In publishing gaming trade journals for years, CEM and its publisher have read and written about various gaming trends often throughout this time. When we thought about how to tackle this “future of gaming technology” article, we decided to take a look back at various predictions from years past. Going back a whole decade, there has been much buzz about server-based and server-supported gaming. Even 10 years ago, thoughts were that it was imminent and hurdling toward reality. However, as we sit today, this is not yet an embraced reality.

There was similar excitement about i-gaming years ago. However, when the Bush administration passed the Unlawful Internet Gambling Enforcement Act in 2006, much development on this front ceased, at least from a business perspective in the United States. But with the stark reality of a long economic recovery and budgetary shortfalls, there seems to be a change of heart.

So we turned to the experts to give us the answers—or their best predictions. On the following pages, read essays from suppliers, associations and other professionals, weighing in on what they think the reasons are that SBG has not yet been aggressively deployed in gaming, as well as how long it will be before we see U.S.-based i-gaming operations and what its impact might be on traditional brick-and-mortar operations. Their responses were thoughtful and candid, and we think each has an interesting perspective to share with CEM readers and the industry as a whole. Read on and join the discussion!

John Acres, Founder, Acres 4.0
Before describing my vision of the future of gaming technology, let’s review the foundation upon which this future is predicted. For many years, I’ve preached that server-based technology was an expensive answer to a problem no one had. Nothing occurred in the past year that changes my belief that complex and unreasonably costly server-based designs deliver no significant benefit that existing casino technology cannot provide at a lower cost.

I’m not saying that our existing game and system technology is anything to be proud of—indeed, our entire industry is technically obsolete. Our technology was birthed in an era when each equipment supplier, and each casino operator, presumed it could enjoy monopoly profits by using proprietary technologies to eliminate, or at least minimize, competition.

When Nevada legalized gambling out of economic desperation in 1931, most other states wanted no part of it, due to its perceived immorality and association with organized crime. Over the ensuing decades, Nevada developed regulations to deter undesirable characteristics of the business and, while those rules did accomplish much good, they eventually became weapons against competition that also stymied desirable innovation.

By the 1980s, moral objections to gambling had abated and many state governments came to view legalized gambling as a less objectionable alternative to raising taxes yet again. These changes brought us 30 years of breakneck expansion and breathtaking profit. Our growth occurred within the confines of now-archaic regulatory concepts, which diminished efficiency and player appeal. Few of us minded though, because cost and complexity discouraged competition and, at least in the short term, fattened profits.

Companies like Hewlett Packard, Dell and IBM found the value of our industry too insignificant to justify the cost of climbing over its surrounding regulatory fences. We were left to manage gaming’s technology on our own, while they concentrated on consumer markets—and consumers.

Those of us in gaming were grateful to be left alone, but in the midst of counting our earnings, and battling each other, we forgot about the consumer. We failed to realize that our products were too boring for many and too expensive for most. We failed to adapt our games and products to meet the desires of younger audiences.

Today, only a tiny minority of adults regularly participates in casino gambling and they are growing old. Our games are developed for the customers we have, with no attention paid to the consumers we do not attract. Younger people—and here I use that term to indicate anyone under the age of 50—demand different experiences than their parents. When our existing core customers “age out,” we’re going to fall off a steep economic cliff that’ll make us remember the past four years of economic recession as “the good old days.”

Today’s Internet has won the hearts and minds of consumers everywhere. Low in cost, easily accessible and highly innovative, the Internet offers an amazing selection of affordable, often free, entertainment. And make no mistake; casino gambling is nothing but a form of entertainment.

Every consumer dollar spent on an Apple iPad™, an Android smartphone or an Amazon Kindle is a dollar not wagered in a casino. Worse, these devices are powerful portals to further and constant consumer consumption, where games, information, education, movies, music are offered in ever-expanding quantity. Whether for a fee or for free (and paid for through advertising), the Internet owns the world’s consumers and we don’t have a prayer of winning them—or their wallets—back with our current products or marketing methods.

Against this background, I see two possible futures for casino gambling.

The first is oblivion. Just as horse race tracks once thrived and have now all but disappeared, without radical change, casinos are headed for extinction. Calculators and computers made slide rules obsolete, and the Internet can surely do the same to us.

The second possibility is bright, shiny and profitable, but rests in the exact opposite direction from which we now travel. To achieve this future, we must embrace all things Internet, including its technology, its reach and its pricing models. Brick-and-mortar casinos offer a sense of community and participation that solitary Internet experiences cannot match. Only by combining the two can we achieve future success.

Here are five key elements of a successful casino of the future:

• Internet integration. Consumers touch your casino from home and learn to play. They enjoy qualifying rounds at home and earn extra powers and capabilities that are deployed when they visit the casino. Social media is tightly integrated. Think enhanced tournaments, virtual awards, community play and social interaction.
• Ergonomics. Why should players sit on tall stools in front of expensive boxes originally designed to hold coins we’ll never again utilize? Let’s give them comfortable living-room-style seating and places to store coats and purses.
• Cashless. Green paper is costly to collect, count and redistribute, not to mention the security problems it causes. The Internet doesn’t use cash, and casino operational costs will drop significantly if we don’t either.
• Personalized. We spend a great deal of time and money buying games of varying volatility, denomination and function in order to offer players a wide range of choice. Instead of asking the player to find a game she likes, let’s adapt the game’s behavior to match each player’s personal characteristics.
• Innovation. New game concepts are constantly introduced. Win/day analysis is banned. The new metric is incremental revenue and appeal to new audiences.

I firmly believe in this second vision of the future and I am committed to help bring it to reality. Are you?

Frank Fahrenkopf Jr., President and CEO, American Gaming Association
Innovation: It’s a hallmark of success, and a trademark of the commercial casino industry.

Through innovation and investment in new technologies, the industry has revolutionized the casino floor, modernizing everything from games and security to design and marketing. Where patrons once traversed casinos carrying buckets of coins, floors today are virtually cashless thanks to ticket-in/ticket-out (TITO) technology. Multi-player games allow customers to compete against each other on a single machine, and radio frequency identification (RFID) in casino chips helps many properties improve security and player tracking.

One of the most significant innovations in gaming technology in recent years has been server-based gaming, linking machines across a single property or across the country, increasing operational efficiencies and allowing increased versatility and flexibility in delivering superior gaming experiences to customers. This emerging technology once again was a hot topic among industry executives in early October at the Global Gaming Expo, the industry’s premier event and trade show.

The operational efficiencies made possible through server-based gaming are clear, but the technology has been slow to take hold on gaming floors across the country due to the elongated replacement cycle brought about by the recession. Those properties that have introduced the technology, such as Aria Resort and Casino in Las Vegas, have reaped the benefits, and I have no doubt that, as the economy recovers, more and more casinos will look to this new technology as a way to enhance their business.

Another technology that holds great promise for our industry is online poker.

Throughout the past several years, the American Gaming Association (AGA) has taken a measured approach to the issue of online gambling. We had concerns about the availability and effectiveness of tools and technologies to support effective regulation.

However, during the last few years, more than 85 countries have legalized online poker, many with highly controlled and effective regulatory systems to protect their citizens. They offer tested, real-world evidence that the latest technological developments and advancements in the operational process can allow the U.S. to implement a safe and secure online poker system.

The AGA believes that a strong regulatory model for the licensing and regulation of online poker that preserves states’ rights to determine what types of gambling are allowed within their borders is the best approach to ensure a consistent regulatory and legal framework.

Poker is a beloved pastime enjoyed by millions of Americans from all walks of life. It has played a strong role in our nation’s cultural history. Licensing and regulation of online poker in the U.S. would ensure American consumers are protected and that the jobs and revenues associated with this billion-dollar industry are realized here in the United States.

To the extent that poker is permitted under state laws, it is essential that online poker operators adhere to the same stringent regulations that govern brick-and-mortar casinos. The AGA recently introduced a Code of Conduct for U.S.-licensed online poker companies that outlines the measures the AGA thinks are necessary to ensure that American consumers are playing online poker in a fair and secure environment provided by a responsible operator.

The code includes provisions to prevent minors, as well as individuals living in states where online poker is illegal, from gambling online. The code also mandates implementation of tools and practices to prevent money laundering and cheating, and to promote responsible gaming among online players. This strict regulatory system is vital—and possible thanks to modern technologies currently being used in the global online poker industry and in other industries like online banking here in the U.S.

The millions of Americans who are playing poker online deserve to know they are playing safely with law-abiding operators. Regulating online poker will provide U.S. law enforcement officials with unambiguous rules and clear procedures to prosecute illegal operators.

The AGA is working to educate members of Congress about the Code of Conduct and the need for strong enforcement against illegal operators and unambiguous U.S. laws. While there are still many challenges ahead, the passage of legislation is more likely today than it has been in a decade. Some regulatory and technical issues are yet to be addressed, but proposed legislation could receive consideration by Congress later this year.

It’s important to be realistic in acknowledging that Congress has some major issues to attend to during the remaining part of the year. Neither the AGA, nor anyone else, can guarantee or predict whether the online poker issue will break through, but the AGA and others are working hard to educate members of Congress about this issue and the need for a federal solution.

If licensing and regulation do­ occur, AGA members see online poker as a natural complement to their existing business and a way to extend their brand. Online poker isn’t just a growing trend; it is a critical underpinning in the evolution of our business.

Gavin Isaacs, CEO, Shuffle Master
The real reason SBG has not yet been aggressively deployed in gaming is that it still doesn’t make financial sense for the operator, and the player doesn’t see the benefits yet. From a casino’s perspective, the investment is quite significant and it will take time to implement. From a player’s perspective, server-based gaming doesn’t truly offer anything different, so it hasn’t attracted new players. Further, the many complex proprietary protocols and platforms, coupled with the regulatory environment, haven’t made it any easier. In theory, server-based gaming makes sense, but the reality is that the infrastructure needed to support server-based gaming is a huge commitment with benefits that are largely unproven at this point. Wiring an existing casino floor to accommodate server-based technology is an expensive proposition for many operators, particularly in this environment. It isn’t realistic for many operators but where it may make more sense is for a new opening, as we saw with Aria Resort & Casino (which is actually server-supported), where a complete overhaul of the slot floor is not needed. However, in the last three years, we have seen a lack of new openings hence very limited opportunity for server-based gaming.

We’re seeing the technology-evolution drive change in the way our customers do business and we’ve definitely seen how it impacts the player universe, so I would not rule out server-based gaming in the future. In gaming, big shifts like this take time to gain acceptance and, because of the regulatory environment, can take longer to implement than other industries.

I-gaming is legal in many jurisdictions globally. For many years, brick-and-mortar casinos believed that i-gaming would cannibalize their business by converting customers who typically visited live casinos into stay-at-home gamblers. But given i-gaming’s rapid growth and the substantial dollars generated by the U.S. on an annual basis, we’re seeing more and more land-based gaming operators changing their minds and positioning themselves for the legislation of i-gaming in the U.S. I believe that online poker will be the first to be approved in the U.S., and the effect will be material given what we heard about the number of dollars that have gone overseas. Many major casino operators, including Caesars Entertainment and Rank Group, have been looking at online gaming as a way to increase market share by reaching customers who may not ordinarily gamble in a live casino. Land-based and online players are, for the most part, different. Land-based casino operators will need to maintain existing customers, cater to the new online customers, and hopefully develop bridges between the two. If land-based casino operators are successful building synergies, the new player base will be a definite bonus and create incremental revenue.

As a supplier, we plan to use the same strategy we use with land-based casinos: license our brands to operators. It is important that the play-for-fun and play-for-real versions of our games feel authentic and replicate the live experience as much as possible as to encourage cross-over and to also maintain brand consistency. The Internet is a way of life for Gen X and Gen Y. Digital media trounces most traditional channels among these Millennials so it will be inevitable that, over time, gaming evolves to fully cater to this group. We’re already seeing what a powerful tool social media can be for player outreach and casino promotions.

As the popularity of both gambling and the Internet continues to grow, online gaming is undoubtedly an exciting frontier and a promising area of expansion for the gaming industry.

Michael Pollock, Managing Director, Spectrum Gaming Group
Part of the problem in predicting when technologies will be developed and deployed is that the people doing the predicting will not be the ones purchasing or deploying the technology. Server-based was supposed to be the next great wave, following the widespread deployment of ticket-in/ticket-out (TITO). There is a critical difference between the two: TITO provided instant cost savings to operators who were able to save labor and do away with the costly “hard count” infrastructure. Suppliers loved it because it fueled a wide range of equipment purchases, instantly rendering old hardware obsolete.

Server-based is decisively different. The cost savings for operators are more ephemeral and difficult to measure because they are largely confined to such concepts as yield management or being able to continually reprice and reconfigure floors to meet shifting demand while improving productivity. Suppliers have been continually seeking ways to optimize the profitability of server-based, but there are conflicts. True server-based would allow machines to be reconfigured across product lines, which means that suppliers who fought hard for market share on the casino floors could lose some of that share via the virtual flip of a switch.

Meanwhile, operators are shifting to a server-based-ready floor, which is a long way from server-based itself. Server-based, by its very nature, shifts much of the slot floor from a capital investment to a current expense, which could have a material impact on EBITDA, but not net income. (A machine that is capitalized and depreciated never touches the EBITDA line, which is the basis for many performance-based bonuses within the industry.) The result is that server-based is moving on an evolutionary scale toward deployment, with much of the change coming in the form of enhanced modules and windows that achieve many of the goals of server-based, but not all.

By their nature, evolutionary trends are hard to pinpoint on a calendar. Revolutionary trends are much easier to forecast, and the deployment of legal Internet gaming in the United States will almost certainly be a reality by 2013. We base that projection on our observation that too many forces—both political and economic—are pulling too hard for the United States to remain on the sidelines.

In 2002, we first developed our theory on the deployment of Internet wagering (now known as SIGHT: the Spectrum Internet Gaming Heuristic Theorem), and so far the trend that we projected is unfolding precisely on schedule. The essence of SIGHT is that the land-based casino industry would initially reject online gaming, slowly accept it and then ultimately grab it in a massive bear hug. We are approximately halfway between steps two and three.

SIGHT was developed by examining past trends, looking at technologies that were the Internet of their day. We have gone as far back as the development of the telegraph in the 19th century, and how it affected the newspaper business. But our most appropriate analogy is the development of radio in the 1920s, and how it affected professional sports.

Professional baseball in the 1920s viewed radio as an enemy that would keep fans at home listening to games, rather than putting them in stadium seats. Ultimately, baseball (leading other sports) moved from acceptance to embrace, recognizing broadcasting as the principal means by which new fans would be identified and cultivated. That is precisely the same issue confronting land-based casinos. Internet wagering offers the potential to become the principal means through which new gaming customers will be identified and incented to visit land-based casinos.

That plan, however, requires an add-on, which we have termed the SIGHT corollary: Brick-and-mortar casinos, both tribal and commercial, should be the primary beneficiaries of online wagering. Unlike Europe, where online gaming is already flourishing, the United States has an existing $60 billion (in revenue) gaming industry, with hundreds of billions of dollars in capital investment, as well as hundreds of thousands of employees, along with other public-policy assets. Those assets—and the advancement of those public policies—cannot be ignored.

Our SIGHT theorem essentially leads to the finding that, if online wagering is allowed to develop in the United States without clear ties to land-based operators, we will have squandered a once-in-a-century opportunity.

The legalization of Internet wagering is largely inevitable, but the deployment of the SIGHT corollary is not. Reaching that goal will require a concerted, clear effort on the part of gaming operators—large and small, tribal and commercial—working in partnership with policymakers in Washington and at the state level. Achieving that goal is no sure thing.

Much of the debate over the legalization of online wagering is focused on whether it will occur in Washington or at the state level. That is, in our view, almost beside the point. Eventually, it will be conducted on both interstate and intrastate levels, likely within the next five years.

What games will adults be playing online, in addition to mainstays such as poker? We don’t know, and frankly, neither do you. Why? Because the very nature of gaming and the nature of the Internet mean that most of the games that will be playing in five years, 10 years or more from now have yet to be invented. Stay tuned for more details.

Bruce Rowe, Senior VP of Strategy and Customer Consulting, Bally Technologies
We believe that server-based gaming (SBG) is being deployed at a faster pace than ever. Gaming operators are increasingly using servers to drive strong return on investment by one, communicating with players and creating exciting events across entire casino floors; and two, by managing databases for marketing programs and operational analytics in more sophisticated ways than ever before; and three, for Internet gaming.

At Bally Technologies, we see a growing demand for technology that enables casinos to use player-user interface technology on the gaming device to deliver self-service features, player’s club account access, marketing messages and secondary bonus games from a central server. There is a proven return on investment from these solutions for their ability to streamline operations and deliver a powerful experience to players. Casinos that use this technology are seeing increased coin-in, an uptick in carded play, more comprehensive market data about their customers, and most importantly, smiling, excited and loyal patrons.

Server-based applications that enable casinos to almost instantly change games from traditional play to slot tournament mode have proven to deliver significant value and return on invested capital. Huge labor savings are realized because casinos no longer have to install and uninstall machines into tournament areas, and they no longer have to allocate space or warehouse tournament games during non-tournament hours.

Certainly the downloading of game content component of server-based gaming—the hype that people have been talking about for the past eight years—has not been adopted as rapidly, because it does not solve a critical business need or create a compelling return on investment.

I-gaming will come at some time in some form, but there are many hurdles to overcome. The state and federal law must be clear, the regulations must be crafted and agreed to, regulators must be hired and/or trained, operators must be licensed, manufacturers must be licensed, technology must be installed, tested and approved, business and marketing plans must be created, and then we go live.

Given the list of activities listed above, somewhere between two and five years seems realistic. It is likely that poker will be the first approved type of content. That said, there is a real and present need for states to increase revenues, which always helps motivate change.

We believe that consumers of i-gaming products will show similar overlaps in product preferences, and in general, will initially appeal to a younger demographic, but there will clearly be some overlap of consumers across both channels.

In our view, i-gaming will not be as profitable as traditional casino gaming for most operators, and all operators will not choose to be in this space. This is why it is more important than ever that casinos invest in technology solutions that enable them to create compelling, in-venue experiences across their casino floor.

These types of floor-wide experiences add excitement and anticipation to game play and create even more loyal customers. They drive people to visit the casino to enjoy an exciting social experience using a combination of player-user interface technology, personalized promotions and floor-wide event applications, and media management technology that broadcasts the event on plasma screens throughout the casino. And most importantly, these solutions do not interrupt a casino’s vital revenue stream because slot play can continue during most of these promotions and communications.

At the same time, realizing that i-gaming is just two to five years away in the United States and some operators will elect to be in the space, it is important that land-based casinos have a single view of their customer across all platforms—mobile, online and systems-based gaming. Operators are going to need solutions that integrate data from slot and casino management systems as well as i-gaming systems so they can incorporate their marketing, promotions and player rewards programs across all channels.

We will deliver to our land-based casino operator customers the technology that enables them to market to, entertain and inform their customers from a computer, on a mobile device or at a slot machine on the casino floor. The integration of these three domains will leverage the distribution of i-gaming and ensure the viability of brick-and-mortar gaming long into the future.

Sue Schneider, Principal, eGaming Brokerage
First of all, I think it’s important to note that one form of Internet gambling has been legal in the U.S. for a number of years now. Oregon regulators have successfully been regulating advanced deposit wagering (ADW) online with a number of licensees.

The large terrestrial gaming operators (via the American Gaming Association) have come to the conclusion that the technical tools are in place to allow this borderless delivery system to be regulated. And they seem to have finally realized that they can use this to grow their businesses rather than cannibalize it. Consequently, they are making a big push in the final days of this year’s congressional session to pass a federal system to allow for poker only.

They seem to have neutralized the National Football League by making sure that sports betting is clearly excluded. They have even somewhat neutralized Sen. Jon Kyl (R-Ariz.), the most ardent and long-time opponent of Internet gaming in his chamber. Whether they’re successful in slipping something through in this debt-concerned Congress that’s desperately seeking new revenue streams is yet to be determined.

There’s a lot of interest in this topic on the state level in the U.S. It’s primarily because of the severe need for revenues. But, given the recent law enforcement actions against offshore poker operators by the Department of Justice and, subsequently, the problems with those defendants paying back players, player protection is moving up on the scale of arguments for licensing and regulating.

We’re already beginning to see a number of state lotteries begin to offer their lottery products online intrastate. This will undoubtedly lead to a few of the more entrepreneurial states attempting to broaden the range of products that they can offer online. This has already been the case in the District of Columbia, which has proposed and adopted measures to allow for online poker to be played there. Its implementation is still in question, however, as it’s encountering resistance from residents. If other states attempt to offer non-lottery products through their lotteries, it will take legislative action, so those debates will be fascinating.

There was a flurry of proposals in state houses this year. Most notably, New Jersey legislators overwhelmingly passed a bill to allow intrastate casino gaming online only to see it vetoed by Gov. Christie. Other states with attempts included Florida, California, Hawaii and Iowa among others.

I would anticipate that those states and maybe more will reinitiate efforts to legalize i-gaming in their states after the new year. Given the DoJ’s actions, the playing field has been leveled, so the answer of how to control unlicensed operators has been answered in part. Then the question of who will be allowed to operate will be main question. As always, the devil’s in the details, as is evident in the California debates on the topic.

These proposals will be fairly straightforward presuming that they remain intrastate. This is palatable for casino games where you’re playing against the house. Poker is more problematic. Making a poker product viable commercially requires liquidity, a large enough pool of players, to make it interesting in a player-to-player environment.

There are a handful of states that have the population to support adequate poker liquidity. If other smaller population states are to participate, they will need to pool their players across borders, a la Powerball. The conventional wisdom is that this would require a change in the Wire Act, which is a long shot, at best.

So there are clearly signs that, finally, debate on regulating this aspect of the gaming industry is gaining steam. There are more than 100 jurisdictions globally, including almost all of the First World countries, now licensing, regulating and taxing this activity. It may well be a long haul, but it’s about time the U.S. comes along with the rest of the world.

Martin Storm, President and CEO, BMM Compliance
When one examines the topic of why server-based or server-supported gaming, collectively known as SBG, has not been the huge success that was anticipated, the answer requires a detailed view of the last significant technology implementation.

Today, there are only a few remaining casinos that use coins, tokens, hoppers and coin acceptors. In early 2003, however, the vast majority of casinos were using coin handling equipment as ticketing was making its way on the scene. To implement ticketing, there was a lot of work to do—the manufacturers had to retool their gaming devices, the regulators had to study ticketing and adopt regulations, and the test labs had to conduct evaluations and make recommendations. Casinos had to create and implement additional internal controls, because now, for the first time in the history of gaming, the repository of a significant casino financial liability was no longer on the gaming floor. The unredeemed ticket liability was being retained on servers out of the public eye and away from the direct oversight of the regulators. Revenue calculations were being modified to accommodate the ticket activity. Coin handling equipment in the hard count rooms were going silent. The server rooms were coming under fresh scrutiny by regulators. Many subtle, but significant, changes were occurring.

All of this activity resulted in a tremendous investment by the casino industry that was both tangible and intangible. The tangible cost was the physical equipment that was purchased. Ticketing touched every game in the casino, added servers to the IT department and introduced ticket-redeeming kiosks, now ubiquitous in the industry. The intangible costs were buried in the time and effort it took to create the revisions to internal controls, training for attendants, cashiers, accounting departments, count room teams, internal audit staffs and management, plus the royalty fees for the ability to implement this technology in each and every game. The casino industry was reeling from the effort and expense associated with the implementation of the ticket redemption feature but was also enjoying the benefits.

Ticketing was tangible to the patrons. It eliminated the hard count process and all the accompanying equipment like tow motors for hauling coins across the casino floor, reduced insurance claims from employees with bad backs, and cleaned up the casino floor from all those rolled coin wrappers and coin cups. Theft of patrons’ coin cups quickly became a story of the old days and, probably most importantly, the patrons embraced the concept. All the while SBG, the next big innovation, was being discussed incessantly at each and every gaming conference for a decade, but the industry was not taking a bite of the apple. Why?

What every casino operator has to decide is its return on investment for adopting a new product or technology. The cost benefits of SBG have not been immediately measureable. In reality, the adoption of new innovation is largely driven by financial analysis and it is most likely that SBG will be the next large casino investment as aging equipment is replaced. There are many good reasons to implement SBG, but it is not necessary to repeat those discussions here—you have already been hearing the rhetoric at the gaming conferences.

How quickly can i-gaming be implemented? The phrase that comes to mind is “in a New York minute” or as Johnny Carson once said, it’s the interval between a Manhattan traffic light turning green and the guy behind you honking his horn. American gaming companies have their plans in the queue and are ready to implement once that great unknown is revealed—the shape of i-gaming regulation. As is well known, the details are the challenge. There are many casino companies that have been thoroughly investigated so there will be instant credibility for the implementation of i-gaming from these qualified brick-and-mortar (B&M) operators. Several questions arise with regard to the regulatory details, for instance, will the servers be required to be in the U.S., will i-gaming operators be permitted to accept wagers across state lines, will all forms of games be permitted, who will evaluate the games on the servers, how strict will age verification and geolocation requirements be, will the industry be regulated federally or by state, and will there be enforcement of i-gaming sites deemed illegal?

After passage of the UIGEA, there was a 2009 European study that evaluated the impact of that law on European i-gaming operations. The UIGEA impact was described as devastating. Due to the differences between the gaming industries of the U.S. and Europe, the impact of i-gaming on B&M operators cannot be clearly forecast. The implementation of i-gaming will also vary the impact. If the same operators of B&M casinos also control i-gaming operations, it becomes a scenario of controlling mobile and land-based phones. You have the market covered. The one segment of this industry that has not received a lot of attention and may ultimately be the Zenyatta of the i-gaming industry are the lottery agencies. The government lotteries are currently just quietly running at the back of the pack, but could be crossing the finish line in the i-gaming race. With lottery track records of established credibility in the public eye, these government agency operations are serious contenders. Many answers to these questions will be revealed when we see the legislative details.

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