Casino City's Global Gaming Almanac - 2019 Edition

Assumptions and Methodology Casino City’s Global Gaming Almanac 825 Appendix A: Assumptions and Methodology Introduction This appendix summarizes the economic assumptions and the underlying methodology used to calculate the financial information presented in Casino City's Global Gaming Almanac , Casino City's Global Gaming Almanac CD and Casino City's GlobalGamingAlmanac.com online service. Our philosophy in the body of this almanac is to fully disclose the underlying financial data and sources within each jurisdiction. This appendix extends this philosophy by clearly presenting the techniques we have used to manipulate the raw data to present financial summary information. Five major topic areas are covered in this appendix. They include currency conversion, inflation adjustment, revenue estimates based on industry averages, calendar year revenue calculations and missing data estimates. Currency Conversion Financial data for each jurisdiction is reported in the local currency and also in United States dollars. The United States dollar figures are used for comparative purposes. The raw currency conversion rate data used in the preparation of this almanac was provided by Open Exchange Rates and is available on their website at www.openexchangerates.org . Financial data for a particular currency and time period is converted to United States dollars using the arithmetic mean, or average, of the daily exchange rates for the currency during the time period. For example, the daily exchange rates for December 2017 for the Euro are as follows: 1 December 2017 1.189300 2 December 2017 1.189300 3 December 2017 1.185666 4 December 2017 1.186790 5 December 2017 1.183048 6 December 2017 1.180405 7 December 2017 1.177279 8 December 2017 1.176400 9 December 2017 1.177413 10 December 2017 1.176770 11 December 2017 1.177594 12 December 2017 1.174250 13 December 2017 1.183690 14 December 2017 1.177458 15 December 2017 1.175620 16 December 2017 1.175620 17 December 2017 1.174318 18 December 2017 1.178391 19 December 2017 1.183722 20 December 2017 1.187767 21 December 2017 1.185272 22 December 2017 1.185799 23 December 2017 1.186240 24 December 2017 1.185347 25 December 2017 1.187145 26 December 2017 1.185740 27 December 2017 1.190034 28 December 2017 1.193966 29 December 2017 1.199900 30 December 2017 1.200466 31 December 2017 1.200192 Using this raw exchange rate data, a monthly average exchange rate of 1.184223 is calculated for December 2017. Thus, revenue of EUR 10,000.00 in December of 2017 is equivalent to USD 11,842.22 that month. A spreadsheet that summarizes the monthly average exchange rate between the currencies used in this almanac and United States dollars is provided in Casino City's Global Gaming Almanac CD and Casino City’s GlobalGamingAlmanac.com online service. Inflation Adjustment Inflation-adjusted revenue figures have been provided for a number of jurisdictions. All inflation-adjusted figures in the almanac are expressed in December 2017 currency. The inflation adjustment factor for a given month is calculated as the consumer price index value for December 2017 divided by the consumer price index value for the month. When underlying revenue data covers a period spanning more than one month, inflation-adjusted revenue is determined by first allocating a pro-rata portion of the revenue to each month in the covered period and then adding together the separately calculated inflation-adjusted revenue attributable to each month. A spreadsheet that shows the raw consumer price indices for each of the jurisdictions for which we were able to obtain CPI data, together with the corresponding inflation adjustment factor, is provided in Casino City's Global Gaming Almanac CD and Casino City’s GlobalGamingAlmanac.com online service. Revenue Estimates Based on Industry Averages Gaming revenue can be calculated as sales (handle or turnover in the pari-mutuel industry, amount wagered in the sports betting industry) less the prizes paid out, or handle or amount wagered returned to bettors. However, this information is not available for every gaming activity in every jurisdiction. To estimate gaming revenue in these jurisdictions, we used industry averages we calculated using data from other jurisdictions that provided more complete financial information. For race wagering, gaming revenue is the handle or turnover less the handle returned to bettors. We determined gaming revenue averages 17.8% of the handle based on 109 data points where we could determine both the actual handle and the actual handle returned to bettors. This industry average was applied to 223 additional data points to estimate the associated gaming revenue.

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