The AIC Gaming and Casinos event was held at sunny Surfers Paradise over three days in late February, attracting over 180 delegates from as far as Finland, France, Africa, UK, Canada, US as well as Asian visitors from Malaysia, Hong Kong, and Singapore.

The three-day conference included government and regulatory issues, online gambling developments, and future trends for the industry as it applied to Australia and the global gaming industry. Fortunately the sessions were well-timed and not too lengthy, with numerous networking breaks in between at the small exhibition area.

Indeed, some of the seasoned conference delegates found that the river cruise in itself deemed the conference a huge success. The change of plans happened at the last minute. "We had planned the cruise as a cocktail party and 3-course sit down dinner for 70 delegates on the first night of the conference," said AIC's organiser, Mr Leon Kantor. "During the course of the day we learned that over 120 delegates were looking forward to attending the cruise, so we quickly changed the plan to offer cocktails and substantial snacks throughout the evening, rather than a sit-down dinner."

This allowed the speakers and guests to mingle and move around between the open-air upstairs deck and indoor cruise facility, to meet as many gaming associates as possible. This is what conferences are all about!

High rollers - rolling commission or rebate on loss?

The conference covered both land-based gaming operations and online and future gaming applications. Mr Brian Fiddis, Executive Director of International Marketing for Conrad Jupiters casino, explained the definition of a high roller from a terrestrial casino's point of view, as it varies substantially from the on-line environment.

High rollers generally fit into two categories, Junket Groups and Individuals.
1. Junket groups - mainly cash. Paid a higher percentage for introducing players to the property that the casinos would normally be able to target. The group/junket operator also organises intineraries, funds transfers and marketing such as dinners.
2. Individuals - credit for established customers and cash for new unknown business. Individuals are paid a slightly lower percentage, but it is still an attractive deal depending on the property. For instance, Jupiters offers a rebate of up to 20% on losses based on the initial deposit for certain customers.
According to Mr Fiddis, some Australian casinos in the high roller market offer both rolling commission (where a percentage of the amount bet is returned to the player) and rebate on loss commission (where the player receives a rebate on the front money or initial amount bet).
"The Las Vegas system, however, focuses solely on variations of the rebate on loss scenario," he said.
There is naturally an inherent volatility in the high stakes gambling industry, however land-based casinos continue to pursue this lucrative market.
"As long as one is clearly focused on the pro's and cons, and maximizing contributions to revenue, fundamental probability is not in question," explained Mr Fiddis.
For both the player and the operator, attractions include the "deal" in terms of commission, credit and betting limits, the product which includes accommodation, food and beverage, access to destinations and service such as staff relations particularly regarding cultural understandings of different nationalities.
Mr Fiddis outlined the future of the high-roller and premium play gaming market in terms of a geographically targeted market.
With regard to opportunities, all eyes appear to be firmly fixed on China as the next growth market.
"At the present moment, there are via and funds transfer challenges to be met, however, this section of the marketplace should continue to grow and develop quite strongly in the next two or three years."

"Casinos that do not support iTV users will be missing out on a market tipped to reach more than 10 million users by 2002." - Forrester Research.

One of the more arresting, if not controversial, presenters was Brad Allen, Co-founder and Director of WSA Online. The content of his topic, the Introduction to iTV and the impact on the online gambling environment was refereshingly new, and his delivery was novel in its approach. Forget the usual powerpoint presentation or overhead slides - he actively used the podium with his wireless mike, sketched on the whiteboard, selected delegates from the audience to participate in his presentation, and even passed around brochures on the latest technology from the US and a current WAP phone.
Melbourne-based WSA Online is an online development company with four core businesses - consulting (involving licensing, revenue projections), developing web sites, online media buying, and its blue sky research and development division.
Mr Allen concentrated on the Blue Sky aspects of his company's business, informing delegates of the potential of iTV and WAP. For non-techno heads, iTV is interactive television or more commonly known as webTV, which overlays web content over TV programming and uses a set-top box or dedicated TV receiver to merge the content. According to Mr Allen, Microsoft claims a current base of around 900,000 subscribers to webTV, up from 400,000 around 12 months ago.
"iTV and online gambling essentially come together through the internet, gaming and TV content. iTV creates the opportunity to drive potential online gamers online though new access packages," he explained.

"Totally new gambling concepts may emerge from the online environment through iTV"

Unlike PC-based internet gambling, iTV has the potential to merge an internet gaming interface with TV content.
"This has very significant implications," explained Mr Allen, citing the following examples:
* Casino games - one to one marketing with "push" marketing relating to special offers, new games etc. Specialist programming could also create new options such as live feeds from casinos.
* Lottery - opportunities to sell lottery tickets with a reminder sent prior to close of the draw.
* Sportsbetting - opportunity to synchronise with sports programming to offer last bets etc.
* New games - theoretically anything with random and odds that can be calculated can offer a wager.
"Just as importantly, the nature of the interface also means that gaming can be undertaken in a communal environment," said Mr Allen. A combined function of iTV could be as simple as watching TV while simultaneously surfing the internet.
Mr Allen was critical of many current internet casino games, as they suffer from "poor design, very lengthy software download times and a similar range of games."
As an alternative, the iTV context has the potential to create a far more attractive image for online gaming than the "solitary" nerd connotations of gambling on the PC.
"iTV can also make the online casino a group experience, which will tend to discourage problem gamblers and provide balances for excessive impulses," he said.
On a separate note, Mr Allen mentioned that current trends point to a $15 billion gambling market by 2005 in Australia, an increase of $4 billion in the next five years. Poker machines are estimated to grab 58% market share, followed by Wagering/TAB and casinos (each with 13%), lotto/keno/pools with 10.6% and other forms of gambling representing 5.4%.

WAP will Zap online gamers

For those unfamiliar with techno phrases, WAP is Wireless Application Protocol, the likes of what we are beginning to see emerge by delivering interactive content to cell phones and hand-held computers like Palm Pilots.
Mobile phones compatible with the WAP protocol are already on the market, with more enhanced versions expected to become the "norm" over the next year or two.
"From the gambling perspective, WAP presents a great opportunity," said Mr Brad Allen from WSA online. WAP will enable reminders of race, event or lottery draw times to be sent to the user, and complex bets placed and confirmed using the text interface.
"WAP content can be co-ordinated with live events or TV programming, meaning that owners of a WAP phone have most of the potential of iTV at their fingertips whenever they watch the television," he said.
Unlike iTV or internet interfaces, WAP phones are likely to be with the user and switched on during most waking hours, making reminder services more useful and allowing timely messages or offers to be sent with near certainty that they will be seen. WAP looks like it's coming to your shirt pocket sooner rather than later!

53 Governments sanction internet gambling

Sue Schneider, Chair of the Interactive Gaming Council, provided an update on the current role of the IGC. The trade association now comprises 80 companies and interested governments/organisations to provide a forum to advance the common interests of the global interactive gaming industry.
"Online gaming has been a new phenomenon since 1995, when we saw the first promotional use of the internet for gaming," said Ms Schneider.
"There are now over 200 operating companies or governments, and more than 700 internet gaming sites with a potential US$3 billion market by 2001," she explained.
More than 53 governments sanction some form of internet gaming worldwide, even though proposed US prohibition legislation passed the Senate in 1999.
"Regulation lures legitimate operators, whilst prohibition opens the door to unscrupulous operators to prey on the market. Prohibition will create a new breed of "at-home" law breakers, whereas regulation offers jurisdictions valuable tax revenues," said Ms Schneider.
In a nutshell, the Interactive Gaming Council has a very compelling argument against the prohibition of internet gambling.
Ms Schneider sums it up when she says "The "genie" is out of the bottle - online gaming is here to stay. International co-operation is a must, and the need for regulation is imperative."

Norfolk Island forges ahead with online gambling

Mr Kev Leyshon, the Director of Gaming with the Norfolk Island Gaming Authority, informed the gaming conference delegates on February 24 that an election was held the previous day, and Mr Geoff Gardner had been re-elected as Minister for the Authority.
They have been actively marketing the island as an attractive online gaming jurisdiction for the past six months, and are currently assessing five applicants. Two un-named applicants are just completing the conditions of the license, while the remaining three are currently undergoing probity checks.
"In six months we're likely to take off in an internet gaming operational sense," said Mr Leyshon.
Successful applicants, who will pay 4% government duty, are given twelve months from day of licensing to the time when their operation goes live, although extenuating circumstances will be considered.
"Gaming is raw commerce, and can be likened to the days of the industrial revolution," explained Mr Leyshon to the AIC delegates. "There will be sharks in the water to start with, then we'll have a heap of small fish, but we'll end up with a selection of big fish and a few whales."
He acknowledged the location of Norfolk Island, 1400 km east of Australia in the Pacific Ocean and around 1.5 hours flight time from Sydney, as a problem - particularly with regard to communications.
"However, telecommunications company Telstra confirms that they can supply any bandwidth and claim that they will be competitive, but are yet to supply prices," he said.
The island is currently working with the applicants in assessing other communications options such as satellite delivery, which will increase accessibility on a global level.
In order to apply for an internet gaming license, the operator must be an Australian registered company and needs to maintain a bank account on the island. Interestingly, the license does not require the operator to be domiciled at Norfolk.
Norfolk Island is part of the Australian Commonwealth, and as such they are kept fully informed of internet gaming developments.

Internet casinos spending $2 million a month on advertising

"The top internet casinos are spending A$50,000 to $2 million per month just on marketing," disclosed Mr Shaun McCamley, highlighting one of the distinct differences between internet gaming vs. traditional gaming.
Operating costs are substantially different when operating an on-line gaming site compared to a terrestrial casino.
Marketing an on-line casino can represent as much as 30% or 40% of budget, whereas a casino such as Caesars or Mirage may only allocate 10% on advertising and promotion.
Land-based casinos base their earnings and subsequent profitability of their business around gaming hold or "drop". Internet casinos, on the other hand, work on deposits.
"We are in the business to share the risks and rewards, and as such supply the software at a nominal price and then work on a royalty basis of 30% on gross revenue, which offering technical support and software upgrades," said Mr McCamley, VP of InterContinental Casinos Ltd.
He delivered an extremely informative presentation to the AIC delegates, outlining of his experience as an internet casino operator, interspersed with current facts and figures. Understandably, as is common with most internet casino sites, 85% of bets placed originate from the U.S. How ironic, when Senator Kyl believes he can prohibit internet gambling!
InterContinental's current sites, www.usacasino.com and www.newyorkcasino.com are powered by Boss Media and offer unlimited "real estate" in terms of table games. In layman's terms, the client software can be customized to offer as many tables as required for their specific casino operation. Blackjack offers the speed of up to 550 hand rates per hour, and their audited payout ratios from Price WaterHouse Coopers validate that 93% of the bets placed are won.

Relates conference news

While at the conference, InterGaming caught up with Mick Caban, the General Manager of Sky City Limited. He received notice only the night before that the New Zealand casino operator had won the Adelaide Casino Bid. Effectively, Sky City was selected as the preferred purchaser of the Adelaide Casino in South Australia, and will acquire 100% of the issued shares in the casino as a cost of A$180.25 million. Sky City regards the Adelaide Casino as a business that compares closely to its Auckland operation in that both cities are similar in size and a number of key staff are Australians who had previously worked at the Adelaide Casino.
Sky City comprises the casino, a range of restaurants and bars, the 344-room Sky City Hotel, a conference centre, Sky City theatre and Sky Tower. The company also has new casinos under development in two other locations in New Zealand - Hamilton and Queenstown, New Zealand's most popular alpine resort.
The deal is still subject to approval by the SA Gaming Supervisory Authority and the Foreign Investment Review Board of Australia.

Delegates included:

Paul Abbleby, CEO GoCorp, William Balgowan, Casino Project Manager Victorian Casino & Gaming Authority, Peter Bridge, CEO Lasseters Hotel Casino, Mick Caban, GM Sky City Limited, Sing Hong Chai, MD KY Asset Management Malaysia, Kwang Hua Chhoa, Director Opcom Holdings Malaysia, Brian Cooke, Director Interactive Gold, Mario DeSouza, Operations Mgr Viola Group International Hong Kong, Joe Collins, Group Exec Business TAB Limited, David Ford, Executive Director QOGR, Ed Foy, CFO ebet limited, Tony Fontaine, Consultant Station Casinos USA, Wolfram Gauglitz, Director New Business Silicon Gaming USA, Christer Jannson, President PAF Finland, Robert Gee, Director Research, CIBC World Markets, Ian Hughes GM Gaming Laboratories Australia, Berni Keete, Casino Controller Jupiters Casino, Lindsay Leborgne, Commissioner Kahnawake Gaming Commission Canada, Christian Lee, VP Innoco Inc USA, E Dutch Lerat, CEO Sask Indian Gaming Authority USA, Tim Maland, Snr VP Finance Playboy Enterprises USA, Michael Meeks, President E-Success Canada, Hugh Monypenny, MD Bellamy Miller and Monypenny, Piers Morgan, GM Jupiters Limited, James Osborne, Director Christchurch Casinos, Franck Santa-Maria, MD Bally France SA France, Sue Schneider, Chairman Interactive Gaming Council, Banjamin Shaw, CEO Zettes Group PLC UK, Dave Steinhardt, GM MGM Grand Darwin, Mac Sugita, MD Pacific Gaming, Rob Sutherland, Director Risk Management E-Success, Mark Waters, Director Business Development Gambling Software Systems, Kombamong Wak, Deputy Registrar National Gaming Control Board New Guinea.