1.Agenda 6 Disciplines Global Market Regulatory Confusion/Legislation (U.S.) Black Friday Pros & Cons To Legalization The Future Factors For Success

2. Online Gambling: CategoriesSix Disciplines:1. Poker2. Casino Gaming3. Betting on Horse Races4. Betting on Other Sports, Such As Soccer and Baseball5. Online Bingo; and, Online LotteriesSource: http://www.pwc.com/gx/en/entertainment-media/publications/global-gaming-outlook.jhtml 3. Online Gambling: Global Market Jurisdictions 4. Online Gambling: Categories 5. Online Gambling: U.S. Regulatory Confusion Regulation varies: at the federal and statelevels. Uncertainty exists because rules andregulations were created pre-Internet.Source: http://www.pwc.com/gx/en/entertainment-media/publications/global-gaming-outlook.jhtml 6. Interstate Wire Act: 1961 Outlaws the placing of sports bets over thetelephone.Source: http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 7. Interpretations: Wire Act Department of Justice: all forms of onlinegambling are illegal. US Fifth Circuit Court of Appeals: appliesonly to sports betting and not other types ofonline gambling. Supreme Court: has yet to rule as it relatesto online gaming.Source: http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 8. Legislation: (UIGEA) of 2006Unlawful Internet Gambling Enforcement ActCame Fully Into Force In 2010Illegal for banks and other institutions totransfer funds to offshore gaming sites insupport of illegal online gamingDoes not:define illegal online gaming, does not apply toonline gaming that is conducted within theboundaries of a state or a tribe.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 9. Legislation: Senator Harry Reid2010:drafted a proposal into a tax bill to allowcasino companies to set up their own onlinepoker sites, exempt from UIGEA, for theircustomers to use.January 2011:Senate Republicans John Kyl and SpencerBachus blocked the bill.Source: http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 10. Online Gambling: Black FridayApril 15, 2011:US Department of Justice seized domains/bankaccounts of PokerStars, Full Tilt, Absolute Poker.However:U.S. consumers continued to comprise half ormore of worlds poker marketwith privateoffshore operators.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 11. AGA: American Gaming AssociationSource: www.aga.com 12. Legalizing Online Gambling: Pros Economy: stimulation through taxation. A congressional report from November 2009 stated if regulated could generate $42 billion over 10 years. New Job Creation: not only in gambling sectorbut other verticals too. Safety: Americans who play can play safelywith responsible, law-abiding operators.Source: http://www.businessinsider.com , http://www.wallstreetjournal.com 13. Legalizing Online Gambling: Cons Easy Access: to computers will lead to gamblingaddiction and ease of minors to place bets. Regulation: legislation will be too heavily influenced bylobbyists. Increase in Illegal Activity: Cyber criminals target consumers andcompanies.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 14. 2012: Where Do We Stand? June 10, 2011: Nevada, Assembly Bill 258 passed the legislature and was signed by the governor and made effective. Assembly Bill 258: prepares Nevada for the federal legalization of online gambling in the near future.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 15. 2012: Where Do We Stand? Other States Following: Massachusetts, California, Iowa and Floridaare considering similar legislation. 2012 PWC Global Gaming Report: Overall, the message on the regulation of online gamingespecially poker in the US is watch this space.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 16. Online Gambling: Taxation Methods A tax on stakes: levied directly on consumers when placing bets, tends to discourage consumers from participating. Gross profit tax (GPT): levied on operators winnings. *Mostcountries favor GPT option.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 17. Online Gambling: Legalized Countries UK: remains the largest online gaming market globally, having legalized it in 2005. Italy: introduced a licensing system that says sites must be licensed within Italyuses filters to block Italians from accessing sites not licensed within the country. Expected to overtake the UK as the largest legal online market.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 18. Online Gambling: Pro-Countries Other Countries Moving Towards Legalization: Greece Germany Spain Iceland Norway Switzerland Denmark Belgium Finland AustraliaSource:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 19. Online Gambling: Asia Pacific & Latin America Philippines: only country where online and mobile gaming is permitted, legalized in 2000 with PAGCOR as the sole operator. Argentina and Chile: only countries in Latin America where online and mobile gaming is permitted.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 20. The Future: What Can We Expect? U.S: tensions between intrastate regulation andthe inherently location- independent natureof Internet services. Smaller states will find it hard to sustain the growth of regulated services due to small player numbers, and subsequently, frustrated providers.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 21. The Future: What Can We Expect? U.S: Online Poker Will Likely Be First In: Next few years poker providers will be allowed to operate on an interstate basis in the U.S. This will likely lead to a legitimization of the market. This regulatory change will represent a watershed for legalized cross-border online gaming, marking the start of a new era.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 22. Social Networking & Online Gambling:What Can We Expect? Second Life laid the groundwork: Pre 2007 they played host to hundreds ofvirtual casinos, lottery games, and otherforms of gambling, using in-game currencythat could be exchanged for real money. Emergence of Chiliconnect-like sites: enables players to share the results of their online poker games on social networks.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 23. Social Networking & Online Gambling: What Can We Expect? Social networking sites: key distribution platform for online gaming services, resulting partnerships between gaming brands and social networks. Social Networking & Online Gambling: Skill-based games and fantasy sports leagues.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 24. Social Networking & Online Gambling: What Can We Expect? Mobile Usage: especially significant, can seamlessly host web-based content making online gambling available anywhere. New Hybrids: Skill-based games and fantasy sports leagues. Lotteries: Continue to expand and grow online.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 25. Online gaming: complementary not cannibalistic Physical Casino Experience: will continue to differentiate itself by enhancing the experience, therefor making online gambling an economic complement to off-line.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 26. Online Gaming: Key Success Factors Providing A Unique Experience. Understand Changing Needs & Behaviors ofConsumer. Keep Pushing The Limits of TechnologicalInnovation. Stay Flexible.Source:http://www.pwc.com/en_GX/gx/entertainment-media/publications/assets/pdf/global-gaming-outlook.pdf 27. Online Gambling: Future Possibilities Mobile Casinos: Integration of live casino games or gameswhere players can compete against eachother. 28. Online Gambling: Future Possibilities Interactive Gambling: via TV Gamification Companies: Move In