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KellyCom Articles - a selection of articles written by Judi Kelly - KellyCom - Back to Articles Index


Monthly gaming news from Australia
28 April 2000 , Club Life - (Clubs NSW publication)

Another conference - but a good one

The recent AIC Australasian Gaming and Casinos conference at the Gold Coast was one not to be missed.
With the plethora of gambling conferences currently available - and most not at a cheap price - it's difficult to pre-determine which ones are worthwhile attending.
I, for one, try to select conferences based on the networking opportunities and the ability to learn something new from relevant topics delivered by intelligent and informative speakers.
This conference, in my opinion, was the best ever. The delegate list included the "who's who" from the gambling industry, from testing agencies, to regulators, operators, and CEO's of top Australian and international gaming organisations.
In addition, the conference included specific topics relevant to the delegates - international gaming legislation and regulation updates, opportunities for online gambling internet gambling versus traditional gambling, and the latest technology including WAP and interactive TV.


Potential problems with gaming staff

"The most glaring omission in the Productivity Commission report was the oversight in addressing staff issues," said Jim Connolly from Betsafe.
"There are major staff sufferance problems for those working in the gaming industry that are often neglected," he said.
Mr Connolly presented a contra response to the debrief by Gary Banks, the Chairman of the Commission's inquiry into Australia's Gambling Industries.
For instance, self-exclusion programmes should be internal, and the industry itself should also take a pro-active stance toward staff training. This is a different stance from the Commission's report that suggested that it was the government's responsibility to develop appropriate preventative measures for those that personally believe that they have a gambling problem.

Options for modifying pokies
· Curtailing bill acceptors?
· Limitations on spending rates?
· Enforced breaks?
· Big payouts by cheque?
· Pre-commitment mechanisms?
Source: Productivity Commission

Mr Connolly agreed with the key strategy of harm minimization and the issue of capping the number of machines.
"Accessibility is definitely an issue, but it's a venue issue and not arbitrary.," he said.
"Where does the industry go from here? I suggest a partnership approach, along the lines of what we've achieved through our Betsafe clubs programme." Obviously, responsible gambling needs constant monitoring and improvements to meet the challenges that lie ahead.

Improving regulatory processes
· State Parliament decides policy
· Independent controls commissions
- issue licenses
- provide information for policy
- oversee harm minimization (awareness, help services, research)
· Separate "policeman"
· Consulting local communities
Source: Productivity Commission

Blue skies for National Standards

Over recent years, gaming machine manufacturers have complained about the need to submit the same equipment, games and systems to multiple jurisdictions for testing and approval against individual standards and specifications. The reason for this is added costs and time delays to introduce products in a very competitive environment.
In addition, regulators have questioned the need to maintain either their own testing facilities and employ specialized staff, or their ability to demand exclusive access to independent testing agencies.
Both of these issues are relevant to club managers, who want the latest technology quickly.

Mr Bill Lahey, Chief Executive of the Victorian Casino and Gaming Authority, delivered an update to AIC conference delegates regarding the response of regulators to the concerns of manufacturers and the regulator's own need to improve operational efficiency, through
· Establishment of National Technical Standards
· Implementation of a National Scheme for Accreditation of External testing Agencies.

The National Gaming Machine Standards Model

In Australia and New Zealand, thirteen statutory bodies regulate gaming machines, approved with their own technical standards. With the gradual adoption of common gaming technology and control systems, the differences became minimized through development by the regulators of the "Australia/New Zealand National Standards for Gaming machines."
By 1997, the working party adopted a new approach that maximized the contribution of manufacturers and operators in the development of the National Standards. Manufacturers had the opportunity to initiate proposed amendments to the standards, enabling a more open and transparent process. The latest version of the standards currently applies to NSW, QLD, SA, Vic and WA, and the document includes common "core" requirements agreed by all jurisdictions and a matrix that identifies the differing requirement of participating jurisdictions such as minimum player return, bet and prize limits.


The role of External Testing agencies
Regulators have agrees to accredit external testing agencies within the National testing Standards framework. Uniform technical standards now apply across most of the Australian and New Zealand gaming jurisdictions to accommodate the concerns of the manufacturers and improve the regulatory processes.
However, new pressures have emerged arising from community concerns about the negative impacts of gambling, including changes to machine features and the provision of player information.
Mr Lahey from the VCGA concluded his presentation with the logical next step:
"Continued co-operation between regulators and manufacturers is critical to the success of ‘responsible gambling' achieved through changes to the design and operation of gaming machines."


Break-out box
Current state of online Gaming
Over 200 operating companies or governments
More than 700 internet gaming sites
At least 53 governments sanction some form of internet gaming worldwide
The "genie" is out of the bottle - online gaming is here to stay
International co-operation is a must

Gaming Info - InterContinental Casinos
Turnover - spin rates up to 600/hour
Blackjack hand rates up to 550/hour
Success based on deposits, not "drop"
Detaild games statistics such as audited payout ratios
Hold percentages lower than traditional operations (eg slots return up to 98%)

GAMING NEWS SNIPPETS

Bally Gaming pulls out of Australian market - again
US-owned gaming machine maker Bally Gaming has closed its doors in Australia less than five years after attempting to re-establish its local presence. Bally Gaming spokesman Mr Ted Cully, whose clients include Crown casino and Tabcorp, confirmed that some staff have been laid off. This is the third time North America's second-largest gaming machine manufacturer, Bally Gaming, has pulled out of Australia since the early 1970s.

Two internet gambling companies bank on an IPO

Lasseters is aiming to raise $40 million in their float giving the casino group a market capitalisation on listing of $117.5 million.
The company, which owns and operates the Lasseters Hotel Casino in Alice Springs and Australia's first licensed internet casino, Lasseters Online, is offering 30 million new shares at $1 each, raising $30 million to develop and expand its online casino and to retire debt.
Lasseters Holdings, formerly Quilter Assets (Australia), bought Lasseters out of receivership for about $20 million in 1997. Since then, total revenue has increased 28 per cent to $20.4 million in 1998-99.
This financial year, Lasseters Holdings' total revenue is forecast to grow 44 per cent to $29.4 million, with the hotel casino contributing $22.6 million and Lasseters Online $6.6 million.
Lasseters Hotel Casino is forecast to post EBITDA of $4.9 million and Lasseters Online a loss of $3.4 million.
Lasseters Hotel Casino opened in 1981. Lasseters Online, launched last April, is expected to contribute 22 per cent of the group's total revenue in 1999-2000 and 53 per cent of total revenue in the six months to December 31, 2000.
The 120-page prospectus, containing some interesting facts and figures in relation to internet gambling, is available on the Macquarie website under Share offers at www.macquarie.com.au


*****

Meanwhile, Access Gaming Systems Limited, a supplier of internet gaming systems, intends to raise approximately$45 million with an initial public offering of shares.

The company, with a workforce of over 150, supplies major casinos and lottery groups in regulated jurisdictions in Australia and Europe with a total Internet gaming system which the operators can easily customise.

Access supplies regulated internet casinos and lottery operators, including Lasseters Online, Tattersall's, Federal Hotels, Golden Casket and GOCORP in Australia as well as Austrian Lotteries, Westdeutsche Lotterie, Holland Casinos and RAL in Europe. Access' current clients have a combined turnover of in excess of $20 billion through their existing land based distribution channels.

"Our base of quality clients offers investors a unique opportunity to gain a diversified exposure to the rapidly expanding Internet gaming industry. Frost & Sullivan estimates the industry will grow from $639 million in 1998 to $17.2 billion 2003 representing a compound rate of growth of more than 40% per annum," Managing Director, Stephen Mulcahy comments, "The industry is still in its infancy and Access expects to sign up additional clients in the near future."

Access has also taken the approach of making its Internet gaming system an open platform, enabling its clients and independent games developers to create new games based on its platform. To achieve this, it provides its Game Development Kit (GDK) free of charge.

Access is forecasting revenues of $11.3 million in the year to June 30, 2000 with a net loss of $7.5 million. Directors say that while the majority of Access' clients will not be operational until the latter part of year ending 30 June 2000, these clients should contribute strongly to Access' revenues in 2001 and beyond.

The prospectus can be viewed on Access' website www.access.com.au