11.3%
10.1% 10.8%
900 10% 9.5%
8.8%
800
700 8% 7.1% 7.3%

600 6.3% 6.1% 6.2%

720 5.4% 5.9%
6% 5.2%
500 458 4.9%
647 4.8% 4.6%
398
400 332 66
556
293 325 4%
309
300 82
205 92 98 103 107
200 338 2%
234
215 208 206
100 204 192 189 187
0 0%
2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013E

2014E

2015E

2016E

2017E

2018E

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014E

2015E

2016E

2017E

2018E
Offshore Onshore

New York State Onshore Interactive Gambling New York State Average iPoker Gross Win per Adult 2016 (US$)
Gross Win (US$m)
800
25
700 22.84

600 20

500 494
15
437
400 12.25
361
300 10
8.13 7.59 7.25
5.93
200
103 107 196 210 225
98 3.13
66 82 92 5
100

0
0
2010

2011

2012

2013

2014

2015E

2016E

2017E

2018E

New York State United Kingdom Italy Denmark France EU28 Spain

Horse Betting - Lottery iPoker (15% GWT)

NB. Taxation in all the European Nations is higher, poker has less tradtion and is one of a number of interactive gambling products

94 | iGamingBusiness | Issue 87 | July/August 2014

 Data Centre

Pennsylvania
In Pennsylvania, which recently held two Each would pay $5m for their license and pay
complement existing casino stakeholders’
gaming businesses, as well as its wider
impacts, is now fully underway. Based on a
14% GGR tax scenario. H2 projects that GGR
legislative hearings (see p13) with a focus on 14% of gross gaming revenues. from online poker could reach $129m in
iGaming, Senator Edwin Erickson is poised While the bill’s chances of passage this Year 1 post-legalization, growing to $176m
to introduce SB 1386, providing for the issue year are slim, the conversation among and 5.1% of Pennsylvania’s total gambling
of licences to land-based casinos in the state. legislators over how iGaming could gross win by 2018.

Pennsylvania Interactive Gambling Gross Win (US$m) Pennsylvania % of Gross Win Interactive

3000 14%

12.2%
12.1%
12%
250
9.7%
206 10%
200 182
7.2%
176
150 152 152 156 8%
140 6.8%
150 138 129
6% 5.0% 5.1%
105 92 4.9%
97 97 4.6% 4.4%
100 94 94 4.2%

4%
2.4%
2.1% 2.0% 2.0%
50 1.9%
90 88 84
2%

0
0%
2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013E

2014E

2015E

2016E

2017E

2018E

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014E

2015E

2016E

2017E

2018E
Offshore Onshore (iPoker 14% GWT)

Pennsylvania Average iPoker Gross Win per Adult 2016 (US$)

14

12.25
11.42
12

10

8.13
8 7.59
7.25

6
5.93 All information courtesy of H2 Gambling Capital,
June 2014. H2 is universally regarded as the industry
4
standard for data regarding all aspects of the global
3.13
gambling industry. H2 has worked with or supplied
2
information to over 700 organizations over the past
decade and offers the most complete one stop
0 iGaming/land-based market data service. For further
Pennsylvania United Kingdom Italy Denmark France EU28 Spain details or access to H2’s subscription service/US
NB. Taxation in all the European Nations is higher, poker has less tradtion and is one of a number of interactive gambling products
state-by-state forecasts, email: data@h2gc.com.

iGamingBusiness | Issue 87 | July/August 2014 | 95

Data Centre

California
the numbers
With several bills in play, Michael Genest of Capitol Matrix Consulting
analyzes the considerable fiscal and economic benefits of intrastate poker
to the US’ most populous state.
We estimate that legalizing internet
intrastate poker in California as proposed by
SB 51 and SB 678 would result in additional
state revenues over the first five years of
$845 million. In 2015, it would also increase
California’s total economic output by $334
million and add 1,952 jobs, with annual
amounts growing in subsequent years. Our
estimate is based in part on our review of
previous estimates of proposals to legalize
internet poker in California, and in part on
new data provided by industry experts that
takes into account changes in the illegal
internet poker market since Black Friday in
April 2011.
studies have produced a substantial range
of estimates regarding the volume of play,
the revenue to be generated by a tax on
GGR and by the increased economic activity
generated by the legalized sites.
Offshore play estimates
The estimates of the volume of play on
offshore sites vary significantly for several
reasons. Genest Consulting (the precursor
to Capitol Matrix) and Blue Sky both used
projections for offshore GGR in 2011, while
LECG used projections for 2012. Genest
Consulting’s projections were provided
by Global Betting & Gaming Consultants
(GBGC) while LECG’s were “derived from”
estimates provided by H2 Gaming Capital. 1
These are the two leading firms worldwide
that track and project the activity of Internet
gaming sites. While Blue Sky relied on
GBGC for some per-player dollar figures,
they also used the results of direct surveys
of Californians to project the numbers
of players.2 Each of these approaches is
reasonable and the range of projections they
provide simply reflects the fact that there
will always be significant uncertainty in
estimating the volume of any illegal activity.
Moreover, as LECG stated in its report:
“a strong case can be made that a legal
California system will be able to recapture
much of this activity, but until the system is
in place, the ultimate share of business that
returns to California is unknown.”

SB 51 and SB 678 Figure 1 - Comparison of Previous Studies of Impacts

Senate Bills 51 and 678, pending in the of Legalizing Intrastate Internet Poker in California
Legislature, each legalize internet poker,
Before Black Friday Post-Black Friday
place a 10 percent tax on gaming revenues
Genest LECG Blue Sky Consulting Blue Sky Consulting
and allow I II
Consulting
any firm to seek authorization to operate a Estimated GGR of California Players on $536 m $825 m $316 m No Estimate
site that is subject to specific regulation. Both Offshore Sites

bills stipulate that operators of such sites Proposed Market Structure for Legalized One monopoly site Up to 3 Hubs Not Specified Not Specified
Intrastate Sites multiple sites
must maintain the physical plant and the
Estimated First-year GGR of proposed, < $50 m $370 m to $704 m $452 m $624 m
employees inside the state and serve only legalized, intrastate site

players located within the state’s boundaries. Proposed GGR Tax Rate 10.0% 20.0% 10.0% 10.0%

Tax Revenue on GGR < $5 m $74 m to $141 m $45.2 m $62.4m

Previous estimates of Internet poker volume Other State Revenues Minimal $130 m to $256 m $36.3 m $54.2 m

Impact of Exclusivity Violation on State’s Indian -$350 m No estimate No estimate No estimate

and tax revenues Gaming Revenues

There have been several studies of proposals

to allow legalized intrastate Internet poker
in California. As Figure 1 illustrates, these
1
H2 advises us that it did not directly provide the $825 million estimate and that it “sounds high” for a 2012 estimate.
2
Such a survey essentially relies on contacted individuals to honestly report their own illegal activity. It is possible that this accounts for Blue
Sky’s significantly lower estimate of GGR on the offshore sites.

96 | iGamingBusiness | Issue 87 | July/August 2014


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Data Centre
Estimating GGR and gaming tax revenues in
a legal intrastate market
Players in a newly legalized market would
be of two types, those switching from the
illegal, offshore market and those who
begin playing Internet poker only after it is
legalized.3 The LECG study indicates that the
former would be serious players, gambling
more money over longer times, while the
latter would be casual. Each
study used a different approach to
estimating the “recapture rate” of those
playing on offshore sites:
• Genest Consulting assumed that there
would be only minimal transfer from
offshore sites for two reasons. First, the
specific proposal analyzed called for a
one-site monopoly. Industry experts advised
Genest Consulting that such a monopolistic
site would not have succeeded in attracting
customers away from the established
offshore sites in the pre-Black Friday
environment. Second, players moving from
the illegal sites to the legal sites would have
to report their earnings for income tax
purposes. This would reduce their chances
to (illegally) avoid taxation and would make
playing on the legal site much less attractive.
• LECG assumed a range of recapture rates,
from a low of a flat 25 percent to a high of
80 percent growing to 100 percent over time.
LECG based these ranges on H2’s analysis
of the transfer rates in other countries
that have legalized Internet gaming and
on the testimony of industry experts.
The proposal that LECG was analyzing
would have created a more competitive,
and therefore a more attractive gambling
environment by allowing up to three hubs
with multiple sites potentially operating
on each hub. However, it should be noted
that it would still have suffered from a
substantial income reporting disincentive.
In addition, the proposal analyzed by
LECG did not specify the tax rate, so they
provided separate estimates for 20, 30 and
40-percent rates. Industry experts advise us
that a tax rate above 10 percent or so would
make it financially difficult for operators to
invest sufficiently in player recruitment and
98 | iGamingBusiness | Issue 87 | July/August 2014
retention and thereby seriously reduce the
volume of play.
• Blue Sky’s first report relied on surveys
of Californians to determine the recapture
rate. While this has the advantage of being
California specific, a survey-based estimate
should be viewed with caution. It is unclear
how honestly respondents would answer
a question that, in essence, asks whether
they would cease playing illegally if a legal
alternative were available. In addition,
Blue Sky’s reports did not analyze a
specific proposal, so a key condition of
creating a strong poker market, competition,
is not addressed.
• Blue Sky’s second report came a month
after Black Friday. While the exact impact of
Black Friday was not yet known at that time,
Blue Sky correctly assumed that the closure
of the three largest offshore sites would
shift far more play into a legalized market.
Accordingly, they increased their estimated
GGR in a legal market by 38 percent.
• With regard to new players being
attracted to the newly legalized market, the
approaches of each report also differed:
• Genest Consulting did not think the
monopolistic site proposal it analyzed would
draw significant numbers of new players
into the internet poker arena.
• LECG relied on estimates from H2
Gaming and Capital. Both H2 and GBGC
in general rely on data gleaned from
monitoring Internet play worldwide and
they use the experience in other countries
to model the growth rates of play and the
effects of legalization on the volume of play
in specific markets.
• In both of its reports, Blue Sky uses its
survey methodology to project the impact of
legalization on current non-players.
Of course, once the GGR estimates are
complete, the revenue to be expected from
taxing that GGR is simply a function of the
tax rate. It is worth noting, however, that
LECG modeled several different tax rates
3
These could include players who stopped playing after Black Friday but return upon legalization.
and correctly assumed that higher tax rates
would result in lower GGR levels, in part
because they would make it more difficult
for firms to invest in player recruitment and
retention, which is both costly and necessary
to maximize the volume of play. H2 advises
us that a tax rate of 10 percent would not
create a significant disincentive, but rates
much higher than that level would tend to
have significantly deleterious effects on the
volume of play in the market.
Estimating other state revenues
Legalizing intrastate internet poker would
create, at least in theory, four other sources
of increased revenue to the state beyond the
tax on internet gaming itself: (1) corporate
profit taxes on the companies operating
the legal sites, (2) personal income tax on
players’ winnings, (3) personal income tax
on the earnings of employees working on
the sites, and (4) increased income and sales
tax from the increase in the state’s economy
that could result from legalization.
The special case of exclusivity
Genest Consulting relied on legal advice
from its client to the effect that legalizing
Internet poker would violate the exclusivity
clauses in existing Indian Gaming
compacts. To the extent that exclusivity is
violated, it would automatically free up the
gaming tribes to cease making the payments
to the state that the compacts require. In
2010-11, those payments totaled $365
million. Obviously, the potential loss of that
amount of revenue would have dwarfed
any state revenue gain from legalization.
However, a more recent legal opinion
provided to us by our client indicates
that Internet poker would not violate the
exclusivity clauses in the compacts. While
exclusivity remains an issue for further
legislative consideration, given the most
recent legal opinion, we do not assume in
this analysis that SB 51 or SB 678 would
result in any revenue losses to the state.
 Data Centre

GGR and revenues from the 10
percent tax
Figure 2 displays H2’s most recent projection
of the size of a legalized intrastate Internet
poker market in California, assuming
legalization takes effect in 2015. The
revenue that the state would collect from
the proposed 10 percent tax is also displayed
(see figure 2).
The methodology that H2 used to
make these projections is quite similar
to how it made the projections for the
earlier LEGC study, essentially modeling
what has happened in other countries
after legalization and using the current
worldwide volume of play as an indicator of
market potential. In fact, the market volumes
are similar, adjusting for growth to the year
2015, to H2’s earlier estimates of the volume
Figure 2 - Projections of a legal intrastate, Internet market in California
and the state revenue from a 10-percent Tax (Dollars in millions)4
2015
GGR $729
State Revenue from the 10- percent $73
GGR Tax
Figure 3 - Total revenues from a legal intrastate Internet
market in California (Dollars in millions)
2015
Direct State Revenues from GGR Tax $73
of the offshore market that existed prior to earning substantial incomes, often in the
Black Friday. hundreds of thousands of dollars annual,
H2 advises that there is no definitive data are in this category.
on what California online poker players did • Some moved their gaming to brick
after Black Friday, but that they probably fall and mortar casinos or card clubs in
into one of several categories: California or other states.
• Some may have continued to play on the As a result of these uncertainties, H2
few remaining offshore real-money poker advises that at least in the initial years of
sites. In fact, H2 estimates that in 2014, legalization, the projections of GGR should
these sites will have a GGR from California be regarded as an upper limit. Industry
players of about $38 million. experts, however, advise us that over time,
• Some switched to free-play, social gaming the California market has the potential to far
or subscription poker sites. exceed these projections.
• Some switched to real-money sites that
offer games other than poker and which have The bottom line
yet to be effectively shut down by the DOJ. Figure 3 summarizes our estimate of total
• Some ceased play altogether. revenues that can be expected under SB 51
• Some moved outside the USA. Very or SB 678. It is noteworthy that our estimate
likely, the professionals who had been of increased ‘other” revenues equates to
about 7 percent of GGR, as compared to
LEGC’s 15 to 16 percent and Blue Sky’s 8 to
9 percent. The major reason for our lower
estimate is the impact of Black Friday on
2016 2017 2018 2019
offshore, illegal Internet gaming. The effect
$867 $992 $1,149 $1,292
has been to significantly reduce the relative
$87 $99 $115 $129
amount of offshore spending available to
be recaptured, thereby limiting the relative
amount of indirect revenues associated with
legalization of Internet poker.
Figure 4 summarizes the estimated total
2016 2017 2018 2019 5-year Totals impact on California’s economy (see table).
$87 $99 $115 $129 $503

Other State Revenues

*This is an abridged version of CMC’s economic
Corporate Profits Tax -- (4) (9) (10) (11) (33)
study. The entire report is available by contacting
PIT On Winners’ Earnings (27) (32) (36) (42) (47) (184)
Capitol Matrix Consulting at 916-425-4350.
Indirect Revenues (22) (23) (23) (27) (30) (125)

Subtotals, Other State Revenues $48 $58 $68 $78 $88 $342

Ratio of “other” to GGR 6.61% 6.69% 6.85% 6.82% 6.84% 6.80%

Totals $121 $145 $167 $193 $217 $845

Estimated total impact on California economy*

Figure 4 - Estimated total fiscal and economic impact on California from legal Michael C. Genest opened
Genest Consulting in January of
intrastate poker
2010 to provide advice, analysis
2015 2016 2017 2018 2019 and advocacy on fiscal and policy
Gross Gaming Rev. $729 million $867 million $992 million $1.14 billion $1.29 billion issues affecting state and local
Economic Output $334 million $352 million $354 million $410 million $460 million government. In January 2011, Genest added
State Revenues $121 million $145 million $167 million $193 million $217 million
two partners, Brad Williams and Peter Schaafsma,
Jobs 1,952 2,053 2,063 2,375 2,657
and founded Capitol Matrix Consulting. Prior to going
into private practice, Mr. Genest served for four years
as Governor Arnold Schwarzenegger’s chief financial
4
SB 51 and SB 678 require substantial deposits of sites that register to operate internet poker. The deposits would be used to pay the policy advisor in his role as Director of the California
GGR tax until they are depleted. Figure 4 does not attempt to model this cash- flow because it would depend on the numbers of sites
Department of Finance.
and it would not affect state revenues in total.

iGamingBusiness | Issue 87 | July/August 2014 | 99

Data Centre
EUROPEAN REGULATION
In conjunction with Ash Averill, Associate at DLA Piper, iGaming Business
provides a snapshot of the European iGaming markets, charting the regulated
online gambling products and legalised operator types within each country,
and impending market updates (where applicable).
AUSTRIA
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,
bingo and lottery.
Operator Type: Licences for sports betting
and horse race betting are available for private
operators on a regional basis within Austria
whereas poker, casino, bingo and lottery are
controlled by the monopoly, Austria Lotteries.
Status: It is understood that the
compatibility of Austria’s monopolistic
gambling laws with European law may be
scrutinised further following aggressive
marketing practices by Austria Lotteries
and a recent ECJ decision regarding the
restrictions imposed on gaming machines.
Even so, the Member State has proposed
changes to its regulations (notably a ban on
in-play betting) to help curb match fixing.
BELGIUM until mid-2013 as further implementing
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,
bingo and lottery.
Operator Type: All products are available
to private operators save for lotteries, which
are reserved exclusively for the monopoly
provider. However, online operators need
to partner up with local casinos in order
to satisfy the land-based establishment
requirement; or alternatively, apply for one of
the 34 retail licences (F1 licences) which can
be extended to cover online (F1+ licence).
Status: The European Commission
requested information from Belgium in
November 2013 in relation to its gambling
regulatory regime, which is one of the first
steps the Commission can take towards
infringement proceedings. However, the
Belgium Gaming Commission (“BGC”)
appears confident that Belgian gaming laws
can withstand any European scrutiny and
proposed that further restrictions and a
tightening of the legal framework be imposed
100 | iGamingBusiness | Issue 87 | July/August 2014
by the next government.
Three decrees have been notified to the
European Commission (relating to the type
of games that can be offered and limitations
on such games as well as the monitoring
and control of online games) and are
currently subject to a standstill period, but it
is uncertain if the proposed changes will be
implemented this year.
BULGARIA
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,
bingo and lottery (excluding raffles and
instant lottery games)
Operator Type: All products are available to
private operators save for lotteries, which are
reserved exclusively for the monopoly provider.
Status: Bulgaria’s Gambling Act became law
on 1 July 2012 but licences were not available
legislation needed to be in force. Any
operator from an EU/EEA jurisdiction or the
Swiss Confederation can apply for a licence.
Changes to the tax rate in Bulgaria from
a turnover to a gross gaming revenue based
system has prompted a number of operators
to apply for a local licence.
CROATIA
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,
bingo and lottery.
Operator Type: All products are available to
private operators save for lotteries, which are
reserved exclusively for the monopoly provider.
Status: Following Croatia’s accession to
the European Union in July 2013, it was
understood that the Member State would
submit new legislation to the European
Commission that was compatible with
European law. However, on 5 March 2014
the Croatian government notified a draft
bill which seeks to embolden the position
of the monopoly and local operators. Only
land-based casinos and betting operators can
apply for a licence pursuant to the draft bill
and ISP blocking is also proposed.
CYPRUS
Regulated Gambling Products: Sports
betting and lottery.
Operator Type: OPAP have a monopoly over
lottery operations and only sports betting
licences are available to private operators.
Status: Cyprus regulated online gambling
in July 2012. The government published a
blacklist and warned local ISP providers that
they would face fines for failures to block
sites offering unlicensed gambling products.
In response to a request for further
information by the European Commission in
November 2013, Cyprus has notified
draft legislation to the European Commission.
However, the draft only addresses the
criticism of the requirement to have a local
establishment. The draft should receive
comments from the European Commission by
8 September, at the end of the standstill period.
CZECH REPUBLIC
Regulated Gambling Products: Sports
betting, horse racing betting and lottery.
Operator Type: Online gaming is not
expressly regulated but a limited number
of local licences are available for Czech
companies with Czech share ownership.
Lottery is reserved for the monopoly.
Status: Czech Republic were in the process
of submitting new regulations to the
European Commission in order to create
a comprehensive online gambling regime
until the Czech government was disbanded
in June 2013. The subsequent government
has requested that the Commission extend
the deadline for the adoption of a new,
compatible Lottery Act until the end of 2014.
A draft framework for the new legislation
has been announced and it is understood
that the Czech government wishes to
regulate all gambling activities and that
stringent enforcement measures will be put
in place for any unlicensed operators.
 Data Centre

DENMARK
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,
bingo and lottery.
Operator Type: Sports betting, poker and
casino licences are available to private
operators. Bingo, lottery and horse race
betting (fixed odds only) is controlled by the
state monopoly.
Status: The Danish online gambling regime
went live on 1 January 2012.
ISP blocking measures are active in
the jurisdiction and the Danish Gaming
Authority has been granted an injunction
in order to block operators and suppliers
that have been targeting Danish customers
without a the requisite licence.
A decision is expected in 2014 from ECJ on
whether or not taxing online casinos less than
land-based casinos amounts to state aid.

ESTONIA
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,
bingo and lottery.
Operator Type: Licences for all gambling
products are available for private
operators save that the monopoly has
exclusive rights to lottery.
Status: Only 18 operators are currently
licensed in the jurisdiction, 9 of which relate
to online gambling. A “blacklist” of almost
800 operators is constantly maintained
and updated by local authorities and ISP
blocking is in force. It is understood the
Estonian government is intending to require
players to set weekly or monthly limits
before gambling online, a development
which could occur this year.
FINLAND 
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,
bingo and lottery.
Operator Type: All gambling products
are under the exclusive control of the three
monopoly providers, Raha-automaatiyhdistys
(“RAY”), Fintoto Oy and Veikkaus Oy.
Status: Ruling from the ECJ confirmed that
Finland’s three monopoly providers are
legally permitted which has subsequently
been written into law. In November 2013,
the European Commission also withdrew
its infringement proceedings against the
Member State.
Active enforcement measures are in place
(restrictive marketing for offshore operators
and ISP blocking).
FRANCE
Regulated Gambling Products: Sports
betting, horse race betting, poker and lottery.
Operator Type: Private operators can
obtain online licences for sports betting,
horse race betting and poker. The monopoly
has exclusive rights to lottery.
Status: France is a regulated market that has
been sanctioned by the European Commission.
On 13 February 2014, French Members of
Parliament introduced a bill which amends
several provisions of the French Consumer
Code. The amendments expand the
definition of prohibited games of chance to
capture games that are, even in part, based
on chance. The full impact of the changes is
yet to be determined.
GERMANY
Regulated Gambling Products: Schleswig-
Holstein, a small Northern German state,
regulates sports betting, horse race betting,
poker, casino and bingo. The other 15 states
of Germany currently only permit sports
betting and horse race betting.
Operator Type: Private operators can no
longer obtain licences in Schleswig-Holstein,
and those in existence will expire on 30 June
2019. In the other 15 states, horse race betting
licences are available at a regional level but
the position surrounding the 20 available
sports betting licences is still uncertain.
Status: The licensing regime in Germany is in
a state of flux. Two separate regulatory regimes
are in operation and the 20 federal sports
betting licences have still not been awarded.
On 12 June, the ECJ ruled that the existence
of two regulatory frameworks within one
Member State does not necessarily contravene
European legislation but has left national
courts to decide on the matter. The judgment
does not deal with the limit on sports betting
licences however and challenges are expected
after the licences have been awarded.
GREAT BRITAIN
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,

iGamingBusiness | Issue 87 | July/August 2014 | 101

Data Centre
bingo and lottery.
Operator Type: All licences are available
to private operators save for lottery, which
is reserved exclusively for the monopoly
provider, Camelot.
Status: Foreign operators can transact with,
and advertise to British customers, but only
those regulated in the EEA or a “white list
jurisdiction” (Alderney, Isle of Man, Antigua
and Barbuda, and Tasmania).
A move to a local licensing model has
been announced and is expected to be
implemented in Summer 2014, with a
corresponding tax rate of 15% of gross profits
entering into force on 1 December 2014.
GREECE
Regulated Gambling Products: Sports
betting, horse race betting and lottery
Operator Type: All products are exclusively
reserved for the monopoly providers although
24 transitional licences for private operators
remain active, whereby all gambling products
are permitted.
Status: The licensing regime in Greece (like
Germany) is also in a state of flux. The Greek
government submitted a new draft law to
the European Commission in March 2013,
which effectively rescinds the 24 transitional
licences granted to operators enabling them
to keep transacting with Greek residents.
It is understood that the European
Commission have criticised the revised
legislation and until the position is resolved,
the transitional licences will remain in
force. Despite this, the Hellenic Gaming
Commission has essentially sanctioned
the launch of OPAP’s betting monopoly
without notifying the relevant decree to the
European Commission.
HUNGARY
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,
bingo and lottery.
Operator Type: Only the state monopoly,
Szerencsejáték Zrt. and local concession
companies can apply for a licence.
Status: In January 2013 the Hungarian
government submitted an amendment to
its Gambling Act which essentially reserved
gambling activities for the state or local
concession companies. On 26 June 2013,
102 | iGamingBusiness | Issue 87 | July/August 2014
the Hungarian National Assembly adopted
the draft legislation, which entered into force
15 days after it was promulgated. However,
the executive order necessary to implement
the licensing regime has not yet been
introduced. The National Tax and Customs
Authority has the ability to require ISPs to
block any unlicensed sites, which took effect
on 2 January 2014, but no action has been
taken so far.
IRELAND
Regulated Gambling Products: Online
gambling is not specifically accounted for in
Ireland’s outdated legislation and as such all
products are currently unregulated.
Status: Ireland is in the process of
updating its legislation which will create a
comprehensive online gambling regime and
payment restrictions. It is not anticipated that
the legislation will be introduced before 2015.
ITALY
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,
bingo and lottery.
Operator Type: All products are available
to private operators save for lottery which
is reserved for the monopoly provider.
However, it is currently not possible to
obtain a licence in Italy.
Status: Italy is a fully regulated market.
Italy extended the number of betting markets
available to its residents last year and it has
recently approved new variants of poker,
which may help attract new interest to the
product in Italy.
LATVIA
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,
bingo and lottery.
Operator Type: Although online gambling
is regulated, only five operators are licensed
in the jurisdiction. Lottery is reserved for state-
owned Latvijas Loto.
Status: Updated legislation was supposed
to be implemented in January 2012 but
parliament has extended the submission
period twice and developments seem to
have stalled. The new legislation restricts
the provision of online gambling to Latvian
registered operators. Stricter enforcement
measures including ISP and payment
blocking are contained in the draft bill
together with higher tax rates and fees.
LITHUANIA
Regulated Gambling Products: Lottery
Operator Type: Local or national lottery
licences are available for locally established
companies.
Status: Other than lottery, the law is silent
on whether or not gambling activities can or
cannot be offered online.
Draft legislation was notified to the
European Commission in February 2014. It
requires operators to establish a Lithuanian
company in order to obtain a licence and
have a share capital of at least 4 million Litas
(circa. £1 million). The draft also sets out
enforcement measures to be taken against
illegal operators as well as software and
technical requirements.
Lithuania were also the subject of further
information requests by the European
Commission in November 2013.
LUXEMBOURG
Regulated Gambling Products: Lottery
Operator Type: Monopoly.
Status: The general prohibition on
gambling in Luxembourg appears
sufficiently wide to cover all forms of
online gambling.
MALTA
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,
bingo, lottery.
Operator Type: Private operators can apply
for a local licence but not in relation to
lottery products.
Status: On 3 June, the Maltese regulator (the
Lotteries and Gaming Authority) introduced
a number of policy changes for its licensees.
These include changes regarding hosting
servers abroad, audit requirements and the
cloud environment. It is still anticipated that
Malta will update its gambling legislation in
the near future.
NETHERLANDS
Regulated Gambling Products:
Sports betting, horse race betting, poker,
casino, bingo, lottery.

Operator Type: Monopoly for all products.
Status: The fall of government in April
2012 delayed the plans to regulate remote
gambling but in May 2013 the Remote
Gambling Act was published. It stipulates
the conditions which operators will be able
to offer online gambling in the Netherlands,
including establishment within the EEA,
player protection requirements and a two-
tier tax system.
The draft legislation was sent to the
European Commission in March 2014 and
it is understood a licensing regime could be
implemented in early 2015.
NORWAY
Regulated Gambling Products: Sports
betting, horse race betting and lottery
Operator Type: Online gambling in Norway
is reserved for its two monopoly providers:
Norsk Tipping and Norsk Rikstoto.
Status: The monopoly has extended its
offering to include live betting, e-bingo and
casino games in an attempt to redirect traffic
from unlicensed sites. However, the new
government is understood to be considering a
limited licensing regime for foreign operators,
with any proposals likely to be announced in
the 2015 budget.
POLAND
Regulated Gambling Products: Sports
betting and horse race betting.
Operator Type: Licences are only available
for companies with a local establishment.
Status: New legislation enacted on 1
January 2012 only permits betting and
only four licences have been granted to
local companies (Fortuna, Milenium, STS
and Totolotek).
Poland were also the subject of a further
information request from the European
Commission in November 2013.
PORTUGAL
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,
bingo, lottery.
Operator Type: Monopoly for all products.
Status: A draft law for online gambling
in Portugal is likely to be introduced to
parliament in June but implementation is
anticipated to be 2015.
ROMANIA
Regulated Gambling Products:
Mutual horse racing, mutual sports betting
and lottery.
Operator Type: Monopoly
Status: Given licences are only available
for Romanian companies under the current
legislation, in order to comply with European
law, in December 2013, the government
announced its intention to submit a new, EU
compliant draft to the European Commission.
It is anticipated to provide a fully regulated
regime and could be implemented as early as
this year. The draft law allows entities within
the EU to apply for a licence, it imposes a
reform on licence fees and eliminates the tax
on player revenues.
SLOVAKIA
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,
bingo, lottery.
Operator Type: All products are operated
by the monopoly save that land-based sports
betting operators can offer services online
due to a legal loophole.
Status: No developments are anticipated in
the short term.
SLOVENIA
Regulated Gambling Products: Sports
betting, horse race betting, poker, casino,
bingo, lottery.
Operator Type: Online gambling must be
operated by land-based casinos or lotteries
and, as a result, only the monopoly holds
online licences in Slovenia.
Status: Slovenia has published a new draft
gambling law but it seeks to reserve its
restrictive position on gambling. The law has
not yet been voted on in parliament and a
timeline for implementation is unclear.
SPAIN
Regulated Gambling Products: Sports
betting, horse race betting, casino, poker,
bingo and lottery.
Operator Type: Private operators can
apply for licences for all gambling products
save for lottery.
Status: The first online licences were
issued on 1 June 2012. Under the law,
online gambling operators must hold a
Data Centre
general licence and a specific licence for
each gambling activity from the National
Gambling Commission. Draft laws
introducing slots and betting exchanges are
currently in consultation phase.
The National Gambling Commission
has taken action against unlicensed
operators and a number of fines have
already been imposed.
SWEDEN
Regulated Gambling Products:
Sports betting, horse race betting, poker,
bingo and lottery.
Operator Type: Only public benefit
organisations, the horseracing industry and
the state lottery may obtain a licence. No local
licences are available for private operators.
Status: The Swedish government intends to
update its online gambling regulations but
have confirmed that it is unlikely to happen
for the next two years. However, in the
meantime, the government has appointed
an investigator to find ways to combat
advertising from unlicensed offshore
operators (deadline of 30 November 2014 to
report on findings).
In November 2013, the European
Commission requested Sweden to comply
with EU rules on the free movement of
services with regard to the regulation and
supervision of its gambling monopoly.
UKRAINE
Regulated Gambling Products: All online
gambling products are prohibited.
Status: Gambling has been illegal since
the introduction of the “Law on ban of
gambling business in the Ukraine” in 2009.
Since then a number of laws regulating
gambling activities have been drafted but
none have actually been enacted, save for
one law giving police and enforcement
authorities additional powers to enforce the
ban on gambling.
All-In is an online resource focused on the fast-moving
global gaming market. DLA Piper’s global gaming team
has created a dedicated site to deliver topical legal and
regulatory updates from specialists
throughout our network. Visit All-In at
http://blogs.dlapiper.com/all-in/.
iGamingBusiness | Issue 87 | July/August 2014 | 103
 Dakota
Montana Minnes

Data Centre
o

South
Dakota

State of the Union Wyoming

Since the US Department of Justice publicly reversed its position on the White Live (iGaming)
scope of the 1961 Wire Act in December 2011, conceding that it only Green Legislation Enabled/Lottery Online
reserved jurisdiction over sportsbetting, iGaming Business has been reporting Iowa
Nebraska
Amber Work in Progress/Under Consideration
on various state activity with regards to the broadening of intra-state lottery Red Undecided/Back to the Drawing Board
and iGaming models. The most recent update includes the introduction of a Blue No Movement
new online gambling bill in Pennsylvania. Black Prohibited/ Pending Prohibition

Nevada: White Division of Gaming Enforcement announced that

Regulated Gaming Type: Poker-only online gambling gross win in the US state fell by Georgia: Green

Utah
Operator Type: Applicants with existing land- around 8% on a month-over-month basis in May.
based license New Jersey’s online gambling industry generated
Colorado a total of $10.5m, down from the $11.4m recorded
Go-live Date: Live. There are now three real-money
online poker platforms in operation in Nevada.
Ultimate Poker, WSOP.com and Real Gaming,
formerly South Point Poker. In March, Ultimate
Poker’s parent company Ultimate Gaming signed a
deal to provide online poker for customers of Reno’s
Peppermill and four other affiliated casinos.
Delaware: White
Regulated Gaming Type: Full-service online
rizona gaming
Operator Type: Centralized iGaming system via
Delaware Lottery and operated by the three state
casinos
New Mexico
Estimated Go Live Date: Live. Delaware became revenue in May, down from $2.1m the prior month.
the first state to launch a full service online gaming
offering on October 31, 2013. The iGaming program
is run by the State Lottery, and is powered by a
vendor collaboration between 888 and Scientific
Games/WMS, which saw free-to-play versions go
live in August 2013. The state’s iGaming law also
provides the opportunity to explore compacts with
other states, a function also evident in the Nevada
and New Jersey regulations.
New Jersey: White
Regulated Gaming Type: Full-service
online gaming
Operator Type: Atlantic City casinos with
existing land-based license
Estimated Go Live Date: Live. The New Jersey
in April, driven by falls in both casino and poker.
Poker revenue dipped 12% month-over-month
to $2.27m, while online casino revenue was
down 7% to $8.2m. The Borgata Hotel Casino
& Spa continued to lead Atlantic City’s casinos
in the nascent Garden State iGaming market, its
Borgata-branded and software partner PartyPoker
marginally increasing their collective market share
to 38% from 36% in April. Second place Caesars’
market share held steady at 27%, despite its revenue
falling to $2.8m, from just over $3m in April. The
Gamesys-powered Tropicana’s recent growth also
came to an end, generating just under $1.9m in
Maryland: Green
Regulated Gaming Type: Online lottery
Operator Type: Maryland Lottery controlled
Estimated Go Live Date: No further updates. As
previously reported, the Maryland Live! Casino
launched a free-to-play online casino last year to
build awareness and a database, but there has
been little in the way of news since then as to
when in 2014 the lottery will be available online.
Texas
Minnesota: Green
Regulated Gaming Type: Online lottery, instant
win tickets
Operator Type: Lottery controlled
Present Status: Online.
Regulated Gaming Type: Online lottery
Operator Type: Georgia Lottery controlled
Estimated Go Live Date: Online
Illinois: Green
Kansas
Regulated Gaming Type: Online lottery
Operator Type: Illinois Lottery controlled
Estimated Go Live Date: Online
Michigan: Green
Regulated Gaming Type: Online lottery
Oklahoma
Operator Type: Michigan Lottery controlled
Estimated Go Live Date: Late 2014
California: Amber
Present Status: Thirteen California tribal leaders
have provided amended bill language that would
provide a licensing and regulatory framework
for real-money Internet poker in California.This
included restrictions on companies which took
online gambling business from US consumers after
31 December 2006. PokerStars owner the Rational
Group and its California land-based partners the
Morongo tribe, the Commerce Club, Hawaiian
Gardens Casino and Bicycle Casino swiftly issued
a response to the 13 tribes’ announcement and
proposed amendments, stating that while they
supported legislation that would allow Californians
to play on well regulated and trusted websites,
“[w]e strongly oppose the so-called ‘bad actor’
language that is nothing other than a blatant
attempt to provide certain interests with an unfair
competitive advantage by arbitrarily locking out
trusted iPoker brands.”

104 | iGamingBusiness | Issue 87 | July/August 2014

sota

Data Centre

Wisconsin New Yo

Michigan
Washington

North Maine
Montana Dakota

Oregon
New
Minnesota Vermont Hampshire

Idaho
South
Wisconsin New York Massachusetts
Dakota

Wyoming Michigan
Rhode Island

Pennsylvania
Connecticut

New Jersey
Pennsylvania
Iowa
Nebraska
Nevada
Ohio
Delaware
Utah Indiana
Illinois Maryland
Colorado
West
California Virginia Virginia
Kansas

Ohio
Missouri
Kentucky

North Carolina
Tennessee
Arizona Oklahoma
New Mexico South
Arkansas
Carolina
District of
Illinois Indiana Mississippi Alabama Georgia
Columbia

Louisiana

Texas

West
Virginia Florida

Missouri
Kentucky

Massachusetts: Amber Pennsylvania: Amber Iowa: Red North Carolina

Present Status: Online gambling proponents
in Massachusetts pledged to push forward
with plans to allow the lottery to experiment
with iGaming, despite the AGA’s withdrawal
of support of support for expanded Internet
gambling, reported The Boston Herald. State
Treasurer Steven Grossman said: “They can
have their squabbles all they want. We’ll
Arkansas
continue to move forward to study this issue…
Present Status: Pennsylvania State Senator Present Status: No progress expected
Tennessee
Edwin Erickson has formally introduced his in 2014.
online gambing bill. An earlier draft of
Erickson’s Senate Bill 1386 leaked in May Maine: Red
contained language stipulating that: “The Present Status: Prohibits the electronic sale of
board only may approve poker games lottery tickets under SP 657, passed 2012.
pursuant to this chapter”. However, this had
South
been removed from the bill when it was Carolina
District of Columbia: Red
formallly submitted on June 17, and the bill Present Status: Back to the drawing board

Mississippi
You have to change to survive and flourish.”.
The State Gaming Commission added in a
statement: “The AGA’s decision to withdraw from
discussions regarding online gaming reinforces
Louisiana
the Commission’s position on this topic. The
Commission believes that a slow and deliberate
approach to this issue is the most responsible
way to move forward, given the significant and
varying opinions on this matter.”
New York: Amber
Present Status: Poker-only bill under
consideration.
language now defines an authorized game as Florida: Red
“[a]ny interactive game approved by the board Present Status: Back to the drawing board
pursuant to this chapter”, The bill provides for an Georgia
intended tax rate 14% of gross gaming revenue, Connecticut: Red
Alabama
and a one-off fee of $5m per licence. A ‘bad Present Status: Undecided
actor’ clause in the bill will exclude companies
that violated the Unlawful Internet Gambling Utah: Black
Enforcement Act of 2006. It also provides for Present Status: Prohibited
interstate online poker compacts.
Texas: Black
Mississippi: Amber Present Status: Prohibited at the state level.
Present Status: Study into pros and cons of However, there remain plans to allow the state to
Internet gambling underway. opt in to any federal online poker legislation.

iGamingBusiness | Issue 87 | July/August 2014 | 105

Florida
 Data Center
Data Centre

iGaming Dashboard
In conjunction with H2 Gambling Capital, the iGaming Dashboard offers a monthly overview of the
iGaming sector in numbers. This is the June 2014 edition.

total global igaming gross win (€bn) PERCENTAGE OF GLOBAL INTERACTIVE GROSS WIN DOT
45
COUNTRY/state monopoly
60%
40

35 50%

30
40%

25

20 30%

15
20%
10

5 10%

0
2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013P

2014E

2015E

2015E

2017E

2018E

0%
2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013P

2014E

2015E

2015E

2017E

2018E
Percentage of Global Gambling Gross Win Interactive Global Interactive Gambling Gross Win by Region (2013e) (€bn)
12%

10% 6%
1%
8%
14%
2% 29%
6%

4%

2% 48%

0%
N America Latin Am / Caribbean Europe Asia/ME Africa Oceania
2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013P

2014E

2015E

2015E

2017E

2018E

percentage of global igaming gross win dot

country/state monopoly Global Interactive Gambling Gross Win by PRODUCT (2013e) (€bn)
16%

14%
8%
12%
6% 47%
10%
6%
8%

12%
6%

4%

2%
21%
0%
a

pe

be /

ica

nia

ge
ric

/M

rib m

Bingo Poker Casino Betting State Lotteries Skill/Other/Com Lots

ro

ra
er

ea
Ca tin A

an
Af

e
Eu

Am

Oc
ia

Av
As

La

al
N

ob
Gl

106 | iGamingBusiness | Issue 87 | July/August 2014

 GET ACCESS TO THE MOST COMPREHENSIVE
PROFESSIONAL RESOURCE FOR THE
BUSINESS OF INTERACTIVE GAMING.
Access to iGaming Business includes:
• Print copies of iGaming Business
magazine as well as access to
the digital version
• Digital archive of back issues of
iGaming Business magazine
• Access to daily news, breaking
news, press releases and the
event calendar
• Access to online features and
news analysis
• Access to dedicated sections;
To subscribe please visit www.iGamingBusiness.com or email info@iGamingBusiness.com
technology, finance, marketing,
management and legal
• Access to European Gaming Lawyer
Magazine (print and digital version)
• Access to full webinar archive,
previous recordings and
presentations
• Full support and dedicated
account manager
• Access to the iGaming Business
directories (print and digital version)
Data Centre

US STATE TRAFFIC
Competitive intelligence services company, Experian Hitwise, provides data on the top-visited
gambling sites ranked by US Internet traffic for the entire US and by state, based upon a sample
of 10 million US Internet users. The data does not include mobile traffic.

Most Popular
Gambling
Rank Rank Rank
Websites Total Visits Visits Share
Apr 14 Mar 14 Feb 14

Caesars Casino 16,879,440 4.92% 1 17 31

Websites inthe US
PCHLotto 14,236,694 4.15% 4 2 1

Lottery Post 13,998,388 4.08% 5 1 2

Ranked byVisits
Share

NY Lottery 10,365,175 3.02% 7 3 4

Florida Lottery 9,811,733 2.86% 6 4 3

Monthof may Bovada.lv 9,809,445 2.86% 3 5 19

2014
World Series of Poker 8,599,653 2.51% 2 12 17

Pennsylvania Lottery 8,324,799 2.43% 8 6 6

Texas Lottery Commission 7,656,591 2.23% 11 7 5

PCHSlots 7,078,438 2.06% 10 9 8

Websites Segmented Visits Segmented Rate

Most Websites
Segmented Segmented
Visits Rate
Massachusetts State Lottery
Commission
55.28% 93.08%

Popular Illinois Lottery 32.51% 88.70% FoxWoods Resort Casino 2.79% 43.02%

Gambling Lottery Post 8.38% 7.69% Lottery Post 2.59% 2.04%

Websites PCHLotto 4.40% 4.08% Bovada.lv 1.86% 2.23%

Ranked by
Bovada.lv 3.47% 4.86% PCHLotto 1.61% 1.28%
Illinois Lottery Online 2.78% 95.02% King.com 1.43% 2.48%
Visits from PCHSlots 2.50% 4.83% Powerball 1.41% 2.44%
Illinois* Twinspires.com 2.43% 9.06% FreeSlots 1.12% 1.84%
TVG 2.09% 10.13% BetUS 1.06% 19.21%
FreeSlots 1.72% 3.30% Mohegan Sun 1.03% 21.06%
Lottery USA 1.54% 5.29%
Most POPULAR GAMBLING WEBSITES
Ranked by Visits from
Massachusetts*

108 | iGamingBusiness | Issue 87 | July/August 2014

 Data Centre

Most POPULAR
GAMBLING WEBSITES
Ranked by Visits from
IOWA* Websites
Segmented Segmented

Most
Visits Rate

Powerball 11.27% 3.16%

pOPULAR
Most
PCHLotto 7.87% 1.02%

Bovada.lv

FreeSlots
5.81%

5.38%
1.13%

1.44%
GAMBLINg
WEBSITES
Popular King.com 4.72% 1.32%
Ranked by
Gambling
World Series of Poker 4.70% 1.61%

ScoresAndOdds.com 3.63% 6.38% Visits

Websites PCHSlots 2.71% 0.73% from
Ranked by
Visits FROM
Bovada.lv Sports

Cappers Mall
2.16%

2.05%
2.38%

N/A
new
CALIFORNIA* jersey*
Websites Segmented Visits Segmented Rate Segmented Segmented
Websites
California Lottery 20.79% 94.60% Visits Rate

Bovada.lv 4.44% 13.90% Caesars Casino 22.48% 93.49%

PCHLotto 4.39% 9.10% World Series of Poker 14.43% 49.10%

TVG 3.20% 34.67% Lottery Post 6.78% 8.59%

King.com 2.96% 13.37% www.harrahscasino.com 5.38% 98.29%

WorldWinner 2.82% 12.62% 888 Casino 4.43% 93.88%

FreeSlots 2.28% 9.81% New Jersey Lottery 3.82% 89.27%

PCHSlots 2.23% 9.62% 888.com 1.99% 94.66%

Lottery Post 1.89% 3.87% Harrah's Casino Hotels 1.70% 9.13%

Harrah's Casino Hotels 1.80% 15.59% Bovada.lv 1.49% 2.89%

PCHLotto 1.44% 1.85%

Most
Popular GAMBLING
Most POPULAR
Websites Ranked by Gambling
Visits from NEVADA* Websites
Segmented Segmented
Websites
Segmented Segmented Ranked by
Websites
Visits Rate Visits Rate Visits from
FLORIDA*
World Series of Poker 27.31% 31.90% Florida Lottery 45.20% 90.96%

Covers 6.92% 16.68% PCHLotto 5.13% 7.37%

PCHLotto 4.80% 2.11% Bovada.lv 3.50% 7.60%

California Lottery 2.65% 2.56% Lottery Post 3.30% 4.70%

Harrah's Casino Hotels 2.56% 4.72% PCHSlots 2.50% 7.48%

PCHSlots 2.03% 1.87% Florida Lottery - Second

1.67% 95.57%
Chance Drawing
Bovada.lv 2.01% 1.34%
King.com 1.61% 5.05%
Clubwpt.com 1.93% 6.97%
FreeSlots 1.61% 4.78%
FreeSlots 1.91% 1.74%
Powerball 1.40% 4.38%
VegasInsider.com 1.37% 7.34%
NY Lottery 1.39% 2.61%

*4 Rolling Weeks ending June 14, 2014

Source: Experian Hitwise US
iGamingBusiness | Issue 87 | July/August 2014 | 109
 marketplace

MARKETPLACE 2014/15
Welcome to the MarketPlace listings section in iGaming Business. All listings below are from our suppliers guide
MarketPlace 2014/15. To request a free copy of this publication or to have your company listed below please contact
Ian Larcombe on +44 (0) 207 954 3412 or email ian@igamingbusiness.com.

advertiSinG, marKetinG & Pr Vivo Gaming

Bluff/JackpotsReview www.vivogaming.com
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CAB Magazine www.worldmatch.eu
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iGamingCalendar Secure Trading
www.igamingcalendar.com www.securetrading.com
Income Access The Innovation Group
www.incomeaccess.com www.greentube.com
www.theinnovationgroup.com
N O V O M AT I C - W I N N I N G T E C H N O L O G Y
Lyceum Media Marilyn Monroe Photos ©Renaissance Road Inc.
THE HOFF © 2013 Hoffworld, LLC. • THE HOFF and DAVID HASSELHOFF are trademarks of Hoffworld, LLC and are
conSuLtinG
www.lyceummedia.com registered in the United States and other foreign nationals. Used under licence from MX Digital, LLC. All rights reserved.

Secure Trading
Netrefer www.securetrading.com
www.netrefer.com
SoftSwis
Online Casino Reports GreenTube_MagDirectory_58x58.indd 1 02/06/14 15:56
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www.onlinecasinoreports.com
corPorate Service ProviderS and truStS
PIMS SCA
www.pims-sca.com Affinity Management Services
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Think Management
www.thinkmanagement.com
Net
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EntertainmentMalta
MaltaLtd.
Ltd. Equiom
The
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www.iaffiliates.com www.edict.de ANT Marketing
nokibetaffiliates www.AntMarketing.com
Greentube
www.nokibet.com
www.greentube.com Correlsense
Skrill www.correlsense.com
GTECH
www.skrill.com
www.gtech.com fiXed oddS
BinGo Software Microgaming Kiron Interactive
GTECH www.microgaming.com
www.kiron.co.za
www.gtech.com
Net Entertainment
Microgaming www.netent.com fraud Protection & id verification
www.microgaming.com Experian
SoftSwiss
caSino Software www.softswiss.com www.experian.com

1X2gaming Ultraplay Secure Trading

www.1x2gaming.com www.ultraplay.com www.securetrading.com

110 | iGamingBusiness | Issue 87 | July/August 2014

 marketplace

Betradar Alderney
www.betradar.com
Alderney Gambling
www.alderneygambling.com
Game Software

1X2gaming Gibraltar
www.1x2gaming.com Continent 8 Technologies
www.continent8.com
Secure Trading
www.securetrading.com Gib Telecom
www.gibtele.com
GTECH
www.gtech.com
Isolas
www.isolas.gi
Gaming Management Software Isle of Man
Comtrade Continent 8 Technologies
www.comtrade.com www.continent8.com
BetConstruct
Microgaming Capital IOM www.betconstruct.com
www.microgaming.com www.capital-iom.com
BetGames.tv
SoftSwiss Equiom www.betgames.tv
www.softswiss.com www.equiom.im
Comtrade
Manx Telecom www.comtrade.com
Hosting
www.manxtelecom.com
Evolution Gaming
Bmit www.evolutiongaming.com
Netcetera
www.bmit.com.mt www.netcetera.co.uk
Ezugi
Continent 8 Technologie Jersey www.ezugi.com
www.continent8.com
First Names Group Microgaming
Curacao e-Gaming www.firstnames.com www.microgaming.com
www.curacao-egaming.com Vivo Gaming
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www.vivogaming.com
eCommerce Park Continent 8 Technologies
www.e-commercepark.com www.continent8.com Lottery Software

Manx Telecom PTL Limited Betware

www.manxtelecom.com www.ptl.com.mt www.betware.com

Netcetera Vodafone Malta GTECH

www.netcetera.co.uk www.gtech.com
www.vodafone.com.mt/solutions

Vodafone Malta Intralot Interactive

Legal Services & Licensing
www.intralotinteractive.com
www.vodafone.com.mt/solutions
Affinity Management Services Ultraplay
Jurisdictions www.affinity.co.im www.ultraplay.com
Curacao Curacao e-Gaming
Managed Services & IT Infrastructure
www.curacao-egaming.com
Curacao e-Gaming Euro Consulting EMEA
www.curacao-egaming.com Isolas www.euroconsulting-emea.eu
www.isolas.gi
eCommerce Park Ardenta
www.e-commercepark.com Live Dealer & Live Games www.ardenta.com
eMoore Actual Gaming Dictao
www.emoore.com www.actualgaming.com www.dictao.com

iGamingBusiness | Issue 87 | July/August 2014 | 111

 marketplace

GTECH Capital IOM

www.gtech.com www.capital-iom.com

Income Access Counting House

www.incomeaccess.com www.countinghouseltd.com

SoftSwiss Curacao e-Gaming

www.curacao-egaming.com
www.softswiss.com
Dough Flow
Vivo Gaming www.DoughFlow.com
www.vivogaming.com
Lateral Payment Solutions
WorldMatch www.lateralpaymentsolutions.com
www.worldmatch.eu
Microgaming
Payment SoLutionS www.microgaming.com

Realex Payments
www.realexpayments.co.uk

Safecharge
www.safecharge.com

Secure Trading
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Skrill
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Vantiv Gaming Solutions

www.vantiv.com

PoKer Software

BetConstruct
www.betconstruct.com

Connective Games
www.connectivegames.com

GTECH
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Greentube
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112 | iGamingBusiness | Issue 87 | July/August 2014

 marketplace

Pentasia treaSury and BanKinG ServiceS

www.pentasia.com

Betting Jobs Capital IOM

www.bettingjobs.com www.capital-iom.com
Cross-platform
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Greentube N O V O M AT I C - W I N N I N G T E C H N O L O G Y
www.betconstruct.com
www.greentube.com Marilyn Monroe Photos ©Renaissance Road Inc.
THE HOFF © 2013 Hoffworld, LLC. • THE HOFF and DAVID HASSELHOFF are trademarks of Hoffworld, LLC and are
registered in the United States and other foreign nationals. Used under licence from MX Digital, LLC. All rights reserved.

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tranSLation ServiceS SoftSwiss
Intralot Interactive 101 Translations www.softswiss.com
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LVS All in translations Vivo Gaming
www.lvs.co.uk www.allintranslations.com
ww.vivogaming.com
Sports Betting Tech One Hour Translation
www.sbtech.com www.onehourtranslation.com
WorldMatch
Kiron Interactive PSD Translation
www.kiron.co.za www.psd-group.eu www.worldmatch.eu

iGamingBusiness | Issue 87 | July/August 2014 | 113

 Data Centre

Top 100 gaming sites worldwide

Rk Name URL Games Rk Name URL Games
1 bet365 www.bet365.com Bingo, Casino Games, Live/In-Play Betting, Lottery, Mahjong , Mobile Bingo, Mobile Casinos, Mobile Live Dealer 51 bet-at-home www.bet-at-home.com Casino Games, Live/In-Play Betting, Lottery, Mobile Casinos, Mobile Racebooks, Mobile Sportsbooks, Poker, Racebook

2 The National Lottery UK www.national-lottery.co.uk Lottery, Mobile Lottery 52 My Georgia Lottery www.mygalottery.com Lottery
3 BetFair www.betfair.com Betting Exchange, Bingo, Casino Games, Live/In-Play Betting, Lottery, Mobile Betting Exchange, Mobile Bingo 53 SBOBET www.sbobet.com Casino Games, Live/In-Play Betting, Mobile Sportsbooks, Racebook, Sportsbook
4 William Hill www.williamhill.com Backgammon, Binary Options, Bingo, Casino Games, Forex, Live/In-Play Betting, Lottery, Mobile Binary Options 54 Atlantic Lottery www.alc.ca Bingo, Fantasy Sports, Lottery
5 888 Casino www.888.com Bingo, Casino Games, Live/In-Play Betting, Lottery, Mobile Bingo, Mobile Casinos, Mobile Poker, Mobile Racebooks 55 Sportsbook.com www.sportsbook.ag Casino Games, Live/In-Play Betting, Mobile Racebooks, Mobile Sportsbooks, Poker, Racebook, Sportsbook

6 Ladbrokes www.ladbrokes.com Backgammon, Bingo, Casino Games, Live/In-Play Betting, Lottery, Mobile Bingo, Mobile Casinos, Mobile Live Dealer 56 BetVictor www.betvictor.com Betting Exchange, Bingo, Casino Games, Live/In-Play Betting, Lottery, Mobile Casinos, Mobile Live Dealer

7 Paddy Power www.paddypower.com Bingo, Casino Games, Live/In-Play Betting, Lottery, Mobile Casinos, Poker, Racebook, Rummy Games, Skill Games 57 UFX Markets www.ufxmarkets.com Forex
8 TAB Racing and Sports www.tab.co.nz Live/In-Play Betting, Racebook, Sportsbook 58 TwinSpires www.twinspires.com Mobile Racebooks, Racebook, Sportsbook
9 TAB Sportsbet www.tab.com.au Mobile Sportsbooks, Racebook, Sportsbook 59 Sun Bingo www.sunbingo.co.uk Bingo, Casino Games, Lottery, Mobile Bingo, Mobile Casinos
10 eToro www.etoro.com Forex, Mobile Forex 60 PlayHugeLottos.com www.playhugelottos.com Lottery, Mobile Lottery
11 Unibet www.unibet.com Bingo, Casino Games, Live/In-Play Betting, Lottery, Mobile Bingo, Mobile Casinos, Mobile Live Dealer, Mobile Lottery 61 FXCM US www.fxcm.com Forex, Mobile Forex
12 Betfred www.betfred.com Bingo, Casino Games, Live/In-Play Betting, Lottery, Mobile Bingo, Mobile Casinos, Mobile Live Dealer, Mobile Lottery 62 TVG www.tvg.com Mobile Racebooks, Racebook, Sportsbook
13 SkyBet www.skybet.com Mobile Racebooks, Mobile Sportsbooks, Racebook, Sportsbook, Spread Betting 63 Bets10 www.bets10.com Bingo, Casino Games, Lottery, Poker, Sportsbook
14 FanDuel www.fanduel.com Fantasy Sports 64 Stan James www.stanjames.com Bingo, Casino Games, Live/In-Play Betting, Lottery, Mobile Casinos, Mobile Racebooks, Mobile Sportsbooks

15 Sportsbet www.sportsbet.com.au Live/In-Play Betting, Mobile Racebooks, Mobile Sportsbooks, Racebook, Sportsbook 65 Mecca www.meccabingo.com Bingo, Casino Games, Lottery, Mobile Bingo, Mobile Casinos
16 32Red www.32red.com Casino Games, Lottery, Mobile Casinos, Spread Betting 66 DerbyJackpot www.derbyjackpot.com Racebook, Sportsbook
17 WorldWinner www.worldwinner.com Backgammon, Skill Games 67 Oanda - FXTrade www.fxtrade.oanda.com Forex, Mobile Forex
18 InstaForex www.instaforex.com Forex, Mobile Forex 68 Ace 2 Three www.ace2three.com Rummy Games, Skill Games
19 Bovada www.bovada.lv Bingo, Casino Games, Live/In-Play Betting, Lottery, Mobile Casinos, Mobile Poker, Mobile Sportsbooks, Poker 69 DraftKings www.draftkings.com Fantasy Sports, Mobile Fantasy Sports
20 Coral www.coral.co.uk Bingo, Casino Games, Live/In-Play Betting, Lottery, Mahjong , Mobile Bingo, Mobile Casinos, Mobile Poker 70 TopOption www.topoption.com Binary Options
21 Tombola www.tombola.co.uk Bingo, Lottery 71 Binary.com www.binary.com Binary Options
22 Casino.com www.casino.com Casino Games, Lottery, Mahjong , Mobile Casinos, Mobile Lottery 72 TheLotter www.thelotter.com Lottery, Mobile Lottery
23 Jackpotjoy www.jackpotjoy.com Bingo, Casino Games, Lottery, Mobile Casinos, Mobile Lottery 73 Foxy Bingo www.foxybingo.com Bingo, Casino Games
24 Virginia Lottery www.valottery.com Lottery 74 Wozhongla.com www.wozhongla.com Lottery, Mobile Lottery, Mobile Sportsbooks, Sportsbook
25 WSOP www.wsop.com Casino Games, Mobile Poker, Poker 75 Play Now www.playnow.com Bingo, Casino Games, Live/In-Play Betting, Lottery, Poker, Sportsbook
26 Sportingbet www.sportingbet.com Casino Games, Live/In-Play Betting, Lottery, Mobile Casinos, Mobile Lottery, Mobile Racebooks, Mobile Sportsbooks 76 TomWaterhouse.com www.tomwaterhouse.com Mobile Racebooks, Mobile Sportsbooks, Racebook, Sportsbook
27 Tatts www.tatts.com Lottery, Racebook, Sportsbook 77 DraftStreet www.draftstreet.com Fantasy Sports
28 24Option www.24option.com Binary Options, Mobile Binary Options 78 iFOREX www.iforex.com Forex
29 Nairabet www.nairabet.com Binary Options, Live/In-Play Betting, Sportsbook 79 Totesport www.totesport.com Bingo, Casino Games, Fantasy Sports, Lottery, Mobile Racebooks, Mobile Sportsbooks, Racebook, Sportsbook

30 MyBet www.mybet.com Casino Games, Live/In-Play Betting, Lottery, Mobile Sportsbooks, Poker, Sportsbook 80 TABtouch www.tabtouch.com.au Live/In-Play Betting, Mobile Racebooks, Mobile Sportsbooks, Racebook, Sportsbook
31 Illinois Lottery www.illinoislottery.com Lottery, Mobile Lottery 81 Tempobet www.tempobet22.com Casino Games, Live/In-Play Betting, Poker, Sportsbook
32 Markets.com www.markets.com Forex 82 Party Poker www.partypoker.com Casino Games, Mobile Poker, Poker
33 Rummy Circle www.rummycircle.com Rummy Games, Skill Games 83 Costa Bingo www.costabingo.com Bingo, Casino Games, Lottery, Mobile Bingo
34 PokerStars www.pokerstars.com Mobile Poker, Poker 84 IronFX www.ironfx.com Forex, Mobile Forex
35 Pinnacle Sports www.pinnaclesports.com Casino Games, Mobile Sportsbooks, Sportsbook 85 NetBet www.netbet.com Casino Games, Live/In-Play Betting, Poker, Sportsbook
36 The Health Lottery www.healthlottery.co.uk Lottery 86 Gamebookers www.gamebookers.com Casino Games, Live/In-Play Betting, Mobile Racebooks, Mobile Sportsbooks, Poker, Racebook, Sportsbook

37 Horse Player Interactive www.horseplayerinteractive.com Mobile Racebooks, Mobile Sportsbooks, Racebook, Sportsbook 87 Sky Vegas www.skyvegas.com Casino Games, Lottery, Mobile Casinos
38 IG www.ig.com/uk Binary Options, Forex, Mobile Spread Betting, Spread Betting 88 Sports Interaction www.sportsinteraction.com Casino Games, Live/In-Play Betting, Lottery, Mobile Casinos, Mobile Racebooks, Mobile Sportsbooks, Poker

39 Gala Bingo www.galabingo.com Bingo, Casino Games, Lottery, Mobile Bingo, Mobile Casinos, Sportsbook 89 Centrebet www.centrebet.com Mobile Racebooks, Mobile Sportsbooks, Racebook, Sportsbook, Spread Betting
40 Tipico Online Gaming www.tipico.com Casino Games, Live/In-Play Betting, Sportsbook 90 LeonBets www.leonbets.com Casino Games, Mobile Sportsbooks, Poker, Sportsbook
41 www.BetCRIS www.betcris.com Bingo, Casino Games, Live/In-Play Betting, Mobile Sportsbooks, Poker, Racebook, Sportsbook 91 Forex.com www.forex.com Forex, Mobile Forex
42 StarGames www.stargames.com Bingo, Casino Games, Mobile Casinos, Poker, Skill Games 92 Sky Poker www.skypoker.com Casino Games, Lottery, Poker
43 PlayMillion Casino www.playmillion.com Casino Games 93 Las Vegas USA Casino www.lasvegasusa.eu Bingo, Casino Games, Mobile Casinos
44 Oz Lotteries www.ozlotteries.com Lottery 94 Bodog www.bodoglife.com Bingo, Casino Games, Live/In-Play Betting, Lottery, Mahjong , Mobile Casinos, Mobile Racebooks

45 CaesarsCasino.com www.caesarscasino.com Casino Games 95 ClubWPT www.clubwpt.com Casino Games, Poker

46 Betclic www.betclic.com Casino Games, Live/In-Play Betting, Lottery, Mobile Sportsbooks, Poker, Sportsbook 96 Opteck www.opteck.com Binary Options, Mobile Binary Options
47 AnyOption www.anyoption.com Binary Options, Mobile Binary Options 97 Game Duell www.gameduell.com Mobile Casinos, Skill Games
48 5Dimes Casino and Sportsbook www.5dimes.eu Backgammon, Casino Games, Lottery, Poker, Racebook, Skill Games, Sportsbook 98 Plus500 www.plus500.co.uk Forex, Mobile Forex
49 Bet9ja www.mybet9ja.com Live/In-Play Betting, Racebook, Sportsbook 99 XM Markets www.xm.com Forex, Mobile Forex
50 bwin www.bwin.com Backgammon, Bingo, Casino Games, Live/In-Play Betting, Lottery, Mobile Casinos, Mobile Live Dealer, Mobile Poker 100 Betsson www.betsson.com Bingo, Casino Games, Live/In-Play Betting, Lottery, Mobile Casinos, Mobile Sportsbooks, Poker, Sportsbook

Data provided by casino city press

• Traffic rankings indicate relative popularity of the 100 most popular iGaming sites offering real-money wagering and are based on historical web usage of a panel of
nearly 20 million users over a 3-month period prior to publication.
• The rankings are estimates based on panel usage and should not be considered absolute ranking values.
• Only the top 5% of all iGaming sites are listed. For detailed, current, accurate information on 2,500 iGaming sites and 2,000 iGaming portal sites, along with rankings of
the top 1,000 iGaming sites and the top 1,000 iGaming portals, directories of software providers, other suppliers, regulatory jurisdictions, and more, the latest edition of
Casino City’s iGaming Business Directory is indispensable.
View sample pages at www.casinocitypress.com

114 | iGamingBusiness | Issue 87 | July/August 2014

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