By Roger Gros   Wed, Nov 11, 2009

Global recession or not, in most parts of the world, slots are still the biggest money-makers for casinos.

For the slot sector of the gaming industry, there is one real coming-out party every year. While the European industry has its more targeted event every January in London with the International Gaming Expo, those manufacturers still come to the big event-the Global Gaming Expo in Las Vegas.

Every year, Global Gaming Business offers an exclusive preview to what the world's slot manufacturers have in store for the coming year, and the innovations to be highlighted at the G2E show. Welcome to that preview.

Whether or not they are struggling with short-term revenues right now, officials of every slot manufacturer in the business know one thing about the worldwide economic slump: It has created an anomaly in the normal slot replacement cycle. Slim capital budgets have forced casinos to slow their purchases over the past couple of years.

The result? There is a huge replacement cycle upon us. Combined with new openings like CityCenter and other new casinos in several parts of the world, this means there is an enormous potential for a large group of new game sales.

The slot-makers, thus, have pulled out the stops for this year's G2E show. Prepare for an unleashing of a breathtaking array of new technologies, new game styles, new server-based solutions-new slot technology, from all corners of the sector.

Here is a rundown of what the top slot manufacturers in the business have in store for G2E 2009.

The Player Is King
WMS uses technology and innovation to please the fickle customers
by Roger Gros

Technology is at the very core of WMS. So it is not surprising that technology is driving the success of the company in the 21st century.

When Harry Williams started the company in 1943, it was because the Stanford engineering graduate had developed the innovative “tilt” function that changed the way pinball would be played forever. Williams went on to develop a highly successful pinball company that, like major competitor Bally Manufacturing, morphed into a slot machine company, although several decades later than Bally.

But technology remains at the heart of WMS. The company’s development in the 1990s centered around video lottery terminals, giving it a boost when it came to the tribal gaming market, where video was the game of choice.

Themes became another specialty of WMS when “Reel ‘Em In” and “Piggy Bankin’” took off.

But it wasn’t until the last five years, under the direction of Chairman Brian Gamache and President Orrin Edidin, that WMS began to really shake up the gaming industry. Innovations such as Adaptive Gaming, Transmissive Reels, Sensory Immersion and Community Gaming have blazed technology trails in the slot manufacturing industry, greatly increasing the company’s visibility and market share.

Floor of the Future
When Gamache and Edidin joined WMS, it was a fairly healthy company with good growth in the video slot market, but limited prospects. Along with the WMS team, they launched an initiative designed to envision the “slot floor of the future.” Whether it was technology, intellectual property, theming, the slot cabinet… whatever encompassed the slot experience was dissected and examined from the perspective of the ultimate customer—the slot player.

Gamache says the exercise is ongoing.

“It’s a journey,” he explains. “When we were in our re-emergence days, as we call it, in the early 2000s, we had always planned on a three-part technology improvement plan. The first part was to stabilize our current system. The second phase was to get to a competitive level. And the third was to leapfrog our competitors into the futuristic gaming platform that we see today. All the heavy lifting we’ve done over the last nine years is really starting to pay huge dividends for our shareholders, our employees and our customers. But we’re still in the early innings.”

It has been the company’s ability to re-invest in research and development that has made the difference, according to Gamache.

“Our board was very instrumental in giving us the ability to invest in R&D when others weren’t,” he says. “We’ve gone from $16 million in investment in my first year in 2000 to $115 million this year. We’ve shown to Wall Street that we can convert that additional R&D spending to revenue for our shareholders. We’ve demonstrated that it’s the right strategy. We’ve become known for our innovation, and I think our best days are ahead of us. “

The initiative to envision the slot floor of the future has led to a germination of these ideas and concepts developed during that exercise.

“The marriage of the intellectual property with the technology and game content is allowing us to have a discernible difference over our competition,” says Gamache. “When you look at our CPU-NXT2 Platform, it allows us to develop games that we could never have considered because of the depth of the math modeling, the various outcomes, the graphics... All the things that our games are known for would not have been possible without this platform.

“We went from worst to first. In the first five years we were here, we spent a lot of time hitting singles and doubles. We had to do that to get our company back in play and get the acceptance of the players back in our camp. Now we’re able to swing for the fences by taking calculated risks and pushing the envelope.”

Edidin says the technology is nice, but there’s only one way to measure a company. 

“It always comes down to the strength of the product,” he says. “We used to measure the breadth of our product offering by the number of themes we had. We’ve gotten away from that and now use product categories as a yardstick. So instead of selling 80-90 different themes, we have a few basic categories with the themes behind it. Whether it’s Sensory Immersion, Adaptive Gaming, Transmissive Reels… These are important categories that are built on innovative technology and intellectual property.”

Financial Strength
WMS has continued to boost revenues and grow market share even through the worst economic downturn anyone has experienced. Gamache says the legacy of the founders and the previous chairman, Louis Nicastro, has benefited the company.

“We’re a conservative company by nature financially—that our former chairman left to us,” he says. “We are a very creative, innovative company when it comes to finances. We don’t have to go out and buy everything just to have it. We don’t have a corporate ego. If we license a theme, that’s OK with us. We’re very proud of our balance sheet. It doesn’t get a lot of attention when things are great, but over the last couple of years the strength of our balance sheet has made the difference. We’re debt-free; we have a great cash flow situation and it’s only going to get better.”

That balance sheet enables WMS to make deals with casinos that some other suppliers just can’t do, according to Edidin.

“The strength of our balance sheet does allow us to get more creative in trying to help our customers through tough, challenging times,” he explains. “We want to work with them to get our new products on the floor in a timely manner. For no capital spend at all, we lease the products to them and they get the best, highest-earning products, like Wizard of Oz and Star Trek, which are going gangbusters!”

The long-awaited replacement cycle will kick in strongly once the recession eases, says Gamache.

“Innovation is going to spur the next replacement cycle,” he says. “The server-based initiative and our application suites will be important elements. We’ve been planning for this for nine years now. We believe our suites of applications are going to radically change the way this industry sees slot machines.”

And the renewed expansion of gaming will also play a key role in building the business of the slot manufacturers.

“This is the recessionary silver lining,” says Edidin. “When we go through one of these economic downturns, we always see an expansion of legalized gaming. The riverboat phenomenon was born of that. Indian gaming, which is really the state sharing the revenues from tribal casinos, was part of that too. This latest expansion is more of a state-owned VLT market, which is one we served for many years. These are fresh markets for WMS and great growth opportunities.”

The international market has always been good to WMS. The strength of the European market has been long-lasting, and now Gamache is eyeing Asia for a similar success. 

“Asia is just at the tip of the iceberg,” he says. “Our market share in Macau is in the 12 percent range, which is great because we’re a relatively new player in that marketplace.

“In Singapore, our market share will be in the 18 percent to 20 percent range, a respectable amount. We think that will grow over time. Typically, we’re not as strong at the openings because of the bundling that goes along with the systems deals, but over time, that second and third wave of purchases to right-size the casino floors gets us well over 20 percent.”

Player Focus
Unlike many slot companies that cater to the casino executives who buy their products, WMS concentrates on the players—the end user—of the slot machine, when designing its products.

“This is where our strategy differs from our competitors,” says Gamache. “Our strategy is all based on the players’ experience. Our goal is to provide the player with a new and different gaming experience than exists today. Our challenge is not to come up with new ideas. We have to de-select some of the great ideas we’ve already had. We almost have too much going on. We want to concentrate on the slam-dunk ideas going forward.”

Some of those player experiences are now focused on community gaming—those groups of machines that link together players for bonusing and teamwork purposes.

“Many of our most successful products are networked through our systems,” says Edidin. “When you look at our Community Gaming Big Event systems, those are really baby steps toward networked gaming, because they are truly a server-based game. And when you add ‘Reel ‘em In Compete to Win,’ we’ve got a way to identify players so we can offer them terrific game experiences that they recognize and enjoy, whether it’s episodic or persistent.”

Gamache downplays the importance of technology in developing successful slot machines. The technology in use on slots and systems is generally technology proven in other business sectors to work, he says.

“Cutting-edge technology is too expensive for our business,” he insists. “It’s kind of like buying a car. You don’t buy a car for the radio or the airbags. You assume they’ll be there and work well. You buy it for other reasons.

“The gaming experience is no different. The players assume certain parameters when they sit down at a gaming machine. Server-based gaming is just a delivery vehicle. It’s always going to be about the content and the applications you bring to the table.”

One of the company’s player-oriented innovations was the “Bluebird” slot cabinet, which was developed ergonomically for the player’s comfort. It was the first such cabinet that placed the buttons and the screens in positions that were comfortable and convenient for the player, and were proven to produce higher earnings than the same game in a standard cabinet.
   
Networking the Servers
WMS officials believe the benefits of a networked floor are going to be too important for casinos to ignore for much longer. Whether it is community play, competition among players, the ability to specifically recognize individual players with games and options they enjoy, or casino executives understanding the benefits of networked slots, he says the need for networked gaming will become paramount.

“Let’s be clear,” says Edidin. “The slot machine is the revenue engine for most casinos, and they understand they have to update that floor regularly to remain competitive and drive revenue.”

Gamache says the pressure will build on casino companies to invest more heavily in slot machines.

“Most of the multi-unit operators haven’t bought product for the last couple of years,” he says. “And there hasn’t been any pressure on them because the guy across the street hasn’t bought product either. When one starts to buy games, it will create a domino effect that will benefit our company.

“We’re hearing from customers we haven’t heard from in a long time. People are coming back in, kicking the tires and wanting to know more about our products. That’s all positive, but I’m not overly optimistic. We’ve told Wall Street that the first six months of 2010 are going to be challenging, but that things will loosen up by the end of the year. We think the worst days are behind us.”

For the future, WMS is working on some equally revolutionary systems that will tailor the games to the individual players.

“The gaming experience will transcend the physical constraints of a slot machine,” says Edidin.    

“We’ll see more and more applications that are personalized to the player, but follow that player, whether that’s around the casino or online.

“If you ask any great game designer, they’ll tell you that the Holy Grail of game design is player identification. They’ll say, ‘If I only knew who was playing my game I could customize the experience for that player.’”

Gamache says these innovations will change the way the business operates.

“Ten years from now, our business is going to be dramatically different,” he says, “and it’s all about the way the content is distributed. Internet gaming will be alive and well, which will create a lot of opportunities to create new relationships with the players.

“We spend a lot of time as senior management talking about the future of our industry and how we can define it rather than react to it. We’re focusing on that GenX and GenY player who might not be a player right now, but 10 years from now, they’ll be in our wheelhouse.”

As he considers the future, Gamache is confident that WMS is on the right track.

“I want to make sure we have the right intellectual property, that our strategy is flexible enough so that we plan for the vagaries of the business climate and the replacement cycle,” he says. “Some of those are out of our control, some are not. So we do the best we can every day to make sure we have the right people, that they are inspired, that they have to right environment in which to thrive, and then we want to ensure we make the customer experience a great one. If we do those things

well, we’ll have a lot of opportunity for growth.”

Global Games 2009, Part II: WMS Gaming

By Frank Legato   Wed, Nov 11, 2009

Early this decade, WMS Gaming set out to show casinos and players what digital technology could do for slot games. Today, several manufacturers are offering "networked" games, casinos are finally looking at installing Ethernet on at least portions of slot floors... and it is becoming clear just how far ahead of the curve the Chicago-based manufacturer was back then.

WMS has specialized for the past few years in slots that take advantage of what server-based gaming can do for casinos, without the casinos having to rewire or retrofit the floor. They are games that come with a localized server-a bank of server-based games that are linked together, that can be changed to new games (or new "episodes" of the same game), and that often can give experiences that redefine the slot machine.

The progression of WMS products has been remarkable indeed. There was "Monopoly Big Event," the first game that brought players into a bonus event at the same time. Then came "Sensory Immersion," which placed players inside games like "Top Gun," "Dirty Harry," and most successfully, "The Wizard of Oz," the slot-maker's latest mega-hit.

There was "Transmissive Reels," which put video features on a classic reel-spinner thanks to a transparent video overlay on top of the reels. There was the "Innovation Series," with new game styles like "Cascading Reels," "Spinning Streak" and "Money Burst." There was "Adaptive Gaming," which burst on the scene last year in the form of "Star Trek" and "Reel 'Em In Compete to Win," games that are still drawing crowds around the industry.

This year's Global Gaming Expo will provide additions to all these series, along with plenty of new WMS innovations that promise to redefine the slot floor.

WMS officials say it's all part of the plan that began early this decade.

"This was always a journey for us," says Larry Pacey, executive vice president of global products and "chief innovation officer" for WMS. "There was never a single product or platform that has defined this exercise. We continue to chase what has been our evolved vision of what the casino will look like in the future. Now that we have all the platforms in place, our customers will see how all the pieces and parts go together."

Rob Bone, vice president of marketing for WMS, says the company's efforts for the past decade have been focused on changing the very nature of the slot machine. In fact, "Changing the Game" is the official theme of the slot-maker's G2E display this year. "We are changing the game entirely, from the operator's perspective, the player's perspective, the industry perspective," Bone says. "It's not a matter of 'if,' but 'when.'"

While the overall change the company has brought to the slot floor has been gradual, all the new game styles have made WMS the hottest slot-maker in the business. According to Bone, as slot manufacturers plan to launch a flood of new technology this year, the pace of innovation at WMS is about to kick into high gear. "We know our competition is coming with new technology; we know we've got a bull's-eye on our back," he says. "Instead of waiting, we're taking it to another level to stay out front."

Bluebird Singing
That new level of technology will be evident in the WMS offerings this year at G2E. "This year, you'll see not a linear progression of what we've introduced previously, but an acceleration," says Pacey. "These are some pretty radical leaps in capability, translating into whole new player experiences-which is what it comes down to every time."

It all starts with Bluebird2.

The ubiquitous Bluebird cabinet gained popularity around the world after its introduction early this decade, but WMS is calling Bluebird2 its "cabinet of the future." A slimmer version of the original, Bluebird2 will provide one hardware package for all of the slot-maker's game styles. The slot glass of the original is replaced with a second high-definition LCD panel, meaning it will be the cabinet of choice for server-based, downloadable content.

The Bluebird2 cabinet has wider LCD monitors, and the dual-screen presentation allows for content that is exclusive to the new format. "The game 'Lucky Penny,' for example, is one we could never have offered in Bluebird1," Pacey says. That game features the bonus system WMS calls "ARIA," for "Advanced Random Intelligence Algorithm." In plain terms, it means players never get the same bonus experience twice. There are literally trillions of possible outcomes in a given game, and a bonus feature can trigger on any spin. "I call it organized chaos," says Pacey.

Stepper Surprise
The dual LCDs in the new cabinet apply to both video slots and steppers, thanks to the Transmissive Reels format. Pacey says all of the company's new stepper slots going forward will use the Transmissive Reels technology, which means there will be video-style animation featured in all of the company's new spinning-reel games.

It is one recognition of the resurgence of stepper popularity among players, says Bone. "Steppers constitute well over 35 percent of our shipments now," he says. "Everything uses Transmissive technology now, and we've used steppers for a lot of different areas of innovation."

Those steppers are available in just about every game category, including a new high-denomination category-classic reel-spinners with video animation added on top of the reels. "There's something about moving mechanical reels that is special, as opposed to two layers of video," says Bone, referring to simulated 3D presentations of reel-spinning formats. "Mechanical reel players have definitely moved over to playing them, which is why we created the new high-denom category."

Two standout games in this category, according to Pacey, have the first four-by-five reel presentations (five reels, four active symbols each) of any stepper games in the business. "Max Win" employs multiple bonus events-a "bonus-bank" setup that awards random events in return for an ante wager-and stacked wild symbols in a classic reel-spinning setup. "A wide range of outcomes is possible because you have the Transmissive setup," Pacey says, "married to the bonus-bank feature."

"Max Win" is a cartoon character that ushers in free-spins and other bonus events, by the way. The Transmissive Reels video overlay allows effects such as spinning reels that change colors, and of course, "Max" flying over the reels.

The four-by-five reel interface also appears on "Hot Hot Super Respin," a 50-line version of the popular "Hot Hot" game style. Whenever stacked symbols appear on the first reel, that reel is held and all others re-spin twice.

The company's other big introduction in the stepper category is a five-reel mechanical series of games in the "G+" series. This is the series which, a few years ago, offered a back-to-the-basics approach in the video category. Games in this series feature simple, free-spin bonus events, stacked wild symbols, and the same sights and sounds as the video versions of the same games.

Video Prowess
The emphasis on steppers may have grown, but that doesn't mean WMS isn't capitalizing on its status as the dean of the video slot. The manufacturer is launching a wealth of new video titles this year, both in existing and completely new game groups.

The G+ video series is being extended to include a new category of 50-line and 100-line titles, with stacked wild symbols replaced by a single wild symbol that covers an entire reel. There also is a new "G+ Deluxe" category, targeting the high-denomination market with a four-by-five interface. "G+ was all about the real gambler experience; this ramps that up to the next level," says Pacey.

New twists on classic WMS video come in the form of games like "Jackpot Block Party," which takes the legendary gift-package pick-a-tile bonus game and multiplies it by four. There are four separate screens of packages in the bonus round-a "block party." The player picks packages, matching bonus amounts until "Pooper" characters are revealed on all four screens.

The classic proprietary theme is joined by several new versions of branded themes in revenue-sharing games: "Monopoly Planet Go" places the classic board game theme into a 3D space scene. Monopoly icons turn into planets and aliens in six separate bonus events played out on the top-box video screen. "Press Your Luck" is a new video slot with an interactive bonus that remains true to the TV game show of the same name.

Other new video slots include "Great Wall," a local-area progressive in which the incrementing progressive is actually a number of free spins instead of a dollar amount; and "Hercules," a multi-level progressive game in the Hot Hot Super Respin
category that switches the player to higher jackpot levels according to how many of the "respin" symbols land.

The Innovation Series (Money Burst, Spinning Streak, etc.) adds two new game styles this year-"Super Multi-Play" and "Win It Again."

Super Multi-Play presents a grid of four reel sets. The player wagers to activate all four sets, but plays on one larger primary screen. With all of the screens active, any special symbols-wild symbols, bonus triggers, etc.-carry over to all four screens. When you hit the bonus, the free spins carry through on all four screens. The first game in the series is called "Silver Sword."

Win It Again is a super-charged version of WMS' pioneering "Cascading Reels" game style. In Cascading Reels, symbols in winning combinations disappear, and new symbols drop into the empty spaces, often forming new winning combinations, and more cascades. In this version, the player is awarded for four cascades in a row. When this happens, the player wins the accumulated value of all four, plus the amount of the next cascading win. "A small win can manifest itself into a very large win," comments Pacey.

The first theme in this new game style? "I Love Lucy."
    
Show-Stoppers
While most slot-makers would love to have any of the previous games, Pacey and Bone say the real WMS show-stoppers this year will be two new versions of the smash "Wizard of Oz" theme, new games in the Adaptive Gaming series and several Community Gaming slots.

The franchise based on the classic film The Wizard of Oz, which has had players lining up to play for nearly two years, gets two new entries. "Follow the Yellow Brick Road" is a Transmissive Reels game with a four-level mystery-trigger progressive, wide-area where available. Bonus events follow Dorothy and Toto toward Emerald City, as they meet the Tin Man, Scarecrow and Cowardly Lion along the way, triggering free spins and bonus awards.

"The Wizard of Oz Ruby Slippers" is in the "Sensory Immersion" style of the original "Oz" game. Each character from the film triggers a different bonus event while appearing, in a feature-rich sequel to what has been WMS' most successful slot game in years.

The Adaptive Gaming series gets Episode 5 of the "Star Trek" game, "Live Long and Prosper." It joins the four other "episodes," which players can move through by earning "medals" from Star Fleet in various game events.

The series, which links games on a wide-area network-and uses log-in codes to allow players to pick games up where they left off at later dates-also includes the hot game "Reel 'Em In: Compete to Win," which features a national "leader board" for its community "fishing contest" bonus events.

This year, the game group gets an entirely new franchise with "Lord of the Rings," a series of Sensory Immersion video slots based on the recent film trilogy depicting the classic novel of the same name.

Instead of "episodes," games in the Lord of the Rings series will reflect spots along the journey of the film's hobbit characters. Instead of medals, players will earn "miles" to unlock new bonus events. There will be eight different bonus events at the launch of the series, featuring clips and characters from all three of the films. As with other Adaptive Gaming slots, players will be able to stop games and pick up later where they left off on their "journey through Middle Earth."

"We think it's going to be the killer of the show," says Bone.

It's not the only "killer" Bone and Pacey think they have for this year's G2E. "Goldfish Race for the Gold," one of several new games in the successful Goldfish brand, is a community-style game that features a competitive seahorse race between all players on the bank. The prize for winning the race is one of four progressive jackpots.

Because of the popularity of the Goldfish franchise, Pacey says he expects this slot offering, complete with a giant overhead video display for the competitive race, to be the manufacturer's featured attraction of the show.

The Goldfish game is one of an array of new community-style games being launched at the show. One of the most high-profile is a modernized version of what once was a slot license owned by rival IGT. WMS is launching a community-play version of "The Price Is Right," its game show theme updated to reflect the popular show's current incarnation. TV host Drew Carey provided ample video and audio contributions, guiding the player through bonus events based on the show, including a video "Cliff Hangers" bonus.

There also is a new Monopoly community-style game called "Monopoly Bigger Event." This features a huge overhead video display-twin 52-inch high-definition LCD monitors, forming the largest-ever Monopoly display. There are four new community bonuses, with a new type of qualifying mechanism for the bonus and new games like "Big Money Spin," offering what WMS calls "true, meaningful interaction between players."

Server Solution
Finally, WMS is launching a complete networked solution at G2E that allows progressives, community bonuses, mystery events and even proprietary promotional merchandising to be integrated into one group of games.

The system includes remote-configuration download, a central game controller, an administrative server and an ultra-hit progressive controller that can be used with multiple themes. The bonus from "Piggy Bankin'," or "Jackpot Party," for instance, can be added to any game at the operator's discretion using this system, with merchandising for the bonus channeled to the base game. Operators can mix and match progressives or bonuses to any downloaded base game.

"This is industry-changing," says Pacey. "By enabling mixing and matching of games and bonus events at the operator's discretion, we give them the tools to customize their floors as they see fit." He says that eventually, the solution will feature portals to extend the functionality to games from any manufacturer.

"Now, you have a reason why you want networked gaming on your floor," Pacey says. "This is in the labs already, and through the next calendar year, you are going to see our portal technology widely distributed throughout the gaming space. This gives the operator a new level of control. Initially, it will be bank-by-bank via this portal technology, but ultimately, we see this as an enterprise-wide technology."

Pacey says the portal technology is the culmination of a race that began earlier this decade. "The good news," says Pacey, "is that we're not really chasing anyone. We're chasing a vision."

By Frank Legato   Wed, Nov 11, 2009

AC Coin & Slot Service Company built its business on the fact it was the exclusive distributor in Atlantic City and the Caribbean for the largest slot manufacturer in the world, International Game Technology.

The Pleasantville, New Jersey-based supplier relied on that relationship in its early years, and depended upon the distributorship for the majority of its income well into this decade.

However, beginning in the late 1990s, the company's business model began to change, as AC Coin became the creator of a wealth of proprietary bonus games, which it attached to IGT base games and began selling across the industry. The company's reputation morphed into that of a supplier of original gaming experiences, rather than a distributor of the products of others.

"Over the past couple of years, (the distributorship) has been a smaller and smaller part of our business," says Jerry Seelig, the company's executive vice president and general manager (and the main creative force behind the company's most successful slot brands), "as we've continued to grow other parts of our business."

That natural progression of AC Coin's business model came full-circle in early October, when the company announced the sale of its exclusive distributorship rights back to IGT, substantially altering the relationship begun in 1983 when company founder and CEO Mac Seelig signed the permanent distributorship agreement with IGT founder Si Redd. (At the time, Redd's company had been incorporated for less than a year.)

IGT purchased the distributorship for new IGT machine sales in Atlantic City and the Caribbean from AC Coin for $20.6 million, including $10.6 million in cash consideration. Also, IGT and AC Coin have amended the terms of the AC Coin & Slot proprietary game agreement.

IGT will now have direct access to sell games to casino customers in Atlantic City and the Caribbean. On the other side of the equation, AC Coin will be free to partner with other slot manufacturers around the world to sell its proprietary slot games, and to partner with manufacturers of Class II and central-determinant lottery games inside the U.S.

The new terms enable AC Coin & Slot to sell proprietary games outright, as well as offer a lease-to-own, or traditional lease structures. (Under the former arrangement, all games were sold on a participation basis.)

The company also will retain the right to utilize IGT's base machines and platforms to continue to develop its future product offerings.

According to Mac Seelig, the new arrangement retains the long-held relationship between the two suppliers, while allowing AC Coin the freedom to explore new markets. He says he expects the distributorship income to quickly be replaced with new business. "Over the years, we've been very fortunate to have a great R&D team here," he says. "We've had a lot of inquiries over the years to do this with other manufacturers, so the new arrangement opens up a lot of things for us. We think we're going to have a lot of people coming toward us at a very rapid rate. We've got a great reputation; I think a lot of things will come toward us.

"It's very exciting-probably the most exciting thing that's happened for me, other than when I signed the contract with IGT 26 years ago."

G2E Strategy
One constant for AC Coin that will not change is research and development, and for G2E, the company will opt to display its best-new games on established platforms.

Don't expect hundreds of new games, though. The company is introducing just five new titles. However, they are representative of the best of the company's proven game platforms.

"Everybody is showing 50 or 100 games-we believe at the end of the day, that's sensory overload," says Jerry Seelig. "With the games we are bringing, we wanted to show the durability of the video platform we've developed."

The games build on the success of classic reel-spinning games with mechanical top-box bonuses like the venerable Slotto, but squarely in the video platform.

AC Coin's prowess in creating community-style games also will be on display. "Love Bug," being debuted at the show, is a three-player conversion to Slingo and Big Game Show games now in the market.

Three base Triple Double Red Hot 7s games-an IGT stalwart in a 50-line setup-attach to a common game show-style bonus board, including a random "Free Bee" bonus feature that adds credits when a random number of selections on the big bonus board occur without a match.

The company introduces a new platform this year-a two-game community-style format, with two machines linked to an overhead bonus game. In "Rock 'n' Roll Legends," a rocker character appears on the overhead board, and as he blasts out rock tunes, musical notes vibrate from the guitar across a board as credit amounts float upward. When a note intersects with an amount, the player is awarded that bonus.

IGT's Triple Hot Ice three-reel, 15-line slot is the base game for these two-machine units. As with most of AC Coin's communal game setups, each player earns bonuses and proceeds through his game individually, with bonuses played out on a shared screen.

"Dream Weaver" is a unique game that uses an IGT Sizzling Wild base game linked to a bonus on the top LCD screen. The bonus screen displays three sets of reels, and a random number of spins occurs. The reel spots display credit amounts. The "Dream Weaver" character appears to decide how many spins the player is awarded on the bonus screen.

The unique twist: On each bonus spin, the player can be awarded up to nine credit amounts. As long as each reel displays a higher amount than the previous reel, the values on each reel are added together.

Finally, "The Munny Returns" features cartoon animation of a mummy monster and a top-box bonus that houses two different bonus events. One of them, triggered by scatter symbols on the reels of a base Sizzling 7s game, is a simple event in which lights flash behind bonus amounts until one is awarded. The unique part of this event is its frequency-it happens every six spins.

The second event is a Slotto-style event that occurs every 65 spins, on average. The mummy's sarcophagus in a creative top-box display disburses Slotto-style lotto balls to award credit amounts and multipliers.

Jerry Seelig says these five games are indicative of the strength of AC Coin's platform. "We want customers to understand the fantastic value they are getting from AC Coin, and that our games continue earning at the highest level," he says. "These are not flash-in-the-pan games that last six months. We still have S-Plus Slotto games (launched in 2000) in the field that are still very successful."

He attributes this to "an understanding of what players want, and the ability to deliver that in a way that's unique."

"While the games change, the players don't," Seelig says. "They want to be entertained, and they want to feel they've gotten a fair shake from the slot experience. There are a lot of games we have on the drawing board that never make it to market, because we spend painstaking hours to determine how those games communicate with players.

"They know they're getting a great value from us."

By Frank Legato   Wed, Nov 11, 2009

One of the newest faces in the slot sector is also one of those with the most potential.

Aruze Gaming is an offshoot of Aruze Corp., one of Japan's most successful manufacturers of pachislo machines-the slot-machine clones that fill Japanese amusement arcades. However, the company is no stranger to the gaming industry.

Back in the 1990s, the company owned Universal Distributing of Nevada, which achieved a large market share in new slot sales. Universal bridged the gap between the struggles of erstwhile slot king Bally and then-rising star IGT, with hit games like "Magnificent 7s."

As IGT's star rose, Aruze owner Kazuo Okada focused the company's energies on the growing pachislo market in Japan, where Aruze achieved market dominance. The company's gaming industry presence focused on South Africa, where Aruze slots achieved a 30 percent market share.

By early this decade, Aruze was ready to re-enter the U.S. casino market-first as an operator, when Okada bought a sizable stake in Wynn Resorts. Two years ago, the company got serious about parlaying its expertise in the pachislo market into slot machine sales in North America. The first order of business was to bring in game developers and marketers experienced in the Americas.

Aruze opted to acquire a ready-made slot content company which itself had been formed by seasoned pros. Last January, the company completed the purchase of True Blue Gaming, the content provider formed by former Aristocrat Technologies Global GM and Marketing VP Kent Young. Young had formed the company along with Aristocrat's top former game designer, Scott Olive.

Young and Olive had led Aristocrat's success early this decade in the U.S. market with Hyperlink, Reel Power and other groundbreaking game styles. By acquiring True Blue, Okada got a package deal of proven successful game producers.

Aruze Corporation formed Aruze Gaming America as a Las Vegas-based subsidiary, and began investing heavily in the new supplier's technology, intellectual property and R&D.

The Global Gaming Expo is Aruze's coming-out party for the worldwide gaming industry, and for North America in particular.

"It's a new day for Aruze," says Young, who is now general manager of Aruze Gaming America. "That's our theme for G2E-we're positioning ourselves to be a major player within the global markets. Since the start of this year, we've been pushing into new markets from a licensing perspective. We've developed a whole new range of products, acquired some licensing, and gotten a considerable number of games approved. Several products are out there on trial, and there is excellent performance in the field."

Currently, field trials are ongoing in Nevada, California, Oregon and New Mexico. The good performance in the field will be boosted this month at the trade show, when the rest of the industry is introduced to the new Aruze.

Full-Court Press
The arrival of the new Aruze will be heralded to G2E attendees at full volume, in the form of a mind-boggling collection of new slots, special game styles and state-of-the-art hardware.

The fact something special's going on is evident from the hardware alone. Aruze's cabinets-the "G-Wave" upright, the "G-Comfort" slant and the futuristic "G-Enex" upright-are unique in their ergonomic design and flashy style. G-Wave features two high-resolution monitors (the top slanted down toward the player), surrounded by multi-colored LED lights and featuring an ergonomic play panel. The G-Wave video format features 3D technology, customized sound and music, and high-resolution color.

The G-Comfort slant is just what the name indicates, with a play panel that essentially is a miniature cocktail table with buttons. Dual monitors are positioned at viewing angles allowing the player the most natural range of motion.

G-Enex is Aruze's cabinet for the future, with dual monitors, superior 3D animation, high-resolution graphics and custom sound that produces what the company calls an "integrated sensory experience."

The initial success in the field of Aruze slots has been attributed to special features like "Rescue Spin," which counts down losing spins and reimburses the player periodically with free spins and credits. On free-spin games, if a player goes a certain number of spins without a bonus sequence, an "angel" comes onscreen and awards a free-spin round. A countdown appears when there are 10 games left until a Rescue Spin.

A button on the panel allows the player to activate this feature-a wager at least covering the paylines is required, providing the operator a coin-in benefit.

The new games to be shown at G2E continue a momentum that's been building since the first of the manufacturer's games reached the field. Two of the most successful games so far have been "Shen Long" and "Legend of the Qin Dynasty."

Shen Long-which Young says is the No. 1 penny game in Australia's New South Wales clubs-features a unique wild-symbol bonus feature that can result in huge credit wins. When the bonus is triggered, a "Mini Game" prompts the player to choose from five gems to reveal a number of free games, and a number of wild symbols to appear during those free games. Anywhere from 20 to 60 wild symbols can be assigned to the free spins, which can result in some spins in which nearly all symbols are wild.

The Qin Dynasty game has a similar wild-symbol/free game feature, in which additional wild symbols are added to each free spin. Both games have been extremely popular in the Pacific Rim markets, and Young says the high credit awards are sure to make them popular in the U.S. as well.

The new games to be displayed at G2E take the math and volatility of games like these and tack on a ton of entertaining features. One that promises to be one of the highlights of G2E is "Rock You: Queen." This game takes the music, images and recorded performances of the legendary rock band and wraps them into a masterful package that provides Queen-a-holics ample opportunity to enjoy the music while experiencing a remarkable number of winning outcomes.

Queen's hit songs play throughout the primary-game reel-spinning, and both animation and live-action video of the band are featured in bonus events. There are three separate bonus events, all involving Queen music and performances.

When the "Greatest Hits" feature is triggered, five of Queen's hits are displayed in a jukebox-style setup, each representing a number of free spins-and a different volatility for the bonus round, from five free spins with high volatility to 15 spins with low volatility. Once the hit is selected, the song plays as the free spins play out, and video of the band performing the song follows.

The second bonus event actually is triggered during the free spins. A bicycle symbol triggers the Bicycle Bonus. As the song "Bicycle" plays, the main screen displays a bicycle race, and the player picks the Queen member he thinks will win. The race plays out in 3D animation, with the player paid according to his choice. Then, it's back to the free games.

The other bonus is the "Drum Bonus." When a drum symbol lands, the player is awarded a mystery bonus award ranging from 15 to 600 credits.

The Queen game is a microcosm of what Aruze has to offer both players and operators. For players, there are tons of visuals and sounds-Queen frontman Freddie Mercury flying across the screen on a bicycle, sounds that anticipate upcoming bonuses, lots of music.

For operators, the game has features designed to increase overall coin-in: Take the "Max Bet Special." When the player presses the max-bet button, it actually adds 5 percent to the game's long-term payback percentage-a 90 percent game becomes a 95 percent game, which is duly communicated to the player, a sure enticement for surrounding players to jack up bets to the maximum.

Other games offer extra free spins when the player chooses the Max Bet Special.

Entertainment, Volatility
Other games to be launched at G2E display Aruze's trademark mix of entertainment value and program volatility. According to Steve Walther, the company's vice president of product management, Aruze slots are produced in three different volatility categories.

"We've got a very broad range of content," he says, "covering both entertainment styles and gambling styles. We also have the 'G-Deluxe' range, which is differentiated through top-box animation and a mechanical interface between the game and top box." The company also has a category called "G-Link," consisting of linked or networked games.

For G2E, expect to see a barrage of products in every category, for every gaming taste. There are hilariously entertaining games like "Bow Wow Bucks," with cartoon dogs on free-spin and second-screen bonuses. There are mechanical top-box games like "Vampire & Beauty," in which the player picks coffins to open for bonus awards.

Viewing Aruze's offerings reveals something for everyone. Games targeting the Asian markets include "San Guo Zhi Dai," which tells the story of "The Three Kingdoms" of  Chinese history in graphics and bonus events; and "Giant Panda," which features a funny sequence of a group of pandas crossing the video screen after big wins, or to add wild symbols to increase a win.

The feature is called-you guessed it-"Pandamonium."

For those who like community games, Aruze offers "Link Craps," a community-style game in which players join together during the bonus round in a shared experience not unlike that of a live craps table. When the bonus is triggered, one of two modes can be chosen by the triggering player-"Easy" mode for beginners, in which only a Pass Line bet is made; or "Professional Mode" for advanced craps players. Players are eligible for the bonus if they have wagered a certain level, but those who don't qualify are given a chance to place additional bets to get in on the event.

Once the bonus begins, it is much like a real craps game-the shooter throws virtual dice, and everyone cheers him on. It is a truly unique slot experience.

Other strong video titles include "Saber Toothed Tiger" and "Big Challenge Mammoth," both designed for high-limit, high-denomination play; "Showgirl," in which sexy Vegas showgirls glide across the screen adding wild symbols in free spins; and "The Last Emperor," another game designed for Asian markets that courts the high-limit player.

Then, of course, there is Aruze's famous "Jackpot Battle Royal," a multi-level progressive link delivered in a bank that is hard to miss, with giant, dimensional gloved hands popping out of the overhead display to lend 3D motion to the bank.         

The company also has a complete range of stepper slots, many featuring the "Transmissive Reels" technology that places a video overlay on top of spinning reels to add video animation. Aruze was the pioneer of Transmissive Reels, which it introduced in Japan's pachislo markets.

Finally, Aruze will be demonstrating its system products at G2E as well. "We are in our early days as far as systems, but we have a commitment to bringing new technologies to market," says Walther, whose background included a stint as head of product management for the OASIS system, both at Aristocrat and at CDS before its acquisition by the Australian slot-maker.

Product Rollout
Aruze will spend the near term aggressively pursuing licensing in key jurisdictions. According to Young, the company is currently pursuing full licensing in Nevada, California, Oregon and New Mexico, and is doing installs in Mississippi. The company also is going through the licensing process in Pennsylvania, Florida, New York and Connecticut, and is about to enter key jurisdictions in Canada and South America.

Meanwhile, the company continues to increase its presence where it is already licensed. At press time, the first Aruze games were being installed in Atlantic City, and the popularity of the company's games was on the rise in South Africa, Macau and Australia.

"We're significantly increasing our research and development," says Young. "We have three development centers currently-Aruze Gaming Japan, our Australasian studio, and the True Blue Gaming team (in Las Vegas). We also have a software team in the Philippines, assisting in integrating everything. We're really seeing the key parts of our business coming together."

The most important part of the business, getting games in the field, is already well under way for Aruze. And from all indications, it's full steam ahead.

By Frank Legato   Wed, Nov 11, 2009

Earlier this year, Jamie Odell, the new CEO of Australia's Aristocrat Leisure Ltd., announced a new commitment to North America in game design and marketing.  

At G2E, that commitment comes of age.

Odell, aware that the Americas are key to Aristocrat's emergence from the economic downturn, initiated a focused effort to produce high-quality additions to the company's game library with an eye to North American sales.

A new executive leadership team includes Julius Patta, a veteran software engineer and game designer brought in as chief technology officer. Patta, who is based in the Las Vegas headquarters of Aristocrat Technologies, the manufacturer's U.S. subsidiary, was joined by Paul Kitchin, chief marketing officer for the corporation, in the U.S. office to help focus on the North American market.

The effort bears fruit this month. "You'll be pleasantly surprised at what you find from us at G2E," says Doug Fallon, director of marketing for Aristocrat Technologies. "Our offerings are player-led and technology-driven, and a lot more focused on the North American market." 

The company's game designers and software engineers obviously did their homework, from intense research into what has worked in the past to focus-group research on what types of game experiences are player favorites. They formulated new play styles; they dug deep into their technology bag to create entertaining new game features.   

The result? Welcome to the new Aristocrat. It's a combination of the best of what made Aristocrat the hot company of the slot market early this decade and a rejuvenated, player-focused group that could well become the next hot slot-maker.

Not since those heady days of the early 2000s has Aristocrat arrived at the fall Las Vegas trade show with a stronger collection of new product. Back then, Aristocrat led the industry in innovation with concepts like Hyperlink, Reel Power and Bonus Bank-all groundbreaking slot concepts that subsequently were copied by just about every other major slot-maker. This year's offerings likely will set new standards.

The industry got a taste of what's in store earlier this year with the instant popularity of "JAWS," the masterful multi-progressive game based on the legendary shark-attack films of the 1970s. G2E will see the next version of that franchise, a 50-line game titled "Night Hunter." "It has a different feel, based on the night theme," says Dallas Orchard, Aristocrat's director of gaming operations. Orchard says the game will be added to existing JAWS links, which the company will keep refreshing in response to customer demand. He says the 1,300 JAWS games already installed are earning up to two times the house average.

New Realms, Old Friends
But a refresh of this year's most successful game is only the beginning. Aristocrat arrives at G2E with new looks, new game styles and even new twists on a few of its successful older games.

Take "Beat the Bandits." This is one of the most interactive video slots ever produced  by Aristocrat-an Old West-themed game that is packed with entertainment and new technology. The slot features a multi-tiered bonus event that takes the player through three different Old West experiences in the quest for a progressive. The bonus-round progressive is one of three levels; there is a top progressive that is awarded as a mystery jackpot.

According to Fallon, Beat the Bandits uses a "Vertex" progressive controller, a first-of-its-kind server based on G2S protocol that adds advanced bonusing capabilities. The result is an interactive bonus sequence that starts with a dice "face-off" between the player and "Madame Red." The dice results are multiplied by the line wager, unless one of the results is doubles, which triggers the next level of the feature.

That level is a choice between three bonus games, each with a different volatility. The volatility level determines the level of progressive jackpot. Incredible animation leads the player to search for banditos, to gamble with Old West poker players, or to face off with "Granny" to see who can shoot more bottles off a fence. It is arguably the most intense treatment of a theme yet from Aristocrat.

Other new video achievements include "Beijing Bonanza," Aristocrat's first linked community game in the Gen7 video format. It includes a tournament feature that pits players against each other, and a community feature that brings players together for a common cause.

"It is really about connecting players," says Orchard. "It features both a tournament feature-player vs. player to win top awards-and a group bonus, which is a free spin or roll of the dice option from the triggering player."

The tournament feature assigns an animal to each machine on the bank. During an animated sequence, the characters collect gold nuggets to fill up spaces in a pyramid on the top screen-the first player filling up the pyramid wins the bonus. In the community bonus, the player triggering the event chooses free spins or a die feature. The outcome of the game is displayed in everyone's top box, and each player wins according to that outcome. "It's unique in that we're giving an individual player the ability to influence the outcome of everyone's game," says Fallon. "The first four players win a prize and each will win according to how much they bet in the primary game."

An ante-bet feature allows players to wager extra to increase multipliers for their bonus prize.

Another video highlight for Aristocrat brings back one of the slot-maker's most entertaining game concepts from the late 1990s-the chicken! A new "Reel Power" game-no paylines; all wins paid as scatters-"Chicken 2" reprises the comical animated chicken bonus round-if the chicken crosses the road safely, the player gets the higher bonus. If the chicken is flattened by a passing truck, it's a consolation prize. This game was hilarious in its original incarnation, in the comparatively primitive 1990s video format. In Gen7, it stands to be even more popular.

Finally, the company's big video introduction for the show is a new licensed game featuring comedian Jeff Foxworthy. "Jeff Foxworthy Redneck Rumble" is a Triple Standalone Progressive video slot incorporating video clips of comedy bits, unique voice-overs and video of Foxworthy leading into bonus rounds, and several hilarious bonus sequences based on the comedian's famous "redneck" routines.

One bonus feature is a treasure hunt through a redneck's junk-strewn back yard. The player collects beer cans to trigger different jackpot levels. Another is a "Truck War," a tug-of-war between two beat-up pickup trucks. Then there's the "Stink Bait Bonus," in which Foxworthy's character fishes in his miniature swimming pool while drinking beer. Once he catches a bonus amount, the player can opt to cast again to win either a larger award or cut his winnings in half.

In all, it's a hugely entertaining sequel to the original Foxworthy "Bonus Bank" video slot. And the topper? A pickup truck, naturally.

These new concepts will be accompanied by a number of new standard video slots in the MKVI and Gen7 platforms.

Stepper Style
Aristocrat has been refining its "RFX" stepper series for the past few years, and the company is using G2E to launch several new play styles in what is its most ambitious collection of reel-spinners yet.

"The RFX stepper has always had strong mechanical performance, but we now have the platform to make it work," says Orchard. "RFX is approved everywhere, and I believe we have the most advanced reel mechanism in the industry. Now, it's all about creating the right games on the platform."

The most high-profile of these is "Kentucky Derby RFX," a racetrack-themed multiple-progressive licensing the venerable theme owned by Churchill Downs. There are four progressive jackpots, the top symbol-driven and the other three won through the free-game feature/horse race.

When the free-game feature is triggered, the field of horses appears on the players' screens, and players select which horses will come in first, second and third. During the free spins, when binocular symbols land on the reels, your horse advances in the race. The "Grand Award"-the top of the three progressives-is won by hitting the trifecta. There also are prizes for an exacta and a quinella.

The race on the top LCD screen of each machine-and on an overhead display-plays out in compelling 3D animation, with changing angles displaying the action as horses change positions. "This is really about taking the excitement of the Kentucky Derby race and bringing it to the players as they play their free games," says Fallon. "We're excited about this," adds Orchard. "The math is very solid, and we're hoping to get a boost for the RFX series from this."

Other highlights in the stepper area include "Hillbillions," a three-level stand-alone progressive in which the jackpot feature occurs at random (players search for gold nuggets to trigger the progressives); and RFX Five-Reel XRP-for Xtra Reel Power-which features a four-by-five configuration (five reels, four active symbols per reel) and the Reel Power scatter-pay setup for 1,024 ways to win. "I don't think there's any other stepper configured like this," says Orchard. Two titles in the new series, "Salmon Rapids" and "Old Bayou," will be launched at G2E.

There also is a new line of three-reel RFX steppers, designed for high denominations. Highlights for launch at the show include "Same Way 7s," a classic single-line game; "Skin Deep Cherries," a nine-line game; and "Pow-Tastic 7s," a nine-line progressive. Also, the "Xtreme Mystery" jackpot feature is now available for RFX steppers as well as Gen7 video slots.

New Game Styles
Aristocrat returns this year to the type of innovation that caused the company to expand in Nevada early this decade, with totally new game styles that build on the technology developed over the past decade.

"Big Top Jackpot" is the first game in the new "Hyperloop" series, an extension of the Hyperlink multiple-progressive slot, incorporating a mechanical wheel topper. Focusing on the circus ringmaster concept, the game's top-box bonus apparatus incorporates a motor that pushes different-colored balls into the wheel. When the jackpot is triggered, the balls move into the box, and the motor moves the balls around the wheel. (The actual wheel doesn't move.)

When two balls correspond to a progressive jackpot, the player wins that prize level. Two red balls trigger the top prize. "There was a tremendous amount of work involved in designing an interface between the digital and mechanical aspects of this game," says Orchard. "We wanted to bring more to the table in bonus games, and this fully themed evolution of Hyperlink is a pretty impressive product package."

Another new bonus slot is "Hit The Heights," which incorporates both a wheel and a ladder topper.

Other new launches for G2E include more additions to the Triple Standalone Progressive series; "Power Pay" games that award extra features for ante bets; Double Standalone Progressive games; games for the Latin American markets; and a lineup of multi-player electronic table games, offered through Aristocrat's distributorship agreements with Electroncek (Interblock) and Pokertek.

Also new for G2E will be the first two games produced under Aristocrat's partnership with video game manufacturer Sega-a multi-line game called "Bonanza Brothers" and a Reel Power game called "Golden Axe."

"Sega provided the art and animation; these are their brands," Fallon says. "It will provide players with a completely different style of entertainment."

One game concept not to be unveiled until the show is "Big Bang," which Fallon will only say is a "different style of player experience."

The games, of course, will be accompanied by demonstrations of the latest technology improvements to Aristocrat's popular OASIS 360 casino management system and "TruServ" server-based solutions.

In all, it is Aristocrat's most ambitious collection of new products in years. "We're looking at building our business in new and different areas," says Fallon, "with new styles of game play, interactive play aspects, and value-added products.

"Innovation is the key word."

By Frank Legato   Wed, Nov 11, 2009

It's no secret that casinos will soon be ready to renew aging slot floors with a flood of new products.

Bally Technologies is ready.

For two years, the world's oldest slot maker has defied the recession, growing revenues through a combination of superior technology and a broadening market base. The company's Alpha platform, developed after the acquisition of the former Sierra Design Group, has thrust Bally back to a position it once owned exclusively-the elite of the slot business.

Now, as the next generation of the platform, Alpha 2, is perfected, Bally is preparing to dazzle the industry with just how diverse its product range under Alpha has become.

"Bally is still this unique company because of such a wide breadth of products," says Mike Mitchell, Bally's vice president of game development. "We can service so many different environments."

For the past two years, as most slot manufacturers struggled with domestic sales, Bally made headway with its new Alpha game styles and cabinets-most groundbreaking have been the industry's first real wide-screen format in the form of "CineVision;" multiple-progressives "Hot Shot" and "Quick Hit;" and a variety of games on the V32 cabinet, with a vertical monitor originally designed for the company's video roulette game, but which has crossed over to become one of Bally's most popular game styles.

Meanwhile, Bally has continued to expand into new markets around the world-a low-cost, high-return hedge against a general slowdown in domestic sales due to the recession. "There has been significant growth opportunity internationally," says Dan Savage, vice president of marketing for Bally. "Over 25 percent of our growth was in international business last year, and there is lots of opportunity to increase that further." Savage says some jurisdictions have been "tough from a compliance point of view," but that Europe, Asia and Australasia continue to be very attractive markets.

The real potential for the near term, though, is closer to home. "There is a ton of growth opportunity domestically," says Savage.

Mitchell agrees that North America is in line for a huge replacement cycle. "I don't think the floors have ever been older than they are right now," he says. "The average age of slots on the casino floor domestically is greater than it has been for the past 10 or 15 years."

Bally is ready, he says, to provide the replacements, both in the game styles that have been ultra-hot for two years and in the game lineup for G2E, which will be a powerful mix of new games and revivals of old game styles using the newest technology.

Additionally, Bally will show new technology that will bring all game styles-including the company's classic reel-spinners-squarely into line with what Mitchell calls the "paradigm shift" to server-based gaming.

Hot Styles
Bally's lineup of games for G2E will, at first, build on some of the huge successes the slot-maker has had during the past few years. Not the least of these has been the V32 vertical-monitor game style, which began with roulette but has since been the platform for some of the most successful Bally slots of the decade.

At the forefront have been the "Quick Hit" series of multiple progressive slots and "Fireball," which uses the large vertical screen for a dazzling fireworks-in-space display to enhance another of  Bally's most successful multiple progressives, "Hot Shot." 

"The V32 cabinet definitely has some legs, and it has given us big penetration in the video segment," says Savage. "Quick Hit Platinum has been a hammer! Fireball is the No. 1 penny game at Grand Hinckley in Minnesota." Mitchell adds that the original video roulette game on the V32 format has continued to be one of the company's most popular games. "By next year, we will have 30 titles on the V32 format," he says. "A year ago, we had one."

The highlights among several new V32 titles being launched at G2E include several new incarnations of Quick Hit Platinum placing classic titles like Black & White, Black Gold and Stars & Bars into the successful multiple-progressive platform. (Quick Hit Platinum provides a simple symbol-based progressive setup-the more scattered Quick Hit symbols on the screen, the higher the progressive.)

Another big introduction in V32 is "Hee Haw," a revival of a title from Bally's former video series that is greatly enhanced by the capabilities of the Alpha platform. Multiple bonus events recall much of the comedy from the legendary country music/comedy variety series in a two-level progressive version of the game. "Hee Haw was very popular in our S9000 format; we've brought it back by popular demand," says Mitchell.

Other high-profile titles to be launched on V32 include "Playboy-Girls of Canada" and "Breeder's Cup Turf Edition."            

Additionally, the company is launching two complete new game series on V32, "Crazy Cash" and "Magic Money," each with several individual game titles. Also on V32 this year will be 10 games from Australia's Ainsworth Ltd. That slot manufacturer, founded by slot-industry legend Len Ainsworth, provided game content for the V32, which has a player interface similar to that used by the Australian company.

Among other highlights in the video area is the first Class III version of "1,000,000 Degrees," a series of four wide-area progressive games with a million-dollar jackpot reset that the company has had much success with in Class II markets, where it was originally launched as the industry's first Class II million-dollar progressive.
    
Reels Rule
"Any discussion of Bally slots should start with reel-spinning games," says Mitchell. "We've gotten a lot of requests to renew our classic reel-spinning slot machines, so that's one of the areas we will lead with at the show-around 30 classic, high-denomination slot machines."

"There are between 40,000 and 50,000 S6000 (reel-spinners) in the market that are getting long in the tooth," adds Savage. "The casinos still want those games, so we've re-created them in our newer systems while maintaining the classic design." The newer format means a wider presentation, with wider reels and a top-box LCD monitor replacing the old slot glass. The wider presentation also means the newest Pro Series reel-spinners will be handle-less-the absence of handles fits the wider games into the same footprint, and the fact that the new cabinets are thinner means more room for aisle space.

These traditional games are joined by steppers in all of Bally's newer formats, including the V32-spinning reels are placed under striking vertical bonus or multiple progressive displays in games like "Ultimate Tower of Power," "Draw, Match, Win!" and others in the Digital Tower Series, as well as reel-spinning versions of Fireball and the new "Instant Fortune CineReels," a progressive on Bally's "QuarterMillion$" $250,000 wide-area link.

Also on the V32 cabinet is a scatter-pay slot series called "243 Ways to Win." One of the first games will be "Reel Money Scatter," an extension of the Hot Shot play mechanic with a video wheel.

This year, Bally also brings spinning reels into the world of networked gaming with two new technologies designed to fit spinning-reel games into server-based setups. "Transparent Reels" presents mechanical spinning reels with a video overlay for graphics and bonus features. The video screen is touch-enabled, for interactive bonus events in a reel-spinning slot.

Games are already in the field with the technology added to five-reel steppers. At G2E, Bally will introduce three-reel steppers using the Transparent Reels video overlay. New titles include "Dragon Dynasty," "Twin Tigers" and "Hot and Wild Blazing Stars."

Finally, Bally will launch another new technology at G2E that will neatly fit reel-spinning titles not only into networked floors, but into jurisdictions where only video gaming is permitted. "Reel Image" places reel images on a horizontal video screen with a surface that is curved like the surface of a mechanical reel. The result is a dynamic set of images and animation on reels that truly resemble mechanical spinning reels.

"Reel Image allows us to leverage our stepper portfolio into video-only markets," says Savage. "We have an extensive lineup of great stepper products we can now put into an all-video market like Minnesota." He says placing Reel Image slots next to flat-screen representations of reels reveals a greater authenticity to the true look of traditional reels. Bally's engineers have even added little touches like having the reel images "wobble." The reel-spinning setup, of course, can disappear for full on-screen animation. Moreover, he says fully downloadable content can be placed into this format in networked setups.

In all, Bally plans to introduce no less than 150 new stepper titles by next April, according to Savage.

Wheels and More
Reel Image is only one of several new game series to be included in Bally's G2E lineup. One such series capitalizes on the manufacturer's recent court victories involving its right to use a particular bonus feature on its slots-the wheel.

The "Spinnovation Series" includes both stepper and video titles with top box bonuses incorporating a spinning wheel. Leading this series will be new versions of some of the most popular Bally slots.

"Monte Carlo Royale" is a series that incorporates several base games into the elegant Monte Carlo theme, with its familiar roulette-style bonus wheel. "Hot Shot Cash Wheel" adds a spinning bonus wheel to what has arguably been Bally's most popular slot game.

One of the most innovative new games in the series is "Cash Spin," a stepper slot in the V32 cabinet with the Transparent Reels video overlay. The unique part is the bonus wheel, which employs a new technology called "U Spin It." It is a virtual wheel, but the player actually reaches up and physically spins the wheel. The wheel reacts to the player's physical pull, spinning more quickly or slowly according to the strength of the player's action. It is a very authentic effect.

In all, there will be six different new Bally wheel games at G2E.

Other new game styles include "Blazing Hot Tournament," a new community game with a thermometer-style on-screen bonus meter and large LCD displays above the games for a common bonus round.

"DualVision" makes a return this year with a new setup and several new games. This game style, introduced last year, is designed for two. The new configuration places two games in a circular configuration called "Penta-Pod." The slots are designed so bonuses can be played both cooperatively and competitively. The first two games in what will be another new series for Bally are "Two For The Money" and "Race To Riches."

Bally has a number of other new innovations up its sleeve this year. "Old School" is a new series of classic games. The company's core video library will double in size this year. Two new cabinet styles will be introduced as well-the Pro Series V22/26 Slant Top and the V22/22 upright. (The numbers indicate the diameter of the wide-screen game formats.)

Bally's system products will, of course, have their own area at the company's G2E booth. Bally will display its "Networked Floor of the Future" suite of server-based applications-the Blazing Hot Tournament community-style game is one of those networked products-along with the latest versions of its leading slot and casino management systems.

Also featured will be Bally's "Command Center," a server-based solution that enables operators to view, examine and manage the floor configuration from a central location, with links to machines, player-tracking displays and peripherals; and "CoolSign," a property-wide media management system that gives operators control of digital signage around a property.

Other marketing and promotional tools to be displayed include Power Card, a stored-value care solution that Bally calls an "electronic wallet;" and "iVIEW Display Manager," an intelligent controller that enables casinos to present messages on the main game screen in a "screen-within-screen" setup.

For Bally, though, this G2E is all about the games, in every size, shape and form. The manufacturer will present upwards of 214 unique game titles in an expanded booth that will showcase more than 300 total games. It is the most games ever displayed by Bally at G2E, and according to Savage, the display represents the manufacturer's versatility as the Alpha platform matures and Alpha 2 is perfected.

Savage says this year's mind-boggling display is only the beginning. "Our five-year strategic plan centers around being more customer-centric," he says. "We're going to do much more customer research-we'll probably increase this tenfold."

Bally, despite the recession, has seen its profit this year rise 20 percent, and its stock price rise more than threefold. If those numbers are an indication of anything, it's that the company is already getting it right on what the players want.

By Frank Legato   Wed, Nov 11, 2009

Time to open the "whole is better than the sum of its parts" file.

The two companies that make up the slotsupply arms of Gtech Corporation were certainly well-known to casino operators long before they joined under the Gtech corporate umbrella.

By the time the Atronic Group was acquired by the Rhode Island-based lottery giant in mid-2008, it had spent more than a decade building itself up from a localized Austrian specialist supplier of 3D video slots into a worldwide force in the slot market. Spielo Manufacturing, Inc. had spent even more time building its own reputation as one of the top providers of video lottery terminals for markets extending from its base in New Brunswick, Canada, to lottery markets across the U.S.

The two companies would retain their individual identities after the merger-as would their parent Gtech, after its acquisition by Italy's Lottomatica S.p.A, now the parent of all three companies.

For the past two years, though, the companies have been busy merging the technologies of the two veteran gaming machine suppliers. Atronic, while retaining its European operations in Graz, Austria, has moved its slot R&D and manufacturing operations to Las Vegas, where Atronic Americas is now the main hub for casino sales.

While Spielo has retained its Canadian headquarters, its engineers now work with those of Atronic on products for the casino industry-as Atronic technology is incorporated into Spielo's VLT products.

The result of all this is a newly merged technology that is moving the Atronic and Spielo brands forward in both the casino and VLT markets.

"When you look at our business, Atronic is really a brand," says Ken Bossingham, chief operating officer of Atronic Americas. "Much of the infrastructure previously was based in Austria. Now, after the closing of Scottsdale (Arizona, the previous headquarters of Atronic Americas), the infrastructure is in Las Vegas and New Brunswick. So, we are now leveraging all this North American infrastructure to build games forthe North American player."

This year has seen the completion of the merger of the two gaming machine brands. Bossingham says forging the suppliers into one corporate culture has been a challenge, but merging the technology has gotten a boost with the release of "ProdiGi Vu," a new platform for both video and stepper games that Bossingham says will be the company's platform of the future.

For now, he says, games from the European subsidiary in Austria will remain with "e-motion," the platform that has served Atronic well for years. However, e-motion will be slowly phased out in favor of the new platform in North America.

The new platform is functional for the move into networked gaming, with wider dual LCD monitors, a more durable design, and different technology for content. ProdiGi Vu uses USB- and flash-card-based content rather than EPROMs.

There is a dynamic button panel-each button is a miniature video monitor, which means every aspect of a game can be changed to a new theme in a server-based setup. There also is one item that promises to be a hit with a lot of players: a remotecontrol. It is a hand-held button on a wire thatallows the player to sit back and hit the spin buttonwithout reaching.

"ProdiGi Vu also is very tech-friendly," says Mike Brennan, product manager for Atronic. "It is a much more durable platform, and the system architecture is much more simple and modern.”

The new platform also has more processing power than e-motion, which permits more intense 3D graphics and a wider range of game outcomes. This has been used by game designers of both former companies, and will be key in Atronic/Spielo’s integrated offerings at G2E.

Integrated Approach
Atronic will bring ProdiGi Vu forth as the common denominator for products of both the Atronic and Spielo brands at G2E. “Our approach is to take the best-of-breed from both companies,” Bossingham says. “While we’re sharing our product development efforts as an integrated company, we’re going to sell to the North American casino market under the Atronic brand, while bringing the best product forward from the integrated company. Spielo will do the same thing in their markets. 

“We’ll leverage the product development and competencies we are now able to bring forward asone integrated company.”

One aspect of this G2E collection from Atronic that is different from the past is that operators will generally be able to purchase most of what they see on the spot. Bossingham says 85 percent of the products at the show will be available for sale in most North American jurisdictions, and another 10 percent will be available for placement by the first quarter of 2010.

Part of this is a result of Atronic’s new content strategy. Many of the games being displayed on the new ProdiGi Vu platform are titles that have been tested in the field. “Our content strategy has been adjusted,” Bossingham says. “We’re doing market segmentation, market analysis... We’re making good, solid decisions on how to improve the overall quality of our content. We feel really strongly going forward that we’re not going to release any content to our customers for which we can’t prove a certainperformance level on the casino floor.”

Bossingham says the company is “validating content” before offering it to the customer, which wasn’t the practice previously. “We’re starting out with a strong footprint, and trying to prove the vitality of the new format,” he says. “We have new games that have tested very well on e-motion, so we have the opportunity to take the highest-performing games and import them to ProdiGi Vu.”

G2E LINEUP
Some of the top Atronic games at G2E will be ProdiGi Vu versions of titles released earlier this year on e-motion that have passed what the slot-maker calls its “critical test bank program.” Basically, thatmeans games that have proven to earn at least 125 percent of house average.

One is an ingenious new version of “Deal Or No Deal,” the franchise product based on the popular game show, available in e-motion, the e-Harmony slant-top, and the giant “Titan” cabinet. The strength of the series’ popularity has been the bonus game that re-creates the game show itself—the “Briefcase Bonus,” in which the player selects a briefcase from a group as his own, and reveals the bonus contents of several others before accepting or rejecting an offer from the “Bank.”

The player is shown the values of all the briefcases; he just doesn’t know which value is in which case. As potential values are eliminated, the offers from the Bank become larger or smaller, based on the probability that a large or small value is in the player’s case. The process goes on until the player takes a “Deal” or his chosen case is the only one left.

It is a true gambling activity, and the risk-taking is the heart of both the game show and the slot series. The new version of the game, “Deal Or No Deal: What’s Your Deal,” capitalizes on that—there is no reel-set for a video slot base game. It’s just the extremely volatile Briefcase Bonus. The player hits the “play” button to either go directly into the bonus, or, if it’s a “losing” play, to increase the amounts in the briefcase for when the bonus does occur.

“As we’ve shown in game development, we’re willing to take risks,” says Brennan. “We’re taking the real risk with this game. Some of the players we’ve watched were making betting decisions we’ve never seen before on a slot machine. People are betting tons of cash—the type of betting only seen in the pit before. This is a niche product, but it’s a really great one.”

Participation games introduced last year that will be relaunched at G2E include “The Three Stooges” and “Stargate.” According to Bossingham,Stargate-based on the popular science-fiction series involving time and space travelers-has been a runaway hit where it has been introduced. "Stargate is really through the roof at Harrah's Rincon," he says.

"There are three individual base games with their own bonuses, and five shared bonuses on top, plus a four-level progressive."

He says what contributes to the popularity of the game is that the bonus feature is 100 percent funded by a side bet-no percentage is taken from the base game to fund the bonus. "You can still play the base game and have a great time," says Bossingham. "All three have their existing volatility and really interactive bonuses. Players really get their money's worth."

Stargate was introduced at last year's G2E, but was refined after numerous study groups, with the revised version approved in Nevada in July.

Other games being shown at G2E that traveled similar paths of release, refinement and re-release include "Deal Or No Deal Wild," "Xanadu 9 Dragons" and the stepper version of "Stargate."

"We've been more strategic on our product rollouts," says Brennan. "We work with focus groups to provide insight on the player experience. 'I didn't understand how I got that symbol' can be valuable feedback. It could be something as simple as putting 'Bonus' on the bonus symbol. Game designers are sometimes too close to the development. We like to bring the human element in, in the form of actual players."

Other reworked games being shown include the three-reel, five-line stepper version of the classic Atronic game "Sphinx," in the tall-top "Passion" format. Bossingham says the game has been one of the best dollar products on any floor where it's been introduced, which he attributes to the buy-a-feature setup of the wagering.

"You can bet one, three or five coins," he explains. "One coin activates the five lines; three coins activate the wild symbols; five coins activate the video bonus feature. Players love climbing the pyramid in the top-box bonus." He says player feedback prompted the company to incorporate the buy-a-feature structure in the three-reel stepper version of Stargate as well.

Other Atronic slot offerings at G2E will consist of a wealth of core video slots transformed from emotion into the new ProdiGi Vu format. Among them will be "Jewelly," "Adventures In Bonusland," "Princess of the Amazon," "Island Quest," "Phoenix Fortune," "Valley of the Scarab" and "Money Out the Wazoo."

Linked Products
Atronic/Spielo also will be demonstrating its two major linked products at G2E, which both use the company's Multi-Functional Controller product, or MFC. The MFC product links banks of games for either tournaments or community-style games.

The two major products being demonstrated at the show are "Tournamaster" and "Bingo Factory."

Tournamaster links slots in a four-machine bank to a central game controller to allow instant switching between revenue mode and tournament mode. Additionally, a display shows real-time tournament standings, and detailed player reporting features are automatically exported to the back of the house.

Bingo Factory links base games together to a community-style bingo game. As players spin the reels on the primary games, they collect bingo cards through a symbol on the third reel. When the common bingo bonus is triggered at random, each player can have up to four collected bingo cards for the bonus round.

When the bonus is triggered, each player selects a "Lucky Gnome" character to serve as its "dauber." The overhead LCD screen and the top screen on each machine then display the cartoon gnome characters doing the ball draw in a 75-ball bingo game. The player who fills his bingo card wins a progressive jackpot, but there are other prizes for completing a row. Payments are based on the wager of the triggering spin.

The bonus is designed to hit every 75 spins on a full bank of four machines.

While the linked games and refined e-motion slots are a big part of the show, Bossingham says this year's G2E is really about the launch of ProdiGi Vu as Atronic's platform of the future.

"These games are examples of the positive steps we've taken in the time since the merger deal was closed," he says. "We've got a long way to go, but we've got a really motivated team, and we're taking every opportunity to build on the quality of our product.

"G2E is the first step in that coming-out party."

By Frank Legato   Thu, Nov 12, 2009

Any company would find it challenging to lose a major market for its products. The loss of two in one year, though, could easily be fatal.

Not for Casino Technology, which in fact had two of its major markets disappear this summer. The manufacturer, based in Sofia, Bulgaria, marks its 10th anniversary this year with an eye toward expansion.

Casino Technology's products can be found in 50 countries, and that number is growing every year. That's a vital fact in light of what happened this summer in two of the company's major markets, Russia and Ukraine.

There had been fair warning that Russia was going away, its major casinos forced to close by government order July 1. No one, though, saw the Ukraine situation coming.

Only weeks after the Russian industry shut down, the government of the Ukraine, overreacting to a fire in a slot parlor, shut down all of the nation's slot venues. Casino Technology faced a fresh challenge.

Luckily, much of the slot manufacturer's focus for the past few years has been on expanding into new markets. Casino Technology Vice President Rossi McKee says the sudden glut of inventory, while certainly not welcome, did serve a purpose in the market expansion. "It is good news with respect to the economic situation," she says, "because we can use this equipment as stock that is already manufactured; we don't need to invest as much, and we can place this equipment and get it to the end customers-the players-as quickly as possible."

According to Sonia Nikolova, the company's sales and marketing director, by the end of this year, all Casino Technology equipment returned from Ukraine-much of it had been on installment financing arrangements that collapsed when the casinos closed-will have been refurbished and resold in other markets. "All the machines from Ukraine are preferred games for the Balkan region, so it was not hard to find a market for them in Serbia, Romania, Macedonia, Albania, Cyprus and elsewhere," Nikolova says.

And, as attendees at G2E will see, there is plenty of new product in the pipeline as the company continues its strategy to move beyond Eastern Europe. Casino Technology's success always has been traced to the quality of its products. The company has been a dominant force in Eastern Europe, thanks to innovative video slots and multi-player table innovations-and company executives say the strength of the product line will carry the company as it expands to new markets.

"We didn't expect Ukraine to close completely, but we knew there would be some change in legislation," says Ivan Tzankarsky, the company's executive director. "We started taking measures to replace those sales before this happened."

Those measures have consisted of a coordinated push toward establishing a presence in Asia (the company has games installed in Macau, and is focusing on Singapore and the Philippines as well), Central and Western Europe, and beyond that to the Americas.

Casino Technology's slots have already established a foothold elsewhere in Europe. "Anticipating the upcoming changes in Ukraine, Russia and Kazakhstan, we started to prepare adequate substitution for those markets a year ago," says Nikolova. "We have limited-payout machines in Italy, Hungary and Czechoslovakia, where we're expecting very good sales next year. Results are also very good in Portugal, and we have good installations in Germany-we're focusing on doing more there. There is quite a big potential, especially for Western Europe."    

The next target markets for the company in Europe are France and Switzerland. "We're targeting both France and Switzerland-although Switzerland is a relatively small territory, we don't want to miss any opportunity," says McKee.

The company also recently became licensed to sell machines in Greece. "If changes in legislation happen, as expected after New Year, Greece is going to be a very good market for us outside of the casinos-for the routes, the straight gaming halls," McKee says.

The company already has established a foothold in the Americas as well. "We've stepped up pretty successfully for the past year and a half in Peru," McKee says. "We've got quite a lot of installations there, and the games are well-received by players. We're continuing to enlarge our base of titles there, so we can offer new and better games for the Peruvian market.

"Another promising market for us is Argentina. It is one of the best-regulated markets in South America. We are moving forward with the desire to be one of the biggest suppliers in that market."

Casino Technology also is pursuing new sales in Chile, and in Central America and the Caribbean markets.

North America and G2E
Casino Technology has been making gradual inroads into North America, but this years' events have accelerated the pace of its U.S. market entry. The company's first games have already been installed in California, and more games are currently at Gaming Laboratories International for certification.

According to Nikolova, the company's next move in the U.S. will be more California installations-games will be in six casinos by January, she says-and in Oklahoma, where two installations are planned.

This year's Global Gaming Expo will do much to spread the word to U.S. operators about Casino Technology's products. The company's lineup of products this year will highlight some of the biggest introductions from last year, including the "Gemini Sensa" video slot format, and games that are approved or near approval in the U.S. for that series.

The "Tangra Touch" slant-top cabinet also will be highlighted, as well as a perennial at the company's trade show displays, "PlayMe Dueling Pianos." This is a pairing of two grand pianos, each with an embedded automated roulette wheel linked to four player stations along the piano's side.

According to Nikolova, the company's G2E focus will be a library of certified games approved for California and Oklahoma. At the IGE show in London, the company will launch its improved video slot format, "Gemini Sensa Plus," with dual 22-inch monitors and a third monitor for server-based functions.

For the U.S. show, slots for GLI-approved formats will provide the basis for the launch of a new series of video slots, called "Pro." Games in the series combine free spins and high volatility to create extended time on device, says Nikolova.

Among the titles being launched at G2E are "Rumble in the Jungle," a 25-line video slot featuring three progressive jackpot levels, won during a free-spin round. "African Moon" takes the triple-progressive jackpot concept to a 50-line format.

Another featured game is one designed for the Native American market, called "Prairie Dancer." It is a 100-line video slot with a stacking feature that can result in the entire screen being covered by one symbol. Another game including this feature is "Gourmet de Paris," a unique 25-line game that features every symbol spinning independently as a separate reel.

Among the other highlights are "Cage King," a 25-line video slot with a three-level progressive; and "African Magic," a 25-line game featuring high volatility and a multiplying wild symbol.

Casino Technology also is developing a new series of 3D video slots which will be officially launched in January. For G2E, though, the focus will be on spreading the word in the U.S. about the quality of Casino Technology slots and multi-player electronic table games.

Casino Technology was able to weather the storm of challenges this year because its products were already in demand. Next year, the strength of the slot-maker's product line promises to dawn on operators in an ever-growing number of new markets.

By Frank Legato   Thu, Nov 12, 2009

Georgia-based Cadillac Jack faced a big test last year, and a big question: Could the company, long a leading supplier in several Class II markets, translate its success into the fiercely competitive Class III markets?

This year, that goal is closer than ever, as 2009 sizes up to be the most successful of the company's 14-year history.

Cadillac Jack instilled a new management team last year-headed by Chairman and CEO Gene Chayevsky-and focused on setting up the engineering and product development needed to expand current markets and move into new ones. The effort is paying off. "This will be our most successful year ever because we succeeded in reaching milestones we set for ourselves in 2008," says Mauro Franic, vice president of product management and marketing for Cadillac Jack. "No. 1 was to have a high-performance product, and build a library around it that will support a rotation of placements in the U.S."

The accomplishment is still unfolding. The company has sold its first Class III slots in California and Wisconsin, and has increased its presence in Class II markets including Texas, Alabama and Oklahoma-and Mexico, which has been one of the company's strongest traditional markets.

Franic says the company has expanded its product families for both Class II and Class III, and is now launching games that are available in both technologies. "We're focusing on dependability of the products and a growing library of titles, particularly for our 20-line, 200-coin video reel family," he says.

By the end of the year, Cadillac Jack will have released 28 new games in its 20-line video series alone, as well as expanding the wide-area progressive line with new games and new play features.

For G2E, the company also is emphasizing its new line of 50-line video slots-highly volatile games that have already achieved success in the company's new markets. For the fourth quarter of 2009, the company introducing a second group of 50-line slots, which Franic calls a "complementary family" of games with similar volatility to the first slots introduced last summer, but with a higher hit frequency in the main game.

"These slots are designed to keep the type of player who likes a longer time on device," Franic says. "We've shifted some of the pays from the bonus events to the main games to achieve a higher hit rate."

New Formats, New Games
One can't discuss Cadillac Jack's new games without first noting another milestone that will be on display at G2E-the company's first state-of-the-art, dual-screen cabinet, which will be the company's format of choice going forward.

"We're very excited about this cabinet," says Franic. "We considered the best-in-class in manufacturing design, and made it extremely modular. It offers high serviceability and low maintenance. The sound has been greatly enhanced as well. One of our focus groups put it against the BOSE sound system, and a key for our design team was to exceed that experience. Placement and orientation of the speakers has been optimized. Audio and lighting effects are very attractive."

The new format links the game controller to a lighting controller, so lights change colors according to different game events. Other visual advantages-the high-definition, 22-inch dual LCD monitors, and a sleek, slim-line design.

Franic says the new cabinet is designed to be upgradeable, and to run server-based solutions for both Class II and Class III.

Two of the company's main G2E product launches will feature the new cabinet. Cadillac Jack will launch a new series of 40-line video slots , and a redesigned version of the company's first multi-level progressive slot, called "Mega Money Maker."

The company also will launch new games in the 50-line, 20-line and 40-line game groups.

According to Franic, the 50-line series has been enhanced with higher hit frequencies, multiple vertical-stacked wild symbols and other features that pump up the entertainment.

In the 50-line series, one game being showcased is the Native American-themed "Ghost Bear." The game, available in three-reel and five-reel setups, and in Class III and Class II versions, features prominent Native American actor Adam Beach (Windtalkers, Flags of Our Fathers) as the host, guiding players through bonus rounds and primary game features.

Beach guides the player through the legend of the mystical spirit bear, which represents peace and harmony to many western Canadian First Nations tribes. The theme is wrapped around a highly volatile game that features free-spin bonus events and multiplied jackpots. (Beach himself will be at G2E helping to promote the game.)

For Cadillac Cash, the company's wide-area progressive mainstay for both Class II and Class III markets, the company is launching "Pump It Up," a new 50-line game with a 1950s theme that features "Frenzy Spins," in which symbols on the center reel lock in place while the surrounding reels spin in opposite directions for additional winning combinations.

Other 50-line slots on display will include "Firehouse 50," "Expedition Outback," "Legends of the Orient" and "Big Easy Bucks."

Forty-line titles include "So Hot," which has been the company's best-performing game so far in the new format; plus additional titles including "Queen of the Delta," "Truck Stop Jackpot," "Galapagos" and "Barnyard Blastoff."

Expanding Markets
Cadillac Jack's G2E showcase is intended as a springboard to expansion into new markets in the U.S., Latin America, Asia and elsewhere.

The company's "Latin Bingo" game, already popular in Mexico, has been redesigned. It was already translated into Portuguese and enjoyed much success in Brazil before that market shut down. Franic says the company will be ready if and when new legislation reopens the huge Brazilian gaming market.

Cadillac jack also has shipped its first games to Asia, and will be placing product in Cambodia and Laos, says Franic.

Meanwhile, the company is focused on expanding its presence in U.S. Class III markets. "One of the things we've done is to work with both leading labs, GLI and BMM, to allow us to expand," Franic explains. "This year, we went into Montana and other new markets. For next year, we will try to expand our licensing in Class III-initially tribal, then commercial."

Expect Cadillac Jack's next U.S. markets to be Idaho, Mississippi, Michigan and New Mexico-he says Nevada and New Jersey could follow as early as 2011.

Franic says the company is now ready to move into the mainstream. "For the company, 2008 was a year of challenges," he says. "The new management team knew it had to restructure to be competitive, to better the product offering, and to streamline the organization to focus on product and engineering. Now, our focus is on giving our customers the things that really matter."

For Cadillac Jack, that customer base only stands to grow.

By Frank Legato   Thu, Nov 12, 2009

Euro Games Technology this year continues its journey west.

Already well-established in its home base of Bulgaria, the Sofia-based company, begun in 2002, began international expansion before the economic downturn hit its main Eastern European market-and well before the loss of Ukraine, one of its strongest markets, earlier this year.

According to Ivelina Mihaleva, the company's deputy director for international offices, EGT began expanding westward immediately upon the opening last year of its new headquarters and manufacturing facility in Sofia. The hope is to export the company's success in Eastern Europe, where its role as a supplier was supplemented last year by the launch of its own casino chain, with locations in Romania and Georgia.

"Our main focus since moving into our new offices has been to expand internationally," Mihaleva says, noting that the effort has accelerated as business has slowed in its main markets of Bulgaria and Romania, and of course, Ukraine. (The company has offices in Romania, Ukraine, Hungary and Georgia.)

The main focus of international expansion has been Latin America, Western Europe, Asia and South Africa. Aside from Asia-where new opportunity in Singapore, the Philippines and elsewhere has been offset by new government restrictions in Macau- Mihaleva says new orders have spurred additional growth in most new worldwide markets.

The company's products are drawing good reviews in South American markets such as Argentina and Peru. EGT depends on partnerships with local distributors to get its games in front of operators in other parts of the world.

"Local companies know the market, they know the clients, and they give us quick reach into new areas," says Mihaleva.

The company's products are certified by Gaming Laboratories International in Latin America and Asia, and are currently before GLI in the U.S.

By the Global Gaming Expo, Mihaleva says, EGT is expected to be ready for product launches in North America, beginning with California.

Product Strategy
The company’s strategy in expanding into new markets is to replicate what has been successful in Eastern Europe. That means “Vega Vision,” an award-winning video slot platform, will be on full display at Global Gaming Expo, as well as the slanttop version of “Vega Vision+,” a wide-screen format featuring a 22-inch main screen and a 26-inch top LCD monitor, all wrapped up in an advanced ergonomic design.

Mihaleva says the Vega Vision platform, in combination with a total of 30 approved video slot games, is already performing well in all of the company’s markets.

G2E will mark the launch of the upright version of Vega Vision+. In addition to the wider presentation, the new format features higher video resolution and more tech-friendly functionality. It won the award for “best new video slot game design” at the recent Eastern European Gaming Summit.

At G2E, the company will be launching five new games for the Vega Vision+, and the Vega Vision series in general:

“Rise of Ra II” is a new version of what has been one of EGT’s most successful video slots. It is a highly volatile 15-line video slot designed for low denominations. Other new titles include “2 Dragons,” a 20-line game featuring beautiful artwork; the African-themed 20-line game “Wild Savanna;” “The Great Egypt,” which has a unique 10-line configuration; and one other to be revealed at the show.

At press time, the company was perfecting its next big product release. “Vega Vision Multi-1” is a multi-game version of the Vega Vision+ format. It will feature a choice from among eight games and different denominations, with the option for the addition of progressive jackpots.

EGT also will display its line of multi-player electronic table games at the show, including a sixplayer electronic blackjack game, an eight-player auto-roulette unit, and its newest offering, “Vega PS.”

Vega PS—for Play Station—is a system of individual player terminals linked to either a live roulette wheel with a video camera or an automated roulette wheel. According to Mihaleva, the system allows an unlimited number of terminals to be linked to a single roulette game.

Mihaleva anticipates the company opening offices both in North America and South America soon, part of what she says is EGT’s goal to become a major player worldwide over the next five years.

“Our quality is high enough to take us to the highest rungs of the gaming industry, like IGT,Bally, Novomatic and Williams,” Mihaleva says.

“The thing that makes us special is the price. We’vegot the quality, we’ve got perfect customer service, but the price is quite reasonable. In these difficult times, I would say price matters.”

G2E will be the next opportunity for EGT to show its complete package to operators.

By Frank Legato   Thu, Nov 12, 2009

International Game Technology has a simple message for the industry: Never count the slot leader out.

The world's largest slot manufacturer is ready to party like it's 1999.

They would certainly love to. Precisely 10 years ago, IGT was at the crest of its meteoric rise to the top of the slot market, and in the meat of a period of unprecedented dominance in market share. Among the slot-maker's introductions at that fall's trade show were "The Addams Family" and "Little Green Men"-games that helped usher in the golden age of themed video slots.

At this fall's trade show, IGT is looking to recapture that magic-a time when trade show attendees spent most of the show at the slot-maker's massive booth-with a dazzling display of technology designed to dominate the annual slot showcase.

IGT has had a rough couple of years, to be sure-surging competition from rival slot-makers; flat sales as capital budgets dried up; a glut of costly litigation. A year ago, the challenges seemed large indeed as share prices bottomed out and layoffs seemed inevitable.

During the past year, though, the slot-maker has gone through a major corporate rejuvenation. Early retirement and voluntary separations took some of the sting off a force reduction that was only one part of across-the-board cost reductions. The management structure was revamped in an ongoing effort that saw Patti S. Hart replace TJ Matthews as CEO, and which peaked last month when Phil Satre took over as chairman of the board of directors.

Satre, the former CEO and longtime executive of Harrah's Entertainment, brings an operator's perspective to IGT's board in a move that has been universally lauded on Wall Street. IGT's stock price has rallied dramatically. In a trend that even a one-time write-down for the fourth quarter could not dampen, IGT's shares have nearly tripled since their low point a year ago.

After this month, IGT's comeback will be complete. Still the largest and by far most prolific slot-maker-nearly half the slot machines operating in the world were made by the Reno-based manufacturer-the company plans a product showcase at the Global Gaming Expo that promises to rival any of its previous displays, with an aim to recapture the mantle of technology and innovation leader that some of the company's competitors have claimed during the past two years.

Dubbing its G2E theme "Taking Gaming To The Next Level," IGT is planning to wow the trade show, just like the old days. It is no coincidence that one of the architects of this year's IGT slot showcase is the very man that led the company's slot development in the heady days at the beginning of the decade, Joe Kaminkow.

Kaminkow was brought back into IGT's game design scheme about a year and a half ago, and is now vice president of game design for "Studio One," the main team in IGT's revamped system of design studios, each producing a different style of game.

"We put together our team the first of the year, with the mission to decide where to take gaming to get it to the next level," Kaminkow says. "We've produced some great things, and one important note-all the products operators are going to see from Studio One are available before the show, during the show and just after the show. There is no preview of products that are a long way from sales; they are ready now."

Kaminkow's studio is producing the "wow" factor for IGT this year, in the form of a number of game groups that promise to dominate the trade-show floor-and the casinos.

Next-Level Display
The company's game designers simply call it "the 103." The technical name is the "MJ 103 Series," and the number refers to an apparatus designed to grab attention from across a casino floor-an enormous, 103-inch video monitor flanked by two "smaller" 40-inch LCDs.

It's like a theater movie screen with slot machines in front of it; it lights up the entire surrounding casino area. "It's going to change the gaming floor forever," says Kaminkow. "There's that 'gasp;' it takes your breath away. This is a product that will be a staple on every casino floor."

The 103 is the central feature in what IGT is calling the "Center Stage Series" of community-style slot games. Five machines-"play stations," they're called-sporting sleek new cabinet styles sit in front of the big display, each with a newly styled "Mega FX Surround Chair," with built-in speakers booming audio effects to draw players into the game.

Kaminkow's team has utilized everything the new technology has to offer in the inaugural Center Stage Series games, all with "MegaJackpots" wide-area progressive jackpots on top of different themed games.

First out of the gate will be "Wheel of Fortune Experience," a new version of the venerable wheel slot that does what fans of the game have always asked about-a reproduction of the "hangman" puzzle game from the TV game show. Three players on the bank are chosen at random 10-12 times an hour for the big bonus game. Each chooses letters, and gets bonus awards for how many times the letter appears in the puzzle.

The next game on the Center Stage format is "American Idol," a cinematic reproduction of the famous performance reality show. In the community bonus round, all the contestants from the reality show's first season are features in "auditions," and players receive bonuses according to how each Idol judge rates the performance.

"Wheel of Fortune Triple Spin" is a third game for the Center Stage format. The primary game in this one is in IGT's popular new "MultiPLAY" setup-players wager on and spin four game screens at once, with bonus free spins playing out on the full screen. The community bonus in this version of the game is similar to the "Super Spin" version of the wheel, with several players entering into individual wheel spins played out on the big screen.

According to Kaminkow, the games on Center Stage are completely interchangeable. "Once deployed, it is a truly downloadable system," he says. "Think of it as a Cineplex, with slot games as the films." Any of the three initial games (and more later) can be downloaded to switch all monitors, LCD screens and digital signage, as well as the games themselves, to match the new game.

There is a smaller version of the Center Stage setup available-the "MJ 70 Series," with a 70-inch overhead monitor and two 32-inch side portrait displays. It is a four-machine setup, designed for smaller casinos or for larger casinos to install more than one of the Center Stage banks.

MultiPLAY, Multi Progressives
Kaminkow's group also injected life into new games into several other games in IGT's MultiPLAY series, including some that also fall under the MLP brand, for multi-level progressive.

One of the most high-profile is already out in the casinos, and has been gathering multitudes of fans among women. The quintessential "chick game" comes from the quintessential "chick show"-Sex and the City. Kaminkow, referring to the popularity with women of a certain rival manufacturer's game, calls this his "Oz-killer."

"Sex and the City," the slot game, wraps the MultiPLAY and MLP game mechanics around one of the most feature-rich games ever produced. The Mega FX chair adds to the experience, as do the pink-colored draping the cabinet and most of the bonus events.

The video slot, a MegaJackpots wide-area progressive available in banks of two with a common topper, has five different interactive bonus events, each allowing the player to pick one of the four main female characters from the show. "Mr. Big," a.k.a. actor Chris North, hosts the bonuses, guiding players through each events.

The events themselves are made for women: "Simply Fabulous!" has the player open jewelry boxes to reveal numbers for a four-digit bonus award. "A Perfect Present" uses free games to award bonuses linked to champagne, chocolates or other gifts. "Change of a Dress Bonus" has the player picking outfits for one of the characters. "Hello Lover!" has the player shopping for shoes.

When all four screens are active, bonus events occur every 25 spins, on average.

The progressive uses a giant gift wheel to reveal a prize linked to one of the characters-Mr. Big is the top jackpot, followed by jackpots labeled Carrie, Samantha, Miranda and Charlotte.

The MultiPLAY format also is used for a new version of the popular IGT/Barcrest slot "Top Dollar."

"Top Dollar MultiPLAY" places the familiar, simple "stacks of money" light-box bonus game and places it on a tall, vertical LDC video monitor. The base game uses the traditional reel-spinning format, but in four sets of reels, using the "REELdepth" multi-layer display technology, or MLP.

The MLP technology, which uses overlapping LCD screens to create a 3D effect to represent spinning reels, has been improved of the past year, says Kaminkow. The images are more clear now, and little nuances such as reflective light have been added to increase the authenticity of the effect.

As with the other games, the Mega FX chair adds to the experience.

Another big MultiPLAY launch at G2E will "Alice's Adventures In Wonderland." Five unique bonus events follow Alice, the Mad Hatter and the rabbit through all the familiar events that happen in the legendary book.

Finally, the MLP series this year travels to another reality show with a community-play game called "The Amazing Race." Each machine in a bank is color-coded to one of four continents-Europe, Australia, South America or Africa. A competitive group-play feature is triggered when one player receives scattered bonus symbols, and players use "miles" they have accumulated to race around the world. Each destination has a corresponding progressive, and awards five additional spins toward the next "leg" of the race. Each progressive can be won by several players during one bonus event.

"It's an exciting event," says Kaminkow, "and very attainable. A wager of 60 cents qualifies you." It is part of what Kaminkow says is an effort to make special features of games available for modest investments. "We looked at the economy, and we made sure there is volatility, but sustainability of play as well," he says. "These are games for the $100-wallet player."

Core Products
IGT's specialty progressives will be joined at G2E by a showcase of new core products for sale, including games in all of the manufacturers' play styles.

Highlights include a REELdepth version of Double Diamond, also in the MultiPLAY format. It features the classic Double Diamond three-reel game, in the traditional single-line setup or in three-line, five-line or nine-line configuration. The traditional screen and paytable-the MLD effect makes them appear as spinning reels-is multiplied by four in the MultiPLAY format.

IGT is offering two legacy Double Diamond themes in the new format-Double 2X3X4X5X Times Pay and Triple Stars-in addition to the traditional game. On all version, up to eight progressives can be won-two per game screen.

Players are encouraged to play all four screens by a prominently advertised fact-the return is 97 percent with all four reel sets active.

Also in the core-product category is "Cougarlicious," a comical take on "cougars'-middle-aged women seeking out young men.

Other for-sale core game highlights include "Blast Off," a video slot featuring a unique seven-by-four reel display. The seven reels actually enact three separate five-reel games, with players betting to activate each. With all reels active, wins are evaluated based on reels 1 through 5; 2 through 6; and 3 through 7.

It is a scatter-pay game, with 1,024 ways to win on each spin with all reels active. The "Blast Off" bonus is a free-spin round, in which the player chooses the volatility-more spins with low volatility or fewer spins with higher volatility.

Another new way to play can be found in the 10th anniversary edition of "Little Green Men." Called "Reelin' & Dealin' Little Green Men Attack!," the slot offers a unique game screen that displays three reels and two vault doors. The player can pay to unlock fourth and fifth reels for additional wins and more frequent bonus events-the bonus symbols appear most frequently on the two extra reels.

There are many more core games to be shown in IGT's mind-boggling slot display. "Little Shop of Horrors" uses 3D animation and a 3-4-5-4-3 reel configuration. A hilarious bonus event prompts the player to "pick a flower bud," which grows into a hideous monster that offers one of three bonus prizes.

When a plant symbol appears on the bottom row, IGT's "Tumbling Reels" feature kicks in, in which the symbols in winning combinations disappear and others tumble into their place. When a plant symbol appears, it grows each time a winning combination "tumbles," covering reel spots as a stacked wild symbol.

"Blood Life" is a "Reel Control" game, which employs an element of skill in stopping and holding reels. According to IGT, it s the first approved skill-based game for reel-spinning players.

Video Poker
Video poker also will be well-represented for IGT this year. Standouts include "Super Times Pay Mega Progressive," a multi-hand game produced in partnership with Action Gaming that features progressives for the 10-Play royal flush resetting at $50,000 in quarters and $200,000 in dollars.

Other variations on the Super Times Pay theme include a "Double Super Times Pay" game that awards a multiplier every 15 hands. "Super Times Pay is the most successful multi-hand video poker game since the original Triple Play," says Mike Fields, vice president of Action Gaming and IGT's resident video poker consultant. "We're capitalizing on that with prudent games, and play models that work."
Other video poker highlights include "5 Star Poker," a compilation of the most successful multi-hand games, each in single-hand configuration. "Can't afford 18 coins for Super Times Pay? This offers the same feature and the same excitement for six coins," says Fields.

Finally, "Hot Pursuit" is what Fields calls the "first truly communal video poker game." The game is based on the popular "Spin Poker" game. Every player landing a three-of-a-kind hand is qualified for a "lap" in a bonus hand, played out on a 70-inch common LCD screen. The bonus round occurs randomly-it is three stacked video poker hands, and players qualify for one, two or all three hands according to how many trips hands they have accumulated.

The most high-profile of the new poker games, though, is "Texas Hold 'Em Heads Up," a single-player game that allows the player to compete against the computer. (See Man in the Machine, below.)

IGT also will have its server-based system products on full display at G2E. The company's "sbX Tier One" server-based solution, which is a small-scale networked setup, is already in the field in several locations. Well over 200 game themes are now available for downloading to these systems.

IGT will show its Tournament Manager system, which provides a complete solution to instantly transform a group of games from revenue to tournament mode and back, along with overhead leader boards and kiosks where players can enroll and select tournament rounds in which they would like to participate.

IGT's Advantage Bonusing product line also will be demonstrated, as well as the "Slot Analytics" system, an enhanced product line based on the Mariposa customer-relationship management technology IGT acquired recently.

In all IGT's product lineup for G2E is designed to make a statement to the industry: The leader is back, and better than ever.

Man in the Machine
Ever since Texas hold 'em took poker rooms by storm earlier this decade, there has been speculation about creating a single-player video poker machine that can duplicate the experience.

It would not be easy: Texas Hold 'em is a competitive game, and part of the appeal is being able to outfox your opponent by bluffs and betting schemes. Still, many have speculated that some sort of artificial intelligence could be incorporated in a computer that would provide a poker player with a worthy "opponent."

IGT's booth will display such a product at G2E. It is a breakthrough game designed by Gregg Giuffria, co-owner of the Hard Rock Biloxi, who also happens to be a computer enthusiast (in addition to a Top 20-selling rock artist of considerable heavy-metal fame).

"Texas Hold 'Em Heads Up" employs a technology Giuffria calls "Neural Net." He says it is the artificial intelligence factor that has been missing from normal video poker. The machine responds to bluffs; it bluffs and raises-it plays poker.

"Neural Net emulates human thought processes," says Giuffria, noting that it is actually a step ahead of "Deep Blue," the IBM computer that defeated world chess champion Gary Kasparov in the 1990s. "This chip plays chess as well, but it also plays blackjack, stud poker, Texas hold 'em-any kind of game," he says.

Neural Net, says Giuffria, was developed by one of the world's authorities on artificial intelligence. He says the play function resulting from this program, called "Meta Action," has actually been limited from what Neural Net can actually do-namely, adapt to its environment and to its opponent. "According to gaming regulations, it has to be fair and equal to all players," he says.

Texas Hold 'Em Heads Up is initially available in a "Limit" version, with bets ranging from 25 cents to $100. A "No Limit" version will come later. "What I'm excited about is that people are going to win on this thing," Giuffria says. "You have the ability to win if you play well. Test groups have been absolutely ecstatic about it."

By Frank Legato   Thu, Nov 12, 2009

Last year, Steve Sutherland, executive vice president and COO of Konami Gaming, declared the slot manufacturer's plan was to "reach the podium," meaning Konami is destined to be on the podium, Olympics-style, as one of the top three slot-makers in the world.

This year, Sutherland's prediction became a corporate culture, and the "podium" concept became the main mission of the company. When the company's engineers perfected a vastly improved computer platform to run both video and stepper games, the word, first used to identify the slot-maker's cabinet, was a natural to identify the Konami platform of the future.

At G2E, Konami officially unveils the Podium product line, along with a collection of new games that venture beyond the confines of K2V, the slot-maker's legacy platform.

"We definitely made a concerted effort to step outside the box," says Ross O'Hanley, senior director of marketing for Konami. "Some of the pieces we've done have been very unusual. Our new slogan is 'Borne From Fun,' and going forward, we'll have that theme. Looking at our heritage as a multi-faceted company, we're glad we're able to leverage Konami Digital Entertainment in our slot development."

O'Hanley is referring to the video game division of the slot manufacturer's parent company, Konami Corporation of Japan, which was founded as a jukebox supplier in 1969 and was one of the pioneers of the arcade video game business. Video entertainment is still a mainstay of the company, known around the world for its Metal Gear Solid series and other famous video games.

For the past few years, Konami Gaming has been leveraging the expertise of Konami Digital Entertainment, creating bold new slot styles as joint efforts between the home entertainment and casino entertainment experts of the company. "You've already seen that with Advantage 5," says Sutherland, referring to the company's groundbreaking five-reel stepper slot series. "You're now seeing it with 'Advantage Revolution,' a definite joint effort, and with elements of the Podium platform."

Pushing the Envelope
"Advantage Revolution" is a unique new slot style being launched at G2E, In the top box is a three-sided, revolving bonus apparatus-on one side is a set of mechanical spinning reels; on another is a mechanical bonus game; on a third is an LCD video monitor. The bonus changes according to events in the primary game.

Advantage Revolution is certainly "out of the box," but there are plenty of innovations in the mainstream Podium platform as well. For instance, there are side buttons. "There are buttons at each side of the panel, reminiscent of the old arcade pinball machines," says Sutherland. "At G2E, we will demonstrate the capabilities of the Podium button panel, which, particularly in secondary bonus games, gives the player more control of the game."

Last year, Konami showed the Podium platform in the "secret area" of its G2E booth, reserved for concepts that are still in development. This year, it will be available for sale. "At our test site at (California's) Barona Casino, the product is showing very high earnings and high customer acceptance," Sutherland says. "And, because of our worldwide introduction of the same cabinet style, this will allow us to further leverage our worldwide resources, not only in the U.S., but in Australia and other markets. This is one of the first times the same physical platform is being launched worldwide."

Sutherland stresses that the North American sales group, while fully servicing and supporting the K2V machines in the field going forward, will be fully transferred to Podium sales for new products by the first of the year.

"There is a big replacement cycle coming up," says O'Hanley. "Because of the absence of capital, the age of the slot floor has grown older than it has been in the last 15 years. The consensus is that operators are soon going to start employing capital to maintain their edge. With the new platform, we will be ready."

Game Showcase
In addition to Advantage Revolution, new products to be launched at G2E include Konami's follow-up to "Beat the Field," the successful community-based slot carrying a horse-race theme that was released in the U.S. this summer. (It was already successful in Australia, under the name "Sport of Kings.")

Beat the Field places a community video horse-race on top of banks that can include any of several Konami game styles as a base game-video or reel-spinning, three-reel or five-reel, multi-line or "KonXion" scatter-pay slots. Each base game has its own special features that will not change, but the common bonus race leads to one of four progressive jackpots. The winner of each bonus race wins one of the four jackpots. Every other horse is awarded a consolation prize.

Players who bet more can get assigned more horses in the random bonus race. There are "longshots" and "sure things," and the level of progressive assigned to each horse reflects the odds.  "The lowest level of progressive gets the short odds," says O'Hanley. "Longshots are assigned to win the Maxi, or highest jackpots. It works like a true horse race-the favorites come in more often."

The horses have tongue-in-cheek names like you find at the real track: "Nutmeg Snowball." "Clueless Socks." "Sunburned Bob." "Immortal Stranger." "Heavenly Drift."

The computer picks a backdrop for the race-the autumn-colored "Colorful Vermont," or "Rockies in the Rain," or an overcast city, or the desert. What follows is a remarkable 3D, high-definition video sequence of a "Running of the Roses"-style horse race.

The race runs both on the giant overhead LCD video screen and on each player's machine. You see the race from several angles, including the perspective of the jockey of your horse. The horses change position during the race, and their positions in the race are constantly tracked by the computer-each player's horse always indicates its position in the race.

For G2E, Konami is launching the follow-up to Beat the Field. Called "Top Track," the community-style event is transformed into a Grand Prix-style auto race.

Other game highlights include "Jumpin' Jalapenos," a popular multi-line video slot featuring the unique "4-5-5-5-4" reel configuration; and "China Shores," which has been one of Konami's best-performing new video slots this year.

Finally, operators will be ushered to Konami's "secret room" for a preview of "K3V," the next generation of video technology that will be combined with the Podium platform. "The new technology will feature 3D effects in video, dual LCD screens with images floating between the screens, and a lot more features that will make games more exciting and entertaining," says O'Hanley.

System Success
Systems will also be a big part of Konami's G2E booth. The Konami Casino Management System, or KCMS, has been a big revenue-driver this year, and got a big boost when it was chosen as the system for the new Rivers Casino in Pittsburgh.

"The fact our system is Oracle-based has attracted a lot of IT people," says O'Hanley. "What has attracted the operators is that we have the system documented as having the best up-time in the industry. Anyone who

The Rivers installation was joined this year by a major installation of KCMS by the Osage tribe in its seven Oklahoma properties.

Sutherland says the management at Rivers is now entering the second stage of KCMS implementation. "Rivers will now leverage the strength of the system's marketing opportunities, with an advanced-incentives module," he says. "The Rivers system has made a number of major operators aware of the system."

In all, G2E for Konami will be a showcase of what the slot-maker's technology can do, now and in the future.

It's one more step toward that podium.

By Frank Legato   Thu, Nov 12, 2009

Most in the industry know Lightning Gaming as a producer of multi-player electronic table games like "Lightning Poker." Welcome to "Lighting Slots."

The supplier is using G2E to kick off a new line of single-player slot games. According to the company, 20 titles will be released at the show, but the most high-profile will be two versions of a game licensed from board-game king Hasbro-"Scrabble."

Video Scrabble is a video bonus slot that involves playing the famous word game for money. There are no reels; the object is to form high0-scoring words using the official Scrabble tournament word list provided by Hasbro.

The player gets an initial draw of seven letter tiles. The best available word is highlighted, and the player has a choice of holding any of the seven letter tiles. A second draw is initiated, replacing any tiles not held. The highest-value word is again calculated, and the player is paid according to a pay table.

If all seven letters are used, a bonus game is initiated. The bonus screen displays a partially completed scrabble board, and players automatically draw seven additional letter tiles. The tiles automatically form the highest-possible-scoring word on the Scrabble board, and the letter scores are then translated into credits for the player.

(Scrabble Spin, the second game, will be unveiled at the show.)

"Video Scrabble will appeal to traditional casino patrons and casual gamers everywhere," says Lighting Gaming CEO Brian Haveson. "Our first adaptation of Scrabble delivers engaging and entertaining game play, successfully translating the popularity of Scrabble to the casino industry."

By Frank Legato   Thu, Nov 12, 2009

Austin, Texas-based Multimedia Games has spent the past year and a half preparing for a transition from Class II electronic bingo-where the company has been a leader-to the traditional Class III market.

The company's new management, headed by President and CEO Anthony Sanfilippo, decided to turn its expertise in Class II and central-determinant video lottery into success in the commercial casinos after traditional Class III suppliers began to crowd the Class II market.

Global Gaming Expo is the company's official introduction to Class III operators-a coming-out party, if you will. At least, that's how the company's executives are viewing the trade show, according to Mick Roemer, Multimedia's senior vice president of sales.

Roemer, a veteran marketer and game developer whose experience includes executive posts at IGT, VLT, Bally and other traditional slot-makers, joined Multimedia to help guide the move into Class III. He has helped with much of the technical preparations, such as becoming licensed and contacting operators he has dealt with for years at his other companies.

"We've made great progress over the past 12 months," Roemer says. "We're there now; we have installations in California and we're starting to move across the country."

The company is still very much involved in its Class II markets, as well as central-determinant lotteries, where the company maintains the contract to run 13,000 VLTs for the state of New York. But for the next year, that expertise will be seen in more and more Class III markets.

"We have 50 licenses now, and our goal is to get another 60 to 70 over the next six months," says Roemer. The company is licensed to sell Class III machines in California, Minnesota, New York, Florida, Wisconsin, Kansas and Iowa, with Mississippi and Michigan up next. Then, the Holy Grail-Nevada. "Within the next 12 to 18 months, we will be well on our way," Roemer says, noting that the licensing process has gone smoothly because the company is so well-known in Class II markets.

"We have a little different perspective than others entering the market, because we have such a large footprint in Class II," says Roemer, "and we have people who have helped us understand the (Class III) market better."

There is one thing, though, that operators in Class III markets are about to find out: Multimedia Games has been keeping a ton of game design talent as a Class II secret.

The Intro
Multimedia's intro to Class III at the Global Gaming Expo will surprise many. The slot-maker's collection of new games is remarkable in its variety, and in the quality of graphics, game play and the wealth of clever and entertaining game features.

Many of these game features give players the chance to accumulate winnings while having a great time. Take "Haunted House." The video slot has a bonus feature that has the player touching the screen at various spots in a room, to reveal spooky hauntings in places like an old picture, or a closet door. Credits are accumulated until you find a key, which unlocks a door to another room in the house. It is a highly entertaining, interactive search through a delightfully creepy haunted mansion. Great stuff.

Another standout is "Invasion From Outer Space," a kitschy 1950s-style alien invasion theme that places the video reels on top of a full-screen video of people running from flying saucers in something called "Respin For Your Life." (Screaming characters in the game are actually real people from Multimedia's Austin offices.) In another bonus game, it's time to shoot down flying saucers, at the behest of a classic '50s-style public service announcement urging the player, "It's time to fight back!"

"$pin Up$," one of the games in the manufacturer's new "Player HD" cabinet, uses the giant, 23-inch video monitor for a bonus round of 1940s pin-up girls. You pop the balloons on the pinups to reveal free spins and bonus credits. (The pinups are in bathing suits in U.S. versions of the game, but an international version has them in the buff.)

"Mega Meltdown" is another game with stunning graphics. This one features a six-tier progressive jackpot, combined with a high-denomination classic three-reel slot. "Slot Car Speedway" is a new community game with the same bonus mechanic as "Sport of Kings," a horse-race game that has been Multimedia's most popular Class III offering thus far.

In Slot Car Speedway, the player's betting level buys a range of "bet tickets." When the bonus is triggered, the bet tickets are used to wager on one or more cars in the race. The player's cars are marked with arrows, and the race itself is a completely random event.

Other highlighted games at G2E will be "Crown Jewels," the company's first game with a four-by-five play interface (four rows of symbols on five reels); "Wild Rainforest," a video slot with a free-spin round that places reels over top of a beautiful rainforest scene; "Dragons Wild," a game with unique "half-stops" on the reels that allow stacked wild symbols do nudge into position; and "Triples," a five-reel mechanical stepper slot that features large reels that are individually lit, and change color when free spins start. The effect is achieved by LED lights above the reels.

The remarkable quality of the games can be attributed to the design talent the company has always sought out-pros like Executive Producer Clint Owens and Senior Product Manager John Carpenter. "Clint has been very successful in focusing on Class III products," says Roemer. "He has achieved that delicate balance between volatility and entertainment. You don't want to create a game that's super-volatile with a lengthy picking bonus, and you don't want to use too much animation. For example, in Wild Rainforest, the art itself is pretty stunning, but it doesn't get in the way of the game play. The game doesn't feel like it's all about the animation.

"We're trying to learn from each product."

Roemer says Multimedia recently did an investor conference that was packed with people, and the attendees were all waiting in line to get a spot in front of the games. "It's pretty impressive when you see the response to these games," he says. "We feel we really understand the math and the look, and combined with the Commander, it makes for a nice portfolio of products."

The "Commander" is the Class III Casino Commander, a controller that allows a bank of slots to be instantly switched between revenue mode and tournament mode. It recently was installed in California. (A Class II version has been in operation for some time in Texas.)

For Roemer, who's certainly been around the block in the slot market, Multimedia Games is a refreshing change. "The thing I love about Multimedia is the passion," he says, "the desire to be bigger and better, and to climb the mountain and do really good work. In that respect, Multimedia is the best company I've worked with. There is a lot of talent and a lot of technology, and I don't think there's a company out there with the same passion to become much bigger than it is today.

"We're not in this to be a fourth- or fifth-tier player. We're in this for the long term."

By Frank Legato   Thu, Nov 12, 2009

Austrian Gaming Industries, the slot-manufacturing subsidiary of Austria's Novomatic Group of Companies, has been in an expansion mode for the past year, in a campaign to translate its traditional dominance of the European slot market to new jurisdictions in Asia and the Americas.

According to Max Lindenberg, who heads marketing business development for Novomatic, the company has been courting new markets in Argentina, Peru and elsewhere in Central and South America. "We are in contact with major operators in Paraguay, for entry in the beginning of 2010,"  Lindenberg says. "This demonstrates our focus on the South American market, where we have subsidiaries in Argentina, Peru, Chile and Paraguay."

In Peru, the company operates 13 casinos, with more in development.

Lindenberg says Novomatic is in constant contact with its affiliates in South American markets, to assure game design for that part of the world is targeted to the players. "That is the advantage of being an operator," he says. "You get feedback and information directly from those markets, which you can incorporate in game development."
    This year, Novomatic also has turned more attention to North America, where the company is licensed in Colorado and Florida, and is pursuing contracts with distributors to spread its games to more Native American markets.

"We have developed special financing packages for our customers in the U.S.," Lindenberg says. "We had record revenues last year, which enables us to invest in financial packages for our customers, to drive our aggressive expansion policy."

That expansion will get a boost from the G2E show.
    

G2E Lineup
It's no secret that Novomatic makes its major product introductions at the International Gaming Exhibition in London every January.

However, every fall, the Global Gaming Expo serves as a reminder to the North American gaming industry of the incredible innovation that pours fourth every year from the dean of European slot-makers.

This year, Novomatic will introduce G2E attendees to the server-based platform it launched last January. Called "Novo Unity II," it provides networked capabilities for electronic multi-player table games.

"We're bringing operators the opportunity to run an unlimited number of individual player stations connected to one live game, and to interconnect those machines between roulette, blackjack, craps and other games," says Lindenberg.

Also at G2E, the company will display its "Super V+ Gaming" cabinet, which incorporates three video monitors; and its slant-top cabinet with the popular "flip-screen" feature. This feature allows players to step on a foot pedal to switch the player interface between the main game screen and the top-box LCD monitor. "It's been very well-accepted on international gaming floors already," says Lindenberg.

The company will showcase some 35 titles for its "Coolfire II" series of video slots. New titles include "Diana's Realm," "Animal Athletes," "Hot for Love" and "Waikiki Beach." The titles will be displayed in the "Super-V+ Gaminator Multi-Game" format, as well as the flagship Super-V+ Gaminator upright, and the "Novo Super-Vision" and "Novo-Vision" slant-tops.

The multi-game format features up to 27 games per game mix, and multi-denomination formats with up to seven player-selectable denominations.

The company also will display 12 Super-V+ slots linked to a jackpot controller called "Flexi-Link," which enables a multi-level mystery progressive jackpot. A popular theme for this setup is "Buffalo Thunder," which offers a display of four jackpot levels on a large overhead screen. Called "Powerlink," the display requires no additional interfaces-it is "plug and play."

In all, 12 new Novomatic game themes have been developed specifically for G2E. While more will no doubt be in store for the London show, Novomatic's G2E lineup nevertheless serves as a reminder of the benefits of a major slot-maker just below the U.S. radar-but nothing less than legendary in Europe.

By Caitlin McGarry   Thu, Nov 12, 2009

The design process typically begins with listening to the needs of casino operators, slot technicians and customers, all of whom play an important role in a cabinet's end result.

"We try not to focus on what's important to us," says Bally Technologies Vice President of Marketing Dan Savage. "We literally pull operators in a room in focus groups and ask them that exact question: 'What are you looking for in a cabinet? Are you looking for an eye-attracter that's going to get people to sit down? Are you looking for compelling content in the inside of it? Are you focused on ergonomics? Serviceability? Are you looking for efficiency of electronics?' Our statement is, 'The hardware will always get people to sit, or should get people to sit. The software has to keep them there.'"

After conducting focus groups and sifting through the data collected by the company's marketing department and development team, a slot cabinet designer begins to search for inspiration. For some, like Norm Wurz, vice president of hardware for WMS Gaming, design cues can come from the most unlikely of places.

"Design inspiration comes from several areas including the players' unique tastes and cultural trends, everyday items such as appliance designs or automotive designs, things with which consumers have become comfortable and enjoy provide a tremendous amount of insight into the player's expectation," Wurz says. "We are not afraid to pick up cues and explore ideas from anywhere. Similar to fashion designers, we monitor consumer trends and continue to watch what's hot."

Walking through any casino floor will quickly reveal the latest trends in cabinet design: wide screens, sound packages, lighting effects, plush seating and ergonomic details are a common theme throughout today's slot cabinets, which are designed to not only attract players but also to make their playing experiences as comfortable as possible.

Ross O'Hanley, senior director of marketing for Konami Gaming, says his team gleans design inspiration from Konami Corporation's Japanese business.

"A lot of the things originally done in Japan through Konami Digital Entertainment were for the amusement market, which is very different, but it incorporates players being entertained and playing a game for fun as opposed to playing a game and trying to be entertained but also trying to win money," O'Hanley says. "What they started with in Japan was the opportunity to bring players back based on the entertainment and excitement without any kind of financial possibility. We thought if they were able to develop this great player retention using lighting effects for the arcade business, it might carry over very well into the gaming business, and it has."

Konami's latest cabinet, the Podium, utilizes the trends of today in its design, with dual 22-inch LCD displays, 360-degree surround lighting, ergonomic button panel and a variety of other features. O'Hanley says the focus group sessions Konami conducted at the beginning of the design process with industrial design partner Stuart Karten Design indicated that players were not only seeking the latest and greatest in technological features, but also design details that would enhance their gaming experience.

"We're offering our customers what we a call a shelf and a no-shelf version," O'Hanley says. "What we learned from our dealings with Stuart Karten Design is that many players in their focus group, when asked what they liked and what they didn't like about slots, a lot of females in particular didn't like that they didn't have a place to put their purse when they were playing a slot machine. So we have one version of the Podium that has a small, convenient shelf for a person to put a purse or a lucky charm or whatever else they want to put on a slot machine, and we've got another version that has more of a traditional slant. It's great having options, obviously, for the customer."

Built to Last
Technological innovations have made slot cabinet design more sophisticated and interesting, but also more challenging, due to the minimum five-year shelf life that slot cabinets are expected to have on a casino floor. With every year bringing new innovations, cabinet manufacturers are finding themselves designing well into the future to ensure that their cabinets will fill
casino operators' long-term needs.

While Cadillac Jack is fairly new to the world of slot cabinet design, Chief Architect David Harris says the company designed its new Genesis cabinet to be as technologically advanced as possible.

"We are designing this to be used well into the future," Harris says. "One of the key points that we used when we were first looking at this design was to look at expandability and adaptability. Basically, it can be put on a fully networked floor. We see this moving into the future five years or seven years, something to that effect. One thing you can never fully gauge is how much technology will change over the next five years, but the thought process, the thinking that we put into this cabinet, was that it would be around for many, many years. The cabinet itself won't be available until the first quarter of 2010, so I would expect it to move us into 2015 or 2017, depending on what future technological innovations happen."

Atronic and Spielo have years of experience designing cabinets for long-term use. Cindy Hovey, director of product management for Spielo (which is represented by Atronic in the U.S. market), says the company first began designing cabinets for lottery corporations, which typically purchased all of their cabinets in one lump, rather than staggering purchases like commercial gaming properties in the United States do. The lottery cabinets were expected to last for a minimum of seven years, so Hovey says Spielo is accustomed to designing for long-term use.

"We design all our cabinets, and we have for years and we're still designing them this way, for a three- to five-year sales life and a seven-year parts and replacement warranty-type life," Hovey says. "Even though slot operators and casino operators want them to last longer, the challenge that we're facing is in the area of peripherals and components, because those lives are getting shorter and shorter. If you look at an issue like LCDs, selecting a size and an LCD that you use in a cabinet is very tricky because those are changing out year by year by year.

Hovey said cabinet manufacturers face the challenge of choosing the right peripherals and components, because their lifecycle can be shorter than that of the hardware. She cites LCDs as an example of a peripheral that's been evolving on an almost yearly basis-in part because LCD technology is driven by high-volume consumer television sales.

"What we do is to try and get that three- to five-year sales life, and the seven-year operating life for the cabinet is to really work with the peripheral and component manufacturers and understand their timeline and their product evolution and build the right components into the cabinet at the beginning to ensure we get that long life. That's a struggle. If you pick the wrong size LCD, it's here today and gone tomorrow, because LCDs are driven by TV sales, because that's where all the money is."

Though keeping up with technology is the most challenging aspect of designing slot cabinets, Hovey says Spielo/Atronic's cabinets, including their newest release, the prodiGi Vu, have exceeded casino operators' expectations.

The Future Is Now
The demand for new technology is also being affected by customers' increasing awareness of casinos' environmental impact. Gaming operators are building new properties to strive for the U.S. Green Building Council's Leadership in Energy and Environmental Design certification, and are making their energy concerns known to gaming equipment suppliers-including slot cabinet manufacturers.

WMS Gaming's Wurz says energy efficiency was one important element on his mind when creating the new Bluebird2 cabinet, but the extent of his environmental concerns are largely dependent on what the consumer wants from a cabinet.

"It's a trick thing to do and requires creative balance; ensuring the delivery of the performance that customers expect and the experience that the player desires from these products-dual LCD panels and a graphics card that can deliver 3D and a CPU that provide an unbelievable graphic and design experience. To deliver on these expectations certainly requires some power and we have to be efficient," Wurz says. "It is important for us as designers to be energy-efficient while at the same time ensuring the return on the operators' investment. Asking the customer if they would be willing to accept a bit more horsepower if they knew the product was going to perform? That's what I mean by creative balance. Creating a design that emphasizes what is most important to the player and most efficient and cost-effective for the operator. Rest assured, we're always looking to be more efficient for our customers."

Efficiency is also a concern for Cole Kepro International, which customizes its designs according to what its customers request. The company's latest cabinet, the Evolver, can also be outwardly customized in order to maintain a modern appearance further in the cabinet's life.

"The benefit of the Evolver product is it has the ability to change the aesthetic look of the cabinet on the outside while leaving everything else the same," says Cole Kepro COO Stan Banks. "The Evolver cabinet was designed so that it could be a particular look today and a new look tomorrow-the same cabinet, but with different color concepts, sidings and aesthetics."

Cabinet customization may become more prevalent as the future of cabinet design appears on the horizon. Cole Kepro's Dirk Haton, vice president of product development, says he thinks slot cabinets will have to become "smarter" machines-just like every other piece of equipment in today's world.

"It's going to be more downloadable games," Haton predicts. "There will be less bill validator acceptance and ticket out. A lot of it's going to be smart card. A lot of the markets are going to that. The monetary interface is going to be very limited. The coin went away a few years ago for the most part. We have some products that we sell that's just smart card, a card reader, and there's no bills in and no ticket out. That seems to be some of the evolution."

From eliminating cash and potentially TITO technology altogether to enhancing graphics and widening screens, such as the 23-inch display on Multimedia Games' new slot cabinet, the Player HD, it seems slot cabinets are becoming more grandiose as time passes.

"The cabinets tend to be moving toward more versatility in terms of preparing for server-based gaming and more flexibility," says Mick Roemer, senior vice president of sales for Multimedia Games. "Most of the new innovations have come from trying to think about how we make the game much more flexible and configurable, either on a stand-alone basis or on a server-based basis."

In an effort to diversify casino demographics, Bally Technologies has designed a cabinet that will appeal to a new type of gambler: the couple. The company's new DualVision cabinet has a love seat to entice pairs to play Bally's games, and also enables couples to pool their cash and bet together on one game.

"Instead of a couple walking in a casino door and separating and saying, 'I'll meet you in the car in two hours,' we want to keep them together," says Bally Technologies' Savage. "We want to have them enjoy a gambling experience on the same type cabinet. DualVision's all about trying to get a new demographic profile onto the casino floor, and it's our effort to try and make that a compelling game experience.

"There's a great avenue on that cabinet for competitive play. If you could have a cabinet which two people sit at together, and if you could imagine a game like Battleship, where the screen is separated with a privacy filter, and two people play against each other for a bankroll, that's what the younger generation is doing today on Xbox, Wii and Playstation. Of course you've got to get that through compliance, but we now have a hardware cabinet where we can put that into focus groups and test that also."

Bally will be testing its DualVision cabinets at select resorts on the Las Vegas Strip later this year. The company will also be displaying its new Alpha Pro Series cabinets at G2E this month.   

By Frank Catania   Thu, Nov 12, 2009

The internet gaming industry may finally bring the U.S. back into the fold next year.

In 2009, two very significant interactive gaming bills were introduced in Congress. On May 6, Rep. Barney Frank (DMass.) introduced HR 2267 in the House of Representatives. Titled "The Internet Gambling Regulation Consumer Protection and Enforcement Act of 2009," the bill currently has 54 co-sponsors. On August 6, Senator Robert Menendez (D-N.J.) introduced S 1597, titled the "Internet Poker and Games of Skill Regulation, Consumer Protection and Enforcement Act of 2009."
This bill presently has no co-sponsors.

The major difference between the two bills is that the Frank bill would license and regulate all internet gambling, except for sports betting, while the Menendez bill would license only non-banking interactive poker and other skill games, as well as legalizing interactive interstate horse racing "without need for a license pursuant" to the Menendez bill.

The Frank and Menendez bills contain remarkably similar provisions. Both delegate enforcement responsibility to the U.S. Secretary of the Treasury, to develop regulations and a licensing framework within 180 days from passage to ensure that all licensees of internet gaming facilities and games of skill will be suitable, solvent and willing to carry out socially responsible policies. The secretary, upon determination of suitability, solvency and social responsibility, would then issue five-year renewable licenses to internet gaming and
game of skill operators.

The proposed legislation would require all applicants submit, inter alia: "(A) criminal and credit history of the applicant (and any senior officers); (B) financial statements of the applicant; (C) documentation showing the corporate structure of the applicant and all related businesses and affiliates; and (D) documentation containing detailed evidence of the applicant's plan for complying with all applicable regulations should a license be issued, with particular emphasis on the applicant's ability" to (i) protect or prevent underage and problem gamblers and (ii) ensure games are being operated fairly.

Security Provisions
Just as required in most gaming jurisdictions, compliance with the above requirements would require a thorough background check not only of the applicant, but also of all directors and senior executives of a business enterprise.

The applicant must also establish by the high evidentiary standard of "clear and convincing evidence" that the applicant: "is a person of good character, honesty and integrity,” “has or guarantees acquisition of adequate business competence and experience” in the operation of internet gambling and games of skill facilities, and “has or will obtain sufficient financing for the nature of the proposed operation and from a suitable source.”

Any conviction of an offense punishable by more than one-year imprisonment, providing false information, or being delinquent in tax payments will automatically result in a determination of unsuitability.

Both bills would mandate the secretary to require that the licensee has established mechanisms to ensure that all bettors are logging in from a jurisdiction that does not prohibit internet gambling, that all gambling taxes are collected, and that there are appropriate safeguards to prevent “fraud, money laundering, and terroristic finance,” and appropriate safeguards to prevent compulsive internet gambling. The secretary will also have authority to examine all licensee records and require a licensee to attend a hearing. Should a licensee commit a willful violation of regulations, he would be subject to a civil penalty not to exceed $100,000.

The secretary may also defer determination as to suitability of an applicant to a state or tribal regulatory body, although “the Secretary retains the authority to review, withhold, or revoke any license if the Secretary has reason to believe that any applicant or licensee does not meet the suitability requirements for licensing established under this section, or any other requirement of a licensee.”

The secretary may also rely on “qualified” state or tribal regulatory bodies “for such other regulatory and enforcement activities” as the secretary might find appropriate.

Responsible Gaming
Portions of each bill are devoted to provisions mandating responsible gambling procedures, including a “Self-Exclusion Program.”

Among the minimum requirements are provisions ensuring that customers may establish loss limits, have access to responsible gambling material, and forfeiture by a self-excluded gambler of any winnings should the gambler ignore the self-exclusion. The Menendez bill would also require licensed operators “to prevent persons” on the self-excluded list from initiating wagers. It also authorized a study for the identification, prevention and treatment of problem gambling, and the conduct of a national campaign on problem gambling awareness issues (Title III).

Both bills may alleviate concerns of those states or tribes that do not want their residents to participate in U.S.-licensed online gambling. For example, the governor or principal tribal chief may decide to opt out of any inclusion within 90 days after the enactment of either bill.

There are certain differences between the bills. While the Frank bill is silent on taxation, its companion bill "The Internet Gambling Regulatory and Tax Enforcement Act of 2009" (HR 2268), introduced by Rep. Jim McDermott of Washington, would establish a monthly 2 percent tax on all customer-deposited internet gambling funds. There is also a penalty of 50 percent of all deposited money should the gambling operator not be licensed. The licensed operator must also establish procedures for the reporting and taxing of customer winnings.

The Menendez bill (Title II, Internet Games of Skill Tax Provisions) would amend the Internal Revenue Code of 1986 to require a 10 percent gaming licensing fee on a "licensee's internet gaming deposited funds for a calendar month." The amount would be split between the federal government and either the state or tribal government of the player. The Menendez bill also imposes huge tax penalties on an unlicensed operator, and a withholding tax on nonresident aliens.

The Menendez bill also imposes a 21-year age requirement, while the Frank bill defers to the legal age "as defined by state or tribal law." While both bills permit civil monetary penalties and mandate user fees on licensed operators, the Frank bill makes both assessments "unappealable," while the Menendez bill permits judicial review of both the amount of the user fee and the penalty.

More importantly perhaps, the Menendez bill specifically states that an online skill gaming operator who had accepted U.S. players could not be denied a license for that reason, and could continue to accept customers while the application was pending.

The Frank bill would deny a license to a gaming applicant if the applicant was convicted of an offense with a one-year imprisonment penalty, but is unclear as to the licensing prospects of a non-sports gaming operator who accepted U.S. customers.

The Menendez bill, unlike the Frank bill, would not defer to a state or tribal gaming determination on suitability unless the regulations were "no less stringent" than those that would be established by the secretary.

Finally, the Menendez bill would require the director of the Financial Crime Enforcement Network (FinCen) to draft a list of unlawful internet gambling enterprises, including the names of owners and financial agents (Sec. 103). Should the director include an entity, it would then be the burden of the operator to establish "by a preponderance of the evidence that such a person is not an unlawful internet gambling enterprise" before the Federal District Court for the District of Columbia.

There is consensus that the Frank bill will be the first to move through Congress, but probably not until 2010. It is uncertain whether the Menendez bill will divide the online gambling licensing supporters, since the major hurdle seems to be proving that internet gaming can ensure the location of the player and verify the age requirementthrough a "know your customer" policy. These verification procedures should be the same for all interactive gambling. 

By John Restrepo   Thu, Nov 12, 2009

The Las Vegas resort industry, and for that matter, Southern Nevada, is at a turning point in its history-one that many in the industry, and those who observe and analyze it, never thought they would see in their lifetimes. It would not be hyperbole to say that the industry and Las Vegas are being fundamentally "reset" before our very eyes, because of the Great Recession of 2008-2009 (technically it started in December 2007). The recession is now finishing its second year.

Who would have thought just a short two years ago that the Las Vegas economy, largely driven by its vaunted gaming-resort industry, would not continue on its undeviating trajectory of largely uninterrupted rapid growth that started with the opening of the Mirage in November 1989. This was the birth of the mega-resort, not just in Las Vegas, but globally. The morphing of the industry intensified between 1995 and 2007-a period that is now looking like a modern version of the "Gilded Age," and not just in Las Vegas.

So, where is the Las Vegas resort industry today, and what are the future prospects for the industry and Southern Nevada in the global economy of tomorrow?

The Industry Today
Some of the major indicators of the Las Vegas resort industry's health are worth noting:
    
• Visitor volume dropped by 6 percent between June 2008 and June 2009, from 3,179,472 to 2,980,122. The moving 12-month average decline was 8 percent, from 39,101,420 to 36,148,453.
    
• Convention attendance declined by 19 percent between June 2008 and June 2009, from 438,044 to 355,436. The moving 12-month average decline was 23 percent, from 6,320,157 to 4,884,385.

    
• Gross gaming revenue plummeted by 15 percent between June 2008 and June 2009, from $806,097,000 to $687,546,000. The moving 12-month average drop was 13 percent, from $10,478,893,000 to $9,108,780,698.

    
• Lodging occupancy decreased by 7 percentage points between June 2008 and June 2009 from 89.4 percent to 82.2 percent. The moving 12-month median was 90 percent in June 2008, versus 84.3 percent at the end of June 2009.

    
• The room count grew by 3 percent between June 2008 and June 2009, from 136,583 to 141,030.

    
• Coin-in per slot and drop per game and table-indicators of "gross gaming spending"-dropped by 11.8 percent and 4.6 percent, respectivel,y between May 2008 and May 2009.

Some of the national indicators are having a major influence on personal discretionary spending, and by extension, on the health of the Las Vegas resort industry. They are:
    
• The U.S. household debt service ratio, which estimates the ratio of debt payments to disposable personal income, dropped to 13.5 in Q1, 2009, compared to 14.1 in Q1, 2008 (note: debt payments consist of the estimated required payments on outstanding mortgage and consumer debt), a welcome sign in terms of spending.
    
• The U.S. personal savings rate at the end of Q2, 2009 was 5, more than double the median rate of 2.4 during the peak (2004 and 2005) of the boom, a good indicator for the wealth rebuilding by households, but great for consumer spending.

    
• The consumer confidence index in July was 46.6 compared to 51.9 in July 2008, but it was above the seven-month median in 2009 of 40.8, another good sign.

    
• The consumer sentiment index in July was 64.6, compared to 61.2 in July 2008 and equal to the YTD median of 2009, also good.

So where does that leave the Las Vegas resort industry today?

It indicates that Las Vegas is in the unusual and unenviable position of offering a product or "experience" that continues to be highly desired, but where the value proposition of many customers has changed, because of the massive losses of wealth, even if only perceived in some cases. The proof of this new reality is clearly seen in the data above, as well as the anecdotal and empirical evidence about consumers' new-found frugality as they rebuild savings and retirement accounts, and wait for home prices to show a sign of stabilizing, for a sustained period.

This unrest is compounded by the massive amounts of debt that the industry has incurred in recent years. In essence, the industry has never faced this many large-scale financial and market challenges in its storied history.

We are not suggesting that it will take a long time for tourist volumes in Las Vegas to recover, or, for conventions and attendees to return, once the unfortunate words and deeds of the Obama administration fade. What we are suggesting is that for a period longer than has ever been experienced in modern Las Vegas history, U.S. and international consumers will be spending substantially less for the Las Vegas experience.

This fact is having a severe impact on the local economy. The numbers are there for all to see:

    
• 40,600 jobs lost between July 2008 and July 2009. Some 17,300 of these jobs were in the resort industry, a 43 percent share.
    
• An unemployment rate that reached 13.1 percent in July, nearly double the July '08 rate of 6.9 percent. The Nevada rate in July was 12.5 percent, while the U.S. rate was 9.4 percent.

   
• A median house price that tumbled by 40 percent between July 2008 and July 2009, despite the rapidly rising number of sales (large numbers of speculators are in the market).

Back to the Future
Returning to the question of the "turning point," what is the Las Vegas resort industry doing to respond? Clearly, certain critical steps are being taken to lure back visitors. Room rates are being slashed, increasingly aggressive comps are being offered, etc.

Now the industry faces the situation of offering rooms significantly below the $250-plus per night that many of these resorts were built around (along with the flood of gourmet restaurants, "luxe" nightclubs, high-end retail shopping and high-rise condos).

The most over-hyped of this "luxury rush" was the move to high-rise condos, including hotel-condos, especially along the Strip. The hubris was no better characterized than by the term "Manhattanization" of Las Vegas as a fait accompli. There were some who even said that the Strip was Las Vegas' "ocean," as an answer to the observation that most communities with successful high-rise condo markets have water views, be it lakes or oceans.

There is no doubt that the success of the Las Vegas brand was instrumental in attracting the massive amounts of capital, as well as numbers of visitors, that poured into Southern Nevada during the last 10 years. Also, to say  a lowering of lending standards also contributed in a major way to the "irrational exuberance" that infected so many would be an understatement.

What appears to have been lost in this race to higher and higher levels of luxury, and what contributed to the industry bubble, was the snubbing of the value customer by many in the industry. This customer was the backbone of the industry for much of the last 30 years prior to the mid-1990s. Unfortunately, in the rush to chase after the Holy Grail-the luxury visitor-no matter the cost, large segments of the industry did not nurture the value-oriented visitor (the same can be said for many in the locals' casino industry). In fact, many industry decision-makers largely turned their backs on this visitor as being too downscale for the "new" Las Vegas. As one industry insider, who early on predicted the issues to come, rhetorically asked me, "When everything that is being built on the Strip is considered luxury, what does luxury mean?"

And now the most important question: Where does the Las Vegas resort industry go from here? What are the strengths that can be built upon in a clear-headed and objective manner? It is actually a very simple answer. It's a strategy that has proven itself over and over again. It's the industry's resilience and ability to change directions quickly in the face of market and financial realities. Add to this formula the immense creativity of the industry when it is placed in a corner, as it is today. These qualities have served Las Vegas extremely well in the past, and they are the necessary ingredients to its sustained recovery.

If the Las Vegas resort industry is nothing else, it is comprised of trend-setters who will lead the global gaming-resort industry out of this morass. It simply has no choice. The financial stakes are too high, and this leadership is part of its culture and its DNA. Even the most optimistic industry insiders agree that it will take at least 10 years for the Strip to see another building boom, and the next one is not likely to be as extravagant as the last one.

So the road is clear for the industry. To wit, the Las Vegas resort industry must reinvent itself, because of the new economic reality. It must return to its roots by expanding its value proposition. It should not forget the luxury customer it has so heavily invested in, but it must re-energize its attractiveness to the value customer that served the industry so well for so many years.

In many ways, the global economic and financial resetting we are seeing today is moving the Las Vegas resort industry to another stage in its evolution. It is like the teenager growing to adulthood. It can be a very painful and turbulent learning experience, but one that is a necessary part of growing up.

By Roger Gros   Thu, Nov 12, 2009

Casino proponents were stunned last month when the voters of the Penghu Islands off the coast of Taiwan turned down the legalization of gaming in the county. What was expected to be a necessary step in the process of establishing casinos on the archipelago became the end of the road, at least for several years, when nervous voters decided not to take the chance.

The opposition was organized, to the point of reserving seats on ferries and flights from the Taiwan mainland for island residents who work there.

Opponents brought in many anti-gaming activists from the U.S., including Timothy Kelly, who served as the executive director for the National Gambling Impact Study Commission in 1999.

For the proponents, there was a complacency borne of the fact that the islands had twice before approved casinos in non-binding referendums. They expected approval by the voters who were looking for economic development on the islands. The defeat of this measure means that voters cannot be asked to reconsider it for at least three years.

The defeat was a devastating blow for one company, AMZ Holdings, which had spent years acquiring land and building relationships with locals. Other companies said to be eyeing Penghu included MGM Mirage, Harrah's Entertainment, Melco Crown Entertainment and Las Vegas Sands.

The Penghu government was also expecting a positive vote and had set aside land for a government-owned development that would have included a casino. Penghu’s economy is tourismbased, but falls off to almost nothing during the fall and winter when wicked winds rake the island and make it an unpleasant destination. Casino gaming would have changed that, but now the future is uncertain.

Two weeks later, the shock was only beginning to wear off with members of the Penghu government after the referendum went down in flames. After all, the government has spent years chasing gaming legalization in the national legislature, finally achieving success last February. The concurrence of the islands’ populace seemed like a foregone conclusion.

Taiwan officials were also stunned, and began considering alternatives.

Two island groups that had previously not been considered likely casinos sites, Kinmen and Matsu, which are located just off the Fujian Province, on the Chinese coast, are now receiving attention. Because the islands are closer to mainland China and farther from Taiwan, the possible market is limited largely to China, where a government prohibition on travel to the casinos is likely.

In April, a referendum on Little Kinmen, part of the Kinmen Islands, approved gaming by almost 70 percent, while a referendum in the township of Kinsha on the main island of Kinmen rejected casinos in July.

A referendum on the full island of Kinmen may be held in December, in conjunction with county elections, but some observers think the issue is so controversial, it will be put off until next year.

Officials of another island, Green Island, part of Taitung County in eastern Taiwan, expressed interest in a casino.“We don’t rule out the possibility that a casino may be opened on Green Island,” a Taitung county government source said.

Orchid Island, however, has ruled out gaming. The indigenous Yami people have indicated they do not want legalized gambling to “contaminate” their culture.

Meanwhile, Miaoli, a central Taiwan county, wants to replace Penghu as the site of the first Taiwanese casino. The only problem is that the authorization for casinos has only been given to offshore islands, not the mainland of Taiwan. So new legislation would be necessary.

To achieve that goal, Liu Cheng-hung, the magistrate of Miaoli, has launched a campaign to legalize casinos in the county.

“We want the casino the people of Penghu have given up,” the magistrate said at the opening of his campaign office.

Kuomintang, the National Peoples Party, supports Liu’s efforts, with Wu Po-hsiung, Kuomintang chairman; Wang Jin-pyng, president of the Legislative Yuan; Chu Lih-lun, vice premier; and Liao Liao-yi, secretary-general to President Ma Ying-jeou, attending the opening of the office.

The Taiwanese government is continuing to draft rules that will govern casinos in any part of the country, scheduled to be completed by the end of this year.

In Penghu, recriminations were at hand aimed at the anti-casino campaign. Many casino supporters said the defeat has plunged Penghu into crisis since it will now have difficulty attracting economic development to the islands.

Wang Chien-fah, magistrate of Penghu, disagrees.

“How come it has created crisis?” Wang said. “We’ll be able to develop tourism without a casino. Don’t think we are at a loss over what to do now that the casino referendum was defeated.”

Some blame the national government for failing to assure Penghu residents that issues associated with casinos would be handled.

One Penghu official told the Strait Times, “The average person does not know what the casinos will be like. In Singapore, the prime minister explained very clearly why the country has to have casinos and the impact. There are clear laws. But in Taiwan, there’s still a large degree of uncertainty.”

By Dino Juliano & Daniel Sanson   Wed, Nov 11, 2009

After years of trying, lawmakers in the potential powerhouse market of Brazil finally appear ready to pass a gaming bill.

At the time this article went to press, Bill 270/2003 had just been passed by the lower house Committee on Constitution, Justice and Citizenship (CCJ), and adopted by a vote of 40-to-7.

Significant, given the nearly 6-to-1 for-to-against ratio, but even more so because the CCJ was the final committee through which the bill needed to pass before proceeding to a vote by the plenary of the Congress. If the bill passes through the lower house, as expected, it will be the first gaming proposal to have made it that far. Then only a favorable Senate vote would be required to pass
the bill.

What follows is a timeline of events which will highlight why bill 270/2003 marks several firsts in the turbulent history of Brazilian gaming, and how these translate into circumstances that will likely make you bullish on Brazil.

Bad Start
While the last seven years have proven tumultuous times for the industry, especially the period between 2003 and 2007, one must look further back to find how it came to be as such. The seeds were sown in the '90s under a series of loose and ill-conceived policies which enabled the local courts to bypass the 1946 law banning all forms of gaming at their whim, but failed to establish a regulatory body or protocol for policing the industry. It was a recipe for disaster from the very beginning.

The lack of enforcement at the federal level meant that for every bingo that legitimately received the protection of the courts, two would pop up illegally. These illegitimate operations mushroomed as corrupt politicians and judges turned a blind eye in their districts, in some cases given a lack of policing resources, but often purporting to later solicit bribes from the illegal facilities.

In this way, bribes from illegal game runners for the protection of judges or influence of politicians became commonplace. What ultimately materialized was a mix of 1,500 legitimate and illegitimate operations housing 130,000 unregulated machines, and an industry inextricably linked to corruption and organized crime.

Brazil, of course, is not the first Latin American country to suffer the effects of vague or ill-formed gaming laws, though it is the largest. As a newly elected president in 2006, Peru's Alan Garcia was faced with a similar task of controlling the sheer chaos that had developed following a far-from-comprehensive bill issued in 2002-under the previous administration of Alejandro Toledo-which indirectly allowed the open expansion of the industry without a working regulatory structure. The situation there was similarly exacerbated by a series of court injunctions issued by provincial judges (often via bribes) enabling slot halls to operate without concern for what little new legislative direction there was and, for the most part, without paying any gaming tax. The number of illegal game rooms in Peru in 2002 (215) mushroomed to 897 by the end of 2006, whereas proper applications were only pursued by a handful of operations.

While Garcia's administration has met with much success reining in this situation in a very short time frame, it was only because of his ability to quickly get the control away from the courts and into the legislature that he was able to successfully carry out the process of legitimizing and regulating the industry.

Rewind to 2003. In Brazil, President Luiz Inacio "Lula" da Silva brought his center-left Partido Trabalhista ("Worker's Party") on a platform of anti-corruption and transparency in government. Part of that platform rested on the promise of fixing the gaming problem. Lula would not meet success with Garcia's future ease or immediacy.

Catch 22
As it relates to gaming, the first two years of Lula's term were defined by a series of brash and uncoordinated moves, politically savvy as they may have been.

Lula came out swinging, ready to knock corruption out of gaming-but not looking to knock gaming out of Brazil. The first proposal to regulate the country's gaming sector was presented midway through the first year of his term. However, the initiative was abandoned fairly quickly when Waldomiro Diniz, then head of the State Lottery of Rio de Janeiro (part of state-owned bank CAIXA Economica Federal), was caught soliciting bribes from well-known illegal gambling boss and numbers-runner Carlos Ramos, and subsequently accused of extorting money from gaming businessmen to collect money for the PT.

The high-profile and very damaging political scandal tarnished the image of the recently elected president personally, and the anti-corruption image of the PT as a whole. Combined with a host of other issues, Lula's approval rating took a nose-dive, and his position on casinos in Brazil took a 180.

Politically broken and looking to separate itself from scandal, the administration, in 2004, now stood ardently behind the immediate closure of all bingos and slots across Brazil through a medida provisória-which can be thought of as a presidential decree. A medida provisória holds immediate validity as law unless quickly overturned by the Senate. Following an explosive backlash from the worker's unions, the Senate did not waste time using its veto power.

Rendered impotent on the issue, the administration played the only card it had left: it went back to the Congress. Legal. Illegal. The administration no longer had an opinion. It just wanted a definition of the industry's status. Fast.

However, Lula had demonstrated through recent events that gaming was a lose-lose issue. With the potential for scandal lurking around every corner, supporting the legalization of gaming was career suicide; but coming out against it clearly did not keep you in the voters' good graces. The issue was tossed around the house like a hot potato. For three years there were cries from the administration, the industry, the workers and their unions to provide clarity. Over 70 proposals surfaced in the Congress and Senate, many of which had given false hope of an international growth opportunity in the past. But, the Congress lacked the resolve to move it along. There was just no motivation to take the risk.

Shock Therapy
Fast forward to 2007. The industry in Brazil showed peak size and was more entrenched in corruption than ever, the shocking depth of which was revealed by a series of high-profile federal police stings that year.

"Operation Hurricane" was the largest and most invasive of these. In its wake, hundreds of halls were forced to immediately shut down and tens of thousands of machines were confiscated by local and state authorities, and subsequently destroyed. Corrupt members of the judicial and legislative branches were also purged from the system.

Lula seized the opportunity to again ask Congress for a definition on the gaming matter, delicately noting, "While the issue is not defined, bingos will continue having a legal part and a clandestine one. This creates an immutable industry around the appeals for court protection." Congress did not come through.

Three months later, 79 government officials were implicated in activities with the slots mafia in another high-profile sting, "Operation Check Mate." Among those implicated were the brother and godfather of the president.

Lula beseeched the Congress once more, with an elevated demeanor: "The activity must be regulated or banned, but it must not continue like this, because we will never achieve transparency the way it is right now!" Congress did not come through.

In the end, it was Brazil's Supreme Court that stepped to the plate. In a grand attempt to separate the parasite of corruption from its host, the court issued a decision stating that only the federal government has capacity to decide if the gambling activity is legal or not, thus stripping the local courts of any further involvement with the gaming issue, and destroying the underlying policies that incentivized the corrupt behavior.

In retrospect, the one-two-three punch which removed the courts from control, the illegal facilities from the market, and the corrupt officials from the playing field, as in Peru, provided the change of scenery needed by the administration to initiate a meaningful dialogue on the gaming situation. The immediate set of outcomes, however, did not translate into an instant win for the administration.

Despite the fact that 600 gaming facilities remained open at the time with a black hole where a comprehensive policy of how to deal with them should have been, the issue weighing down the administration was the collateral damage that accompanied the closure of the 900 illicit facilities.

A large sum of the sector's estimated 300,000-plus employees were displaced practically overnight. These workers had historically been the loudest proponent for the administration to find some resolve and get gaming in order rather than just sweep it under the rug. Their rallies in support of this were always large, and once, in the capital, numbered in the tens of thousands. The workers, being the voting base of the "worker's party," did not go unheard.

Lula Steps Up
In March 2008, José Múcio Monteiro, minister of institutional relations, was authorized by the president to consolidate the 70-some proposals floating around into a master proposal via a series of debates in the political council of the federal government. The goal was to work through the issue comprehensively prior to its being presented to the Congress.

The administration's speed and focus in addressing this matter in the aftermath of the events of 2007 enabled the Congress to do its job without fear. As a result, the candid dialogue on gaming sounds like any you have heard in proposed U.S. gaming jurisdictions, with proponents touting benefits a regulated industry would bring to tourism, state coffers, the health debate, and job creation; and the more cautious addressing the realities of challenges posed from issues such as money laundering and the logistics of federal oversight. That, in itself, is a vast change from anything that has occurred in Brazil since gaming's inception in the country.

The result of that 12-month debate was a version of the current bill that was sent to the president of the Congress, who then chose the relevant commissions that would scrutinize its content. As this article went to press, a working version of Bill 270/2003 was bound for final review and a vote in a plenary session of the Congress.

Key highlights of the present form of the bill call for a limit of one bingo hall per 100,000 inhabitants (approximately adding 1,400 more halls) with no more than a 50 percent ratio of slots to bingo seats at any one hall. The minimum payout for bingo and machines would be set at 70 percent of the drop, and gaming taxes are established at 17 percent of the hold. The federal government will receive 30 percent of the tax collection and the states will receive the rest, after the discount of the 15 percent for health programs, 1 percent for the Culture Fund, 1 percent for the Sports Fund, and 1 percent for the Public Safety Fund.

As the bill made it through the commissions of the lower house without dramatic controversy, we envision a rather quick passage by the Congress as a whole in the near future-this is the general consensus of those close to the situation. At that point, the Senate will remain the project's only barrier.

There are those who believe it is the Senate that will prove to be the bill's kryptonite. Such a person will almost certainly reference how a Senate-led proposal to ban all gaming-which arose around the same time Lula instructed his ministers to form a plan for regulation in 2008-signifies staunch opposition of the Senate to gaming regulation in general.

It is our belief that people making this argument misinterpret the significance of the event. In fact, this proposal was led by just one man, Jarbas Vasconcellos, who by some local analyst accounts was most interested in using the gaming issue as a medium to berate fellow party members and publicly redefine his own alliances as we enter into an election year.

Regardless of personal motivations or potential posturing, interest in this proposal (along with Vasconcellos' voice on the matter) simply fizzled out very quickly-thus reflecting that the Senate is not likely to hold a preconceived negative bias on the issue; and perhaps it is even to the contrary.

Final Word
Federal police stings and major scandals between 2003 and 2007, while politically painful and show-stopping in terms of finding an approach to gaming regulation in Brazil, did a number of things to benefit the cause.

First, it brought the control away from the courts and into the government, a move that proved crucial to Peru in legitimating its industry.

Second, it purged a large number of illegitimate operators and corrupt government officials from the system. Finally, the overnight disappearance of hundreds of thousands of jobs generated anger in the voting base, amplifying their pro-regulation stance at a crucial time where public support was needed for the administration to become successfully proactive on the issue.

These three events collectively enabled, if not demanded the administration to take further action, the same action they aimed to take in 2003 that was quashed by scandal, fear, party politics and the poor approval rating that signified a hostile voting base.

Circumstances have changed significantly since that time, and the administration-presently enjoying an 84 percent approval rating with 70 percent of the public in support of a regulated gaming scenario-has been able to rally the Congress on a pro-regulation initiative that has not stopped gaining momentum since its inception in March 2008.

Furthermore, 2010 is an election year, and Lula made a platform promise in 2003 to fix gaming during his term. He has not yet accomplished this. Questions of legacy aside, it seems logical that it would be like striking gold for the PT to come fresh off of a big win as October elections rolled around. Successfully regulating gaming-specifically in a way that eliminates the necessity to resort to a highly controversial CSS tax to underwrite health spending-would be that gold mine.

But for as much support as the election year may bring, it could prove equally as detrimental. Major scandal implicating high-level officials-be it a gaming scandal or some other-has a habit of popping up at inopportune times for the administration, and could derail efforts. Lula, to some extent, has hedged this by refraining from addressing the issue directly and supporting the process thus far only through his ministers, but enough dirt can weigh anything down. That would be the opposition's gold mine.

There are additional systemic risks lurking in the political spectrum for 2010. We'd need another article to break it all down, but analysts call this a defining year in Brazil's multi-party political system. Party rifts and revised political identities/loyalties, especially within the ranks of those historically loyal to Lula's Worker's Party, could spell trouble as politically motivated defectors try to find a voice. Luckily, we have the experience of Vasconcellos to remind such people that the gaming issue may not be the most advantageous channel for such purposes.

Another wild card is the media, which to date has really yet to weigh in on the issue and is certainly one of the larger swaying forces in the country. Industry associations are calling legislation on the books as early as next March. This is not an impossible estimate by any means. Conservatively speaking, however, it will be wise to assess the media response in the coming weeks, as the bill gets ready to be put to vote in the general session of Congress. The level to which news reports accurately reflect the material issues being discussed on gaming regulation is likely to be a leading indicator as to the overall accuracy of that prediction.

While nothing is cast in stone at this juncture, certainly the future of gaming has never looked so near for Brazil.   

Dino Guiliano is principal and managing director of DGSA International Strategy Advisors in Costa Rica. DGSA and its regional affiliates provide strategic and tactical resources supporting the international growth initiatives of the world's premier gaming and hospitality firms.

Daniel F. Sanson is a seasoned Brazilian lawyer and the CEO of BetConsult, a DGSA regional affiliate based outside of Sao Paulo, Brazil. BetConsult offers expert advice to foreign and domestic gaming clients on matters of corporate law and taxation in Brazil, and offers general corporate advisory services for foreign gaming firms looking to do business in Brazil and surrounding markets.

To receive free, timely updates and analysis on Brazil's evolving regulatory situation, inquire at BRAZIL@dgsa-international.com.

By GGB Staff   Thu, Nov 12, 2009

Leading slot manufacturer International Game Technology has named Philip G. Satre chairman of its board of directors, effective December 1.

Satre replaces former president and CEO TJ Matthews, who will remain on the board but will step down as its chairman. Matthews was replaced as the company's CEO earlier this year by Patti S. Hart.

"Phil Satre brings a tremendous wealth of gaming industry experience and, most importantly, a customer's perspective to his new position, which will benefit IGT now and for many years to come," said Hart. "I have been very impressed with Phil's contributions since he joined IGT's board earlier this year, and I look forward to working with him as we move forward to accomplish the company's goals and objectives.

"In addition, I am pleased that Mr. Matthews will continue to serve on the IGT board. We are fortunate to have the combined experience and knowledge of both Phil Satre and TJ Matthews."

Satre has served on IGT's board of directors since January. He also is chairman of Nevada Energy, Inc., and serves as a board member of Nordstrom, Inc., Rite Aid Corporation, Stanford University and the National World War II Museum.

Satre retired from Harrah's in 2005, after eight years as chairman and 17 years on the operator's board of directors.

"I am very excited about the opportunity to help lead a great company into the future," said Satre of his appointment. "Despite the challenges facing our industry today, I am very optimistic about the future of gaming and the company's future. I look forward to working with my board colleagues and with Patti Hart and her senior team to lead the company into the future."

By GGB Staff   Thu, Nov 12, 2009

Eastern European gaming operators, still recovering from the double whammy of the closure of the Russian casino market and the surprise shutdown of casinos in Ukraine, gathered in Sofia, Bulgaria, last month for a summit on how to address their collective challenges.

The second annual Eastern European Gaming Summit, coupled with the Balkan Entertainment & Gaming Expo trade show, focused on ways to overcome the current economic challenges through marketing expertise, new technology, and branching out to new markets.

The summit-sponsored by the Bulgarian Trade Association of the Manufacturers and Operators in the Gaming Industry, Spectrum Gaming Group, Bulgarian slot manufacturer Casino Technology and several media partners-featured two days of professional panels followed by the "EEGS Masterclass," a two-day workshop covering effective slot operations and casino marketing.

The conference offered operators in Eastern Europe insight on how to maximize profit during the worldwide economic downturn. At an opening-day panel, regulatory and operational representatives said casino operators in the Balkans and nearby regions must be flexible in reaching out to new markets, including online gaming operations. "Because of the recession, people are changing attitudes about online betting," said Andre Wilsenach, chairman of the International Association of Gaming Regulators.

Others in the conference sessions pointed to technology, acquisitions and marketing as the key factors that will lead the industry out of recession. "We'll see changes in technology and in the number of gaming companies," said former Nevada Governor Bob Miller, who is chairman of the International Association of Gaming Advisers. "In an economic downturn, the one with cash is king," he said, noting that mergers and acquisitions are likely to have the dual purpose of allowing some companies to shed under-performing properties and others to enter the industry at a low startup cost.

There were several marketing panels, including two presentations by marketing expert Mike Wallis, managing director of International Casino Monitoring Ltd. in the U.K., and Nick Middleton, marketing director for Storm International.

There were 279 registered participants for the conference, which doubled the attendance of last year's inaugural event.

The BEGE trade show, though smaller than last year (52 exhibits compared to 72), drew praise from the 1,268 registered attendees. Exhibitors, including slot manufacturers, ancillary equipment providers and a new section of amusement equipment displays, reported brisk business and good sales. There was increased visitation from central European countries such as Romania, Serbia, Slovenia, the Czech Republic and Greece, according to initial reports.

Milena Tsankarska, marketing manager for BEGE, said both the conference and the trade show were successes.

"The initial comments we had indicated that the events were much better organized and more interesting this year, and that even in these days of crisis, the show and conference had real success," Tsankarska said. "We had confirmations from most of the companies that they will participate on BEGE 2010, which will take place October 4-6, 2010. Also, we had some new companies that were interested in the show, and we believe they will participate in next year's BEGE as exhibitors."

One highlight of the event was the awarding of the second annual BEGE Awards. Among the winners were Alfastreet Gaming Instruments, which won the new-casino product award for its R8 multi-player roulette; Casino Ritz as most successful new casino brand; Euro games Technology's Vega Vision+ as best new video slot game design' WMS Gaming's Hot Hot Super Respin as most innovative video slot game; Casino Technologies' Tangra Touch for best industrial design; and MEI for most effective customer support.

By GGB Staff   Wed, Nov 11, 2009

Just one month after the National Indian Gaming Association sent a letter to President Barack Obama asking him to appoint a new chairman of the National Indian Gaming Commission, the current chairman, Phil Hogen, is stepping down. The letter was a result of a unanimous decision by the NIGA board asking that Hogen be replaced as soon as possible.

Hogen, an enrolled member of the Oglala Sioux Tribe of the Pine Ridge Indian Reservation in South Dakota, has been the chairman of the NIGC for the past six years. His tenure has been controversial, as he has sought to implement minimum internal control standards and technical standards for Class II gaming machines, and to extend the regulatory authority of the commission to all casino gaming in Indian Country. Tribes have battled with him at every step of the way. In many cases, legal challenges to NIGC rulings have resulted in victories for the tribal positions.

George Skibine, a career employee at the Bureau of Indian Affairs, is replacing Hogen on a temporary basis. Skibine formerly was acting principal deputy assistant secretary at the Bureau of Indian Affairs. By law, Skibine could serve as acting chairman of the NIGC for up to 120 days.

Tribes have welcomed the arrival of Skibine, who has deep relationships in Indian Country. J.R. Matthews, Quapaw Tribe of Oklahoma vice chairman and NIGA treasurer, said Skibine may change the attitude of the tribes toward the NIGC.

"I think George is a great choice as an interim because at the Department of the Interior he was used to doing consultations with tribes and he did a good job," Matthews told Indian Country Today.

Hogen departed on October 1 and was replaced immediately by Skibine.

By GGB Staff   Wed, Nov 11, 2009

U.S.-based operator Harrah's Entertainment Inc. has signed a letter of intent to manage casinos and hotels for the recently announced, mixed-leisure project Metropolis, to be situated in the central European country of Slovakia.

Metropolis is the latest effort from regional developer TriGranit, which has its headquarters in neighboring Hungary.

The €1.5 billion project will be constructed in phases. The initial phase, with an estimated completion date sometime in 2012, will include a hotel and casino plus two additional hotels, retail shops, a water park and a theme park. Subsequent phases will see additional casinos, conference facilities, luxury apartments and golf courses.

According to the Wall Street Journal, Harrah's potential investment in the project would be less than $50 million.

TriGranit must still obtain government approval for various aspects of the development.

The Journal article notes that Jan Jones, senior vice president of communications and government relations at Harrah's Entertainment, said it could be a while before ground is broken.

Metropolis will be built on a 30-hectare site just south of Bratislava, the Slovakian capital, near the borders with Austria and Hungary. Vienna, 70 kilometers away, is a 45-minute drive, and Budapest at 200 kilometers is about two hours. The 220-kilometer primary catchment area has a population of 29 million. However, the development is being touted by TriGranit as a destination capable of attracting visitors from all over the world.

The project is the latest example of a trend in this region toward huge developments that combine family-oriented amusement and cultural attractions, business meeting facilities and casino resorts.

In Hungary, three such projects have been announced. The €1 billion King's City is planned for the shores of Lake Velence, about 200 kilometers from the Metropolis site. The €1.3 billion Dream Island would occupy Margaret Island in the middle of the Danube River between the two sections of Budapest. And EuroVegas, which is being developed just over the border from the Metropolis site, will eventually feature five casinos-including a Hard Rock International property with 600 hotel rooms, 200 gaming tables, 3,000 slots, a 20-table poker room and an assortment of amenities.

In relatively nearby Romania, Leisure Dome will include an 86,000-square-foot casino, a 600-room hotel and a variety of business and pleasure elements, including an indoor snow ski slope. Even farther afield in Europe, in Spain, the ambitious 2,700-hectare Gran Scala project, with its 32 casinos and numerous leisure and business amenities, will dwarf the above-named efforts.

TriGranit is a real estate investment, development and management company with operations in seven countries in Central and Eastern Europe. The company has been involved in Slovakia since 2000, beginning with development of the Polus Center, that nation's first American-style retail and entertainment hub, in Bratislava.

Harrah's has had difficulty in establishing a significant presence in Europe. An aborted deal in Slovenia, uncertainty and delay in Spain and the disappointment of U.K. casino reform has stymied the company at practically every turn.

Now, Harrah's is counting on the vacuum left by the closing of the Russian and Ukrainian markets to give a push to this new attempt.

Jones told the Journal, "Since all of Russia gambling closed down without the new gambling districts opening, there's a belief that there's real opportunity to build new projects in surrounding countries."

By GGB Staff   Wed, Nov 11, 2009

Optimism over the future of Macau was deflated substantially last month when the Chinese government backed off its relaxation on travel to the SAR and imposed new and onerous visa restrictions.

Just days after the Macau government announced it was considering raising the gambling age from 18 to 21 and imposing a cap on the number of table games offered across the city, the Beijing government announced it is re-imposing the visa restrictions it set on the province of Guangdong. Residents of Macau's biggest markets were recently permitted to visit Macau once a month after more than a year of being limited to one visit every two months. The relaxation had spurred gaming revenues to record levels in August and September, reversing an 18-month decline.

But the new restrictions, which rolled back to the once-every-two-months level, should slow the growth of the city, which has seen the debut of several new casinos in 2009, including the massive City of Dreams, owned by Melco Crown Entertainment.

The Guangdong government claimed that the policy had never changed since the restrictions were announced, but it is clear that residents have been able to visit Macau more frequently for the past several months.

Observers said Beijing was once again alarmed by the overheated growth of gaming revenues in Macau over the summer, and that this latest move is yet another attempt to control the growth to avoid perceived "social problems" created by gambling. Several years ago, a handful of government officials in Guangdong were caught embezzling money to gamble in Macau and were punished severely.

"We are getting a U-turn on the visa restriction policy," Credit Suisse analyst Gabriel Chan told MarketWatch. "It's a sign that the government
doesn't like these kinds of growth rates and they are exploring ways to cool down the market."

Earlier that week, a meeting between Francis Tam, Macau's secretary for economics and finance, and representatives of the six casino operators in Macau resulted in other possible gaming restrictions.

Tam told the operators the government wants to raise the legal gambling age from 18 to 21, matching most of the other developed gaming jurisdictions in the world. While the change would not impact the large casinos, the companies operating slot parlors are likely to see some impact.

For Wynn Resorts, it's not an issue, according to the chairman.

"This would have absolutely no effect on us," said Steve Wynn in an interview with Bloomberg TV. "A casino is no place for children. Someone should be earning their own living before they think about gambling."

In addition to raising the gambling age, Tam said the SAR is drafting a law prohibiting slot machines from residential areas, which could further impact companies that operate the slot parlors. 

Another measure being considered by the government is one that would cap the number of table games in Macau. The restriction would be designed to curb growth and to ensure the residents of Macau have first option at the jobs.

Most analysts see the effort to curb tables as a way to control supply.

Macau gaming stocks fell after the restrictions on ages and tables were announced, but quickly rebounded.    

But the re-imposed visa restrictions had a more deflating effect, with stocks dipping again on the revelation.

By GGB Staff   Wed, Nov 11, 2009

Bermuda Premier Ewart Brown recently told the BBC that if reinsurance companies based on the island nation are barred from doing business in the U.S., then other ways of raising money would have to be considered, including the creation of a gaming industry or even the introduction of an income tax.

The pro-gaming element suffered a defeat just three months ago, when a bill was defeated that would have allowed cruise ships to operate their casinos while in port. However, the cabinet is still studying an independent report from the Innovation Group on the potential impact of land-based gaming. The $300,000 report was initiated at the request of local hotel owners a year ago.

Brown's comments to the BBC, though primarily in defense of the local reinsurance industry, instantly stirred up Bermuda's anti-gaming forces.

According to the Royal Gazette, Shadow Finance Minister Bob Richards criticized Brown for trying to "scare Bermudians into accepting casino gambling."

Richards, talking to the Gazette about Brown's BBC interview, said that the premier's "pro-gambling views are well-known," but emphasized that establishing a gaming industry is not a magic solution.

"Gambling will not, on its own, solve the crisis in the hotel sector. Neither will it, on its own, liberate the hundreds of millions of dollars of investment funds that are required to redevelop our accommodation offerings for our visitors. Casino destinations have not been immune to this recession."

By GGB Staff   Wed, Nov 11, 2009

Last month, U.S. Bankruptcy Judge A. Jay Cristol announced his plans to appoint an examiner to organize the sale of Fontainebleau Las Vegas. Penn National Gaming bid on the resort last month, but reports indicate that the offer was for less than $300 million. Fontainebleau is valued at around $3
billion.

"The court believes it is more expeditious to proceed with any potential sale as soon as possible rather than to wait until October 28, when a trustee, if appointed, would be required to expend a significant amount of time to obtain counsel, familiarize himself or herself with this case and effectuate a sale," Cristol said in an order last month.

Penn National is considered the stalking horse bidder in the potential sale, meaning that the company has set the minimum price. Other companies can offer more, but the fact that the project still requires approximately $1.5 billion to complete construction must be taken into consideration.

"There's a lot of money left to spend, and I think anyone's price would reflect that," Penn National lawyer Richard Mason told the Miami Herald.

In its bid, Penn National said it would provide $16 million to finance the costs of Fontainebleau's bankruptcy. By choosing to appoint an examiner in the case, Judge Cristol decided to reject lenders' bids to move the case from Chapter 11 to Chapter 7.

In a Chapter 7 bankruptcy, Cristol would have to appoint a trustee to oversee liquidation. Cristol said appointing an examiner would be more cost-effective, and would also clear up the conflict between Fontainebleau and its creditors, who have been unable to reach a compromise over financing for the property.

Penn National is interested in purchasing Fontainebleau because the gaming company has no presence in Las Vegas, and has the capital to purchase a property, but wants to limit its exposure in the costs to complete the property.

But even as Penn makes its offer, analysts agree the resort is worth very little compared to the amount it needs to finish construction. The disparity in numbers is striking:
    
• Developers have spent approximately $2 billion on the project thus far;

• subcontractors have yet to be paid about $375 million for work done in recent months; and

• the resort would need much more money to be completed.

"Fontainebleau's not worth anything until you finish it," Penn National CFO Bill Clifford told analysts at a September conference.

By GGB Staff   Thu, Nov 12, 2009

Last month, Steve Wynn announced that country superstar Garth Brooks will be performing at Wynn Las Vegas' Encore Theater 15 weekends a year for the next five years, beginning December 11. All tickets are $125, a price that Wynn and Brooks settled on to curtail scalpers, and go on sale October 24.

"I told him he couldn't afford me," Brooks said at a press conference announcing his residency.

"I was wrong."

Brooks agreed to the deal after Wynn promised him a private jet to fly to and from his home in Oklahoma, where he is raising his three daughters. He will fly to Vegas to perform one show Friday, two shows Saturday and one show Sunday before flying back to Oklahoma to be with his family. Future dates will be announced quarterly as to avoid scheduling conflicts with Brooks' family obligations.

Brooks said he plans to perform solo with just a guitar to accompany him, but he wouldn't rule out bringing his band or his wife, country singer Trisha Yearwood, out on stage at some point.

By GGB Staff   Thu, Nov 12, 2009

International Game Technology and AC Coin & Slot last month announced a restructuring of the companies' longstanding relationship. Under a new agreement, IGT has purchased the distributorship for new IGT machine sales in Atlantic City and the Caribbean from AC Coin & Slot for $20.6 million, including $10.6 million in cash consideration. Also, IGT and AC Coin have amended the terms of the AC Coin & Slot proprietary game agreement.

The original 1983 agreement between IGT and AC Coin & Slot granted AC Coin & Slot exclusive rights to distribute IGT games in Atlantic City. The agreement was later amended to include the Caribbean. In 1994, the two companies entered in to an agreement that allowed AC Coin & Slot to utilize IGT base machines in all of its proprietary bonusing slot games. Several years ago, IGT challenged the arrangement in court, with the deal being reaffirmed.

Under the new agreement, IGT will now have direct access to sell games to casino customers in Atlantic City and the Caribbean. The combined transactions will provide AC Coin & Slot with the resources and opportunities to develop the core of its business and continue future growth and product development.

The new terms enable AC Coin & Slot to sell proprietary games outright, as well as offer lease-to-own, or a traditional lease structures. The company will retain the right to utilize IGT's base machines and platforms to continue to develop its future product offering. AC Coin & Slot is now also free to seek alternative platforms to develop games in certain other gaming jurisdictions worldwide, and to seek out new partnerships in the Class II, and central determination game markets.  

"This restructuring provides IGT the opportunity to sell direct to our casino customers in Atlantic City and the Caribbean," said Craig Billings, vice president of corporate finance and investor relations for IGT. "We look forward to working directly with these valued customers and to supporting AC Coin & Slot as they continue to seek new efficiencies and growth opportunities."

"This is a true win-win for both companies and reflects the dramatic growth and evolution AC Coin & Slot and IGT have experienced in 25 years since the original agreement," said Mac Seelig, president and founder of AC Coin & Slot. "We are incredibly excited to embark upon this new phase of growth."

By GGB Staff   Wed, Nov 11, 2009

A bill sponsored last month by U.S. Senator Byron Dorgan of North Dakota would spell relief for many tribes whose aspirations to put land into federal trust has been put in limbo by the U.S. Supreme Court's Carcieri v. Salazar decision in February. Dorgan calls it a "technical amendment" to the Indian Reorganization Act of 1934.

Dorgan's legislation would add wording to the act that spells out how the Department of the Interior puts land into federal trust. The decision was the result of a case involving a Rhode Island tribe, the Narragansett, that wanted to put 32 acres into trust and was opposed by the state government (Rhode Island's governor, Donald Carcieri, being the "Carcieri" in the case). The high court ruled that tribes recognized by the federal government after 1934 can't put land into trust. This potentially could affect dozens of tribes.

Dorgan, chairman of the Senate's Indian Affairs Committee, has predicted dire consequences for tribes if the decision isn't modified, and has been under considerable tribal pressure to do something to modify or clarify it. Tribes refer to this legislative remedy as the "Carcieri Fix."

"Inaction by Congress could significantly impact planned development projects on Indian trust lands, including the building of homes and community centers; result in a loss of jobs in an already-challenging economic environment; and create costly and unnecessary litigation," he commented.

He has also said that the existing situation creates two classes of Indian tribes, which he calls "unacceptable."

Some tribes and Indian law authorities worry that the decision could endanger land that has already been put into federal trust for tribes that were recognized after 1934. Others say that existing law protects land put into trust, even if that process was made illegal by this year's court decision. Dorgan's bill specifically addresses this issue. It would ratify all lands that have been put into trust since that year and clarify that the Secretary of the Interior has the power to do that in the future.

By GGB Staff   Wed, Nov 11, 2009

While founder Stanley Ho lies in a Hong Kong hospital recovering from August brain surgery, SJM has moved forward with the opening of new casinos-L'Arc last month, Oceanus by the end of the year.

In a bid to fund operations in the midst of the worldwide economic downturn, SJM last month announced it will sell convertible zero coupon bonds to raise US$258 million. In the face of Asian IPOs by Wynn Resorts, Las Vegas Sands and possibly MGM Mirage, it's likely that SJM wanted to get the jump.

"Investors may be concerned that upcoming IPOs are not doing that well and Wynn's IPO may also affect the overall perception of the entire sector," said Gabriel Chan, a Hong Kong-based analyst at Credit Suisse Group AG. "SJM may have wanted to raise funds before that."

Ho, meanwhile, hasn't been heard from, even though his family insists he is recovering normally. But even reports that he is moving from one hospital to another were headline news in Macau. And because there is no succession plan, investors are understandably nervous about the 88-year-old's health.

"Stanley's health condition is a big concern for some investors, even though the company itself is run by a team of professional managers," Chan said. "The question remains that if Stanley's not around, would relationships with junket operators in Macau be lost? If Stanley comes out of hospital looking healthy that would help the share price."

By GGB Staff   Wed, Nov 11, 2009

Recent moves by Australia's James Packer and companies controlled by him have got observers wondering as to possible actions the billionaire might be planning. Packer has increased his stake in Crown Casinos to 40 percent, giving rise to speculation that he could be planning to take the company private.

Although much has been made of the huge losses suffered by Crown in its U.S. ventures, the company is still stronger than many, according to a Bloomberg article. In August, Crown reported net debt of 0.9 times earnings before interest, tax, deprecation and amortization. That compared with 4.6 times for Wynn Resorts, 8.4 times for MGM Mirage and 9.9 times for Las Vegas Sands.

"We see Crown's strong balance sheet as a significant advantage in the current environment and believe it has the potential to provide substantial growth opportunities," Harry Theodore, an analyst at Royal Bank of Scotland Group Plc, said in an October 12 report that recommended the stock as a buy.

Crown shares have been trading between A$8.50 and A$9 a share in recent weeks, more than double their 52-week low of A$4.18.

Stephen Bartholomeusz of Business Spectator acknowledges the going-private scenario but sees another possibility in a further expansion of Crown in the direction of troubled Australian casino and betting firm Tabcorp.

Bartholomeusz believes that Tabcorp's "crisis-level" share price of A$7 reflects the future loss of a crucial gaming license in 2012, increased competition from online betting operations and higher fees in the case of another license, and an investment of A$500 million in its Star City casino. Crown and Packer could add Star City in Sydney and Tabcorp's Queensland casinos to Crown's Melbourne and Perth casinos, instantly doubling the number of states in which the company is active. 

"There are a hell of a lot of companies in trouble and someone like Crown can do well out of it," Cameron Peacock, an analyst at IG Markets in Melbourne, told Bloomberg. "They have recapitalized themselves and could be looking to buy some distressed casino assets at distressed prices."

By GGB Staff   Wed, Nov 11, 2009

In the next phase of its expansion in Black Hawk, Colorado, Ameristar Casino Black Hawk celebrated the grand opening of its 536-room hotel on October 8. Though the gaming and hospitality market has suffered during the recession, Ameristar CEO Gordon Kanofsky said his company still believes in the market.

"Ameristar remains very enthusiastic about Black Hawk," Kanofsky said in a statement. "Our $235 million investment in this expansion will generate more local economic development by attracting guests who would be spending their leisure dollars elsewhere."

By GGB Staff   Thu, Nov 12, 2009

Representatives from the National Center for Responsible Gaming and the Task Force on College Gambling Policies spoke to a broad audience this morning about incorporating gambling disorders into existing campus health considerations and the importance of creating science-based policies and programs to address gambling on campus. The breakfast, hosted by the Morgridge College of Education at the University of Denver, drew a wide range of university stakeholders from institutions across the Denver metro area-from administrators and faculty to graduate counseling students, and from treatment providers to student leaders.

The Task Force on College Gambling Policies last month released its "Call to Action" report, which details 10 recommendations higher education institutions can use to create tailored, science-based policies and programs addressing gambling-related harms on campus. The task force was created by the Division on Addictions at the Cambridge Health Alliance, a teaching affiliate of Harvard Medical School, with funding from the NCRG. Dr. Karin Dittrick-Nathan, assistant clinical professor of child, family and school psychology in the Morgridge College of Education at the University of Denver, is a member of the task force.

"Gambling disorders still are not widely understood or addressed on college campuses, as demonstrated by the fact that only 22 percent of U.S. colleges and universities have policies on gambling, according to a Harvard study," said Dittrick-Nathan. "The task force's recommendations provide higher education institutions a set of guidelines to begin discussing this issue and developing policies and programs about gambling that are appropriate for their individual campuses and promote student persistence in school."

The breakfast at the University of Denver was part of the NCRG's annual road tour, which this year visited Black Hawk/Central City and Denver, Colorado. In addition to the breakfast, the trip included a presentation to the Colorado Limited Gaming Control Commission and meetings with members of the Colorado Gaming Association and the Problem Gambling Coalition of Colorado, state government representatives, addiction treatment professionals and other stakeholders.

"Each year, the NCRG visits gaming communities to share information about the latest research on gambling disorders," said Alan Feldman, NCRG board member and senior vice president of public affairs for MGM Mirage. "These tours help advance public education about gambling disorders and responsible gaming, promote responsible gaming practices and raise awareness about the importance of limiting gambling-related harms. We also help raise awareness among key stakeholders of how research is being translated into science-based, practical programs, as well as resources that can help them in their everyday work."

This is the NCRG's third annual road tour. Previously, the NCRG's road tour has visited Chicago; Des Moines, Iowa; Kansas City, Missouri; Las Vegas and Philadelphia.

By GGB Staff   Wed, Nov 11, 2009

A decision by a three-judge panel of the Ninth Circuit Court of Appeals forced the California Gambling Control Commission to begin issuing licenses that Governor Arnold Schwarzenegger has maintained that the state was not required to release. The state currently has an estimated 62,000 slot machines, second only to Nevada.

On October 5 the commission awarded 3,547 licenses to 11 tribes chosen by a drawing. Most of the tribes are in Northern California. The largest number of licenses went to Big Sandy Band Rancheria of Mono Indians, for 1,650 machines. The only Southern California tribe to apply for licenses is the Cabazon Band of Mission Indians, which asked for an additional 44 licenses for its Fantasy Springs Resort Casino.

The state had argued that the 1999 compacts signed by 61 tribes and under which most gaming tribes still operate set an upward limit of 32,000 slots. Many tribes argued that the number was well over 100,000. Such unclear sections were rampant in the 1999 compacts that were written in a matter of weeks instead of months under former Governor Gray Davis, and which ever since have created problems resulting from uncertain language.

The governor had hoped that the panel would delay the order until his appeal to the full court is heard in February. He is still confident of eventually winning the appeal, according to a spokesman. But the panel didn't buy his argument that releasing additional machines would cause irreparable harm.

Several tribes that are entitled by their compacts to install up to 2,000 slots, but never reached that number because of the state's insistence that there were no more licenses to release, plan to begin installing hundreds of slots as soon as possible.

By GGB Staff   Wed, Nov 11, 2009

The history of gaming operator Gala Coral reads like a chapter on financial practices of the past decade. Born in a management buyout, raised on ambitious acquisitions and ultimately owned by a private-equity consortium, the group is likely to end half in the hands of lenders.

The private equity companies that own Gala Coral are said to be prepared to trade lenders half the company in exchange for writing off loans worth £540 million-about $860 million.

The deal would see owners Candover, Cinven and Permira relinquish up to 50 percent of the bingo, casino and betting operator to a group of lenders headed by investment groups Intermediate Capital and Park Square, according to the Times. Negotiations are under way, with a result expected by the end of October.

The three private equity firms put an additional £125 million into Gala Coral last year to relieve some of the pressure, according to news source EGR.

Gala Coral has been stuck servicing a total debt of £2.6 billion at a time when revenue has been hit by the poor economy and a smoking ban. The company has closed half a dozen bingo clubs in recent months, and now faces an increase in bingo tax, from 15 percent to 22 percent.

In an interview with U.K. news site Bingo Hideout in August, Gala Coral chairman Neil Goulden said, "Of course we want to strengthen our weaknesses. We are at the moment a great company with a bad balance sheet. Debt is not necessarily a bad thing, but ours is maybe too high for a modern climate. We need to clear some of the debt so that we can free up cash flow. We have £250 million in the bank but we can't spend it-and we need to be able to do so, so that we can grow the business."

Gala Coral has a new business plan by which £550 million would be repaid over the next three years, as well as £500 million paid in interest, according to the Times.

By GGB Staff   Wed, Nov 11, 2009

The casinos of Grand Korea Leisure have done well this year-so well that the operator's Seven Luck Casino Gangnam, one of three that carry the Seven Luck brand, has added a third floor of gaming.

The new 13,550-square-meter third floor has five VIP rooms and a general gaming area with 19 tables, reports the Korea Times.

Gangnam has also made changes to its other two gaming floors, most notably the addition of a dedicated area for poker on the first level. The casino now operates a total of 74 tables and 112 slots.

Grand Korea Leisure is now the leading operator in South Korea in terms of revenue and total visitors. Gangnam has led the company and is expected to provide over half of the anticipated 2009 revenue of KRW400 billion-about $346 million.

Mirae Asset has been selected to manage the IPO of Grand Korea Leisure. The offering will attempt to sell 49 percent of the currently 100 percent-state-owned company. The first 30 percent of shares will be offered in November, with the remaining 19 percent following next year.

The news at Kangwon Land Casino is not so upbeat, despite reports of record profits.

The only casino where Korean citizens are allowed to play is facing increasing pressure in the form of lawsuits, most of which claim the casino ignored its own betting limits and entrance bans at the expense of compulsive gamblers.

Korea Times cites Kangwon Land and the Ministry of Culture, Sports and Tourism in reporting the casino has been sued 23 times since it opened in October 2000, for alleged combined losses of over KRW53.8 billion. In a number of cases, the court has ruled against the casino.

"The fact that Kangwon Land keeps losing in its court cases, despite its all-star lineup of attorneys, shows that the casino has been relying on murky schemes and irregularities to entice more and more gamblers and squeeze money out of their pockets," said independent lawmaker Song Hun-suk.

"The problem is that the casino has been bending its own rules for money, allowing gamblers to bet over the legal limit and being flexible about the entrance ban placed at the request of the families of pathological gamblers."

By GGB Staff   Wed, Nov 11, 2009

Beneficial Holdings, Inc. has abandoned its bid to acquire international gaming operator Thunderbird Resorts, after Thunderbird announced it had launched a public offering and private placement of up to 75 million shares of its common stock.

However, just one day after making public the cancellation of the deal, Beneficial announced it had contracted for the purchase of seven gaming locations in Nicaragua, from operator Inversiones Nacionales Capri. And the following day, the company said it is retaining three consultants to assist in locating live gaming opportunities in Argentina, Columbia and Peru.

Beneficial Holdings began its move into Central American gaming in early July, with the appointment of L. Carolina Navarro of Managua, Nicaragua, as president and COO. By mid July the company announced its first acquisition of an existing gaming property, in Nicaragua, by wholly owned subsidiary Grupo Beneficial.

At the time, Navarro said in a press release, "This is just the very beginning of our business plan. We are presently studying and pursuing additional negotiations in Central America with the ultimate goal of joining the ranks of casino companies such as Thunderbird Resorts, Princess Casinos International and Star City Casinos, which successfully operate in Managua."

The Thunderbird deal would have given Beneficial an instant presence in Costa Rica, Guatemala and Panama, an increased offering in Nicaragua, plus properties in Peru, the Philippines and Poland.

In a press release, Beneficial said its original plan was to seek opportunities in Central America only. However, factors including "political turmoil" in Honduras and reductions in allowed operating hours and numbers of slots for casinos in Costa Rica had "played a role in expanding" the company's focus.

Beneficial says they are already in discussion with an investor group that has a majority holding in a "multi-location gaming parlor network with assets in Argentina, Columbia and Peru." Beneficial wants to obtain a 60 percent stake in the investment group's assets.

The company wants to have over 750 machines operating by the end of Q1 2010. The seven newly acquired gaming venues in Nicaragua raised the number of gaming devices currently being operated by Beneficial to over 200.

By GGB Staff   Wed, Nov 11, 2009

The Greenbrier, the historic mountain resort hotel that has been a favorite of presidents and royalty for more than two centuries, became West Virginia's newest gaming venue last month.

After several trial runs and inspections, the West Virginia Lottery Commission gave the resort the go-ahead to open a temporary casino in an upscale lounge. The interim facility-called the Tavern Casino-offers 40 slot machines and 10 table games. Table games include blackjack, roulette and Three Card Poker.

The hotel is offering room packages that include match-play coupons for the casino. Gaming is restricted to the hotel's overnight guests, members of on-property clubs and attendees of conventions and meetings held at the resort.

Those same restrictions will be in place for the permanent casino, a $25 million facility being built under the front lawn, which will retain its traditional flower bed but will add several other landscape features, including a new reflecting pool and pedestrian walkways. The permanent casino will house 320 VLTs and 38 table games. It is expected to be an elegant affair, complete with free nightly champagne for guests.

Anticipated completion for the permanent casino and additional retail and dining facilities is next April. The Tavern Casino will be used for private parties and groups when the permanent casino is open.

Local businessman Jim Justice bought the Greenbrier out of bankruptcy last May. He has pledged to return the resort's Mobil five-star status, lost in 2000 and not recaptured by Marriott, which managed the property until this year.

By GGB Staff   Thu, Nov 12, 2009

Crown Limited Executive Vice President of Design and Construction Todd Nisbet has been appointed to Melco Crown Entertainment's board of directors. Nisbet is replacing John Alexander, who resigned from the board the day Nisbet was appointed.

"We welcome Todd to the board," Melco Crown Co-Chairman and CEO Lawrence Ho said in a statement. "We also thank John for his service over the last three years. His contribution to the company is greatly appreciated."

Prior to joining Crown Limited, Nisbet, a graduate of the University of Nevada-Las Vegas, served as executive vice president and project director of Wynn Design and Development, where he managed project development at Wynn Las Vegas and Wynn Macau. Nisbet also worked at Marnell Corrao Associates for 14 years.

By GGB Staff   Thu, Nov 12, 2009

John Acres, the slot industry legend who invented player tracking and co-founded Mikohn, Inc. and Acres Gaming, has received licensing from the Nevada Gaming Commission for his new venture, a slot content company called Talo Nevada.

Acres, whose previous venture was a game content partnership with former Sierra Design Group executive Rich Fiore, will move forward with ideas such as a slot machine that offers players a choice of volatility for every game. The machine would be able to offer programs with play features similar to games with which players may already be familiar.

"It's kind of like Amazon," Acres told the Las Vegas Sun. "If you like this, you may also like this."

Acres received a manufacturer and distributor license for his new company.

By GGB Staff   Wed, Nov 11, 2009

Henry Sy, the richest man in the Philippines, has raised his stake in PAGOR's Entertainment City, showing confidence in the organization's struggling development on Manila Bay.

Sy, whose fortune comes from shopping malls is Asia, has been committed to the project from the start. Entertainment City is an 800-hectare development on the shores of Manila Bay, which will eventually contain four multibillion-dollar casino resorts. The first project was slated to open in 2010, but none has yet broken ground.

A company controlled by Sy, the Belle Corp., has purchased the entire outstanding capital stock of Premium Leisure and Amusement Inc. through a stock swap. PLAI was a holding company set up by Sy to build and operate the casino resort.

"Along with SM, we have committed to spend P46 billion (US$1 billion) over 25 years. PLAI will be spending at least P8 billion (US$171 million) by 2011," said Belle Vice Chairman Willy Ocier.

"In taking over PLAI," said Belle corporate secretary Bayani Tan, "Belle plans to bring in foreign and local partners to contribute their expertise in managing world-class entertainment and gaming facilities."

Other developers at Entertainment City include Travellers International Hotel Group, a partnership between Alliance Global Group Inc., controlled by real estate tycoon Andrew Tan and Star Cruises of Malaysia, a subsidiary of Genting.

Sources say PAGCOR has backed off its initial demand that the developers build the full casino resort before opening. Aruze has reportedly been planning to operate a much-scaled-back property before committing to invest the full US$1 billion. 

By GGB Staff   Thu, Nov 12, 2009

Former U.S. Secretary of State Alexander Haig resigned from MGM Mirage's board of directors on October 7 after 19 years with the company. It is unclear why the former secretary of state decided to leave the company.

"We are tremendously honored that Gen. Haig has played a key role in the direction of our company for the past 19 years," MGM Mirage Chairman and CEO Jim Murren said in a statement.

"His knowledge and expertise have been instrumental in the success and development of MGM Mirage and we are deeply indebted to him for his contributions to our company."

Haig is a retired general with a wealth of government experience who later became chairman of Worldwide Associates, Inc., a consulting company.

By GGB Staff   Thu, Nov 12, 2009

Shawn Johns and Rick Geiger recently announced the creation of Geiger Johns Associates, LLC, a business consulting firm with background in Native American businesses, such as gaming enterprises.

"After spending over 15 years with technology companies in Silicon Valley and in the Indian and commercial gaming business, this new venture gives me the opportunity to assist businesses both in and out of Indian Country, so that both financial and human capital is delivering what is needed for high achievement and successful enterprises in our various communities," said Johns, who is a member of the Cheyenne River Sioux Tribe.

Johns and Geiger have put together the annual study of tribal gaming operations and the economic impact statement for the National Indian Gaming Association for the last six years.

The pair also has a wealth of online gaming consulting experience.

"I look forward to working with Shawn on helping current and new enterprises demonstrate their value to their communities and stakeholders, as well as working with companies to improve margins, profits and overall performance," said Geiger.

By GGB Staff   Wed, Nov 11, 2009

As construction crews hoisted the massive pieces of the signature "sky park" to the top of Marina Bay Sands, the questions continued to linger about how the owner of the casino, Las Vegas Sands, will earn enough money to pay off the $5.6 billion property. And the same could be said about the other casino, Resorts World on Sentosa Island, owned by Malaysia's Genting Berhad.

Michael Leven, president and COO of Las Vegas Sands, said in August that gaming revenue will account for 75 percent of the total revenue generated by the project. But for that prediction to come true, Marina Bay Sands must attract a huge number of VIPs who are also main customers in Macau.

Regulations have yet to be finalized governing the VIP market, although the junket operators are required to be licensed, something some believe few operators will attempt. The application process is difficult and onerous, so there's a good chance that the recognized junket operators may simply avoid Singapore.

Then there's still a question of whether Singapore will employ the Macau procedures that pay the junket operators a percentage of the money deposited by the junket players, or the Las Vegas model that rewards the junket operators with a percentage of the players' losses.

Leven says he doesn't care which model they use in Singapore, just that the decision be made quickly.

"We have to prepare for these groups," he told GGB News, "and we can't do it unless we know how we're going to operate."

He says Genting would have the advantage if the Macau formula is used, while his company might do better with a Las Vegas formula. But in the end, he just wants the decision made so they can move forward.

But an already-low VIP gaming tax (especially when compared to Macau) may give the Singapore casinos a better financial structure when it comes to the VIP market.

Gaming analyst Edward Ong of Macquarie in Singapore estimated the gaming market in the city conservatively at between S$4.5 billion and S$4.9 billion, which would give each casino a share of more than S$2 billion.

By GGB Staff   Thu, Nov 12, 2009

Paul Pusateri has left his post as executive vice president of the Venetian resort in Las Vegas to become the head of the Palms Casino Resort. Pusateri was recently appointed president and general manager of the Palms.

Pusateri is replacing former president Jim Hughes, who resigned earlier this year. Hughes opened the resort in 2001.

"It is with great pleasure that I announce Paul Pusateri as the newest member of the Palms team," owner George Maloof said in a statement. "Paul's innovation, leadership and years of experience across the hotel and gaming industries will be a tremendous asset for the development and growth of the Palms brand. We're thrilled to have
him on board."

By GGB Staff   Thu, Nov 12, 2009

Temecula, California's Pechanga Resort & Casino recently announced that Bally Technologies will be providing up to 5,000 iVIEW Display Manager controllers at the property. Bally has been testing the controllers at Pechanga since May, and will now commence a large-scale rollout of the iVIEWs at the property. Pechanga said it plans to add iVIEW to each of the casino's gaming machines in the next two years.

"We are looking forward to leveraging our world-class, high-speed infrastructure by adding iVIEW DM's powerful window-management system to create new offerings for both our customers and employees," said Pechanga General Manager Craig Clark. "The successful test has shown us that the customer-service possibilities are far reaching and will enable us to even further elevate our guests' experience and create an interface at the gaming machine to use for advertising, marketing, customer service, game-in-game and floor-wide tournaments."

The iVIEW allows casino operators to display messages on game screens as a picture within a picture. The display manager does not interfere with game play, and is also backwards-compatible.

"The lessons we have learned together in the last six months are priceless," said Ramesh Srinivasan, executive vice president of systems for Bally. "We knew from our experience with over 200 Ethernet floors and integrating our technology into existing games from every manufacturer that this would not be easy. But the reaction of the players, and the fact that Pechanga is moving forward with the large-scale deployment, says it all."

By GGB Staff   Thu, Nov 12, 2009

Sun International is going cashless: the South African company plans to add Atronic's CRYSTAL.net online platform to 877 gaming machines at its 11 African casinos.

"It's a great honor for Atronic that Sun International ahs decided to move to CRYSTAL.net by following the trend of providing the best services to their players," said Atronic COO Thierry Aiglon. "This deal signifies a continued commitment to a trusted business relationship that started in 1991. Combined with CRYSTAL.net, Sun International's existing chip cash cashless solution becomes even more attractive and interactive, and introduces enhanced player communication with a more personalized and compelling multi-media experience to the floor."

CRYSTAL.net is a player-tracking platform that allows Sun International to market to its guests as well as streamline operations by building on the Atronic CRYSTAL WEB platform already in place.

"Staying ahead in today's highly competitive gaming arena, Sun International will install CRYSTAL.net," said Des Whitcher, director of gaming development and slots for Sun International. "This new player-tracking interface will enhance the overall customer experience through stunning graphics, personalized messaging and a variety of bonus concepts. We are installing CRYSTAL.net in all our slot prives."

By GGB Staff   Thu, Nov 12, 2009

Thermal printer supplier FutureLogic, Inc. announced that its "GEN2" printers have been selected by Michigan's new FireKeepers Casino. The new $300 million gaming property, which opened in August, has installed the GEN2 printers on all of the casino's 2,680 TITO games. After previously deploying FutureLogic's GEN2 printers at other properties, FireKeepers credited the printers' features, flexibility and reliability provided as the basis of this exclusive agreement.

FutureLogic's GEN2 printer, together with the GEN2 Universal printer, has won 10 industry awards during the past six years. The printer features "ITH" (Intelligent Ticket Handling) technology to eliminate torn, smeared or crumpled tickets, and offers 50 percent more standard paper capacity than other gaming printers, according to the company.

The printer is server-based ready and supports both SPC (IGT) and GDS protocols. It can also be configured to communicate with multiple hosts simultaneously, such as RS232 or Netplex and USB.

"The Nottawaseppi Huron Band of the Potawatomi Indians, our owners, and Full House Resorts, the managing partner of FireKeepers, placed strong emphasis on making sure that all the technology on our slot machines would be functional, durable and, most importantly, would provide unquestionable reliability for our guests," said R. Bruce McKee, general manager of FireKeepers. "After testing and evaluating samples from all the major suppliers, we chose FutureLogic to be our sole supplier of slot printers."

FireKeepers Director of Slots Steven Senk added, "FutureLogic met their delivery commitment and our budget requirements. The performance of their printers has met our expectations."

"We are pleased that FireKeepers, the hottest new casino in Michigan, has chosen FutureLogic as its exclusive printer supplier based on their past experience with our equipment," said Nick Micalizzi, VP of sales and marketing for FutureLogic. "We regard this agreement as validation that we are providing our customers with the leading-edge technology and unmatched customer support they have come to expect from FutureLogic."

By GGB Staff   Thu, Nov 12, 2009

Pala Casino Spa & Resort recently announced the installation of 10 of DEQ Systems' EZ units-five EZ Baccarat and five EZ Trak.

"Pala Casino Spa & Resort prides itself on the quality of its players and the performance of its operations," said Mike Crenshaw, vice president of casino operations. "EZ Baccarat is now the standard and we are very happy to offer this high performance game to our distinguished clientele."

EZ Baccarat eliminates the commission in the game, thus speeding up the play of baccarat.

"We are very proud to have Pala as one of our EZ Baccarat clients," said DEQ President and CEO Earle G. Hall. "Pala has an amazing amount of baccarat play and EZ Baccarat is sure to be a crowd pleaser."

By GGB Staff   Thu, Nov 12, 2009

Elektroncek, the Slovenia-based producer of auto-roulette and other automated table games under the Interblock brand, has introduced a new brand of multi-player, automated table games to the casino market.

The manufacturer officially launched the casino version of the "Euroblock" brand with "Star Roulette 08," an eight-player electro-mechanical roulette game.

Euroblock is the brand Elektroncek has used for automated roulette games sold in the European arcade market. In the casino market, it is aimed at providing the same quality as the premium-priced Interblock products in products targeted for more price-sensitive markets.

Euroblock Star electro-mechanical roulette is an automated gaming device, consisting of real casino roulette wheel with automatic ball blowout and wheel hood lifting. The electronic and mechanical features give it the appeal of the classic game. It is available in six-player and eight-player versions. Player stations are equipped with either a 19-inch or 15.4-inch LCD screen.

By Sudhir Kale   Thu, Nov 12, 2009

Recently, I was consulting with a large casino company that was preparing to open another huge gaming property. At its existing properties, the company was still grappling with the typical problems associated with customer data analysis-low levels of carded play, outdated customer contacts, inability of legacy systems to talk to one another, problems with data integration, and the like.

Despite these problems, the company decided to sink a few million dollars on customer relationship management systems for their new property. By the time I got on the scene to resolve some other marketing issue, it was supposedly too late to reverse this decision. All I could do was to see if the company's "people side" of the CRM equation was in place.

To assess the situation, I gave 20 key executives a "CRM-Readiness Survey" to fill out, seeking information on how well-defined the customer base was, the relation of employee performance to customer satisfaction, and other factors.

Normally, there is a tendency among top executives to over-estimate the performance of their company when it comes to issues such as customer orientation and customer satisfaction. Discounting this upward bias, I have found that companies that do a good job at customer relationship management and customer retention typically score above 75 percent on my survey instrument. In this instance, the mean score was 58 percent, well below what is adequate for a company to be considered "CRM-ready."

For this company to be considered a serious contender, substantial work would be needed by way of change management. Change management here would have required an overhaul of the company's culture, processes, organization and systems, a task that would have taken a minimum of six months to complete in the hands of a competent consultant and with motivated executives. I conveyed this to the client.

In response to my suggestion, the client wrote, "With regards the CRM recommendations, while I agree we may not be as ready as we should be, we simply cannot delay the roll out of the technical systems while waiting for the people skills to come up to speed."

I would have also liked to have reported that such a response is atypical; unfortunately, this is more the norm.

The fascination of casino executives with CRM software and hardware in absence of CRM-specific skills and capabilities within the organization defies explanation. Would you invest $300,000 in a Ferrari 430 or even $40,000 in a BMW 135i convertible for your son and have the car in your driveway before he even knows how to drive? Would you rather not have him take some driving lessons, gain some road sense, and get his early experience in a beat-up Chevrolet instead? Or would you say, "I simply cannot delay the delivery of the Ferrari while waiting for my son's driving skills to come up to speed?"

Cutting-edge technology is never a panacea for a poor customer experience. I have said this many times before and I will say it again: The technological requirements of most casinos desirous of practicing CRM are fairly modest-in most cases all you will need is a good email program, Microsoft Excel, and the standard SPSS package. Investing in state-of-the-art CRM systems is not going to crate customer delight, and it is not going to triple your theoretical win overnight. At best, technology allows you the capability to optimally execute your CRM strategy. Technology cannot define the strategy for you, let alone execute it.

Before investing further in CRM-related gizmos, executives should ask themselves if any stock has been taken of the customer-relating activities already in place, and whether there is sufficient alignment across these activities. Customer relationship management does not always mean multimillion-dollar data houses and the latest in data mining software. Logs of customer emails, the "black books" of casino hosts, and customer interactions at the call center are also significant CRM enhancers.

Prior to CRM capital expenditure, senior executives need to explore what else they can do to further their customer relationships without spending an additional cent on technology.

CRM has three pillars-people, processes and technology. Unlike a stool, however, each pillar does not equally share the load of CRM activities. Based on my experience, successful CRM requires 65 percent of effort to be devoted to people issues, 20 percent to process design and re-engineering, and 15 percent to technology.

The pro-technology bias in CRM frequently leads to someone in IT becoming the CRM champion for the organization. I have worked a lot with IT executives and have tremendous respect for them. Unfortunately, in most casino organizations, very few IT executives have ever seen a customer in flesh and blood, let alone interacted with him.

Having an IT person head CRM initiatives is like making the architect who designed your hotel building its COO. IT executives can create the infrastructure required for successful CRM; they seldom possess the experience or knowledge to design cohesive CRM strategies.

Change management, the heart and soul of virtuous CRM, should never be short-changed. For sure, change management is painful, even terrifying. It takes a significant amount of time; it can be expensive. Company culture often needs to be drastically altered, people's long-held assumptions need to be challenged.

But these are significant ingredients in the CRM recipe. They create the platform for strategic orchestration of the customer experience. Technology, for the most part, can tell you what your targeted customer desires and the way he or she behaves. Your people and processes make it possible to utilize this knowledge to consistently delight the customer and maximize her lifetime value.

By Frank Legato   Thu, Nov 12, 2009

November. Time once again for all of us to put on our nice little suits (though mine's not quite as little as my cartoon image may suggest) and go to the Global Gaming Expo, to see new slot machines and new thermal printers and new casino-quality playing cards, and patented cameras and patented digital thingamabobs.

And lots of new "solutions." In case you haven't heard, there are no more computer systems, no more slot platforms, no cabinets, no marketing tools. Everything's a "solution" now. Even if you don't have a problem, I'll bet someone is going to offer you a solution this month.

All these solutions, by the way, are also from the "next generation." Everything's the "next generation" now. It's the "next-generation light bulb," and the "next-generation casino buffet chicken-salad mixer," and the "next-generation casino restroom toilet scrubber/fly-swatter/towel dispenser."

That last one has an entire booth at the trade show, by the way.

Anyway, if everything is "next-generation," what the heck are we living in now? Does the current generation really suck? Are we living in the past?

I only bring all this up because of the trade show. I've been covering these things for the past 25 years, and sometimes I feel like I can write the quotes ahead of time, and fill in the names later. Hey, maybe I'll try that. It will save me a lot of work.

"(Insert name), vice president of marketing for (insert company), says the company's G2E display represents a next-generation solution that will revolutionize the gaming industry."

Oh, yeah-did I mention? Everything's a revolution too. Producing a great new technology is just like toppling an oppressive regime, I always say.

I can probably write some boiler-plate stories on "roundtable discussions" at the conference too:

"(Insert name) told attendees that the synergies formed through the partnership will generate EBIDTA and cash flow which, at the end of the day, will form a lasting basis for prosperity in the (slot, or table-game, or donut-making) sector of the gaming industry."

Roundtable discussions are always big on "synergies," and panelists always say "at the end of the day." I don't think anything ever happens in this business before the end of the day. Maybe we should all just come in at 4 o'clock.

Yes, I know-this year the discussions will all revolve around what we can do to extricate ourselves from this steaming heap of an economy. And I was just kidding about the roundtable discussions. At the end of the day, there are going to be some great G2E panels. Like the one I'm moderating. I can guarantee there will be some synergies on that one.

There are other issues that no doubt will be dealt with at G2E. How about smoking bans? That issue's always good for some throw-down, head-knocking, round-table smack-downs.

The issue's back in the news in New Jersey, where some editorialists are blasting the Atlantic City Council for not passing a total smoking ban on casino floors. One South Jersey paper went as far as to say, "There's a tobacco stain on New Jersey's soul."

Come on, now. Don't you think that's a bit harsh? I mean, I quit smoking some time ago, but I still think it's part of the casino atmosphere. I was recently in Bulgaria, where more than half the adults still smoke. Walk around anywhere in that region and it's like Turner Classic Movies.

They're planning to ban smoking there next year. You want to talk panic? Picture a smoking ban in the U.S. being imposed in about 1955.

Personally, I like what Wales Bull Tail, manager of the Little Bighorn Casino in Lame Deer, Montana, said about the subject. The Little Bighorn, since it's on the Northern Cheyenne reservation, is exempt from a statewide indoor smoking ban. When asked about it, Wales said:

"Gambling without smoking is like trying to eat meat without salt."

I want this guy on my G2E panel. I love everything about that quote. And it's not just the joy of combining meat, salt and smoking in a cavalcade of enjoyable unhealthy activities, all tied to the concept of "Little Bighorn." I love the man's name, Wales Bull Tail, and even the name of the town, Lame Deer, which usually means the meat will be available pretty easily.

Well, I must apologize. I seem to have strayed off of my original subject, which was the G2E show.

At the end of the day, does it really matter?

By Caitlin McGarry   Thu, Nov 12, 2009

Product: eReady gaming table
Manufacturer: GPI Gaming

As the gaming floor becomes more and more sophisticated in efforts toward increased efficiency and security, including the growing use of RFID technology for chip verification and tracking, gaming tables have become inundated with electronic equipment such as shufflers, RFID readers and display monitors. All of this electronic equipment in one small space has the potential to create issues such

as equipment overheating, wireless signals interfering and a tangle of cables. Gaming Partners International's eReady gaming tables are designed and built especially to accommodate the electronic equipment that is increasingly required on gaming tables. Drawing upon its extensive experience in manufacturing high-end gaming furniture, as well as its pioneering efforts in developing and implementing RFID technology on table games, GPI has developed an innovative and unique design that allows the electronic equipment to perform at its fullest potential, while maintaining the beauty and function of the gaming tables.

The eReady table combines GPI's custom-built, hand-crafted gaming tables with a unique internal design that is tailored to accommodate each casino's equipment requirements. The eReady tables are designed with a unique form factor,some of which includes specially built
areas for shufflers and bill validators to be securely and ergonomically placed for dealer convenience and comfort.

This new design also includes ventilation openings throughout the table to allow for increased ventilation and cooling of the electronic equipment.

To accommodate the different types of cables associated with the equipment, such as electrical, network and RFID cables, the eReady table is built with a unique system of piping and conduit inside the table base wall to separate and insulate each type. As RFID wiring can be very sensitive and easily pick up disturbances from AC sources or other cables, the eReady table also contains routing grooves under the tabletop that are coated with specially formulated shielding paint to eliminate disturbances and protect these cables. The tabletop is also coated with this shielding paint to ensure the elimination of signal interference with the RFID transmitters.

GPI's eReady table will not only present an optimal environment for electronics on casino table games; it will provide for an efficient and more convenient table for casino personnel.

For more information about the eReady gaming table, visit www.gpigaming.com. 

By Caitlin McGarry   Thu, Nov 12, 2009

Product: PokerTable IQ
Manufacturer: CMI Gaming

The newly formed CMI Gaming is quickly emerging as one of the major players in the gaming equipment supply industry, and the company has expanded its product line from biometric time card and door
monitor systems to the poker room management system PokerTable IQ.

The system tracks poker players with a player's card, which places the player on a list when the card is swiped. From the waiting list, the dealer can move the player to a live game list via a touch-screen interface. Using a customizable formula, PokerTable IQ tracks poker players' points and comps, allowing poker room operators to reward players.

The PokerTable IQ product essentially delivers slot-style marketing to the poker room. CMI Gaming President and CEO Judith Katz says PokerTable IQ is exemplary of CMI's efforts to "provide the technology of tomorrow, today."

CMI recently completed a three-month beta test of PokerTable IQ at the 4 Bears Casino & Lodge in New Town, North Dakota.

"We were proud to work with 4 Bears Casino and we appreciate their assistance in making our product a complete poker room management system, with player waiting list, player tracking and our poker room promotion tool," CMI Vice President Neal Katz said in a statement.

CMI is focusing on providing innovative products to smaller casinos such as 4 Bears, filling a niche that the company thinks is often overlooked.

Mitch Bintliff, the poker room manager at 4 Bears, said that PokerTable IQ is "perfect for six- to 20-table poker rooms like ours. It puts a sophisticated poker tracking system into the price range of small to mid-sized poker rooms."

For more information about PokerTable IQ, visit www.cmigaming.com.

By Randall A. Fine   Thu, Nov 12, 2009

Last month, as part of the Fine Point Group's engagement managing the $350 million Greektown Casino-Hotel in Detroit, Michigan, I gave the Michigan Gaming Control Board an update on the operational performance of the property. It is something we have to do each month as part of the bankruptcy process, and frankly, given how strong our recent performance has been, something I honestly look forward to.

As I stood in the hearing room before the three members in attendance, several reporters, a dozen MGCB employees and several dozen others who I guess find these kinds of hearings entertaining, I regaled them with the performance metrics in which our various creditors were interested-the pickup of another point of market share, our third all-time high operating profit month, and our third all-time high property revenue month.

Feeling quite proud of myself, I opened my presentation up for questions from the board. One, a very highly regarded bankruptcy attorney, spoke right up. To paraphrase, she said, "All these numbers are well and good, but what was the net income for the property?" You know, the actual profit that goes on an income statement?

I stood there, momentarily speechless, and then in the earnest way that sometimes serves me well-and in this case, certainly didn't-said, "I don't know." Not my proudest moment. Remarkably, when I turned to Greektown's stable of restructuring advisors, none of them knew it off the top of their heads either.

I got a fair amount of grief for this-and while some of it was overboard (with one phone call, I was able to get the number), the fact that the CEO of a property didn't know actual profit off the top of his head was something reasonably troubling.

Which got me to thinking: Why is it that I didn't care enough about net income to keep track of it? And the answer was quite simple: Because, in our industry, for whatever reason, people generally don't care what it is!

Which got me to thinking even more (sometimes a good thing, sometimes not...): Qhy don't we care about actual profit? And shouldn't we?

In general, our industry is focused on the EBITDA that a property generates. EBITDA stands for Earnings Before Interest, Tax, Depreciation, and Amortization expenses. Let's go through each of these. Earnings are that "actual profit" that the board member was asking me about. But why do we remove these other four items?  The simple answer is that these other four items aren't driven by property operating performance. Interest represents any payments that are made on debt. Looking at two  properties with the same revenues and cost structure, if one has debt and the other does not, the one without debt will have a higher "net income," even though the facilities generate the same operating profit.

Taxes aren't considered because "they are what they are," and frankly, different capital structures can create different taxation liabilities-even when the property makes the same amount of money. Finally, depreciation and amortization are excluded because they are non-cash charges for prior capital decisions. For example, a $10 million buffet expansion that is depreciated over 10 years shows $1 million in expense during each of the 10 years after its opening.

To summarize, these four categories of expenses are excluded because most observers are attempting to evaluate the performance of current operations, and including these four expenses can blur the impact of capital structure or capital improvement decisions on performance.

Sometimes properties incorporate other items into the EBITDA calculation. For example, at Greektown, we use EBITDAR-the "R" standing for "restructuring expenses." Bankruptcy is a remarkably expensive process, with millions of dollars spent on non-operating items that go away once you exit Chapter 11.

But the question remains, does that make it right that we are so focused on EBITDA (or EBITDAR) at the expense of net income?

Unfortunately, I do not believe the answer is a simple yes or no. The answer lies somewhere in between, and I think a deeper understanding of why can help illustrate a number of the structural problems that have led our industry to its first-ever recession.

I believe it is completely reasonable to exclude interest and taxes from the evaluation of the performance of casino operations. An underleveraged casino will pay higher taxes than one that is highly leveraged, and its interest payments will be higher. Neither affects whether the casino is well- or poorly run. However, the decision to spend on capital improvement is often made by the same management that is responsible for operating performance.

And when they are never charged for that $10 million buffet on their income statement, it can lead them to make sub-optimal investing decisions that inflate EBITDA at the expense of the efficient use of capital. Were operators forced to take charges for their capital expenses in their operating profit measurement, they would likely be far more judicious.

The good news, as I look back at my regulatory performance, is that it actually was most important that I be focused on the metric that measures that I can control-EBITDA(R). I don't control our capital structure and, for now anyway, have limited influence over capital expenditures. Even so, when I speak again before the regulators next week, you can bet that I will know our net income cold.

By GGB Staff   Thu, Nov 12, 2009

When Las Vegas Sands was in serious financial trouble earlier this year, Chairman Sheldon Adelson turned to an old friend to take over the position that had been vacated by Bill Weidner, LVS board member Michael Leven. A longtime "hotel man," Leven was headed US Franchise Systems, Inc., the company he founded in 1995, which developed and franchised the Microtel Inns & Suites and Hawthorn Suites hotel brands. He was previously the president and COO of Holiday Inn Worldwide, president of Days Inn of America, and president of Americana Hotels. He has also served on the board of directors of Starwood Hotels and Resorts and Hersha Hospitality Trust. With LV Sands for six months, Lewen entered a company in financial, operational and developmental distress. He spoke with Global Gaming Business Publisher Roger Gros at his office at the Venetian in Las Vegas in October. The full version of this interview, which includes Leven's comments on Sands Bethlehem, the Las Vegas market, the Macau situation and his relationship with Adelson, is located at   www.ggbmagazine.com as well as a recorded podcast at www.ggbnews.com/podcasts.


GGB: You took over about six months ago, and it's certainly been a tumultuous six months. What was the first task you focused on when you came on board?
Levin: The first was that the company was embarking on a major cost-reduction program and a right-sizing program that we had to complete. As part of that situation, I had to make sure that we had the right people in place, particularly in Asia, to execute those programs, to execute that right-sizing, and to steer those operations-the existing operations in Macau and the future operations in Singapore-in an appropriate direction. We had appropriate management in Las Vegas. My concentration in Las Vegas was to provide assistance in the right-sizing efforts here, but in Asia, we had some difficulties that had to be corrected. So the first was the right-sizing; the second was hiring the right people; third was the balance sheet.

Was the survivability of the company a focus at that point?
I think the reason the stock price was what it was is that people didn't really understand the basics of the company, other than looking at debt covenants and the financial situation, and as a consequence, people attributed a significant amount of risk. Sheldon (Adelson) never believed that the company was really in dire straits, from the point of view of bankruptcy or any of that, and having been on the board for four and a half years, when I came in I really felt that the company was very salvageable, because we had great assets and a cadre of very good people. I just think we lost our way a bit over the last couple of years and made a few mistakes. It happens at every company, and we're not impervious to making mistakes either, but they had to be corrected. We had to right the ship and get on a different course. I think survivability was never really a real concern of mine, it was how we were going to survive.

Are you comfortable now with the debt load the company holds, or are you still working to rectify some of that?
We developed a five-step process to get our company back into a situation where we would be in compliance with our debt covenants, and eventually we'll begin to pay down debt. We have to pay $500 million down in the Macau situation, assuming the IPO does well and gets done. With Singapore opening as well as the future of Macau and when Vegas turns, we'll have appropriate facilities to pay down debt. Also, Sheldon's basic theory of selling the non-core assets-malls, apartments, things like that-will come back into play as the economy turns around. We're in a very good position from a cash flow standpoint going forward. We think we can certainly pay all the interest, but paying it down is going to be a matter of producing more cash than we have.

How is Sands Bethlehem performing? Can you give us a timetable on the hotel and later build-out?
I think, very candidly, the property is not meeting our expectations at the moment. It's generating less EBIDTA than we thought would come out of it at this time. Some of that, actually, is our own fault, because not having the hotel, not having the retail facilities or the conference center, has affected that. It still produces very strong business on weekends; midweek is a problem there. It continues to be a problem. We're adding two more restaurants, opening in November, and we expect now with the new legislation coming in with Pennsylvania and table games, that that will significantly give us more revenue and allow us to really dig down deep to see whether in fact we should finish the hotel and other facilities. I'd say the timetable for that is a little bit away in front of us at the moment.

But obviously that facility was designed for the hotel, for the meeting space and the retail as well.
Once again, candidly-we overbuilt the facility. It's not a slot parlor, per se, it's a lot more. It's a slot parlor as part of a larger complex. The fact that we had to stop that expansion last year I think has hurt Bethlehem's numbers, and we're hoping that with table games coming in that we'll be able to generate enough to regenerate those products.

Let's talk about Las Vegas. Every property here has been feeling the pinch; it's been a brutal year. Room rates and occupancy rates are down; of course, gaming revenue is down. How has the economy been impacting the operations here at the Venetian and Palazzo?
People coming into the hotel is not our problem. We've had three or four very unlucky months in the casino. We've had the play, and our win percentage has not been on a theoretical basis, and as a consequence, it's hurt our results in the last four months. Everybody tells me-I'm only in the business six months-"Eventually you start getting what you're supposed to get. Otherwise, you shouldn't be in this business."

I think generally retail business is obviously pretty poor, and it's been poor everywhere. Our group business was not up to expectations, but our future bookings-our July, our August and our September bookings for the future-exceeded last year dramatically. So we think groups are coming back, but the price still isn't there. We took a lot of costs out of Las Vegas, so as long as we keep our occupancy up and get reasonably lucky on the tables, we're going to be OK. We can wait it out.

What CityCenter is going to do I think is going to prevent rates from accelerating, particularly on the FIT and wholesale sides of our business, because they're just more rooms on the marketplace. So that's going to prevent rates going up a lot. But I think we're positioned, the way we operate and the nature of our products, that we'll do enough business to still generate appropriate returns.

How about the meeting and convention business? Has that been down as much as room rates and the gaming revenues?
The convention business is down this year. Next year, it looks better. Rates are still not there. Our gaming business is really not down; it's down in terms of our win, but it's not down in terms of our play significantly. In fact, as I said, if we had won just the theoretical number in the last four months, we would be OK. Not spectacular, but certainly no one would be worried about us. I can't speak for the other hotels because I don't track them really as much as some of the other people in the business do, because I really focus here, but our EBITDA results for the entire company as a whole in the last couple of months have been relatively good compared to last year, in spite of the economic environment. But we need to get luckier.

You mentioned CityCenter-just your gut feeling, do you think it's going to be accretive or dilutive in the short-term?
I think clearly it's going to be dilutive in the short-term. I think also it's going to be creative in the long-term. I've been in the hospitality business for 50 years. I've seen different situations and different cycles, not only in other cities but in Las Vegas as well, when supply comes in and supply goes up, you always have some kind of downdraft, since supply seems to always increase during times when the recession hits. Eventually it'll be absorbed. I think CityCenter will more than likely contribute some very high-quality facilities to the city, and I think some of, the lesser players are going to get hurt pretty badly. And MGM, they may do some cannibalization of some of their own properties. But more so on the macro basis, it's going to hurt room rates in the city. It'll be a year or so, maybe more, before we have some semblance of real improvement, rate-wise. But I do think CityCenter will attract, hopefully, as Jim Murren has said, more travelers to Las Vegas, and maybe some different travelers because of the upscale nature of those properties.

Have you been able to attract some of your Asian players to Las Vegas, because you have such big operations in Macau now and Singapore-have they been coming to Las Vegas in any great numbers?
We've had Asian players here prior to Macau. I don't know if we're getting more players, but I mean, our top players are pretty much all Asian. That's run by our casino marketing department. We've generated a significant amount of players this year, as we did last year. They've been luckier than we've been in the last couple of months. But that will turn too.

Let's turn to Singapore. You're building a project there, and, last time I looked, it's estimated to be about $5.6 billion. When you came in, the bid was $3.5 billion. What were the chief reasons that the price has almost doubled on that facility?
I think the chief reason for the real expansiveness was that 40 percent of that building and that whole facility's underwater. I don't mean underwater financially, I mean literally under real water. Going down deep and building the foundations of that facility first of all took considerably longer than we thought it would take, and it was considerably more expensive. I would guess to say that at least half of the overrun is in that particular area.

The other thing that we found is when we made the presentation to Singapore, we presented a spectacular building with unique engineering situations and things that people have never seen before in a hospitality or gaming complex. I think we underestimated the cost of construction, the cost of design and the cost of completion.

We're still finding things we didn't think were there. We have a pretty big contingency there, and we haven't gotten any indication that we'll be over the $5.6 billion, but that $2 billion was basically half in getting the foundation in and half in the nature of what's being built. It is nothing short of spectacular.

As we're speaking now, we're beginning the lifting of the skypark. Everybody is saying their prayers that the first piece, which I believe is the heaviest piece, is supposed to go up in the next 24 to 48 hours. It's a major engineering feat to get 700 tons of concrete in one slab up in one area 56 stories in the air when wind over five miles can hurt it, rain can hurt it, and if it slides the wrong way and hits the building, you've got real problems. It could crush a floor, do things like that. It's an amazing thing. I think, assuming that that gets done well, which it has to be, you're going to see a place that no one's ever seen before. Not only the skypark, but the theaters, the museum, the nice facility and all the rest. It's just out of this world.

That overrun is pretty big. Are you confident that you're going to be able to increase the revenues enough to make up for that?
We're projecting some pretty significant numbers in Singapore. We certainly should get 20 percent or so returns on our investments, maybe more if you take the debt out and just on equity. On equity it'll be more than 20 percent. We expect by the second year in Singapore we'll mature, and then start paying down some of the debt. In reality, nobody really knows what's going to happen in Singapore. I can tell you what I do think I know. I do think it's going to be a spectacular convention and meeting and social facility, and from a hospitality standpoint. What we really don't know is how good that Singapore gaming market really is. Most of the investment banks and others have put out reports indicating what the value of the gaming market is for Singapore. If they're anywhere close-because of the tax structure and what-have-you-we'll have a real homerun there. But we don't know for sure.

Are you comfortable with the regulatory scheme there and how they plan to operate the VIP junkets?
I met with the CRA when I was in Singapore a few weeks ago, and told him, "Look, we're prepared to go either way. We're prepared to do it on the junket basis and VIP and the Macau way, or we're prepared to do it the Las Vegas way, which is a very moderate amount of that, very small amount of that, and more on premium players." As of last week, it looked like they were turning towards the premium player situation because the junket situation really wasn't going to work for them. We're fully prepared to do that. We're working on credit situations; how we handle the premium players ourselves. It's probably harder to do it that way, but it's more profitable if it works. I think it's not quite clear what'll happen. Some people predict they'll start that way and then loosen up as they go. I can't speak to Genting, but I think that they would have more difficulty-since they run VIP stuff and they're more experienced at it-that they would prefer it to be a little looser on the junket side. I think some of our casino people probably would too. From our point of view, both Sheldon and my own, whatever way it is, just define it for us, and we'll make it work.

It looks like the regulatory system as it's written is well done, taking the best from the U.S. and Australia and some of the other jurisdictions. There's apparently a cash-reporting issue that the casino has to track all the players so that they don't spend an excessive amount. I'm not really sure how that runs.
I'm not really sure either, except there's deposits that VIP players have to make that are pretty significant. I think Singapore really wants to be careful, and to build a system that is world-class in terms of quality, lack of potential for anything that might happen improperly, and that's why they forced-I think rightly so-integrated resorts and not just casinos, per say. I think it's a work in progress. I think it's going to start some way and then be modified along the way.

How about access to the site? I understand there's a subway station that is supposed to be completed around the same time the building is completed that now is completely behind schedule. Are you a little nervous about that, or do you have enough parking contingency that you'll be able to bring people there anyway?
I think that although a lot of people in Singapore use cars, we think a lot of people will come by public transportation to a place where they can get off. But most will come by taxi. A subway would've brought a lot more local people there. Taxis are relatively inexpensive in Singapore, and we do have parking. If the subway were there, we certainly would be happier about it, but I think it may impact perhaps retail and some of the other things more than the casino. Casino players are going to find a way. People who would shop, go to Orchard Row or whatever, who could conveniently come by subway, it might be tougher for them. But we're pretty much dependant on taxis. There is a bus line that people will come by. It's a question of what the quality is of the people who are coming. The resort is going to have so many things going on in it: skating rink, restaurants, shows, Lion King, and all this kind of stuff. They'll find a way to get there. Clearly it would've been better if the subway were there because it would have dropped people right off at the casino door practically. It'll make it a bit more uncomfortable, but I think in the early going, it might be a blessing in disguise, because getting used to handling the volumes of those people with everything working at the same time, it might be too much for us.

What about the locals? That's an interesting component they've had by charging them an entry fee to get in or an annual entry fee. Is that a concern of yours? Have you done research on how many locals have indicated they would sign up for it?
Yes, we have some research that indicates that the $100Sing fee is not going to be in the way at all, but the research on the annual payment came back with significantly less people would buy the annual. I think you have to go 20 times to make up for the annual pass or something like that, which means you'd have to go almost every other week. In the early going there was some concern about the fee, but what we're told by local people there and people who know the indigenous population, if they're going to play, they're going to play. It's US$60 I guess, and it's only for locals, so it won't bother anybody else?

Are there ways you can return that fee in terms of cash back?
We can't. The rules do not allow any of that kind of situation. When somebody told me about it first, that was the first question I asked, "Can you return it?" But it's not allowed.

It's a level playing field for Genting as well.
We hope so, although we don't know whether Genting might be smarter at finding ways around it than we would be. I don't think anybody wants to fool around with that situation.

This facility was proposed by the Singapore government to draw more meetings and conventions, as well as tourism. What kind of presales are you getting in terms of those sectors of the revenue stream?
We're getting a lot of inquiries in the last six months as the product finally came out of the water and was on the ground. We're somewhat light in our bookings for '10. We don't start taking anything til April anyway, but for '11 we're looking at somewhere around 100,000 rooms or so on the books, and we're getting better every day. We're beefing up our sales operations now. Everybody knows that Singapore is a very good solid MICE destination. Between us and the Suntech Center and Genting themselves, there are three actual MICE venues now in Singapore, plus a great airport. I expect that by the end of '11 and into '12, you're going to see really, really significant MICE business. We're not worried about that at all.

The performance of this property is important to the company, but is it kind of a make or break element here?
If Singapore fails, then I think it would be a major problem for the company, but I think that if it doesn't reach expectations, the company's going to be fine. It's not a boom or bust scenario. I think it's going to be either a moderate success or a fabulous success. I can't see it failing. Obviously, our ability to pay down debt and to do what we have to do depends a lot upon what Singapore's EBIDTA is, and if it's half what we expect it to be, we'll pay less down. It'll put other pressures on, but certainly not make or break in terms of the company's survival. I think, without trying to predict anything, I think if Singapore does not perform very well, it'll be hard to have a very high-performing stock. But that doesn't mean the company's going to be having problems.

Give me your vision for Macau. When the IPO comes out, what have you projected to be the future for Macau in the short-term and in the long-term?
I think short-term, when the IPO gets done, $500 million of debt will be paid down and we'll be sitting with $2.8 billion of debt. The Macau predictions in terms of income from the present operations are all in the public documents and they're all in the analysts' reports; you'll be able to see them. I can't really talk about them. We're in pretty good shape there. The hope is that with the Macau IPO, we will restart five and six, which will put an additional 6,000 to 6,500 rooms in the marketplace, which will take a couple years to grow out, but another very significant casino, entertainment space, etc. We believe that five and six is a game-changer for the Cotai Strip. It's always been Sheldon's vision to have Las Vegas East, and we think it will generate a lot more activity. Steve Wynn is talking about doing his product there; we have sites seven and eight, site three, so eventually the long-term vision is by Sheldon's 80th birthday, which is four years from now, we should have five and six and maybe seven and eight or something like that done so he can have his 80th birthday party and see his vision for the Cotai Strip done.

Five and six is going to be a game-changer because for the first time we're going to see, although Hyatt is there now, we're going to see some major international brands like Sheraton and Shangri-La or whatever come to the Strip, and see what they actually do in terms of generating the kind of mass-market tourist and tour and MICE business that really isn't there quite yet. We do some of it at the Venetian; we'd like to do more, but for the Cotai Strip to really be what Sheldon believes it should be, you need to have all those segments working. I think the IPO is critical, because it will help us do our project financing for five and six, and we will more than likely put more equity into five and six, and that will stimulate other situations. I think, unlike Steve Wynn, we intend to put more money into Macau; he's taking money out of Macau. I hope we get credit for it.

You also have Galaxy, which they say they're going to restart next year as well, so they'll be another major project along the Strip there. Obviously the more critical mass you get there, the more people are going to visit.
It's always been Sheldon's theory that the more you have, the more people will come. I agree with that 100 percent. There is a ramp-up period, and once you get built-like with Singapore's MICE space, people don't book it until they see it; they don't book it until they believe it. Since most of this stuff is booked a year, two years, three years, four years out, you don't always see right away the thing filled. I think over time-everybody knows that Asia, China, Singapore, all these countries are where the big growth in the world is, the big middle class growth in the world is today. It's certainly not here and it's certainly not in Europe. We predict that perhaps 80 to 85 percent of our EBITDA will be coming from Asia as a company, which I think is a very significant competitive advantage.

Let's talk about the executives you've appointed both in Macau and in Singapore. These are people with hotel experience and not much gaming experience. Is this an indication that the company is looking more toward the hospitality side, or is it just that you're more comfortable with people with hotel experience?
No, I'm not more comfortable with people with hotel experience than gaming experience. I think the facilities in Macau and the facilities in Hong Kong and in Singapore at the chief executive level require somebody with broad business background. I looked at people who were not hotel people either.

You can always hire hotel people and you can always hire casino people. I think we have enough people who understand the business to be able to drive strategies to these people, but I needed professional management people-people who could manage a diversified product line and balance it out. I happened to find two extraordinary people, both of whom were very different in many ways who bring something to the table. Steve Jacobs in Macau is an extraordinary executive who I've known for many years and worked with for many years. Tom Arrassi in Singapore I've known but never worked with, but I've known him through the business for many years. They bring different skill sets in terms of their management style and what-have-you. I don't think there was any prejudice for a "hotel person" or for a gaming person.

The gaming industry-you look at some of the people who run gaming operations, and I'm not sure the CEO of some of the companies we have here, at Harrah's and MGM, I don't know that they came from the gaming business. I think the technology in a particular field-you can always hire a chef to cook, you can always hire a salesman to sell, you can always find the technological experts, but what you can't find is the generalist who can put all these things together in an appropriate way to maximize the results. First and foremost you need very, very good management. In Macau previously, we had a guy who was a casino-based guy, and basically he spent his time with the VIP people, and the casino was very profitable, and the rest of the place was left by itself. He would've been a decent guy to leave there running the casino operations, but he couldn't do the whole thing.

In Singapore, we have very good, solid casino people, and now we've rejiggered that team a little bit to bring in...hotel people were there before; we're putting some different people. I've had Asian experience in my own career, and I found that you have to be very careful when you go into an expatriate environment. You have to have the right sense of urgency. You can get loads of sleep by living and working in Asia for many years, believe me. It's a wonderful place, and it's a great place to get loads of sleep in, but when you're opening a $5.5 billion situation, or a Macau facility, with all those facilities it could $20 billion worth of stuff, you've got to have a sense of urgency.

How about your bench strength in terms of executives in the company? We've seen some executives leave in the last few months or so. Are you comfortable that you have people in place in the corporate level of the company that can drive the company where it needs to go?
I think when I took this job, one of the things that Sheldon Adelson said to me was, "I'm going to give you a contract for two years and I expect you to find a replacement." I don't know if he'd say that to me right now, but maybe he'd say maybe three years, maybe four years. I'm always looking for people who can replace me or be in the top, and I'm still searching for a number of executives. I brought in four or five people. I have a couple of empty slots that I'm still looking for now in different specialties. But I also try to upgrade internally, at the lower levels as well. I try to find bright people, good people. There are some barriers to that that I find along the way because we have some entrenched ways of doing business here, which I'm trying to change and occasionally gets me upset about, but I think at the end of the day, it starts at the top by having good-quality people. I think that we have to look at the company as a business now, not just as the gaming industry. It's not just about big-time Asian players; it's not just about conventions. It's about making sure we have the right customers for our retail shops and everything else. On the human resource side, I'd say the human resource side-if you can divide my job into threes, one-third is the human resource side, one-third is the strategic side and one-third is managing the CEO.

Why did you take on this challenge? You grew an incredible hotel company through your early career and you were kind of relaxing being on the board of directors, and suddenly you're running the whole thing. Why did you take up that challenge?
I was running the Georgia Aquarium for a very dear friend of mine, Bernie Marcus, who was similar to Sheldon. He was a billionaire-he founded Home Depot-who grew up without a dime in Newark, New Jersey. Sheldon grew up in Boston and was a poor person as well. Neither one of them I think had to have soup every day or something. I was really friendly with Bernie; I worked with his foundation after I sort of got out of the hotel business, and then I ran his aquarium, which was his biggest gift. When Sheldon called me in to say he'd like me to do this work, I turned him down, actually. I said, "I'm too old. I have a great job that Bernie Marcus said I could have for the rest of my life. I could play golf on the weekends; I could go away on vacation; I could work a normal day's work. I love the fish and the people; it's a fun place to be." So Sheldon and his wife, Dr. Adelson, said, "We want you to go home and think about it, and before you turn me down, think about it a second time." So I had two people to talk to, Bernie Marcus and my wife, because I didn't want to uproot myself from Atlanta after 22 years. The first one was my wife; I talked to her, and she was in a state of shock. We didn't make any conclusion. That night, we were sleeping, and at 3 a.m. I was sort of up, looking at the ceiling, and I said, "Are you up?" She said, "Yeah, I'm up." I said, "Well, what do you want me to do? I'm not going to do if you don't come with me." Sheldon had offered me the ability to commute for a few years, and I said, "I can't do that. I can commute for awhile, but not for a few years. I'm married 48 years; I don't want to spend this time in my life away from my wife." So I said, "What do you want me to do?" She thought for a minute, and said, "Go for it." I said, "OK, then I want to talk to Bernie." So I went to see Bernie Marcus down in Florida-he was in Florida at the time-and we had the conversation that I would leave the aquarium and go and do this. I wanted his advice. Should I do it? Should I not do it? He said, "You should do it, because it'll be good for the United States of America and for the state of Israel if you help Sheldon's company to be where it should be." He said, "You may make some money, but you know, it may not make a difference. It'll be good for the country and it'll be good for Israel, so go do it." So I did it.

It didn't even compute that that would be part of the equation.
I didn't either. People ask me, and I told Sheldon. What people don't realize about Sheldon is that he's got enough money, and he self-actualizes on the company obviously, because it's his vision. But almost every dime, every nickel, every penny if that stock goes up is going to be a gift, is going to be given away to help this country and to help people all over. I'm not a big philanthropist myself because I don't have that kind of money, but I sort of share that particular situation. It may sounds too soft for a big executive to talk about, but at the end of the day, this is what he does. Everything's going to his foundation.

He's certainly an amazing entrepreneur and he built incredible businesses through the years. He's got somewhat of a strange reputation in the business because he's supposedly hard to work for, but I know you've known him for years and years. How do you work with him? How do you manage the chairman?
I think Sheldon is one of the most spectacular entrepreneurs you'll ever run into. He is sometimes volatile, oftentimes excitable and most times right. I try to work with him to be as candid and honest and as up-front as I can be, to tell him what's going on, to make him aware of the problems I've finding probably 99 percent of the time. Sometimes I hold back for reasons of timing and things like that. At the end of the day, Sheldon looks at me as somebody that-I'm not interested in taking his job, like previous people might have been. I'm interested in doing the job for him so that he can get what he wants out of the company and be successful. I challenge him in the areas that I think he might be wrong. He listens; we talk about it. Sheldon doesn't recognize the clock.

Time is not a thing for him. I accept it. I can be called on the golf course; I can be called on a holiday; I can be called in a toilet. I carry my phone with me at all those places. I don't object to it. Oftentimes I'll sit with him in the office after 1 p.m. when he comes in til 6 p.m., just talking and doing. He needs the comfort that he knows what's happening, and I think people would say he's been more involved in the last six months than he's been in the last three or four years. He's agreed that this is what he wants to be involved in, because he's got more invested here than in any other place. I think you have to be very patient if you want to get something across.

I was trying to get the deal done for Steve Jacobs, the CEO of Macau, and I was stuck on one item. I couldn't make progress with Sheldon on it. I'd go in and we'd talk, and I'd go in and talk, and he'd pass it up. I was at the last day; Steve Jacobs called me and said he had to register his daughter in school either in Atlanta or in Hong Kong. If he didn't know by 3 p.m. or 4 p.m., he was out. I didn't want to lose him. So I called Sheldon, it was a Friday, and I called Sheldon, and I said, "Listen, I've got to see you on Monday, regular time, 1 p.m. We've got to finish this Steve Jacobs thing." He said, "OK, fine." So I went in, I sat there at 1 p.m. He went through his agenda with me, and I'm looking at my watch. It's 1 p.m., 2 p.m., 3 p.m., 4 p.m., 5 p.m., 6 p.m. At quarter of 7 p.m., his wife called and said he had to leave at 7 p.m. for dinner. So he says, "I have to leave in 15 minutes." I said, "Sheldon, I've got to solve the Steve Jacobs problem between now and the time you leave. It's too late. I'm going to lose him." So we sat down and finished the problem, and we got it done. I can tell you, it would have been very difficult for us to do the IPO without him, because he's been very strategic to getting it done. And we did it. And I walked away saying, "It took five hours and 45 minutes til I got to my agenda, but I was willing to sit there until I did."

From time to time, this is what it takes. I've been willing to do that. It goes with the territory. I'm not as free as in other jobs. Jobs I've had, I've worked for some very strange CEOs along the way. I can tell you that none of them call you at night, none of them call you on Saturday, none of them call you on Sunday, whatever it is. But it doesn't make any difference. I kind of like it, actually. He is an extraordinary person. My hope is that someday that people will realize what this man really is as opposed to what his public persona is, because he is an incredibly ethical guy. For me, that's very high criteria. I've seen that. He's said that anyway. When I was negotiating on my deal with him, and I asked Bernie Marcus, "Can I take Sheldon's handshake?" He said, "You can take his handshake." And he was right.

Tell us what you want the vision of the company to be. What is your vision? Do you want it become one of the leading gaming companies in the world or gaming/hospitality companies? Do you want to create a corporate culture that values the employees and the customers and the shareholders? How do you want to take this company?
First and foremost, the company should be successful in attaining what its goals are. And its goals are to do integrated resorts in a variety of places and make them very successful. All that you say about the garden motherhood of treating employees right, giving them bonuses, giving them options, those sorts of things, I think that goes without saying. But I think most important, I think the company ought to be recognized as a leader in a place to work, that people want to work here, and they have the feeling that they have opportunities, that they're encouraged, that they're respected, and that the culture of the company is one that's not only successful in its own business, but that the suppliers to us want to do business with, that they're treated fairly and justly-that it's a great place to do business and a great place to work.

By Frank Fantini   Wed, Nov 11, 2009

Historically, the weeks and months leading up to G2E have been viewed as a time when stocks of gaming suppliers rose in anticipation of the new products to be showcased at the industry's biggest event.

Sure enough, that pattern is repeating this year, but perhaps more as part of the general stock market recovery, and in anticipation of what is now widely expected to be a revived slot machine replacement cycle in North America starting next year.

Indeed, G2E has grown so large and busy that most companies now privately preview new products to casino customers, thus stealing some of the show floor's thunder.

But there may be another reason to remember this G2E. It may be seen someday as coming at a milestone. One might even say that G2E 2009 is, for the gaming industry, being held in Year 1 BCC-Before CityCenter.

In fact, it might even be that when MGM Mirage begins opening CityCenter towers in December that the world will forever change for destination casino resorts, the companies that build them, and the investors who play them in so many ways.

CityCenter will kick off a round of openings of the most expensive casino resort ever built.

And while people have educated expectations, no one really knows until customers respond whether they will succeed financially in a manner that matches their spectacular architecture, plunge their owners into bankruptcy, cannibalize competitors into dire straits, or some combination of in-between results.

Whichever it is, we suspect it will have a profound impact on all the players, on Las Vegas and on the evolution of gaming internationally.

In Las Vegas, the $8.5 billion CityCenter, $4 billion Cosmopolitan and $3 billion Fontainebleau will add more than 13,000 upscale hotel and condo units to a market already suffering a surplus, especially at the high end.

In Singapore, Genting and Las Vegas Sands will soon open $4 billion bets that they can get a return on investment in an entirely new market.

These are all daunting amounts. Imagine, to get a 15 percent cash flow return, Cosmopolitan must generate $600 million in EBITDA, Fontainebleau $450 million and CityCenter $1.2 billion. That compares to the $478 million that history's most successful casino, Bellagio, generated at its peak.

And they have to generate those numbers in competition with Las Vegas Sands and Wynn Resorts, not to mention MGM's Bellagio, MGM Grand and its other upscale properties.

MGM CEO Jim Murren has said CityCenter will be so spectacular, creating such a unique resort, that people will be compelled to visit, making it a huge success and growing the Las Vegas market once again.

Further, given its cost and the other mega-resorts coming on stream, it will be a long time, if ever, before a true competitor will be built, locking in CityCenter's preeminence far into the future.

There are doubters, of course. Though on one point, there appears to be consensus: Las Vegas won't see new multibillion-dollar mega-resorts for maybe a decade or more.

But even if CityCenter succeeds, what happens to other properties, including sister resorts?

Already, some analysts have cut Bellagio's estimated 2010 EBITDA below $250 million. And given the huge increase in room supply, the temptation for competitors will be to lower rates to compete.

With less debt, the casino industry might find it easier to ride out the competitive wars, but companies may be caught between a rock and a hard place, having to lower rates to compete but having to maintain rates to generate money for debt service, or having to further cut costs to maintain the finances to stay within lending covenants and risk losing business to competitors.

The phenomenon most often mentioned as probable is another round in the pattern of older properties moving down the food chain while some at the bottom just shut down. There is wide and open speculation as to who the candidates for demotion and demolition will be.

It also is likely that lenders for newer resorts find that the best way out is to take their losses and leave, allowing property prices to drop sufficiently so new investors can buy them cheaply enough to operate at a profit.

The arguments in Asia are less vociferous, and Wall Street analysts have been willing to project EBITDA numbers of $500 million and more for Marina Bay Sands and Resort World Sentosa.   

But not everyone is a believer. While Asia has plenty of high rollers, it is yet to be proven that there are enough of them, at least cultivated right now, to support the new mega-resorts, or to do so without cannibalizing Macau.

There also is argument that the restrictive rules governing Singapore gambling will undermine success.

But if Genting and Las Vegas Sands win their bets, the response may be more predictable than in Las Vegas: copy-catting.

Already, mega-resorts are rising in the Philippines. Other nations could follow-Taiwan, Japan, Korea and Thailand among them.

And the riches to be made from such big investments obviously are proving worth the risk so far.

So, at G2E this year, more will be discussed than the latest whiz-bang products. A major topic of speculation will be how this new era of destination resorts plays out.

By GGB Staff   Wed, Nov 11, 2009

I have devoted many pages in this publication to discussing the latest news about the U.S. commercial casino industry. This month, however, I would like to turn my focus overseas, reflecting instead on the state of play abroad. During these challenging times-when nearly every U.S. gaming jurisdiction faces an arduous road to recovery-some global gaming markets represent significant bright spots for our industry.

The rapid approach of Global Gaming Expo 2009 serves as a reminder that gaming truly is a global community. Each year, G2E draws several thousand international attendees, representing 89 countries last year alone. 

This year's event once again will convene a diverse group of international participants. At press time, 23 percent of the show floor-more than 59,000 square feet-already has been dedicated to exhibitors based abroad. G2E provides the leaders of the global gaming industry with invaluable opportunities to discuss the latest
gaming issues and trends with their colleagues all over the world.

After all, the international gaming landscape has changed considerably during the past year. And there is much to learn from the recent struggles and triumphs of the global gaming   community.

In Russia, the casino boom recently came to an abrupt end. After the 1991 Soviet collapse, gaming establishments multiplied and slot machines quickly spread to shops and malls. In 2008, the gaming industry provided 400,000 jobs and generated an impressive $3.6 billion in revenue.

However, the future of Russian gaming was threatened in 2006 when the government, led by former president Vladimir Putin, made an ill-informed claim about the effects of gambling, calling it the "alcoholization" of the country. The anti-gambling movement began to gather steam, and, this summer, Moscow authorities issued a near-total ban on gambling activities. Though an underground gaming industry continues to thrive, unfortunately, most-if not all-legitimate gaming companies no longer operate in the region.

In Asia, gaming has experienced both growth and contraction throughout the past year. For example, though Macau, the world's largest gaming market, enjoyed a prosperous start to 2008, the global economic crisis took a tremendous toll on the city's casinos as the year came to a close.

In addition, tourism to Macau stalled, due in large part to tightened visa restrictions on travel from mainland China. As a result, the city's efforts to attract greater numbers of middle-class, mainland Chinese tourists were significantly hindered. Gaming revenues tumbled, and unemployment numbers soared.

This summer, however, the tide abruptly turned. Macau shocked economic analysts by earning record profits for August, raking in $1.34 billion. That record was shattered only one month later, when revenues reached $1.38 billion in September, a 53 percent jump from September 2008. Without question, Macau's roaring recovery is the result of Beijing officials' decision to relax visa restrictions. Unfortunately, the restrictions have been re-imposed, but it still looks like Macau is heading toward recovery.

In Singapore, work on two multibillion-dollar integrated casino resorts-the country's first gaming establishments-is nearly complete. The 2,500-room Marina Bay Sands Resort & Casino, as well as Resorts World at Sentosa-a recreational complex that includes a casino, hotels and a Universal Studios theme park-will be completed in early 2010. Both establishments are expected to perform extraordinarily well, likely earning Singapore a place in the top echelon of Asian gaming markets.

In Latin America, gaming markets in a number of countries are demonstrating tremendous promise. Unlike the U.S. and Asia, Latin America's casinos have not been significantly impacted by the global financial crisis, and gaming continues to expand at a break-neck pace. Excitement within the global gaming community is fervent about the opportunities provided by this burgeoning gaming region.

Currently, Chile and Argentina are leading the way; they have the most mature gaming operations in Latin America. In fact, according to the latest figures, gross gaming revenue in Chile for the first half of 2009 jumped a dramatic 78.1 percent when compared to the same period last year.

Gaming also is on the rise elsewhere in Latin America. In Mexico, gaming industry insiders are awaiting new legislation to clearly regulate Class III games, which could spark explosive growth throughout the country. In Brazil, legalized gaming may soon become a reality with the advancement of Bill 2245, which would allow for 1,000 new bingo halls across the country.

Here in the U.S., the commercial casino industry has experienced the most challenging year in its relatively young history. Nearly every gaming market has been impacted by the drop in consumer discretionary spending brought about by the economic recession. Nevertheless, the industry continues to create jobs, tax revenue and opportunities for local businesses that are needed now more than ever. Though it may be facing significant obstacles, at its core, the industry remains strong.

While some economists have declared the recession over, key economic indicators portend a slow and difficult recovery process for the U.S. economy, and thus for our industry. As long as consumer discretionary spending remains depressed, the commercial casino industry and others like it will be challenged.

In times like these, we need an event like G2E to bring the global gaming community together to share the ideas, technology and best practices that will propel us forward. Innovation-which will be on full display at G2E-is crucial to the future prosperity of gaming in the U.S. and abroad.  Agility also is an essential ingredient for success. Ultimately, those who don't adapt, change and innovate are destined to be left behind.

The U.S. commercial casino industry has a long way to go to fully recover. However, we will continue to evolve and to maintain a focus on the future. And, with the help of events like G2E, we will continue to deliver an entertainment product that is unsurpassed both here in America and around the world.

By Roger Gros   Wed, Nov 11, 2009

Bottom? Has anyone seen the bottom?

So the experts tell us we're bouncing along the bottom of the latest version of the recession. If you're in Las Vegas or Atlantic City, the bottom would look nice. But I'm not sure we're there.

If you're in Macau, the bottom has a false floor, as the Chinese government re-imposes visa restrictions to cut the legs off of a mini-recovery.

If you're in Europe, you can never tell whether times are good or bad because the taxes are so high and regulations so oppressive. And in Russia, you might as well find another country.

If you're in Australia, the recession began more than five years ago when the state governments panicked and imposed some ill-considered restrictions on gaming in the name of problem gambling remediation.

But if you're in South and Central America, it's "what recession?"

So while the global economic downturn has different meanings and impacts around the world, I believe it has one silver lining common to all jurisdictions: opportunity.

Just look at the meltdown of the U.S. stock market-particularly gaming stocks-last year. Stocks like MGM Mirage, Las Vegas Sands, Boyd Gaming, IGT and most others hit new lows-dramatic lows that no one ever thought we'd see and still have viable companies.

Well, savvy investors jumped on those stocks and now they have rebounded substantially. Maybe not to the levels from which they fell, but still increasing from those lows by hundreds of percentage points.

Investors who understand the gaming industry can still find some values, although it takes a bit more research and courage than it did last year.

For those who have the financial resources to buy a casino resort, now is the time. We saw Phil Ruffin pay $750 million for Treasure Island in Las Vegas, once a $1 billion-plus property. In Atlantic City, a group led by Carl Icahn bought the Tropicana for $200 million (and that wasn't even cash, just debt forgiveness). And now Penn National is bidding less than $300 million for the unfinished Fontainebleau in Las Vegas-a property that has already cost $1.5 billion. (Of course, another $1 billion will be required to finish it.)

There are plenty of other properties available around the world if you have enough money and enough business acumen to know which ones are potentially profitable.

Executives can also make their mark in this economy. If you are a traditional, follow-the-rules kind of person, it's probably not going to happen for you. But if you push the envelope, get creative but frugal, motivate your employees and produce results, then you'll probably go farther than you would have before the world changed.

Even at lower levels, employees who deliver the customer service, come up with new ways to make players happy and can pass that knowledge on to fellow employees have a great chance to advance.

And don't think customers don't understand that they also have opportunities. Heck, when room rates drop from $350 a night to $150, they know something is up. Many of them remember the old days, when Vegas gave away the store. The challenge for gaming companies is going to be catering to those customers and making them feel that they're getting the store when they're really not. That perception can come in many ways-it's all about delivery.

Vendors to the gaming industry have not sat still while crying about a lack of business. Almost to a company, these creative vendors have spent the time developing new and improved products and services. So when the economy returns, these companies will be off and running.

Even in my business, there's opportunity in this down economy. Not only is the gaming world changing for my company, but the media world as well. So we have something of a double challenge, but one that is exciting.

We were the first gaming company to produce podcasts, so it's that commitment to technology that is driving our new products and services. GGB News, the only interactive weekly e-newsmagazine, comes out every Monday (www.ggbnews.com). Our blog gives you insight into some of the most gripping issues in the industry through my eyes and those of our writers (blog.casinoconnection.com). And once we determine how to best serve our readers and advertisers, you'll find us on Facebook, Twitter and other of these fascinating social networking tools.

So times are tough, but they will get better. And the companies and individuals poised to take advantage of these once-in-a-lifetime opportunities will be the success stories of the future.