By Frank Legato   Wed, Sep 03, 2008

Times may be rough in the industry, but slot-maker Bally Technologies has a sure-fire hedge against the economic doldrums: Sell more machines. In more places.

For Las Vegas-based Bally, those places span the globe. In the past four years, sales outside of the U.S. have gone from 6 percent of overall revenues to 15 percent. “We’re optimistic that we’re going to grow that to over 20 percent in the next 12-24 months,” predicts Bally CEO Richard Haddrill, “as we expand in new jurisdictions and introduce our full product line globally. We’re very excited about the international marketplace.”

Bally has been on an international offensive for the past three years, concentrating on getting a sales infrastructure up and running in the Asia-Pacific region, South America, Mexico and, most recently, South Africa and Eastern Europe. The company opened an office in Johannesburg, and is following that up with an office in Ljubljana, Slovenia, that will serve both Central and Eastern European markets. (Bally is firmly established in Western European markets.)

John Connelly, who as vice president-international is overseeing the expansion efforts, notes that in many of the newer jurisdictions, customers are seeing Bally product for the first time in a decade or more. As a result, he says, Bally is not as affected by the international economic slump as other companies. “Although you see some attrition globally with the markets, the impact on Bally is minimal,” Connelly says, “because we’re opening up new markets. We’re seeing a lot of momentum in these markets where before we had relatively little.

“Though you’ve heard a lot of doom and gloom in a lot of discussions concerning market conditions over the past six to eight months, I feel considerably different when I view the outlook for Bally’s international business growth.”



Right Time, Right Product

One may wonder why Bally, the oldest slot manufacturer in the world, waited until now to make an international expansion push. According to Haddrill, among the reasons is the overall investment required for such an expansion.

“It takes a big investment to go international,” Haddrill says. “You have to internationalize your product, converting the games to the local language, and to clear regulatory hurdles in different jurisdictions. On the system side, it’s no small investment to internationalize. We’ve now made those investments, which is very important. We’ve also made the investments in international infrastructure. It’s expensive to set up sales offices to support the different jurisdictions, but we’ve had the financial wherewithal to do that in the past couple of years.”

Most important in the timing of the expansion, though, is the state of the product itself. The Bally product being seen in the new markets is nothing like the product those casino operators may have seen 10 years ago, or even five years ago. The technological rebirth of the Bally product that has occurred since the 2003 acquisition of Sierra Design Group has completely transformed the company’s product line—and as a result, its sales.

Combined with Bally’s continued dominance on the system side of the business, the Alpha Elite product line—one advanced computer platform for reels and video; wide-screen and wide-reel formats; ergonomic cabinets—is what has really driven the international expansion. “Without Alpha, there is no way our games business could have competed internationally,” comments Gavin Isaacs, Bally chief operating officer. “On top of solid, dependable technology, we have had room to innovate, and that’s what Alpha gave us.”

“Also very important on the game side,” adds Haddrill, “Bally’s history was predominantly as a stepper company, and there were not many market opportunities for steppers internationally. But with the company expanding so successfully into video, and with the new style of bonusing multi-line steppers coming of age, we’re finding that not only is our stepper product being well-received internationally, but our video product as well. Our products are playing well internationally, where historically they have not.”

With the right games in place, Bally has embarked on a coordinated effort to expand—deliberately and carefully—into new markets. The international sales offices have opened with minimal cost, and as a result, most of the new sales revenue has gone straight to the bottom line.

The company’s sales staff has been ready to serve each local market, thanks to coordinated efforts at the corporate level such as July’s annual sales conference, in which sales executives from all corners of the globe converged on Treasure Island in Las Vegas to review the previous year, talk about objectives for the coming year and, as Isaacs says, get into the “nuts and bolts” with specific training for each international group.

“All of our international people get sales training, and cross training between systems and games,” Isaacs explains. “Our field service people have their own off-site training meetings as well. This is really an opportunity not only for a get-together and bonding as a team, but the meeting provides training to launch the year.”

“People are really excited to share ideas on how to serve their customers better in the different markets, and to share excitement about the future direction of Bally,” adds Haddrill. “We rolled out our five-year strategic plan to the leadership team, and we shifted from that broad message for the total company to the education sessions, which are more detailed about products and in-market strategies.”



New Markets; New Customization

Connelly says these efforts will allow Bally to capitalize on opportunities cropping up around the world, beginning with Macau and the rest of the Asia-Pacific market. Macau, however, is only one of a wealth of opportunities for the company.

“From an overall international strategy standpoint, the Asia-Pacific market is obviously very important,” Connelly says. “That said, we’re seeing significant growth trends right now in markets where we haven’t been present, as well as those where we currently reside. For example, look at Chile, where over 15 new licenses have been issued.

“We’re seeing tremendous growth in the southern region of South America. The same for South Africa. Bally left there seven years ago, and we just re-entered, having tremendous success, in both our percentage of the floor and the performance of our products. The same for Eastern Europe, where we’re just re-entering several markets. And let’s not forget Mexico. Bally is one of the leaders in that market, and we continue to see very large growth in the Mexican market, both from the machine and the system perspective.”

Connelly notes that for most of these markets, the strength of Bally’s current game library has been the key to success. “Several of the same products you find are doing so well in the United States are doing extremely well in those countries,” he says.

Those “same” products are, of course, tweaked for the local markets. The strength of the Alpha platform in new markets is maximized, says Connelly, by customizing the games with an eye toward the culture, play habits and, most importantly, the language of players in each new market area.

The process involves careful coordination between Bally’s central research and development teams and the representatives in the field at each location. “We have a common R&D strategy and plan across the company,” says Srini Raghavan, vice president and managing director for Bally in India, “but the regional and global R&D teams wok together as one, and augment each other’s efforts to fulfill our objectives.”

The R&D team in India is over 500 strong, and works on developing both game software and casino management systems. It is one of 12 such R&D studios around the world, and the only one in Asia. (Bally is doubling the size of its India operation by the end of the year.)

Ramesh Srinivasan, Bally’s executive VP of systems, says the goal of Bally’s R&D is to create basic product framework that can be adapted to work in any worldwide market. “For our international lines of products, we are making sure the games and systems, on the same code base, can work in different regions without having to change the basic product,” Srinivasan says. “It provides for portions that can be easily translated into different languages. You don’t have to change the basic software to make the products easily adaptable to different areas.”

The success of the final product in each area, though, still depends to an extent on the Bally executives who are in the field offices, and thus familiar with the local cultures and customs.

This is particularly important in markets like Macau, where the slot market is still growing, and cultural familiarity can be the key element in whether a gambler—in China, there are many trying slots for the first time—even sits down at a slot machine. According to Catherine Burns, Bally’s vice president and managing director for the Asia-Pacific market, that means communication between the field and the R&D staff.

“It means a lot of talking to the experts who make the games, to relay cultural differences that are important,” Burns says. “The Chinese player is no different than any player I’ve ever seen. They enjoy playing the game, they like to win, they want some fun, they want a good experience. The cultural differences, you only learn by being there—whether it’s certain colors or themes that are considered lucky, or any other important difference.”

Burns notes, though, that success in Asia still begins with a good math program for the game itself. “If you’ve got great colors and themes but a poor mathematical model, you’ve got a poor game. To me, success in the market is a mixture of both factors. We need to cherry-pick the best games worldwide, use our local knowledge to understand our player, and relay that back to our game development people. Then, we will have constant improvement, constant innovation.”



Bright Future

As Bally continues to expand its product base into new jurisdictions, the company’s executives are methodically meeting each new challenge.

“One of the greatest challenges when you take a company global is developing the appropriate infrastructure to meet your client base,” says Connelly. “And, as you can imagine, each country or territory has certain regulations, certain laws, which requires you to have a knowledgeable staff so you can maximize your revenue and speed to market.”

He adds that some of the company’s most successful products are now beginning to take hold in the company’s newest markets. “We have some incredible products that have been giving us great results in Western Europe,” he says. “We’re starting to take those products into Eastern Europe and South Africa, and making sure we can maintain the appropriate levels of support for the demand we’re receiving. It is a healthy growth, but a controlled growth.”

The ability to execute that controlled growth internationally has been welcomed by Wall Street, according to Haddrill. “Clearly, it’s viewed as one of the strengths of Bally,” he says. “With the economic downturn present in the U.S. and other international markets, investors have looked at Bally and seen a company with the opportunity to continue to grow from what was a relatively small base of international business to a much larger base.”

He adds that the controlled nature of the growth means it has remained a profitable expansion.

“When a lot of companies expand internationally, they will overbuild the infrastructure, or they will focus just on revenue growth,” Haddrill says. “We’ve been successful thus far in rapid growth, but also profitable growth.”

“As we’ve grown globally,” adds Connelly, “we’ve been very successful in creating offices around the world with very cost-efficient structures. That has allowed us to generate immediate profits out of these offices, whereas other companies that have been in the market a decade or more are dealing with the challenges of having built up a large infrastructure, and dealing with that from a profit standpoint as economies and markets fluctuate.”

Haddrill says the main goal for Bally in this effort is to learn to “think globally,” while maintaining the Bally corporate culture and business practices that have led to the slot-maker’s recent surge in sales.

“As you go into international jurisdictions and grow as fast as we have, you need to be ever-vigilant to keep a common culture and great business practices, as well as enforcing good, strong business ethics,” says Haddrill. “Creating a global culture is not simple, because you’re adding a lot of people from different countries and different cultures.

“Building a company that has one culture, but thinks and acts globally, is a challenge. I’ve been very proud with the success we’ve had in doing that.”

By David Ross   Wed, Sep 03, 2008

For decades, the casino industry has looked to use radio frequency identification technology, without much success. Finally, after several false starts, RFID may live up to its promise—to bring heightened security and the same ability to track player bets to table games that slot machines have had for years.

The casino industry first began to look at RFID technology 20 years ago when RIFD tags were being used to combat mad cow disease by tracking diseased cattle.

In 1988 Harrah’s Entertainment asked John Kendall, current president and CEO of Chipco International, if he could put RFID inside casino chips. He’s been interested in the problem ever since, especially how it could be used affordably in the gaming environment.

The first manufacturer to use RFID in the casino industry was the former Mikohn Gaming Corporation, now Progressive Gaming International Corp. It introduced a product in the mid-1990s called Safe Jack (a twist on blackjack) that used RFID chips and sensors. It promised to track players’ bets, eliminate counterfeit chips, automate credits and fills to the chip tray at the table and generate dealer performance statistics.

It used 125 KHz inlays, i.e. silicon chips with a tiny antenna to capture radio wave energy. When a sensor in a table or in a handheld unit broadcasts a signal at the 125 KHz frequency, anything nearby will talk back to the reader, telling it, “I’m a $25 chip!” The reader’s software will total how many chips of how many denominations have been moved in a bet and will, for instance, tell the reader that the player has bet $50.

At least that is way it is supposed to work.

But in the 1990s, the only RFID channel that the FCC had made commercially available was the 125 megahertz frequency. The FCC assigns frequencies to the military, TV, AM radio, emergency responders and the police. In 1990 that frequency was 125 MHz, which worked fine for tracking animals. The problem with tracking a lot of casino chips is that the processing speed was too slow—you couldn’t get information in real time.

Another problem was that there were no good security measures available—it could be hacked. Third: the inlays were expensive, about $5 apiece. For those reasons Safe Jack failed to launch, although 5 million of the 125 MHz chips ultimately sold.

“It was the wrong frequency but it was the only one available,” notes Kendall.

During the mid-1990s the FCC, under increasing pressure, opened more commercial channels, including 13.56 MHz and 915 MHz in 2000 and 2.45 gigahertz and 124 KHz in 2001.

For various technical reasons, the 13.56 MHz frequency is the only one usable by the gaming industry. It is a magnetic frequency that forms a “mushroom”-shaped “cloud” similar to the earth’s magnetic field. It is possible using this frequency to place a sensor that just reaches to a chip at a particular player stack, without reading someone else’s stack.

“It is the perfect structure,” says Kendall.

Perfect for reading short distances, it doesn’t serve well for stopping theft or otherwise reading chips at a distance—say across a doorway. It takes 4.5 watts of power to do that, and until 2004 the FCC limited the power for such readers to one watt. That year it increased the allowed power for readers to eight watts with 13.56 MHz.

Now all of the pieces were in place to make RFID technology work.
   


Physics in the Way

However, in the intervening years many people told casino operators that the technology existed to do what regulations and the limits of physics said could not be done.

Those people, says Kendall, “were wrong. They didn’t understand the physics of the radio frequency signal and the gaming applications, or the reach required. Consequently, many early adopters were badly burned. They were sold technology that could not work. The 13.56 MHz is the proper radio frequency for gaming applications now that FCC has allowed enough power to reach across a doorway. So now these systems are being installed around the planet.”

One who got burned was Steve Wynn, who opened his Wynn Las Vegas casino on the strip in 2005 with an RFID system designed to stop employee theft and counterfeiting.

The sensors installed in the Wynn read chips at 125 MHz. The problem was that chips left on the reader too long burned up and “died.” That happened to 60 percent of the inlays in the first year, and no one knew why. Only after the chips were dissected was the problem discovered.

Today’s 13.56 MHz inlays have a default device to prevent that. Called cloaking, or “go to sleep” (GTS), it was introduced in 2005-2006.

The industry has said repeatedly that it needs an RFID device that can read a stack of 20 chips in a fraction of a second. This gives real-time information on how much Player A is betting so the operator can see if there’s something wrong and get the pit boss to watch.

Kendall’s company, Chipco, is demonstrating such a product, which came about when all of the pieces came together and prices fell for RFID chips.

Called the Intelligent Table System, it is undergoing testing and will soon be introduced to the market. However, Kendall says that what his company sells actually isn’t truly RFID, but another technology marketed under that term. He claims true RFID still hasn’t been perfected.

Two technologies are being marketed as “RFID.” One uses 13.56 MHz chips and 125 MHz chips with RFID inlays utilizing Australian-based Magellan Technology’s patented phase-jitter modulation design. Magellan’s innovative high-speed item-level system technology is used in 13.56 MHz inlays in partnership with Progressive Gaming and Gaming Partners International.    

Chipco uses magnetic coupling, rather than true RFID. “We market it under RFID because that’s what the industry is familiar with,” says Kendall. “Magnetic coupling is not broadcast technology; it’s electromagnetic technology.”

Electromagnetic technology is what a transformer uses to move telephone conversations through a line. The transformer “couples” the energy to transform it further down the line. It is different from radio frequency technology.

Kendall notes that, “The GPI and the phase jitter modulation technology are based on (19th century theoretical physicist James) Maxwell’s theories and our system does not use those principles. Ours uses (19th century scientist Michael) Faraday’s principles of electromagnetic induction, and we have applied for patents using his magnetic coupling.”

According to Kendall, “The problem is that they haven’t figured out how to control the 13.56 MHz signal, even though it is a magnetic signal. To read the 20 chips high, they need to energize it, and they can’t control it so it doesn’t read the chips of the guy next to him. It’s what I call the ‘cross talk’ problem. It gives an inaccurate report unless you control the cross talk problem by controlling where the system goes. In my opinion with RFID you can’t control it. Using Faraday you can control it.”

Kendall says his system can differentiate stacks of chips one half inch apart.



The Magellan Solution

Kendall’s claims would probably be disputed by Progressive Gaming’s Bodo Ischebeck, the company’s resident expert on the RFID technology.

“Progressive has been using RFID technology for some years, but the technology never caught on until two years ago,” he notes. That’s when PGIC partnered with Magellan.  “It can handle thousands of chips, even if the chips are very closely stacked,” says Ischebeck.

“With that technology we are catching on in the global market. We don’t face any competition anymore. That’s what the casinos have been looking for in the last 10 years. They never before liked the technology because it was too slow and too expensive and not reliable. We are coming to the point that this RFID technology is the right technology for the casino industry. The ship numbers show this.”

Progressive Gaming produces the chips and readers under a technology agreement with Gaming Partners International, the world’s leading supplier of chips, plaques and other table equipment. In the last 18 months, since the first chips were shipped to Macau, over 7 million gaming chips have sold. Wynn and two other Macau casinos have been joined by 20 U.S. casinos and several in Europe in employing the PGIC/GPI solution.

“We are building our product around this technology,” says Ischebeck. “RFID in chips gives the possibility to track where chips are moved on the table or throughout the casino.”

Progressive Gaming’s Chip Inventory System, or CIS, consists of an RFID-enabled gaming chip, chip stations and a centralized database server. CIS unites multiple devices and applications under one umbrella, including the cage, vault, chip banks, tables and chip trays. Each chip has a unique signature. Each chip is monitored in real time and its movement history can be accounted for during the course of its life. The system is designed for operators to know what is going on with every chip all the time.

“You can now get the same information from the table that you get from slot machines,” says Ischebeck. “Before, table managers relied on manual record-keeping and looking at tables and average bets, and trying to guess what the bettors were doing. This gives real-time information on table games.”

The second area where this technology is being applied is security: protecting against counterfeiting chips, and chip theft. When a chip leaves the table unauthorized, it can immediately be marked as invalid. The person trying to cash it will find it to be worthless.

The third area where PGIC’s product is useful is in building a new application range for jackpotting and bonusing. It can be used to rate players for comps.

PGIC is working with IGT for the U.S. market with IGT’s table management system, Table ID. For the rest of the world, PGIC has its own table management system and cage system that works with the RFID chips.

“I believe that RFID is a mature technology, but I do believe it has a way to go before it reaches its full potential,” says Eric Lancaster, IGT’s product marketing manager for Table ID. “As we move forward and can track the cards better, we can find out if someone is overpaid or underpaid. The key is tying it in other technology. RFID can tell if a chip was added, but can’t detect it during an addition. The key is to marry RFID to other technologies.”

By Lance Boldrey   Wed, Sep 03, 2008

This year will mark the 20th anniversary of the Indian Gaming Regulatory Act. During the last two decades, a large number of partnerships have been created which have resulted in the establishment of an extremely successful Native American casino industry.

Native American governments have flourished as a result of the economic development opportunities provided by tribal gaming, while a number of investors have earned financial gains by providing seed capital and management experience to assist these sovereign tribes.

When one looks at the numbers, it becomes clear why the industry continues to receive attention from the investment community, and why some investors get overly eager to contribute before completing the appropriate due diligence.

In fiscal year 2006, tribal gaming revenue topped $25 billion. According to the National Indian Gaming Commission, in 2006, tribal gaming was offered by 226 out of the 562 federally recognized tribes, at 419 locations in 28 states.



Complicated Process

Today, though, most if not all of the “easy” projects—with federally recognized tribes holding gaming-eligible land in good markets and states that favor gaming—have been completed. But there is still no shortage of tribal gaming proposals, often touted by “middlemen” who claim to have deals that are “easy” or “a sure thing.”

The truth is that there are some very unique and complicated processes that Native American casino projects must navigate before becoming a reality. Consequently, it is important for anyone seeking to enter the arena of investment in a tribal casino project to understand that although opportunities are out there, they must be properly vetted to ensure that a project has merit.

There are several key points that an investor looking at committing capital should examine before moving forward with a tribal gaming investment.

First, even before traditional due diligence, it is important to have an understanding of the key variables that should be immediately understood when an investor is faced with a tribal gaming proposal.

Land eligibility: If the casino site was not held in trust for the tribe in 1988, what is the basis for it to meet one of the IGRA exceptions to the general rule that land acquired post-IGRA cannot host gaming? Does that exception fit the circumstances?

If the land is not yet in trust, getting it placed into trust and within one of the IGRA exceptions almost certainly will take years of effort and require detailed environmental reviews that provide ample opportunity for competitors or other opponents to file suit and delay the project. Be especially wary of claimed “shortcuts,” as they rarely exist.

Federal recognition: If the tribe isn’t federally recognized, where is it in the process? What do independent experts say about the tribe’s case? The Department of the Interior’s recognition process takes many, many years, and is famously difficult. Congressional action is relatively rare, and requires enormous political support.

Tribal government: Is there a valid tribal government in place? Is the leadership of the tribal government properly elected, and do these governmental leaders have the authority to enter into management or development agreement discussions?

Politics, politics, politics: Is there a willing state and host community? If not, what leverage does the tribe have to win support? Without state and local support, be prepared for years of legal wrangling. More importantly, what are the tribal politics like? An unstable tribal government may make the most lucrative project too much of a headache to be worthwhile.

Too good to be true? Apply some common sense. The most cautious, conservative business people often lose their minds at the prospect of a gaming deal. Approach tribal gaming proposals with even more skepticism and caution than a more traditional business proposition. If a promoter says his project is absolutely going to happen, and offers a 1 percent interest in a $400 million annual return for $100,000, does this even come close to passing the smell test? (This was honestly a sales pitch that I saw in the past, and a number of investors bought it.)



Unique Differences

Unlike non-Indian casino projects, the investor cannot own a piece of the casino itself. Investment instead typically comes in the form of a management or development agreement, each of which brings the NIGC and federal government oversight into play. The NIGC’s role is one of protecting the tribe. In the case of a management agreement, IGRA limits the duration and amount of the management fee, with the fee only being paid after payment of most other expenses. Apart from background reviews of the participants in the management company (which would come in any gaming jurisdiction), NIGC approval also triggers review under federal environmental law.

While use of a development or consulting agreement may avoid some of these thickets, it eliminates any control the investor would have over the project. And, if such an agreement were later determined to grant management rights or an ownership interest to the investor, it becomes void ab initio—as if it had never even existed.

Consequently, the smart investor will still deal with the NIGC to seek a “declination letter” finding the development or consulting agreement to be consistent with NIGC’s interpretation of the relevant law and rules.



Advice Upon Entering

Once due diligence is complete, and a decision is made to invest in a tribal gaming project, what are the most important pieces of advice?

First, while an attractive project will be one with a clear path to the finish line, investors need to be prepared to be flexible. Native American law and the politics surrounding Indian gaming are both constantly in flux, and the playing field changes frequently. Proposed changes to IGRA and new regulations are always bubbling, and some changes take place outside of the appropriate statutory and rule-making process.

For example, just three years ago, for a project taking place on new lands, an appropriate early step was obtaining a gaming compact with the state, to lock in the parameters of a project and state support. Then, by means of a mere letter, the Department of the Interior changed the rules of the game, deciding that a compact cannot be approved until the land upon which gaming is proposed is held in trust.

In January 2008, with no notice or consultation with tribes or the public, the Department of the Interior put in place a whole new substantive requirement that new lands for gaming generally be within a “commutable” distance of a tribe’s reservation.

Second, given ongoing changes and the complexities of these projects, it is necessary for all investors to manage expectations—both their own and those of the tribe. Tribal gaming projects can be extremely beneficial for both the tribe and the investor, but they are high-risk endeavors, and both parties need to be prepared to be in a project for the long haul. If a project was “easy,” it would already be done.

As Native American gaming under IGRA enters its third decade, it is important that any future investors acknowledge the accomplishment that Native Americans have achieved in creating this new industry and developing a number of new jobs. To reach this same level of success, a cautious and well-considered approach on behalf of tribal gaming investors is in order.

And, though the process may indeed be complicated, it is important to recognize that there are still great opportunities for both tribes and properly educated investors.

Lance Boldrey is a member of the Lansing, Michigan office of the Dykema law firm. He leads the firm’s Indian law practice, with an emphasis on gaming, economic development and state-tribal relations. His work includes performing due diligence on tribal gaming projects and proposals for consultants, developers and gaming management companies. Boldrey can be reached at 517-374-9162.

By Rich Geller   Wed, Sep 03, 2008

The development of casino industries within European countries generally has been a story of entrepreneurs leading the way and legislators following more or less closely behind. The result is that, over time, a well-regulated and healthy gaming industry emerges and becomes an important part of the economy, providing jobs for people and tax revenues for local, regional and national governments.

However, sometimes things go wrong. The regulations and taxes imposed by government agencies that do not “get it”—like Germany, for example—can be excessive to the point where the industry and therefore the benefits to the nation begin to suffer. At the other extreme, a government that becomes paralyzed by a mix of external pressure from the industry and self interest on the part of legislators and others in power can find itself failing to keep pace with development on the business side of the equation.

It appears some version of the latter might have happened in Ukraine. Either that or the authorities purposely have chosen to see what kind of a gaming industry real laissez-faire capitalism can produce.

The number of gaming operators in Ukraine was put at over 1,400 recently by official government data. Unofficial estimates put the total closer to 2,000 operators. Included in that number are casino businesses, but also sports betting operations and, of course, slot arcades. Lots of slot arcades. In fact, the number of gaming machines of all categories in operation in this country of 41 million people is estimated to be as high as 240,000.

Half of these devices are thought to be operating without a license and thus not providing any direct revenue to the government. Because of this and other factors, the Ukraine Accounting Chamber Board believes it is missing out annually on between 3 and 7 billion Ukrainian hryvnia, as the local currency is called. That comes to between $667 million and $1.6 billion not finding its way to the public coffers in the course of the year.

It is not as if there are no regulations in place. There are in fact official fees and taxes for the operation of casinos and gaming equipment. Under present regulations, for each casino that offers table games, an operator pays €150,000 for a license that is valid for five years. For casinos that only offer slots, an operator pays a single license fee of €150,000 that covers all such properties owned by the company. In addition to the license fee, there is a monthly per-device charge per gaming apparatus. For each roulette table, the cost is about $3,500 a month, each card table about $265 and each slot machine about $75. There also is an income tax on company profits.

The problem for the treasury is one of implementation. Industry sources suggest that it is only in the capital city of Kiev that the business is well-regulated, and that elsewhere in the country those “authorities” overseeing the gaming industry might be somewhat less than official, or official-minded.

Problems and Solutions

According to a report from the Accounting Chamber released in May, this loose state of affairs seems to have been brought on by the government itself. Inaction on legislative proposals plus confusion regarding which department controls what appear to have created a vacuum, into which the usual suspects have been free to step.

The auditors pointed to several problems, including the fact that all regulations relating to gaming have not been brought into one body of work, but instead are still spread among many unrelated documents—which in turn are scattered among various regional and national authorities. Additionally, no concrete steps have been taken to establish a system for the exchange of information among the various agencies.

The result has been no coordination in the distribution or oversight of gaming licenses, no centralized collection of operators’ financial results and no formula for the allotting of collected fees and tax revenues to governmental needs.

The Accounting Chamber auditors place the blame for all this at the foot of three organs of government. They say the Cabinet of Ministers and the Ministry of Finance failed to act on the conclusions and proposals produced by a previous audit of the gaming industry, and that the nation’s lawmakers in the Verkhovna Rada, the single-chamber legislature, rejected the one bill on gaming presented them by the government and have not considered any other bill submitted by representatives of the people.

The audit, which was conducted in 2007 and the first quarter of 2008, uncovered “numerous cases” where the Ministry of Finance violated the existing legislation and regulatory acts during the performance of its supervisory role over gaming licenses. The report called the efforts by Finance “small-scale and ineffective.” Ironically perhaps, the audits covered only 0.4 percent of gaming licenses.

The collection of annual fees assessed for individual gaming devices, a function performed by the State Tax Administration, was also found to be sub-par. The reason cited was the lack of coordination with the licensing information in the hands of the Ministry of Finance. The situation is that about 2,000 operators are doing business merely by paying their machine and table fees but without possessing an official gaming license.

For its part, the Accounting Chamber Board informed the relevant governmental bodies of its findings and made recommendations for change in an effort to bring about a more efficient regulation of the gaming industry—and a more profitable return for the treasury.

The board must have struck a nerve. By June the Ministry of Finance had come forward with a bill that addressed some if not all of the audit’s findings. Some of the suggested measures even hint at a movement toward a consolidation of the industry.

The main feature of the bill is the establishment of minimum capital requirements for new gaming operators. Casinos and slot arcade operators would need to have the equivalent of €1 million to set up shop. Sports betting offices would require €200,000 and eventual online operators €500,000. The bill suggests that the cabinet be allowed to set license fees.

Another signpost of approaching consolidation is a measure that would set a minimum number of slot machines per location. The number mentioned is 40 slots per casino, which would be a serious hurdle for most of the smaller operators.

Notably absent from descriptions of the bill is any talk of the establishment of a dedicated gaming board, which unfortunately seems to point to a continuation of the status quo in the area of accountability and oversight.

Nevertheless, the bill proposes the creation of a national register of gaming businesses, the establishment of restrictions on where gaming businesses can locate, and some form of consumer protection for those who participate in gaming. For example, slot machines would have to return to players a minimum of 80 percent. Operators found in violation of regulations would be subject to a fine of 500 times the minimum wager.

Allowed forms of gaming would continue to be cylindrical games like roulette, card games, dice games, slot machines, lotteries, bookmaking and tote organizing. Advertising of gaming based outside the country, presumably referring to online gaming sites, would be prohibited.

Who Gains

If consolidation is being promoted, then one of the bigger beneficiaries will be Ritzio Entertainment Group. Worldwide, the billion-dollar-a-year company operates over 1,000 locations and 55,000 slot machines, in 15 countries.

In Ukraine, Ritzio has more than 150 gaming locations, including the River Palace Casino & Entertainment Centre. The River Palace is the largest casino in the country—21 tables and 100 slots—and is located on a ship on the Dniepr River in Kiev. Ritzio operates over 10,000 machines around the country, in slot clubs under the brands King Entertainment Centres and Metro-Jackpot Gaming Clubs. The company also owns the local sports betting chain Sport Pari.

Undoubtedly the most transparent operator in Ukraine is the Olympic Entertainment Group—OEG. The public-listed Estonian operator opened its 22nd Ukraine property in July, just three and a half years after establishing its local subsidiary there.

In September of last year Olympic Casino Ukraine acquired for €9.2 million five casinos previously operating under the Eldorado name. The deal gave the Ukraine subsidiary company its first two casinos with tables.

At the end of 2007, OEG had 19 properties operating a total of 950 slots and 17 tables in Ukraine. They produced gaming revenue of €11.3 million, accounting for about 7.5 percent of parent OEG’s total for the year. Ukraine was OEG’s fastest growing subsidiary.

By Dave Bontempo   Wed, Sep 03, 2008

Bob Arum and Don King have slugged it out—verbally, economically and legally—for nearly 40 years. As boxing’s two original heavyweight promoting champions, they scrapped for the spoils of a multibillion-dollar, unregulated industry. They lambasted each other, battled for network dates, jockeyed for soaring profits and sought to control the ascending boxing-gaming marriage.

Along the way, they revolutionized gaming. They brought big attractions, frenzied excitement, enormous media attention, celebrities and expensive players through casino doors. They brought revenue.

Now the industry extends its gratitude. It will induct the promotional duo into the American Gaming Association’s Hall of Fame September 16 at Red Rock Casino Resort & Spa.

Yes, the men who fought repeatedly in courtrooms, at press conferences and in the news media will be honored, together, for the first time. They also will become the first sports personalities ever admitted to gaming’s Hall of Fame.

Arum and King will be enshrined along with Bernard Goldstein, the father of riverboat gaming, and award-winning, cutting-edge celebrity chef Emeril Lagasse.

“For me, this is a terrific honor and it is also nice to be placed in the Hall of Fame alongside so many gaming moguls—guys like Steve Wynn, who have made enormous contributions to gaming,” says the 76-year-old Arum, who maintains his promotional base in Las Vegas. “I also think it’s appropriate to be inducted along with Don. He was there with me when we brought great, memorable events to the casinos. He deserves the honor as well. Yes, we battled, but there comes a point where you get too old to fight.”

King, now based in Florida, adds a similar sentiment.

“I think this is a wonderful honor and I’m very happy and proud that Bob is being inducted too,” 77-year-old King says. “This was a marvelous thing we both contributed to, the expansion and the growth of gaming. He richly deserves to be inducted and I couldn’t be happier. Bob is a great guy.”

Induction into the Gaming Hall of Fame is the highest honor bestowed in the gaming-entertainment industry. Only slightly more than 60 have gained entry since its 1989 inception. The honor roll includes gaming, entertainment and political giants, ranging from Frank Sinatra to Don Rickles, Barron Hilton to Donald Trump and Steve Wynn, Siegfried & Roy to U.S. Senator Harry Reid.

“The gaming industry is one that is constantly changing and it is because of innovators like Bernie, Bob, Don and Emeril that the industry continues to rise to new heights,” says Frank J. Fahrenkopf Jr., president and CEO of the American Gaming Association. “Their contributions are truly outstanding.”



Satisfying Career Twilight

Arum and King relish this distinction. They are already boxing hall-of-famers. Outside of their industry battleground, they can be appreciated as visionaries, pioneers and venture catalysts. They can be honored for helping shape the gaming booms in Las Vegas, Atlantic City and many other casino markets throughout the world.

Their conflicts, once intense, barely matter to those outside boxing. It almost seems comical now that Arum often accused King of conflict-of-interest, controlling both boxers in an event by making a manager share his rights with King’s son Carl. Or that King once labeled Arum a “rat fink,” and that each was accused in the business of controlling world sanctioning bodies. They knew each other’s tricks. They were also targeted—and unscathed—by government investigations.

King and Arum, who sued one another over fighter contracts and reigned as gunslingers in boxing’s near-lawless world, have put down their weapons. They advance to this Hall-of-Fame setting, where industry leaders aren’t scorned for being sharp-edged, even ruthless. This rivalry wasn’t much different than Wynn and Donald Trump, also members of the Hall.

“When Bob was my antagonist, he was fiery and tenacious and our rivalry was intense,” King says. “I admire his never-say-die attitude and his perseverance. We were doing things nobody did before, creating hundreds of billions of dollars in the cities in which we promoted. I needed a rival. I would never know how good I am if it wasn’t for Bob Arum.”

Their fellow honorees had less-publicized battles.

Goldstein followed a successful 40-year career in scrap metal recycling, river freight transportation and affiliated business to start a second career, in gaming. He was instrumental in lobbying for the original riverboat gaming legislation in Iowa and opened the nation’s first riverboat casino, the MV Diamond Lady, April 1, 1991 in Bettendorf, Iowa.    

Lagasse is the chef-proprietor for 10 restaurants in New Orleans, Las Vegas, Orlando, Miami and Gulfport, Mississippi. His branding became increasingly significant as casinos utilized high-end cuisine to attract non-gaming revenue. Lagasse’s personality and famous “Bam” phrase, which he shouted while adding a key ingredient to a meal in his televised show, vaulted him to fame.



Selling the Fantasy

Arum and King supplied the figurative sizzle for Emeril’s steak. They provided legions of electric personalities, from Muhammad Ali to Roberto Duran, Sugar Ray Leonard to Marvelous Marvin Hagler, along with Mike Tyson, Evander Holyfield, Oscar De La Hoya and Julio Cesar Chavez. Fighters spent their final training week at the hosting casino, generating substantial free advertising in the guise of a boxing news story.

The events dramatically impacted the casino bottom line. Some results could be measured via post-fight revenue. Much of it could not. Boxing matches created a mystique for the hosting casino, which lured future customers.

Did Arum realize his events impacted the bottom line?

“Only when I was negating,” he laughed.

“I remember a story Henry Gluck, then the chairman at Caesars World, told me. When he and his wife Arline were traveling in Europe, the guy carrying his bags found out he was the head of Caesars. When he mentioned Caesars to Henry, he made a motion like he was a fighter. It was amazing. Caesars was identified throughout the world because of the sport of boxing.”

King and Arum, boxing’s original power brokers, were joined in the early 1980s by Main Events. The trio became boxing’s version of American automotive giants Ford, Chrysler and GM. A promoter, manager, network, casino or boxer who did not proceed through them rarely did meaningful business.

It was a lucrative era. The spread of gaming beyond Nevada made boxing a precious commodity. The Arum-King influence spans many eras—closed circuit in the 1970s, the revolution of gaming and site fees in the 1980s, pay-per-view in the 1990s and internet revenue today. They have always managed to be at the forefront of significant change.

Both men also remain active. They each promoted significant boxing cards shortly before this induction.

This tandem has been at the pulse of boxing history.

King has presented more than 500 world championship fights, including those with Ali, Joe Frazier, Larry Holmes, Leonard, Evander Holyfield and Duran. He promoted or co-promoted 11 of the top 15 grossing live gates in Nevada history, including bouts at Caesars Palace, the MGM Grand Garden and Mandalay Bay. He also promoted more than 20 championship bouts in Atlantic City, and has a street named after him there. He was the first promoter ever inducted into the Boxing Hall of Fame in Canastota, New York.

King, educated on the streets of Cleveland, Ohio, ruefully acknowledges gambling’s affect on his career.

“I would have to say, humbly, that gaming has been a way of life for me for a long time,” he says, eyes twinkling. “Before ever going to Las Vegas, we had these after-hours joints; you could call it Las Vegas in the neighborhood. We had the players, the hustlers, the blackjack, and all types of gamblers. I ran those types of operations. We had gambling, just like Caesars Palace.

“Back then, it was an outlaw industry. It was looked on with disdain, almost like robbing from the poor. Now it’s an in-law industry. There is a community involving boxing and the gaming institutions, a marriage made in heaven.

“You surround players who want to be wined and dined with celebrities and the slogans, and they will attend your fight. You ask a celebrity like Michael Douglas if he will come, and then you surround him with his friends, so more people want to come.”



Different Routes, Same Destiny

The entrepreneurial heavyweights prospered via different roads. King supplied his celebrity status to drive event revenue. He has appeared in movies like When We Were Kings, a documentary of the 1974 Ali-Foreman battle in Zaire. King was the only promoter named to Sports Illustrated’s “40 Most Influential Sports Figures of the Last 40 Years” in 1994.

Arum has been a technical pioneer. Beyond his contract knowledge, he mastered the six-month promotional tour for major events, the dynamics of closed-circuit theater revenue and the pay-per-view universe. He prefers the low-key, effective administration role. It befits his background, first as a graduate cum laude at Harvard Law School and then as a Justice Department lawyer for U.S. Attorney General Robert Kennedy. Arum helped the government win major verdicts against ConEd, CitiBank and Standard Oil. He became enthralled with boxing when asked to secure the proceeds of a 1962 heavyweight championship fight between Sonny Liston and Floyd Paterson.

He would later display savvy gambling instincts.

In 1983, Arum signed a cast-off Roberto Duran and took a major financial risk by putting the Panamanian legend against champion Davey Moore in Madison Square Garden.

The event sold out, which only brought Arum to even. But then Duran won the bout, setting up a lucrative meeting later that year with Hagler in Las Vegas. Had Arum not rolled the dice, placing months of work into a promotion that could have lost substantial money, he would not have landed the big score.

While conceding the high-profile stage to King, Arum is good for blunt quips.

He routinely referred to the World Boxing Association ratings committee, based in Central America, as “the Noriegas of Panama,” to great laughter. Arum also grasped and serviced the burgeoning Hispanic market before anyone else. Like King, he has promoted many of boxing’s all-time highest-grossing bouts, including the 1985 Hagler-Hearns blockbuster at Caesars Palace.
 


Memories…

“As I look back, it was that outdoor arena at Caesars,” Arum says. “All those great fights, Hagler-Hearns, Leonard-Hearns, George Foreman knocking out Michael Moorer (to become the oldest heavyweight champion ever, 45). It was magic. Nothing will ever, ever supplant that. We staged an event and the world came.”

King retains fondness for the Rumble in the Jungle, his break-out role as a promoter in 1974, the night Ali upset Foreman in Zaire.

“Ali had always been running his mouth, but Foreman wasn’t going to fight him because people would think he was picking on an old man,” King says. “Finally, one day George says, ‘Man, I should shut his mouth,’ and that’s how we got him in the ring. Then, Foreman got hurt and the fight was delayed, but we kept it together.”

King and Arum dealt with corresponding gaming heavyweights. They sold fights to Trump, Wynn, Barron Hilton, Kirk Kerkorian and Cliff Perlman in Las Vegas. Atlantic City executives Ken Condon and Arthur Goldberg made similar contributions.

Boxing, conversely, aided their bottom lines.

“It has made their hotels better, their goods and services better,” King indicates. “The cab driver, the bus boys, the boutiques, the restaurants, everybody benefits. You look at all these buildings rising in Nevada on the Strip and now into Henderson. And they are all built on people’s caprices, whims and dreams. We as promoters made casinos in Las Vegas and Atlantic City household words around the world—from every nook and cranny to every shanty.”

Their collective journey through the nooks, crannies and shanties comes full circle September 16—on the podium. It seems fitting that David Copperfield is a past Hall of Fame inductee.

After all their fighting, Arum and King can enjoy some magic.

Dave Bontempo, an award-winning journalist and commentator, announces major boxing matches throughout the world.

By Dino Guiliano   Wed, Sep 03, 2008

It’s one of the most populous countries in the world with very few gaming options. As the South American gaming industry salivates at the possibility of casinos or even expanded gaming in Brazil, they understand that you have to crawl before you walk.

Clarity regarding the status of bingo and slots in the would-be gaming mecca that is Brazil has to date at best remained a distant hope of industry proponents in the country.

However, due to a series of political events between December 2007 and May 2008, followed by the swift and well-timed maneuvering of over two dozen Brazilian politicians in recent months, a set of congressional decisions to be made this fall—which outwardly center on a controversial health bill proposed by the administration of President Luiz Inacio Lula da Silva—implicitly carry with them substantial potential to enable the immediate and comprehensive regulation of the Brazilian gaming sector. This could then secure the change of direction the historically anti-gaming government has begun cautiously exploring in recent months.



The Backdrop

Brazil is estimated to have offered upwards of 130,000 machines (comprised of both e-bingo and traditional slots) in 1,500 halls that operated throughout the country at its peak in 2006. While the federal government has since 1946 considered bingo halls and gaming parlors to be constitutionally illegal, their existence is the result of a series of on-again-off-again Supreme Court and local court rulings passed in the 1990s through 2002—all of which favored the transition of clandestine bingos into the mainstream and attempted to lay the groundwork for their proliferation under such a scenario (for both traditional and video versions).

Any traditional slots in the marketplace have historically operated completely out of the context of the law, and continue to do so. In 2007, hundreds of these halls were forced to shut down and tens of thousands of e-bingo machines were confiscated by local and state authorities when the depth of corruption in the industry was revealed by the high-profile police sting that year, “Operation Hurricane.” The operation also left in its wake judges, attorneys and other public figures, most who were to face prosecution for taking bribes from members of the Brazilian mafia to allow corrupt bingo halls to remain open—thus leaving a gaping wound in the face of an administration that prides itself on a platform of anti-corruption.

Many of those operations that continue to function today (despite a Supreme Court decision last year which effectively vindicated the government’s position) legitimately claim that local court injunctions prevent authorities from ever demanding their closure, underlining the broader historical disconnect between state and federal laws governing the activity—a disconnect which ironically both incentivized and enabled the bribery at the local courts to begin with.

In the end, the present legal situation is precarious at best.

Thus, holding jobs that have been in constitutional limbo since a failed 2004 attempt of the Lula administration to eradicate the activity altogether (via a Senate-overturned presidential decree made that year), the sector’s estimated 300,000-plus employees have been the loudest proponents of an absolute legal standing for and the comprehensive regulation of the industry—their rallies in the capital numbering in the tens of thousands.

The voice of the masses, representing the crux of Lula’s left-wing Worker’s Party voting base, in theory, provides muscle to the solicitations of bingo
operators and union leaders who have been pressing this administration to introduce stringent regulations governing bingo rather than outright prohibition as a means to clobber the link between organized crime and Brazil’s gaming industry, as the government has been loosely pursuing since 2004. Brazilian media reports suggest that the cries may have finally resonated with the Lula administration.

Thus, with clear voter support as well as an undeniable example of the harm brought to the country vis-à-vis legal uncertainty, and the lack of any regulatory framework for the industry (and also following adamant backing by the Brazilian equivalent of the U.S. Consumer Protection Agency as well as its Central Bank this past October), one might not consider it shocking that earlier this year President Lula instructed his secretary of institutional relations to re-commence conversations with the bingo workers to see if some legislative solution can be found.

The Brazilian newspaper O Globo reports Lula has authorized the examination of several conflicting proposals to regulate bingo and other gaming proposals currently pending in the Brazilian Chamber of Deputies or the Senate, and to begin negotiations on formulating a consolidated plan toward the license and regulation of the country’s bingos.



Subtle Realities

While outsiders may view the 180-degree turn of the administration as substantial progress for Brazil’s gaming interests, and as a victory for its employee unions, they need only look back to the happenings of 2004 to understand the fragility of the situation. In fact, it was a scandal uncovered at that time—when Lula first initiated the idea of getting behind a federal bingo regulation—that sparked the government outrage preceding the attempt at a ban in the first place.

From the government’s perspective, it would seem that subsequent scandals uncovered involving high-ranking politicians, organized crime and the industry over the past three years have not created any more of a hospitable environment for these same considerations to take place today. And yet they are, which makes one wonder, is the outcome likely to be any different from four years ago?     

Many in the Brazilian media have framed this as a long battle of a government stubbornly intent on gaming prohibition vs. a country whose populous is 70 percent in favor of the legalization and regulation of the existing bingos (according to public polls).

The story itself as presented above even reads that way. However, to form such a conclusion is to ignore the underlying dynamics of the situation.

In fact, it is the combination of corruption and organized crime that the administration ceaselessly seeks to purge from both the political system and the society at large. The gaming industry has simply gotten caught in the crossfire. That is not at all to say that gaming is just an innocent bystander. Having largely provided the medium for which crime syndicates can clean their illicitly earned funds as well as more than its fair share of related corruption scandals, the government is justified in giving the gaming industry some attention.

However, as the country’s gaming proponents are apt to point out, a clear legal status and regulatory framework for the industry would likely exact the same results as the prohibition-cum-clean-up act, without the mass extinguishment of 300,000 jobs, and all the while yielding new tax in-flows to the state.

As we see time and time again throughout the region, though, the road to transparency is a painful one; and it takes a government of strong will and fabric to make the transition. Previous attempts by this administration to bring some legal/regulatory clarity to the sector have quickly brought to light corruption in its ranks which, in turn, undermined its credibility as the premier anti-corruption force that it claims itself to be and quickly caused it to abandon such direct and ambitious pursuits in regards to gaming.

One could speculate, then, that while the war over bingo has brought to light complex and politically sensitive disputes over state and federal powers, the “interests” of powerful organized crime syndicates and business owners advocating regulation in place of prohibition, as well as a compelling story of the needs of the people, it is not a far reach to conclude that it is the fear which has embedded itself in the collective political mindset that has forced the administration (some might say rather unwillingly) into the half-hearted prohibition stance.

After all, to the individual politico it would be career suicide to risk the faintest hint of affiliation with those of your political colleagues who may eventually be proven entangled in scandalous activities tied to the gaming industry.

And for the collective, the party is already walking on eggshells in the wake of several other unrelated issues. So the thought goes, why open the door to more bludgeoning and potentially render the party impotent on its premier platform issue, the fight against corruption?

Absent an internal champion for the cause, the government has had no choice but to make clear its skepticism of the proponents’ case and opt in favor of the prohibition stance it has held since 2004. After nearly four years of outwardly adamant, largely ineffectual support for the prohibition of all gaming in Brazil, depending on his viewpoint one might either find it ironic or about par for the course that the administration’s recent policy flip-flop—in which it is slowly and ever cautiously mounting the fence on the issue—comes following the December elimination of a blanket financial transactions tax. The elimination of the tax created a $23 billion revenue shortfall for the government, thus making mighty attractive the potential $1.5 billion-$3 billion annual windfall from placing a tax on those bingos still standing.

Have no doubts, however, that while surely more incentivized than in 2004 to make room for an environment that would enable the collection of $1.5 billion-$3 billion in tax revenue, the administration’s newfound lukewarm pro-bingo mindset will quickly fail come any new implications of scandal; and it is likely that their stance would once again veer toward the opposition while avoiding direct conflict by keeping the issue “at the bottom of the pile.”

Going with that assumption, recent history would present serious doubts as to any real long-term potency in the government’s present motions. However, circumstance (and some political maneuvering) may possibly prove history ill-informed.



Champion at Last?

And so we return to the beginning of our story, that of a healthy handful of politicians who utilize due process to inject some bias into the cluelessness of circumstance and outwardly champion the people’s and the industry’s (and maybe our readers’) interests. Voila!  What six months ago was an abject bone of contention in Brazilian society could in two months be the focus of the House and Senate.

Well, perhaps... Let’s back up.

To make a long story short, Brazil’s Senate voted against Lula’s House-passed proposal for an extension of the widely despised .38 percent CPMF financial transaction tax last December. Since that time the government cut spending and raised other taxes as it scrambles to fill the $23 billion revenue void (which in 2007 counted for 6 percent of the federal revenue).

While seemingly unrelated, one such Lula-proposed move was approved by the lower house of Congress by the slimmest of margins in May, and would oblige the government to increase spending on health from 7 percent to 10 percent of its gross income by 2011.

A controversial rider on this bill proposed financing these changes via the creation of a new financial transactions tax of 0.1 percent, called the CSS. According to Senate leader Romero Juca, Brazil’s Senate will circle back to vote on the creation of a new financial transactions tax in October or November, after the country’s local elections.

With the Brazilian press speculating on a defeat for Lula, the lengthy time lapse before the vote has created space for the bingo industry to propose its own, alternative solution to Brazil’s health financing uncertainties.

In early June, over two dozen Brazilian politicians submitted a bill that would license and regulate bingo halls throughout Brazil. Bill 3489 would authorize Brazil’s Ministry of Finance to issue two-year licenses to bingo halls with a minimum capacity of 500 people and a minimum of 50 employees.

The bill also establishes a minimum capital requirement for bingo operators, who would be obliged to pay licensing fees in addition to a 15 percent tax on gross revenues (which they estimate could provide upwards of US$2.9 billion, which could then be put toward the funding of health programs instead of CSS contributions). That tax would be split between federal and state governments, and all halls would be centrally linked to guarantee government oversight over tax payments.

According to its proponents, the successful implementation of the bill could lead to wider regulation of gambling activities in Brazil, although the authors of the bill maintain that President Lula is currently “very reluctant” to consider any possibility of slot machine regulation.

But despite the general movement in favor of bingo regulation, success in due process would appear to rest on the broader health funding debate. If Lula fails to gain approval for his CSS proposal, the prevailing thought is that his administration would come under pressure to declare the bingo bill a matter of “constitutional urgency”—guaranteeing a congressional vote within 90 days. But if the CSS unexpectedly receives Senate approval, thus securing the health funding, bingo could become a forgotten victim of circumstance relegated to the “bottom of the pile.”

With everyone’s cards on the table, it is now simply a waiting game. The only certainty is that this is surely the closest Brazilians have ever come to finding common ground on the bingo debate in a fashion that is almost politically palatable to everyone’s agenda.

Dino Guiliano is the director of Latin American operations and emerging market research for Denver-based gaming consultancy the Innovation Group. He can be reached at the company’s regional headquarters in San Jose, Costa Rica (+506-2201-1544) or via e-mail at dguiliano@TheInnovationGroup.com.

By Frank Legato   Wed, Sep 03, 2008

As Bally Technologies increases its international presence, new offices are cropping up to meet ever-increasing demand for Bally slots and systems around the world. Here are a few of the hottest of Bally’s new international hot spots.


Asia-Pacific

As new, tourist-oriented properties such as Venetian Macao and the coming City of Dreams widen the market in Macau, that Chinese enclave heads the list of new opportunities for Bally.

“We’ve got a series of products that have been performing very, very well in Macau,” says Bally Asia-Pacific VP and Managing Director Catherine Burns, “particularly Hot Shots and Quick Hit. With a couple of new property openings coming, we’re looking at additional growth.”

Macau is only one portion of the Asia-Pacific region ripe for growth. “We’re also seeing some nice growth with our longtime customers like Genting in Malaysia,” Burns says. “We’re looking at good growth in the Philippines, and in the peripheral markets of Cambodia and Vietnam, which we’re now making a push into. With the success we’ve had from the products, we expect that to be very strong this year.”



South America / Central America

The burgeoning new market in Chile is only part of the growth on which Bally is poised to capitalize in South America. “We have an office in Buenos Aires, Argentina, which supports that part of the world, and we also have an office in Puerto Rico, which supports the Caribbean and Central America territory,” Connelly explains John Connelly, VP-international.

“We continue to see tremendous opportunity in some of the emerging markets, such as Peru, Colombia, Belize… even in places such as Nicaragua, we’re starting to see some major players enter with the capital needed, and the regulatory agencies are starting to step up with the right kinds of requirements to make us feel comfortable entering.”

There are other possibilities that could result in huge new markets. “There is a lot of discussion on when Brazil will open legally,” Connelly says. “We’re not creating a strategy to be first in that market, but we’re keeping our eye open to make sure we’re able to take advantage of the opportunity.”



Mexico

Mexico, of course, is one market in which Bally already has a very strong foothold. All of the games in the market are Class II electronic bingo, which, again, reminds one of the value of that 2003 acquisition of SDG, long one of the leaders in Class II gaming.

“One of the advantages of representing Bally internationally is that our portfolio of products is so extensive,” comments Connelly. “It’s a competitive advantage, and Mexico is a market we’re spending a lot of time focusing on.”



South Africa

Bally’s advantage in the South African market is the company’s strength in the stepper product. “It is one of those markets where the stepper product is quite strong,” says Connelly. “Approximately 40 percent of the machines are steppers—very old steppers; three-reel machines. There are even some old 10-reel games by Universal and some other companies.”

The opportunity for Bally in South Africa? Replacing those old games.

“We see a tremendous opportunity in South Africa, because many of the machines are 10 years old, or older. There is an effort by the four or five major groups down there to do some conversions in the near term. We’ve timed that appropriately to support the needs of our customers down there, and the initial performance of our products, both stepper and video, has been some of the highest on the floor.”

Bally plans to announce a managing director for the new Johannesburg office this month.



Eastern Europe

Bally was one of the manufacturers that suffered the least from the casino closures of the Putin administration in Russia—the company was selling via a distributor agreement, which made the effects of the decline in the market minimal.

While Connelly says the company will keep a  vigilant eye on Russia to possibly capitalize on the coming of the new gaming regions, there are plenty of other ripe markets in the region, from the Baltic states to the former Soviet republics of central Europe.

By locating an office in Slovenia, says Connelly, Bally will be centrally located to serve not only the Baltics, but Ukraine, Rumania, Croatia, Slovakia, Italy, Austria and other major markets.

“The intent of our office there is to support our customers from both system and gaming perspectives in Eastern European countries and the eastern E.U.,” says Connelly. “Some would be surprised to know how many contracts we’ve signed there in the past 12 months, both in the system and gaming areas. That’s going to be a great strategic advantage for Bally in becoming global.”

By   Wed, Sep 03, 2008

Casinos make a lot of money off of slot machines—including video poker, keno, blackjack and a few other machines that are typically found on the slot floor. To keep players “coming back for more,” casinos since the beginning of the modern gaming era have resorted to various types of incentives (bribes). There are numerous reasons for these incentives, but the basic one is to encourage players to come in and lose more money to the casino.

The two major forms of incentive are cashback and comps. Before going any further, let’s delineate these terms.

Cashback is a cash rebate going to the players based on their play. It can be based on the same formula across all machines in the house, have two distinctive categories (slots versus video poker, where video poker receives less cashback due to its lower house edge), or numerous categories based on theoretical loss or other factors.

In Las Vegas and most regional casinos, the amount of cashback is usually based on a percentage of coin-in, whereas in Atlantic City, it is usually based on
a percentage of each machine’s theoretical. There are pros and cons to both
methods.

Cashback based on coin-in gives the players a direct, understandable, calculable reward. It can be easy for your staff to explain to your customer. Basing cashback on theoretical gives a casino considerably more flexibility to assign specific rebates to specific games—and even change them without notice (though the customers will notice this more than you may think).

The biggest drawback of the theoretical-based system is that it is very difficult for the slot club staff to explain to the customer. On more than one occasion, someone has said to a player, “The cashback is based on what you lose.”

Which one do we recommend? It is whatever your customers are used to, with two caveats. Not all forms of cashback offered by your casino (see below) have to be based on the same system (same-day can be based on points, mail rewards on theoretical). Also, whatever rewards you do base on coin-in, it may be next to impossible to change them to theoretical at a later date.



Types of Cashback

Years ago, cash rewards fell conveniently into two categories: “same day,” where the player could pick up his cashback the same day he earns it; or “bounce-back,” where the player got a voucher in the mail that was redeemable sometime in the future. Both of these categories still exist, but there are now additional ways to distribute cash to your players as well.
 
Many casinos now offer a monthly cash mailer (sometimes in lieu of same-day cashback, but more frequently in addition to) with different tier levels of cash a player can earn, based upon either coin-in or theoretical in some earlier time period. This is different than bounce-back cash because with bounce-back, the amount the player may receive is unlimited as long as he put lots of dollars through the machine. With monthly mailers (usually two or four coupons, each of which must be redeemed on a specific dates), there is a maximum “top mailer” that only the highest 5 percent of your customers receive.

There are also “incentive checks” where a player may receive a specific amount (perhaps $20, perhaps $20,000) but it must be played during a specific time period—which can be a few hours, a few days, several months or anywhere in between.

Although this is “cash,” it may or may not be considered “cashback.” Cashback is a long-term entitlement, whereas these incentive checks are frequently specific to a promotion (or a special marketing effort by the casino to attract specific customers or demographic) and are quite flexible.

Whenever a casino’s marketing department believes that throwing money at the problem is a good way to solve it (and it occasionally is), incentive checks may be in the mail shortly.



Welcome to ‘Free Play’

Many casinos now offer “free play” (instead of cash paid out of the cage or slot club booth) for some or all of their cashback programs. Free play is typically downloaded at (almost) any machine with a PIN.

It usually must be played through at least once. The advantages to the casino for this are that there are fewer labor costs associated with awarding the cash, and once physically at the machine, many players do not have the discipline to play the money through once and then stop. There can be player resistance to this, especially if a player feels that he is being forced into a specific course of action, but similar to the introduction of cashless machines, this can be overcome by marketing the benefits (get your rewards without the line) and using a little sensitivity, or maybe a bribe.

(Please remember that if your players thought everything completely through on a rational basis, you would have a lot less business.)

Unfortunately, one of the reasons for the increased usage of free play is the mistaken assumption that “free play” is “free” to the casino, due to the high number of players who play it until they lose it. While it is cheaper than handing out cash, free play still can be a costly incentive if not monitored.

Another downside of free play is that one spouse (or significant other, or even a friend) will pick up the free play for both, which may mean one person visiting the casino rather than two. Casinos typically aren’t worried about spouses using each other’s free play, but there are teams of players doing this in some locations, which is not what the casinos had in mind.



Comp Variations

There are more ways to deal with comps than there are with cashback. The comp accounts may be open (i.e., transparent to the player) or closed. There may or may not be additional discretionary comps available. Comps may be based on actual loss rather than theoretical loss. Sometimes comps are “trip only,” and sometimes they are “lifetime,” assuming some minimum amount of ongoing play.

Sometimes a certain percentage of comps are redeemable only in November and December. Sometimes there are different rates to use comps at restaurants owned by the casino as opposed to restaurants owned by someone else. Sometimes there’s a discount if a player uses comps instead of dollars to buy things. Sometimes there is a maximum of comps that can be redeemed at one time. At many casinos, sales tax is waived if you use comp dollars but not if you use real dollars.

The big advantage of open comp dollars accounts is that it allows more players to appreciate your rewards (instead of just the hard-core comp-consumers). Plus, it cuts down on the number of small comp requests going to your hosts or supervisors—thus allowing them to spend more time with the bigger fish. However, due to the general nature of gaming and players, it is always good to have some method that allows your staff to provide additional comps to big players or developing players.

Table game players, even in new markets, can be an especially traditional crowd regarding comps. Very few casinos give same-day cashback to table game players, and many who have tried it have stopped. Instead of relatively small amounts of cash (that can be complicated to calculate) and even comp dollar accounts, table game players seem to still prefer discretionary comps coming through direct staff interaction.



Cashback vs. Comps

What do the players want—cashback or comps? Unfortunately, the answer is both, and more of both—which means that you have to use your professional judgment to provide a diverse yet manageable program.

A casino that offers only cashback (especially same-day cashback) may be needlessly exposing its staff to aggressive comp-begging, and is probably not creating enough future visit incentives. Even though a player did what you wanted and played away all the cash rewards you gave him, he is not going home with a positive feeling about that part of your rewards program.

A free meal at your casino is (hopefully) more memorable, but a comp-only program can get boring rather quickly even in the best casinos—and can be a disaster if your restaurants (or other amenities) offer “nothing special,” and your competitors offer cashback.

Casinos with a “sleep-at-home” locals crowd do not need to give away (i.e., reinvest) as many comp dollars as casinos catering to “sleep and eat at the property” non-locals. You need to be reasonably competitive overall with your neighbors, although there are many areas (especially machine selection and customer service) other than cashback and comps which will successfully differentiate your product.

Each market has a different typical mix between cashback and comps, as operators who were successful in one location have frequently (and expensively) found out when they opened up in another location and thought they knew everything.

In general, video poker players care a lot more about cashback than slot players do. The reason is simple. A strong video poker player can analyze the return of a machine at a glance (i.e., one machine returns 99.54 percent; another 97.30 percent; etc.) It is easy for these players to add the return on the machine to the cashback rate to get the total return. Slot players can’t do this, because they usually have no idea of how much the game returns. If a player can’t know (and for the most part does not care) whether a machine returns 92 percent, 94 percent or 96 percent, knowing whether the cashback rate is 0.20 percent or 0.80 percent is largely worthless.



Changing Comp Dollars to Cashback

Cashback versus comps is an ongoing and ever-changing discussion influenced by many factors, including market maturity, available technology and economic conditions (such as the current situation of increased unemployment, as well as increased food costs, which can make comp dollars more expensive for the casino).

In the last year or so, several casinos added additional cashback options. For example, in the Las Vegas locals market, Station Casinos recently instituted a program where the players can redeem comp dollars (earned after the program was instituted) for free play, thus allowing players to turn points normally used for comps into cashback if they like.

It was a very popular decision, though many players redeemed only some of their comps for free play because the casino gives a better redemption rate for comp dollars (600 points equals one comp dollar for certain categories of comps) over cash (1,000 points equals one free play dollar), and there are additional discounts when you use points (such as a 25 percent-75 percent discount on the buffet, depending on tier level). All in all, a nice choice for the players to make.

A struggling casino in Laughlin is currently running a three-month promotion where players can redeem all comp dollars for cash—including any previously earned comp dollars. While this is also very popular with players, especially those with large balances of basically worthless comps, it strikes us as a needlessly expensive promotion.

Regardless of what their financial statements say, a significant percentage of comp dollar balances were never going to be redeemed, and many of those dollars are held by customers who have long lost any potential to be consistently strong players (at this casino or even any other casino). Of course, this policy increased business (as would passing out $100 bills at the door), but they would probably get the same benefit by allowing only currently earned comp dollars to be redeemed—and it would cost them a lot less money.

Today’s casino managers have many more tools available than their predecessors in creating an effective (and much more fair) reward program, but the basic goal is still the same: to encourage the player to visit their casino again, and to play more while they are there.

And as no two players, casinos or casino markets are exactly alike, there is no hard-fast answer as to what works, except knowing what your choices are and what you and your players best appreciate.

Jeffery Compton, the recognized expert on players' clubs, is president of CDC, one of the industry's leading marketing consulting firm. He can be reached at jeffrey.compton@compdance.com. Bob Dancer is a gaming analyst and the world’s pre-eminent video poker expert. He can be reached at bdancer@compdance.com.

By Frank Legato   Sun, Sep 28, 2008

By Roger Gros   Sat, Sep 20, 2008

By Marjorie Preston   Mon, Mar 01, 2010

By GGB Staff   Thu, Sep 04, 2008

The opening of the Water Club at the Borgata in June added to the unique amenities and standout facilities offered at that hotel. Already one of Atlantic City’s most successful casino resorts, the non-gaming Water Club has elevated the Borgata to yet another level. Hotel President Larry Mullin explains what it has meant to introduce a new product to the market and why he believes it will help ensure the success of the Borgata during difficult times. Mullin took over as president of the Borgata from its original leader, Bob Boughner, in 2005. Mullin’s previous experience includes time at the Trump organization, which ended when he was president of Trump Marina, prior to joining the Borgata. He spoke with Global Gaming Business Publisher Roger Gros at the Water Club in August. To hear a podcast of the full interview, including Mullin’s opinion of the Atlantic City market and its future, visit www.ggbmagazine.com and click on the GGB Podcast button.


GGB: What market demographic are you targeting with the Water Club?

Mullin: We’re looking for the customer who’s looking for a trade-up experience. Atlantic City has made some great strides in upgrading its product, but there’s much more competition, not just here but throughout the entire region. Now daytrippers have a choice between New York, Atlantic City or Pennsylvania, but that convenience doesn’t include the options we offer in terms of retail, restaurants, nightlife and some of the entertainment we offer, as well as a great hotel. We’re not necessarily reaching out for the most price-sensitive customer here. We tend to have younger customers with a lot more discretionary income who are looking for a new experience.



The opening had to give you a little bump over the summer.

It’s been a great reason to make another visit to the Borgata. We’ve been open five years now, and it’s no secret that convenience is a premium for people trying to stretch their dollar. To make a decision to come out to the Water Club, you need something compelling like this. It’s been great for us.



As we go into fall, we face more challenges: there’s the total smoking ban coming into effect in October, and, of course, the economy. Will these factors affect price points?

So far we haven’t seen too much resistance to our rates, but we’ve seen changes in our guests who are frequent gamblers, the people we offer free rooms to. Because of the supply and the offerings they have at their disposal, which are many, we have had to adjust. But I think a lot of this is short-term. Like any business, you have your ups and downs and at times you adjust your pricing. We could offer a lot more for a lot less, but at some point we’d have to compromise on what we’ve put in here, and we see that as detrimental to the design and positioning of this new hotel.



What do you think is the overall significance of the Water Club to the future of Atlantic City?

The most significant thing is the fact you can invest in a quality product like this and hopefully get a decent return on it. We don’t measure our return on the first quarter or month or on the first year. It will be defined in the next few years, much as it was with Borgata. But if you don’t have a product like this, then you run the risk of being run out of business. There’s a lot of market out there. People are looking for quality and value, and I think we offer both.



Before you added the Water Club, there was an expansion to Borgata that included restaurants operated by Bobby Flay and Michael Mina, and the poker room, which was a major step up for the casino. Are those the sorts of thing you need to dominate the market?

You need everything. The market is not as vibrant as it was when we opened a few years ago, I think because of the economy, and not what we see competitively. In the last 40 years, the economy has been down six times, and it does come back. The challenges out there now are unlike anything we’ve seen before because of the credit market, which doesn’t give people a lot of confidence to want to invest. We will be measured in the years to come by the return we show. People will say, “How did the Borgata and Water Club make their mark, and what do we need to do to meet that bar in new investment?”



Do you think Atlantic City is actually in a pretty good position to come back as the economy rebounds?

When the economy comes back, I think Atlantic City’s position is as good as anybody’s, if not the best for the short-term and mid-term. We have a new train service coming on at the end of the year from New York City. We have three nice new hotels in place—the Water Club, Harrah’s and the Taj Mahal’s second tower—and the biggest thing missing in the market has been the ability to have guests stay longer than a day trip. At the same time, we also have great restaurants. We just opened Izakaya, and it’s been tremendously received. I think people who invest in these convenience markets, unless they’re willing to invest at the same rate as you see here, they will have challenges over the long term. Right now, they’re bottom-feeding.



Harrah’s has done a great job repositioning itself with the Pool and its retail. Trump Marina has just announced a sale to be repositioned as a Margaritaville. Are you excited about that?

I’m excited about all of that. Again, it’s new investment, it’s new ideas, it’s new things we believe will bring people to this marketplace, which has always been great. I think the biggest challenge Atlantic City has faced has been its reputation and the perception out there among people who haven’t come to the city. We’ve worked hard here at Borgata and I think Atlantic City has worked hard in the last few years to change some of that, bringing in product like you see in Las Vegas and at great resorts—the kind of dining, entertainment and nightlife that give people a reason to be excited about coming here. I don’t feel there’s anything here, especially at this property, that we shouldn’t be proud of. It’s a great place to come have some fun.

 

By GGB Staff   Thu, Sep 04, 2008

Tropicana Entertainment has named Ed Ailstock as general manager of the River Palms Hotel Casino in Laughlin, Nevada.

Ailstock will oversee all operations of the 1,000-room resort.

Ailstock joined the River Palms Hotel and Casino in 2001 as slot manager. He was promoted to director of casino operations, and in 2006 was named casino general manager. He has 19 years experience in the gaming industry in various management positions in Nevada, Louisiana and Iowa.  
“Ed has both a technical and management background that is a great asset to the property,” said Rick Yuhas, regional vice president of Tropicana Entertainment. “He is bringing new and exciting games to the casino floor and with his personal emphasis on customer service, our guests will have a memorable experience at the River Palms.”

By GGB Staff   Thu, Sep 04, 2008

Table game supplier TCSJohnHuxley announced the appointment of Jo Purvis to the position of sales director Europe, effective September 2. Purvis will head up the Mainland European Sales Division, and will report directly to Group CEO David Heap.

Purvis has over 18 years of experience in the gaming and leisure industry, most recently as sales manager for WMS International.

“Jo is highly regarded within the industry and we are delighted she is joining the company,” said Heap. “This appointment reflects     

TCSJohnHuxley’s continued emphasis on developing and strengthening our European sales presence, and we are confident she will
lead the division to further success.”

By GGB Staff   Thu, Sep 04, 2008

Gaming Laboratories International announced that several of its managers in its world headquarters have been promoted to director. Diana Bowers has been promoted to director of quality assurance; Janusz Boskowicz to information technology director; Patrick Moore to director, technical compliance; and Joseph Shipman to director of mathematics.

“We are very proud of these employees for achieving the level of director,” said Paul Magno, vice president and co-founder of GLI. “Each has shown a tremendous dedication to GLI, and more importantly to our customers, and we celebrate their success with them.”

GLI, the world’s largest gaming equipment testing organization, employs more than 400 people in its labs around the world, and is currently hiring qualified testing engineers.

By GGB Staff   Thu, Sep 04, 2008

Clarion Gaming’s American office is instituting several staffing changes, including long- term online gambling industry leader Sue Schneider stepping down from her position as CEO.

Her two-year commitment to remain full- time in that position after the sale of River City Group to Clarion Events has ended. Schneider will continue to act as an advisor for Clarion.

“This is still such a dynamic industry,” stated Schneider, “so I’m pleased to continue my relationship with Clarion Gaming to continue to innovate and implement new ideas to serve it.”

Schneider became notorious a few years ago for donning a sumo costume and taking on the founder of Gambling911.com in a bloody grudge match in Montreal, Quebec. She would lose handily.

ATE and River City Group had been sister companies, co-producing the European i-Gaming Congress and Expo (EiG) for the past four years. The Barcelona event has become the biggest online gambling conference following Marc Lesnick’s Affiliate Gaming Conference held in Amsterdam.

Peter Rusbridge, CEO of Clarion Gaming, noted that a number of new enhanced services will be arising out of the office in St. Louis, Missouri.

“We’ve got over 60 years of i-gaming industry experience, which is amazing for such a nascent industry,” said Rusbridge. “So we’re keen to leverage both the knowledge and relationships that they have to continue to grow Clarion Gaming.”

Mark Balestra, now head of digital publications at Clarion in the U.S., will be adding features to current publications like IGamingNews.com, Internet Gambling Report, and research reports as well as developing additional titles for the gaming industry.

Chris Krafcik has taken on a new role as editor of IGamingNews.com.

Holly Rauch has joined to do sales for the digital publications division and Jeanette Kozlowski is now joining Emily Swoboda as a staff writer.

Dawn Kirkwood has taken over as head of conferences for this office and will be overseeing the production of such conferences as World Poker Congress, Next Generation in Gambling and the InDepth series, as well as initiating new regional events for North and South America. She’s now joined by marketing coordinator Karen Thomson and operations coordinator Dan Fitzgerald in new positions.

Nancy Krause, now head of sales, will continue her service to exhibitors and sponsors for Clarion Gaming events. She’s joined by Tony Boschert, who brings years of event experience to the company.

By GGB Staff   Thu, Sep 04, 2008

The new Jay Daniel Company, a casino management consultancy, has opened offices in New Orleans and Dallas.

Company founders are Jeffrey Dahl and Daniel Davila. Dahl was president and COO of both Torguson Gaming and the Beau Rivage Resort in Biloxi, Mississippi. Davila became Torguson’s CFO and treasurer after working 15 years as a Wall Street casino and equity analyst and holding other corporate posts.

Jay Daniel partners are Joe Billhimer, former COO of Hard Rock Casino Biloxi, and Mike Hammer, principal of the Pontchartrain Capital investment bank.

Davila, who lives in New Orleans, tells the Biloxi Sun Herald that the consultancy will concentrate on planning, developing and managing casinos. It will also evaluate existing operations, analyze markets, handle due diligence for mergers and acquisitions, advise on staffing and work with debt and equity facilitation.

Jay Daniel is developing business, the paper says, by “offering a 20 percent referral fee.”

By GGB Staff   Thu, Sep 04, 2008

Tamaya Enterprises, Inc., manager of New Mexico’s Santa Ana Star Casino, announced the appointment of Scott Eldredge, director of marketing and transportation, as interim general manager of Santa Ana Star Casino.

Effective August 15, Eldredge replaces Conrad Granito, who resigned to become the general manager of the Coushatta Casino Resort in Kinder, Louisiana. Granito has served as the casino’s general manager since 2003.

 “As general manager for five years, Conrad led Santa Ana Star Casino to become one of New Mexico’s leading Native American gaming casinos,” said Tamara chairman Aaron Armijo. “Under his management, the casino more than doubled its revenue and received numerous industry awards for marketing, and was recognized two years in a row as one of the top 10 places to work in New Mexico. While we are grateful for Conrad’s leadership, Scott is the right person to step in and continue the momentum he began, along with the support and strength of the casino’s directors and managers.”

By GGB Staff   Thu, Sep 04, 2008

Timothy Cullimore has been appointed as the new chief executive of London’s Ritz Club, where he will supervise a new phase of growth and development at the London casino.

Cullimore was most recently director of operations for Casinos Austria International’s U.K. division. Prior to that, he was Belgium CEO for Grand Casino Brussels, and worked in executive positions at Casino de Crans-Montana, Switzerland, at the Swiss Federal Gaming Board as a consultant on gaming legislation, Casino de Montreux, Switzerland and Casino de Montreal, Canada.

Andrew Love, the former chief executive of the Ritz Club, will continue his role as executive chairman of the club and deputy chairman of the Ritz Hotel.

“Tim is a vigorous and dedicated individual whose previous responsibilities have included securing new licences, building, development and operation of new casinos,” commented Love. “He will enjoy bringing to fruition the strategic planning of both his own initiatives and the directives emanating from the board of directors. He will be accountable for achieving financial success for the operation, and motivating his team to excel.”

By GGB Staff   Thu, Sep 04, 2008

Slot and system manufacturer Bally Technologies, Inc. announced that Michael J. Carlotti has joined the company as vice president of investor relations and capital markets.

Carlotti brings 10 years of experience as an investment banker and three years of experience as an equity research analyst, in which his primary focus was on the gaming industry.

“I am very pleased to welcome Michael to our management team,” said Bally CFO Robert Caller. “His Wall Street background will help Bally streamline its investor communications and will assist the company with its ongoing capital-market initiatives.”

By GGB Staff   Thu, Sep 04, 2008

Multimedia Games announced the appointment of 25-year marketing veteran Ginny Shanks as chief marketing officer. Shanks most recently was senior vice president of brand marketing for Harrah’s Entertainment.

“Ginny’s insight and keen understanding of the casino gaming experience will prove to be invaluable to our company as we develop and distribute relevant and robust products to present and future customers,” said Anthony Sanfilippo, Multimedia’s president and CEO.

During her time with Harrah’s Entertainment, Shanks was responsible for maximizing the value of the company’s key strategic brands—Caesars, Harrah’s and Horseshoe casinos; the Total Rewards player loyalty program; and the World Series of Poker. In addition to setting overall corporate brand strategy, Shanks oversaw sports and entertainment marketing, strategic alliances, consumer insights, public relations and nationwide casino promotions.

Multimedia also announced the appointment of Uri L. Clinton as general counsel and corporate secretary. He also joins the company from Harrah’s Entertainment, where he served as vice president of legal affairs for the operator’s Central Division.

By GGB Staff   Thu, Sep 04, 2008

Gtech Corporation video lottery subsidiary Spielo USA has been selected by the Delaware State Lottery as exclusive distributor for Slovenia’s Alfastreet.

Spielo will distribute Alfastreet’s R8 eight-player automated roulette games to all three of the state’s racinos—Delaware Park, Dover Downs and Harrington Raceway.

The R8 units, which place eight touch-screen player stations around a central, automated roulette wheel, will be manufactured by Atronic Americas LLC, another GTECH subsidiary which holds the exclusive license to manufacture and distribute Alfastreet products in North America.

“With 56 gaming positions at all of the gaming venues in Delaware, Alfastreet R8 will provide players who typically prefer live table games with an entirely unique experience, including features such as an automated roulette wheel, low and high wagering, one-touch betting, and multi-lingual screen menus,” said Victor Duarte, Spielo’s chief operating officer. “For the Delaware Lottery, in addition to greater profits when compared to live table games, Alfastreet R8 offers the highest levels of security, is easy to maintain, and allows for more efficient staffing.”

By GGB Staff   Thu, Sep 04, 2008

System supplier Table Trac, Inc. announced several new system installations last month. The company signed a contract with the Cheyenne and Arapaho tribes for the installation of casino management systems at four tribal casino properties in Oklahoma.

“Our commitment to evaluating and choosing the right system for our gaming operations has been a dedicated and collective effort for some time,” said tribal spokesman Chris Derenzo. “When it came down to operating history, performance and price, we were comfortable with our choice of Table Trac/Casino Trac.”

Table Trac also announced a new contract with Thunderbird Resorts, a premier resort and casino operator throughout Central and South America. Table Trac is expanding its agreement to supply casino management and player reward systems to multiple Thunderbird casinos, primarily in Costa Rica.

By GGB Staff   Thu, Sep 04, 2008

WagerWorks, the online gaming software subsidiary of slot leader International Game Technology, announced the release of a new slot game featuring Elvis Presley.

The new Elvis game features 50 paylines, stacked wilds for big wins and a free-spin bonus. “We take a great deal of time and pride in producing top-quality imagery and sounds for our games,” said Ernie Lafky, executive producer for WagerWorks/IGT. “Peter Valsamis, audio designer, went to incredible lengths to make the music in our new Elvis game as authentic as possible. Great care was taken in using vintage instruments, microphones, studio gear and recording techniques true to the period of the original recording. The amazing soundtrack, combined with retro imagery, truly evokes 1960s Las Vegas and speaks to the outstanding attention to detail we consistently achieve in our production values.”

By GGB Staff   Thu, Sep 04, 2008

North Carolina-based PokerTek, Inc. announced the first installation in Indiana of its PokerPro automated poker table, as Horseshoe Casino Chicagoland in Hammond began a field trial of several of the 10-player tables in its new 350,000-square-foot gaming and entertainment facility.

PokerPro places 10 video player stations around a video representation of the deal and flop in Texas hold ‘em or Omaha poker.

“We are delighted to begin our field trial in the state of Indiana and increase our presence in the Midwest,” said PokerTek CEO Chris Halligan. “We’ve proven that players in this region accept and appreciate the benefits of automated poker. We are pleased that our partnership with Harrah’s has allowed us to be part of such an amazing property.”

By GGB Staff   Thu, Sep 04, 2008

Slot supplier PacificNet, Inc. announced that its subsidiary PACT Game has joined with Sociedade de Jogos de Macau in sponsoring a promotional slot tournament to be held at SJM slot halls in Macau.

The goal of the slot competition is to increase slot play and player loyalty in the Macau market. PACT Game is contributing prizes including cash, Motorola mobile phones, bikes, golf wear and sports wear. Prizes to be provided by SJM include diamond wrist watches, digital cameras, gold coins, jewelry and free dinner buffets. The slot machines for the tournament are being supplied by PACT Game.

By GGB Staff   Thu, Sep 04, 2008

Gaming software and system supplier Sona Mobile Holdings Corporation announced that it has completed the “Express Funding” functionality of the internet wagering application for the New York Racing Association.

The system project is the second phase of a previously announced agreement between both parties. Under the terms of the agreement, Sona Mobile was contracted to develop a web-based wagering platform for NYRA which allows racing fans to access real-time racetrack information and securely place wagers on all races.

Phase I of the project included online registration, access to track information and online wagering capabilities. NYRA, which owns and operates the three largest racetracks in New York, will pay Sona Mobile the remaining 50 percent of the development funds following the launch of Phase II.

Express Funding is the new way for NYRA Rewards Program members to fund their accounts. Members making personal check deposits, including electronic funds transfer requests, will now receive immediate credits to their account.

By GGB Staff   Thu, Sep 04, 2008

Cantor Gaming, an affiliate of global financial services company Cantor Fitzgerald, announced that it has acquired the assets of Michael (Mickey) Wichinsky’s family of businesses. Wichinsky started the slot design and manufacturing firm Games of Nevada in 1979, changing the name of the company to Gamemasters in the late 1990s.

Cantor Gaming now owns Wichinsky’s comprehensive catalog of casino games, intellectual property and full library of art, designs and technology.

Wichinsky will remain as a consultant to the company as Cantor integrates and adapts games and content from the Wichinsky catalog onto its mobile gaming device, eDeck. eDeck is currently undergoing field trials at the Venetian in Las Vegas.

By GGB Staff   Thu, Sep 04, 2008

Casino revenues fell throughout the United States in June but showed some signs of stabilizing, according to the first National Revenue Report published by Fantini Research.

The NRR is a complete report on gaming revenue in the United States. It is published monthly by Fantini Research, publisher of Fantini’s Gaming Report.

The first NRR revealed that gaming win in regional casino markets fell 1.38 percent to $2.225 billion, a deterioration from the year-to-date gain of 1.57 percent.

The damage was worse when new casinos are factored out. Same-store revenues fell 5.66 percent.

However, there are glimmers of hope, the report’s author, Frank Fantini, said in pointing to casino companies such as Ameristar, Pinnacle Entertainment and Isle of Capri that grew revenues through expansions.

For more information about the National Revenue Report, contact Frank Fantini at FFantini@FantiniResearch.com, or by telephone at 1-866-683-4357.

By GGB Staff   Thu, Sep 04, 2008

Private, independent gaming test lab BMM Compliance announced that it has established BMM Macao as its first Asian office in the Macau Special Administrative Region, the latest effort in the organization’s global expansion.

BMM Macao will assist in the expansion of BMM’s Asian market presence by the provision of local compliance, testing and consulting support for gaming manufacturers, operators and regulators in Asia. It also will provide clients with international gaming and regulatory knowledge and experience to facilitate access into other regulated markets around the world.

By GGB Staff   Thu, Sep 04, 2008

Global Cash Access, a leading supplier of ATMs and other cash-access equipment and systems to the casino industry, announced that it has finalized the acquisition of former rival Cash Systems, Inc.

The aggregate amount paid to Cash Systems’ stockholders, note holders and warrant holders, together with Cash Systems’ transaction expenses, is approximately $33 million. Cash Systems is now a wholly owned subsidiary of GCA.

“We are very pleased to have closed the acquisition and are excited about the opportunities the acquisition of Cash Systems provides for the continuation of our strategy of having the scale required to compete effectively in the highly competitive electronic payments market,” said GCA President and CEO Scott H. Betts. “We believe that the acquisition of Cash Systems provides us with unique synergies within the gaming market.”

By GGB Staff   Thu, Sep 04, 2008

California-based TableMAX Holdings, LLC, a supplier of multi-player electronic table games, announced the closing of a share exchange with CJPG, Inc., which constitutes a reverse acquisition

CJPG, Inc. (Pink Sheets: CSJP - News) is the Nevada corporation formerly known as Casino Journal Publishing Group, Inc., which once published Casino Player and Strictly Slots magazines. It trades on the pink sheet section of the OTC under the symbol CSJP. Under the terms of the share exchange transaction, TableMAX members will be issued shares of CJPG’s common stock in exchange for 100 percent of the issued and outstanding membership interests of TableMAX.

In connection with the transaction, CJPG changed its corporate name to TableMAX Corporation and Stephen Crystal, president and CEO of TableMAX, was appointed to serve as president and CEO of the new company.

The company expects to change its trading symbol in the future.

In conjunction with the share exchange transaction, the company completed a private placement financing transaction in which it received approximately $3 million in gross offering proceeds in the form of cash and the cancellation of debt, before payment of commissions and fees.

By GGB Staff   Thu, Sep 04, 2008

System supplier Progressive Gaming International Corporation announced the signing of a note and warrant purchase agreement with leading slot manufacturer International Game Technology.

The company also announced definitive agreements for a new credit facility and term loan with Private Equity Management Group Inc.


IGT agreed to purchase a new $15 million Progressive Gaming 7 percent convertible note and warrants for common stock. Progressive Gaming intends to use proceeds from the financing with
IGT and borrowings from the new credit facility with PEM to retire the remaining $30 million of its 11.875 percent senior secured notes due August 15, thereby eliminating the remaining portion of its high-yield debt.

The company and IGT also will expand their strategic relationship, established last April, to cover server-based gaming upon closing of the financing transactions.

Under the expanded alliance, Progressive Gaming will transfer its Casinolink Jackpot Station technology to IGT. It is expected to be integrated with IGT’s extensive IP portfolio, including IGT’s “sb” server-based technologies as well as future versions of the technology.

PGIC will retain a license to continue to market the standard progressive and mystery jackpot features of Casinolink to current and new customers worldwide. Additionally, over the next five years, PGIC expects to receive approximately $9 million for engineering services provided to IGT, and for the technology transfer and royalties related to Casinolink.

By GGB Staff   Thu, Sep 04, 2008

Slot and system manufacturer Aristocrat Technologies announced that its OASIS 360 Casino Management System has been selected for the M Resort, Spa and Casino, a $1 billion resort scheduled to be completed in the spring of 2009 on South Las Vegas Boulevard.

Under the agreement, M Resort will leverage its Ethernet casino floor network with the use of Aristocrat’s SpeedMedia Marketing and Promotions applications on more than 1,900 “Sentinel III” in-game displays across the casino. SpeedMedia gives M Resort the flexibility to create and deploy customized downloadable media and offers players additional gaming excitement with configurable secondary bonusing events.

In addition, OASIS 360 will provide M Resort with multi-game analysis, customer management tools, casino floor diagnostics applications, PersonalBanker cashless wagering technologies and the integration of the resort’s hotel and food and beverage outlets.

By GGB Staff   Thu, Sep 04, 2008

Spanish slot manufacturer Unidesa Gaming & Systems announced that it has installed the Time Gate slot series, its star product, in the Casino Of Marbella in Spain.

Time Gate includes four different base slots linked to a four-level progressive jackpot. The player can win any of the jackpots without having to wager a maximum bet. “Consequently,” said a company spokesman, “it widens the target and increases its potential attractiveness, translating into bigger turnovers and better results for the operator.”

By GGB Staff   Thu, Sep 04, 2008

Slot and system manufacturer Bally Technologies announced that the Seminole Tribe of Florida will implement its TableView table-rating and player-tracking system at its six casinos in south Florida.

Bally’s TableView allows pit staff to enter player ratings, request chip fills and credits, and issue customer comps and markers in real time. The Seminoles have already linked 70 tables at the Hard Rock casino in Hollywood, Florida, to the system, and the tribe ultimately plans to use the system on 400 tables across six properties.

“We did an extensive evaluation of TableView and other vendors’ technology prior to making a commitment to Bally,” said Seminole Gaming Chief Operating Officer John James. “Our users unanimously agreed that TableView is far more user-friendly and is based on solid, current technology. And TableView is a perfect complement to our existing operations because it fully integrates with our Bally casino management system, protecting and enhancing the investment in technology that we’ve already made.”

The Seminoles recently added blackjack and baccarat to their Florida casinos under a compact with the state (although that compact is being challenged in the courts).

By GGB Staff   Thu, Sep 04, 2008

Game content developer Acres-Fiore Inc. announced a strategic partnership with slot manufacturer Bally Technologies, under which Bally will make an equity investment of $6 million in Acres-Fiore in exchange for exclusive use of Acres-Fiore game designs for a minimum of three years. During this period, Acres-Fiore will develop its concepts using Bally products, will test the designs on casino floors around the world, and will license resulting successful products back to Bally for production and sale in return for recurring
royalties.  

Over the past year, Acres-Fiore has written over 30 patent applications centered on a new technology called “Personalized Gaming,” which automatically adapts the behavior of gaming machines to the physiographic profile of each player.

“Players are individuals, and respond best to an individually customized gaming experience,” explained John Acres, CEO of Acres-Fiore. “No longer must players wander the casino in search of a suitable game. When a player sits down at a game built with Personalized Gaming technology, its characteristics automatically adapt to that specific player’s personality.

“Each game behaves differently for each player. Personalized Gaming technology revolutionizes the casino floor by delivering heightened emotional gratification to players while simultaneously increasing play volume and profits for casinos.”

According to Acres, the Personalized Gaming technology requires an advanced platform, and the company is using Bally’s Alpha platform combined with its “Networked Floor of the Future” server-based technology.

“As a creative designer, I’m impressed by the speed with which the Alpha platform can be programmed to deliver high-quality content to players,” said Richard Fiore, chief creative officer of Acres-Fiore. “This lets me immediately deliver great stand-alone games to the industry while also building the long-term foundation on which Personalized Gaming technology rests.”

Bally and Acres-Fiore expect to introduce the first games on this system, called “Paychaser” and “Members Bonus,” later this year in Southern California casinos.

By GGB Staff   Thu, Sep 04, 2008

Paul Oneile, CEO of Australian slot manufacturer Aristocrat Technologies, announced that he is leaving the company at the end of December to “pursue private interests.”

Analysts quickly speculated that Aristocrat’s poor market performance this year was the reason that Oneile was leaving, perhaps exiting before he could be removed by the company’s board of directors.

In an interview with the Sydney Herald, Oneile denied he is leaving because the business is in decline, saying the current economic slump “just happened to coincide with the end of my contract. There is nothing untoward in any of this. If you’re asking if the two are linked, the answer is definitely no.”

Aristocrat Chairman David Simpson reiterated that in a separate interview with the newspaper. Asked whether Oneile was “abandoning a sinking ship,” Simpson said, “He is not jumping and it is not sinking. Let’s get it right, this is a profitable company producing a good cash flow. It is not sinking and he is not jumping from a sinking ship.”

Oneile has attributed Aristocrat’s poor performance to the slumping economy in the U.S., but analysts are pointing to a less-than-stellar rollout for the company’s new video slot series, “Gen7,” and the “Viridian” cabinet.

The price of Aristocrat’s shares plummeted more than 20 percent after the news of Oneile’s departure.

On a more positive note for the company, Aristocrat announced the forming of a Systems Research & Development Centre in South Africa during the next few months, to support African and European markets.

“This is a very exciting time for us,” said Systems Director Devon Dalbock. “While we
have been working closely with Sydney R&D in the past, the market requirements for this region are somewhat different than that of Asia Pacific. I believe that local R&D will certainly make us more agile in responding to market requirements, and ultimately this must translate to a competitive advantage.”

By GGB Staff   Thu, Sep 04, 2008

Harrah’s Entertainment has begun an experiment in which they are removing large portions of their stock of slot games that require participation, or revenue sharing, with the manufacturer.

The experiment is reportedly a move on the part of Harrah’s to cut costs in the face of sinking revenues—the operator logged a net loss of $97.6 million in the second quarter.

The experiment to reduce reliance on participation games—slots, usually carrying high-profile themes, that are leased by the casino in exchange for a cut of the profits to the manufacturer—started at Bally’s and Paris in Las Vegas. In July, a student gaming writer, Alex Ruehle, tipped Global Gaming Business that Bally’s and Paris had removed Wheel of Fortune, one of the most popular slot games in the industry. A slot supervisor told Ruehle it was an experiment by Harrah’s to remove participation games from the floor and replace them with slots purchased on a traditional business model.
 
Harrah’s officials would not confirm or deny our inquiries concerning the “experiment.” However, last month, a Harrah’s spokesman confirmed to the Las Vegas Review-Journal that, in fact, the operator is experimenting with removal of high-profile, recurring-revenue games that were leased on a participation basis.

For the past half-decade, some of the highest-earning slot games on the typical casino floor have been leased in revenue-sharing arrangements. Games like IGT’s Wheel of Fortune, Star Wars and other well-known titles are joined by games such as WMS’ Monopoly series, Wizard of Oz, Star Trek and other games in the typical casino’s inventory of revenue-sharing games.

Early this decade, revenue sharing was among the subjects of greatest contention between operators and slot manufacturers, who insisted that the high-profile brands being sought out by players required huge research and development budgets—which could only be supported by recurring revenue from participation games.

Eventually, operators came to accept participation, not only because the games typically earned twice or more the house average—easily paying for the extra cost of offering them—but because they were not stuck with non-earning titles. Participation deals typically provide assurance that games can be switched out by the manufacturer on the operator’s request.

Analysts are saying that Harrah’s is going to do a comprehensive study of earnings with participation games versus non-participation games, and perhaps seek more favorable revenue-sharing arrangements with the slot-makers.

Investors on the manufacturing side are watching the development closely—participation has provided a good portion of revenues for most of the top slot manufacturers, and if other operators follow the lead of Harrah’s—the largest operator in the business—the revenue crunch affecting the industry could begin to seriously affect bottom lines in the manufacturing sector.

By Frank Legato   Thu, Sep 04, 2008

This game is designed to place the player inside the famous Clint Eastwood Dirty Harry films, with the WMS “Sensory Immersion Gaming” technology. It is the latest WMS game to be placed in the virtual reality-style setup, with the vibrating seat and the BOSE surround-sound chair.

The Sensory Immersion format is used to the hilt in both the primary game and in an amazing bonus feature. At random times during the primary game, a police helicopter will fly by and “buzz” the reels. (Thanks to the speakers behind the player’s head, the effect is that the helicopter is flying from behind and landing on the reels.)

If the spotlight lands on the fifth reel, it triggers the “Spotlight Feature,” in which the helicopter returns with the spotlight, shining it on that symbol and four others, turning them all into wild symbols.

The main bonus on the game is the reel draw of the game. It places the player on a virtual ride inside—what else?—a police car engaged in a chase through the streets of San Francisco.

Three scattered “Make My Day” symbols with all paylines active start the chase. The player selects a police car, and selects one of four targets for Harry to shoot his Magnum at. If the shot hits, the criminal’s vehicle swerves into credit values, or into objects for larger credit awards. Randomly, coins will spill out of the vehicle for extra credit awards. If the getaway car crashes into a “Catch” symbol, the criminal is caught, and a new chase begins.

If the shot misses, the criminal may shoot back. If he manages to disable Harry’s car, the bonus is over.

Players will love this virtual chase. The other Sensory Immersion games have experienced lines of players waiting to play. This game should be no different.

Manufacturer: WMS Gaming
Platform: Sensory Immersion
Format: Five-reel, 20-line or 30-line video slot
Denomination: .01, .05
Max Bet: 100, 300
Top Award: Progressive: $500,000 reset
Non-progressive: 10,000 credits
Hit Frequency: 52.79%—55.94%
Theoretical Hold: Progressive: 13.99%, 14.02%
Non-Progressive: 5.98%—13.96%

By Frank Legato   Thu, Sep 04, 2008

This new five-reel video slot, available in either IGT’s Game King or Game King AVP series (for

Advanced Video Platform), uses that video platform’s high horsepower to create a different sort of video graphic than previous games in the format, which tended to use the extra computer power for live-action video.

Cartoon-like video animation is presented in this game, albeit in extremely high definition and very sharp colors. Cartoon characters representing single animals or pairs of animals in Noah’s ark pop through reel symbols that are represented as portals in the side of the wooden ship.

But the Bible story’s pairs of animals also translate into a very intriguing new feature in this 30-line game—a proprietary feature called “Split Symbols.” When two characters appear in one symbol, it is counted twice—the five reels can contain up to 10 symbols per payline, enabling up to 10 symbol wins on each line.

The free-spin bonus is another strong feature of this game. When triggering symbols land, 10 free spins play out, with, according to the manufacturer, a 281 percent average return on bet for each spin. The player will nearly triple his wager, on average, for each free spin.

These two features, combined with the fun cartoon graphics and IGT’s typically strong video game math, should be a hit with players. The math program is one of the more volatile penny programs, which typically has appealed to a wide range of players.

Manufacturer: International Game Technology
Platform: Game King; Game King AVP
Format: Five-reel, 30-line video slot
Denomination: .01
Max Bet: 300
Top Award: 10,000 credits times line bet
Hit Frequency: 36.6%
Theoretical Hold: 3.5%—14.4%

By Frank Legato   Thu, Sep 04, 2008

While Konami’s “Advantage” series of reel-spinning slots has been on a tear of late, this game will remind operators of the manufacturer’s core strength in the video genre.

The game’s Aztec temple theme is available in several configurations, including 20-line, 25-line and 30-line setups. It also is available in denominations ranging from pennies all the way through $5 denominations.

Volatility is in the medium range, with a hit frequency of around 40 percent.

The main opportunity for big wins comes in the free-spin bonus, which is this game’s main feature.

Three, four or five scattered temple symbols trigger 15, 20 or 25 free spins, respectively.

During the free spins, the “bird” symbol—a phoenix rising from the flames—is wild, and multiplies the jackpots. If one or more of the bird symbols substitute in a winning combination on a free spin, the jackpot is multiplied by either five, 10 or 20. The free-spin round can be re-triggered within the free spins, which can add much time on device and good credit wins without the high volatility of most games designed exclusively for pennies.

Striking, high-resolution video graphics complete the package of what is a very strong offering from Konami.

Because it is a K2V game, Rising Fire supports all of Konami’s mystery jackpot systems and other extras, like “Quick Strike,” “Diamond Point” and all of the progressive options.

Konami has been on a roll lately, and the company’s success can ultimately be traced to very strong program math. While its success has been strongest in the reel-spinning genre for the past few years, this game will reassert the company’s knack for successful video slots.

Manufacturer: Konami Gaming
Platform: K2V
Format: Five-reel, multi-line (15, 20, 25) video slot
Denomination: .01—5.00
Max Bet: 5, 10, 20 or 50 per line
Top Award: 20,000 credits times line bet
Hit Frequency: 40%
Theoretical Hold: 4%—18%

By Frank Legato   Thu, Sep 04, 2008

This game combines two very successful former versions of the series of slots based on the popular Deal Or No Deal TV game show, and adds, for the first time, a wide-area progressive jackpot and a secondary progressive.

In the base game, players can choose between “Line Mode” and “Super Play,” according to the number of paylines activated. The player has the option to activate one, five, 10 or 20 lines with at least a single coin per line, which triggers the Line Mode, and normal multi-line video play. Activating all 25 lines triggers Super Play, in which all wins are paid as left-to-right scatters. (At press time, Super Play was not yet approved in Nevada.)

The Deal Or No Deal logo is wild on all but the first reel, substituting for all but the briefcase symbol.

There are two levels of progressive. Five Mega Deal symbols win the top “Mega Deal Progressive,” which resets at $50,000. Five money or phone symbols trigger the secondary “Rapid Hit Progressive,” resetting at $30,000. Max bet is required to qualify for these progressives.

Finally, like all other games in this series, this slot includes the central “Briefcase Bonus.” This is the main feature of the TV game show. The game show screen appears, showing 20 suitcases, each containing a different credit amount. The player is shown a list of the amounts hidden in the suitcases.

The player picks one suitcase, then five of the remaining suitcases, which will open to reveal the credit amounts inside. The bank will make an offer, based on values in the remaining suitcases. After the bank makes an offer, the player may decide “Deal” (take the money from the bank), or “No Deal” (keep playing). If the player chooses “No Deal,” he may select four of the remaining suitcases and wait for the next offer from the bank. This continues until the player accepts the bank’s offer or the player’s suitcase is opened.

Manufacturer: Atronic Americas
Platform: e-motion
Format: Five-reel, 25-line video slot
Denomination: .01
Max Bet: 75
Top Award: Progressive; $50,000 reset
Hit Frequency: Approximately 50%
Theoretical Hold: 10%

By David Ross   Thu, Sep 04, 2008

Research shows that from half to two-thirds of the 5 million online poker players are concerned about “fairness” of the game.  Additional survey data shows that about 30 percent of non-online players would play if they were convinced the game was trustworthy.

With more than 100 million poker players worldwide, that is a significant untapped online gaming market.

Gioia Gaming Systems’ newest gaming product, Cut N’ Shuffle, allows players to play and cut a real deck of cards during online poker rather than rely on random number generators. Gioia’s Game Check product provides technology to allow each game to be audited and verified by an independent third party.

“There is a significant amount of distrust among players when it comes to internet poker,” says Frank Wilde, director of marketing for Gioia Gaming Systems, based in Denver, Colorado. “The gaming market has demanded a method to improve the perception of unfair gaming, and Gioia has responded with a solution that is tangible and verifiable.  As a result, we expect to see a windfall of new online players join in the game.”

Gioia’s product technology offers the following features:

• Internet poker players get an online gaming experience with cards from an actual deck.

• The elimination of inside or outside manipulation or pre-determination of cards and outcomes is assured.

• Players can cut the deck prior to the deal.

• Separate digital and video records are maintained for every deal.

• Poker games can be validated by an independent third party.

• Gaming authorities receive auditable results.

• The game pace is not compromised.

• 32,400 decks are dealt per minute per system.


“Cut N’ Shuffle” scrambles and shuffles the cards, then records a digital file of the shuffled deck by way of a barcode system.  The electronic file is then presented to the players at the table for the option of a cut (a feature not available in other games through RNGs). This helps eliminate the practice of utilizing robotic players.

Following the game, the results are returned to the Gioia Gaming System servers for instant digital verification.  Additionally, players will have the option (for a nominal fee) to request validation of the deal through a recognizable third party using the video record.

Wilde says he thinks an additional byproduct of Gioia’s technology may be its potential impact on legalizing online gaming in the United States.  

“Without the ability to ensure fairness in online gaming, the push to legalize it continues to be threatened. The industry has made strides in addressing key issues such as underage gaming, location and problem gambling, but addressing fairness continues to be a challenge. Gioia’s system is designed to ensure fairness by providing an auditable game result,” he says.

For more information, contact Gioia Gaming Systems at 303-288-6332 or visit the company’s website at www.gioiasystems.com. You can also email Frank Wilde, director of marketing, at frank.wilde@gioiasystems.com.

By David Ross   Thu, Sep 04, 2008

U.K.-based Heber, a leading manufacturer of embedded and PC-based reel and video gaming control systems, has launched two new peripheral gaming controllers, XLuminate and Xspin.            Stunning lighting effects can be created when using XLuminate that include fading, quick switching and tri-color LED control. XSpin is capable of driving up to eight mechanical reels, and  is ideal for controlling mechanical,  multi-bank spinning-reel gaming machines, top boxes and multi-client applications.

XLuminate has been designed to be added to Axis 945 or any Windows or Linux gaming system equipped with a USB port. It is designed to control up to 256 multiplexed lamps or 256 LEDs, and adds total lighting control to a gaming machine application.

XLuminate allows the operator to control individual lamps or LEDs with 16 individual dimming levels. It also includes onboard memory storage, which enables multiple LED data patterns to be used for the quick switching of LED effects, such as text displays and other lighting patterns.

The Xspin USB gaming controller module drives up to eight mechanical spin reels. It has been designed to be added to Axis 945, or any Windows or Linux gaming system equipped with a USB port.

Heber products can be ordered from its Chalford, Stroud office in the U.K. or from its distributors in Buenos Aires, São Paulo and Sydney. Call  +44 (0) 1453-886-000 or email Russell.Mort@Heber.co.uk.

By Frank Legato   Wed, Sep 03, 2008

Welcome to September, everyone.

There are just so many things to like about September. NFL football. Real games, not exhibitions with the scrubs. (Last year, my Steelers went from “suck” to “OK.” I’m hoping they crack “good” this year.) The weather cools down in September, which makes it nice for me when I go to all the slot manufacturers’ offices to see their new games, so I can write about them in our big G2E show issue.

I love that. In years past, I always did my annual tour of the slot-makers in July, which typically involved repeated 100-yard dashes between air-conditioned offices and super-heated cars. It was like a race with the grim reaper, the goal being to avoid melting into a heap of primordial goo before I could unlock the car door.

Heck, in Las Vegas this month, the mercury is likely to dip to a chilly two digits. Yep, the 90s. (At two in the morning.) (On a cold night.)

September also marks the official start of Trade Show Season. This month, I’m off to Bulgaria, for the Balkan Entertainment and Gaming Expo. I’m completely ready. I can now pinpoint Sofia, the location of the conference, on a map. It’s right there between Serbia and Turkey, next to the McDonald’s across from the Pep Boys.

I will be moderating a professional panel at the Balkan show. After that, I will be moderating a couple of panels at the Global Gaming Expo in Las Vegas, followed by the International Gaming Exhibition (formerly International Casino Exhibition—instead of ICE, it’s now “IGE,” which sounds like someone having an attack of heartburn) in London, where they are just beginning to consider an educational conference, where I may be called upon to do another panel.

Yes, I go to these panels—they are usually called “roundtable discussions,” although I have yet to see a round table at any of them—and, as we would say back in the hills of Tennessee, “commence to moderatin’.”

This means I ask questions, and the members of the panel try to decipher just what the heck I’m getting at:

“Mr. Smith, do you feel the ramifications will be acutely felt once the server-based paradigm replaces the analog world-view with an Ethernet-based, digital frame of reference in the industry at large?”

“Yes.”

“Well, considering that revelation of modern technology, do you think the industry will see a day when the traditional reel-spinning genre, combined with the advent of the electronic age in table game operations, will evolve to new levels of efficiency?”

“Umm… We have a game with a chicken in it. It’s really cool.”

In any event, this September is extra special for the casino industry in general, because yet another Legato will be unleashed on unsuspecting gaming operators. My younger son, Jim, will turn 21 on the 24th of this month, and, as I did with my older son Joe a few years ago, I am obliged to take him to a casino to mark the arrival of his legal gambling age.

Jim will become the latest beneficiary of the gaming wisdom I have compiled over the past three decades since my own 21st birthday. I will teach him the expert methods I myself employ when playing a slot machine, gleaned from nearly a quarter century of writing and analyzing the games:

“Put the bill in here.”

“Now, push that button.”

“Now, say a curse word.”

But how about video poker?

“Hold those two cards.”

“Now, hit the ‘deal’ button again.”

“Now, say a curse word.”

But what if my son wants to play table games? I can help him on blackjack, maybe.

“OK, you’ve got a five and a three. Split them! No, double down! I mean, go fish!”

How about craps?

“That’s your pass line, and your no pass line. Lay odds behind the pass, and stay away from the prop bets, and watch the shooter, and back up your front bets, and the 10-times odds will front your back bets, and…”

Maybe we should stick to the slot machines. I can probably do the most damage that way.

Then, I’ll moderate a panel on teaching our children how to gamble in casinos.

We’ll use a round table.
    

By Frank Fahrenkopf   Wed, Sep 03, 2008

In all but a few gaming jurisdictions in Asia, electronic gaming machines are the most popular form of gaming entertainment in casinos. The overwhelming majority of those who enjoy this activity do so responsibly, and numerous studies have shown that, even during an era when the availability of casino gambling has expanded rapidly around the world, global prevalence rates for problem and pathological gambling have been remarkably stable over time, and in some instances have declined.

Still, the debate over the role of gaming machines in creating problem gamblers remains lively. All evidence to the contrary, a number of international regulators, legislators and researchers continue to contend that altering the physical or mechanical aspects of a gaming machine can reduce gambling-related harms.

The most recent salvo in this misguided pursuit is the Poker Harm Minimization Bill of 2008, put forth by the Australian Senate. The bill would impose a number of restrictions on the actual design and operation of gaming machines in the country, including restricting the value of currency that can be accepted by the machines, imposing technologically enforced betting limits, outlawing free spins or games, and limiting the spin rate, number of paylines and jackpot values.

This is scary stuff for those of us in the gaming industry. But more troubling is the fact that technological approaches have been scientifically proven to be completely ineffective at reducing gambling problems. The Canadian province of Nova Scotia limited the maximum bet allowed on its video lottery terminals, restricted the length of each gambling session, and required that both clocks and anti-gambling messages be displayed on VLT screens. The result? There was no reduction in the average amount of money gambled per gambling session.
 
The province of New South Wales in Australia experimented with reducing the speed of games and imposing electronically enforced betting limits, but research found the efforts would not reduce problem gambling. The same province tried shutting down electronic gambling machines for three hours each day. Again, the impact on problem gamblers was found to be nil. Finally, New South Wales tried requiring a display of anti-gambling messages on poker machine screens. A follow-up study concluded the effectiveness of the messages was “somewhat limited.”

So, why don’t these restrictions work? The answer is simple. Human nature being what it is, players adopt compensating strategies to defeat the technology-based restrictions. Research shows that people can lose control of their gambling when playing very different types of games providing very different experiences. There is, therefore, little reason to expect that changing various rules of a game will ensure that a person predisposed to gambling irresponsibly will not lose control while playing it, or some other game.

Research shows the better approach is to assist individuals directly, and that the malady is far too complicated to be treated with such a “quick fix” solution.

Individuals who are unable to control their gambling are, for example, likely to suffer from a combination of problems. A leading study of problem gamblers reviewed data for more than 43,000 Americans and found that pathological gamblers suffered from other behavioral disorders at alarming levels, including alcohol and drug abuse as well as mood, anxiety and personality disorders. The plain implication of these results is that treatments for problem gambling must also consider whether other behavioral disorders are present and need to be addressed by a therapist, or other treatment method.

Accordingly, simplistic fixes like those proposed in the Poker Harm Minimization Bill, which support tinkering with technology, are unlikely to make any material impression on individuals experiencing such a complex set of interrelated problems.  

There also is recent evidence that a substantial number of people who are unable to control their gambling have some success, over time, in changing their behavior and regaining control. While this phenomenon of “natural recovery” is not exhibited in every individual suffering from a gambling disorder, the recovery pattern emphasizes the importance of individual action in controlling the problem.

All this is not to diminish the problem, and disordered gambling is a serious one. But as the global effort to reduce disordered gambling continues, it is vital that regulatory policies be aligned with the medical and public health research into pathological gambling—its causes, patterns, and responses to treatment.

It also is imperative that regulators consider the impact of ineffective “quick fixes” on the entertainment experience of the 98 percent to 99 percent of the global population who safely enjoy casino gambling. Measures to protect the few who may be at risk must be proportionate, and should not unnecessarily disrupt the interests of the vast majority. In that respect, legalized gambling is no different than other forms of human activity—credit card use, eating, consuming alcoholic beverages, driving a vehicle, or surfing on the internet—that can cause injury if done to extremes or in an unsafe manner.

Addressing such a complicated disorder calls for a public health approach in developing
effective strategies for assisting people who are unable to control their gambling. A host of other factors also are involved in the effective reduction of disordered gambling, including public awareness of the disease, how to gamble responsibly and the availability of treatment resources, all of which are the focus of our efforts here in the U.S.

In sum, empirical evidence about pathological gambling provides no real support for legislative approaches like that of the Poker Harm Minimization Bill of 2008. Quick fixes have failed in the past because they are fundamentally inconsistent with what we know about people who cannot control their gambling—and will degrade the gambling experience for the vast majority of people who choose to gamble responsibly.

By Frank Fantini   Wed, Sep 03, 2008

Gaming stocks enjoyed a summer rally as stocks ranging from Isle of Capri to Las Vegas Sands leaped 69 percent above their lows. Yet, there is a long way for them to go as they remain 70 percent below their 52-week highs.

Thus the question: is this a break-out in which stock prices can be sustained until industry fundamentals improve and carry them higher, or is it a bear trap for overly eager bulls?

We suspect that, for the immediate future, stocks have bounced back from way-too-low valuations, and should find some stable ground here.

But the intermediate outlook may be less sanguine. The reason? The economy.

Gaming stocks also have been hit hard for a variety of reasons that have nothing to do with the economy, such as smoking bans, and new competition cannibalizing rather than growing markets.

But the big hits across the United States have come from a drained consumer. As everyone knows, the American economy has not been in a recession. But the consumer has.

High gasoline and food prices have robbed consumers of discretionary income. The guy spending an extra $200 a month to fill his gas tank and another $200 more at the grocery store has just lost his play money.

And the bursting of the housing bubble hasn’t helped, eliminating the easy money from home refinancings and stirring a storm of worrisome news about crises in the financial industry sure to rattle consumer confidence.

Hopefully, most of the problems for home builders and buyers, mortgage lenders and banks is now behind, or at least a recovery can be discerned on the horizon.
 
But all of this slowing down in consumer spending is starting to affect jobs and factory orders, which means yet more effect on jobs. And that is the classic stuff of recessions.

We won’t try to divine whether we are in, or falling into, a recession. But it seems reasonable to expect that consumers aren’t likely to see much improvement in their situations for a while.

And, while avid gamblers continue to gamble, the economic environment is not one in which many of the newly attracted casino-goers will opt for the high-priced shows, dinners and hotel room rates that turbo-charged the business in recent years.

We note that two knowledgeable CEOs—Peter Carlino of Penn National and Jim Perry of Isle of Capri—recently said that the avid gambler is still showing up as he did in past recessions, though he may be spending less.

So, longer term, the casino industry will do well. People love to gamble. It is risk-taking as entertainment. And both risk-taking and entertainment are essential to people.

The economy will rebound. America has been a bull market for 400 years. That isn’t about to end in the land that still lionizes entrepreneurship and invention.

And Las Vegas will do well as long as the century-old trend of migration to the Sunbelt continues, America’s population grows, and the rest of the world becomes affluent.

But it may be a while between now and then.

Put another way, investors might not have to hurry back into gaming stocks for fear of missing the next bull run.



November Catalyst?

One reason that casino stocks rallied in July and August was the decline in gasoline prices. Indeed, casino stocks have performed in perfect inverse to the price of oil.

The next catalysts, at least for regional casinos, could be provided by the voters of Colorado and Missouri, and in the case of Lakes Entertainment, of Ohio.

In Colorado, voters will decide whether to increase the bet limit from $5 to $100, allow 24/7 gaming, permit roulette and craps, and freeze the tax rate.

In Missouri, voters get to repeal the $500 loss limit and, with it, what amounts to requiring people to register each time they enter a casino.

Polls in both states indicate voters favor liberalizing the gambling rules.

The changes would transform Colorado, making it possible to steal back many Denver players who now go to Las Vegas, or stay home.

Public companies with Colorado operations include Ameristar, Century Casinos, Isle of Capri, Penn National, and tiny Global Casinos, Inc.

Ameristar would benefit greatly as it is building the state’s only destination casino resort in Black Hawk.

Century would benefit immensely because Colorado represents more than a third of its business. Co-CEO Peter Hoetzinger recently said the company is already preparing to add table games quickly if the bet limit is lifted.

Isle of Capri also has a big presence in Black Hawk.

In Missouri, removing the loss limit would benefit all the operators. They include Ameristar, Isle of Capri, Penn National and Pinnacle.

Ameristar and Pinnacle might be the biggest winners because they have developed upscale properties to appeal to high rollers.

Estimates of the value of the repeal on both companies range from $1 to $3 a share. And, with big bets in both Colorado and Missouri, Ameristar could be a double winner.

For its part, Lakes is pushing a statewide referendum in Ohio to build a casino between Cincinnati and Columbus. By one estimate, that could add $5 to $10 a share to LACO’s stock.

Clearly, if the Colorado and Missouri referendums pass, they will be big plusses for a number of regional casino operators. And that should bring more attention to the stocks and their growth prospects.

Frank Fantini is the editor and publisher of Fantini’s Gaming Report. A free 30-day trial subscription is available by calling toll free: 1-866-683-4357 or online at www.gaminginvestments.com.

By GGB Staff   Wed, Sep 03, 2008

Lake Las Vegas, the 3,592-acre residential and resort development in Henderson, Nevada, filed for Chapter 11 protection last month. The company reported debts between $500 million and $1 billion, and assets that total between just $100 million and $500 million.

By GGB Staff   Wed, Sep 03, 2008

Bill’s Casino in Stateline, Nevada, on Lake Tahoe, laid off all of its 28 dealers and closed all table games in the last week of July. The casino, owned by Harrah’s Entertainment, had 13 blackjack tables and a roulette and craps table. Harrah’s said business is down this summer compared to recent years.

By GGB Staff   Wed, Sep 03, 2008

Harrah’s Entertainment is slowing, but not halting, construction on its $700 million Margaritaville Casino in Biloxi, Mississippi, to “adjust the plan to better align with the economic environment, market conditions on the Gulf Coast and the current financing environment,” a spokeswoman says. The project was due for completion in 2010 with two more phases that could boost the cost above $1 billion. Reports listed no new schedule.

By GGB Staff   Wed, Sep 03, 2008

Plans to introduce internet gambling regulations in Poland may become a reality before the end of the year. The new tax revenues would be allocated to the construction of new football stadiums in Gdansk and Warsaw, where the 2012 UEFA European Football Championship will be held.

By GGB Staff   Wed, Sep 03, 2008

The U.K. Gambling Commission has published new rules for some casino games. In craps, multiple odds bets are now allowed. In electronic versions of blackjack, players may now be dealt identical cards if the version of the game so requires. In Let It Ride, the dealer may now discard either the top or bottom card of his first three cards. In punto banco, the Dragon Bonus side wager now pays odds on any winning hand with a third card. And finally, operators may now restrict the longest odds offered on Ultimate Texas Hold’em poker and pai gow poker with Fortune Side Bet, as long as players are made aware of the change.

By GGB Staff   Wed, Sep 03, 2008

Supporters of an initiative to increase Colorado’s gambling limit from $5 to $100 and add craps and roulette have gathered 130,000 signatures to qualify for the November ballot. They needed 76,000.

By GGB Staff   Wed, Sep 03, 2008

Kentucky state Rep. Greg Stumbo says he will propose a bill for the 2009 legislative session to allow the Blue Grass State’s racetracks to become racinos. The bill from the former attorney general earmarks funds raised by the racinos to be used to reduce registration taxes on boats and vehicles and to help create larger racing purses.

By GGB Staff   Wed, Sep 03, 2008

New developers of what was called the Bacaran Bay Casino in Biloxi, Mississippi, announced the project will be renamed to reflect the change in companies. For now, it will be called the Phoenix Caillavet Street Project. “The first thing we needed to do was to stop the confusion,” said Phoenix Gaming Group Managing Director John Ed Ainsworth. “This is no longer a Torguson project. That ended on March 18.” The Phoenix Gaming Group is a partnership between Caillavet Street Development Group, which owns the land, and financier Firegame LLC. For now the company is testing different possible names.

By GGB Staff   Wed, Sep 03, 2008

Still in talks with potential buyers, Inspired Gaming has completed an emergency fund-raising. The company raised £40 million by placing preference shares with investors. It is using the money to finance the £20 million cost of exiting its loss-making pub slot machine business, to reduce its debt load and to fund future expansion.

By GGB Staff   Wed, Sep 03, 2008

RW Development last month was pondering whether to appeal the Mississippi Gaming Commission’s July 17 rejection of a waterfront site for the proposed South Beach Casino in Biloxi. The commission said a seawall at the site kept the casino from being “tied to the water” as a post-Hurricane Katrina state law requires for land-based casinos. The developer says the commission misinterpreted the law.

By GGB Staff   Wed, Sep 03, 2008

Phase 2 of the under-construction Firekeepers Casino five miles west of Battle Creek, Michigan, will include a hotel meant to double the casino’s market range to 100 miles, says GM Bruce McKee. Construction started in May, and the Nottawaseppi Huron Band of Potawatomi Indians and Full House Resorts of Las Vegas expect to open the $300 million casino next summer.

By GGB Staff   Wed, Sep 03, 2008

The new Santa Fe Casino and Los Silos Hotel in Santa Fe, Argentina, opened August 11. The casino is owned equally by Boldt S.A. of Argentina and Inverama S.A. of Spain now that the two companies have acquired the stake that was previously held by Grainco S.A. of Argentina. The price of the additional stake totaled $13.7 million.

By GGB Staff   Wed, Sep 03, 2008

Missouri’s secretary of state has certified a ballot question that could let voters repeal the state’s $500 gambling loss limit in November. Increased revenue estimated from unlimited play could boost state gaming taxes $105 million a year or more, especially with the rate raised to 21 percent from 20 percent under the measure. It also scraps required casino I.D. checks unless needed to prove players’ ages, and it caps the number of casinos allowed at 13. That mix of issues could lead to a challenge of the referendum’s constitutionality before the election. Meanwhile, the Missouri Chamber of Commerce and Industry, representing 3,000 companies, has endorsed repeal of Missouri’s $500 loss limit. The referendum has yet to be certified for the ballot. Casino operators Ameristar and Pinnacle have each put $1.2 million into the referendum effort.

By GGB Staff   Wed, Sep 03, 2008

A court in Linz, Austria has referred three questions dealing with casino licensing and advertising to the European Court of Justice.

The questions involve current laws and practices in Austria, which has a monopoly casino operator in Casinos Austria, and seek answers relating to the legitimacy of laws and practices as they relate to Articles 43 and 49 in recent amendments to the original E.U. Treaty.

The ECJ decision, when rendered, could have bearing on the long-running controversy surrounding the question of casino monopolies in all E.U. member states.

By GGB Staff   Wed, Sep 03, 2008

Tighter government-mandated regulations and controls on all forms of gaming seem to be driving German players away from legal, regulated providers and into the arms of unlicensed operators. That is one plausible explanation for the decline in gaming revenue being seen across the casino, lottery and sports betting industries.

The new regulations, which include a partial smoking ban and restrictions on advertising, came into effect at the start of 2008. Since then, one-third of all casinos in Germany are reportedly feeling the pinch, and even some long-established lottery and sports betting organizations are hurting.

The casino industry reported a 19 percent drop for the first six months of 2008.

By GGB Staff   Wed, Sep 03, 2008

The U.K. Gambling Commission has published changes to its licensing fees for all forms of gaming, including existing casinos. The new fee schedules went into effect August 1.

Under the new rules there are now five licensing categories for casinos, relating directly to gross gaming yield. The five categories are designated A through E and refer to gross gaming revenues of up to £5 million, £5 million to £25 million, £25 million to £100 million, £100 million to £250 million, and over £250 million.

The commission has also created several new licenses. Four of these permit operators of certain types of premises to do some of their own maintenance. Also, a new category of license is available to betting exchange operators who are not operating as bookmakers themselves.

By GGB Staff   Wed, Sep 03, 2008

The Palm Beach casino in Cannes has found a way around the smoking ban introduced in France at the start of the year—weather permitting.

An 800-square-meter outdoor space, accessible only from inside the casino, allows players to participate in roulette, blackjack and poker while lighting up.

“We took advantage of a law approved in 2007, which authorizes games to become visible activities, but we had to overcome the reservations of the minister of the interior in several points,” Richard Frischer, director of the Partouche brand casino,
told AFP.

Security and surveillance concerns had to be dealt with, as well as how to handle sudden weather-related interruptions during play.

“We hope this venue will allow us to face the competition of casinos in Monaco,” said Frischer.

French casinos have seen business decline by 10 percent since the introduction of the smoking ban. Nearby Monaco saw revenues increase by 16 percent for the third year in a row.

By GGB Staff   Wed, Sep 03, 2008

A real estate development firm owned by the Qatar Investment Authority has delayed plans to acquire a larger share of Monaco casino resort operator Société des Bains de Mer, or SBM.

On July 6 Qatari Diar offered to buy all the shares in SBM not owned by the Principality of Monaco.

Qatari Diar offered €725 per share but was told by SBM representatives in July that only 10 percent of the company could be acquired by the firm. Qatari Diar currently owns 2.45 percent of SBM.

Qatari Diar responded on August 1 that it was only interested in proceeding if it could acquire 30.4 percent of SBM.

In an article that appeared in Les Echoes, Qatari Diar Director General Ghanim bin Saad Al-Saad said that his organization does not want to change the strategy of SBM but would like to be able to affect its decisions.

By GGB Staff   Wed, Sep 03, 2008

Illinois Governor Rod Blagojevich, acknowledging his past year’s attempt to get new casinos and racetrack slots past state House Speaker Michael J. Madigan was a failure, now wants to lease out the Illinois Lottery to help fund the governor’s latest capital improvement program.

Blagojevich has downsized the planned budget for improving roads, schools and other infrastructure to $25 billion. When three or four taxable casinos and 4,000 racino slot machines were in the mix, he eyed $34 billion. Illinois has had no capital-improvements budget for a decade, partly because lawmakers worry about raising taxes to fund one.

The Daily Herald of Arlington Heights noted that Blagojevich abandoned the casino quest—which he pursued for taxes, not because he favors more gambling. In an extensive series, the newspaper reported that casinos are tightening slot payouts to maintain profits as play slacks off in the current economy, and that Illinois ranks low in the Midwest for gambling addiction
programs.

Legislators defeated another Blagojevich lottery-leasing proposal early this year, and at least one chided the governor’s renewed hope for a multimillion-dollar up-front payment from a private company wanting to lease the state lottery. Residents accepted the lottery to fund education, not construction, said Rep. Barbara Flynn Currie, standing in for Madigan at the meeting where Blagojevich announced his plan.

By GGB Staff   Wed, Sep 03, 2008

An Ohio casino advocacy group says it’s come up with more than twice the number of signatures needed to put a $600 million casino project on the November ballot.

MyOhioNow presented 800,000 signatures to Secretary of State Jennifer Brunner. The signatures, reportedly from 80 of 88 Ohio counties, must now be verified.

Minneapolis-based Lakes Entertainment Inc. wants to build a casino resort in Clinton County near Dayton, Columbus and Cincinnati. It would include a 220,000-square-foot casino with up to 5,000 slot machines, 100 gaming tables and a 1,500-room hotel.

“We look forward to a positive and honest campaign to get the support of Ohio voters,” said MyOhioNow’s Rick Lertzman, who notes the casino could create 5,000 permanent jobs and employ thousands of people during the construction phase. The group says the casino would return 30 percent of revenue to Ohio counties on a per-capita basis.

According to the Dayton Business Journal, Lertzman predicts opposition will come from casinos in neighboring states including Indiana, Michigan, Pennsylvania and West Virginia.

By GGB Staff   Wed, Sep 03, 2008

In a surprise decision last month, Boyd Gaming announced that it would halt construction on its $5 billion Echelon project on the Las Vegas Strip across from Wynn Las Vegas and its companion hotel, the new Encore, slated to open at the end of this year. Boyd officials blamed the slumping credit markets for the decision.

Echelon is being built on the site of the old Stardust. It will contain several independent hotels, including the Delano and the Mondrian, as well as shopping and extensive meeting space.

Boyd had insisted for over a year, since the implosion of the Stardust in the spring of 2007, that it had sources for the funding of Echelon. But as credit becomes tighter and interest rates soar even higher, company officials had no choice.

“We have decided to delay construction of our Echelon project on the Las Vegas Strip due to the difficult environment surrounding today’s capital markets and the challenging economic conditions that currently exist,” the company said in a press release accompanying its second-quarter earnings report. “We expect to resume construction when credit market conditions and the overall outlook for the economy improve.”
 
Boyd Gaming CEO Keith Smith said the company hoped to resume construction in 2009, with the official debut of the property pushed back a year to 2011.

Smith said Boyd and two of its joint-venture partners—General Growth Properties, which was building and will operate Echelon’s retail space; and Morgan’s Hotel Group, which was planning to build two boutique hotels—were unable to secure financing to complete the project, spurring the decision to suspend construction.

The investment community cheered the decision, sending Boyd shares up more than 20 percent in trading on the day of the announcement. BYD closed at $12.10 on the day, up more than $2.

Meanwhile, MGM Mirage downplayed reports that it was having trouble finalizing funding for its CityCenter project in Las Vegas. While admitting that financing has not been finalized, MGM Mirage CFO Dan D’Arrigo expects no delays in construction and the expected late 2009 opening of CityCenter.

“I don’t think it’s any surprise to anyone that the financial markets are not what they once were,” D’Arrigo said. “The credit crunch is real and it’s one that we—like any other company out there looking to raise capital—have to deal with.”

He said the company has approached about a dozen banks to participate in the financing and over half of them have agreed to sign up.

Though MGM Mirage posted a loss, the news about CityCenter and changes in its slumping Macau operation were seen as a positive, sending company stock upward after the call.

By GGB Staff   Wed, Sep 03, 2008

The recently published Ernst & Young report “Reviewing the market: The 2008 Global Gaming Bulletin” lists the number of casinos in the eastern region of Asia at 121. For all of Asia and the Middle East, the listed number is 213, although the real number of casinos is imagined to be much higher.

Lately, Vietnam has been receiving a lot of attention, with the government looking for investors who are willing to put up billions for regional tourism and convention development. Such large-scale development is a prerequisite for those looking to include a casino in their plans.

The latest to break ground in Vietnam is the $4.2 billion beach resort development project from Asian Coastal Development. The company, an initiative of Canadian entrepreneur Michael Aymong, plans to eventually have five resorts and an international conference center operating at the Ho Tram Strip, a beach area 50 miles southwest of Ho Chi Minh City.

By GGB Staff   Wed, Sep 03, 2008

While all Macau casino companies have diverse backgrounds, they are, in a very substantial way, all linked together by a common thread. But that doesn’t stop them from trying to create growth and revenue by very different means.

Wynn Resorts recently reported record revenue and EBITDA for the second quarter, and most of it was driven by a more than 50 percent increase in revenues at Wynn Macau. Las Vegas profits dropped substantially, however, as Wynn Las Vegas felt the impact of the severe downturn in the Las Vegas market.

The Macau property is finally reaching its potential. While increased VIP commission rates paid by other casinos in the Macau market had prevented Wynn Macau from increasing its market share in 2007, the second quarter turnover soared 75 percent. Slot machine revenue was up 90 percent, although win per unit dropped by 30 percent because of a tripling of units in the facility.

Encore at Wynn Macau is under way, which will add more than 400 rooms and suites to the property, with construction due to be completed in early 2010. And a 1,500-room resort on the Cotai Strip is still in the planning stages, according to Wynn, one of the projects with approval prior to the moratorium imposed by the Macau government several months ago.

The victim of Wynn’s gain seems to be Melco Crown, which had cornered the VIP market with a high commission payment and an agreement with junket consolidator A-Max Holdings. According to A-Max CEO Ted Chan, VIP rolling chip turnover was down to HK$36 billion (US$4.6 billion) a month from an average of HK$40 billion. The turnover figure was 27 percent below analysts’ projections of up to HK$49 billion a month.

Also last week, Melco Crown co-owner James Packer announced that his Crown Casinos would not invest in a massive casino project planned for Manila Bay in the Philippines. Rowen Craigie, Crown CEO, blamed the decision on the credit crisis.

“The recent and ongoing events in world credit markets have made it very difficult for gaming operators to develop commercially viable casino-entertainment projects where those projects require significant external debt funding,” said Craigie.

Meanwhile, Stanley Ho’s SJM began to evaluate plans to renovate his original casino, the Lisboa. Ho and his senior staff began to consider plans submitted by several architectural firms including Dennis Lau and Ng Chun Man, Leigh & Orange Ltd. and Simon Kwan & Associates Ltd., all from Hong Kong, along with Paul Andreu from France and Progetto CMR from Italy.

Preliminary designs for the renovations will go on public exhibition this week in a ballroom at the Grand Lisboa, the most recent casino opened by SJM.

“It was in February 1970 that the Hotel Lisboa first opened its doors to greet customers from all over the world,” said Ho. “Since then Hotel Lisboa has become a representation of Macau and a justifiable symbol of Macau’s financial growth and success.

“I am particularly excited about this next step in the evolution of the Hotel and Casino Lisboa and I am looking forward to delivering a property of which all Macau can feel proud.”

Las Vegas Sands, meanwhile, was looking forward to the soon-to-open Four Seasons Hotel, which it hopes will ramp up its VIP market share. While the Venetian continues to improve in the VIP market, its original casino, Sands Macao, has seen a precipitous dip in recent months. The company posted a loss in the second quarter, attributable to increased operating expenses and net interest expense.

RevPAR (revenue per available room) dropped almost 20 percent at its Venetian Las Vegas property in the second quarter.

The Four Seasons, due to open this month, brings a new level of luxury to the Venetian, which has the largest casino floor in the Macau market. The Four Seasons will have a separate casino, mostly devoted to the VIP market.

Approvals for several properties in Macau operated by Las Vegas Sands have slowed significantly, as the government struggles with tightening gaming regulations.

“We will of course continue to do everything in our control to deliver our announced developments as expeditiously as possible,” LVS President and COO Bill Widener said.

And MGM Mirage and partner Pansy Ho began to plan for a casino resort on the Cotai Strip, although it is still unclear whether the government’s moratorium on new developments excludes this previously announced facility. Pansy Ho insists it will go forward.

In last month’s quarterly conference call, MGM Mirage announced a slight uptick in market share and that it has instituted some changes. President Bob Moon will be moving back to the corporate offices and will be replaced by Grant Bowie, the former president of Wynn Macau, in September.

Increased restrictions on visitations from the Chinese mainland may be balanced a bit in the future with the construction and completion of a bridge connecting Macau with Hong Kong and Zhuhai. The bridge will make it easier to get to Macau, which is now reachable only by ferry from those two cities.

The design of the bridge was approved last week by the Chinese Ministry of Transport. It will now be considered by the Central Government and State Commission for National Development for final approval.

The bridge will be financed by the Executive of Hong Kong (50.2 percent), the government of Zhuhai (35.1 percent) and the government of Macau (14.7 percent).

By GGB Staff   Wed, Sep 03, 2008

With casino development one of the biggest topics throughout the Asia-Pacific region, the government and the people of Taiwan continue to blow hot and cold on the subject. It is not a new situation.

The Penghu County of Taiwan, composed of a number of islands between the main island and the Chinese mainland, has been one of the primary locales touted as being ripe for casino development. According to a recent report in the Taiwan Journal, 57 percent of voters responded favorably to casinos in a county referendum brought by pro-casino elements in the local government five years ago. Unfortunately for supporters, because voter turnout was only slightly over 20 percent, the results were relatively easy for the national government to dismiss as being of no consequence.

Several times the national legislature has rejected a casino article in the Offshore Islands Development Act. The most recent refusal came just last December. One bright spot: In 2003, a 51-vote margin made the casino element a loser, but in December 2007 the margin was only 27 votes.

In a very real sense the delay may have already cost Penghu and Taiwan dearly. Las Vegas Sands Corp. is said to have been looking at Taiwan’s islands several years before Macau became a possibility.

A longtime supporter of casinos, independent legislator Lin Pin-kuan from Penghu is not giving up. He has reportedly tried to introduce casino legislation in each of his four terms. Now, according to an aide, the ruling party may be ready to accept the change.

Lin wants Minister Chen Tain-jy of the Council for Economic Planning and Development to honor President Ma Ying-jeou’s campaign promise to pass casino legislation as soon as possible. The council reportedly will send its version of the casino article to the national body in December, where discussion will begin.

Even if Taiwan does OK casinos, however, there is no guarantee that Penghu will get the nod. There are many counties around the island said to be vying for the prize.

By GGB Staff   Wed, Sep 03, 2008

The Savan Vegas Hotel & Casino is on track to be the first five-star hotel and entertainment complex to open in Savannakhet Province, Laos, in November.

The project includes a 58,000-square-foot casino with 60 tables and 250 slots, a five-star hotel with 180 rooms, two restaurants, a coffee shop, a bar, a pool and a spa. Total investment is said to be around $25 million.

The resort will benefit from the easy access afforded visitors from Thailand via the Friendship Bridge over the Mekong River, completed in 2007. Thailand currently has no legal casinos.

This is the first major investment project in Laos for Sanum Investments Limited. Sanum is also building Paksong Vegas Spa Resort & Casino in Paksong District, Champasak Province, scheduled to open in spring of 2009.

By GGB Staff   Wed, Sep 03, 2008

While revenue numbers for the first half of 2008 continue to show dramatic growth for gaming in Macau, the future of the former Portuguese enclave is more uncertain than ever.
 
Revenues in the second quarter grew by 47.6 percent over the same period in 2007. The VIP market led the way by growing by 52.2 percent, but the mass market growth held its own at a 38 percent growth clip.

Jefferies & Company estimated in a new report that Macau will grow by 30 percent in 2008 and 10 percent in 2009.     

Revenues in the first half of 2008 were US$7.4 billion, or 70 percent of the more than $10 billion the Special Administrative Region posted in 2007.

Growth is predicted to slow down for several reasons. Additional capacity will fall in 2009 with a few casinos opening, including the Melco Crown’s City of Dreams and the Four Seasons, with a casino operated by Las Vegas Sands.

A cap on the commission rate paid to VIP operators also is expected to adversely affect the market. The cap was imposed last month when casinos failed to reach a consensus on the cap and how to implement it.

But the big challenge to the Macau’s future comes from the Chinese government, which last month announced additional restrictions on travel from the mainland, a main source of customers for the Macanese casinos.

Chinese visitors to Macau can only stay seven days if they do so before traveling to a third destination. Previously, a 14-day stay was permitted. And visitors who violate that rule will only be allowed a two-day stay if they apply for visitation using the same stipulations. A second violation will result in all future applications being refused.

Edmund Ho, the chief executive of Macau, earlier this year imposed a moratorium on new casinos to try and cool the spectacular growth.

By GGB Staff   Wed, Sep 03, 2008

Federal officials were busy considering conditions at three California tribal casinos last month:

• The San Pasqual tribe’s government has collapsed, which could force closure of the Valley View Casino in Valley Center.

The San Pasqual tribal council—called the business committee—has split and each faction, claiming to be the tribal government, tried to suspend the other and instituted impeachment proceedings against the other. The local representative of the Bureau of Indian Affairs, James Fletcher, last month sent a letter to the tribe with a title designed to get its attention: “The Bureau of Indian Affairs has decided not to recognize the existence of a tribal government for the San Pasqual Band of Mission Indians.”

Without a government, the tribe can’t legally operate its Valley View Casino, which each month pays an estimated $4,000 to each enrolled member—which is the root of the dispute. Part of the tribal council, led by the vice chairman, has started proceedings to disenroll about 80 members of the 300-member tribe, claiming that they are actually not legitimate descendents of tribal members from the last century, although the BIA ruled in 1994 that they were.

• The Sycuan tribe’s lucrative amended gaming compact for the Sycuan Resort & Casino in El Cajon might need to be yanked because the tribe hasn’t ratified it.

California’s governor, legislature and voters have approved the pact that allows Sycuan to add 3,000 slot machines to 2,000 it already runs. The compact requires an up-front annual payment of at least $18 million for the first 2,000 machines.

Sycuan’s agreement also says the tribal council must ratify the compact to make it active. Those 68 members of the tribe have never done so.

Now citizens groups and a San Diego County supervisor want the U.S. Interior Department to rescind its own approval of the Sycuan compact.

• Safety and other factors merited a visit to the Soboba Casino in San Jacinto, which has been called unsafe after shootings and police tensions on the surrounding reservation.

Tribal Chairman Robert Salgado says he requested the visit “to make clear there was no violence at the casino,” the paper said, after three members of the tribe died in shootouts with Riverside County sheriffs on the reservation.

By GGB Staff   Wed, Sep 03, 2008

A little-noticed National Indian Gaming Commission denial of one-touch gaming devices as Class II machines for Alaska’s Metlakatla Indian Community could reach far through the rest of the U.S. tribal gaming business, some tribes are worrying.

The one-touch game amounts to a facsimile game of chance, NIGC Chairman Philip N. Hogen told Metlakatla. “This game is therefore Class III and cannot be operated without a compact,” he said. Metlakatla has no state gaming compact, so it is entitled to no higher than Class II gaming under federal law.

The June 4 Metlakatla decision came the day before Hogen announced that NIGC was “putting aside” proposed rules to distinguish Class II bingo devices and Class III slot machines. The rules need a deep cost-benefit analysis, he said, after many tribes complained they could lose millions if their machines were re-classed.

Now Class II tribes say it will make vendors loath to risk their licenses by providing one-touches, leaving the Class II business “decimated by a de facto manufacturer’s embargo on one-touch machines and their operational systems.”

Some add that NIGC’s decision will slash the “entertainment value” of some machines now being run as Class II. That could drive off players in areas where supposedly more appealing Class III slots are available.

By GGB Staff   Wed, Sep 03, 2008

Weeks after blackjack and baccarat were declared illegal at the Seminole Hard Rock Casino near Hollywood, Florida, the games continue to roll on, with no immediate end in sight.

“If you’re a player, you can make reservations now for October, Thanksgiving and Christmas,”
law professor and gaming expert Robert Jarvis told the Miami Herald. “The games will continue.”

Unless a special legislative session is called, the matter cannot be resolved until the regular session convenes next March. Meanwhile, the tribe and Governor Charlie Crist will appeal the state Supreme Court’s July 7-0 ruling, which says Crist had no legal authority to grant the high-stakes card games last year.

According to federal law, tribal casinos can have Class III games as long as they have a valid compact with the state. The compact must give the tribe all the games already offered at casinos in Florida. But since Class III table games like blackjack and pai gow are illegal in Florida, the Supreme Court says the tribe can’t operate them either. Only the legislature or a constitutional amendment can change the law.

Tribal attorneys say banked card games are not illegal, and offered as proof the 1990s Million Dollar Flamingo Fortune TV show, run by the state lottery, which featured a banked game.

The outcome of the dispute is critical to Florida’s economy. In exchange for the games, the Seminoles agreed to pay the state at least $100 million a year for 25 years. If the court ruling is upheld, “the tribe can operate its slot machines and the state gets nothing,” law professor Kathryn Rand told the Herald. “That would be a pretty bad outcome politically for the state.”

With the outcome unknown, plans are still in place to offer blackjack at the Tampa Hard Rock later this year.

By GGB Staff   Wed, Sep 03, 2008

Canadian Justice Minister Rob Nicholson is open to a plan that would lift the ban on individual sports betting at casinos. A reversal of the criminal code prohibition against such wagers would presumably help casinos that are struggling with decreased revenues, due in large measure to fewer Americans crossing the border to gamble.

Sports gambling in Canada is limited to government-run lotteries that allow betting on groups of sports, rather than one individual game. A change in the law would likely attract Americans, who cannot legally bet on sports outside Nevada.

By GGB Staff   Wed, Sep 03, 2008

Managers of Star City Casino in Sydney thought they had a partial way around the smoking ban.

Not so fast, said the New South Wales Health Department.

In January, Star City submitted plans to the city to remodel one of the casino’s restaurants and transform it into a 130-machine slot area. The remodeling job was supposed to satisfy the legal requirement that allows smoking in an indoor area as long as that area is 25 percent open to the outside air.

But Mike Wallace, chief executive of the South-West Area Health Service, says the plans submitted fall short of the defined goal. According to the Sydney Morning Herald, Wallace said that a lot more than 75 percent of the planned slot area would be enclosed.

“Therefore, smoking would not be permitted in this area,” Wallace said. “While we understand the city of Sydney does not have a role in assessing plans for compliance with the regulation, the practical implication is that the design will require substantial modification to comply. This may affect aspects of the development that council is required to assess (such as noise). If built, it may require costly modification.”

The upshot of the expected rejection is that Star City may have to spend an extra A$200 million to make the “outdoor” slot plan work, according to Macquarie Bank analyst Steve Wheen.

“This is a significant increase on the last budgeted expense for the project of A$300 million,” the bank said, according to the Herald.

“We highlight that such an increase will be difficult to generate a meaningful return on investment over the medium terms. Maintain underperform recommendation.”

The city council was expected to reject the current redevelopment plan.

There was no reported response from Star City.

By GGB Staff   Wed, Sep 03, 2008

Clairvest Group Inc. and an investment fund it manages will put up about a third of the equity for Casino New Brunswick, the casino hotel complex due to open in 2010 near Moncton, New Brunswick.

The merchant bank invests its own capital as well as funds managed by it into ventures with “the potential to generate superior returns.” It then sells the assets for a profit after they’re developed.

The $90 million casino, New Brunswick’s first, will feature 600 slot machines, 20 table games and eight poker tables.

Despite an eight-foot wooded buffer zone and security fence between the
complex and neighborhoods, Moncton
residents are hardly unanimous in their support of the casino complex, to be built in the Magnetic Hill section.

“Within a couple years, instead of birds we’ll have cars in our backyards practically,” resident Jacques Saindon told The Canadian Press.

By GGB Staff   Wed, Sep 03, 2008

Casinos Austria International celebrated the opening of its newest casino, the Gran Casino Los Angeles, in Chile last month.

The casino features 10 gaming tables—four American roulette, two Caribbean poker, two blackjack, one punto banco, one Mini Craps—and 200 slot machines. A 40-seat bingo room completes the gaming offerings.

The casino also has a restaurant that serves local and Mediterranean dishes, and a bar. A 90-room, five-star hotel with spa facilities and a conference center for up to 500 persons is scheduled to open at the start of 2009.

“We are very excited about our new casino,” said Gabriel Benvenuto, general manager of Gran Casino Los Angeles. “With its original woodwork and modern, spacious design, Gran Casino Los Angeles is a great new attraction in the heart of the city.”

This is CAI’s sixth casino in South America and the company’s first in Chile. CAI is involved with five casinos in Argentina.

By Roger Gros   Wed, Sep 03, 2008

When I interviewed Harrah’s Gary Loveman last spring, I was surprised at how outspoken he was about the industry’s lack of success in legalizing gaming in multiple jurisdictions recently. Just in the past year, gaming has seen opportunities in Massachusetts, Ohio, New Hampshire and Maryland go by the wayside.

“Since 1992, we’ve had three states make it into gaming,” he told me. “That’s an extraordinary result when you think about what we’re talking about here. You need a perfect alignment of legislative leadership, gubernatorial leadership and statewide and local business leadership to make this work. Those things are very tough to find.”

Indeed, the industry has not achieved much success in this effort, and most disappointing of all, the success we have seen has come at the cost of a high tax rates and nonsensical regulations, making it difficult to make a reasonable profit in Florida, Pennsylvania or New York.

It all began in 1994 when the industry set its sights on Florida. Fresh from successes in Iowa, Illinois, Indiana and, the most unlikely of all, Mississippi, the Sunshine State seemed a natural domino to follow.

With Bally Manufacturing’s Arthur Goldberg leading the charge, the industry poured millions into the effort, envisioning massive casino resort complexes on the beaches of Miami, Jacksonville, Palm Beach and elsewhere.

But while the industry thought it was a natural, the conservative people of central and northern Florida had other ideas. The proposal, which would have permitted 20 casinos and riverboats across the state, was too broad and overreaching. The organizers of the effort poured millions of dollars into the campaign, yet paid little attention to the sentiment from those non-resort areas of the state. The referendum went down to an overwhelming defeat, joining at least four other efforts to legalize gaming in Florida.

After that loss, the industry has taken a hands-off approach to legalization, preferring to let local businessmen and legislators take the lead before it got involved.

This is what has led to the legislative and electoral defeats since then, as well as the high taxes and strange regulations imposed in Florida, Pennsylvania and New York.

Harrah’s has actually changed its philosophy since Loveman’s arrival. The company has been active in Massachusetts, where politics derailed an effort to OK three mega-casinos earlier this year. Harrah’s spent millions on a Rhode Island referendum last year in an effort to legalize an Indian casino it would have operated with the Narragansett tribe, but failed to come close again, undoubtedly because the stars described by Loveman failed to line up correctly.

Internationally, the game is completely different and even more complicated. Often gaming occurs in a quasi-legal atmosphere—like in Russia and Chile—and then is either completely legalized or booted.

China has put a vice on Macau’s gaming growth by making it more difficult to obtain visas to visit the jurisdiction (Why are visas even necessary to visit what is essentially just a different part of the same country?) and insisting on a freeze of casino expansion.

It’s the responsibility of a reputable gaming industry to communicate with legislators, businesses and public officials to establish a real rapport and understanding. The U.S. is well served at the federal level with the American Gaming Association, and most state associations are proactive in this regard.

Internationally, the industry is too often playing catch-up. After an initial period of great growth and expansion, the industry sometimes forgets that it must always communicate with the powers-that-be to make sure they understand the challenges and opportunities of gaming.

So when approaching a new and potentially profitable casino jurisdiction, it’s time to scrap the “let them come to us” philosophy. Gaming needs to identify the potential for the jurisdiction, outline a plan that will demonstrate the benefits to the community and highlight the industry’s socially responsible stand when it comes to problem gambling and other possible negative impacts on the community.

We need to demonstrate more clearly our corporate responsibility and commitment to making that particular jurisdiction a better place.