“The trouble started in Mirano, a town in the province of Venice, with some telephone calls by angry players to 117, this being the special telephone number to report grievances to the military corps dealing with tax and customs crimes (“Guardia di Finanza”). The callers were claiming to have lost huge sums, some even more than Euros 1,500 in one go, playing at a machine fully authorised by the Gaming Board. In addition, more than one person had gone personally in tears to the offices of the Guardia di Finanza. The seizure of the first machine was organised by men reporting to Capt. Fabrizio Musci in a bar in the neighbourhood of Mirano. According to the office of public prosecutions in Venice, what is significant about the Black-Slots, now enjoying the highest demand in the AWP market in Italy, is that they apparently are built already rigged, unlike those rigged by the owner of the bar or of the premises where they are played. During a long investigation coordinated by Giorgio Gava, public prosecutor, the men of the Guardia di Finanza have identified some companies implicated in the production process, in addition to at least two certification bodies who apparently ‘signed off’ the technical audit of the machines. At the end of March the Review Court confirmed the seizure of over 500 slot machines, all bearing the required stamp of approval by the State Monopoly but found to be rigged. After the initial investigation by men of the Guardia di Finanza in Mirano, these machines were seized by 140 soldiers of the Guardia di Finanza Provincial Command in 430 bars, pubs and night clubs throughout the province of Venice. After requests by many slots owners to have their machines released, in another important stage of the enquiry, known by the name of “Black-Slot” and coordinated by the public prosecutor Giorgio Gava, the Review Court has opened a new front. On 15 June issued an order for the precautionary seizure of machines covering the whole country. Following a detailed examination of the criminal proceedings against the producers and representatives of the two certification bodies and according to the Public Prosecutor, the request for precautionary seizure is made with good reason and should be granted, because in all electronic machines under the name of Black Slot, Stack Slot and Terza Dimensione, gambling is implied with the possibility of winning money purely by chance. Indeed it is a case of machines designed and built for games of chance. On the other hand all the AWPs being investigated appear to have been designed and programmed to issue winnings well above the limits set by paragraph 6 of Art. 110 of TULPS (Testo Unico delle Leggi di Pubblica Sicurezza - the Unified Code of Italian Police Laws): 200 euro for Black Slots, 200 euro for Stack Slot cards, 600 euro for Terza Dimensione cards.

The Italian Government throws away 2.5 billion euro from newslot machines

As Monica Cuprifi reports on www.Jamma.it, since 2005 the sector has witnessed other upheavals with many companies implicated, and this should have given pause for thought.

With the 2006 Finance Bill a new gaming machine was introduced specifically at paragraph 6a, with claims that it would assure greater safeguards. Then a change was introduced again with the new machine, putting forward something even more innovative, when perhaps it would have been better to mend what was not working too well.In the last few months the AAMS or gaming board which is judicially responsible for ascertaining the legality of gaming machines, has issued a clarification, stating that the machines under investigation are not regular. But what does this mean? If the machines were connected to the network, one would ask what Sogei (the overall Information Technology arm of the Italian Government) and the State Monopoly were checking before the action taken by the magistrate. It is a shame that no operator was told that these machines were irregular, not even by the body responsible for issuing the authorisations for their use that has continued to approve them. A typical Italian style mess, in which the right hand does not know what the left is doing.

HUNTING THE GUILTY PARTY

“In this story the State is the injured party”, says the Gaming Board. And what about the operators? The strange thing is that it is up to them (small and medium size companies) to support a sector that on its own guarantees billions in tax revenues to the Government (Euros 2.5 billion according to the latest estimate, a greater revenue than those from Government permits or stamp duty) and they are being asked to take action and fund the replacement of the machines. What is truly funny is that even the AAMS and Sogei technicians are not aware that the machines accused of being illegal suffer from a flaw that occurred during the process of authorisation, punishable with a fine, but are not true gambling machines. In other words they cannot be charged with the offence of “gambling”, even though they are not machines for games of skill, because they are similar to the ones used in casinos. Fundamentally the issue arises from a hypocritical point of view that tries to classify as pure entertainment the slot machines in which money is inserted in the hope of getting more in return by sheer chance. Whether one likes it or not, this is a game. There is nothing vulgar, let alone evil (provided one does not exaggerate) in an idea that must be legitimised because if in a bar alcoholic drinks are on sale, and at a tobacconist you can buy cigarettes, with slot machines authorised by the State Monopoly one can buy excitement and on this I do not believe one does violate any legal principle.

All that has happened is a sort of "news story of an anticipated scandal".It was in 2003 when, beginning to think about the introduction of AWPs in Italy for the first time, we were satisfied to follow a European example, but we were aiming at creating something extraordinary and new. In the whole world there isn‘t a legal market as big as the Italian market, with more than 200,000 machines, managed by dealers authorised by the Government. Add to this a connection system for the machines to a network, responsible for keeping a check on gaming data and transferring millions of data items in very fast timescales. We were talking then of a real-time control of operations, even though it was known that it would have been impossible to implement the system quickly also because the connection services suppliers cannot guarantee even today the activation of physical access points as promptly as it was then thought. It was realised later that the most important mistake was the decision not to directly involve the existing human and professional elements in the process, in other words the sector experts. It was acknowledged too late that the project was ill-conceived, since in other countries like Sweden or Denmark they are still trying to find a solution with just a few thousand machines connected to the network. If at the outset thought had been given to issuing a law that was less vague we would have avoided the worst.

THE GOVERNMENT WASHES ITS HANDS OF THE MATTER

If the Government continues to believe that it can squeeze resources from the sector that are no longer there, it must also take the responsibility for having reduced its revenue to zero. The Government is asking the sector today to throw in three hundred million euro in order to replace products certified by its own administration and following the same procedures under which the machines now under investigation were produced. At least the seizure of machines has now been stopped and probably alternative solutions will be sought until September. Although it is well known that the political left-wing does not like gaming, certainly it cannot be fussy over the large sums of money (one billion euro in tax revenues between January and May) going to fill the nation’s coffers. Imagine if today the floodgates were to be opened to the precautionary seizure orders of machines, a series of unimaginable chain reactions would be triggered, with an endless series of legal cases in the courts ranging from compensation claims to challenges to the criminal charges brought against the operators. Jamma believes that the stopgap solution put forward by the Finance Ministry, although tainted with abnormality, could be the most viable measure to take (i.e. to give time to the operators for the replacement of the machines), but there is hope that the measures will not stop at this. The costs to be borne by operators must be recognised through tax incentives and breaks.

Who is going to take the blame?

The stories currently circulating, the threat of seizures, the analysis of the reasons that have brought the Italian system of automatic play to the brink of disaster prompt some thought on how to apportion various responsibilities to those operating in the sector. machines are introduced into the marketplace was the most innovative and far reaching contribution made by the Law. With the Law 289/02, a verification and certification procedure was introduced. For all the operators it seemed like the end of a nightmare.

At last a higher authority, independent of all parties, charged with the task of assessing the legality of machines and of avoiding errors of interpretation (too many had occurred in the past, and some of them were not accidental) made during the production or distribution of the gaming machines. The system quickly developed: today the producer must build machines on the basis of the provisions contained in the manufacturing technical regulations, must allow its machines to undergo a compliance test at an approved certification institute and must deposit the source code and one example of the model with AAMS. The latter, working together with SOGEI, having checked the machine software and the model for compliance, issues a distribution permit. The responsibilities/duties of the producer/importer are as follows:

- submit to the verification procedure and test, leading to the issue of a permit;

- distribute the machines guaranteeing their compliance to the model deposited.

The additional advantages brought about by this system to the customers of the producers/importers appear very clear. The machines have a compliance certificate attached in the form of a distribution permit issued by the Government, and the Government is also able to check the source code and the specific machine model.

In addition, with bureaucratic zeal, AAMS has introduced a further check before allowing the machine to be placed in the market: only after a “careful” evaluation of the paper documents attached can the collection of monies be authorised, again by AAMS. Actually up to the summer of 2004 the term “takings” (incasso) was used in preference to “collection” (raccolta). Automatic gaming was still in the hands of private operators. Later what can be called the AAMS principle was introduced, with the Government intervening in the gaming sector with monopolistic systems and licences; 10 licensed dealers appeared, winning tenders to manage the network for the machines (later the licence was changed to a licence to run the gaming machines) Before the introduction of the 200,000 NewSlots, the market was made up of machines able to distribute monetary amounts in prizes that were not uniformly quantifiable in all cases. Operators were authorised to distribute self-certified machines, guaranteeing compliance to the rules and regulations relative to the product. No specific independent checks were in existence and many times the demarcation line between legality and illegality was set by a judge on the basis of an expert report appointed by the Court during the hearing of numerous seizure cases.

There was not even a responsible authority with the task of controlling and administering the sector. For these reasons the Law 289/02, introduced in 2003, was greeted by everybody with great enthusiasm. At last the automatic gaming machines were ranged by type, gaming would distribute reasonable winnings clearly and rationally quantified, and the AAMS was charged as the reference authority for gaming. Moreover, the new process whereby machines are introduced into the marketplace was the most innovative and far reaching contribution made by the Law. With the Law 289/02, a verification and certification procedure was introduced. If the system works, it is clear that, when faced with a presumed non-compliance/illegality of a NewSlot corresponding to the sample model registered, there must be a mistake in the authorisation procedure, authoritatively detected only by an expert analysis of the machine software (Source Code) and of the compliance of the machines distributed with the registered sample model. These tasks can be performed by AAMS and SOGEI: they have available to them all the tax and gaming data about the operating machine, and also have the powers to cancel the permits that had been issued to the operators previously.

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