Gaming in Europe

It may not have shattering visitation numbers like Macau, but the European gaming market is hot in its own right. With many new bills, legislation and news coming from various countries in the continent, today CEM brings you one perspective.

Tracy Cohen
Tracy Cohen
We sat down with Tracy Cohen, marketing manager for TCSJOHNHUXLEY and recently appointed director of Europe for the Association of Gaming Equipment Manufacturers (AGEM), to get her take. Her first-hand knowledge of the market is invaluable, so read on to find out what she sees and thinks, ranging from recent developments and initiatives at her own company, her new position with AGEM and other gaming trends in Europe.

AGEM in Europe
CEM: AGEM has a growing presence in Europe. Please tell our readers about the strength and scope of the association there.

Tracy Cohen: AGEM was founded more than 10 years ago to identify issues of common interest to suppliers and manufacturers, so that collectively the association can help out when and where appropriate.

Since that time, the membership has grown considerably, with the numbers reaching 115 at the end of June. Of these members, there are currently 31 companies that are internationally based, 19 in Europe alone and another dozen that have sizable operations in Europe. The growth of AGEM, especially on an international level, has been great, but it also highlighted the need for AGEM to have representation outside the U.S.

CEM: Does AGEM currently have any big initiatives in the European market?

TC: The members have discovered that there is truly strength in numbers, and even though they compete against each other every day, the reality is they benefit by working together on issues of common concern.

Our network of members allows the association to keep track of important legislative and political challenges in many of the world’s gaming jurisdictions. With so many eyes and ears out there, the members raise issues that are relevant for all suppliers. The bottom line is that if there is an issue affecting a broad range of suppliers anywhere in the world, AGEM wants to know about it and try to help where possible.

Right now, the hot topic in Europe is online gaming, with many countries currently reviewing and debating options. Although many of our members are not currently directly involved in this sector, there is no doubt that any changes will affect all areas of the industry, so we are keeping a watchful eye on developments as they happen.

CEM: What are your primary duties as the new director of Europe for the association?

TC: The most important aspect of my role, and one of the main reasons for AGEM appointing me, was to have someone on the ground in the same time zone who was able to respond to
e-mails and telephone calls in a timely manner and with understanding of the local market. My role as marketing manager for TCSJOHNHUXLEY has allowed me to work with many of the European members, and I have established good relationships and contacts over many years.

Hopefully, this knowledge and experience of the market allows me to be better equipped to address any issues that affect a broad range of suppliers in the region and service their best interests, bringing them to the table for the wider membership to address.

CEM: There are about 19 European companies that are AGEM members. Do you anticipate increasing that number significantly?

TC: We are always looking to add new members, which relates to all manufactures and suppliers in our sector. As mentioned earlier, there is strength in numbers, and with so many changes likely on the horizon, it makes sense for us to broaden our membership as much as possible.

CEM: What have been some of the early outcomes of opening this new office for AGEM?

TC: One of the most important items that’s been at the top of the agenda for the last six months has been the discussion surrounding the London show. Through a close association and long working relationship with the show’s organizer Clarion Gaming, I have been able to report back to the members the many developments surrounding the proposed future of Earls Court and the possible alternative venues available.

This culminated in early June when AGEM hosted a supplier meeting held in Macau just before G2E Asia, inviting both Reed Exhibitions and Clarion to present to the assembled group. It was at this time that Clarion announced plans to move the ICE show in 2013 to ExCeL, a purpose-built state-of-the-art facility on the east side of London, close to the Olympic Village. This first-hand response and information sharing is extremely worthwhile and has been extremely valuable to the members.

CEM: What are your goals in the coming months and year for AGEM’s operations in Europe?

TC: The role of AGEM in Europe faces greater challenges than those in the U.S. due to all the differing regulations, legislation and laws from country to country. However, by establishing close working relationships through regular discussions with organizations such as the European Casino Association (ECA) and GLI Europe, who through their day-to-day dealings have a very good grasp of issues that relate to our sector, I will be able to report back to members, keeping them abreast of any changes.

AGEM is very active in addressing problem gambling issues having contributed hundreds of thousands of dollars to organizations that address education, prevention and treatment.

Previously, this has centered mainly in the U.S., but the association is looking to work with organizations outside the U.S., and this will continue to be a key focus for the association going forward.

TCSJOHNHUXLEY in Europe
CEM: Can you please now tell us about TCSJOHNHUXLEY’s strength in Europe?

TC: TCSJOHNHUXLEY is a global business with 11 offices worldwide, covering all the major gaming jurisdictions. The head office is in London, with the main U.K. operation in Stoke-on-Trent situated in an 86,500 square foot purpose-built facility incorporating administration, technical support, a service center and manufacturing. Eclipsing anything else in Europe in terms of what can be achieved in the alliance between casino supplier and operator, standards of production have been enhanced through logistical advances in warehouse layout. Raw materials follow a near-conveyor belt flow around the warehouse from goods in to goods out in a process where they can be tracked at any stage of their development by their soon-to-be owners. The closeness of the manufacturing function to the centrally located logistics center also brings it own advantages with speedier and more cost-efficient delivery.

The Stoke manufacturing operation has a team of more than 100 staff who are trained specialists and skilled craftsmen, as much of the traditional product range is custom built to order.

At the end of 2010, the European Technical Support Center, which is also based on the Stoke site, was awarded the prestigious ISO 9001:2008 accreditation. The European operations division has been hugely successful over the last five years, with growth year on year and the highly skilled team tripling in size. Offering installation, maintenance and service support, it is without doubt the strongest and best service supplier to the gaming industry in the U.K. and Europe.

CEM: Are there product offerings that are exclusive to markets in Europe—or are doing exceptionally well there—that you want to tell us about?

TC: We do not specifically have product offerings that are exclusive to markets in Europe, though we do fine-tune products for specific regions or sectors if required. Our hugely successful MultiPLAY product has been further developed to include a fully automated and cashless configuration for an even greater return on investment. By using the new TCSJOHNHUXLEY Gemini™ wheel combined with bill acceptors and ticket printers, the result is a very lucrative 24 hour-a-day live-hybrid roulette platform that requires no dealer or inspection. The robust table design of MultiPLAY HD Auto offers high-quality gaming to all types of venues, ranging from traditional casinos and electronic casinos to slot clubs and electronic arcades that are popular in Eastern European areas.

CEM: What impact does i-gaming make on your business in Europe, if any?

TC: At present, i-gaming does not make any real impact on our business, although we have supplied products to several i-gaming companies. As the i-gaming sector continues to grow, I believe land-based operators will benefit from a crossover of new players this market will undoubtedly generate, which can only be good for business.

CEM: How do you balance your work between AGEM and TCSJOHNHUXLEY?

TC: The two roles complement each other very well. Currently, my AGEM responsibilities are part time, requiring about 10 hours per month, so I can combine this quite easily with all my other activities for TCSJOHNHUXLEY. Through my day-to-day dealings with the media, suppliers and operators, I have found I can bring benefits to both roles.

Commentary on the Market
CEM: What similarities do you see between the U.S. and the European gaming industry? Differences?

TC: The biggest “difference” is one of scale. The U.S. properties within larger gaming communities are vast and more like destination experiences; the majority of European casinos are tailored for gaming. American operators seem to have cracked the loyalty reward programs better than most European operators, and due to their product offering, are able to make the incentives to play at their property over another somewhat easier.

Player activity and trends are very similar apart from the types of games played, as we know roulette in Europe is a major footprint on the gaming floor, whereas card games and craps are “king” in the U.S.

CEM: What are some of the up-and-coming gaming markets in Europe?

TC: From a live gaming perspective, although not up and coming, I would say the U.K., which has at last started to approve some new larger-scale casinos. Licensees for Newham (which is close to the Olympic site) and the NEC in Birmingham are in the process of approval, which will hopefully see the projects come to fruition in late 2012 onward. It is anticipated more will follow.

Online gaming is being discussed widely across Europe right now, with many countries in various stages of debate. With so many traditional gaming companies developing interests with online gaming businesses, this sector is bound to have a major impact once approvals start to happen.

CEM: What markets stand out in Europe as leaders in table game play?

TC: The U.K. and Greece stand out as leaders in table game play, primarily as roulette is such a significant influence. Both countries have a large amount of roulette play that dominates the gaming floor. The introduction of hybrid versions such as the MultiPLAY system have proved to be phenomenally successful with traditional roulette players as they combine the experience of live table gaming with the very latest advances in gaming technology by merging traditional table games and live croupier with a full-sized multi-player betting surface.

The recent introduction of TouchBet Roulette in Greece has been extremely popular with many of the casinos ordering additional terminals after just a few months to cope with player demand. These games deliver all the benefits of electronic gaming, such as increased profitability and reduced time between games, but do not strip away the core essence of live gaming that players enjoy.

CEM: We also have an article in this issue on the trade show scene in London. From your perspective, what do you see and why do you think it’s important for gaming trade shows to happen there?

TC: There are many regional trade shows across Europe. However, the ICE show in London has always been the biggest in terms of size, the amount of sectors it covers and attracting the most international visitors.

London also happens to be one of the most vibrant cities in the world, offering unrivalled links to every major destination worldwide and with unlimited attractions for visitors (even in January). It is for these reasons that visitors to ICE were unanimous the show should remain in city, which in turn led to all the exhibitors agreeing it would be foolish to relocate the show to mainland Europe.

The move to ExCeL in 2013 brings a whole new perspective to the show. The purpose-built state-of-the-art facility will allow the show to expand and provide even more opportunities for exhibitors, and we can all enjoy discovering a new area of London that has been rejuvenated by the expansion of the financial center in Docklands and the Olympic Village.

Amanda Huggett is the Managing Editor for Casino Enterprise Management. She can be reached at (701) 293-7775 or editor2[at]aceme.org.

Gaming in Europe: From an Attorney’s Perspective
By Sarah Klaphake Cords

As Tony Coles, partner at Jeffrey Green Russell in London and president of the International Master of Gaming Law (IMGL), began to tell me about all of the different happenings in gaming law in Europe, he reminded me that, “Nothing in Europe is easy.” Tony Coles
Tony Coles

So we took time to discuss the highlights of the major legal issues in European gaming. Read on to learn what’s happening in the United Kingdom, France, Italy, Spain and Greece. Coles also shares what people attending the IMGL conference in Vienna can expect this fall and why an issue being addressed in Australia is something every jurisdiction may deal with as they work to regulate Internet gambling.

CEM: Currently in the U.K., companies that are regulated in another EU jurisdiction or in a white-listed jurisdiction are allowed to advertise to players in the country as if they were U.K. licensed, but they do not have to pay any regulatory costs or taxes. Can you tell us about the plans that may change that?

TC: The government announced a couple of weeks ago that they’re planning to change the regulatory terms so as to involve the necessity for all operators who want to do business here to have a U.K. license. What we don’t know at the moment is what the detail is going to be or how the reform is going to be structured. But we do know the gambling commission here in the U.K. has announced that there will be a transitional arrangement so that operators who are properly licensed with an existing EU jurisdiction or in a white-listed jurisdiction will be able to segue into this new U.K. structure without too much additional formality so there’s no interruption to their businesses. What we also don’t know is what the tax structure is going to be. We understand that that’s not going to be announced for some while. And indeed, all of these new changes are unlikely to come into force until next year at the earliest, possibly 2013, but certainly not until 2012. So there’s going to be a period of intense lobbying by people in the industry who are seeking to influence the decision for their individual benefits.

CEM: What is the latest in France and Italy as both markets are working with recently passed laws?

TC: There have been big changes in France in the last year, which lead to the new licensing structure there. Which I think generally, some of the French authorities have indicated it’s not working ideally, but it’s not going to be changed before the French presidential election, and that means that people soldiering on with the current law are not in a happy state of affairs.

In Italy, the new cash games rules have just come into force on the first of August, which has opened up the Italian market for online bingo or online poker, games like that, in a way that it wasn’t before. And that’s been quite important.

CEM: What are the recent developments in countries that are introducing or developing new regulations for online gambling?

TC: There are also big developments afoot in the Netherlands, in Spain and in Greece. All of which have introduced or are in the process of introducing new laws so as to regulate online gambling and specifically to tax them. A lot of international operators are involved in those jurisdictions, again endeavoring to argue for the most beneficial structure that they can. There may also be some challenges to the new structures in all of those jurisdictions, probably most likely to be Greece where there are some very strong views that the new structure is not EU compliant and may be susceptible to challenge in the European courts.

CEM: What are the challenges about?

TC: Generally speaking, there’s a feeling that in some of these new jurisdictions, the new rules, although ostensibly compliant with the concept of the opening of the online markets to competition, are in fact slighted in favor of existing operators, often existing monopoly operators, making it difficult for operators from other European Union jurisdictions to be able to set up and do business as they believe they are entitled to do, and thereby stimulate competition.

There may be an inclination by governments not to change too much or to change in favor, as I say, of existing operators, many of whom can be big contributors to government revenues or to good causes that save government revenues whether in health and sport or similar things.

We’re continuing to see an ongoing struggle in terms of gambling, between governments and the states in the European Union still claiming that gambling is different and that it is not really a business, so it should be specially regulated, often in a way that seems to be for the benefit of existing monopolies. On the other hand, the European Commission—the guardians of the European Treaty—maintain that gambling is a straightforward commercial activity and there should also be no restrictions. That has been going on for some years and gets highlighted in the various decisions that come from the EU Court of Justice, which don’t always follow a consistent pattern. And therefore there is a sort of ebb and flow depending on what the latest decision is and which particular circumstances, from which courts in which particular member state, are in issue.

CEM: Can you give us an update on the efforts to create a new Interstate Treaty in Germany?

TC: Gaming in Germany is regulated in a way that has had the individual states in the country agreeing with each other. It’s like all of the states in the U.S. coming together and agreeing on a common way of regulating gambling. Perhaps in the U.S., that would not happen and obviously never has happened, but in Germany it has happened in the past. The current Interstate Treaty has been condemned as not being compliant with EU law by both the constitutional court in Germany and by the European Court and currently a new Interstate Treaty is being negotiated. There is dispute between the states in Germany in regard to what form that should take. One in particular has gone out on a limb and said it wants to regulate online gambling in an open market way, whereas other states say they don’t. And currently, the draft of the new Interstate Treaty has been severely criticized by the European Commission as not being compliant. So I think there’s going to be a lot more mileage coming out of Germany, Germany of course being a huge and very powerful economy with lots of enthusiastic gamblers.

CEM: At the spring IMGL conference in Napa, Calif., you had a track dedicated to tribal gaming in the U.S. and it proved to be very successful. What can people expect from the conference in Vienna this fall?

TC: Obviously, it is international, but here in Europe it is naturally a little more European focused than it was in Napa. So we are not, in Vienna, expected to repeat Indian country panels but we will be addressing some issues in the U.S. including “Black Friday” and what may happen in Congress. We will also be discussing issues in relation to many other parts of the world, including Canada and Australia.

CEM: Can you describe what is happening in Australia and why everyone might want to pay attention?

TC: In Australia, there is a discussion about what is called “the right to bet,” which is the question of whether, if betting is regulated, the bookmaker should be obliged by law to pay a royalty to the sport whose results he uses and data he uses to run his betting book. If you’re organizing betting on any sport, do you have an absolute right to take the results from the media, or is that a commercial benefit that you’re taking so that you should, as a bookmaker, pay to the sports federation that provides the sport and regulates it and makes sure it’s fair and proper and not corrupt. I think that is going to become a big issue around the world. It’s already an issue in Australia, as I say, and it’s an issue in France where it was written into the new law last year and has been very unpopular and has been challenged in the courts. This issue may well crop up everywhere that betting, and especially online betting, is regulated.

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