Office address St. Anne's House Queen Elizabeth II Street Alderney

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Office address St. Anne's House Queen Elizabeth II Street Alderney Powered By Docstoc
					Office address: 	      St.	Anne’s	House
	                      Queen	Elizabeth	II	Street
	                      Alderney
	                      Channel	Islands
	                      GY9	3TB

Telephone number: 	 +44	(0)	1481	825500

Facsimile number: 	    +44	(0)	1481	823978

General enquiries: 	   Rowie	Gaydon	(Office	Administrator)
	                      info@agcc.gg

Website address:       www.gamblingcontrol.org
                              ALDERNEY
                              GAMBLING CONTROL COMMISSION




24th	May	2010


The	Chairman
Policy	and	Finance	Committee
States	of	Alderney
PO	Box	1
Alderney
GY9	3AA




Dear	Mr	Willmott

I	have	pleasure	in	presenting	the	report	of	the	Alderney	Gambling	Control	Commission	
for	the	period	1	January	to	31	December	2009.

Yours	sincerely




John Godfrey
Chairman




        Members:	John	Godfrey	(Chairman),	Raymond	Birdseye,	John	Clitheroe,	Isabel	Picornell
                                              CO N T EN TS




Mission	statement	&	objectives	                         2

Chairman’s	statement	                                   3

The	Commission	                                         4

Approach	to	regulation	                                 7

Anti	money	laundering	/	combating	the	
	     financing	of	terrorism	                          10

Licensing	and	regulatory	activity	                     12

Technical	activity	                                    16

Financial	statements	                                   17

Appendix	A	–	Holders	of	egambling	licences	
	    and	associate	certificates	                       25

Appendix	B	-	Statistics	                               26




                                                             1
    M I S S I ON S TATE M E N T




    To	ensure	and	maintain	the	integrity	of	the	
    electronic	gambling	industry	in	Alderney.




    OB JE CT I VE S

    To	protect	the	reputation	of	Alderney	as	a	first	tier	jurisdiction	by	seeking	to	ensure	that:

    •	 all	electronic	gambling	on	Alderney	is	conducted	honestly	and	fairly;
    •	 the	funding,	management	and	operation	of	electronic	gambling	on	Alderney	remains	free	from	criminal	
       influence;	and
    •	 electronic	gambling	is	regulated	and	monitored	so	as	to	protect	the	interests	of	the	young	and	the	vulnerable.




2
                                                                                       CHAIRM AN ’S S TAT EM ENT




The	Commission	will	mark	its	tenth	anniversary	with	          The	new	regime	has	been	well	received	by	the	industry.		
the	submission	of	this	report.	The	egambling	business	        In	particular,	it	is	recognised	to	be	a	better	fit	with	the	
has	developed	during	this	period	beyond	anything	             way	in	which	egambling	businesses	now	operate	and	it	
envisaged	when	we	started.		At	31	December	2009,	the	         contributes	to	the	attraction	of	Alderney	as	a	base	for	
Commission	staff	had	grown	to	18	and	there	were	44	           egambling	operations.		
full	licences	in	issue.			
                                                              The	development	and	delivery	of	the	new	regime	was	a	
Our	objective	has	been	to	offer	a	quality	of	regulation	      considerable	task	involving	consultation	with	our	licence	
that	meets	the	best	international	standards.		It	is	          holders	and	extensive	drafting	of	the	new	ordinance	and	
pleasing	to	note	that,	as	we	intended,	this	approach	         regulations.		Its	successful	introduction	was	the	result	
has	attracted	well	run	companies	and	has	brought	             of	the	hard	work	and	skill	of	both	Commission	staff	and	
significant	financial	benefits	to	both	Alderney	and	the	      outside	advisers	including,	in	particular,	the	Law	Officers	
Bailiwick	as	a	whole.		A	recently	completed	survey	by	        of	the	Crown.
KPMG	estimates	the	total	economic	contribution	of	the	
industry	during	2009,	including	telecommunications,	          The	most	important	external	development	during	
rents,	employment	of	staff	in	Alderney	and	Guernsey,	         the	year	has	been	the	prospective	opening	up	of	the	
and	so	on,	at	nearly	£50	million	in	total,	of	which	around	   jurisdictions	of	a	number	of	European	countries	to	
£7	million	relates	to	Alderney	alone.	                        foreign	egambling	companies.		The	Commission	has	
                                                              been	monitoring	the	development	of	their	individual	
The	most	significant	achievement	of	the	Commission	           licensing	regimes.		It	has	entered	into	negotiations	with	
during	2009	has	been	the	successful	introduction	of	          the	jurisdictions	where	most	progress	has	been	made	
the	new	licensing	regime	which	distinguishes	between	         with	a	view	to	exchanging	information	and	securing	
business	to	customer	operators	and	business	to	               access	for	Alderney	licence	holders.
business	operators,	and	which	clarifies	the	extent	of	
the	responsibility	of	the	AGCC	for	activities	outside	its	    It	is	likely	that	there	will	now	be	a	period	of	
jurisdiction.                                                 consolidation	after	the	expansion	of	recent	years.		
                                                              We	are	well	equipped	to	confront	what	may	well	
                                                              be	a	difficult	period	economically	with	skilled	and	
                                                              experienced	staff	covering	all	of	the	areas	of	our	activity.		
                                                              The	Commission	is	immensely	grateful	to	all	of	our	
                                                              staff	for	their	hard	work	and	enthusiasm	under	the	able	
                                                              leadership	of	our	Chief	Executive	Officer	and	Chief	
                                                              Inspector.
                                                              				


                                                              John Godfrey
                                                              Chairman




                                                                                                                               3
    T H E COMMI S S IO N




      The	Alderney	Gambling	Control	Commission	(‘the	Commission’)	is	independent	and	non-political.		It	includes	people	
      with	experience	of	gaming,	regulation	and	licensing.	The	Commissioners	are:




    John Godfrey,	Chairman	of	the	Commission,	is	a	specialist	        Raymond Birdseye	held	the	position	of	President	of	
    in	gambling	regulation.	He	was	re-appointed	as	Chairman	          Barclays	Bank	Corporate	Division	in	North	America	for	
    of	the	Commission	for	a	third	term	of	office	in	2009.	He	         a	number	of	years	before	joining	the	Board	of	the	Civil	
    was	consulting	accountant	to	the	Gaming	Board	for	Great	          Aviation	Authority	(CAA)	as	financial	regulator	for	United	
    Britain	for	almost	30	years	and	an	adviser	to	the	Government	     Kingdom	Airline	Companies	and	Air	Travel	Organisers	
    of	The	Bahamas.	For	much	of	this	time,	John	was	also	an	          Licences.	Additionally,	he	was	Chairman	of	the	CAA	Audit	
    expert	witness	for	the	Metropolitan	Police.	John	chaired	the	     Committee	and	several	other	committees.	He	was	re-
    eGambling	Working	Group	of	the	International	Association	of	      appointed	as	a	Commissioner	for	a	third	term	in	2009.
    Gaming	Regulators	from	its	inception	until	2007.




    John Clitheroe	was	a	senior	partner	of	Kingsley	Napley,	          Isabel Picornell	joined	the	Commission	in	2007.		Prior	
    a	prominent	firm	of	London	solicitors	where,	in	addition	         to	moving	to	Alderney,	she	worked	in	local	government	
    to	a	distinguished	career	in	litigation,	he	was	an	expert	on	     reviewing	evidence	for	public	enquiries	and	was	a	Justice	of	
    licensing	law.		He	has	forty	years	experience	of	regulation	in	   the	Peace.		Isabel	is	now	one	of	a	handful	of	highly	regarded	
    medical	services	and	professional	conduct.		He	is	a	member	       certified	fraud	examiners	in	the	Channel	Islands	and	an	
    of	the	Solicitors	Disciplinary	Tribunal	and	an	international	     expert	in	forensic	linguistics.
    consultant	and	lecturer	on	gambling.		He	has	in	recent	years	
    published	several	articles	on	the	field	of	egambling	and	was	
    reappointed	to	the	Commission	in	2007.




4
                                                                                        THE COMMISSION (CONTINUE D )




The	Commission	has	a	staff	complement	of	18	people.	The	executive	consists	of	Andre	Wilsenach,	the	chief	executive	
officer	(“CEO”)	and	Michael	Ellen,	the	chief	inspector.




André Wilsenach	has	a	long	history	in	gambling	                 Michael Ellen	heads	up	the	Commission’s	
regulation.	He	served	on	both	the	national	and	provincial	      inspectorate.	He	is	a	qualified	chartered	accountant	
gambling	boards	in	South	Africa.	Subsequently,	he	              with	extensive	experience	in	the	financial	services	
became	the	first	CEO	of	a	South	African	company	                industry	both	in	the	UK	and	internationally.	Michael	
which	was	established	to	render	electronic	monitoring	          joined	the	Commission	in	2005	as	a	senior	inspector	
services	to	the	National	Gambling	Board	of	South	Africa.	       and	was	promoted	to	chief	inspector	in	2006.
He	is	chair	of	the	International	Association	of	Gaming	
Regulators	for	2009	and	a	member	of	the	International	
Masters	of	Gaming	Law.

The Inspectorate	comprises	three	sections:

Registry,	which	is	staffed	by	the	licensing	officer,	Hilary Bentley and	assistant	licensing	officer,	Kelly Spencer	who	
handle	the	administration	of	all	incoming	applications	as	well	as	a	range	of	administrative	functions.	(At	the	date	of	this	
report,	24th	May,	2010,	Hilary	Bentley	has	left	the	Commission	and	has	been	replaced	by	Kelly	Spencer).

Regulatory division,	which	oversees	licensee	compliance	with	all	laws,	regulations	and	guidelines:
•	 Jorn Starck,	senior	regulatory	inspector,	who	has	a	management	background	in	the	sports	betting	and	call	centre	
   industries;
•	 Konstantinos Despotakis, 	regulatory	inspector	,	who	has	a	senior	management	background	in	the	betting	and	
   gaming	industry;
•	 Frank Casado,	financial	inspector,	who	has	a	strong	financial	and	banking	background	and	has	worked	in	the	
   financial	services	sector	for	many	years;




                                                                                                                               5
    TH E C O M M I S S I ON (C O N T IN UE D)




    Technical division,	which	ensures	that	all	licensees	meet	and	maintain	the	required	technical	standards:	
    •	 Neil Howard,	senior	technical	inspector,	who	has	a	background	in	egambling	software	development	and	
       appraisal	systems	and	network	design;
    •	 Ray Dipple,	senior	technical	inspector,	who	has	extensive	experience	in	the	field	of	systems	networking	and	
       mobile	platforms;	
    •	 Mark Archbold,	senior	technical	inspector,	who	has	extensive	experience	in	casino	and	sportsbook	operations	in	
       Australia;
    •	 Paresh Rughani,	technical	inspector,	who	has	a	background	in	data	centre	operations	and	worldwide	lottery	
       system	implementations;
    •	 Ian Haywood,	technical	inspector,	who	has	systems	networking	experience;
    •	 Chris Parmentier,	junior	technical	inspector,	who	has	technical	support	&	networking	experience




    In	addition,	corporate services	are	rendered	by	a	corporate	services	team	consisting	of:
    •	 Philip Taylor,	in-house	legal	counsel,	who	is	an	English	qualified	solicitor	with	experience	in	the	fields	of	white	
        collar	crime	and	information	rights;
    •	 Nicky Burland,	finance	officer,	who	has	experience	in	financial	and	human	resource	management;
    •	 Rowie Gaydon,	office	administrator,	who	has	experience	in	administration	within	the	hospitality	and	retail	trade	
        industries;
    •	 Paula Moore,	senior	administrative	assistant/PA	to	the	CEO,	who	has	administrative	experience	in	the	financial	
        services	sector;

    During	the	year	the	AGCC	recruited	a	local	trainee,	Christie	Crawford	who	is	part	way	through	a	6-month	
    training	programme,	spending	time	in	each	area	of	the	inspectorate	so	as	to	develop	a	broad	understanding	of	the	
    Commission’s	regulatory	regime	and	operations.	This	recruitment	follows	a	policy	of	employing	local	staff	whenever	
    possible.

    The	Commission	is	keen	to	ensure	that	AGCC	procedures	are	comprehensive,	correctly	documented	and	fully	
    adhered	to.		To	this	end,	during	2009	an	audit	of	inspectorate	operations	was	commissioned	from	an	independent	
    auditing	firm	and	was	carried	out	in	the	spring.		The	resulting	report	confirmed	that	the	inspectorate	staff	conduct	
    the	business	of	the	Commission	effectively	and	efficiently	in	accordance	with	the	relevant	legislation	and	the	AGCC	
    procedures	manual.
6
A P P ROA CH TO R E GUL ATIO N




   The	Commission’s	key	objective	is	to	provide	                Following	this	extensive	and	detailed	research,	it	was	
   a	regulatory	environment	which	offers	robust,	               decided	to	remodel	the	Commission’s	regulatory	
   enlightened,	active	regulation	while	also	being	             framework,	restructuring	it	as	a	mix	of	licences	and	
   responsive	to	the	needs	of	a	changing	industry.		In	         certificates.		Under	a	revised	regime,	to	take	effect	from	
   this	way,	the	Commission	aims	to	protect	players,	to	        1st	January	2010,	licences	would	be	used	to	authorise	
   ensure	the	continuing	high	reputation	of	Alderney	as	a	      activities	split	by	function:	
   jurisdiction	and	to	establish	a	regulatory	environment	      •	 Gambling	operations	–	this	includes	player	
   which	attracts	operators	who	seek	a	comprehensive	and	            registration,	management	of	player	funds	and	of	the	
   tightly	controlled	regime.		                                      gambling	offering.		These	activities	would	be	subject	
                                                                     to	a	category	1	licence.
   The	dynamic	nature	of	the	egambling	industry	means	          •	 The	gambling	platform	–	effecting	the	provision	
   that	the	Commission	frequently	needs	to	review	                   of	approved	games,	run	from	approved	hosting	
   regulations	and	legislation.		Where	changes	to	the	               premises.		These	activities	would	be	subject	to	a	
   regulations	or	the	legislative	framework	are	required,	           category	2	licence.
   the	Commission	will	advise	the	States	of	Alderney’s	         Certificates	continue	to	be	used	to	confirm	that	
   Policy	and	Finance	Committee	on	the	introduction	or	         equipment	has	been	tested	and	suppliers	of	core	
   amendment	of	legislation.		                                  services	and	hosting	facilities	have	passed	our	tests	for	
                                                                fitness	and	propriety.		As	in	the	past,	providers	of	games	
   In	order	to	assess	the	impact	of	recent	–	and	               or	software	would	need	to	have	their	software	tested	
   continuing	-	industry	developments,	during	the	year	the	     and	certified	in	order	for	it	to	be	incorporated	onto	a	
   Commission	undertook	a	detailed	reappraisal	of	the	          licensed	platform.	
   egambling	industry	and	relevant	legislation,	involving	
   detailed	analysis	as	well	as	extensive	consultation	with	    The	new	licensing	structure	also	allows	for	a	seamless	
   licensees,	external	consultants,	industry	representatives	   player	transfer	to	approved	platforms	outside	Alderney’s	
   and	independent	experts.		It	was	recognised	that	            jurisdiction	with	the	introduction	of	a	new	regulated	
   important	issues	affecting	the	industry	include	the	         category:	a	foreign	gambling	associate.		This	is	an	entity	
   increasing	emergence	of	media	based	companies	               “to	whom	a	category	1	licensee	transfers	customers,	
   and	other	non-gambling	participants;	technological	          or	allows	them	to	be	transferred,	for	the	purpose	of	
   advances	and	the	development	of	non-traditional	             that	entity	effecting	gambling	transactions	with	the	
   gambling;	the	emergence	of	new	support	industries	and	       customer	or	arranging	for	those	customers	to	gamble	
   specialist	suppliers,	and	the	increase	in	international	     with	others”.		The	Commission	is	of	the	view	that	this	
   regulation.		This	review	of	the	egambling	landscape	         potential	structure	more	adequately	reflects,	and	serves,	
   also	considered	the	increasing	development	of	               the	increasingly	international	and	multi-jurisdictional	
   multi-location	distributed	networks	and	the	growth	of	       nature	of	the	gaming	industry.
   business-to-business	operations	as	a	major	sector	of	
   licensed	egambling	activity.                                 Whilst	non	certified	non-resident	platforms	can	still	be	
                                                                accessed	by	Alderney-registered	players	it	will	in	future	
                                                                be	required	of	the	licensee	to	make	clear	to	the	player	
                                                                that	in	these	instances	there	may	be	different	levels	of	
                                                                player	protection.




                                                                                                                              7
    A P P R O A C H TO R E GULAT IO N (C O N T IN UE D)




    REVISED FEE STRUCTURE                                          PLAYER PROTECTION
    Alongside	the	review	of	the	licensing	structure,	the	          The	Commission	attaches	great	importance	to	player	
    Commission	revised	the	licence	fee	structure	to	ensure	        protection.		The	Commission	therefore	continues	to	
    that	Alderney	remains	a	financially	attractive	jurisdiction	   work	with	its	licensees	to	develop	measures	to	minimise	
    in	comparison	with	others.		Category	1	licence	fees	           the	risks	associated	with	egambling.		Such	risks	may	
    are	now	linked	to	a	company’s	net	gaming	yield,	so	            include	fraudulent	or	under-age	activity,	which	licensees	
    reflecting	more	closely	the	varied	commercial	scale	           are	expected	to	prevent	through	stringent	player	
    of	licensees	and	also	allowing	for	easier	entry	to	the	        identification	and	appropriate	customer	due	diligence.		
    market	for	small	and	start-up	enterprises.	                    Licensees	are	also	required	to	have	in	place	procedures	
    As	well	as	restructuring	the	licensing	framework,	during	      for	identifying	and	assisting	problem	gamblers,	whether	
    the	year	the	Commission	revised	and	reorganised	its	           through	access	to	support	and	advice,	or	through	play	
    regulations	with	the	aim	of	ensuring	that	they	are	easier	     limitations.		
    to	use	and	generally	more	accessible.		The	advantage	
    of	this	revised	approach	is	that,	as	well	as	ensuring	         All	licensees	are	required	to	contribute	financially	to	an	
    that	regulatory	oversight	is	properly	and	appropriately	       appropriate	body	involved	in	conducting	research	into,	
    maintained,	it	is	closely	suited	to	the	varied	ways	in	        or	providing	education	about,	the	risks	of	gambling	or	
    which	different	gaming	companies	are	structured,	              the	treatment	of	problem	gamblers.		During	the	year,	
    whether	they	are	larger	multi-faceted	organisations,	          licensees	and	associated	companies	made	donations	
    small	start-ups,	or	specialist	platform	providers.			          of	around	£1.1million	to	appropriate	charities	including	
    Commenting	on	the	revised	licence	structure,	CEO	              GamCare	and	the	GREaT	Foundation.
    André	Wilsenach	said	“We	believe	this	new	licensing	
    framework	fits	perfectly	with	the	current	and	future	          During	the	year,	the	Commission	considered	
    development	of	the	online	gaming	industry	and	we	are	          issues	relating	to	the	protection	of	player	funds	and	
    looking	forward	to	working	with	operators	and	other	           commissioned	an	external	report	on	options	available	to	
    regulators	in	rolling	out	this	new	approach”.                  a	gambling	regulator	wishing	to	provide	some	clear	level	
                                                                   of	security	to	players.		The	resulting	report	examined	the	
    The	Alderney	eGambling	Ordinance,	2009,	which	                 various	approaches	taken	by	other	regulators,	where	this	
    establishes	the	legal	basis	for	the	new	regulations,	was	      could	be	clearly	identified.		After	due	consideration,	the	
    approved	by	the	States	of	Alderney	on	21st	October	            Commission	concluded	that	in	this	area	transparency	is	
    2009.	The	regulations	themselves	–	the	Alderney	               paramount	and	that	licensees	should	be	encouraged	to	
    eGambling	Regulations,	2009	-	were	made	by	the	                protect	player	funds.		Furthermore,	related	procedures	
    Alderney	Gambling	Control	Commission	on	15th	                  should	be	fully	documented	in	each	licensee’s	internal	
    December,	2009	and	came	into	effect	on	1st	January	            control	system	and	clearly	set	out	in	published	terms	
    2010.		Establishing	the	new	regulatory	framework	              and	conditions	so	that	players	are	fully	informed	as	to	
    meant	that	the	equivalent	ordinance	and	regulations	of	        how	their	funds	are	held.	
    2006	were	repealed.	
                                                                   WORKING WITH A GLOBAL INDUSTRY
    In	anticipation	of	the	new	regulatory	regime,	in	              The	Commission	is	aware	that	developments	in	
    November	and	December	of	the	year,	all	licensees	              egambling	legislation	elsewhere	in	the	world	may	have	
    and	certificate	holders	were	offered	the	opportunity	          a	negative	impact	on	the	ability	of	Alderney	licensees	
    to	transition	their	licence	or	certificate	into	the	           to	access	those	markets.		The	Commission	is	therefore	
    appropriate	form	of	approval	required	under	the	new	           in	discussion	with	regulators	in	various	countries	so	
    regime.		New	licences	and	certificates	were	issued	to	be	      as	to	be	kept	fully	informed	on	relevant	legislative	
    valid	from	1st	January	2010	to	ensure	a	smooth	transition	     developments	and	also	makes	use	of	specialist	
    to	the	new	regime.	                                            consultants	to	keep	the	Commission	informed	of	
                                                                   relevant	legislative	proposals.		During	the	year	the	CEO	
                                                                   worked	towards	developing	more	formalised	working	
                                                                   relationships	with	other	regulators.



8
                                                                            APPROACH TO REGULATION (CONTINUE D )




REGULATORY AND LEGISLATIVE                                     Alderney	has	proven	experience	in	establishing	and	
COOPERATION                                                    maintaining	a	robust,	business-friendly	online	gaming	
The	Commission	liaises	with	other	international	               jurisdiction,	and	shares	this	expertise	with	others	
regulatory	bodies	such	as	the	UK’s	Gambling	                   through	participation	in	the	major	industry	conferences.		
Commission	as	well	as	gaming	regulatory	bodies	in	             During	the	course	of	the	year,	members	of	the	
Singapore,	Nevada,	Antigua,	New	Jersey,	Malta,	the	Isle	       Commission	participated	in	various	conferences:
of	Man,	Victoria	(in	Australia)	and	several	other	gaming	      •	 at	the	Legal	Gaming	in	Europe	conference	in	
enforcement	bodies	in	connection	with	probity,	due	                 January,	the	CEO	chaired	a	session	on	European	
diligence	investigations	and	common	international	                  gaming	regulation,	particularly	addressing	the	issue	
practices.		The	AGCC	also	works	closely	with	non	                   of	progress	towards	standardisation;
gaming	regulators	such	as	the	Guernsey	Financial	              •	 the	CEO	participated	in	a	panel	session	at	the	
Services	Commission	and	Guernsey’s	Financial	                       Online	Gambling	in	Spain	regulatory	update,	which	
Intelligence	Service.	                                              discussed	Spain’s	online	gambling	liberalisation	
                                                                    from	a	pan-European	perspective;
The	Commission	plays	an	active	role	in	international	          •	 the	CEO	moderated	a	session	at	the	European	
regulatory	bodies	such	as	the	Gaming	Regulators	                    Gambling	Briefing,	an	annual	conference	on	legal	
European	Forum	and	the	International	Association	of	                issues	in	the	European	gaming	industry;
Gaming	Regulators.                                             •	 at	the	Gaming	Executive	Summit	the	CEO	
                                                                    moderated	a	panel	discussion	on	developments	and	
In	November,	the	Commission	hosted	a	visit	to	                      issues	in	the	regulatory	landscape;
Alderney	by	Tobias	Ellwood	MP,	at	the	time	Member	             •	 the	AGCC	in-house	counsel	attended	the	
of	Parliament	for	Bournemouth	East	and	a	shadow	                    Association	of	Money	Laundering	Professionals	
spokesman	on	Culture,	Media	and	Sport,	the	UK	                      Forum,	a	seminar	on	countering	the	financing	of	
government	department	which	oversees	the	gaming	                    terrorism	and	Paterson’s	remote	gambling	and	
industry.		Mr	Ellwood	visited	Alderney	and	Guernsey	to	             regulation	conference.		He	also	spoke	at	the	Online	
learn	more	about	how	the	islands	regulate	egambling.		              Gambling	and	Data	Protection	Workshop.
In	Alderney	he	met	with	members	of	the	Commission	
and	the	inspectorate	and	discussed	the	Commission’s	           During	the	year,	the	Commission	met	twice	with	the	
legislative	framework,	the	Commission’s	regulatory	            States	of	Alderney:	in	June	the	Commission	met	with	
approach	and	operations,	developments	in	the	                  the	Policy	&	Finance	Committee	to	submit	the	2008	
egambling	industry	elsewhere	as	well	as	issues	relating	       annual	report	and	to	discuss	the	proposed	revisions	to	
to	player	protection.		Interviewed	on	departure	by	BBC	        the	licensing	regime;	in	December	they	met	with	the	
Guernsey,	Mr	Ellwood	said	that	his	visit	had	given	him	a	      Finance	Advisory	Group	to	submit	the	Commission’s	
greater	understanding	of	the	Commission’s	operations.	         budget	forecasts	for	the	forthcoming	year.		

In	July	the	AGCC	hosted	a	visit	from	the	South	African	        During	2009,	the	Commissioners	had	a	comprehensive	
National	Gambling	Board.		The	delegation	discussed	a	          programme	of	meetings	with	representatives	of	active	
range	of	egambling	and	regulated	issues	before	moving	         licensees.		These	are	important	meetings	which	allow	
on	to	visit	the	UK.		Speaking	on	local	television	about	       licensees	to	discuss	matters	of	mutual	concern	with	the	
their	visit,	they	explained	they	were	visiting	Alderney	“as	   Commission,	and	to	share	valuable	information	relating	
it	is	considered	to	be	one	of	the	best	jurisdictions	in	the	   to	a	rapidly	changing	industry.	
world”.




                                                                                                                            9
     A NT I MON E Y L A UN DE R IN G/ C O M B ATIN G T HE FIN AN CIN G O F T ERRO RIS M




     The	Commission	takes	seriously	all	issues	relating	to	       FATF	monitors	members’	progress	in	implementing	
     anti	money	laundering	and	combating	the	financing	of	        necessary	measures,	reviews	money	laundering	and	
     terrorism.		During	2009,	as	part	of	its	regulatory	review	   terrorist	financing	techniques	and	counter-measures,	
     a	number	of	changes	were	made	to	the	anti	money	             and	promotes	the	adoption	and	implementation	
     laundering	regime	to	ensure	that	the	internationally	        of	appropriate	measures	globally.	In	particular,	
     agreed	standards	are	maintained	and	that	the	anti	           the	Commission	takes	careful	note	of	the	FATF	
     money	laundering	/	combating	the	financing	of	               recommendations	and	special	recommendations	as	
     terrorism	(“AML/CFT”)	framework	for	egambling	               they	relate	to	AGCC	activities	and	those	of	its	licensees.		
     remains	harmonised	with	other	sectors	in	the	Bailiwick.      The	most	recent	report	to	the	Guernsey	AML/CFT	
                                                                  Strategy	Committee	confirmed	that	the	Commission			
     The	Commission	follows	closely	the	guidance	of	              had	no	adverse	experience,	through	its	licensees,	in	the	
     the	Financial	Action	Task	Force	(“FATF”),	an	inter-          key	risk	areas.
     governmental	body	whose	purpose	is	the	development	
     and	promotion	of	national	and	international	policies	to	
     combat	money	laundering	and	terrorist	financing.		The	




10
                               AN T I MO N E Y LAUNDERING/COMBATING THE FINANCING OF TERRORISM (CONTINUE D )




In	order	to	meet	FATF	objectives,	organisations	               In	addition,	in	August,	an	information	session	was	held	
are	required	to	maintain	comprehensive	statistics	             for	newly	operational	licensees	which	afforded	them	
regarding	the	effectiveness	and	efficiency	of	systems	for	     the	opportunity	to	meet	with	representatives	of	the	
combating	money	laundering	and	terrorist	financing.		          Guernsey	Financial	Intelligence	Service.	This	session	
The	Commission	particularly	notes	and	takes	record	            was	followed	by	a	specialist	training	seminar	focusing	
of	suspicious	transaction	reports	by	the	AGCC	or	its	          on	the	preparation	of	business	risk	assessments.	
licensees,	the	details	of	onsite	inspections,	as	well	as	      Representatives	from	14	licensees	were	required	to	
any	formal	requests	for	assistance	relating	to	AML/            attend	and	representatives	from	a	further	14	operational	
CFT	issues.			Suspicious	transaction	reports	produced	         licensees	attended	on	a	voluntary	basis.	In	all	over	40	
by	AGCC	licensees	are	required	to	be	submitted	                delegates	received	a	full	day	of	training.	Further	such	
direct	to	Guernsey’s	Financial	Intelligence	Service	and	       sessions	will	take	place	on	an	ongoing	basis.		
copied	to	the	AGCC.		During	2009,	16	such	reports	
were	submitted	and	the	Commission	noted	that	the	              All	active	licensees	are	inspected	within	one	year	of	
number	of	suspicious	transaction	reports	made	by	              the	approved	start	of	their	live	operations,	and	then	
licensees	is	broadly	in	line	with	expectations	for	a	sector	   annually	thereafter.		All	inspections	incorporate	a	careful	
that	generally	sees	a	robust	AML/CFT	framework	as	an	          examination	of	a	licensee’s	AML/CFT	procedures	to	
essential	tool	in	the	protection	of	reputation.                ensure	that	they	are	robust.	Each	inspection	is	preceded	
                                                               by	a	mystery	shopping	exercise	testing	the	site	from	
During	the	year,	the	AGCC	issued	4	notices	on	                 the	perspective	of	a	player.		An	inspection	will	include	
business	from	sensitive	sources.	These	reiterate	              reviews	of	player	registration,	payment	systems,	player	
concerns	that	the	FATF,	the	Guernsey	Financial	Services	       due	diligence	and	other	controls	used	to	prevent	money	
Commission	and	the	AGCC	may	have	regarding	                    laundering	and	to	combat	terrorist	financing.		
certain	jurisdictions,	as	well	as	the	requirements	for	
each	licensee	when	dealing	with	such	jurisdictions.

The	Commission	continues	to	be	involved	in	a	number	
of	initiatives	aimed	at	raising	awareness	of	these	issues	
with	licensees	and	the	public.	During	2009	these	
included	briefing	and	training	sessions	for	staff	and	
licensees,	as	well	as	consultation	with	other	regulatory	
bodies.		The	Commission	is	regularly	represented	
at	meetings	of	the	Bailiwick’s	AML/CFT	Strategy	
Committee.




                                                                                                                              11
     L I CE NS I NG & R E GUL ATO RY A C TIV ITY




     It	is	a	vital	part	of	the	Commission’s	licensing	regime	     By	the	end	of	the	year	there	were	44	licensees.		
     that	holders	of	egambling	licences	and	associate	            Following	the	transition	of	all	licences	into	the	form	
     certificates,	as	well	as	key	individuals,	are	approved	as	   required	from	January	1st	2010,	these	represented	
     being	“fit	and	proper”.		New	applicants	for	a	licence	       •	 23	holders	of	a	category	1	and	2	licence	
     or	certificate	are	therefore	carefully	scrutinised.		        •	 18	holders	of	a	category	1	licence	
     Consideration	of	the	fit	and	proper	test	is	essentially	a	   •	 3	category	2	licences.
     question	of	personal	and	corporate	character:	assessing	
     whether	or	not	the	individual	or	organisation	applying	      During	the	year	12	egambling	licences	were	
     for	approval	is	likely	to	run	a	highly	regulated	business	   surrendered	or	lapsed.	
     within	both	the	spirit	and	the	letter	of	the	Commission’s	
     regulations.                                                 Associate	certificates	were	issued	to	the	following:
                                                                  •	 Dynamite	Design	&	Marketing	Ltd
     After	an	application	has	been	received,	an	initial	          •	 Bell-Fruit	Group	Ltd	
     information	meeting	will	discuss	in	some	detail	the	         •	 Digitus	Limited	(trading	as	Betsoft	Gaming)
     background	to	the	application,	the	nature	of	the	            •	 Kastraki	(Alderney)	Ltd
     proposed	egambling	activities	and	how	the	egambling	         •	 CTXM	SIA
     will	be	conducted.		The	discussion	will	also	incorporate	    •	 Mfuse	Ltd
     issues	such	as	the	financing,	the	individuals	involved,	     •	 Football	1x2	Ltd
     and	the	software	being	used.	This	is	to	ensure	that	         •	 Endemol	Games	Ltd
     the	AGCC	has	a	full	and	clear	understanding	of	the	          •	 NextGen	Gaming	Pty	Ltd
     proposition	and	addresses	early	on	any	contentious	          •	 Barcrest	Group	Ltd
     or	problematic	areas.	The	inspectorate	will	then	            •	 Live	Game	Systems
     investigate	each	corporate	and	individual	applicant,	        •	 Global	Betting	Exchange
     looking	at	their	business	history	and	relevant	              •	 Blueprint	Gaming	Ltd
     experience,	associated	principals	and	businesses	            •	 Atac	Media
     associates.		The	AGCC	may	outsource	certain	                 •	 Entertasia	Technology	Company	Ltd
     elements	of	the	investigation	to	suitable	third	parties	     •	 Euro	Live	Technologies	Ltd
     where	geographical	or	language	constraints	make	it	
     difficult	to	obtain	the	necessary	confirmation	of	an	        Two	holders	of	associate	certificates	applied	for	full	
     applicant’s	fitness	and	propriety.                           licences	and	so	let	their	associate	certificates	lapse.		Two	
                                                                  further	associate	certificates	were	surrendered	and	one	
     During	2009,	egambling	licences	were	issued	to	the	          was	withdrawn.
     following	companies:
     •	 SPS	Betting	(Alderney)	Ltd                                Following	the	change	in	the	licensing	structure	two	
     •	 Small	Screen	Casinos	Ltd                                  holders	of	associate	certificates	chose	to	transition	to	
     •	 G.	P.	Alderney	Ltd                                        category	2	licences,	with	effect	from	1st	January	2010.			
     •	 Netplay	TV	Group	Ltd                                      Two	organisations	–	a	licence	holder	and	an	associate	
     •	 Gamecode	Ltd                                              certificate	holder	-	chose	to	transition	to	a	foreign	
     •	 Advanced	Games	Lab	Ltd                                    gambling	associate	certificate,	again	with	effect	from	1st	
     •	 Chartwell	Games	(Alderney)	Ltd                            January	2010.		
     •	 Sega	Games	Ltd
     •	 Parlay	Games	Ltd                                          A	full	list	of	holders	of	egambling	licences	and	associate	
     •	 Daub	Alderney	Ltd                                         certificates	at	the	end	of	2009	is	set	out	at	Appendix	A.
     •	 Vantage	Ltd
     •	 Oxalic	Ltd
     •	 Beast	Gaming	Ltd
     •	 WMS	Alderney	2	Ltd



12
                                                                  LICENSING & REGULATORY ACTIVITY (CONTINUED )




Alongside	licence	applications,	the	Commission	also	          Commission	believes	that	this	regulatory	structure	
approved	50	key	individual	applications.		Key	individuals	    more	adequately	serves	the	operational	needs	of	an	
are	those	who	are	deemed	to	be	“in	a	position	to	             increasingly	multi-jurisdictional	gaming	industry.
control	or	exercise	significant	influence	over	the	
operations	conducted	under	an	egambling	licence”.             RESTRICTED USE LICENCES
                                                              A	restricted	use	licence	–	now	known	as	a	temporary	
FURTHER APPROVAL                                              licence	following	the	change	in	the	regulations	-	allows	
Following	Commission	approval	of	a	licence,	a	licensee	       a	company	to	run	egambling	operations	from	Alderney/
will	then	be	required	to	obtain	full	approval	of	their	       Guernsey	for	a	strictly	limited	period	of	time:	no	more	
gambling	equipment	and	their	internal	control	system	         than	30	days	continuously,	or	for	an	aggregate	of	60	
(ICS).		All	gaming	equipment	–	including	random	              days	in	any	six	month	period.		This	type	of	licence	is	
number	generators	and	all	relevant	software	and	              designed	to	serve	the	needs	of	operators	requiring	short	
hardware	-	will	be	rigorously	tested	by	an	independent	       term	use	of	Guernsey-based	gambling	equipment,	
testing	house	to	ensure	compliance	with	AGCC’s	               whether	for	disaster	recovery	periods	or	perhaps	for	a	
published	technical	standards.                                period	of	transition	from	one	location	to	another.		

An	ICS	is	a	system	of	controls	and	administrative	            Four	restricted	use	licences	were	issued	in	2009:	to	
and	accounting	procedures	used	by	a	licensee	when	            Media	&	Gaming	Pty,	MyLotto24	Limited,	Boss	Media	
operating	egambling.		Each	ICS	should	be	designed	to	         Malta	Poker	Limited	and	Boss	Media	Malta	Casino	
provide:                                                      Limited.
•	 administrative	control;
•	 accounting	and	financial	control;                          INSPECTIONS
•	 controls	over	the	operation	of	customer	accounts	          It	is	an	important	element	of	the	regulatory	regime	
   and	player	funds;                                          that	active	licensees	are	inspected	on	a	regular	basis	to	
•	 safeguards	in	relation	to	the	security	of	the	licensees	   ensure	that	they	are	operating	in	full	compliance	with	
   systems;                                                   the	Commission’s	regulations	and	guidelines,	and	that	
•	 comprehensive	and	appropriate	AML/CFT	                     they	adhere	to	the	procedures	set	out	in	their	internal	
   procedures.	                                               control	systems.		Licensees	can	generally	expect	to	be	
                                                              inspected	once	a	year.
HOSTING CERTIFICATES
Holders	of	egambling	licences	are	required	to	house	          The	inspection	team	will	closely	examine	a	broad	range	
their	gaming	equipment	in	approved	premises.		Where	          of	the	licensee’s	operations,	including	
gaming	equipment	is	housed	in	the	Bailiwick	of	               •	 corporate	structures,	staffing	and	staff	training;	
Guernsey,	it	must	be	accommodated	by	a	company	               •	 financial	reporting;	
which	holds	a	hosting	certificate.                            •	 player	registration,	verification	and	associated	
                                                                  banking	procedures;	
The	first	hosting	certificates	were	issued	in	2006	to	        •	 anti	money	laundering	/	combating	financing	of	
Cable	&	Wireless,	Itex	and	Newtel.		Although	individual	          terrorism	procedures;	
hosting	providers	have	expanded	or	added	to	their	            •	 games	fairness	and	player	protection;		
approved	premises,	no	new	hosting	certificates	were	          •	 security	policies	and	procedures;
issued	in	2009.                                               •	 operation	of	approved	games	and	gaming	
                                                                  equipment.	
Under	the	2009	Regulations,	foreign	hosting	premises	
used	by	an	Alderney	licensee	must	be	approved,	and	
may	but	need	not	hold	a	hosting	certificate.		The	




                                                                                                                           13
     L I C E NS I NG & R E GULAT O RY AC T IV IT Y (C O N T IN UED)




     Following	an	inspection,	a	full	report	is	prepared	which	        SANCTIONS
     will	address	any	issues	arising	which	need	attention.		          The	AGCC	has	a	range	of	sanctions	at	its	disposal,	
     Where	serious	issues	arise,	a	further	inspection	or	a	           including	financial	penalties	and,	for	the	most	serious	
     formal	sanction	may	be	required.                                 regulatory	breach,	suspension	or	revocation	of	a	licence	
                                                                      or	certificate.			The	Commission	can	also	issue	a	
     During	2009,	the	regulatory	and	technical	teams	                 “direction	to	rectify”	–	in	other	words,	instructions	that	the	
     carried	out	22	inspections.		In	the	main,	these	                 regulatory	breach	must	be	rectified	within	a	specified	
     demonstrated	a	high	level	of	regulatory	compliance	              time.		During	the	year,	the	Commission	issued	three	
     by	licensees	and	reaffirmed	the	importance	of	active	            such	directions	to	rectify	ICS	deficiencies	or	for	breaches	
     operational	controls.                                            of	an	ICS.		Each	of	these	directions	was	complied	with	
                                                                      speedily	and	efficiently.		

                                                                      Where	a	breach	of	the	regulations	continues	or	becomes	
                                                                      more	serious,	a	regulatory	hearing	may	be	called	as	
                                                                      an	opportunity	for	the	licence	or	certificate	holder	to	
                                                                      make	representations	and	present	their	case	to	the	
                                                                      Commission.		Following	a	regulatory	hearing	in	2009,	
                                                                      one	associate	certificate	was	withdrawn	after	concerns	
                                                                      were	raised	regarding	the	certificate	holder’s	continuing	
                                                                      fitness	and	propriety.

     An	inspection	of	Boylesports	Alderney	Ltd.                       FINANCIAL MONITORING
                                                                      As	part	of	the	AGCC’s	ongoing	monitoring	of	licensees,	
                                                                      operators	are	required	to	ensure	that	they	meet,	on	a	
     SPECIAL INVESTIGATIONS                                           continuous	basis,	the	following	three	prudential	ratios:
     The	AGCC	has	the	power	to	conduct	a	special	                     •	 Cash	must	always	exceed	player	balances;
     investigation	into	a	licensee	at	any	time.		This	may	be	         •	 Current	assets	must	always	exceed	current	liabilities;
     deemed	necessary	to	confirm	or	review	a	licensee’s	              •	 Total	assets	must	always	exceed	total	liabilities	
     operation,	or	where	there	are	concerns	regarding	                   (excluding	capital)	by	at	least	25%.
     operational	issues.		While	some	of	these	may	be	
     conducted	by	visiting	licensee	premises,	they	can	also	          These	are	designed	to	provide	assurance	that	operators	
     be	carried	out	remotely.		                                       have	sufficient	resources	to	pay	out	players’	funds	at	
                                                                      any	time.	The	AGCC	must	be	satisfied	that	acceptable	
     During	2009	the	AGCC	carried	out	two	special	                    arrangements	to	satisfy	these	requirements	are	in	place	
     investigations.		These	were	prompted	by:                         before	the	licensee	can	gain	approval	for	full	activation	
     •	 reports	of	suspected	data	theft	impacting	several	            of	their	operations.
         licensees
     •	 a	requirement	to	investigate	the	operations	and	              Licensees	are	required	to	submit	quarterly	financial	
         activities	of	a	new	associate	                               reports	and	regular	operational	reports	covering	matters	
                                                                      such	as	player	activity,	suspicious	transactions,	significant	
     In	both	instances,	the	special	investigation	resolved	           player	deposits	or	losses.	These	are	closely	reviewed	by	
     any	concerns	and	led	to	a	better	understanding	of	the	           the	AGCC,	with	any	potentially	contentious	issues	being	
     operations	concerned.                                            flagged	for	further	consideration.		Licensees	are	also	
                                                                      required	to	carry	out	a	fully	independent	financial	audit	
                                                                      each	year	and	to	submit	their	audited	accounts	to	the	
                                                                      Commission.




14
                                                                 LICENSING & REGULATORY ACTIVITY (CONTINUE D )




THE ALDERNEY GAMBLING                                       REGULATORY ACTIVITY – COMPLAINTS
LICENSEES FORUM                                             The	Commission	has	in	place	a	complaints	procedure	
The	Alderney	Gambling	Licensees’	Forum	(AGLF)	              to	address	player	issues	which	cannot	be	satisfactorily	
was	established	to	allow	Alderney’s	licensees	and	the	      resolved	by	a	licensee.		During	2009,	525	complaints	
AGCC	to	discuss	matters	of	mutual	interest	such	as	legal	   were	received	and	dealt	with	by	the	AGCC,	a	slight	
and	regulatory	developments,	technological	matters	         decrease	on	the	previous	year.		Complaints	arose	for	
and	issues	relating	to	the	wider	gaming	industry.		The	     various	reasons,	including;
chairman	of	the	AGLF,	selected	annually	by	Alderney’s	      •	 claims	of	unfair,	fixed	or	biased	gaming;
licensees,	is	currently	Mr	Phil	Cronin	of	Tombola.          •	 bet	disputes;
                                                            •	 ID	requirement	concerns;
“The	AGLF	is	a	very	useful	forum	for	sharing	news	and	      •	 technical	malfunctions;
views	on	what	is	happening	in	the	online	gaming	world,	     •	 poor	customer	service;
and	also	for	helping	to	develop	a	regulatory	approach	      •	 unfair	game	rules,	terms	and	conditions	or	bonus	
which	understands	the	business	challenges	we	face.”		           requirements;
                                                            •	 unfair	account	closures;
                                                            •	 cash	withdrawal	issues;
                                                            •	 voided	bets.

                                                            Four	complaints	were	progressed	to	the	CEO	for	a	
                                                            preliminary	determination	in	accordance	with	the	
                                                            regulations:	all	these	were	resolved	satisfactorily	at	this	
                                                            level	without	being	escalated	further.	

                                                            The	AGCC	aims	to	work	closely	with	licensees	on	
                                                            resolving	issues	related	to	customer	complaints,	and	
Phil	Cronin	of	Tombola                                      also	liaises	with	relevant	industry	bodies.		During	the	
                                                            year	2009	AGCC	staff	attended	the	annual	conference	
During	2009	the	AGLF	met	on	several	occasions.	In	May	      of	GamCare,	a	UK	based	charity	providing	support,	
the	main	subject	under	discussion	was	the	proposed	         information	and	advice	to	problem	gamblers,	and	also	
new	licensing	model,	which	was	generally	supported.	        attended	a	GamCare	training	session.	
A	subsequent	meeting	discussed	AGCC	proposals	
regarding	the	segregation	of	player	funds.




                                                                                                                           15
     T E CH N I CA L A C TIV ITY




     One	of	the	ways	the	Commission	seeks	to	ensure	that	          DATA SECURITY
     all	egambling	is	conducted	fairly	is	by	requiring	full	       To	an	online	industry	such	as	egambling,	electronic	
     approval	of	each	licensee’s	gambling	equipment,	both	         security	is	of	paramount	importance.		The	Commission	
     hardware	and	software,	following	Commission	approval	         and	licensees	are	therefore	extremely	conscious	of	the	
     of	a	licence.	The	licensee’s	gambling	equipment	              continuing	need	to	protect	the	electronic	security	of	
     including	random	number	generators	and	all	relevant	          all	data,	whether	transmitted	or	stored.		For	example,	
     software	and	hardware	will	be	rigorously	tested	by	an	        licensees	are	expected	to	retain	appropriate	information	
     independent	testing	house	to	ensure	operational	worth	        on	player	activity	and	to	ensure	that	all	such	information	
     and	game	fairness.                                            is	securely	stored	and	only	accessible	by	appropriately	
                                                                   authorised	individuals.		Licensees	are	also	expected	to	
     Following	such	approval,	the	Commission	then	aims	to	         draw	up	and	maintain	a	full	disaster	recovery	plan.
     control	any	significant	subsequent	changes.		In	order	
     to	process	and	monitor	gambling	equipment	changes	            In	order	to	ensure	that	the	AGCC	meets	appropriate	
     more	effectively,	in	late	2008	the	AGCC	introduced	           standards	in	this	area	and	has	robust	procedures	in	
     an	automated	change	control	system	which	allows	              place,	the	inspectorate	carried	out	a	full	review	of	the	
     licensees	to	enter	and	upload	relevant	information	using	     organisation’s	own	data	security	systems	and	policies	
     a	secure	online	portal.		As	a	result,	the	administration	     during	the	year.		The	review	included	externally	resourced	
     of	changes	to	approved	gaming	equipment	has	been	             penetration	testing,	and	examined	potential	data	security	
     streamlined	and	associated	costs	reduced.		The	system	        risks	and	the	scope	for	mitigating	these.		The	review	
     ensures	that	licensee	information,	including	all	changes,	    concluded	that	the	AGCC’s	systems	are	generally	
     is	easily	accessible	by	the	inspectorate	and	the	licensee;	   secure	and	that	they	adequately	protect	transmitted	
     and	also	that	the	vast	majority	of	changes	are	processed	     and	received	data.	However,	further	enhancements	
     immediately,	thereby	allowing	such	changes	to	go	live	        to	security	procedures	were	suggested	and	are	being	
     much	faster                                                   considered	by	the	Commission.

     During	its	first	full	year	in	operation,	the	AGCC’s	change	
     control	system	registered	more	than	1500	change	
     requests,	with	less	than	1%	of	requests	requiring	manual	
     or	paper-based	processing.		This	has	allowed	for	a	
     much	speedier	and	more	cost-effective	turnaround	and	
     licensees	have	generally	been	positive	in	their	response	
     to	the	new	system.		There	has	also	been	some	feedback	
     on	possible	further	enhancements,	which	are	currently	
     under	consideration.		




16
                                                                       FIN AN CIAL S TAT EM EN T S FO R 2009




Statement of the Commission’s responsibilities              The	Commission	is	responsible	for	keeping	proper	
The	Commission	acknowledges	that	it	is	responsible	         accounting	records	which	disclose	with	reasonable	
for	preparing	financial	statements	for	each	financial	      accuracy	at	any	time	the	financial	position	of	the	
year	which	give	a	true	and	fair	view	of	the	state	of	       Commission.		The	Commission	is	also	responsible	for	
affairs	of	the	Commission	and	of	the	profit	or	loss	of	     safeguarding	its	assets	and	hence	for	taking	reasonable	
the	Commission	for	that	period.		In	preparing	those	        steps	for	the	prevention	and	the	detection	of	fraud	and	
financial	statements	the	Commission	is	required	to:         other	irregularities.
•	 select	suitable	accounting	policies	and	apply	them	
    consistently;                                           The	following	persons	served	on	the	Commission	
•	 make	judgements	and	estimates	that	are	reasonable	       during	the	year	under	review:
    and	prudent;                                            •	 Mr	John	Godfrey	(Chairman);
•	 state	whether	applicable	accounting	standards	have	      •	 Mr	Raymond	Birdseye;
    been	followed	subject	to	any	material	departures	       •	 Mr	John	Clitheroe;
    disclosed	and	explained	in	the	financial	statements;	   •	 Ms	Isabel	Picornell.
    and
•	 prepare	the	financial	statements	on	the	going	
    concern	basis	unless	it	is	inappropriate	to	presume	
    that	the	Commission	will	continue	in	business.




                                                                                                                       17
     I ND E P E ND E NT AUDIT O R S’ R E P O RT T O T HE C O MMISSION




     We	have	audited	the	financial	statements	(the	“financial	          Basis of audit opinion
     statements”)	of	the	Alderney	Gambling	Control	                     We	conducted	our	audit	in	accordance	with	
     Commission	(the	“Commission”)	for	the	year	ended	31	               International	Standards	on	Auditing	(UK	and	Ireland)	
     December	2009	which	comprise	Revenue	Account,	                     issued	by	the	Auditing	Practices	Board.		An	audit	
     Balance	Sheet	and	the	related	notes	numbered	1	to	9.	              includes	examination,	on	a	test	basis,	of	evidence	
     These	financial	statements	have	been	prepared	under	               relevant	to	the	amounts	and	disclosures	in	the	
     the	accounting	policies	set	out	therein.	                          financial	statements.		It	also	includes	an	assessment	
                                                                        of	the	significant	estimates	and	judgements	made	by	
     Respective responsibilities of Commission                          the	Commission	in	the	preparation	of	the	financial	
     and its auditors                                                   statements,	and	of	whether	the	accounting	policies	
     The	Commissioners	are	responsible	for	preparing	                   are	appropriate	to	the	Commission’s	circumstances,	
     the	Statement	of	the	Commission’s	Responsibilities	                consistently	applied	and	adequately	disclosed.	
     and	the	financial	statements	in	accordance	with	UK	
     Accounting	Standards	as	set	out	in	the	Statement	of	the	           We	planned	and	performed	our	audit	so	as	to	obtain	all	
     Commission’s	Responsibilities	on	page	17.	                         the	information	and	explanations	which	we	considered	
                                                                        necessary	in	order	to	provide	us	with	sufficient	
     Our	responsibility	is	to	audit	the	financial	statements	           evidence	to	give	reasonable	assurance	that	the	financial	
     in	accordance	with	relevant	legal	and	regulatory	                  statements	are	free	from	material	misstatement,	
     requirements	and	International	Standards	on	Auditing	              whether	caused	by	fraud	or	other	irregularity	or	error.	
     (UK	and	Ireland).	                                                 In	forming	our	opinion	we	also	evaluated	the	overall	
                                                                        adequacy	of	the	presentation	of	information	in	the	
     We	report	to	you	our	opinion	as	to	whether	the	financial	          financial	statements.
     statements	give	a	true	and	fair	view	and	are	properly	
     prepared	in	accordance	with	the	accounting	policies	set	           Opinion
     out	on	page	21.		We	also	report	to	you	if,	in	our	opinion,	        In	our	opinion	the	financial	statements:
     the	Commissioners	have	not	kept	proper	accounting	                 •	 give	a	true	and	fair	view,	in	accordance	with	
     records,	or	if	we	have	not	received	all	the	information	               UK	Accounting	Standards,	of	the	state	of	the	
     and	explanations	we	require	for	our	audit.                             Commission’s	affairs	as	at	31	December	2009		and	
                                                                            of	its	surplus	for	the	year	then	ended;	and
     We	read	the	Statement	of	the	Commission’s	                         •	 have	been	properly	prepared	in	accordance	with	
     Responsibilities	and	consider	the	implications	for	                    the	accounting	policies	as	set	out	in	note	1.
     our	report	if	we	become	aware	of	any	apparent	
     misstatement	within	it.
                                                                                                KPMG	Channel	Islands	Limited
                                                                                                     Chartered	Accountants
                                                                                                                   Guernsey

                                                                        	




18
                                                                    B ALANCE SHEET AS AT 31 DECEMB ER 20 09




                                                         Note                     2009                  2008
                                                                                     £                     £

Fixed assets

Computer,	office	equipment	&	furniture	                       	                   48,188	              68,914
Leasehold	improvements	                                       	                  412,454	             462,307
Change	Control	system	                                        	                   56,435	              87,765
	                                                             	
	                                                            2	                  517,077	             618,986

Current assets	                                               	                         	                     	 	
	                                                             	                         	                     	 	
Cash	at	bank	and	in	hand	                                    3	                4,524,488	           2,590,858
Prepayments	                                                  	                   24,347	               13,907

	                                                               	              4,548,835	           2,604,765
	                                                               	                       	                       	 	

Creditors: amounts falling due within one year	              4	                (723,604)	            (556,239)
	                                                             	                          	                     	 	
Net current assets	                                           	                 3,825,231	          2,048,526
	                                                             	                          	                     	 	
Total assets less current liabilities	                        	                4,342,308	            2,667,512
	                                                             	                          	                     	 	

	                                                             	                         	                       	 	
Capital and reserves	                                         	                         	                       	 	
	                                                             	                         	                       	 	
Retained	surplus	                                            9	                4,342,308	            2,667,512
	                                                             	                         	                       	 	




The	financial	statements	on	pages	19	to	24	were	approved	by	the	Alderney	Gambling	Control	Commission	on	22	
March	2010	and	signed	on	its	behalf	by:




John Godfrey
Chairman




                                                                                                                      19
     R E V E NU E A C C O UN T Y E AR E N DE D 3 1 DE C E MBE R 2009




                                                                       Note        2009             2008
                                                                                      £                £

     Income

     Licence	fees	                                                         	   3,395.650	       3,258,050
     Fees	charged	to	applicants	                                           	     415,309	         399,760
     Bank	interest	                                                        	       32,168	         126,128
     Sundry	income	                                                       7	      27,290	            111,714
     	                                                                     	
     	                                                                     	   3,870,417	       3,895,652

     Expenditure

     Staff	costs	                                                         6	   1,290,563	        1,159,239
     Commissioners’	fees	                                                 5	     100,920	           94,922
     Premises,	furniture	and	equipment	                                    	      90,608	           75,424
     Web	hosting	                                                          	       58,689	          84,614
     Consultancy	                                                          	      224,259	         56,660
     Conferences	and	general	travel	                                       	       104,174	          116,139
     Postage,	stationery	and	telephone	                                    	        39,106	        42,024
     Audit	and	accountancy	fees	                                           	          6,120	          5,265
     Bank	charges	                                                         	           1,476	          1,057
     Publications	and	subscriptions	                                       	          13,732	         9,453
     Sundry	supplies	and	services	                                         	         4,010	          5,300
     Depreciation	                                                        2	         111,453	      66,895
     	                                                                     	                	               	 	
     	                                                                     	    2,045,110	       1,716,992
     	                                                                     	                	               	 	

     Distributions	in	year	                                               7	       150,511	     3,637,963

     Net surplus /(deficit)	                                              9	    1,674,796	      (1,459,303)




20
                                             N O TES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 20 09




1. Basis of Accounting                                          Cash flow statement
The	financial	statements	have	been	prepared	under	              Under	Financial	Reporting	Standard	no.	1	the	entity	is	
the	historical	cost	convention	and	in	accordance	with	          exempt	from	the	requirements	to	prepare	a	cash	flow	
applicable	UK	accounting	standards.	The	income	in	the	          statement	on	the	grounds	of	its	size.
financial	statements	is	collected	by	the	Commission	on	
behalf	of	the	States	of	Alderney.	After	deduction	of	the	       Expenses
expenses	incurred	in	order	to	run	the	Commission	the	           Expenses	are	accounted	for	on	an	accruals	basis.
surplus	is	held	on	behalf	of	the	States	of	Alderney.
                                                                Leasehold
Depreciation                                                    The	Commission	entered	into	a	ten	year	lease	on	the	
Depreciation	is	calculated	using	the	straight	line	             office	property	in	Alderney,	commencing	in	April	2008.	
method	at	the	following	rates:
                                                                During	the	year	the	amounts	charged	to	Revenue	
•		Office	furniture	                25%	per	annum               Account	and	included	in	premises,	furniture	and	
•		Computers	and	related	equipment	                             equipment	expenditure	were:
				(including	change	control)	     33%	per	annum
•		St	Anne’s	refurbishment	         10%	per	annum               2009	 	              2008
                                                                £	      	            £
Licence fees                                                    36,000	 	            27,000
Following	the	approval	of	The	Alderney	eGambling	
Ordinance,	2006,	licences	granted	by	the	Commission	            The	Commission	is	committed	under	the	lease	to	
are	valid	for	an	indefinite	period.	Prior	to	this	Ordinance,	   make	payments	of	£36,000	per	year,	subject	to	review	
licences	had	a	finite	term	of	three	years.	A	non	               in	the	fifth	year,	until	the	end	of	the	lease.	The	rental	is	
refundable	licence	fee	is	payable	on	issue	of	the	licence	      charged	on	a	straight	line	basis	over	the	lease	term.
and	in	advance	of	each	anniversary	of	the	issue	of	the	
licence.	The	licence	fees	are	recognised	in	the	Revenue	
account	in	the	period	in	which	they	are	received.




                                                                                                                                21
     NO TE S TO TH E F IN AN C IAL STAT E ME N T S YE AR E NDED 31 DECEMBER 2009




     2. Fixed assets                                                                             Change
                                          Computer             Office            Leasehold       Control
                                         equipment          furniture        improvements         system             Total
                                                   £                 £                   £             £                  £

     Cost	                                             	                 	                   	             	                 		

     At	1	January	2009	                       91,459	          36,883	            498,536	       94,939	            721,817
     Additions	                                6,927	            2,616	                 0	             0	            9,544
     	                                              	                 	                  	              	                   		
     	                                              	                 	                  	              	                   		
     At	31	December	2009	                    98,386	           39,499	            498,536	       94,939	            731,361
     	                                              	                 	                  	              	                   		
     	                                              	                 	                  	              	                   		
     	                                              	                 	                  	              	                   		
     Depreciation	                                  	                 	                  	              	                   		
     	                                              	                 	                  	              	                   		
     At	1	January	2009	                       42,103	           17,325	            36,229	         7,174	          102,831
     Charge	for	year	                        23,603	            6,666	             49,854	        31,330	            111,453
     	                                              	                 	                  	              	                   		
     	                                              	                 	                  	              	                   		
     At	31	December	2009	                    65,706	            23,991	            86,083	       38,504	          214,284	 	
     	                                              	                 	                  	              	                   		

     	                                             	                 	                    	             	                		
     Net book value	                               	                 	                    	             	                		
     	                                             	                 	                    	             	                		
     At	31st	December	2009	                  32,680	           15,508	             412,454	       56,435	         517,077
     	                                             	                 	                    	             	                		
     	                                             	                 	                    	             	                		
     At	31st	December	2008	                  49,356	           19,558	            462,307	        87,765	         618,986
     	                                             	                 	                    	             	                		



     During	2008	the	Commission	incurred	software,	hardware,	network		and	consultancy	costs	of	£94,939	in	introducing	
     a	new	web	hosting	facility,	to	enable	licensees	to	request	programme	changes	online.	These	costs	are	presented	as	
     Change	Control	project	costs	in	the	balance	sheet	and	will	be	written	off	over	3	years	from	October	2008,	when	the	
     system	became	functional.	 	             	        	         	      	         	           	      	        	         	
     	        	        	            	         	        	         	      	         	




22
                                          N O TES TO THE FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 20 09




3. Cash at bank and in hand                                                            2009                      2008
                                                                                          £                         £

Cash	at	bank:
Business	reserve	account	                                          	                  530,799	                608,848
Applicant	deposit	account	                                         	                   432,376	               409,964
Guernsey	treasury	account	                                         	          								3,510,753	              1,552,146
Current	account	                                                   	                  		50,407	                  19,442

Petty	cash	                                                        	                  							153	                   458

	                                                                  	            				4,524,488	                         	
                                                                                                             2,590,858		


4. Creditors: amounts falling due within one year                                      2009                      2008
                                                                                          £                        	
                                                                                                                  £									

Refundable	deposits	                                               	        												425,326	              409,964
Creditors	and	accruals		                                           	                   298,278	                146,275

	                                                                  	        												723,604	               556,239
	                                                                  		                          	                      	
	                                                                  	                           	
	                                                                  	                           	                          			
Refundable	deposits	cover	the	costs	of	investigating	applicants	and	may	be	refunded	in	whole	or	in	part.

5. Commissioners’ fees
In	accordance	with	the	Gambling	(Alderney)	Law	1999,	as	amended,	the	States	of	Alderney	ultimately	meets	the	fees	
and	expenses	of	the	Commissioners,	including	the	Chairman.

6. Pension scheme and life assurance
A	defined	contributions	pension	scheme,	together	with	life	assurance	cover,	is	provided	for	employees.	The	scheme	
is	administered	by	Anthony	Le	Blanc	and	Partners	Limited	in	Alderney	and	was	started	in	May	2002.	The	scheme	
requires	employees	to	contribute	6%	of	gross	salary	to	the	scheme	and	the	Commission	contributes	a	minimum	7.5%	
of	gross	salary	to	the	scheme	on	the	employees’	behalf.	The	annual	pension	contribution	of	£101,885	(2008	-	£83,191)	is	
included	in	staff	costs.	At	the	year	end	there	were	no	prepaid	or	outstanding	contributions	(2008	–	£nil).




                                                                                                                                23
     NO TE S TO TH E F IN AN C IAL STAT E ME N T S YE AR E NDED 31 DECEMBER 2009




     7. Distributions to the States of Alderney
     During	2009	the	States	of	Alderney	directed	distributions	from	the	retained	surplus	in	the	amount	of	£150,511	(2008	
     -	£3,637,963).	The	remaining	reserves	are	held	by	the	Commission	on	behalf	of	the	States	of	Alderney.	Included	in	
     distributions	for	2008	is	an	amount	of	£3.5m	which	was	held	with	the	States	of	Guernsey	Treasury	at	the	request	of	
     the	States	of	Alderney	and	not	included	in	the	Commission’s	balance	sheet.	These	financial	statements	show	interest	
     received	in	2009	in	relation	to	this	balance	until	it	was	exhausted	in	financing	a	States	of	Alderney	capital	project;	
     these	interest	receipts	have	been	accounted	for	as	sundry	income.

     8. Guernsey Income Tax
     The	Commission	is	not	subject	to	Guernsey	Income	Tax.


     9. Retained surplus                                                                     2009                    2008
                                                                                                £                       £

     Retained	surplus	brought	forward	                                  	                  2,667,512	               4,126,815
     Net	surplus	/(deficit)	for	the	year	                               	                  1,674,796	            (1,459,305)
     (after	distributions)	                                             	
     Retained	surplus	carried	forward	                                  	                		4,342,308	              2,667,512
     	                                                                  	                           	
     	                                                                  	                           	                       	 	




24
                                    F UL L E G AM B LIN G LICEN S EES AN D AS S O CIAT E CERT IFICAT ES
                                                                        AS AT DECEM B ER 31S T 20 09
                                                                                            APPENDIX A




FULL EGAMBLING LICENSEES                                ASSOCIATE CERTIFICATES
Advanced	Games	Lab	Ltd	                                 Ash	Gaming	Ltd	
Arkin	Sports	&	Leisure	Ltd                              Astra	Games	Ltd	
Asia	Pacific	Gaming	Ltd	                                Atac	Media	Ltd	
Azul	Electrico	Ltd                                      Barcrest	Group	Ltd
Beast	Gaming	Ltd	                                       Bell-Fruit	Group	Ltd	
Blue	Square	Gaming	(Alderney)	Ltd                       Blueprint	Gaming	Ltd
Blue	Stone	Interactive	Entertainment	Ltd	               CTXM	SIA		
Bonne	Terre	Ltd                                         Digitus	Limited	(Betsoft	Gaming)
Boylesports	Alderney	Ltd	                               Dynamite	Design	&	Marketing	Ltd	
Chartwell	Games	(Alderney)	Ltd                          Electracade	Ltd
Daub	Alderney	Ltd	                                      Endemol	Games	Ltd		
ElectraWorks	(Alderney)	Ltd                             Entertasia	Technology	Company	Ltd
Entergaming	Ltd	                                        Euro	Live	Technologies	Ltd	
Filco	Limited                                           Evolution	Core	Holding	Ltd
Gala	(Alderney)	Ltd	                                    Finsoft	Ltd		
Gamecode	Ltd                                            Football	1x2	Ltd
Genting	Alderney	Ltd	                                   GameAccount	Global	Ltd	
G.P.	Alderney	Ltd                                       Gaming	Technology	Solutions	Ltd
Interactive	Sports	(C.I.)	Ltd	                          Global	Betting	Exchange	
Interlogic	(Alderney)	Ltd                               Kastraki	(Alderney)	Ltd
International	Investments	Ltd	                          Mfuse	Ltd	
Marathon	Alderney	Ltd                                   Microgaming	Software	Systems	Ltd	
Netplay	TV	Group	Ltd	                                   Mobile	Sports	Ltd	
Oxalic	Ltd                                              NextGen	Gaming	Pty	Ltd
Parlay	Games	Ltd	                                       Orbis	Technology	Ltd	
PKR	Ltd                                                 Playtech	Software	Ltd
Probability	Games	(Alderney)	Ltd	                       S-Tech	Ltd	
Samvo	International	Ltd                                 The	Gaming	Channel	Ltd
Sega	Games	Ltd	                                         Wildcard	Interactive	Ltd	
Small	Screen	Casinos	Ltd
Spin	Leisure	Ltd	
SPS	Betting	(Alderney)	Ltd
The	Games	Portal	Ltd	
Tombola	(Alderney)	Ltd
Totesport	Alderney	Ltd	
Truva	Gaming	Ltd
Vantage	Ltd	
Virgin	Games	Alderney	Ltd
Virtue	Fusion	(Alderney)	Ltd	
Wagerworks	(Alderney)	2	Ltd
Wagerworks	Alderney	4	Ltd	
Wagerworks	Alderney	7	Ltd
Wagerworks	(Alderney)	Ltd	
WMS	Alderney	2	Ltd




                                                                                                          25
     S TAT I S T I CS
     A P P E ND I X B




     	   	    	                                     2009   2008   2007   2006

     Full	licences	in	issue*	                       44	    42	    34	    25
     New	licences	                                  14	    13	    14	    11
     Associate	certificates	in	issue*	              28	    17	    5	     4
     New	associate	certificates	                    16	    12	    1	     1
     ICS	initial	approvals		                        11	    10	    10	    7
     Inspections		                                  22	    17	    13	    10
     Special	investigations		                       2	     4	     1	     1
     Sanctions		                                    4	     4	     10	    -
     STRs	copied	                                   18	    9	     3	     -
     STRs	submitted	                                1	     -	     -	     -
     Training	events	                               1	     3	     1	     -
     Non-routine	inter-regulator	activity	          5	     1	     1	     1


     *These	figures	take	into	account	lapsations.




26

				
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