For GLI, growth in the region crosses all sectors
Since opening an office in Macau five years ago, Gaming Laboratories International, the worldwide leader in the testing and certification of machine games and systems, has parlayed the rapid growth of casino gaming in East Asia into strategic opportunities in a number of new and emerging markets. The debut of the company’s first regional Interoperability and Testing Center in 2009 coincided with GLI Asia being named a recognized testing lab of Singapore’s Casino Regulatory Authority. Last June, GLI crowned its expansion into the interactive space with the launch of the world’s first global e-gaming technical standard, developed in conjunction with Technical Systems Testing (TST), which the company acquired in 2010, enhancing its ability to serve regulated jurisdictions like First Cagayan in the Philippines, where GLI/TST was first to conduct testing. More recently, the company has zeroed in on lotteries as a key growth area, and on the heels of the formation of a global lottery consulting group last fall, GLI Asia has been engaged in major lottery projects in mainland China, South Korea and Taiwan. Inside Asian Gaming sat down with Ian Hughes at G2E Asia to learn more from GLI’s Australia-born managing director of Asia Pacific Operations about the company’s role in ensuring the integrity of the region’s machine gaming and systems technologies and helping to further the development of those markets.
IAG: How is GLI positioned in East Asia right now? And where do you want to be?
Ian Hughes: We’ve been involved in Macau since 2004, doing certifications. So we’ve been involved from the very beginning. We’ve always wanted to have a strong presence to provide service for Asian-based manufacturers. Really our vision hasn’t changed: that was to have a local facility where manufacturers in the region could have their products tested locally, not only for the Macau market, which is where the lab originally started doing most of its work, but also for international markets. That lab now has been providing certifications [for Asian manufacturers] for the U.S. markets. So it was always envisioned. And that’s how GLI labs operate globally. And since the acquisition of TST, that allowed us to bring in their lab that was here in Macau as part of the GLI Asia lab. That allowed us to do a lot of the interactive gaming for the region. So the office serves both terrestrial gaming for Macau, interactive gaming, testing for local manufacturers for global markets, and also provides information and support for our other labs—whether they be in Australia, the U.S. or Europe—wanting to bring products into Macau. We have a very strong and close relationship with the DICJ [the Macau Gaming Inspection and Coordination Bureau]. We help them, and we understand what they do. We’re basically on call straight away for them.
What’s the regulatory map looking like for GLI Asia, the geographic reach? How would you characterize those relationships?
Well, we have different stages of relationships. Of course, there’s PAGCOR [Philippines Amusement and Gaming Corporation], there’s DICJ and CRA [Casino Regulatory Authority] in Singapore. They’re the ones we deal with on an operational, day-to-day level, providing certification and testing services. In addition to that there are other government agencies that we’re working with. For example, in Taiwan we’re on an advisory panel to the Ministry of Transportation and Communication. They’re the ones who are responsible for establishing the regulations.
Ahead of casino legalization, you mean?
Ahead of legalization, yes. They’ve drafted the legislation to go forward; that’s MOTC’s role.
And GLI’s role in that process?
Our area of expertise is predominantly technical and product compliance. The panel has a very wide scope in terms of legislation, licensing and a number of other things. But we specifically talk about product technology and product certification.
Are you looking at other potential markets?
In Korea and Japan we’re engaged in communications, just to keep our finger on the pulse and advise them to see whether it does emerge so we can make sure the legislation makes sense.
Who are you working with in Japan?
There’s a variety. We don’t have a single contact at the moment because, of course, it’s different ministers that we’re having different levels of communications with. We have some consultants and advisors there who keep us informed. We’re trying to find out who the player will be in that area.
When a new or emerging market, a Singapore or a Japan or Korea, say, approaches you, what information are they looking for?
From a product perspective, which is where I predominantly speak from, it’s generally the same. Their prime concerns are revenue protection, ensuring that the machines are accounting correctly, player protection, integrity, security. The key concerns of the regulator are always the same in that regard from a product point of view. That’s global. Then you get some public policy things that may be in there, like player protection, pay information, which may then translate into technical requirements in the player information displays on the game, or other sorts of player information to address problem gambling. But generally they’re fairly consistent.
All this is done out of the Macau office?
Between Macau and others. I’m based in the U.S., so I will come through, and also we will send people up from Australia if expertise is required; we’ll bring some engineers or advice. Our Macau team here is limited in terms of everything they can offer so we make sure we get the right information from the right experts in that area.
An advantage of having GLI’s global reach. You can draw from anywhere.
That’s correct. But when it comes to feet on the ground it’s done locally. But they will draw on research and information from any office around the world. And we have different offices that are experts in different areas. So if it’s interactive gaming it’s more likely to come from our European office. If it’s lottery-type certifications it’s more likely to come from our Canadian office. Systems are more likely to come from Las Vegas or Australia.
RelatedPosts
You mention interactive. The formation of GLI Interactive a couple of years ago signaled the company’s intention to grow aggressively in online gaming. How is that progressing in Asia? It’s not a sector you hear a lot about in this part of the world.
It certainly has legs in Asia. There’s nothing in Macau in terms of the interactive side of things. But certainly there is First Cagayan in the Philippines, which is seen to be the predominant regulated market within Asia for I-gaming. Well, it’s global. Of course, there are legal issues in terms of whether you can take bets from certain jurisdictions.
TST, obviously a key acquisition: How do they figure in this?
TST was our interactive arm, which is changing with GLI Interactive. But TST still has a strong brand because it has always been a leader in interactive gaming. It does exactly what GLI does in land-based, but in I-gaming. TST had a very strong presence in Malta and Gibraltar and the European jurisdictions and in First Cagayan. No development, nothing like that, it had always been testing and certification, same as GLI.
It points to a one-stop shop philosophy, doesn’t it? That seems to be very much a part of the GLI strategy.
That’s exactly right. Not only that, but among the additional services that we do are information security systems audits, which are part of the I-gaming requirements, but they’re not peculiar just to gaming. Information security systems, ISS, is used by the banking industry and a lot of other industries, and there are standards for ISS. Then there are standards for PCI: payment card industry standards. If you’re taking any sort of payment cards, debit cards or credit cards, there are standards which relate to those. So we’re responding to standards that are put out by the gaming regulator, like the DICJ; then there are banking standards that are brought out by the payment card industry; then there are information security systems. So there are a number of regulators besides just gaming regulators that have technical requirements. We’re equipped and staffed and qualified to handle all of those testing and certification requirements.
Lotteries have been another exciting growth area for you in Asia. Can you fill us in on where that’s heading?
Certainly lottery certification testing. There are many lotteries that operate throughout Asia, either run by the state or private companies, that are not certified or tested. We’re a World Lottery Association auditing body, and many of these lotteries are starting to look for WLA certification. That’s a process that has been hugely successful in Europe. We’re starting to see that emerge in North America and Australia, where lottery operators are already starting to go through WLA certification. Which is not mandatory. It has to do with information security systems, robust mechanisms and all that. It’s basically something that the operators want to be assured of having. So that’s an opportunity for growth which we’re pursuing heavily, and it’s been very successful. There’s been a huge uptake in that.
Last but certainly not least, the very important business of gaming machine regulation and homologation: How do you rate it in this part of the world?
Well, of course, it’s changing. In Macau up until October 1st of this year, the homologation process was relatively simple in terms of what the requirements were and the processes involved. It was the responsibility of the concession-holder, whereas in most jurisdictions the requirement to get the product approved is up to the manufacturer. Macau is a little unique in that area. But Macau will be shifting, from October 1st, to its own technical requirements, as opposed to the GLI 11 global standard or national standards. It will be a Macanese requirement. And the requirement to be approved is also likely to shift to the manufacturer. The manufacturer will have ownership of their approval process. That’s still in draft and not yet in place. The Singapore process is highly onerous on the manufacturer. It differs from Macau vastly.
Is that the biggest challenge for GLI in Asia, adapting to these very different standards?
The biggest challenge is language. It’s really coming down and understanding and being able to communicate effectively in that language. And, you know, as you work in more and more jurisdictions you have to cover more and more languages, be it Japanese or Korean or whatever. So we have found people who represent us in those countries who are fluent, and they help us facilitate.
An important issue, come to think of it, considering the complex technical and engineering issues you deal with.
Absolutely.
All bases covered—GLI has a huge standards database to cover every market
