Game Design 1
.1 Overview As the sole authorised operator in Hong Kong, the Club has been playing an active and instrumental role in limiting gambling opportunities via our stringent game design approach that fully embraces RG principles. Having said that, it is imperative for us to remain competitive in order to prevent gaming money from siphoning off to illegal and offshore bookmakers. We closely monitor the trends of illegal markets, such as excessive sports betting offered online, to ensure our game remains competitive yet responsible. Following the last assessment in which the Club was specifically commended by WLA for upholding RG principles throughout the game design process, we have since continued to enforce our stringent approach and proactively limited gambling options. We have further tightened the game design and approval process with a clear RASCI model. We have also adopted well-recognized assessment tool Gam- GaRD to assess the risk level of our betting products. A summary of our efforts since the previous accreditation: Comments from WLA on Ongoing initiatives since last New initiatives after last 2009/10 submission accreditation accreditation The Club has to be aware of the risks of problem gambling resulting from In-play and mobile application The Club has to monitor effectiveness of bet types in fighting against illegal operators Stringent approval process Adhered to rigorous regulatory framework for game launch and modification with close scrutiny of regulator and external advisory body Stringent game design principles No VLT, electronic games, scratch cards or instant games Confined In-play betting to football, 6 bet types (vs. 30+ in illegals) and live matches only (~25% of matches vs ~90% of illegals) Limiting gambling occasions No increase in betting product categories No increase in race meetings No increase in lottery draw and days Best practice assessment tool Deployed Gam-GaRD to assess risk of all existing products (Result: Low risk) Tightened process Tightened game design process with clear RASCI to segregate roles and responsibilities Voluntarily tightened licensing conditions No local football matches offered for betting Reduced physical exposure Reduced number of OCBBs from 105 to 102 in last years 2
.2 Key RG Initiatives in Last 3 Years In line with the Government policy of not encouraging gambling, the Club s underlying philosophy in our Game Design is to balance the need to satisfy demand for popular betting products, while limiting the likelihood of gambling proliferation with too many betting products and game formats. The Club only offers three products namely horse race betting, football betting, and Mark Six Lottery. Online betting is also limited to just these three betting products as well. The Club does not offer any form of casino table game, electronic gaming machines, video lottery terminals, or virtual sports betting. Our latest effort to implement RG in the game design aspect consists of the following initiatives: Voluntarily tightened licensing conditions Reduced physical exposure to betting in community Adhered to rigorous regulatory framework Limited gambling opportunities YET Maintained competitiveness against illegals Proactively limited gambling occasions Tightened stringent design principles and process Managed the risk of In-Play betting.2.1 Adhered to rigorous regulatory framework Hong Kong s regulatory framework remains one of the strictest in the world to enforce RG and effectively restricts gambling opportunities. The government s Home Affairs Bureau (HAB) oversees gambling policy in Hong Kong. The policy bureau is advised by an independent advisory body, the Betting and Lotteries Commission (BLC), primarily on the regulation of the conduct of horse race betting, football betting and Mark Six Lottery in accordance with the provisions of the Betting Duty Ordinance, as well as compliance with licensing conditions by the Club. In particular, consent of HAB is required not only for any amendment to betting rules for bet type launch and modification, but also for betting operations such as the opening and relocation of our Off-course Betting Branches (OCBBs): Only 3 products are licensed for betting, namely horse racing, football, and Mark Six Lottery. While the Club is the sole authorised operator in Hong Kong, the license period is possibly the shortest compared with any other operators globally - Horse race betting license has to be renewed every year - Football betting license has to be renewed every years - Mark Six Lottery license has to be renewed every 2 years 3
The Club needs to submit 2 reports a year to HAB detailing the compliance status of our horse race betting, football betting and Mark Six Lottery businesses. RG policies are submitted together with the report annually for regulator s review and monitoring to ensure stringent adherence to RG principles. - In horse race betting, we have only introduced 1 new bet type Quartet in the last 3 years. Two-way commingling was only introduced in 201 after thorough deliberation with the Government and other stakeholders over the past seven years, primarily aimed at combating illegal gambling. Responsible Gambling Policy Implementation Measures In line with the Responsible Gambling Policy of The Hong Kong Jockey Club (the Club ), and the licensing requirements and codes of practice governing Horse-race Betting, Football Betting and Lotteries, a number of measures and steps have been taken to promote responsible gambling practices among those who gamble, minimize the negative effects of problem gambling, prevent under-age gambling and publicise the risks of illegal gambling. No credit betting The Club does not provide credit betting so as to ensure customers cannot accumulate debts with the Club. This is important since heavy debt is one of the commonest and most serious problems experienced by problem gamblers and their families. Under-age access controls The Club does not, pursuant to the licence conditions, accept bets from juveniles under the age of 18, nor accept bets at premises where juveniles are permitted access. The Club conducts security checks - by deploying security guards at all entrances - to prevent the under-age and students in school uniform from entering Club betting premises. Betting accounts are available for adults only: to open a Club betting account requires age verification. Betting account holders are reminded, through ongoing customer communication and - In football betting, we have introduced only 6 new bet types in the past 3 years. These were carefully reviewed to bring about the biggest impact against illegal and offshore channels and have received consent from regulators. In fact, the number of football bet types today still remains at an extremely low level of 27, which is approximately 20% of the c.150 bet types that illegal and offshore bookmakers offered. The evolution of football betting products of the Club as compared to illegal operators is summarized herewith: through new account opening packs, of the importance of not allowing under-age access to account details. Guards who are well trained and briefed are posted at off-course betting branch (OCBB) entrances to prevent under-age access and these guards are required to record and log all underage access attempts. From July to December 2013, some 27,000 age checks were conducted, and some 1,300 people were excluded (under-age, in school uniform or failed to produce ID when asked), each month on average. In addition to entrance checks performed by guards, Club staff inside OCBBs will also ask those suspected of being under-age to produce ID. Club staff in OCBBs will not sell betting tickets to those who look under-age and who are unable to produce ID. Similarly, Club staff in OCBBs will not cash winning tickets for those who look under-age and who are unable to produce ID. To make access controls effective, wide community support is needed. As a way of mobilising community support, and at the suggestion of the Gambling Watch, a hotline No. of football bet types 2010 2013 HKJC 21 27 Illegals 130 150 (1830266) was introduced in March 200 for the public to report cases of those who look under-age seen entering OCBBs. Though the number of reported cases is low, this is considered an important reporting service. Bi-annual RG Reports submitted to Home Affairs Bureau (HAB) 1 In order to maintain the delicate balance between fulfilling demand and preventing proliferation, the Club has decided not to apply for any new license on other betting products over the past 10 years. We will continue to conduct constant reviews to keep up with changing trends..2.2 Tightened stringent game design principles and process A. Tightened stringent game design principles On top of the strict regulatory requirement, we deliberately self-imposed a set of game design principles, which are arguably one of the most stringent in the world, for example: We do not offer games that are conducive to problem gambling. We have never offered VLT, electronic games, scratch cards, or instant games despite their popularity in other countries. This was commended by WLA in the last assessment We limit betting products while staying competitive against illegal and offshore bookmakers: - In Mark Six Lottery, we have maintained the same game format and there has been no increase in the number of draw days (capped at a maximum of 3 draws a week) Though we understand that the Club offers a much lower variety of bet types when compared with other operators, we stand our ground on only offering the most popular bet types to ensure that they fulfill the role of channeling demand, instead of creating demand. B. RASCI model adopted to govern game design process While active regulator s engagement is already part of the current game launch and modification process, the Club has enhanced RG checkpoints in the game design and approval process since our last assessment: A RASCI model has been established that incorporates multiple RG checkpoints throughout the planning, implementation and execution stages of betting products RASCI model also clearly segregates the roles and responsibilities of different internal and external stakeholders in the game design and approval process The involvement of Public Affairs department (PA) has been significantly increased under this model to reinforce RG monitoring from the planning to launch of betting products
Football - Game Design Process RG Check Points Submit Annual Business Plan for Betting Committeeʼs Approval Planning Review with PA on mplementation Plan Invite PAʼs comments Amend Betting Rules Invite PAʼs inputs Implementation Submit Betting Rules for Betting Committee and Board of Stewards Approval Notify HAB PA to check comments of HAB (if any) Launch Review Post-Launch Evaluation RASCI model ensures strict adherence to RG principles throughout the Club s game design and approval process Application of RASCI model in the Club s football betting game design process which clearly defines the roles and responsibilities of stakeholders 5
C. Best practice tool adopted to assess product risk Although the Club has taken a highly self-restrained approach in our game design and has received positive feedback from both the WLA and local regulator, we are constantly looking for areas of continuous improvement. We are aware of the industry best practice of deploying systematic tool like Gam- GaRD to assess the risk of both new and existing games in a quantitative manner and this tool is now being used by over 30 gaming operators and regulators around the world. In 2010, the WLA even recommended all its members to use this tool as part of their RG accreditation procedures. In light of this, the Club has since the last accreditation conducted Gam-GaRD assessment on all three betting products. Football bet types that have undertaken assessment include Pari Mutual, Pre Match and In-Play, while Exotic, Fixed Odds and Standard bet types for horse race betting have also been assessed. The assessment reports indicated that under the Club s prudent, socially responsible game design approach, all the three products are of low risk and can meet the standards of responsible gambling. We will continue to apply this assessment tool to all new products and major changes on game format in future..2.3 Managed the Risk of In-play Betting One of the points raised by WLA in the last assessment is whether the Club had effectively embraced RG in view of the growing global popularity of In-play betting. We have responded by initiating the following measures: We only offer In-play betting for one product, football betting We only allow 6 bet types for In-play, a fraction when compared to c.30 offered by illegal and offshore bookmakers We have deliberately limited In-play betting for matches that customers can either watch live on local TV or through a football live streaming service hosted on the Club s website for certain accounts. This ensures that customers can make the most informed choice with sufficient and credible live information available for In-play. Under this highly disciplined approach for RG, the Club s In-play match coverage remains at an extremely low level when compared to other operators. As aforementioned, the Club has adopted Gam-GaRD to objectively assess the risk level of our product and help design more responsible lower-risk games. It is worth noting that assessment exercise conducted on the Club s football In-play bet types confirmed they are low risk. 2013/1 Number of matches Number of matches % of matches offered available for In-Play available for In-Play HKJC 9,703 2,27 25% Illegals ~ 50,000 ~37,500 75%.2. Proactively limited gambling occasions Acknowledging the fact that problem gambling in other countries is most commonly associated with non-stop types of gambling such as casino table games that are easily accessible and involve continuous play and rapid, repeated staking, the Club has responded by restricting the number of gambling occasions available by putting a sensible limit on race meetings, football matches offered for betting, and Mark Six draws. For Mark Six, there has been no increase in the number of draw days (capped at a maximum of 3 draws a week) For football betting, while we have increased the number of matches offered for betting to maintain our competitiveness against the illegal and offshore market, this is a very marginal increase when compared to the other operators. For horse race betting, there has been no increase in the number of local race meetings (capped at 83 per season) 6
Football matches offered 2010/11 2012/13 Increase (%) HKJC 8,51 9,58 11% Illegals c.2,000 c.30,000 25% * based on OC&C Strategy Consultants estimate.2.5 Voluntarily tightened licensing conditions As a responsible corporate citizen, we strongly believe in keeping local football in Hong Kong bet-free to cultivate it as a sport and healthy activity within the community. As a result, we decided internally since inception not to offer betting on matches played by non-local teams on local grounds even though the previous football license for the period July 2008 to July 2013 allowed us to do so. A recent example would be the English Premier League Asian Trophy that took place in Hong Kong in July 2013. Although both teams were not local, we still did not offer any betting options as it was hosted on local grounds. In fact, during our most recent license renewal in July 2013, we even voluntarily embed this self-restrained approach by stipulating that we will not offer any said betting within the license itself..3 Gaps and Opportunities for Continuous Improvement In-Play betting is expected to continue its growth and we will continue to monitor and evaluate the trends going forward. The Club is committed to RG and strongly believes that limiting our product offerings to the bare essential is crucial in helping to prevent a spread of problem gambling. Although we understand that the introduction of certain products might be required to help maintain our competitiveness and channel demand back from illegal and offshore channels, we will continue to uphold our RG principles and balance between maintaining competitiveness against other operators while preventing the proliferation of gambling..2.6 Reduced physical exposure to betting in community To closely monitor and enforce the Club s RG principles across all our channels, we have restricted physical gambling opportunities to the 2 racecourses and OCBBs that are 100% owned and operated by the Club. As part of our commitment to RG and to limit the betting opportunities, a thorough evaluation on individual OCBBs has been completed. This evaluation encompassed aspects such as risk-exposure to community and potential problem and excessive gambling. After this careful examination, we have decided to deliberately reduce the number of OCBBs, dropping from 105 to 102 in the last years, despite the significant population growth in Hong Kong. 7
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