“This summer I noted the activities of the State Monopolies Independent Administration with particular interest, especially as far as entertainment machines are concerned. Indeed, the State Monopolies Independent Administration appears to have taken on board operators’ requests and plumped for options that clarify the regulatory reference framework. “This is true both with respect to the method for calculating and paying sums that are owed in the form of a single tax levy on revenues generated by entertainment machines and with regards to moves to rectify inconsistencies that have arisen following introduction of the principle of joint responsibility of third parties with responsibility for gaming collection, and of licensees with responsibility for operating a network of entertainment machines,” the honourable Tolotti claims. In the vice-president’s view, “The latest decrees that AAMS have issued represent a step towards eliminating the anomalies that gave rise to the Court of Accounts investigation and also justify penalties of the order of 100 billion Euro. Now, a new control and proportionate penalty system needs to be introduced. On the other hand, the consequences of the decree to seize approximately 105,000 NewSlots on a pre-emptive basis, as ordered by the Court of Venice judge, is giving rise for concern. It is a matter of great urgency, and a real crisis for industry operators, who are required to make changes in short order to around 50% of all installed machines, as well as for the Inland Revenue, which is required to forgo revenues from the NewSlots corresponding to that particular type of machine, and above all for player/consumer security. “Indeed, I would point out that whenever the investigating judge has identified faults during the equipment approval and authorisation process, the NewSlots have always been expected to connect to a network for monitoring and checking by SOGEI, the general Italian state data company, and by AAMS. In addition, players have always received more than 75% of the available funds in winnings and much better odds than are available from other forms of state gambling games (lotteries return less than 40% of the stake in winnings). “Finally, it ought to be remembered that the state offers games such as NewSlots on a conditional basis because it is seen as a risky game, as are the other games of chance that the Italian State offers licensees in the form of licenses. However, when properly authorised and conforming to the model/pattern that is submitted to the AAMS and Sogei offices, there is no risk that NewSlots will be turned into a tool for perpetrating games-of-chance crimes. That said, where machines are found not to comply with legislative provisions, measures must be quickly identified that ensure that they can then be withdrawn from the market in the shortest possible time.” “Slovenian slot market is a model for Italy” The recent changes to slot machine and associated slot machine management regulations introduced by the Slovenian government provide a good example of how security and control with respect to unlawful activities can be guaranteed. Sandi Winkler, the Slovenian doctor, who is the current head of Siq Italia, is absolutely convinced of this. Siq Italia is the certification unit set up to act as the backbone of the Slovenian system that is dedicated to overseeing the Italian entertainment equipment industry. “We have comprehensive knowledge of the Slovenian slot machine industry, of its characteristics, of the process that has resulted in the current regulations and of the regulation that will become law in a matter of weeks. We are the only organisation in the country that certifies equipment, but this purely technical skill is not our only contribution to the market.” The control body, which is a Government committee and which is responsible for checking and dealing with all issues of a regulatory nature, regularly uses the skills that the SIQ organisation can offer on a range of different issues that affect the market. “As is happening in many other European countries,” Winkler reminds us, “because our system has worked with, and continues to work with, a number of different institutions which are all grappling with changes or updates to the regulation.” Something that is not happening in Italy where the relationship between the parties involved in the sector and the Administration cannot be described as being equitable in nature. “For anyone operating in other markets this kind of perspective might seem a touch peculiar,” continues Winkler, “and I won’t pretend that it didn’t worry us at all at the start of our Italian experience. “In Slovenia, for example, we were directly involved during the equipment control stage of proceedings. The certification body operates an independent structure that is responsible for ensuring that the equipment complies with regulatory provisions. The risk of losing our current levels of credibility and our market position is so great that we would simply never dream of failing to live up to our commitments. Indeed, we act as an initial filter against possible unlawful behaviour. And there is no unlawful behaviour in a country where games of chance are so widely available.” In Italy, certification bodies appear to have a somewhat different position with respect to “slot” products. “The assumptions were very different right from the very start and our role is also very different,” explains Winkler, “and personally speaking, I can only hope that it will be modified, in part as a consequence of recent facts concerning the NewSlot system. We were able, on a number of occasions, to inform the Italian regulatory body of the need for greater comparison with respect to equipment manufacturing issues, particularly during, and not just after, the rule definition stage. report presented to the Finance Committee is particularly effecive The report that Stefano Sbordoni (lawyer) submitted at the hearing that the Chamber of Deputies Finance Committee granted to Jamma’s Studio Research Team on August 1, 2007 was particularly effective. Sbordoni drew the parliamentarians’ attention to a series of issues affecting all Italian games and explained how, over the years, poor or hasty choices had resulted in effects and consequences that have had a significantly negative effect on the system. Above all, Sbordoni stressed the need for intervention in relation to the organisation and functionality of the State Monopolies Administration, calling for a strengthening of its games market regulator role in relation to its “games operator” role. With this in mind, Sbordoni is hoping for a series of interventions that will result in better co-ordination between management actions that are implemented by head office and the operational functionality of peripheral offices. Which is something that can also be achieved by developing the structures in question. Better skills and more accurate professional specifics would also be desirable for an administrative structure that needs to intervene in constantly changing areas each and every day and that also needs access to structures that can boast high levels of training, in legal and judicial matters as well. In response to Committee President Tolotti’s precise question regarding the potential creation of a games agency, Sbordoni reaffirmed his conviction that any such body should be principally concerned with regulations, therefore leaving companies to deal with market operation issues. Treatment of the issue of companies that “play games” was also wide-ranging and detailed. These companies, as Sbordoni pointed out, cannot escape the logic that demands “guaranteed numbers” in order to retain market share. This particular consideration gives rise to a number of interesting ideas that, in the Roman lawyer’s view, the politicians currently working on the issue ought to give careful consideration to: aspects from licence agreement terms and conditions to the prospect that someone will shortly launch new products onto the market. The gaming sector is a disaster area “The gaming sector is a disaster area. A few years ago we had hoped to implement a futuristic initiative, but that proved to be impossible.” The author of this ruthless judgement on the NewSlot situation is deputy minister for the Economy, Vincenzo Visco. “We had hoped to set up a network of some 200,000 machines. Las Vegas has a network of 60,000. With a network of some 20,000 machines, Sweden is the other country that has also succeeded in setting up a network, in spite of the fact that there are fewer people in Sweden and that Swedish people are less inclined to participate in gaming than Italians,” continues Visco. “We, on the other hand, had the intention of setting up a network of 200,000 machines in just two years. It was absolutely inevitable that it would be a disaster!” Thus the first official comment by the deputy minister on an issue that has had thousands of Italian automatic machinery businessmen holding their breath for weeks now, requires no response: the NewSlot system demands urgent intervention, along the lines of the interventions that are generally reserved for major emergencies. But the situation still needs “to be managed” even if it is on the point of failure, adds the deputy minister. “We have already made provisions for replacing the machines,” explains Visco. “Two accounting and judicial interventions have already been implemented. We need to move without directly interfering with judgements in the knowledge that something is probably not quite right if the prepared regulations and drafted agreements involve estimates of 100 billion euro. In any case, we anticipate moving quickly in the future. Some loss of receipts is inevitable,” warns the deputy minister. “I only hope that it does not reach that sort of level. From our perspective, we have been working to ensure that the system does not collapse, even if the system itself is delicate, precarious and full of surprises.” And as Visco reminds us, “I personally launched a campaign two parliamentary terms ago, as well as during the last parliamentary term, to try to ensure that slot machines would not be located away from dedicated premises. They were then accepted into games rooms and bars, even though this is risky for a number of different reasons, as a consequence of which a proposal was then tabled to include them in a network.” Visco suggests that, “It will probably be possible to do so in about a year and a half’s time, but the machines will need to be exchanged for third generation equipment. In short, and as always, a suitable amount of time is needed.” Videogames with radio? Entertainment equipment used all too frequently for irregular gaming; a phenomenon that is well known to all governments, including the Italian government. As is the fact that innovative technology is increasingly being used in order to circumvent statutory regulations. How then, can the irregular market possibly be tackled without recourse to appropriate technology? Which is why Italian legislators have made provisions to use appropriately authorised entertainment equipment that has been fitted with radio identification tags, which is to say RFId (Radio Frequency Identification). Their use could be viewed as additional tools for undertaking inspection checks and reading them would provide identification details such as the equipment model, manufacturer and distribution clearance. Data from SOGEI, AAMS’s technological partner, currently indicates that 69 entertainment machines have been authorised and approximately 4,400 distribution clearances supplied, complete with the associated internal RFID tag, as well as 2,044 operating clearances, complete with the associated external Rfid tag. A rather modest result, if truth be told, given that the Italian market for pure entertainment equipment has, over the years, grown to become the largest in Europe. These days, the excessive bureaucracy that is associated with the authorisation processes (which also includes an examination of the equipment and submission of documentation that also extends to the source code, which is to say all of the instructions associated with a specific programming language used to write a game card program) risks plunging the industry into serious difficulties. But clearly problems never arise in isolation. It seems that Rfids are rather difficult to find (or perhaps that they are of little interest to potential suppliers). The fact is that the State Monopolies Administration has not received a single one since 30 March 2007.

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