By Roger Gros   Mon, Aug 30, 2010

It didn’t take a math whiz to figure out that the Seminole Hard Rock Hotel and Casino properties in Hollywood and Tampa, Florida, were an important piece in the brand that had been developed by the Rank Group of the United Kingdom. Revenue from the licensing deal was one of the key elements to the financial health of the company. Unfortunately, the rest of the company was struggling. Even a Hard Rock Casino in London had failed to produce significant revenues despite a huge investment. And the Hard Rock Cafés, long a cornerstone of the company, also were struggling.

So when Jim Allen, president of Seminole Gaming with oversight over the two Florida Hard Rock properties as well as five other Seminole casinos, came to Rank with the idea that the tribe would buy out their licensing agreement and the entire company along with it, the only thing left to negotiate was the price.

“When we looked at the percentage of profits that the Seminole Hard Rocks were to the entire company, and knowing that the brand needed some work, we looked at it as a real opportunity to take the brand to the next level,” says Allen.

So for nearly $1 billion, the Seminoles agreed to purchase Hard Rock International, which includes all the Hard Rock Cafés, any gaming operation east of the Mississippi (west of the Mississippi, Hard Rock casinos are owned by Morgans Hotel group and several investment banks) and all international expansion opportunities.

Brand New
Allen says the change in the brand actually began when the Seminoles were merely licensees.

“We focused on the hotels and the casinos,” he said. “Previously, the focus was more on the cafés.

“We saw the energy levels that can be developed between casino customers, who can be as young as 21 or someone who is 70 who likes Elvis, the Beatles and Frank Sinatra. So the demographics of our customer could be elevated by using a brand like Hard Rock.”

He says Rank’s way of running the company was hurting the brand as well.

“They had really lost their way on the quality aspect when it comes to food,” he says. “So we went back to basics: The burgers were all made fresh. Soups, salads and whatever were all made on the premises.

“I always use the example that Rank had actually allowed its food to be used on Northwest and US Airways as airline food. Well, there’s no worse perception of food in the world than airline food.

“So the brand was not loved and cared for as we would have done and we have done over the past four years.”

The Seminole experience wasn’t the first encounter Allen has had with Hard Rock. Before he joined the Seminoles, he worked for Donald Trump during a period when the Atlantic City gaming mogul was considering branding one of his casinos as a Hard Rock. Although it never came to pass, Allen recalled his impressions.

“I always believed the brand was tremendously dynamic in the casino sector,” he says.

Business Model
With a variety of operations around the globe, Hard Rock International’s business model can only be called “flexible.” With full ownership, leasing and managing, and simply licensing, Hard Rock International can mold itself to any operational situation, according to Allen.

“We can adapt to any one of those situations,” he says. “But our biggest advantage is that we’re in 54 countries. That isolates us from any particular downturn in the economy in any one country. Our stores in Europe are doing well. The Northeastern U.S. stores are experiencing weakness, but the Orlando hotel is doing great with the opening of the Harry Potter attraction there.”

He says while the cafés are doing well, his attention is elsewhere.

“Our primary focus is growing the casino and hotel brand,” he explains. “That’s our first goal. The second goal is to grow the franchise. The company owns all the stores, but I can’t see much more growth in the U.S. than between five and 10 more outlets. But when you look internationally on a franchise basis, there’s probably at least another 50 cities that could successfully host a Hard Rock Café. As far as hotels are concerned, there’s probably about 25 to 50 locations where a Hard Rock Hotel would be very successful.”

Allen says how they develop these products is dependent upon the location.

“Our best business model is having a developer who wants to pay us for the licensing of the brand and our management,” he says. “That’s the model we like the best, obviously, because the investment from our side is minimized. Our return on investment in Florida is so much greater than anyplace else in the world, so we try to put our cash to best use here in the state of Florida.”

Hard Rock I and II
One of the challenges facing Allen is the two separate owners of the Hard Rock brand. Because the Morgans Hotel Group and several other investors own the Hard Rock Las Vegas, and have control of the gaming and hospitality using the brand west of the Mississippi, Allen says it can be confusing for investors and for customers.

“We’ve had numerous meetings with Hard Rock Las Vegas to assure that protections and standards of the brand are maintained,” he says. “Some of the new people running Hard Rock Las Vegas are now getting up to speed on how this relationship works. It’s in the best interest of both parties to make sure the trademark is protected and we each continue to enhance the brand.

“They cannot do a transaction in their territory without submitting it to us for approval. Now, we cannot unreasonably withhold the approval, but they can’t put it on something that would diminish the brand to any extent. But the projects they have been involved with so far have really been first-class.”

The combination of the two companies obviously would make sense, but Allen says there are some fundamental differences that could make that difficult.

“If you put dollars and cents aside,” he explains, “it would make sense. But unfortunately for Hard Rock Las Vegas, they have about $1.7 billion tied up in that venue. The economics don’t make sense, so they’ve been trying to restructure their debt.”

Hospitality Hopes    
While Allen favors hotels with casinos, there are many examples of Hard Rock hotels performing well without gaming. The company has stand-alone hotels in Orlando, Florida; Chicago; San Diego; Pattaya, Thailand; and Penang, Malaysia. Several other developments are on the drawing board in Abu Dhabi, Panama and Dubai.

“In every market we’re in, we are above revPAR index for the city, and in some cases, over 30 percent higher,” he says. “In Chicago and San Diego and elsewhere, we take the experience of being in a hotel and liven it up with memorabilia, entertainment and special touches you would not find in a normal hotel.”

In non-casino locations, Hard Rock maintains its brand awareness, says Allen.

“In places like Chicago and San Diego, we cater to a business clientele,” he says. “In Orlando, it’s an entirely different focus. We ran 99 percent occupancy last month when Harry Potter opened up, which basically means that every room was booked for every night of the month. The brand really is chameleon-like. It has the ability to do different things in different markets with different ages and demographics.”

And as much as Allen is focusing on hotel and casino development, the Hard Rock Cafés are still an important part of the company.

“They are one of our major building blocks,” he says. “We’re excited to be opening a new Hard Rock Café in our Tampa casino. And that particular café will have some additional elements that are new to Hard Rock. But with the premise of people going to an international city who want some American fare or to hear some familiar music, Hard Rock has been that solution. Next year will be our 40th anniversary. We’ve outlasted some similar chains like Planet Hollywood, Motown Café, All Star Café and just recently the ESPN Zone restaurants. We’re the only one that’s growing, and this will be our best year ever. We’re breaking the trend, and we still think the cafés are a very key element of the long-term growth of this company.”

Music For All
Allen says that music has been re-emphasized since the purchase by the Seminoles.

“And it’s not just rock n’ roll,” he says. “We have all aspects of gaming. We’ve hosted the Latin Billboard awards and brought music back to the brand.”

While Allen doesn’t necessarily believe that artists prefer playing at Hard Rock properties, he does think they see a gig at the Hard Rock in a different light than any other venue.

“There is an awareness in the music community that if you’re involved with Hard Rock, they’re doing more than just trying to sell a ticket or sell a T-shirt,” he says. “We’re also the custodian of music history and memorabilia. We’re up to more than 73,000 pieces now. So, if we donate X number of dollars to an artist’s favorite charity, or if we host an event for that cause, it becomes a triangular event that seems to work very well.”

The motto of Hard Rock—“Love All, Serve All”—has become emphasized as well under the Seminole ownership.

“The philanthropic participation of the brand has not just doubled, not just tripled, but gone up tenfold and more since we bought the company,” says Allen. “And it’s not just the company. It’s individuals in the company, and even the artists who play at our facilities. And that has really become contagious.”

International Outlook
With hotels connected to casinos in Macau (at Melco Crown’s City of Dreams) and Singapore (at Genting’s Resorts World Sentosa), a focus of the company’s expansion is clearly international. Allen explains why this is important:

“Any company today that doesn’t look at their business globally may not be seeing its full potential,” he says. “Since the brand has demonstrated that music is worldwide, culturally it makes sense for us. And we see some of our international locations being more successful than some of our domestic ones. It depends upon the city where we’re located.”

One of Hard Rock’s newest projects is a Hard Rock Casino Resort in Punta Cana, Dominican Republic. Slated to open this fall, Allen has high hopes for the development.

“It’s a relationship we have with a very successful Mexican hotel company, Palace Hotels,” he says. “It’s a 1,700-room resort right on the beach in Punta Cana with one of the largest casinos in the Caribbean. The island has been a tremendous gateway for U.S., Canadian and international travelers.”

Atlantic City Bound
At a time when many investors are fleeing Atlantic City, Allen is making his way back to his roots. Along with a proposal by state Senator James Whelan, a former Atlantic City mayor, to permit 200-room hotels with a smaller casino, Hard Rock is ready to commit to the Boardwalk, should the bill go forward into law.

“Our partners are Ochs-Ziff, a New York capital management firm,” he explains. “We would build a hotel on the Boardwalk near the Atlantic City Hilton with between 200 and 300 rooms.”

Allen isn’t concerned by the recent downturn in the Atlantic City casino industry.

“We think that market still has a lot of life to it,” he says.  “We’ve entered into agreements with them to continue to explore that potential opportunity.”

Allen says he’s not concerned about a smaller casino footprint nor the higher tax rate (approximately 9 percent for existing properties vs. 14 percent for the smaller casinos).

“If you understand the philosophy behind Senator Whelan’s bill,” he explains, “it’s not that you build only 200 rooms and that’s it. You would eventually get to 500 rooms and hopefully many more than 500 rooms.

“If you can reduce capital commitments and get into the market with less rooms, that gets cash flow going and expansion can be considered at that point.”

Another market Allen likes is Massachusetts. Although at press time, no bill had been signed by the governor, Allen remains optimistic.

“We’ve been looking there for almost two years,” he says. “We’ve identified about 14 different sites, which we narrowed down to three. We think we can be a player there because of the success we’ve had all over the world. We don’t have a definitive announcement to make, but we’re confident that if a bill gets approved, we’ll be involved.”

Seminole Wind
The purchase of Hard Rock International by the Seminole tribe four years ago had repercussions around the world, both in gaming and hospitality. Allen says the motivation for the purchase was twofold.

“The tribe looked at it from a sense of pride,” he says. “They recognized that it would be a monumental step for them. Certainly, we had to justify it from an economic standpoint, but because we were a licensee we saw the success of the brand, and more importantly, the potential of the brand.”

Allen says the relationship between the tribe and company is still being worked out.

“I think the average tribal member is very proud that they own Hard Rock,” he says. “But the complexities of the company and the renewed responsibilities that go with that are still a learning process that we’re working through at this point.

“We’re expecting to continue to grow the business and to continue to produce more cash for the tribe. Best of all, it diversifies their assets so they’re not totally dependent upon the Florida properties.”

Allen believes that the tribe is beginning to take more control over its fortunes.

“When I first came here, we started an intern program,” he says. “We take tribal members and not just have them work in the business, but go through a curriculum that includes all the departments. The goal is to give them some educational as well as practical experience. The hope is that some day a tribal member will be sitting in my position and have a true understanding of the business in its entirety.”

Hard Rock Lives
As Allen circumnavigates the globe, aided by Hard Rock President and CEO Hamish Dodds, in search of expansion opportunities and financing for development, he says his pitch is simple.

“We just stress the success of the brand,” he says. “That’s a nice introduction. When you ask what brand has been around for 40 years and just had its best year ever, there are not really any alternatives. That separates us very quickly from a lot of other companies.”

But Allen says it’s the video that makes the prospective clients smile.

“When we can trot out stars like Shakira, Bruce Springsteen, Yoko Ono, Bono… literally some of the legends of the music industry, saying how much they love and support Hard Rock and how we are such an important factor in what they do, that immediately puts you in a different class than most of our competitors,” says Allen. “When you have these kinds of celebrities who work with Hard Rock because the people who manage and own it really care about people, it’s very rewarding and it’s very appealing to people who might want to work with us.”

By Nicole Wolf   Mon, Aug 30, 2010

Marketing experts and investment professionals alike agree that Hard Rock International strives to do two things: leverage the indelible theme of music, as well as the “see and be seen” experience. They also agree that the challenge is the localization of those cross-cutting themes in disparate markets ranging from gaming meccas (Vegas, Macau) to monopoly markets (Tampa and Hollywood, Florida) to outposts across the United States (Albuquerque, Tulsa).

Hard Rock International was the first brand in the food & beverage/hospitality space to recognize that gaming could be a very viable model. Casinos have always used entertainment as a driver of patrons, but most don’t take it to the extreme that Hard Rock has.

Hard Rock continues to reinvent itself using music. Steve Rosen, managing director at Marketations, explains, “When Hard Rock first got into casinos, the initial thought process was that it would open up a younger demographic who would like to play, but of course younger people don’t necessarily have the discretionary income.”

Irreverent, Edgy… And 50-Something?
The demographics of the Hard Rock Café brand are “…cutting edge, people willing to try different things. Only about 30 percent of them will be active gamers, similar to the entire population,” says Michael A. Meczka, president of Meczka Marketing/Research/Consulting.

Meczka explains that the challenges of this themed casino brand are such that “if people in any category have disposable income, the offerings from the Wynns, MGMs, and Venetians are hard to surpass. What Hard Rock does on Sundays with its Rehab pool scene in Las Vegas has now been emulated elsewhere.”

Despite copycats, the brand continues to connote escapism, freedom, fun, irreverence, edginess, weekend warrior hipsters, and maybe even a little decadence and rebellion. John Schadler, managing partner of SK+G Advertising, says, “It’s an interesting platform, because as much as the brand is irreverent and edgy, it also relates to people in their 50s.”

In some of Hard Rock’s markets, notably Tampa and Hollywood, Florida, the 50-something-plus set is de rigueur. Some argue the purity of the brand has been compromised in an effort to drive gaming revenue in each day-part and week-part. “Eleven a.m. on Tuesday may not feel like the authentic, true brand you associate with Hard Rock,” says Schadler.

But it works in Florida’s monopoly market, and the company must manage its business in accordance with who is showing up at any given time. “We’ve done a lot of research on the brand. In a market where there are multiple competitors—like Las Vegas, for example—you may want to confine the brand to a specific appeal, probably a young, hip, hard-rockin’ brand,” says Jeff Hook, vice president of marketing for Seminole Gaming. “But in a place like Florida, where there are not as many competitors, we can be more things to more people. It’s a wide enough brand that we can serve a lot of people and make them happy.”

Love All, Serve All
Bottom line, says Michael Shindler, an executive vice president with Hard Rock Hotels and Casinos for Hard Rock International, “It’s a disparate set of properties. The guests are different as well. One says ‘good night’ as they’re leaving; another says ‘good morning’ as they’re coming home.”

Shindler’s colleague, Hook, agrees. “We have many niches that we serve and we try to do each of them well,” he says. “‘Love all, serve all’ is our motto. We try to give great entertainment value. We have that going at all hours of the day and night, whether it’s in the middle of the casino or in our Hard Rock Live.”

To assist property leadership in staying true to the brand at such a diverse selection of properties, the Hard Rock has enlisted a “vibe manager.” Officially listed as the global music marketing manager, Blake Smith is a musician and former writer who according to Shindler is “a font of knowledge and understanding of the music scene.”

Smith curates the hotel and casino play list, developing an extensive selection localized to each property from which its local leadership team can select to set the tone for different day- and week-parts. Shindler explains, “Blake sets the tone at a macro level and the local team continues it at a micro level.”

Music, Memorabilia… And Macau?
“Music, memorabilia, and a burger. The brand has done a good job of remaining consistent,” says SK+G’s Schadler. “Each local market or each person visiting from another market accepts it.”  

Yes, the brand has grown rapidly and pervasively. While some label the Tulsa and Albuquerque properties as “Hard Rock Lite,” claiming that the renovations have been minor, noting the simple addition of a center bar and some memorabilia, these properties are nonetheless part of a growing domestic brand extension.

One frontier that the company has only begun to explore is Asia. Marketations’ Rosen explains that the Hard Rock Café in Hong Kong exists in a free society in which people identify with the Rolling Stones and other brands, but that in Macau, 70 percent of the market is from mainland China, and may not know the Stones. Rosen ruminates, “The challenge is to put the right celebrity mix into this type of venue. What is the right memorabilia to put on the walls?  How do you localize this international brand?  The theme is still rock music, and yet it’s largely foreign to an Eastern audience.”                          

Shindler says, “There is always an authenticity of rock and roll music. We will not be doing Chinese lutes in Macau just because it’s China. We will always remain true to the rock brand, even if it’s Chinese rock. There’s always a velvet rope, and people wanting to be inside rather than outside of that rope.”   

Rosen’s concern is actually raising brand awareness and ensuing curiosity to drive the desire to get behind the velvet rope. “People are seeing things in Macau that they haven’t seen before,” he says. “It’s like a mini-Vegas. When they come to visit Macau, people from mainland China have a little checklist that includes Wynn (Tree of Good Fortune), Venetian, famous restaurants. Hard Rock may not be on the top of their list because it’s not as well known in Asia. All brands should aspire to get on that ‘must-see’ list.”

Rosen likens it to McDonald’s, which has maintained its core hamburger product worldwide, but has successfully localized certain menu items in Asia by providing an array of fish options, such as such as a shrimp sandwich with seaweed.

Hard Rock International’s Hook says, “Our brand awareness is at an all-time high. We recently did a study in the U.S. where it came in at 94 percent. But even in Japan, it’s over 50 percent, and it’s even higher in Europe. So whenever people see one of our facilities, they trust the brand and know that they’ll have a great time.”

Investing in a Brand
As for the attraction of the brand to investors, Andrew Klebanow, a principal with Gaming Market Advisors, explains, “With the Hard Rock, you may get a bunch of event nights because of the entertainers playing the property, but you’re not buying a customer database. And of course you have to give up a portion of EBITDA. Then there’s the capital-intensive renovation up front to bring a legacy property consistent with the theme.

“In a destination market, the brand can help because customers are buying that lifestyle for the weekend. In a frequency market, it really comes down to the traditional triumvirate of proximity, offers and service.”  

Steven “Slip” Rueben, a member of the executive team at Epic Gaming, says that when contemplating licensing a casino brand, “I generally look for a point savings in straight M&A and a required increase to the top line of close to 20-plus percent. This is to offset the branding/license fees as well as a greater level of capex going forward to keep in synch with the brand’s requirements. I think the Hard Rock brand will get customers to come sooner than otherwise, but I’m just not sure it will meet the financial requirements I would be looking for. That said, at the end of the day, given the choice, I would go into a deal with a Hard Rock-branded property more so than many other brands that one could license.”

Music Cues Memories
“Why do customers like Hard Rock International?” asks SK+G’s John Schadler. “It’s that appetite for celebrity that we are all consumed with. They’ve carved out a place in the mind of the consumer—an irreverence, part of a club. There’s undeniable value in that. Whether you think the brand needs to be remade or can survive as is, it’s undeniable that this is a valuable brand.”  

In 2010, Hard Rock International is enjoying a beautiful confluence in which the age range of both classic rock enthusiasts and prime gamers is 45-65. What happens in 15 years when classic rock enthusiasts are, well, old and no longer hitting the show, partying like weekend warriors into the wee hours of the morning, and gaming until they run out of disposable time or money? The Hard Rock’s Shindler says, “I’m in my 50s. Music formed part of my upbringing. At the Hard Rock, we maintain a relevance in the music space. The casino is an extension of where our customers are taking their lives.”

The ‘Pop’ in Pop Culture
Mark Elmore, principal at Gaga Marketing, reminisces about a recent pop-culture faux pas at the 2010 Super Bowl halftime show, and the importance of adjusting one’s act with the passage of time.

“Remember The Who up there?” he asks. “Pete Townsend and Roger Daltrey, they looked old. At the beginning, Pete did his windmill strumming thing and his shirt came untucked and you saw this big white flab. I’m thinking, dude, you can’t do that anymore! Then they got in their groove and it ended up sounding OK, but really, why not do it unplugged?  It’s probably more age-appropriate for them and for their audience.”  

Elmore says that by adjusting the experience with the aging demographic, Hard Rock could still deliver on what the brand connotes: escapism. Escapism might mean the aging rocker returning as the weekend warrior of his classic rock set. “You might feel as if you’re on a motorcycle going 80, but you’re really on a Vespa going 20. It still feels pretty good!”

Schadler cautions, “Look at the Hard Rock’s ad campaign where you see older people doing things that suggest they are still rockers and the other half of the page is a list of 150 locations in a city near you. That to me says chain mentality, any mall in America. When you begin a brand on its boutique, one-of-a-kind quality and then expand, you’re no longer that boutique, one-off brand.”

Hard Rock International’s Hook believes there is an insatiable appetite for music as a reminder of key moments in one’s life, and that it’s ageless and boundless. “Hard Rock is really built on this music concept. What we find is that music means a lot of things to a lot of people, and it’s generally a happy thing. They think back to when they were in high school or college. You can come in here as a 20-year-old and see memorabilia from Godsmack or you can come in as a 60-year-old and see something from Buddy Holly or Elvis Presley. Music is the tie that binds, regardless of
your age.”

Rock on, Hard Rock.

By Marlene Reyes   Mon, Aug 30, 2010

When I was asked to write an article about the best players clubs in the industry, two thoughts immediately came to my mind. The first was, being that Randall Fine, my boss at the Fine Point Group, is the patent holder for technology used behind the current version of Harrah’s Total Rewards program and the fact that many of us (including me) were involved in the launch of that program, I will get it out of the way now and say that putting it on the list just seemed too self-serving—even for a consultant in the gaming space.

My second thought: Our industry involves so many jurisdictions with different tax rates, regulatory requirements, etc., that it was hard to decide which clubs I truly thought were the best  in the industry, because we as marketers design and implement customized clubs that work for our individual businesses—and each is unique. Some are really good, and some are really bad. Therefore, I picked players clubs that I felt each did a great job meeting one of the core tenets of what makes a good loyalty program.

At the Fine Point Group, we have developed and deployed for our clients a methodology of the five factors that should be used to assess your current program (if you have one in place) and after assessing, as a guide for designing a new, enhanced or refreshed program. The five core tenets of a good loyalty program are simplicity, flexibility, control, aspiration and transferability.

The most important tenet from the customer standpoint is simplicity, or better said, it’s the customer’s ability to understand how the program functions, and why it is beneficial for them. As a basic rule, if employees can’t explain a program in 30 seconds or less, simplicity is not a check mark in your assessment. However, from the casino operator’s viewpoint, the ability to sustain a loyalty program through good times (then) and bad (now) relies on flexibility—the ability of casino operators to make changes to the program as the business changes, without having to overhaul the entire program and disrupt the customer’s experience.

Keep in mind that most of the very best players clubs out there today encompass three, if not more, of the five core tenets to be successful, so the clubs that are used in our examples are no exception; we have simply showcased them for one tenet.

Simplicity
If the program is not simple, no one cares how rewarding it is, because they don’t understand it. Like much of their great marketing, Club Barona at Barona Casino in San Diego, California, is the perfect example of how to keep your players club simple.

Club Barona members know exactly how to earn points and how many points are needed to reach the next tier status level. If $1 coin-in played at a slot machine earns two points, and it takes 20,000 points to earn Gold status, then a player knows that it will take $10,000 coin-in, played within a six-month period, to move to the next level.

Club Barona members are told exactly what they need to do, and once they do it, the club delivers the reward to them as promised. It doesn’t get any easier than that. Besides tier level, other ways of keeping programs simple are explaining how to earn reward points, how to redeem those points, and what the points can be redeemed for—such as free play, comps, cash, etc.        

Sounds easy, right? But 95 percent of the clubs out there miss the mark on this one—and it is critical.

Flexibility
As mentioned earlier, to be sustainable, an effective loyalty program needs to have flexibility for the casino and its employees, to make educated decisions based on a member’s circumstances .

Let employees do what they are being paid to do! Without flexibility, the ability to build relationships with customers is limited and a program will not be successful. Creating an element such as a discretionary comp bucket gives trained, qualified employees, when appropriate, the ability to comp guests above and beyond the parameters of your program.

Additionally, the program must be flexible enough to change as the business deems appropriate without causing significant confusion to the customers or a complete overhaul of the program.

Parx Casino at Philadelphia Park in Bensalem, Pennsylvania, is in a jurisdiction that has a slot tax rate of 55 percent and table games tax rate of 16 percent. So, although all players are members of the Xclub, the program for comping table games players is different because the property has more flexibility with a much lower comp tax.

A good program allows all members to feel rewarded, but that doesn’t mean you have to reward all members based on the same internal guidelines. Given the dynamics of this jurisdiction, having flexibility in a loyalty program gives the casino the ability to make appropriate changes to the internal framework and leaves customers feeling rewarded.

Control
Database marketing and direct mail are the casino’s way to incent customers in a non-transparent way to change their behavior. To balance that mystery, effective loyalty programs reward members for their play in a simple and transparent manner while they are visiting the property.          

This gives members a marketing bucket they can control on their terms—similar to a bank account.

Customers should always know where they stand in relation to tier status and should choose when, how and where to redeem their points—either for cash, free play or comp incentives.

The Grazie Club at the Venetian and Palazzo Casino in Las Vegas has three different types of points: Status Points, which tell a customer where they stand and how many points they need to move to the next level; Slot Reward Points, which are redeemable for slot play and for restaurant meals as well as other on-property amenities; and Grazie Gift Points, which are redeemable for choice gifts. When members control their rewards, this incents their decision of where and how they play based on the competition in the market.

Aspiration
Members need to feel that there is always something in it for them to participate in a loyalty program and ultimately consolidate play at the casino where they feel the most rewarded. Whether the goal is obtaining an elevated status level to have access to valuable benefits, banking points for merchandise or playing for a gift of the month, giving customers aspiration or “something to shoot for” is core to the foundation of any effective program.

A good program makes the customer say to himself, “I must be crazy to play anywhere else.” If the benefits and rewards of the program are not perceived as having value and becoming more valuable as tier status increases, the program will not be successful.

Mystic Lake Casino in Minnesota and its program Club Mystic includes five tier levels with a selection of guaranteed benefits for each tier such as point multipliers, priority service and complimentary hotel stays.

If you look at the program’s benefit list, you will notice something out of the ordinary when compared to other players clubs: There are no asterisks. Why does this matter? Because members would not choose to play for a tier level that promises a reward with disclaimers such as “based on play, when available, Sunday–Thursday,” when it’s sunny out, when the member is wearing a blue shirt... You get the idea. If you tell customers to do something to receive a benefit, reward them with that benefit.

And if you can’t operationalize it or make the math fit within the budgetary guidelines of your program, don’t offer it. Because once you put an asterisk near it, it’s not a benefit any longer. Giving customers the feeling of aspiration in the program encourages them to play up a level that perhaps they didn’t know was possible.

Transferability
The ability to redeem points or receive benefits in an effective program should be as wide a range as possible. If members feel limited in their redemption and participation options, aspiration will be lost in the program and customers will not feel compelled to consolidate their play.

Examples of transferability can be earning and redeeming points at all properties in a multi-location company, using reward points with community partners or outside vendors, or of course, “buying” merchandise with points. The Wild Card, offered at all the Seminole Casinos in Florida, allows a player to earn and redeem points at all Seminole properties across Florida.

Sounds like a no-brainer, yet there are several multi-property operators in the industry who still don’t offer customers some form of portability in their programs. A great example of transferability for single-property operators is the Capital Club at Delaware’s Dover Downs, offering NASCAR ticket redemption for points and discounts at local merchants based on tier.

In these times, it’s all about the marketing, and getting your players club right is an essential piece of the marketing puzzle for attracting new customers, capturing the right data for your database, and retaining the customers you already know.

The programs we highlighted represent some of the best in the industry and using the these five principles as a blueprint is the first step in determining the strategic path needed to create, change, enhance, refresh or overhaul your current program’s framework.

By Dean Macomber   Mon, Aug 30, 2010

Editor’s Note: The online edition of this article is an expanded version of the one in the printed Global Gaming Business magazine.


The world today seems to be becoming more about yin and yang… inter-connected, interdependent but often opposing forces. Gaming has not been exempted.
    
Among the most poignant and watched battles for supremacy within gaming is between the traditional, legacy “Macau model” used to develop, operate and market to the Asian marketplace and the new, upstart “Singapore model.”
    
The former has been around for decades, with tentacles going back 163 years; the latter, for seven months. Despite the rhetoric about the pros and cons of each, both models seem to be doing remarkably well, even more so in the context of the financial crisis that has rocked the rest of the gaming world back on its heels.
    
Within each model, there is an ongoing dialogue about the efficacy of focusing on the upper-tier or mass-market segments of the Asian marketplace. And, within the upper tier where Asian VIP gaming is found, there is also tension between the efficacies of third-party versus in-house VIP marketing programs.
    
There are broad implications to the future growth of Asian gaming in terms of how successful each of these models and marketing strategies will continue to be “as is,” whether the current model options and strategies will begin to morph into their counterpart keeping the best of both, or new models and strategies need to be developed.
    
But the question remains: how much of the success of these models in both venues is due to Asian VIP marketing? What is to be learned from the success generated thus far?
    
It is a slippery slope to try to address the Asian VIP gaming issue by drawing simple conclusions from this rather complex subject. So, like the antique ivory Chinese puzzle ball with up to 20 free spinning balls carved within from one block of ivory, let us try to unravel the puzzle of Asian VIP gaming, what is happening and where it is going one layer at a time.

The Macau Model
While casino gambling had existed in Asia and Macau for some time, Macau’s and therefore Asia gaming’s “Big Bang” came after the handover of Macau by Portugal to the People’s Republic of China (PRC). The new Macau government decided shortly thereafter to end the practice of granting a single, monopoly casino gaming license and open Macau gaming to three concessions to be awarded in an initial bidding process. This was followed by a series of events that led to the granting of three additional sub-concessions.
    
Much has been written and discussed about the Macau model from this starting point, but for the purposes of this article the critical elements are: the potential for an unlimited number of casinos (each casino licensee can own and operate more than one casino and, after a “no change” period that has elapsed, the government may issue more concessions if it so chooses); a relatively high gaming revenue tax rate of 40 percent; and, an evolutionary “Macau” attitude toward licensing and regulation rather than an immediate adoption of “world” licensing standards and gaming regulations.
    
The Macau model propelled Macau from 2002 to 2009 to the world’s largest gaming venue. During this period:

• casinos tripled from 11 to 33;
• the number of table games increased over 14 times to 4,770 tables;
• the number of slot machines increased 18 times to 14,363 units; and
• total gaming revenues increased five times to US$15 billion.

What part did Asian VIP gaming play in these events? During this period, Asian VIP gaming’s contribution to total gaming revenue ranged from 63 percent to 77 percent. As meaningfully, VIP baccarat generated a whopping 65 percent of the total $12 billion increase in revenue. After adjusting for profit margins, VIP baccarat still generated 41 percent of the increase in profit (as defined). It also retained its dominance over the next-closest game, non-rolling baccarat, at 31 percent, and slots at 17 percent. Every other game contributed relatively insignificantly to the increase.
    
Turning to 2010, despite the two casino openings in Singapore this year, Macau continues to do very well (an understatement): total gaming revenue is up year-over-year 68 percent year to date through July.
    
Macau Asian VIP gaming continues to play its part with as much force and fervor as before: VIP baccarat accounted for 71 percent of total gaming revenue. In its 2Q10 earnings release, LVS indicated rolling volume in 2Q10 among its three casinos increased 44 percent over 2Q09. Wynn Macau, historically positioned to cater to the up-market segments, declared it enjoyed a 72 percent increase in rolling volume.
    
In Macau there are two subsets to Asian VIP rolling business—the third-party junket/VIP room operator and the casino-inspired internal rolling programs commonly referred to as “premium direct.”
    
The origin of premium direct programs can be traced to Western operators. In contrast to Asian business practices where it is common for business partners to intertwine their businesses, Western business owners, particularly Western casino owners, loathe giving their profit to someone else. And so, some Western Macau casino operators began premium direct programs in an attempt to cut out the middle man, hoping to push their profit margin from the 12 percent range associated with commissions of 1.25 percent of rolling chip volume to margins solidly into the mid-teen and, at one point of perhaps naïve optimism, hoping to get to a margin of over 20 percent.
    
Working the numbers, target profit margins of mid-teen to 20 percent without the middle man would conceivably allow the casino to pay 0.7 percent to 1 percent in rebate directly to the player and another 0.1 percent for room, food, beverage, transportation and other comp credits, for a total payout of 0.8 percent to 1.1 percent. For Western readers, a 0.8 percent to 1.1 percent payment to a player amounts to 28 percent to 39 percent of theoretical win to the player (assuming an average 2.85 percent theoretical win on baccarat rolling chip volume). Such premium direct incentive rates would lead to approximately a 15 percent profit margin at the high end of the commission rate structure and 25 percent at the low end if—and this was a big “if”—they could attract the players away from the junket/VIP room operators.
    
The casino-inspired premium direct programs, however, faced the headwind of the junket/VIP room operators who already rebated between 15 percent and 30 percent of their commission to the player. When commissions were at 1.25 percent, this allowed the junket/VIP room operators to offer their better players 0.9 percent to 1.1 percent in the way of incentives and comp credits.

The spread between what the casino-inspired premium direct programs and the third-party junket/VIP room operators offered, superficially, looks competitive. But, junket/VIP room operators offered numerous other advantages, e.g., credit. Moreover, their philosophical approach was to compete more on a player-by-player basis (thus allowing them to move individual players up their commission strata and/or even exceed the limit for their best players) versus the Western operators, who philosophically competed more on a formulaic, fixed strata basis.

In execution, the premium direct programs were understandably slow to get traction. For the casino owners who initiated them, these programs initially amounted to only 10 percent to 15 percent of their total VIP gaming revenue. Those casino owners who pushed the premium direct programs have been able to generate as much as 25 percent of their rolling play generated by this program. Be careful, though, because the same operators who push their premium direct programs may also be those who de-prioritize the VIP/junket programs, lowering the total. And, for the record, some casino owners—Asian owners predominantly—choose to minimize or not offer premium direct programs at all.
    
Insight to the current relative importance of third-party junket/VIP programs and in-house premium direct programs can be gleaned from LVS’ 2Q10 announcement that its VIP/junket operator rolling volume constituted 76 percent of their total reported reporting volume at their largest Macau casino and flagship, Venetian Macao (Cotai), with their “in house” premium direct program generating the other 24 percent.

Despite the high gaming revenue tax rates and high commissions paid in a venue dominated by commission-based VIP rolling programs, 2Q10 EBITDA margins for LVS/Sands China Limited consolidated Macau operations was 29.9 percent and for Wynn Macau 30.3 percent. There are, however, lower examples among other companies in the 11 percent and 18 percent range, but they seem to be those companies with still good if not high volume but less higher-margin mass market gaming demand and a lower capital base—making such results still palatable and in some cases still impressive.
    
With revenue growth rates that would make most giddy, the Macau model appears to be working. Facing higher 2H09 base numbers, 1H10 growth rates are not expected to be maintained for the remainder of the year. But, even so, most are projecting a minimum year-end gaming revenue number of $20 billion, which would represent a $5 billion increase over year-end 2009, a nice increase of 33 percent. Virtually every gaming venue and every gaming executive outside of Macau will be envious.

The Singapore Model
If Macau is destined to be Asia’s eastern capital of gaming then it would seem that surely Singapore is destined to be its western, at least for the foreseeable future.
 

In contrast to Macau at the handover, which had a well-established casino gaming industry, Singapore had nothing at risk and was unencumbered in terms of how to launch it.
    
Singapore’s gaming policy did not develop in a total void, however. Singapore was a modern, successful, well-diversified economy. Singapore also had a hard-earned reputation as a very efficient, business-oriented country that was “squeaky clean.”
    
The key elements of the Singapore model are: only two licenses are to be issued with a government guarantee that no more will be issued for a long period of time; a strict (even by Western gaming standards) licensing and regulatory environment will be installed from day one; and, a relatively low gaming tax rate was structured to motivate the presumably huge investment needed to develop two world-class, iconic integrated resorts that would also serve a larger goal, to increase tourism.
    
It worked. Genting Singapore and LVS went well beyond the minimums conceptualizing and building not just mega but meta, world-class iconic integrated resorts at a cost of approximately $4.5 billion and $5.6 billion, respectively. Combined, they offer approximately 1,000 table games and 2,600 slot machines, approximately 20 percent of the table game and slot capacity of Macau.
    
Resorts World Sentosa opened the first day of the Chinese New Year celebrations, February 14, and Marina Bay Sands approximately two months later, April 27. Both are opening in phases with a substantial amount of additional amenities still to open. And, like any new casino project of this size, they are also still on the acceleration portion of the growth curve.
    
Even so, early results from Singapore suggest that early fears that the Singapore government’s strict licensing of third-party junket representatives and VIP room operators would prevent the hugely expensive integrated resorts developed from ever showing a reasonable return on investment were at the least overstated and perhaps just plain wrong.
    
For example, analysts prior to opening were forecasting stabilized combined annual gaming revenue of between $2 billion and $3 billion. After seeing numbers being reported and listening to anecdotal comments, they are now revising their forecasts upward to between $3 billion and $4 billion excluding some outliers. As importantly, whereas EBITDA margins in Macau can reach 30 percent, 2Q10 EBITDA margins for Resorts World Sentosa, Genting Singapore’s integrated resort, was 58 percent and Marina Bay Sands was 44 percent. LVS COO Michael Leven expects this margin to ramp upward in the coming months. LVS Chiairman Sheldon Adelson’s oft-snickered-at predictions that Marina Bay Sands will produce $1 billion EBITDA when fully operational are now being discussed more seriously as a real possibility.
    
With respect to Asian VIP gaming and the junket/VIP operator portion of it, the scrutiny, time, effort and cost of securing a license in Singapore has apparently forestalled most from initially applying. Although nothing has been officially announced, street rumor has it that approximately 20 third parties have applied for a junket/VIP room/commission-based license but none have been granted as yet. Adelson recently speculated that he did not expect to see any “Macau” junket and VIP operators to be licensed in 2010.
    
This leaves the in-house premium direct programs as the only means to cater to Asian VIP players. How is this working? A Macquarie Equity Research report on Genting Singapore’s 2Q10 results suggested that the premium direct program at Resorts World Sentosa was generating 60 percent of their total gaming revenue versus 40 percent for the mass market, up from their estimated 50:50 split for 1Q10. LVS breaks out their reported numbers in more detail: For 2Q10, 42 percent of their total gaming revenue was generated by premium direct programs, 44 percent by table game mass market play, and 14 percent slots mass market play. No one will ever know what could have been possible with a fully operational third-party junket/VIP program in place in each property, but it is only fair to admit that initial performance has been beyond predictions and rather momentous without it.

When asked in their 2Q10 conference call, LVS confirmed that at Marina Bay Sands they are paying 1.2 percent of rolling volume directly to the players with some high-end player exceptions getting 1.3 percent rebates through their premium direct program. This would probably put the LVS Singapore rebates higher than their casinos are currently paying through their own premium direct programs in Macau or Macau junket/VIP room operators are rebating to their players under the 1.25 percent commission cap.

While no one is speculating LVS is doing so, given the respective tax rates, on strictly a bottom-line margin basis LVS would certainly rather have their VIP players play in the 12 percent tax environment of Singapore than the 40 percent tax environment of Macau.
    
In terms of relative competitiveness with Macau, be aware that even higher commission rates exist and have existed in Asia than paid in Macau or Singapore, e.g., rates as high as 1.6 percent to 1.8 percent, but these much higher rates have not resulted in any major visitor shifts away from Macau. In fact, these high rates in second- and third-tier venues demonstrate what kind of “price” variance is necessary to draw players away from the larger, higher-quality, more concentrated casinos in Macau and the variety of activities offered there.
    
The top-line revenue numbers and bottom-line EBITDA margins being generated in Singapore are testimony to at least the short-term efficacy of the respective overall project concept and positioning, and the structuring of their premium direct and mass marketing casino programs. The performance level at this early stage would also suggest that once fully open, the Singapore model will be deemed successful. We will have to wait, however, for that contention to be proven.


Tasseography and Asian VIP Gaming
Reading the current tea leaves of Asia gaming, signs seem to indicate that Singapore nor Macau are likely to change their models anytime soon. This contention should not be misinterpreted to mean that there are not causes to do so. There are.
    
In Macau, external pressure will continue to mount for it to improve its regulatory framework to western/ world standards. This will not cease. Even absent outside influences, internally the Macau government, Macau casino owner/operators, and Macau junket/VIP room operators in their own self interest should nudge each other along to do so before an incident occurs which brings western regulators in to take a closer look; an untoward incident waves away a potential major future gaming and/or non-gaming Macau investor; or a Macau based bidder for a gaming license in a valuable new Asian venue is consciously or subconsciously looked at askance for operating in Macau removing them from contention. All of these forces and others not mentioned conspire to motivate change. But, since real jobs and a growing but essentially ‘one industry’ economy are at stake, such changes should in most instances be evolutionary not revolutionary. Regardless, movement needs to both be made and shown.
    
Independent of the regulatory issue, Macau junket/VIP room operators should also consider their future along other dimensions as well. For example, the ongoing question of where the existing junket/VIP operators will find the capital needed to expand and new operators the capital to start raises any number of issues. This is particularly true if they want to do so by taking in new non-Asian individual or privately held companies, use capital/equity funds from Asia and beyond, seek traditional bank or bond debt, or by going public. Here again, ownership, transparency, probity, and reputation come into play.
    
For those Macau junket/VIP room operators who want to expand with the expansion of Asian gaming, they need to position themselves now so that they can go and be welcome anywhere. There is too much at stake in terms of their ability to generate future earnings not to do so.
    
And, one more morsel of food-for-thought: given the diminished gap between Macau junket/VIP room marketing programs and certain Internal premium direct programs, junket/VIP room operators might consider being acquired by a gaming company as a monetization strategy. Likewise, they might also consider acquiring casinos, purchasing a gaming company, and/or building casinos so they operate their own casinos applying the marketing acumen that has made them so successful to date and keeping the profit margin now going to the casino owner. These strategies also require rethinking and change.
    
Even though it is hard to secure hard numbers since most junket and VIP room owner/operators are privately held and there are instances of possible cross ownership, insiders note that the revenue generated by them has been steadily aggregating to the point where five to ten large operators out of the 70 to 100 operators that may exist at any given point in time generate 80 percent of the total. The large operators have also grown larger over the years. While there is no formal structure, this consolidation can lead to cartel-like behavior by the largest operators. This added to the already established practice by the operators and tolerance by the casino owners of junket/VIP room operators serving more than one Macau casino at one time makes them even more powerful for any given operator.
On the positive side, large operators have the organization to penetrate the broad geographic expanse of the PRC and the Asian marketplace. It also allows the large operators to spread their working capital and credit risk, create operational and marketing efficiencies, leverage the learning curve of how to work with the casino owners and government regulators, and to build a clean regulatory record measured in years. One cannot help but think, however, that some disaggregation would be a good thing even if that comes from aggregation below the top tier so that more junket/VIP room operators fall into the “large” category and/or new operators enter the field.  

Singapore on the other hand, should speed up its licensure of license-able junket/VIP room operators, existing or new, individuals or companies that can pass their strict probity tests. If the existing, traditional junket/VIP room operators will not submit for licensure or cannot be licensed if they do, then new owner/operators and programs need to be found that are licensable. On the operating side, perhaps, just perhaps, there might be reason for tweaking some of the tweak-able elements of their regulations in order to attract greater interest among junket/VIP room operators but only if based on sound reasoning.

Such an exercise would be no different than what has occurred in other start-up gaming jurisdictions, including New Jersey known for its strict compliance philosophy. Why do this when the Singapore Model seems to be working? Because third parties can be very effective in generating tourism, leisure, entertainment, and gaming demand. There is nothing inherently nefarious about commission-based, rolling Asian VIP programs any more than there is something inherently nefarious about airline frequent flier programs. At their core, they are both marketing tools and Singapore will need all of the marketing tools it can get to generate the volume to achieve its tourism and economic diversification goals not to mention providing the means for the two casino operators to earn a justifiable return for the world class, brilliantly executed, and “noble” projects they build but which were also very, very, very expensive. To allay immediate fears of eroding the Singapore Model until it becomes something else, such changes should (must?) result in a new form of Asian third-party junket operators, VIP room operators, or a new form of generic third-party casino marketers, all rightful sub-element of the Singapore Model without changing its basic principles.   

There is a raft of other issues simmering about associated with Asian gaming and Asian VIP gaming that would benefit from frequent, open, and honest dialogue between and among the stakeholders. All are served if this should occur; only a few are served if only a few participate; and, none are served if events unfold individually based solely on selfish and opportunistic motives. Those responsible for Asia gaming must be willing to change and Asia gaming must change if it is to reach its full potential just as gaming has had to change everywhere else gaming has become a major business and economic force. This is a certainty.

By Carolan Pepin   Mon, Aug 30, 2010

Where would today’s gaming world be without bill validators and ticket printers for slot machines? Together, the technology represents the first interactivity a player has with a game—and the last.

From a casino’s perspective, the first interaction is the most crucial. In the beginning, if the bill validator doesn’t take a player’s money or ticket, nothing else matters for that game. It’s relatively simple to understand that if no money goes in, there’s no way to play. Yet, the technology behind these gatekeepers is anything but uncomplicated.

Intelligent Validation
According to Tom Nieman, vice president of global marketing for JCM Global—a pioneering company in bill validation on the slot floor—things have evolved considerably.

“That’s because the raison d’être for the bill validator was to defend the casino against counterfeiting,” explains Nieman. “Criminals have not sat stagnantly since JCM invented the industry’s first bill validator. Instead, they have been very active in creating craftier counterfeits, and we have steadily moved forward, staying one step ahead, developing new technologies to defeat criminals in alliance with the federal agencies and issuing banks worldwide.”

The marketplace demands an ongoing commitment to security, says Nieman, but the company’s latest products also reflect the evolution to even more “intelligent” validation. The company’s new iVIZION bill validator features the latest technology in identifying and processing currency or tickets. Designed as the company’s fourth-generation concept, it also provides “an app for that” pathway to future innovations.

The iVIZION system uses contact image sensing (CIS) technology to secure the validation process, scanning more data points as well as capturing a full 100 percent image of the banknote or ticket. To detect and prevent manipulation or mechanical cheating, iVIZION provides an optical and patented mechanical anti-stringing device.

To meet the need for more intelligence from bill validators, the company’s ICB (Intelligent Cash Box) 2.0 is designed to capture, store and report transactions. This element provides for extensive reports to meet various operator needs, and has an RFID module for easier access to its encrypted, web-enabled data.   

With iVIZION (above), the company also is introducing what is said to be the industry’s first display bezel, the Sentry 2.0—a high-resolution, two-color LCD that can be customized and is easily programmable. Various messaging capabilities include quick dispute-resolution displays available with the push of a button.

Also setting a new precedent—the validator’s modular design will accommodate innovative new applications and future enhancements. Upgrades will be provided through future “apps.”  

“Think of iVIZION as the base unit, with a nearly endless range of applications for today and tomorrow,” says Nieman. “We believe it will be the new standard for the category.”

Listening to the Customer
“The market is beginning to leverage the information from the bill validator to manage cash and security, making processes better and more efficient,” explains Eric Fisher, vice president-Americas for MEI, a company which entered the gaming market 10 years ago and now has a robust share of the market for bill validator equipment. “The purchasing decision for a bill validator used to be the responsibility of the slot team. Now, departments like finance and accounting are very interested in the reports that can be generated, and have become involved in the purchasing decision.”

Listening to what the marketplace is saying has led the company to apply customer knowledge, along with new technology, to its latest product offerings. As a result, the company has introduced new product enhancements that will define the next generation of its Cashflow SC bill validator, featuring improved recognition, security and speed.

“During the development stage, we deliberately did not include bells and whistles that add cost and do not impact profitability,” says Fisher. “Instead, we focused on enhancing the core elements of a bill validator to provide value.

“In particular, we listened to our customers’ concerns of raising capital to implement any new products. We created our Cashflow SC to be backwards-compatible with our legacy technology, and updated the capabilities of the support tools to be able to recognize the difference between next-gen and legacy for customers with mixed floors.”

The next-generation Cashflow SC not only is compatible with previous versions, but also with MEI product extensions that have expanded the reach of bill validators from the slot machine to the entire cash management process. In particular, the latest version will take full advantage of  Easitrax Soft Count, an integrated software/hardware solution that places information collected into a database that can be networked to multiple locations and be accessed to analyze slot floor performance. With Easitrax Soft Count, operators have the ability to manage their assets from the slot machine to the soft-count room with a new level of control previously not accessible.

According to Fisher, the company also focuses on customers through its sales strategy. “We let the customer experience our products firsthand through a Value-Added Trial (VAT),” he explains. “During the VAT process, customers have the opportunity to compare Cashflow SC to their current bill validator in a side-by-side, 90-day trial. We show how the increased acceptance rate and security results in more money in the cash box at the end of the day.”

Server-Ready
“It is no longer acceptable to make a banknote validator that is just quick, reliable and accurate,” explains Eric Kaled, director of marketing for Crane Payment Solutions, a company formed in 2006 that provides payment-system technology to a wide range of industries under the CashCode brand. “The validator of today must be diverse and ready for the future.”  Kaled says the ticket-in/ticket-out concept has changed the game since its introduction 10 years ago, and now, the industry should be responding to what may be the next big wave, server-based gaming—as well as seeking to provide answers to challenges now happening on the slot floor.

“If server-based gaming is the next big wave, then validators need to be versatile, able to handle any currency, any voltage and any protocol at any time,” says Kaled. “At the same time, today’s operators are remarking how their cash boxes are filling up with tickets as well as money. Thousand-note cash boxes are not enough.”

According to Kaled, responding to challenges assailing today’s casino operations has been a driving force for his company’s new products, and has helped Crane develop industry “firsts”—including four-way bar code acceptance, a universal front-load product and now, the Last Five Bills Report. 

The Last Five Bills Report is one of four unique industry-developed automated reports provided by the company’s the oneCheck solution. Introduced at G2E last year and co-developed with Nanoptix, the oneCheck system is a cash management solution that provides dispute resolution and accounting reconciliation quickly and easily through the automated reports.

“Although it doesn’t sound very exciting, one casino reports that oneCheck is savings of $26,000 per year,” states Kaled. The casino reports that time, labor, security and revenue savings result from the simple capability of having the floor attendant press a button on the bill validator for a report.

The Validator Performance Report is another unique capability that can be handled securely by a floor attendant. “Let’s say that auditors make a surprise visit and want to check the firmware on various casino machines. This report provides data with minimal time and effort,” says Kaled.

Teamed with the printer performance report, yet printed separately, the instant Validator Performance Report provides the bill validator serial number and firmware version as well as a host of other information. “It’s a simple solution that also will minimize machine downtime, keeping players happy,” concludes Kaled.

Smooth Finish
The player is ready to leave the game—and the last impression of his or her experience is the interaction with the not-so-lowly ticket printer.  

If the players have won, they excitedly wait for a monied ticket. But what about the player who has lost all his playing money? Can they still walk away with a good impression? Companies involved in the “what prints out” side of the equation have taken on this challenge.

“Today, it’s more about enhancing a player’s personal experience,” states Tim Moser, product marketing manager for Transact Technologies Inc., a company providing ticket printers under the Ithaca and Epic product brands.

“We have envisioned how ticket printers and particularly, our products will be key components of a real-time, networked gaming environment that can reward players before they leave the gaming machine. The ability to prompt players with promotional offers at the gaming machine, giving them the ability to accept the offer and then printing the offer so players have validation that the offer will be honored, is driving the latest developments in our business.”

In particular, the introduction of ServerPort shows how the company will enhance the overall gaming experience for players. ServerPort upgrades the company’s Epic 950 printers with an array of capabilities including the ability to connect directly to player tracking systems and to print promotional offers or coupons at the slot machine. A well-recognized thermal printer for gaming machines, the Epic 950 offers numerous advanced features including quick disconnect, reliable ticket burst and present, low-ticket sensing and USB connectivity. 

The company’s new Epic Ten80 has internally integrated patented dual-port capability, providing interfaces to allow casinos the opportunity to drive promotions and coupons. It also will provide casinos with a printer that conducts the transaction with 30 percent faster time, and along with the Epic 950, provides 33 percent more standard ticket capacity.

“All these products are designed to put the casino in the driver’s seat to tailor the individual player experience,” says Moser. “We see operators become very excited about the capability to provide this immediate feedback and reward of players. It can do more—minimize or eliminate waiting in lines at player’s club or redemption centers, and increase the time players spend at gaming machines or on property.”

What’s Next?
The next big development in validation and printing technology: couponing.

“Promotional couponing indeed will provide the next big lift in gaming,” states Nick Micalizzi, vice president of domestic sales and marketing for FutureLogic, Inc., a company that was part of the first ticket in/ticket out introductions in Las Vegas, and has since shipped more than 1.3 million TITO gaming printers worldwide.  

Promotional coupons can be used to reward and retain players, and equally importantly, to recruit patrons to players clubs, bringing in new members to the loyalty programs where the casino’s best customers typically reside, explains Micalizzi.

“Even more appealing to casinos looking to new sources and added revenue, promotional couponing also can be used for cross-venue marketing,” Micalizzi says.

With non-gaming revenue becoming more important to casino resorts and complexes, Micalizzi says linking reward programs across multiple leisure experiences, as well as casino floors, has become an important initiative. The company is working closely with its EGM and casino customers to facilitate this evolution of the ticket printer market.

“We were recently granted a patent for our dual-port printer technology, which effectively turns our GEN2 Universal ticket printer into a multi-function promotional printer,” says Micalizzi. “In addition, our PromoNet couponing solution, which allows operators to potentially comp 100 percent of their patrons, will be entering into field trials this fall with several casinos.

“We continually conduct studies around player behavior, looking for ways to create new products and applications that enhance the gaming experience.”  

The company has expanded the features and functionality of its technology with its Eclipse universal ticket and receipt printer, which is designed for video lottery terminals and unattended kiosks. A new CouponXpress desktop printer brings its GEN2 Universal printer’s features, functions and flexibility from the game to the cashier’s cage, hotel front desk and other transaction points.  

The company also was honored as one of the Best Productivity-Enhancement Technologies for 2010 at Global Gaming Business magazine’s annual Gaming & Technology Awards, for its new TableXchange printer/scanner, which connects table games to the casino’s existing network by scanning and printing TITO vouchers.

As server-based gaming and other new technologies emerge, printers and validators will evolve right along with them. All of the changes will be based on one element, for both the casino and the player: convenience.

By GGB Staff   Tue, Aug 31, 2010

The American Gaming Association announced that Tim Parrott, former CEO of Shuffle Master, Inc., Aristocrat Technologies and Anchor Gaming,  and one of the foremost leaders of the gaming industry for the past 20 years, will be posthumously inducted into the Gaming Hall of Fame this November during the Global Gaming Expo in Las Vegas.

Parrott died in May, shortly after leaving his CEO post at Shuffle Master due to an undisclosed illness. Prior to joining Shuffle Master, he served as president of Aristocrat Americas for two years.

Parrott also was the founder of Boomtown Resorts, which became part of Pinnacle Entertainment; and was chairman and CEO of On Stage Entertainment, which produces the Legends in Concert production shows. In his year at Shuffle Master, Parrott was credited with changing the culture of the company, cutting costs and improving customer service.

Parrot was also a founding member and longtime board member of the American Gaming Association.

By GGB Staff   Tue, Aug 31, 2010

The industry’s most prestigious technology awards will again be presented at the industry’s largest and most important trade show and conference, Global Gaming Expo. Global Gaming Business magazine has announced that the 8th Annual Gaming and Technology Awards will be presented on the main entertainment stage at G2E on Tuesday, November 16. G2E runs November 16-18 at the Las Vegas Convention Center.

Roger Gros, publisher of Global Gaming Business, says the awards program is a perfect fit with G2E. “Global Gaming Expo is the place where technology companies debut their new products and services,” he says. “By presenting the awards at G2E, the Global Gaming Business Gaming & Technology Awards are able to convey ‘Best of Show’ winners at G2E.”

Courtney Muller, the gaming industry vice president of Reed Exhibitions, the organizer of G2E, says the presence of the awards program at G2E demonstrates the organization’s commitment to excellence in the technology field. “The Gaming & Technology Awards have long been recognized as the top honor for gaming equipment suppliers,” she says. “By partnering with Global Gaming Business on this program, G2E is able to recognize the most innovative and progressive companies developing new technology today.”

Nominations are now being accepted in four categories:

• Best Consumer-Service Technology
• Best Productivity-Enhancement Technology
• Best Slot Product
• Best Table-Game Product or Innovation

Judges for the awards are: Claudia Winkler, president, GHI Solutions Inc. in Las Vegas; Rob Russell, gaming analyst, Regulatory Management Counselors, P.C.; Israel Posner, executive director, Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism, Richard Stockton College of New Jersey; Frank Neborsky, vice president of slot operations, Mohegan Sun; and Peter Johns, director of slot operations, casino division for MGM Grand Macau.

Deadlines: Companies wanting to participate must submit a nomination form. Please submit a nomination form and no more than one page of marketing material (MS Word document or PDF) to the Global Gaming Business offices by October 1. Judges will evaluate the nominees and winners will be announced at the Gaming & Technology Awards program at G2E on Tuesday, November 16.

Click here to download the nomination form.

Nominations should be submitted to Global Gaming Business via email to Sales Director David Coheen (dcoheen@ggbmagazine.com), via fax at 702-248-1567 or via mail at 6625 S. Valley View Blvd. Suite 422, Las Vegas, NV 89118.

By Frank Legato   Tue, Aug 31, 2010

Manufacturer: Aruze Gaming
Platform: G-Deluxe
Format: Five-reel, 30-line video slot
Denomination: .01
Max Bet: 175, 350, 525, 700
Top Award: 4,640 credits times line bet; or stand-alone progressive
Hit Frequency: 23.2%
Theoretical Hold: 1.81%—8.3%

With this game, Aruze applies its operator-friendly math model to an attention-grabbing upright presentation, complete with a sculpted volcano for a top box.
 

The base game is a 30-line video slot with several different bonus events. As with most Aruze games, the “Max Bet Special” is offered, a feature that jacks up the return to the player for a maximum bet.

The bonus events include the “Bonus Pick Game,” in which players are shown six cards—five hide “Big Bonus” and one is a “Free Game Card.” If the player picks three Big Bonus cards  before the Free Game card appears, he moves on to the main “Big Bonus.” Fifteen volcanoes appear on the screen, which hide icons for five different “volcanic levels” that correspond to the bonus amounts displayed in the top-box volcano—300, 500, 1,000, 2,000 and 5,000 credits. The player picks volcanoes until matching three volcanic levels for the corresponding bonus award.

On random Big Bonus events, three “Challenge for Jackpot” symbols are added to the levels hidden in the volcanoes. If the player picks all three of those, he wins the stand-alone progressive jackpot. The manufacturer recommends a reset level of $10,000 for the big prize.

If the Free Games card is revealed during the Bonus Pick, seven “Magma Free Games” are awarded, with extra wild symbols for the free spins. A unique random feature during the free spins: The volcano on top of the screen randomly erupts. If lava covers a reel, all symbols on that reel become wild.

By Carolan Pepin   Mon, Aug 30, 2010

Product: Bluebird xD gaming cabinet
Manufacturer: WMS Gaming

This fourth and latest in the innovative cabinet series from WMS is designated Bluebird xD for its focus on “experience design.” The company drew upon its predecessors along with input from players and operators to engineer across-the-board changes in sights, sounds, high-definition displays and comfort into this newest version.    

The latest advancements in the fields of lighting, audio, interactivity and ergonomics have been combined to present a clear progression in slot game entertainment. Individually and especially when grouped together in a networked environment, the new cabinets add dimension to slot game immersion and player engagement.

The ability to create what is deemed a first-ever bank-level celebration based on in-game activity is a key Bluebird xD highlight. Various game play features and events including bonuses and wins have been choreographed with lights and sounds and at appropriate times, are broadcast across dual rows of high-definition wide-screens. The overall special effect is one of story-line action as game elements appear to respond and engage with each other as they move across all screens.  

The visuals are displayed on the Bluebird xD cabinet with its dual widescreens: 22-inch high definition screens on the bottom and either 22-inch or 32-inch on top. Other major features include a Bose sound system that has been calibrated to how the human ear perceives sound by adjusting tonal balance whenever the game volume changes. This provides clear audio detail and nuance regardless of game volume. For player comfort, screens are positioned for optimal viewing and seating positions offer added leg clearance and an integrated foot rest.

The Bluebird xD utilizes the company’s CPU-NXT2 technology platform and has the option of networked game enablement. The cabinet is available in video and three-reel or five-reel mechanical Transmissive Reels versions. Termed a crossover cabinet, the Bluebird xD has the comfort and sightlines of a slant-top with the convenience and footprint of an upright slot. As part of the Bluebird series, this cabinet also has been designed to be functional, easy to service, adaptable and upgradeable.  

For more information about the Bluebird xD, visit www.wms.com or the microsite www.bluebirdxd.com.

By GGB Staff   Mon, Aug 30, 2010

An appropriations bill adopted by the U.S. House Interior Appropriations Subcommittee last month contained a measure that would “fix” the Supreme Court decision Carcieri v. Salazar that is so disliked by many tribes. The court’s decision limited land-into-trust applications to tribes that were federally recognized before 1934. The remedy would make all tribes, regardless of the date of the recognition, eligible to enter into the process.

“Today’s action is a significant step forward for this important legislation,” Rep. Tom Cole (R-Oklahoma), the only Native American member of Congress, said last month. “Without this language, the standard set forth in Carcieri v. Salazar will be devastating to tribal sovereignty and economic development.”

The pertinent passage in the appropriations bill amends the Indian Reorganization Act of 1934 by replacing the phrase “any recognized Indian tribe now under federal jurisdiction” with “any federally recognized Indian tribe” in the section that authorizes the Interior Department to acquire land for tribes.

“Resolving any ambiguity in the Indian Reorganization Act is vital to protecting tribal interests and avoiding costly and protracted litigation,” Cole said.

The prospects for the bill in the Senate are murky, however.

John Tahsuda, vice president of consulting firm Navigators Global, stopped short of predicting the amendment, as included in an appropriations bill, will meet with success in the House and Senate.

“This amendment is a significant step toward a legislative fix for the Carcieri decision,” Tahsuda, a Kiowa-Comanche, told Gambling Compliance. “However, in this election year climate it is not yet clear how this Congress will enact its appropriations bills.”

Jana McKeag, another Washington, D.C.-based consultant who works for tribal interests, was also downbeat about passage. 

“It is great legislation and it’s likely to be well received in the House, but my concern is it will get stuck in the Senate side,” McKeag advised Gambling Compliance. “It might pass the House but there are a number of governors, attorney generals and others who want to hold up tribes who want to take land into trust for gaming.

“The sad thing is this decision holds up a lot of applications to place land into trust for all types of businesses and things like schools and health clinics. It places tribes recognized after 1934 in a kind of limbo status.”

By GGB Staff   Mon, Aug 30, 2010

In what Brian Pomeroy, the chairman of the U.K. Gambling Commission, called a “difficult year,” the commission’s annual report recommends merger with the National Lottery Commission.

Accordingly, the Department for Culture, Media and Sport (DCMS), which oversees each board, will examine how to complete the merger, which would “improve efficiency while preserving appropriate and effective regulation of both sectors.”

“We already work closely with (the National Lottery Commission) on research and responsible gambling issues and would expect any such merger to offer scope for further synergies and some improved cost-effectiveness,” Jenny Williams, chief executive of the Gambling Commission, said in the commission’s annual report.

A spokesman for the Lottery Commission said it is imperative that the government provide adequate funding for the merged commission so integrity can be maintained.

The proposal is part of a larger plan by the DCMS to eliminate 55 public bodies to save money.

The NLC spent £4.8 million last year regulating its one licensee, lottery operator Camelot Group, which was recently purchased by the Ontario Teachers Pension Plan.

The budget of the Gambling Commission, which receives revenue from license fees, was down 3.9 percent to £12.4 million, but it still ran a deficit of £800,000.

Pomeroy says the next year will also be difficult.

“Consolidation, contraction and closures within the industry, as well as some operators moving offshore, have reduced our expected fee income,” he said. “The next 12 months will be even more challenging with pressure to become more effective—for example, to combat sports betting corruption and other types of illegal gambling while reducing the overall cost of regulation, and working with the National Lottery Commission on the proposed merger.”

By GGB Staff   Mon, Aug 30, 2010

Tabcorp CEO Elmer Funke Kupper was on Australian Sunday television recently, telling the host and the viewing audience that casinos will be more important to the company in the future.

“In Victoria, the license would fall away in 2012,” said Kupper, referring to the fact that Tabcorp will no longer be operating non-casino slot machines in the state of Victoria after that time. “That will make gaming a smaller part of our business and at the same time we’re making very significant investments in our casinos business. We’re doing that because that’s where we have the right conditions: long-term licenses, attractive markets and opportunity for growth.”

The loss of the Victoria license will leave a serious dent in Tabcorp’s top line. In fiscal year 2010, which ended June 30, that business delivered A$270 million in revenue. Net profit company-wide was A$469.5 million, down 10 percent from 2009. Normalized net profit, which corrects for the big swings associated with VIP players, was down 3.8 percent to A$477.3 million.

“So the outcome is that we’ll become more of a casino business as a result of the investments that we’re making,” said Kupper.

The biggest investment is currently A$860 million being used to raise the facilities of the company’s Sydney property, Star City, to the level where Tabcorp hopes it can compete with Crown’s Melbourne property—particularly in the area of VIP play. Tabcorp recently announced it is adding $A285 million to the A$575 million already earmarked for the Star City upgrade. The new money is primarily going to facilities and amenities for the VIP market.

Star City will also be getting a 3,000-seat, multi-use entertainment facility, which Kupper said would generate traffic and establish a brand that would benefit the whole property.

“What we’re creating here is not an events center,” said Kupper. “What we’re creating is an entertainment destination, and if you look at the size of Sydney relative to any other market in this country, it’s by far the biggest market, and if you look at what other casinos are investing, an investment of close to a billion dollars actually makes sense.”

By GGB Staff   Mon, Aug 30, 2010

After a lengthy selection process, the world’s largest gaming company, Harrah’s Entertainment, was named the operator of the two Ohio casinos that will be owned by Rock Gaming, one of the two companies granted gaming franchises in a referendum last November. The other company is Penn National Gaming, which will own and operate casinos in Toledo and Columbus.

The casinos owned by Rock Ventures are located in Cleveland and Cincinnati. The company is controlled by Jeff Gilbert, the owner of the Cleveland Cavaliers of the NBA. The agreement means Harrah’s will make an investment for a “significant minority interest” in the properties. The properties will be branded as Harrah’s casinos.

Harrah’s will contribute its recently acquired Cleveland-area Thistledown Racetrack to the pending joint venture. If the Ohio Lottery’s efforts to implement video lottery terminals at Ohio’s horse racing tracks are successful, the agreement calls for Harrah’s to manage Thistledown as well.

“Our team is certain that Harrah’s top-notch and innovative management team is completely aligned with our unwavering commitment to create and deliver projects that embrace and interact with the downtowns they serve,” Gilbert said

Gary Loveman, chairman and CEO of Harrah’s, said he is excited about the arrangement.

“We look forward to the opportunity to bring our casino brands, management expertise and Total Rewards customer loyalty program to Ohio,” he said in a release. “Harrah’s shares a common vision with Rock Gaming to develop and manage first-class urban-based casinos that will be a catalyst for economic expansion and job creation in both markets.”

The joint venture is expected to invest more than $600 million to develop the Cleveland casino, which will be located in the heart of the downtown entertainment district. The gaming operation is projected to attract 8 million visits to downtown Cleveland annually, while adding another high-profile attraction to Cleveland’s impressive sports, entertainment, music and cultural destinations. More than 8,000 construction and permanent jobs are expected to be created by the development and operation of the project.

The Cincinnati casino will be built on 20 acres of vacant property on the downtown’s northeast side known as Broadway Commons. The estimated $400 million new development is expected to drive 6 million visits to downtown Cincinnati, while creating nearly 4,900 construction and permanent jobs.

By GGB Staff   Mon, Aug 30, 2010

Powerful Philippine businessman Ramon S. Ang, who is vice chairman of the San Miguel Corp., has made an unofficial offer to buy the casinos controlled by the Philippine Amusement and Gaming Corp. (PAGCOR) for $10 billion. The offer follows a suggestion in July by the country’s new president, Benigno Aquino III, that he would consider privatizing the organization.

According to the Philippine Daily Inquirer, Ang said the offer is just a preliminary, but he would put an official offer on the table once the government makes the solicitation.

“The sale of PAGCOR fits in well with the president’s agenda,” Ang said. “Why wait for six years to have $10 billion when you can have $10 billion in just six months?”

Ang claims to have backing from Malaysian investors Robert Kuok, Ananda Krishnan and Francis Yeoh.

Aquino didn’t dismiss the offer out of hand.

“It is a proposal, it is a very interesting proposal,” he said. “But at the same time we have to study the matter first. We have to ensure that if we intend to sell something, it is at the best price we can get.”

Union Gaming Group of Las Vegas estimated that PAGCOR could be worth at least $1.5 billion more than Ang’s current informal offer.

PAGCOR operates 41 casinos and reported a net income of $640 million in 2008, the last year data is available. The agency dedicates 50 percent of its revenue to social causes in the Philippines, which should create a wide range of opposition to Aquino’s proposed privatization. 

Meanwhile, Aquino has suspended issuing of any new casino franchises, and said he may halt all development of new PAGCOR gaming as he decides on his course of action. Senator Franklin Drilon agreed that he should consider this.

“As a matter of policy, the president can say henceforth, PAGCOR will no longer operate casinos,” he said. “That’s feasible but it should be bid out. The actual operations of the casino should be bid out because that will promote transparency.”

Should the casinos be privatized, however, officials say the government will retain regulatory control over them.

“PAGCOR’s regulatory function will have to remain with government and be separated from its commercial operations, which can be privatized,” said Finance Secretary Cesar Purisima.

In a recent development with PAGCOR’s Entertainment City, Harrah’s Entertainment is poised to launch its first Asian operation if the reports are correct that the company is in “the advanced negotiation level” with the developers of the casino resort, Belle Corp. and Leisure & Resorts World Corp., which own Premium Leisure and Amusement Inc., the company building the property.

According to LRWC’s majority owner and former president, Alfredo “Albee” Benitez, Harrah’s has the edge over two competitors because of the strength of its brands. Benitez says the company’s Planet Hollywood brand would be used for the casino resort. The first phase, estimated to cost $300 million, would be a 100,000-square-foot casino, with 1,500 slot machines and 250 table games, surrounded by 100 VIP suites to accommodate players.
A second phase includes two 500-room hotel towers. PLAI has committed to spending $1 billion over
25 years on the project. The first phase is expected to be completed in the third quarter of 2011.

By GGB Staff   Tue, Aug 31, 2010

Pennsylvania’s Mount Airy Casino Resort announced the resignation of its first CEO, George Toth, and the hiring of veteran casino executive John Culetsu as the new executive vice president and general manager.

Toth stepped down Friday, August 5, to “pursue other career opportunities,” according to the casino. Owner and Managing Trustee Lisa DeNaples thanked Toth for his efforts in guiding the resort through its opening phase and the introduction of table games. “George Toth brought a great deal of experience and knowledge of the gaming industry into his role as CEO,” DeNaples said. “We thank him for leading us through the highly successful transformation of Mount Airy Casino Resort and we wish him continued success.”

Culetsu, who took the helm last week, was most recently general manager of the Palms Casino Resort in Las Vegas. He managed the Crowne Plaza Hotel for 20 years, and served in various marketing and management positions at hotels and casinos, including Resorts International in Atlantic City.

“We are thrilled to welcome John Culetsu in a leadership position to Mount Airy Casino Resort,” DeNaples said. “He brings decades of experience in managing blue-chip properties and has mastered the fine art of creating the perfect customer experience for each guest. He will take us to the next level as a destination and ensure our position as the ultimate casino resort on the East Coast.”

By GGB Staff   Tue, Aug 31, 2010

Slot and system manufacturer Bally Technologies has implemented its iVIEW Display Manager “point of play communications” system at Galaxy Entertainment Group’s StarWorld Casino in Macau.

The iVIEW DM system, installed after a competitive bid process, is implemented is live across the casino floor at StarWorld. The system delivers interactive communication to the player on a dedicated screen of each slot machine, without interrupting game play, In addition to Bally slots, the system works through iVIEW displays installed on machines of rival manufacturers IGT, WMS and Aristocrat.

“Partnering with Galaxy Entertainment Group on the floor-wide implementation of iVIEW DM has been such a rewarding experience for Bally Technologies,” said Richard Haddrill, Bally’s CEO. “iVIEW DM is generating excitement among StarWorld’s customers with applications and information available to them right at the game.”

iVIEW DM uses picture-in-picture-style technology to create a variety of additional services on the casino floor, including innovative floor-wide bonusing games; games-within-games; watermark messages and announcements; celebrations of important wins; targeted marketing messages; players club information; and customer-service features.

By GGB Staff   Tue, Aug 31, 2010

Slot and system manufacturer Bally Technologies has opened a sales and service office in Sydney, Australia, marking the company’s return to selling games in Australia and New Zealand for the first time in decades.

Bally announced that its team for sales and service in one of the world’s largest slot markets will be headed by veteran Australian gaming executives Michael McNee and Ron Jeffrey in Sydney, and Cath Burns, vice president and managing director of Bally Technologies’ Asia-Pacific division.

McNee was named managing director of Bally Australia, and Jeffrey was named sales manager for the division.

McNee was a longtime executive with slot manufacturer Aristocrat Technologies in Australia before joining Bally last year as a consultant. He will be responsible for overall product and marketing strategy for the Australia and New Zealand gaming markets.

Jeffrey was most recently national sales manager in Australia for Aruze Gaming. Prior to that, he spent 10 years with Aristocrat in various sales and marketing positions. He will oversee Bally’s sales operations and customer-relationship management throughout the region.

By GGB Staff   Tue, Aug 31, 2010

Manufacturer: AC Coin & Slot
Platform: S2000
Format: Five-reel, 20-line stepper slot
Denominations: .01, .02
Max Bet: 100
Top Award: 50,000 credits
Hit Frequency: Approximately 50%
Theoretical Hold: 8%—11%

This community-style game from AC Coin comes in a setup of two five-reel stepper games under a giant bonus LCD screen used for a common bonus event.

The base 20-line video slot—there is a 20-credit minimum forced bet—is IGT’s “Double Jackpot 7s” pay table. The primary game features AC Coin’s popular “Quick Hit” feature, which promotes increased coin-in by offering a bonus event every seven spins with maximum bet wagered. The Quick Hit bonus, triggered with two bonus symbols on the middle reels, leads to one of three bonuses. Images of a bar, an amp stack or a tattoo hide 12 credit award values. A bonus animation clip plays and one of the values is awarded, with an average bonus of 135 credits.

The main bonus event occurs every 64 spins, on average, with max-bet required. The bonus plays out on the large overhead screen, as one of three “Rock and Roll Legend” characters stands beside four lines representing a musical staff. As the “Legend” begins a guitar solo, notes rise from the bottom of the screen, as credit award levels move across each line. When a note hits a credit award of the same color, that amount is awarded in an ongoing tally.

After all the credits are tallied from the notes, four multiplier awards randomly move across each line. The player receives four additional music notes for the multiplier round. If the note touches a multiplier of the same color, that multiplier is applied to the accumulated award.

The game is designed for low denominations, with a high hit and bonus frequency and built-in incentives for maximum bets.

By GGB Staff   Mon, Aug 30, 2010

Product: AccuLeve
Manufacturer: TCS John Huxley

AccuLevel for roulette wheels is an aptly named solution from TCS John Huxley to quickly and accurately check and adjust the level of a wheel.

AccuLevel was developed to facilitate the maintenance and security issues associated with the operation of roulette wheels, especially the potential of developing uneven wear of the ball track or drop zone bias. By actively rotating wheels, casinos can lessen the risk of operating with predictable drop zones as well as prolonging the life of the wheel.

Simply yet suitably engineered, the AccuLevel provides a single staff member the ability to level and rotate the wheel on a regular basis without the need to adjust electronic winning number-reading devices. Rotation can be done at any time: opening of game; between dealer changes; or even between spins during live play. It also can reduce the potential risk of injury from lifting and leveling heavy roulette wheels at awkward angles.

The unique design of AccuLevel allows easy and accurate three-point leveling, featuring a 360-degree wheel rotation plate with 15 indexed positions. By using the optional tri-point level, specifically designed to sit in the ball track, operators can quickly and accurately check and adjust the level of a wheel. AccuLevel combats unnecessary risks by making wheel leveling easy, fast and accurate, and eliminates any drop-zone bias caused by poor wheel calibration and lack of preventive maintenance.

AccuLevel works with both traditional roulette wheels that use rim mounted winning number detectors and TCS John Huxley Saturn wheels that have embedded sensors. 

For more information on the AccuLevel for roulette wheels, visit www.tcsjohnhuxley.com.

By Ted Keenan   Mon, Aug 30, 2010

The technology that gaming executives have been waiting for to turn the industry on its head has arrived, and with it, new opportunities to improve the player experience, increase player interaction, and add dramatically more excitement across the casino floor.

Player user-interface tools such as Bally Technologies’ iVIEW Display Manager use picture-in-picture-style technology to present players with more information, interactivity and service options than ever before. Much like the picture-in-picture options on TV, solutions such as iVIEW DM provide information on the main game screen without interrupting play. And since players are focused on that screen, they are more likely to read and react to the messages that appear.

In addition, players can access the services and marketing bonuses they desire. Touch-enabled buttons allow players to request beverages, show times or ticket reservations, choose their favorite bonus games, or tap into other services that the property chooses to offer. Players can even choose which side of the game screen the secondary window appears at the time of sign-up at the players club, and can hide the window if they prefer.

Pechanga Resort & Casino, which has used iVIEW DM for the past two years, has proven the technology on machines from a variety of manufacturers.  Pechanga is now on the cusp of trialing new applications which will radically alter how the property is able to create floor-wide excitement and communicate with their players to improve service and enhance the gaming experience.

“Placing the information in front of the player is smart, but the breakthrough is that they are getting something in return—a chance for more winnings, elevated service options, or choices tailored for them,” says Buddy Frank, vice president of slot operations at Pechanga.

Frank says Pechanga was initially hesitant about the picture-in-picture-style technology, concerned the addition of an on-screen message would be distracting. Player testing showed otherwise.

“As with any piece of new technology, its success is determined by how well you use it,” Frank says. “I’ve watched news programs with scroll bars at the bottom of the screen, an update window in the corner, and a ticker across the top. I have a hard time focusing on what the anchors are saying. So if our players are constantly receiving messages via the iVIEW DM, we’ll drive them crazy. But if we provide information that contains something they want, then we’ve exceeded their expectations.”

The technology adaptation also enables floor-wide bonus games targeted toward specific players and tailored to their personal wagering habits. This ubiquitous experience on any machine, available on games from any manufacturer, opens the door for floor-wide social experiences not previously available.

For instance, Barona Resort & Casino’s recent “Off  ToThe Races” promotion created a social gaming experience across the entire casino floor. Players selected their favorite horse on the iVIEW touch-screen display during game play, and if their horse won, they were awarded a share of $10,000. The casino added to the floor-wide excitement by displaying the race on more than 50 displays in the casino driven by the CoolSign media-management solution, and created content featuring live music, a professional race caller and bugle calls to the post.

“This promotion is the first event ever where 2,000 devices and more than 50 displays were all synchronized for a floor-wide community gaming experience,” says Mike Murphy, Barona’s vice president of technology. “Because our customers had to earn 100 points to be eligible to even participate, it helped generate revenue and increased the percentage of carded play. Plus, the interactivity and ability for players to choose their horse to cheer definitely added a feeling of excitement and anticipation on our floor. Off To The Races has been, by far, our most successful casino promotion.”

Because virtual racing was such a success, Murphy said they will tailor the products and infrastructure created for the promotion to do other floor-wide promotions and events that include interactivity and combine the in-game player user interface with the casino displays and sound system.

This kind of in-game technology to create differentiated player experiences is only the beginning. Bally is preparing to launch its iVIEW DM Wheel, which provides casinos the ability to use the award-winning U-Spin technology (first launched in the Cash Spin slot machine) in floor-wide promotions with a virtual wheel that players can touch and spin on the DM touch-screen display. This and other such applications add dramatic new levels of player interaction and an electric atmosphere across the casino floor.

By GGB Staff   Mon, Aug 30, 2010

The federal Bureau of Indian Affairs has identified a 25-acre parcel in the town of Cascade Locks in the Columbia River Gorge in Oregon as the preferred site from among the five considered for a casino by the Confederated Tribes of the Warm Springs.

The BIA identified the Cascade Locks site, which is located inside an industrial park, as the preferred location in a just-published final environmental impact statement released on August 6. It found that the casino would not harm air quality or fish habitat in the gorge.

The 5,000-member tribe wants to build a 90,000-square-foot casino, 241-room hotel and convention center. It would build the casino on the 25 acres it hopes to put into federal trust, and lease adjacent lands for parking and resort facilities.

It currently operates a small casino on its
reservation at Kahneeta. It has 60 percent unemployment.

Interior Secretary Ken Salazar must still endorse the site and the tribe must successfully negotiate a tribal gaming compact with the state.

Outgoing Governor Ted Kulongoski signed a compact with the tribe five years ago, although it has never been ratified by the legislature. The two candidates vying to replace him both oppose off-reservation casinos. The tribe and the governor hope the process can be completed before he leaves office. At the earliest, Salazar must wait 45 days before signing off on the site.

By GGB Staff   Mon, Aug 30, 2010

The government of Cyprus intends to license and regulate online sports betting but ban other forms of online gambling, including poker.

A draft law on the matter has been prepared for submission to the European Commission, which will give its input on E.U. compliance issues. A vote on a final bill is expected before the end of 2010.

“It is a very important bill, which tries to resolve a problem that has developed into a social scourge in recent years,” Finance Minister Charilaos Stavrakis said. “These casinos have been created on every corner of Cyprus and anyone, young or old, can basically gamble in the same way it is done in casinos abroad.”

According to the Cyprus Mail, about 400 locations around the island currently provide the means for online gaming under a “quasi-legal status” owing to the absence of legislation. When authorities raid a location and seize equipment, the operators merely replace the computers and are back in business the following day. In the draft law is a provision for sealing the premises for the duration of the prosecution.

The draft legislation does not specify a tax rate for online sports betting, but Stavrakis said it could be 10 percent. The use of cash would be prohibited, with all transactions occurring via credit card or electronic account. A gaming board with licensing powers would be created. The draft was approved unanimously.

The government has estimated that as much as €2.5 billion is being wagered online annually, although other estimates put the total at several hundreds of millions. The population of the island is 1.1 million.

By GGB Staff   Mon, Aug 30, 2010

A Chinese bank has agreed to back financing to revive stalled construction of a mega-resort in the Bahamas. The Baha Mar project, which has been on hold for two years after Harrah’s Entertainment withdrew its backing, is back on track, according to developer Baha Mar Resorts Ltd.

The developer announced last month that China’s economic planning agency gave its final approval to develop the 1,000-acre resort along Nassau’s Cable Beach. The Chinese Export Import Bank has arranged $2.5 billion in financing, and the nation’s state-owned construction company has signed on to build the project.

Baha Mar is planned to include 3,500 room in six hotels, plus condominiums, a convention center, a golf course, retail shops and what the developer says will be the largest casino in the Caribbean.
The project is expected to result in 11,000 jobs for Bahamian residents, including 6,000 permanent positions.

By GGB Staff   Mon, Aug 30, 2010

New Jersey Governor Chris Christie offered a bright light at the end of the tunnel for the Atlantic City casino operators last month when he introduced a plan drawn up by his commission to study gaming, entertainment and sports in the state, which included the racing industry. The plan, he said, would provide some stability for the gaming industry and certainty for investors in Atlantic City. The commission, headed up by John Hanson, former head of the New Jersey Sports and Exposition Authority, was wide-ranging and positive in almost every sense for Atlantic City and the casino industry.

Christie led off the press conference on the Boardwalk by saying that this plan would “remake Atlantic City.”

“I made a commitment during the campaign and say it again six months later: I don’t think it’s the appropriate time to consider having gaming anyplace else but Atlantic City,” he said.

The governor stressed the urgency of the situation.

“Atlantic City is dying. The question is are we going to allow the same doctors who put the patient in this condition to treat the patient?” asked the governor. “If anybody’s got a better idea, come forward with it. It’s not going to fix itself.”

Some of the proposals in the Hanson report include the following:

• Eliminate consideration of any gaming outside Atlantic City—including VLTs at state racetracks—for the foreseeable future while the plan to revitalize the city is under way.
• Create a state-run “gaming and entertainment” district in Atlantic City, which would draw up a master plan for the area and include marketing and operations within that area. Christie describes it as a public-private partnership that would also absorb the Atlantic City Convention & Visitors Authority.
• Dedicate all Casino Reinvestment Development Authority funds directly to Atlantic City, eliminating the contributions that were slated to go to other parts of New Jersey.
• Eliminate state ownership of racetracks, including the Meadowlands and Monmouth Park, while also eliminating the $30 million annual subsidy provided by the state gaming industry.
• Close the New Jersey Sports and Exposition Authority, which operates the state-owned racetracks and stadiums. The NJSEA recently revealed it is more than $38 million in debt and would require a state bailout.
• Eliminate state support—except in a public-private partnership—for the Xanadu project at the Meadowlands, “which is the ugliest building in New Jersey,” according to Christie. “Make it work or tear it down.”

Christie emphasized that time is of the essence in approving and implementing the plan.

“Swift, bold action is what it will take,” he said. “And we’re prepared to move quickly to make this happen. Delay will lead to demise.”

The goal, according to the report, is to reignite investment in Atlantic City.

“We want to create a business climate in Atlantic City that will create a climate that will encourage investment and create jobs—long-term, sustainable jobs for South Jersey,” he said.

Democrats, meanwhile, convened a “gaming summit” designed to look into the Republican governor’s plan. The first hearing degenerated into a confrontation between racing interests in the northern part of the state and gaming interests in the south, a traditional split in New Jersey.

By GGB Staff   Mon, Aug 30, 2010

The casino industry is a tough business when things aren’t going well. Usually the leader takes the fall, and that’s what happened at two neighboring properties in Macau in July.

First, Steve Jacobs, the president of Sands China, was summarily relieved of his position in what appears to be a showdown with Las Vegas Sands Chairman Sheldon Adelson. Insiders say that conflict was ongoing between the two and Jacobs’ stock options gave him a multi-year cushion if he got fired. Ironically, the Sands China properties—the Venetian, Sands Macao and the Four Seasons—were performing much better than last year. And construction of parcels 5 and 6 are moving forward, as well, with completion expected in 2012.

The surprise replacement for Jacobs is a combination of two executives. Edward Tracy, a former president of the Trump casino organization, was named president and chief operating officer and David Sisk, a former CFO at Caesars Palace and Wynn Las Vegas, was appointed executive vice president and chief casino officer. Tracy, who helped develop a New Orleans riverboat with Capitol Gaming after leaving Trump, has not run a casino in over a decade. As CFO of Wynn Las Vegas, Sisk played a role in the development and opening of Wynn Las Vegas and Encore.

Across the street at City of Dreams, Greg Hawkins stepped down as president following months of disappointing results at the Melco Crown-owned property. Hawkins’ departure led the parent company to restructure upper management at the property.

Ted Chan, currently president of the company’s Altira Macau property, has been promoted to co-chief operating officer of gaming, and will oversee gaming activities across the entire organization effective next month.

Nick Naples, formerly consulting executive vice president at rival Sands China Ltd., has been named co-chief operating officer, operations, and will manage all non-gaming operating activities for the company.

Both Chan and Naples will report directly to Lawrence Ho, the company’s co-chairman and chief executive officer.

The reorganization will eliminate dedicated CEOs at each of the Macau properties, instead giving each of the co-COOs overall corporate responsibilities.

By GGB Staff   Tue, Aug 31, 2010

Hard Rock Hotel & Casino in Las Vegas has entered into an operating agreement with Cantor Gaming, an affiliate of leading global financial services firm Cantor Fitzgerald, to serve as the exclusive race and sports book operator. Cantor Gaming will initially integrate its state-of-the-art “In-Running” technology into the casino’s existing race and sports book, with the aim of launching upon regulatory approval.

Cantor’s In-Running wagering system allows proposition bets to be placed throughout during an event or game, on numerous different outcomes and with the lines constantly changing, up until the final whistle.

Hard Rock will begin work on a new race and sports facility with Cantor Gaming, slated to open in spring 2011. Earlier this year, Cantor Gaming and Hard Rock Hotel & Casino agreed to install the eDeck mobile gaming system at the property, to be rolled out upon regulatory approval.  On approval, wagering methods will include Cantor’s wireless system, so patrons will not be physically bound to the sports book.

By GGB Staff   Mon, Aug 30, 2010

Former National Indian Gaming Commission Chairman Philip Hogen last month told a Senate committee that corruption is more likely after a 2006 court decision. He was speaking before Senator Byron Dorgan’s Indian Affairs Committee’s oversight hearings.

Hogen specifically mentioned Oklahoma as a state that is vulnerable to corruption because its regulatory infrastructure is not as extensive as in other states. It is also vulnerable because, unlike other Indian gaming states, it mixes Class II and Class III gaming.

Senator John McCain, who has for many years made Indian gaming enforcement a special interest of his, commented, “I think we need to stay on top of this because there are many experts on gaming who believe there will be some scandals because of the lack of the kind of oversight and regulation that exists in the state of Nevada.”

He said if enforcement of Indian gaming regulations only affected Indians, he would be less insistent upon it. “If it were strictly an Indian operation, I would be less inclined to be trying to repair this loophole that has been created,” he said.

Hogen criticized the 2006 Colorado River court decision, which removed the NIGC from much of the enforcement of Class III gaming.

The recently installed NIGC Chairman Tracie Stevens said she wants to complete a review of the effects of the decision on the 28 states that have Indian gaming before making a statement about it. “It’s complicated,” she said.

By GGB Staff   Mon, Aug 30, 2010

U.K.-based gaming operator Rank Group plans to increase the number of casinos in its home market over the next two years, investing £50 million in the process.

The multi-sector operator currently has 35 casinos in the U.K. and two in Belgium. Of the U.K. properties, 12 sport the relatively recently created G Casino brand, with two Grosvenor Casinos properties having been converted to the G group in the first half of 2010. There are plans for one new-build and at least three conversions to G in 2011, and two more new-builds for 2012. The target for G venues is 20 total by 2012.

Over the next two years, reports Reuters, Rank plans to build at least five casinos in northern and central England, for a total cost of £23 million. Another five casinos will follow later.

In the first half of 2010, Rank reported a 9 percent increase in gross gaming revenue from casinos compared with the year-earlier period, taking £116 million. Operating profit from the sector increased by almost 20 percent before exceptional items.

By GGB Staff   Mon, Aug 30, 2010

Operator Enjoy is said to be ready to start work on its newest casino, to be located in the town of Castro, Chile, on the northern Patagonia island of Chiloe. Castro is a picturesque fishing village known for its waterfront houses built on stilts.

Radio Bio-Bio and news source Yogonet reported that the first phase of the project will be construction of the casino. A second phase could include a five-star hotel. Work on the development has already been suspended once due to the company’s financial situation.

When completed, the $38 million casino will employ some 300 people.

By GGB Staff   Tue, Aug 31, 2010

Slot and system manufacturer Bally Technologies announced that Robert Caller is retiring from his post of chief financial officer, to be replaced by Neil P. Davidson (l.), currently the company’s chief accounting officer.

Davidson has been promoted to senior vice president, chief financial officer and corporate treasurer.

Davidson joined Bally in 2006 as vice president of corporate accounting, and was appointed chief accounting officer in May 2008. During his tenure, he has worked directly under Caller in assisting the company to improve financial operations. Prior to joining Bally, he served as vice president of finance for Multimedia Games.

“I’m honored to have worked under Robert and assume the role of Bally’s CFO at such an exciting time in our company’s 78-year history,” Davidson said. “Our games and systems product portfolio has never been richer and more cutting-edge, and there is a tremendous amount of innovation currently under development.”

By GGB Staff   Tue, Aug 31, 2010

Slot manufacturer Aristocrat Technologies announced the first European casino installation of its progressive JAWS video slot link. The game, based on the famous 1970s films, has been installed the prestigious Monegasque gaming resort at Monte Carlo’s Casino Café de Paris.

Aristocrat has licensed the JAWS game through an agreement with Universal Partnerships & Licensing. Société des Bains de Mer, exclusive operator of five casinos in the principality, capitalized on the impact of the game launch with an unprecedented outdoor advertising campaign inviting players to “Bite into the Jackpots.”

“Slot games with an instantly recognizable brand behind them always deserve special treatment,” said Monte Carlo Casinos Director General, Eric Schroeter. “Its iconic status means that JAWS is renowned throughout the world and represents an ideal gaming proposition. So it was with great confidence that we invested so heavily in promoting our launch. The instant reaction of players both on the first night and ever since then suggests that this game could prove to be as big a blockbuster as the original movie.”

By GGB Staff   Mon, Aug 30, 2010

The government of Grenada appears willing to let Swedish developer Zublin seek business partners elsewhere in the Caribbean.

Zublin recently withdrew its year-old proposal to build a four-star hotel and casino, plus a new cruise ship jetty, as part of its St. George’s Renaissance project. The total development was valued at 450 million East Caribbean dollars, about US$166 million at current exchange rates.

Problems began when the government of Grenada, led by Prime Minister Tillman Thomas, objected to the casino portion of the deal. Zublin claimed the government was refusing to meet with the company to discuss details and sent a letter to Works Minister Joseph Gilbert, calling the government’s behavior “unacceptable.” Ultimately, Thomas said the project had been rejected after the government had failed to come up with EC$150 million in public financing.

Zublin currently operates a cruise ship terminal and duty-free shopping mall, but says it is no longer interested in investing in Grenada. Instead, the company recently announced it has received preferred-bidder status for a 180-room Marriott Hotel with casino in the new gaming jurisdiction of Georgetown, Guyana. A second project involves a bid to develop cruise ship facilities on Barbados.

Grenada opposition leader Dr. Keith Mitchell told the Caribbean Media Corporation that the government is pushing away investors.

“What happened to Zublin is just a continuation of that missed opportunity and the lack of vision, lack of planning by this government,” said Mitchell, who led the government from 1995 to 2008.

By GGB Staff   Tue, Aug 31, 2010

The National Indian Gaming Commission announced Paxton Myers as the new chief of staff last month. As the former Native American affairs adviser to Congressman Dale Kildee, Myers helped liaise between Congress and the Native American community for years.

“Paxton brings a diverse and practical background with him to the NIGC,” NIGC Chairwoman Tracie Stevens said. “His experience on Capitol Hill coupled with his previous tribal government and gaming operations work will greatly benefit the NIGC. We look forward to Paxton joining the commission and welcome him to the team.”

Myers’ résumé also includes work with both a tribal government and tribal gaming operation from 2000 to 2009. He is a member of the Eastern Band of Cherokee Indians of Native America.

By GGB Staff   Tue, Aug 31, 2010

Aruze Gaming America announced the appointment of Brian Coy as chief financial officer for the Americas. Coy a 20-year veteran of the gaming, hospitality and manufacturing industries, most recently was director of financial reporting for Fontainebleau Resorts, operator of the iconic Miami Beach hotel and developer of $4 billion in resort assets.

Coy will be responsible for operational and financial accounting for the slot manufacturer in the Americas.

“It is with great pleasure that we welcome Mr. Coy to Aruze Gaming,” said Kent Young, executive vice president of Aruze Gaming America, Inc. “His diverse background and experience with financial controls will be instrumental in furthering our growth and development.”

“Aruze is a unique company with a great history and clear growth opportunities,” Coy said. “I am thrilled to be part of such a dynamic team.”

By GGB Staff   Tue, Aug 31, 2010

The newest member on the board of directors at the Las Vegas Sands is former executive vice president of Walt Disney Imagineering, Wing Chao. The newcomer joins the Sands at a time when the company is exploring new ventures in Asia—where Chao did much work with Disney.

“Wing Chao is a world renowned master planner and architect. We have admired his work and remarkable achievements for a long time," Las Vegas Sands Chairman and Chief Executive Officer Sheldon G. Adelson said.

The new board member with a UC Berkley masters and Harvard University undergraduate degree has a robust resume that branches out beyond architecture and his work with Disney. In fact, Chao is also highly regarded in the hospitality industry where he won numerous awards including one of Hospitalit

By   Tue, Aug 31, 2010

The Balkan Entertainment & Gaming Expo and concurrent Eastern European Gaming Summit are being held for the third year running at the Inter Expo & Congress Center in Sofia, Bulgaria. The dates for this year’s show and conference are October 4-6.

The expo draws exhibitors from the interconnected worlds of gaming, amusement and tourism. Well-known casino suppliers like Abbiati and Gaming Partners International are joined by regional companies active in both the casino and street slot sectors. Bulgaria’s home-grown slot industry is well represented by Casino Technology and Euro Games Technology, both of whom participate regularly at G2E, IGE and numerous other shows around the world.

Also featured this year are suppliers active in the security and surveillance, digital signage and food & beverage sectors.

The accompanying Eastern European Gaming Summit will offer attendees a unique opportunity to get to know the region, which has 55 million inhabitants. Representatives of gaming associations from Bulgaria, Croatia, Republic of Macedonia, Romania and Serbia will be joined by their counterparts from Austria, Greece and Poland to review changes in the regulatory environment. The speakers will outline the challenges and opportunities experienced so far this year, and provide forecasts for the near future.

Armin Karu, chairman of the board of Olympic Gaming Group, and Yuri Rozental, director of European marketing for MGM Grand, will present their views. Regional operators Princess Casinos, Grand Casino Beograd and Club Hotel Casino Loutraki will be among those sharing experience with the audience.

Registration can be completed online before September 30. More information is available at www.balkangamingexpo.com and www.eegamingsummit.com.

By GGB Staff   Tue, Aug 31, 2010

Table game supplier Gaming Partners International Corporation announced that it has completed the delivery of the order of casino currency to the new Cratos Premium Resort in Northern Cyprus.

The order, which included over 27,000 casino chips and plaques from the GPI’s Bourgogne & Grasset (B&G) line of casino currency products, is the first for the company in the relatively new Cyprus gaming market.

The Cratos Premium feature the biggest plaques, in both size and denomination, ever offered on the island of Cyrus. According to GPI, they feature the latest designs and the newest state-of-the-art materials available.

“The Cratos Premium promises to be one of the most luxurious resorts in the Mediterranean and we are proud that they have chosen our B&G chips and plaques as their casino currency of choice,” said Greg Gronau, president and CEO of GPI.

The Cratos Premium Hotel and Casino opened on July 20, on a 110,000-square-meter property in Kyrenia. It is the largest tourist investment ever made in Northern Cyprus.

By GGB Staff   Tue, Aug 31, 2010

The 20th annual Executive Development Program for the gaming industry will be offered by the University of Nevada, Reno, November 3-11, at Harveys Lake Tahoe Casino and Resort, Lake Tahoe, Nevada. Sponsored by the University's Institute for the Study of Gambling and Commercial Gaming, College of Business and Extended Studies, the program's emphasis is “Confronting Challenges and Embracing Opportunities—Strategic Leadership in the Gaming Industry.”

The only program of its kind in the world, the exclusive nine-day series is designed for gaming professionals in positions of substantial responsibility including management and executive leadership. Delivering state-of-the-art, industry-specific knowledge in an intensive week of seminars, presentations and interactions, the cutting-edge program utilizes up-to-the-minute case-study analysis to examine issues of critical importance.

The annual program is moderated by William R. Eadington, Ph.D., a professor of economics and director of the Institute of Gambling and Commercial Gaming in the College of Business, University of Nevada, Reno. Eadington also holds the university’s prestigious Philip G. Satre Chair in Gaming Studies.

The Executive Development Program’s faculty consists of casino industry experts drawn from some of the most prominent casino operations in the world. Past faculty members have included Chuck Atwood, Larry Barton, Eugene Christiansen, Glenn Christensen, Harry Curtis, Bill Friedman, Bill Lerner, Larry Lewin, Gary Loveman, Andrew MacDonald, Phil Satre, Glenn Schaeffer, Richard Schuetz, Paul Steelman, Larry Woolf and Andrew Zarnett.

Deadline for application to this year's Executive Development Program is September 16; early application is advised. The program fee of $5,500 (USD) includes tuition, deposit, course books and materials, shirt, canvas briefcase, daily refreshments, lunches on full days, reception, opening dinner and graduation banquet.

Participants are responsible for lodging and travel arrangements and costs. For more about the Executive Development Program, call Extended Studies at the University of Nevada, Reno, (775) 784-4046 or 1-800-233-8928, email gaming@unr.edu or visit www.gaming.unr.edu/edp .

By GGB Staff   Tue, Aug 31, 2010

Gaming Laboratories International has certified a new technology offered by Las Vegas-based company Reel-TV which feeds high-resolution video directly to slot machines.

The Reel-TV patent-pending technology allows casinos to schedule and deliver high-resolution video advertising directly to slot machines on the floor in real time. The idea is to transform idle slot machines into advertising vehicles, as well as adding visual attraction to normal slot interfaces.

Under the system, after a slot machine is idle for 60 seconds, an advertiser’s message will display for 15 seconds, followed by 30 seconds of game display, another 15-second commercial, and so on. Video messaging ceases when a player wagers on the machine.

“This is great news for us and the many casinos that are interested in using our product,” said Reel-TV principal Keith Atkinson. “Approval by GLI will allow us to move forward and meet the demand that we have been experiencing ever since Reel-TV’s recent launch at the Palms Casino Resort in Las Vegas.”

By GGB Staff   Tue, Aug 31, 2010

Elixir Gaming Technologies, one of the leading distributors of electronic gaming machines in several Asian markets, has changed its name to Entertainment Gaming Asia Inc. The company’s shares will continue to trade under the ticker EGT.

In conjunction with the name change, the company launched a new corporate website, www.EGT-Group.com.

“Given the material transformation of the company following the restructuring of our operations over the past two and one-half years, we felt that a name change was appropriate,” said Clarence Chung, the company’s chairman and CEO. “The name Entertainment Gaming Asia more suitably reflects our expanded gaming business model, particularly in relation to our plans to build and operate our own hotel casino in the Indo-China region to complement our existing electronic gaming machines participation business.”

By Leslie Lohse   Wed, Sep 01, 2010

“If you are planning for a year, sow rice;
if you are planning for a decade, plant trees;
but, if you are planning for a lifetime, educate people.”

—Chinese Proverb


In May 2009, U.S. House Financial Services Chairman Barney Frank (D-Massachusetts) introduced H.R. 2267, the Internet Gambling Regulation, Consumer Protection and Enforcement Act, legislation which provides for the licensing and regulation of internet gaming. This legislation has currently become a challenging issue confronting Indian Country.

Different tribal leaders have taken different positions on this legislation; while some have claimed to speak for all of Indian Country on this topic, Indian Country has yet to speak with one voice.

The California Tribal Business Alliance (CTBA) was formed in 2004 to “safeguard and enhance the success of the business enterprises of our tribal government members.” Our philosophy also states our commitment to “act on behalf of its members to work in partnership with federal, state and local governments” and to “protect and advance CTBA members’ status as sovereign nations through productive alliances based on mutual respect and cooperation.” Our membership includes the Lytton Band of Pomo Indians, the Pala Band of Mission Indians, the Paskenta Band of Nomlaki Indians and the Viejas Band of Kumeyaay Indians.

In that spirit of consultation and cooperation, CTBA wrote to Chairman Frank on March 24 stating our concern that tribes were not consulted in the formulation of the legislation, but also stating our intent to “participate in the discussion about federal legalization of internet gambling and formulate a position on the bills consistent with those discussions.” We also expressed to Frank that “we look forward to working with you to create legislation that clarifies federal law on internet gambling and protects the interests of tribal governments.”

In response to our letter, along with several other tribal leaders who had expressed similar concerns, we were copied on a March 29 letter from Frank to the National Indian Gaming Association in which Frank stated that “I intend that this legislation should have no impact on (tribes’) compacts with states; that is, this bill should not in any way impair existing rights regarding compacts either currently in force or to be signed in the future.” In closing, Frank reinforced his commitment to consultation with tribal governments and said, “I urge you, your staff, and representatives of any interested tribal governments to engage with the committee staff and to propose solutions to those problems.”

CTBA, working with like-minded tribal leaders representing the Mohegan tribe, the Mississippi Band of Choctaw Indians and the Barona Band of Mission Indians, responded to Chairman Frank’s request, and on July 13, submitted a letter signed by all of our tribal leaders outlining our concerns, in hopes of educating Frank and his staff about such issues. We worked closely with his staff to develop language that would address the issues as they were expressed in our joint letter.

On July 28, the House Committee on Financial Services voted, by a margin of 41-22, to report the bill out to the full House of Representatives. Chairman Frank’s Manager’s Amendment included language that addressed the majority of our concerns. During the mark-up of the bill, Chairman Frank also reaffirmed his intent to work with Rep. Dale Kildee (D-Michigan) of the Natural Resources Committee to resolve any potential jurisdictional issues. The language in the Manager’s Amendment addresses our concerns regarding the following:

• Allowing tribes to engage in internet gaming without renegotiating their existing compact agreements with state governments covering their land-based businesses.
• Providing that “tribal operations of internet gambling facilities under this subchapter shall not impact an Indian tribe’s status or category or class under its land-based activities.”
• Requiring the U.S. secretary of the treasury to conduct “meaningful consultation” with Indian tribes before any of the aspects of the legislation potentially affecting tribes are enacted.

In addition, by working with Rep. Brad Sherman (D-California), CTBA was able to include amendments which address an issue that is of great concern to our alliance, the assurance that bad actors (illegal offshore internet gaming sites, persons who have intentionally committed a felony violation of federal or state laws, or knowingly violated gambling laws after the enactment of the Unlawful Internet Gambling Enforcement Act of 2006) not be allowed to operate in the United States.

The member tribes of CTBA are banded together by a forward-thinking, entrepreneurial spirit. In that regard, we work together closely to not only protect our existing businesses but to also look for opportunities which will provide a basis for future business that will enhance and provide a revenue stream for our governmental operations. It is incumbent upon tribal governments to be prepared to meet the challenge of internet gaming and ensure tribal interests and concerns are addressed, while protecting our sovereignty.

The internet gaming industry has been operating for almost 15 years. It is part of the international economy. When the Indian Gaming Regulatory Act was passed in 1988, no one dreamed of the dramatic impact that it would have on our tribal economies. Internet gaming provides the potential to expand those economies, as long as tribal governments remain at the table educating and helping to provide solutions to real and potential problems.

On behalf of CTBA, I urge tribal leaders to thoughtfully consider how to make internet gaming yet another exciting opportunity for tribal governments by working with Chairman Frank, as well as their individual representatives.

By GGB Staff   Tue, Aug 31, 2010

Mark Juliano, chief executive officer of Trump Entertainment Resorts, was recently named president of the Casino Association of New Jersey, succeeding Joe Corbo of Borgata as the de facto voice of the New Jersey casino industry. An industry veteran with more than 30 years of experience, Juliano joined the Trump organization in 2005, as chief operating officer, later moving to CEO. He oversees operations at Trump Taj Mahal, Trump Plaza and Trump Marina. Juliano previously served as president of Caesars Palace, Las Vegas, and president and COO of Caesars Atlantic City. Global Gaming Business Publisher Roger Gros and Editor Frank Legato spoke to Juliano about his hopes for the city and its leading industry, one day before Governor Chris Christie made headlines with his sweeping plan for change.  

GGB: Congratulations on being named president of the Casino Association of New Jersey. I don’t know if that’s an honor these days, because it’s such a difficult period in Atlantic City.
Juliano: Thank you. And it is an honor. It’ll be a challenging year, for sure, but we’re up for the
challenge.

Is there one issue in the city that you can pinpoint that is more important than the others?
I think the most important issue out there is just an overall recovery of the economy. Customer and consumer confidence is the single most important thing we need to swing back in our favor. It’s important to keep in mind that gaming is a discretionary spend; it’s something people only do when they feel good about their ability to spend. So once that turns around, that will be a big help.   

The second biggest issue here for us in Atlantic City is competition in neighboring states. So we’re keeping a close eye on what’s going in Pennsylvania. I think the impact of the slot business has been absorbed, and we don’t really see any further erosion of our slot business due to what’s happening in Pennsylvania. But table games just started there, and we’re anxiously awaiting what happens there.

Have you done proactive marketing to defray the effect of the table games?
We have. I know I speak for the Trump organization, but I’m sure the other properties in town have done the same thing. We’ve reached out to our mid-range table game player, because we think that’s the one who will be most impacted by the convenience of Pennsylvania. We have offered them quite a few promotional offers and incentives to continue to come to Atlantic City. It’s a very good situation for our customers.

Sports betting has been a consistent issue since the mid-’90s, when New Jersey residents were denied the chance to vote on it. Are there any legs left on this that would benefit Atlantic City?
Obviously you’re aware of Senator (Raymond) Lesniak’s bill. We would love to see it happen. Sports betting is, in and of itself, not an enormous money-maker. But it’s an amenity that appeals to a lot of people, and it gives you one more reason to come to Atlantic City, and we’re always looking for things like that. Unfortunately, even if the Lesniak bill passes, it will still require federal legislation to make it a possibility here in New Jersey. So we are very supportive of it, but it certainly has a long road ahead of it.

Even if all these hurdles are overcome, the other states will be able to offer sports betting too. So it’s kind of a wash.
Again, the thing that’s different about New Jersey and sports betting is that we really do have all-in destination hotels. We have a whole package of amenities that neighboring competitive states do not have, along with all the restaurants, entertainment, convention space—it really is a much better experience than in Pennsylvania or Delaware.

Another issue before the state legislature right now is online gaming, an intrastate version of that. Where does the association stand on that?
The industry as a whole has not taken a stand on it because different companies have different views. 

I personally don’t think online gaming is a good thing; there should always be an effort of some sort that people need to make to game, and to have people sitting around in their pajamas in their kitchen all day long gambling on their computers is not a good thing. If it happens, then we’ll have to deal with it.

Will the subsidies that the Atlantic City casinos have been providing to the racing industry in past years be over when this current agreement is over?
It’s our strong feeling that that $30 million a year could be far better spent than subsidizing purses at the racetrack. And I know that I speak for everybody in the association when I say we would be glad to continue the $30 million subsidy, but for a marketing fund that the Atlantic City Convention & Visitors Authority perhaps could manage. Everyone has absorbed that expense into their budget and we’re happy to continue, but we’d rather it be spent in a more productive way.

Have you had discussions with Governor Christie about Atlantic City? What’s his attitude toward the resort and the casino industry in particular?
I’ve only had one brief conversation with him. He is very interested in having us make this transition we’ve been talking about for a while. It needs to morph into more than just a gaming town. It needs to be a resort destination, a convention town, a retail town that appeals to a cash-paying customer as well as a gamer. He’s very interested in that, and we’ll be anxious to spend some time with him before the release of the gaming report. He has really been receptive to our ideas on how we can make that happen.

By Frank Legato   Tue, Aug 31, 2010

Something truly amazing is happening this month in Pennsylvania. It’s something few thought would ever happen.

One of the Philadelphia casinos is opening.

Yes, SugarHouse is actually opening for business. Looking at the comical history of the startup of gaming in Philadelphia, I must say, I thought there was a better chance of giant purple monkeys terrorizing the Las Vegas Strip.

First, citizens threatened to lay down in front of the bulldozers because they didn’t want casinos. Next, Philadelphia City Council tried to pass ordinances to prevent the casinos. One ordinance would have banned any casino within 1,500 feet of a residence. (In other words, the entire city of Philadelphia.) City council vowed to fight the waterfront casinos. The state Supreme Court issued two separate orders to city officials to quit stalling and approve the zoning. City officials, including the new mayor, ignored them. The mayor wanted the casinos to follow a private company’s plan for the waterfront—a plan that recommended no casinos.

Just before council could pass an ordinance banning casinos within a mile of the surface of Earth, or a law restricting casino ownership to Lithuanian conjoined twins, state lawmakers stepped in. They told Philly officials they were going to stop giving them their municipal cut of state slot revenues unless these casino projects got going.

Suddenly, every Philadelphia official was Frank Fahrenkopf. Support for the casinos gushed from city government. That was when the state pulled the old switcheroo.

Before city officials experienced their fiscally induced epiphany, they had been joined by state officials in harassing the two developers that had been awarded licenses for casinos in Philadelphia. Everyone wanted them to move their projects off the riverfront. State lawmakers threatened to pass a law that would eliminate all the tax breaks the licensees got under the gaming law unless they moved off the riverfront. SugarHouse refused to move. Foxwoods caved, and moved its project downtown to please the state officials.

It was a move that would eventually plant a big, stinking heap of egg on their faces. Residents in the Chinatown neighborhood were picking up pitchforks and forming a lynch mob, so Foxwoods moved the project several blocks away, to a couple of floors of a shuttered department store. But one of that building’s owners objected, and the lease negotiations bogged down.

So, state officials—this time, the Gaming Control Board—ordered the project back to the riverfront. Then, the Foxwoods partners couldn’t finance their project. Then Steve Wynn stepped in. Then he stepped out. Now, Harrah’s may step in. The original Foxwoods partners, who went out of their way to please the state, are now the sad-sack losers of this whole affair.

Meanwhile, SugarHouse was dealing with problems of its own. After its owners refused to move from the riverfront, the city unleashed its vicious archeologists. The scientists insisted the SugarHouse site was on top of the remains of a British fort from the Revolutionary War. You know, before they made it into a sugar refinery, which it was for decades, without a peep from a single preservationist. Before SugarHouse owners could break ground, they had to wait for the archeologists to sift through the site looking for Hessian latrines. They didn’t find any.

It was all part of the general hilarity of the Pennsylvania casino experience, which, of course, was borne of the hilarity of Pennsylvania politics. The lawmakers, after all, had bent over backwards to create a particularly goofy gaming law, with provisions like this: No convicted felons with gaming licenses, unless your felony conviction is more than 15 years old.

That provision has since been repealed, but I find it comforting to know that Charles Manson would have qualified to own a Pennsylvania casino under the original law.

Well, that’s all behind us now, because SugarHouse is opening. Roll out the Ben Franklin impersonators, Betsy Ross and her flag, a neon Liberty Bell, and anything else you can think of that would add some irreverence to get on the nerves of the anti-gaming forces. (You’ll find them under the bulldozers when construction crews leave.)

One down, one to go. At this writing, no one knows what’s going to happen with Foxwoods Philadelphia. The last I heard, Harrah’s officials were in discussions about the project, and in fact had written off the Foxwoods partners’ debt, incurred when they bought the land for the project from that very same Harrah’s.

You know, the riverfront land. The land city officials would rather see occupied by weeds and field mice than a casino.

In any event, there is officially a casino in Philadelphia. Eventually, there will be two. Just after the parade down Broad Street by the giant purple monkeys.

By GGB Staff   Mon, Aug 30, 2010

The United States took a large step forward in efforts to legalize online gaming last month when the House Finance Committee marked up a bill sponsored by its chairman, Rep. Barney Frank (D-Massachusetts), the Internet Gambling Regulation, Consumer Protection and Enforcement Act of 2009. The bill will now move to the House floor for a vote of the full membership and then on to the Senate, where prospects for passage are not as bright.
 

Frank has been holding hearings on his bill over the past year, with both opponents and proponents testifying. The final shape of the bill changed as amendments were offered, and eventually it passed the committee by a vote of 41-22, with a non-partisan mix of supporters.

The legislation was supported by 69 co-sponsors, along with the U.S. Chamber of Commerce, the Financial Services Roundtable and the National Association of Federal Credit Unions.  

Frank said his bill was designed to allow Americans to make their own decisions on gambling.

“My primary goal is Americans ought to be free to do what they wish without this kind of intrusion,” said Frank. “Some adults will spend their money foolishly, but it is not the purpose of the federal government to prevent them legally from doing it.”

The bill was helped by estimates of billions of dollars in tax revenues dedicated to a government eager to find more funding—one study says it will produce $42 billion over the next 10 years. Some say the estimates are overblown, but it appears to have swayed some of the bill’s supporters.

“I have opposed this bill for years, but I am slowly changing,” said Rep. Brad Sherman (D-California). “The best reason for this bill is the prospect for revenue.”

“We will not pass an internet gaming bill,” Sherman said. “We will pass a bill to do something very important, funded by internet gaming. Forty-two billion dollars over 10 years has an effect.”

A companion bill to Frank’s act, introduced by Rep. Jim McDermott (D-Washington), would tax online gaming at a rate of 2 percent to the federal government and 6 percent to state governments. The federal government would also collect taxes on the overall profits of online gaming companies, as well as taxing the winnings of players.

Some of the elements of the Frank bill:

• requires licensees to take appropriate safeguards to prevent fraud, money laundering, underage and compulsive gambling;
• contains strong protections to prevent minors from gambling online;
• prevents online advertising targeted at underage or compulsive gamblers;
• clarifies the effect of the bill on Indian tribes;
• requires consultation with tribes in implementation;
• prohibits licensees from accepting bets or wagers from persons on the self-excluded list of compulsive gamblers;
• prevents the use of a credit card to gamble online;
• prohibits sports betting;
• requires that players set financial loss limits;
• strengthens regulatory requirements regarding integrity and fairness;
• bans violators of federal and state gambling laws from obtaining a license; and
• requires a substantial U.S. presence as a condition of obtaining a license.

Other amendments were proposed and accepted to line up votes. 

Rep. Gary Peters of Michigan proposed an amendment that would exempt state and tribal lotteries from being licensed by the federal government, since they are already subject to state licensing. In another amendment, people who owe child support would be barred from gambling online, a measure that some states already apply to land-based casinos.

While opponents of the bill, led by Alabama Republican Rep. Spencer Bacchus, tried to defeat it, they were content, in the end, to add some of these amendments that would water down the bill to some extent.

“With this bill, in one broad stroke, we will allow every child in America to gamble on their home computer or in their dorm room,” Bacchus said.

In one of the more controversial amendments, gaming sites that have continued to accept wagers from the U.S. despite the passage of UIGEA would be barred from licensing. This would impact some of the largest poker sites, including Full Tilt Poker and PokerStars.

But opposition will get stronger in the House vote and promises to be even greater in the Senate.

Senator Robert Menendez (D-New Jersey) introduced a bill in the Senate last year that would legalize fewer forms of gambling, including poker. Menendez, however, has fewer supporters in the Senate and even proponents of the bill think it’s too ambitious to get through the upper house of Congress.

In addition, the U.S. Department of Justice and the Internal Revenue Service are on record as opposing this bill.

Nevertheless, the bill seems like a win for the land-based U.S. companies. Although there is hardly unanimity among all the American gaming companies about online gaming, companies like Harrah’s Entertainment and MGM Resorts, which have experience in the online arena, are expected to prosper. Harrah’s already has a Caesars-branded online gaming site that operates out of the U.K., but does not accept wagers from U.S. gamblers.

And despite what seems like a blow because it continues to accept U.S. bets in violation of UIGEA, PokerStars was supportive of the bill.

Currently, the only legal form of online gaming is wagering on parimutuel horse racing. National Thoroughbred Racing Association President and CEO Alex Waldrop said the organization has worked with Frank on his bill to “ensure that any federal legislation that pertains to internet gambling contains adequate protections for online parimutuel wagering on horse racing as authorized by the Interstate Horseracing Act.”

By GGB Staff   Mon, Aug 30, 2010

Years ago, the clang of coins cascading from slot machines and the image of casino customers toting buckets filled with their winnings were among the sights and sounds most widely associated with commercial gaming. But all that changed with the advent of a revolutionary new technology—ticket-in/ticket out (TITO) systems.

When Global Gaming Expo debuted in Las Vegas in 2001, TITO technology was in its infancy; most slot machines still dispensed coins rather than printed tickets. G2E provided manufacturers with a crucial opportunity to showcase the new technology, which has since streamlined casino operations and reshaped the gaming industry.

During the past 10 years, many such innovations have been introduced at G2E. Year after year, the trade show has provided gaming professionals access to cutting-edge technology, valuable networking opportunities and unmatched educational programming. G2E has propelled the industry forward, helping operators and suppliers effectively meet the demands of consumers and improve their bottom lines.

For example, G2E recognized early the growing significance of non-gaming amenities at casinos and developed F&B at G2E, a marketplace of culinary products and services, and has provided a platform for manufacturers to promote the next generation of slot machines—games linked through central server-based networks.

In 10 short years, G2E has become the largest and most successful gaming industry trade show in the world, annually bringing together tens of thousands of people from more than 90 countries. And it has expanded its brand overseas; in 2007, it launched G2E Asia, which provides region-specific content to Asian gaming professionals. Last year, it established a fruitful partnership with SAGSE, the trade show in Latin America—an area that holds great promise for many gaming companies.

G2E has long been described as a trade show developed “by the industry, for the industry.” The American Gaming Association and Reed Exhibitions—co-creators of the G2E international family of events—take these words to heart. So, it should come as no surprise that, as we prepare to commemorate G2E’s milestone 10th anniversary in November, we already are implementing a number of changes to ensure that its coming decade will be even more successful than the first.

Beginning next year, G2E will jump more than one month ahead on the calendar. G2E 2011 will take place October 4-6; the following year, it will be held October 2-4. In 2013, it will take place in late September to accommodate the Jewish holidays.

This change is one we have wanted to make for many years; it was made with both attendees and exhibitors in mind. First, the date change allows for more time between G2E and the January gaming show in Europe, giving our European colleagues and those exhibitors involved in both shows more breathing room and planning time between events.

Also, to this point, G2E has taken place after many companies have submitted their annual budgets for the coming year. Those responsible for purchasing are forced to make decisions before they can assess the new products and services offered at G2E. Adjusting the event calendar will enable gaming operators to plan for the coming year with greater ease and, ultimately, improve sales for G2E exhibitors.

The date changes have led to a venue change, as well. In order to lock in this date pattern for years to come, G2E will move to the Sands Expo and Convention Center beginning in 2011. In addition, Sands’ state-of-the-art facility will provide G2E exhibitors more space to promote their products and allow the show to grow.

Important changes also are happening to G2E’s events abroad. Beginning in 2012, G2E Asia will move to a new date pattern in late May. The 2012 show will take place May 22-24, several weeks earlier than in previous years. Because of these adjustments, future G2E Asia shows are far less likely to conflict with participants’ summer travel plans. SAGSE organizers also will move to a new permanent date pattern in mid-November, with the 2011 show taking place November 9-11.

Together, these changes amount to a more evenly spaced calendar of events that accommodates the needs of our gaming industry partners around the globe. We are confident the revised dates will help fuel the success of the G2E family of events going forward.

But before G2E embarks on a new decade, we must celebrate the passage of its first 10 years. G2E 2010 will include a number of special events to mark the event’s 10-year anniversary. One such event is the posthumous induction of Tim Parrott, former CEO of Shuffle Master, Inc., into the Gaming Hall of Fame.

I had the pleasure of getting to know Tim while he served on the AGA board. He was one of the most beloved and respected figures in the gaming industry—and for very good reason. His colleagues remember him as a fair, smart and customer-centered executive. But, most of all, he was a caring human being. His passage dealt a significant blow to the industry.

One of G2E’s primary goals is to educate and nurture future gaming leaders. I believe Tim is someone young professionals in our industry should strive to emulate, both personally and professionally. Through the UNLV International Gaming Institute certificate program—as well as a new curriculum that provides college students an opportunity to attend G2E—we hope to cultivate a class of leaders that reflect Tim’s legacy, including his tremendous work ethic and good-natured spirit.

The coming decade of G2E is sure to bring with it many innovations that promise to reshape the gaming industry in ways we cannot yet imagine. And I look forward to sharing those exciting advancements with our colleagues overseas. After all, G2E is—at its core—about convening gaming professionals from all corners of the globe. Working together, the possibilities are virtually limitless.

By Frank Fantini   Mon, Aug 30, 2010

Recent months have been fairly drab times for gaming stocks, and the future doesn’t look much more exciting.

The segment that has advanced are the Macau casino companies, thanks to the huge increases in gaming revenue there, and the optimism for Asian gaming generally, thanks also to the fast start of  the new Las Vegas Sands and Genting mega-resorts in Singapore.

Otherwise, the outlook’s been about as dull as dishwater.

Regional gaming markets tread water. The Las Vegas locals market is stagnant thanks to the economic depression that has gripped the metro area. And supplier companies, which constantly see the yearned-for replacement cycle kicking in six months from now, are again seeing it kick in six months from now.

Looking out on trends that could affect the fundamentals of gaming stocks, here are a few things we see:

Lodging is exploding. Investor confidence is booming in gaming’s sister industry. Room rates have begun a recovery and revenue per available room has been growing steadily. The CEO of Sunstone hotel trust recently pounded the table, observing double-digit revPAR growth in strong markets and saying that will be the case in all markets next year.

Much of the improvement is being driven by increased business travel, especially in group and convention business, an important segment for Las Vegas Strip operators.

A number of investors have formed REITs this year and IPO’d to raise funds to opportunistically acquire hotels.

Las Vegas appears to have bottomed. Even though gaming revenues declined in May, they actually grew when unusual items are factored out, continuing a several-month trend suggesting the long decline in business volumes is over.

Casino hotel room rates also have started to turn up, a hopeful sign given that the Cosmopolitan is the only new casino property opening this year, suggesting there may be an opportunity to start the process of absorbing capacity.

One interesting sign: rates quoted to free-and-independent travelers in the weekly JP Morgan survey. Rates compared to last year were up week after week in the summer, though just by single digits.

Regional markets also appear to have bottomed, bouncing back and, like Las Vegas room rates, just a little, but enough to give some encouragement that casinos can begin the slow rebuilding process.

Tea-leaf reading on the economy and consumer sentiment has been mixed, though more down than up among more recent reports.

Still, the idea of free-fall has been all-but-removed, and many economists still discount the chance of a double-dip back into recession.

Asia slowing down? The big bull move might have run its course. Everyone expects Macau growth to moderate in the second half of the year, and there is creeping concern that Chinese economic growth might slow.

So, put all together, there are few catalysts, as the analysts like to say, for stocks moving up soon.

EPS vs. EBITDA
Steve Wynn, in a conference call jab at rival Sheldon Adelson, took aim at an unconventional target—EBITDA, earnings before interest, taxes, depreciation and amortization.

Ambitious LVS reports more EBITDA, but “EBITDA has as much meaning as snow on top of Mount Everest. It’s a worthless number, because you’ve got to pay interest, you’ve got to pay taxes, and depreciation’s as real as the payroll,” Wynn said.

“And when you build all of those facilities, you’ve got to depreciate them and take care of them. So you’d better damn well make sure that they carry their weight,” Wynn concluded.

Hyperbole aside, Wynn has something of a point.

EBITDA is often considered a better measure of a company’s value than earnings for two reasons: it reflects the cash-generating ability of the business, and cash flow is less subject to accounting manipulation than earnings.

It also happens to be the measure prospective buyers use when looking at an enterprise, and is the number lenders use when deciding when to lend, at what interest rate and with what restrictions. Thus, EBITDA isn’t theoretical. It has a bottom-line effect.

But it is also true, as Wynn asserted, that EBITDA isn’t all free cash. Depreciation exists, for example, in the simple recognition that properties and equipment wear out and have to be replaced, and money will have to be spent for that purpose.

One study some years ago showed that Las Vegas resorts spend as much renovating, expanding and refreshing properties in the seven years after opening as it cost to build them in the first place.

So the cash appearing to be freed up by depreciation today is real money spent tomorrow.

And the fact is that companies now report adjusted EBITDA just like they report adjusted earnings, with too many of them recurringly reporting nonrecurring items in a kind of dance around reality.

Similar, perhaps to Steve Wynn, was the answer given by MGM Resorts executive Bill Hornbuckle at an investor conference some years ago when he was asked which measure his company considers more important.

Being majority-owned by one investor—Kirk Kerkorian—the answer is earnings, Hornbuckle said.

And that may be the distinction. A long-term investor who sees himself as owning a part of the business wants that business to produce growing earnings.

Most investors, of course, don’t view themselves as owning a slice of a business. They are more like borrowers of stock, intending to sell it at a profit rather than profit from the business. Even people who describe themselves as long-term investors usually define that as holding a position for just two or three years.

So EBITDA may have more meaning than snow on Mount Everest, but it isn’t the ultimate measure.

By Roger Gros   Mon, Aug 30, 2010

Anyone in the gaming industry has a healthy distrust of the government. Can you say “Illinois?” Or how about “New York?” And not to mention the oldie-but-goodie “New Jersey?”

And it is New Jersey that got me to think about this issue. Usually, I want the government to ignore the casino industry and just regulate the integrity of the games, while leaving the business side of the industry alone. And in New Jersey, that has been the fervent wish of every casino operator since the first casino opened its doors in 1978.

Unfortunately, that has rarely been the case. Throughout the 1980s, governors appointed the most onerous regulators to enforce the world’s strictest regulations. In the 1990s, they loosened up a bit but then began thinking of ways they could make the casinos pay more in taxes. And in the 2000s, they generally left Atlantic City alone, but the business climate soured so the casino industry has been in a two-year freefall.

In July, Governor Chris Christie—a Republican governor in the bluest of Democratic states—came up with a plan to “save” Atlantic City. It included wresting control of the casino district from a mostly incompetent and sometimes-corrupt city government, and setting up a separate agency to run that district. Most importantly, it ends the casino industry’s $30 million annual subsidy of the state racing industry and proposes a sale of the state-owned racetracks, while pledging to keep Atlantic City’s gaming monopoly in the state intact.

This is the most attention the casino industry has received from the state government since Governor Brendan Byrne backed the legalization of gaming in Atlantic City in 1976. And frankly, it makes me nervous.

Now, I admire Governor Christie more than any governor I’ve known in the state over this period. He is finally taking control of out-of-control spending and cutting back at all levels to balance the state budget. He is taking on powerful groups like the teachers’ union and the racing industry in a way that no governor ever has. And he’s telling anyone who listens that he’s been elected to do this job and will not stop until he’s finished.

But over the years, I’ve come to believe the old adage voiced by President Ronald Reagan in the 1980s: “Government is the problem, not the solution.” This belief has been reinforced many times both within the gaming industry and outside of it.

So, I have mixed feelings about the state of New Jersey taking over anything, much less something as important as the casino district in Atlantic City. As I write this, there are few details that have been shared by Christie. But unless casino executives play a major role in determining how the district will work, I fear that the overbearing ineptitude of government at any level will surely prevail.

I interviewed a legendary businessman from Atlantic City last month on this issue. Reese Palley is a name that resonates with gaming pioneers in Atlantic City. Palley ran several art galleries in the city and sold the old hotel to Bally Manufacturing that became its current site. Palley had a theory early on. He wanted to bulldoze all of Atlantic City and start from scratch—create an adult Disneyland with casinos. People scoffed at him in those days, but now he says we have that opportunity once again. He holds the Christie plan in disdain because he says it’s an unworkable plan that is destined to fail.

I’m not that cynical, but I do worry about the North Jersey politicians who are pleading with Christie to allow them to build a casino at the Meadowlands racetrack, across the river from New York City. Anyone who knows New Jersey understands the northern part of the state dominates the south, so Christie is going to have to be very strong to resist their entreaties.

But at least it is a plan. Up until Christie took office, there was only unrealistic hope that the decline would end at some point. That has yet to happen, so Atlantic City will cling to anything, even assistance from the state, which has been so unkind in the past.

And there is reason for hope. No state or city will ever reproduce what Atlantic City has: tens of billions of dollars in investment, a dozen first-class casino hotels on a fabulous beach and boardwalk, with great entertainment, nightlife, dining, shopping and more. Clearly, the economy is Atlantic City’s biggest hurdle, but, if done correctly, the Christie plan could spur a recovery. At least that’s the plan.