Partnership Proposal for a National Self-Exclusion Service

Transcription

1 Partnership Proposal for a National Self-Exclusion Service October 1st, 2010

2 1. Background There are currently several bills that have been introduced before Congress to legalize and regulate online gambling within the United States. The Barney Frank bill, HR2267 Internet Gambling Regulation, Consumer Protection, and Enforcement Act, currently has 69 cosponsors and is the bill that has received the most support to date. The Frank bill is complemented by Jim McDermott s bill HR 4976 Internet Gambling Regulation and Tax Enforcement Act of 2010 which proposes the federal, state and tribal tax regime for the licensed operators. HR 2267 states that The Secretary shall provide by regulation for the establishment of a list of persons self-excluded from gambling activities at all licensee sites (see full text related to selfexclusion in Appendix 2). It is our intention to seek appointment by the Regulator to operate the National Self-Exclusion Database through a new company Responsible Gambling Solutions Inc. (RGS) that will be jointly owned by SecureTrading Inc. and NCPG. SecureTrading Inc., a Delaware Corporation, is a subsidiary of UC Group, a UK based holding company. STI has been established to provide a comprehensive outsourced payments processing and compliance solution to licensed US online gambling operators in a new legal and regulated US market. UC Group has been active in supporting legislation that will create a tightly regulated, licensed market for on-line gambling in the United States that assures a robust set of consumer protections are in place and provides a significant source of tax revenues for the federal, state and tribal governments. The key elements of SecureTrading and RGS s value proposition are shown below:

3 2. Business Proposal Create a new for-profit company Responsible Gambling Solutions Inc. (RGS) that will be jointly owned by the National Council on Problem Gambling (NCPG) and SecureTrading Inc. (STI) Propose to the Regulatory Agency to manage the national self-exclusion and Internet helpline program Improve early identification and preventative measures to reduce the percentage of players that experience gambling problems 3. Responsible Gambling Solutions Inc. Structure Responsible Gambling Solutions Inc. Shareholders SecureTrading Inc. National Council on Problem Gambling Class A Class B Responsible Gambling Solutions Inc. Board RGS Advisory Group Representation Members Special Interest Groups Operators Regulatory Agency NCPG STI 6 4. RGS Ownership STI: Class A Share 75% share of profits Voting rights for operations Outsourced operations contract Liquidity, management/capital provision

4 5. RGS Governance 6. RGS Role NCPG: Class B Share 25% share of profits No voting rights for operations RGS Board of Directors Corporate governance Appoint Advisory Group members for 2-year terms RGS Advisory Group Provide intelligence on problem gambling Advise on direction of data analysis and research projects Advise on Responsible Gambling tools Operate the national self-exclusion program across all Internet gambling operators Provide website interface to NCPG s national helpline to facilitate players seeking professional help Collate and analyse gambling data to develop algorithms and early warning indicators to reduce the rate of problem gambling RGS will ensure compliance with all U.S. privacy and data protection requirements.

5 7. RGS Service Proposition Envisaged capacity Financial 250k helpline requests per annum 250k self-exclusion requests per annum Online gambling operators will be charged a service fee for posting entries to as well as searching the National Self-Exclusion Database RGS will enter into an outsourced service contract with STI to operate the company on reasonable commercial terms It is the intention of RGS to price its services to cover its processing and research costs and earn a small financial return STI gambling operators will provide daily batch data uploads for each player using a unique customer number, including: Deposits and bonuses Wagers by session indicating game played Gross winnings and gross losses by sessions Withdrawals Operator limits and player limits Geo-IP address Gambling operators will have access to all findings arising from data analysis, including comparative performance summaries Self-exclusion options will be standardized Online players at STI customer websites will have access to the NCPG National Help Line Liability will be limited as per the proposed legislation

6 8. Benefits for the Regulatory Agency 9. Benefits for NCPG 10. Next Steps RGS has the credibility of NCPG s involvement as well as STI s processing expertise RGS will, as an independent company, be solely focused on compliance with the regulations concerning problem gambling. Operator participation does not require processing contracts with STI RGS will introduce the first national self-exclusion program and coordinated national helpline support Accurate and transparent industry statistics will be available to monitor Internet gambling performance RGS, as a for-profit company, will be able to support research and analysis programs Dividend distributions to NCPG can support additional awareness programs Set up and funding of RGS will be covered by STI No operational burden on NCPG Extended influence through design/enhancement of National Self Exclusion database The RGS Council will provide critical insight into related Internet gambling problems Upon approval of the NCPG Board to proceed with establishment of RGS, the following steps will be taken: STI & NCPG to jointly present a proposal to the Regulatory Agency and obtain agreement to operate the National Self-Exclusion Database Set up the NewCo 11. Contingencies This proposal is contingent upon the passage of legislation by Congress to legalize and regulate online gambling in the United States and the appointment of RGS to operate the National Self- Exclusion Database.

7 Appendix 1 Biographies of SecureTrading Inc. Management

8 Chris Thom Chairman SecureTrading Inc. Chris Thom heads up the US arm of the UC Group, which is the largest independent internet payment service provider in the UK and services 2400 merchants across a range of industries. Secure Trading Inc. has a primary objective to facilitate the legalization and regulation of internet gambling in the US and then to provide an enterprise level service proposition to US incorporated internet gambling operators, comprising player registration, verification and validation; financial payments processing; tax computation, collection, payment and reporting; and responsible gambling tools. Previously, Chris was employed by MasterCard International at their global headquarters in New York. Over eleven years, he had a variety of global responsibilities, ranging from franchise management, security and risk management, finance, internal audit, Canada region, executive services and central operations, and product development, to his final role as Chief Risk Officer. Throughout his time with MasterCard, he was a member of the executive committee, reporting to the CEO. He chaired the International Operations Committee and the International Security Committee. He was a member of the Mondex International Board and the Debit Advisory Board. He was the project manager for designing and building the new global technology and operations center in St Louis. Prior to this, Chris was for 27 years a lending banker with Midland Bank, European American Bank and HSBC, working primarily in the UK but with postings in New York, Sydney, and Lausanne. His final roles with HSBC were as General Manager Strategic Planning and General Manager Retail, with responsibility for providing core banking services and products to the UK branch network and private banking, as well as business development and marketing, trade services, agriculture and mortgages. He was a member of the six person executive committee, reporting to the CEO. Chris lives in Connecticut with his wife and has two grown up children. His hobbies are sailing, car rallying, skiing and photography.

9 Ted Friedman Chief Operating Officer SecureTrading Inc. Ted Friedman is COO of SecureTrading Inc., the US arm of the UC Group, which is the largest independent internet payment service provider in the UK and services 2400 merchants across a range of industries. Secure Trading Inc. has a primary objective to facilitate the legalization and regulation of internet gambling in the US and then to provide an enterprise level service proposition to US incorporated internet gambling operators, comprising player registration, verification and validation; financial payments processing; tax computation, collection, payment and reporting; and responsible gambling tools. Previously Ted spent five years at MasterCard International at their global headquarters in New York and at Europay International in Waterloo Belgium. At MasterCard, Ted was Global Head of Credit Products and previously served as SVP Change Management. He was actively engaged in corporate strategy and product strategy and was a member of the Pricing and Interchange Committees. At Europay, Ted was Head of Corporate Strategy, a member of the Management Committee, and reported to the CEO. Prior to this, Ted spent eleven years in Luxembourg holding various senior level positions at Cedel SA (now known as Clearstream). Reporting to the CEO, he was Head of Corporate Strategy and held other senior positions in Marketing, Sales, and Product Management. Ted began his career in consulting with Ernst and Whinney. Ted graduated from Duke University and received an MBA from Tulane University and then attained a CPA in the State of Texas. Ted lives in Connecticut with his wife and two sons and enjoys skiing, photography, and attending his kid s numerous sports events.

10 T.J. Sharkey Head of Customer Sales and Support SecureTrading Inc. T.J. Sharkey is Head of Customer Sales and Support for SecureTrading Inc., the US arm of the UC Group, which is the largest independent internet payment service provider in the UK and services 2400 merchants across a range of industries. Previously, T.J. spent 17 years at MasterCard Worldwide at their global headquarters in New York. Over 17 years, he had a variety of responsibilities ranging from strategy, sales, business development, corporate and regional finance and internal audit. He was responsible for the opening of card acceptance within the Quick Service Restaurant, Taxi and Vending categories. He led the merchant sales strategy for MasterCard s PayPass implementation and successfully launched among others, McDonald s, CVS and the New York City taxi industry. He was a member of various internal committees including pricing and interchange. The past 6 years he was responsible for the US merchant sales force and most recently headed up the Global Key Merchant and Acquirer Group, which was responsible for managing key relationships within the merchant and acquirer community. Additionally, he was responsible for implementing a market level strategy methodology in key markets around the world. Prior to this, T.J. spent 3 years at KPMG within their financial services audit practice with a focus on broker/dealer clients. T.J. graduated from Iona College with a BA in Accounting. T.J. lives in Westchester County, NY with his wife and 4 sons and is active in the Hillcrest Lakers Community Club.

11 Appendix 2 Text from HR 2267 related to Self-Exclusion LIST OF PERSONS SELF-EXCLUDED FROM GAMBLING ACTIVITIES. (1) ESTABLISHMENT. (A) IN GENERAL. The Secretary shall provide by regulation for the establishment of a list of persons self-excluded from gambling activities at all licensee sites. (B) PLACEMENT REQUEST. Any person may request placement on the list of self-excluded persons by (i) acknowledging in a manner to be established by the Secretary that the person wishes to be denied gambling privileges; and (ii) agreeing that, during any period of voluntary exclusion, the person may not collect any winnings or recover any losses resulting from any gambling activity at any licensee sites. (2) PLACEMENT AND REMOVAL PROCEDURES. The regulations prescribed by the Secretary under paragraph (1)(A) shall establish procedures for placements on, and removals from, the list of self-excluded persons. (3) LIMITATION ON LIABILITY. (A) IN GENERAL. The United States, the Secretary, an enforcement agent, or a licensee, or any employee or agent of the United States, the Secretary, an enforcement agent, or a licensee, shall not be liable to any self-excluded person or to any other party in any judicial or administrative proceeding for any harm, monetary or otherwise, which may arise as a result of (i) any failure to withhold gambling privileges from, or to restore gambling privileges to, a selfexcluded person; or (ii) otherwise permitting a self-excluded person to engage in gambling activity while on the list of self-excluded persons.