As the gaming industry wipes its hands of 2010 and looks ahead to 2011, there are no doubt similar thoughts being echoed in every corner of the industry. From conversations at G2E, to forecast studies, to building and revenue trends, and the essays on the following pages, the consensus is that 2011 is a turning point. We proceed into the New Year with cautious optimism, coupled with great excitement for new advancements in technology and a watchful eye on Internet gaming. It is definitely a different feeling than what was felt one year ago.
While it’s up for debate whether the Great Recession will end sooner versus later, going through it has taught us all a thing or two about business. The phrase we heard over and over is “new normal.” Here are the lessons some shared:
Andrew Zarnett, managing director at Deutsche Bank, said, “We note, in the future when we look back on gaming, it will be clear. Gaming is absolutely recessionary.”
Linda Gordon, director of marketing for SCA Gaming, stated, “Gone are the days of ‘build it and they will come.’ ”
Tammy Farley, principal at The Rainmaker Group, noted: “In our view, 2011 promises to be the beginning of the upswing in the gaming industry, but we realize the recovery will be slow and our business model has changed for good. Our customers will continue to challenge us to add value and to partner with them to make sure they are poised to benefit from the recovery as quickly as possible.”
And Barry Thalden, partner at Thalden • Boyd • Emery Architects, said: “The good news regarding the economy is that the recession is over. The not-so-good news is that it doesn’t feel a lot better. It’s a lot like banging your head against a wall. It still hurts when you stop. The economy does continue to get better, but this obviously will be a slow recovery.”
Perhaps most telling of what’s to come is what we saw on the trade show floor at the recent G2E. Marcus Prater, executive director of the Association of Gaming Equipment Manufacturers, commented: “… 2011 promises to be different—and not because of that unwavering optimism and positive attitude. What’s most striking as we head into the New Year is what we saw at G2E in November—specifically the most impressive display of gaming creativity and technology ever presented.”
Yes, the technology was abundant. Innovation, clearly, is back—and so are the bells and whistles. And with Internet and mobile gaming rearing its head, it seems manufacturers are beginning to cater to the next generation of gambler.
Bob Stocker, immediate past president of the International Masters of Gaming Law, noted: “The members of the IMGL view 2011 as a very important year for gaming. It will be a year in which the manufacturing industry will continue to make strategic leaps forward designed to address the entertainment interests of a new generation of gamers who have grown up in the electronic age of Twitter, Facebook and other social networking environments. The impact of this new generation of gamers should not be underestimated—it will be huge.”
Murtaza Amiji, director of business development at Tyco Electronics, Elo TouchSystems, added: “Tomorrow’s customers are extremely advanced in their use of new technology and have become increasingly more discerning about where they spend their entertainment dollars, making it essential for gaming operators to deploy equally sophisticated and differentiated gaming offerings. Floors need to stay fresh and abreast of the most compelling options to drive play and maintain an edge over the competition. Luckily, technological progress was spectacular in 2010.”
But there are other ways we can monitor the likely promising future for gaming. Claudia Winkler, president of G.H.I. Solutions Inc., observed: “We have spent 2010 ‘bouncing along the bottom,’ but we are starting see signs of life. In the fourth quarter we finally started seeing marginal upticks in revenue in most markets, and many publicly traded companies are reporting encouraging results.”
“As ever the optimist, I believe this year will be better than last year, and we will see some important benchmarks begin to notch up,” said Sal Scheri, managing director at WhiteSand Gaming. “Room occupancy, ADR, win per unit and top-line revenue are all poised to see upticks. Granted, it won’t be any major rebound, but it will start heading in the right direction.”
George Toth, the new president and CEO of CanCan Development, also made some important notes. “Strip operators have experienced interesting times over the last several years to say the least. Growth in Asia has been the good fortune for those operators invested there. Regional markets have fared better, and tribal gaming has been a bit of a mixed bag. This is where we sit at the end of 2010. It looks like 2011 could be the beginning of recovery for the gaming industry.” He believes that right now, the focus is on jobs in the country. He also said Strip operators and other saturated markets will likely continue to struggle for a while, and where he sees the most opportunity is in the south.
Of course, you can’t talk about the gaming industry without talking about politics, too. With recent elections, bills being thrown around Congress and never-ending speculation about i-gaming, we sit, waiting to see what happens in Washington.
Frank Fahrenkopf Jr., president and CEO of the American Gaming Association, commented: “This past November, we at the AGA, and everyone else in this country, witnessed an election that caused a seismic shift, dramatically changing the political landscape in Washington and in state houses across the country. However, despite the upheaval, the election was a positive one for the commercial gaming industry nationwide. The election of Sen. Harry Reid to a fifth term ensures that a key gaming industry ally will remain among the most influential leaders in Washington. In addition, legislative measures that passed in Iowa, Maine, Maryland and Missouri have the potential to translate into valuable business opportunities for our industry and are proof that voters in all corners of the U.S. understand the positive impact gaming can have on a local economy.”
Despite the many positives, there is always cause for concern. Sheila Morago, executive director of the Arizona Indian Gaming Association, said the “Arizona economy is on life support,” and expressed concern that in the Grand Canyon State, gaming expansion is the “go-to” place for a fix.
Things don’t look much better in the Centennial State. Lois Rice, executive director of the Colorado Gaming Association, said, “Due to Colorado’s limited gaming environment and the location of our casinos in remote former mining towns, gaming expansion continues to be an issue, particularly since the state is facing a budget shortfall of over $1 billion.”
Buddy Frank, vice president of slot operations at Pechanga Resort & Casino, also voiced a concern. “From my perspective, it appears that those casinos that made some recent investment in their slot products have been receiving a bigger share of the small piece of economic recovery than those that did not,” he said. “There’s nothing unusual about that; except that when things were headed down, there seemed to be complete equality. We all went down together. Why the seeming discrimination on the way up?”
Well, whatever it is, some of our contributors have great ideas how to move forward into 2011.
Tom Nugent, president - gaming and retail at MEI, said: “Though 2011 won’t be the year associated with a return to profitability, it will represent a bridge to better days—a bridge constructed by an improving foundation and fortified with emerging technology that will offer a payback for years to come.”
But perhaps the very best closing thought came from the president of Gaming Laboratories International, James Maida. He said: “Making the right decision and making the most of the tools you have in your tool box will mean the difference between a successful 2011 and being left behind.”
Another great lesson from the tough times—resourcefulness.
Amanda Huggett is the Managing Editor for Casino Enterprise Management. She can be reached at (701) 293-7775 or editor2[at]aceme.org.
Marcus Prater
Executive Director
Association of Gaming Equipment Manufacturers
A new year has dawned, and yet it feels remarkably similar to last January. From my chair as executive director of the Association of Gaming Equipment Manufacturers (AGEM) trade organization, that’s not necessarily a bad thing.
Last year at this time, we talked about how the optimism and positive attitude collectively displayed by the supplier segment of the gaming industry would serve us all well while negotiating through the difficult months ahead. Now, 12 months later, we can look back and say that general philosophy helped make 2010 a reasonably good year for the supplier segment.
The year ahead will be better.
AGEM is an international trade association representing manufacturers and suppliers of electronic gaming devices, systems, table games, key components, and support products and services for the gaming industry. AGEM works to further the interests of gaming equipment suppliers throughout the world. Through political action, trade show partnerships, educational alliances, information dissemination and good corporate citizenship, the members of AGEM work together to create benefits for every company within the organization. Together, AGEM has assisted regulatory commissions and participated in the legislative process to solve problems and create a business environment where AGEM members can prosper while providing a strong level of support to education and responsible gaming initiatives.
Our membership is anchored by the big slot machine companies that managed to hold their own during another flat year in 2010, but 2011 promises to be different—and not because of that unwavering optimism and positive attitude. What’s most striking as we head into the New Year is what we saw at G2E in November—specifically the most impressive display of gaming creativity and technology ever presented. The year ahead will be better for suppliers, as operators around the world will be compelled to purchase more product this year compared with 2010, simply because they will have to have it on their casino floors. They will be like the gadget-addicted consumer walking into a gigantic Sharper Image store. No matter what their wallet or bank account say, they will find a way to get the latest and greatest stuff because it is that good. Period.
And so, kudos to the R&D guys for kicking ass during a time when finding motivation may have been difficult.
As for AGEM itself, we look forward to another strong year ahead. We added another 20 or so members in 2010, climbing to 107 total by the end of the year. AGEM’s growing influence has also allowed us to help shape bigger issues such as the implementation of the Video Gaming Act in Illinois and the improvement of the regulatory landscape in the growing Mexican market. In 2011, we will also publish the first AGEM Trade Show Index that rates the satisfaction of our exhibiting members at the largest trade shows around the world. With the amount of money and energy our members invest in trade shows, we expect organizers to respond to the ratings, both good and bad, in order to improve the overall experience for the companies that pay the bills.
In general, AGEM will be here to support the industry and watch our members shine.
Frank J. Fahrenkopf Jr.
President and CEO
American Gaming Association
This past November, we at the American Gaming Association, and everyone else in this country, witnessed an election that caused a seismic shift, dramatically changing the political landscape in Washington and in state houses across the country. However, despite the upheaval, the election was a positive one for the commercial gaming industry nationwide. The election of Sen. Harry Reid to a fifth term ensures that a key gaming industry ally will remain among the most influential leaders in Washington. In addition, legislative measures that passed in Iowa, Maine, Maryland and Missouri have the potential to translate into valuable business opportunities for our industry and are proof that voters in all corners of the U.S. understand the positive impact gaming can have on a local economy.
Specifically, in Iowa, where casino counties must hold an election every eight years to allow residents to determine whether casinos should be allowed to continue operating in their jurisdictions, an average of 78 percent of voters in the 14 counties approved renewing casino gambling. That represents a 4 percent jump from the average percentage of voters who approved similar ballot initiatives in 2002.
While Iowa voters definitely seem to understand the valued role of casino properties in their communities, the turnover in Congress leaves the AGA with the important job of educating new federal lawmakers about the economic benefits of gaming, while cultivating new allies beyond Nevada and New Jersey. A key part of this educational effort will take place in early May when gaming leaders come to Washington, D.C., to meet with members of Congress whose districts are directly or indirectly supported by gaming companies and properties.
Also in support of its education efforts, the AGA will be undertaking comprehensive studies to measure the economic impact and philanthropic efforts of the gaming industry. The development and release of these studies will pave the way for the introduction of the modern gaming industry to political and community leaders, the media and the general public. The AGA will enhance these efforts with the introduction of a redesigned website and an increased social media presence in 2011.
In addition to its work as the voice of the commercial gaming industry on Capitol Hill, the AGA will continue to focus on those issues that affect the entire industry by demonstrating its commitment to promoting responsible gaming and telling the positive story of gaming industry diversity. For the past 13 years, Responsible Gaming Education Week (RGEW) has been a popular way for casino companies to educate their employees, patrons and the public about the importance of responsible gaming, but in the coming year, the AGA will expand the event’s reach to include a more diverse range of casino properties, gaming companies and addiction treatment providers.
The AGA also will continue to work with its affiliated charity, the National Center for Responsible Gaming (NCRG), to develop responsible gaming education programs and materials based in peer-reviewed research and create in-person and online educational opportunities for members of the research, clinical and gaming industry communities.
The AGA also is preparing for significant changes and milestones within the Global Gaming Expo (G2E) family of events. G2E Asia, which is held annually in Macau and is the premier conference and trade show for the Asian gaming industry, will celebrate its fifth anniversary in June, while the flagship G2E event in Las Vegas will change its date pattern to Oct. 4-6 and move to the Sands Expo and Convention Center.
The coming year should be an interesting one for the AGA and the gaming industry. We at the AGA remain focused on providing the support the gaming industry needs to thrive in the “new normal.” We look forward to working with and on behalf of all of our members to address challenges head on and take advantage of any and all opportunities to promote and defend the industry.
Sheila Morago
Executive Director
Arizona Indian Gaming Association
History may prove that the November 2010 election in Arizona was a political tsunami. When the new legislature is seated in January, a great number of its members will be new to government and the overwhelming majority, politically conservative. The turnover rate in the legislature this year is unprecedented. According to longtime political reporter for the Arizona Republic newspaper, Mary Jo Pitzl, it “could have a big influence on how quickly lawmakers will be able to get down to the complex and difficult task staring them in the face: balancing the state budget.”
While many states are facing deficits, Arizona has been one of the hardest hit because of our dependence on the construction and real estate industries for revenue. We might be the Valley of the Sun, but the outlook is dark. And it could be getting blacker since state revenue is typically the last to recover. Some forecasters predict prices for commercial real estate and homes will plunge again before they start crawling upward during 2012 or beyond. The current estimate is Arizona will have a $1.4 billion shortfall this year which means lawmakers will be scrambling to find new sources of money and where to slash spending.
What does this economic reality mean for tribes in Arizona that conduct gaming? First will come the inevitable push for the competitive expansion of gaming, followed by painful cuts to budgets that support critical tribal programs. Although conservative politicians have not supported an expansion of gaming historically, with the Arizona economy on life support, anything is possible. When states face unprecedented budget deficits, gaming expansion is the “go-to” place for money. Add to this the mandate in the Arizona Constitution that the state must balance its budget, and you see the oncoming challenge.
With gaming as the potential “go-to” fix in Arizona, once again we will see the horseracing industry gear up for a racino bill. They have lobbied hard for racinos for years, and tough times give them cause to try even harder. A conservative legislature may appear less likely to approve an expansion of gaming, but this year and for the next few years, we bet the odds for expansion will start to shift. We have already seen some lawmakers support expanding gaming into racetracks.
Despite what our detractors predicted 18 years ago when we started gaming, tribal governmental gaming has proved to be a benefit to our state. At that time we did a lot of educating for public leaders and the public. Faced with the threat of expanded gaming, we must again begin educating the public and the legislature about our industry so everyone understands that gaming is the major—and often only—source of revenue for most tribes. Tribes’ essential services are funded by gaming.
Like our state government, tribal governments are facing declining revenues and smaller budgets. We know that budgets submitted by the governor and the legislature will recommend massive cuts in spending. It will be up to tribes and associations such as ours to identify and defend those state-funded programs we desperately need and work to make sure the programs that benefit tribal people remain intact.
Within all of this uncertainty, there is opportunity. While there are many new players, let’s hope that the mix generates new ideas and fresh concepts that will help us all achieve our common goals. We should see this as an opportunity to learn about the new legislators and understand what they want to accomplish. Then we can set our agenda to encourage collaboration and, hopefully, find commonality on divisive issues.
To turn challenges into opportunities, we will rely on the wisdom of our tribal leaders and their ability to be creative, consider many options and be open to forming some new relationships. In the end, politics is very much about relationships. As Golda Meir, former prime minister of Israel, once famously said, “You cannot shake hands with a clenched fist.” Let us approach the New Year with an open mind and an open hand.
Bill Rutsey
President and CEO
Canadian Gaming Association
For the first time in 15 years, the Canadian gaming industry did not grow in 2010, but rather contracted by a relative modest 2.5 percent to an overall win of just over $15 billion (Canadian). While it may seem contradictory and evasive, our prediction is that 2011 will be a year exhibiting opportunity, growth and standing pat.
The opportunities and growth will come both online and terrestrial and be technology driven. Standing pat will be the likely outcome of politics, with new Premiers just entering office in Newfoundland, New Brunswick and British Columbia and the upcoming provincial election in Ontario, Canada’s largest province.
Online product coming on-stream in British Columbia and Quebec, with other provinces (most notably Ontario and Saskatchewan) studying their online options, will create brand new revenues and opportunity.
Server-based and mobile technologies can provide the opportunity to adapt both product and marketing approaches to reflect shifting demographics and to capitalize on the new forms of entertainment and communications being used by consumers.
The further refinement and development of new facilities and concepts (such as community gaming centers in British Columbia and “Coasters” locations in New Brunswick) together with the renewal and replacement of VLT networks in Quebec and Western Canada should create real opportunities for suppliers as well as an increase in overall win.
As Casino Enterprise Management readers know, there is a significant difference between the Canadian and U.S. gaming models, with provincial governments taking on a significant—and sometimes exclusive—operational role in addition to regulating.
The sheer size of the industry in Canada attracts enormous (and mostly negative) media attention and requires that it be managed in a thoroughly professional and competent manner.
When you combine the simultaneous (some would say schizophrenic) priorities of maintaining markets and growing revenues, upholding social responsibility and guarding customer privacy together with the traditional government responsibilities of consumer protection and regulation it becomes an ever-challenging world for provincial government agencies.
2011 may be a year when some governments seriously consider these various priorities and roles with a view to change some aspects of their operational and ownership models.
We have previously noted the initiative by some provinces to have the federal government legalize single-event sports betting in Canada. Single-event sport betting is a must-have online product from a competitive perspective and would be a significant attractor for communities with casinos, especially border communities (such as Windsor-Detroit and Niagara Falls-Buffalo), as there are 100 million Americans within a six-hour drive of a Canadian casino.
Parlay sports betting has been legal in Canada since 1990. Legalizing single-event betting can be accomplished by a simple amendment to the Canadian Criminal Code and could possibly occur in 2011.
The Canadian Gaming Association will continue to be an important voice for gaming in Canada by representing the industry on important issues and opportunities that arise. We are planning the biggest, most content rich Canadian Gaming Summit ever, to be held at the Vancouver Convention Centre April 18-20. The Summit brings together more than 1,000 Canadian gaming executives for the country’s only trade show and conference. Mark the date and plan to join us.
Mike Smith
President and CEO
Casino Association of Indiana
Several years ago, when I wrote my first column for this magazine, one of the largest legislative issues facing Indiana’s casino gaming industry was the need to make legislators see our industry as something more than a number filling a hole in their budget.
In eight years with the Casino Association of Indiana, I’m pleased to say that is much less of an issue today. While our industry still faces many challenges, we have seen more and more of our state’s key legislators take an interest in Indiana’s casinos, and have seen them develop an understanding that casinos are a legitimate partner that not only provides significant revenue to state and local governments, but also provides great entertainment and employment opportunities for thousands of people and their families.
As we prepare to enter 2011, we are preparing to see many, many new faces on the floor of the Indiana General Assembly. Many of those faces are replacing legislators who were starting to gain a strong understanding of the gaming industry—legislators who, in most cases, were not removed by the electorate, but instead opted to retire after the 2010 session. Fortunately, I believe the men and women who were elected to replace them are quality individuals—quality officials who will seek to understand our industry, and to work with us to do what truly is best for the people of Indiana.
That partnership will be essential as we prepare to face numerous issues in the coming years—many of which are out of our control.
Illinois continues to discuss expanding its gaming industry, while our neighbor to the east, Ohio, will open three casinos in the next biennium. Meanwhile, to the south, Kentucky continues to discuss the possibility of expanded gaming within its borders.
On the legislative front, the Casino Association of Indiana will be seeking action to allow our “riverboat casinos” to become permanently moored vessels or barges. At present, each of those facilities is required to be a “self-propelled excursion vessel,” even though most haven’t moved for years.
We also are facing renewed energy for a statewide smoking ban—an idea that has passed the House each of the past few years before dying in the Senate. The latest iteration of that bill, which will be authored by State Rep. Charlie Brown (D-Gary) and Republican Speaker Pro Tempore Eric Turner, will be introduced in the coming session. We will make every effort to obtain an exemption should a bill move. Rep. Turner announced during a panel discussion earlier this year that smoking will be banned in Indiana’s casinos, either this year or in the future.
Finally, this year, we will make an effort to resolve many of our duplicate tax issues. For years, we have been unable to deduct our wagering tax from our income; meanwhile, the casinos that have opened at Indiana’s horse tracks are paying gaming tax on the required payments to horsemen, and the subsidy to the French Lick Resort and Casino (intended to offset revenues lost by French Lick due to the track casinos’ opening).
Unfortunately, due to the state’s financial distress, it is unlikely that we will have much success in creating movement on these issues.
Lois A. Rice
CAE, Executive Director
Colorado Gaming Association
The Colorado Gaming Association (CGA) is preparing for the 2011 session of the Colorado General Assembly, which convenes on Jan. 12, 2011. The fall elections have given us a new governor, Democrat John Hickenlooper, former mayor of Denver, and have given the Republicans a majority in the House while the Democrats continue to control the Senate. Governor-elect Hickenlooper has indicated that he is making a clean sweep of the cabinet posts, so our industry is concerned about who will be designated as the Department of Revenue chief and who will assume the role of executive director of the Office of Tourism and Economic Development, important cabinet positions that directly affect our industry.
Due to Colorado’s limited gaming environment and the location of our casinos in remote former mining towns, gaming expansion continues to be an issue, particularly since the state is facing a budget shortfall of over $1 billion. During the 2010 legislative session, the Senate introduced a bill during the last three weeks of the session to introduce keno games into Colorado restaurants and bars to raise money for higher education. We opposed this bill, as did the Colorado Restaurant Association and other groups that do not want gaming activities expanded beyond the three towns of Black Hawk, Central City and Cripple Creek. The Colorado Constitution currently provides that any expansion of gambling beyond those three locales must be approved by a statewide and local vote. We expect that there will be another bill introduced in 2011 to expand gaming in some fashion to address the state’s budget situation. However, we are confident that Colorado legislators are learning from other states that funding important state programs such as education with gaming revenues is precarious at best, as economic recessions, such as the recession we are currently experiencing, greatly reduce gaming revenues to states as our customers restrict their spending of entertainment dollars. The CGA conducted polling in January of 2010 on various expansion measures, and 75 percent of Coloradans still oppose expansio
n of gaming activities to the Front Range, either through Native American ventures, lottery expansion, racinos, card rooms and other means.
The Colorado Gaming Association continues to be front and center on issues related to responsible gaming, and in 2009 the CGA board has approved funding the Problem Gambling Coalition of Colorado with a $30,000 annual stipend. Unfortunately, Colorado lags behind other states that fund gambling treatment programs through lottery proceeds and other means. During 2008, the CGA was instrumental in getting legislation passed to divert $140,000 of the Colorado Limited Gaming Impact Fund to the Colorado Department of Behavioral Health to provide services to persons with gambling addiction. However, due to the state’s budget shortfall, we understand that those funds may not be available in the future.
Our industry, like other states, has suffered the effects of the economic recession, but we hope that as the economy recovers over the next few years that we will enjoy growth in our markets. We recently commissioned a study on the economic benefits that our industry provides to the State of Colorado, and while the study has not yet been publicly released, we were encouraged by some of the results, particularly our industry’s contribution to heritage tourism and historic preservation.
We look forward to 2011, which we view as an opportunity to educate our new legislators and state leaders on the significant financial benefits that our gaming industry brings to Colorado.
Peter DeRaedt
President
Gaming Standards Association
As 2010 comes to a close, we at GSA are happy to report that the organization is as strong as ever and that membership and member participation is growing. Suppliers’ use of GSA standards has resulted in amazing new products, regulators are increasingly calling for products driven by GSA standards, and operators are implementing GSA standards.
Further strengthening GSA’s outlook for 2011 is the board of directors’ outline for development and advancement in the year ahead, which includes wider adoptions of GSA standards and further collaborations with other industry associations.
In the middle of 2010, GSA’s board of directors initiated a process to ensure that GSA has the necessary requirements and documents in place, allowing for operators to seek product certification and suppliers to get certified on both the G2S and S2S standards. In 2011, GSA will continue to focus on members gaining certification relating to GDS and Transport standards. Briefly looking back at 2010, GSA and its standards helped suppliers and operators drive innovation, as was clearly evident during G2E. Creative, state-of-the-art applications powered by GSA standards were successfully introduced, thus paving the way to a successful 2011.
2010 also saw GSA making headway both domestically and internationally. In North America, regulators in Maryland, Oregon and across Canada issued recommendations regarding GSA standards in their RFPs.
The outlook for 2011 sees legislation advancing in Illinois that would require suppliers to use GSA standards to communicate with a central system, and countries across Europe are closely monitoring these advancements.
In Asia, we have laid the groundwork for 2011 by incorporating GSA Asia Limited as well as extending our relationship with the Macao Polytechnic Institute (MPI) for another two years, which means that future generations of engineers will graduate with extensive knowledge of GSA and its standards.
2011 will also encourage even further involvement by our members, and just before G2E, The Cosmopolitan of Las Vegas and Isle of Capri Casinos Inc. joined GSA, adding to the overall growing level of participation in the organization, especially by operators.
Our supplier members will continue to rely heavily on operators to help them drive innovation through our Operators Advisory Committee. As a result of the feedback we received from the OAC in 2010, our technologies advanced on several fronts including S2S download capability for WAN; G2S occupancy meter for WAN; Daylight Saving Time adjustment for WAN; audit meters for WAN; player enrollment; and additional messages to improve player communication.
As more and more operators seek to deliver a total player experience across the entire operation, in 2011, we will continue to collaborate with other industry associations on items such as the standards development efforts. We will continue to educate regulators on the value of GSA certification, and expand standards functionality to address operator requirements. Additionally, we will continue to increase operator awareness and involvement, and encourage adoption at the operator level.
In spite of—or maybe even because of—the economic downturn, the industry made great technological strides in 2010, and we can expect even more in 2011.
Robert W. Stocker II
Immediate Past President
International Masters of Gaming Law
Consistent with the “international” in International Masters of Gaming Law, Anthony “Tony” Coles, a senior partner in the Jeffrey Green Russell law firm in London, assumed the presidency at the beginning of 2010. He has graciously requested that I provide the International Masters of Gaming Law’s forecast for 2011.
In the relatively short history of the IMGL (it was formed after the millennium), the organization has grown into the largest association of practicing gaming lawyers in the world. It has achieved this status because of its commitment to gaming law education, inclusiveness of all elements of the gaming industry, an impressive array of gaming publications, conducting educational forums, providing quality speakers for a wide variety of gaming education conferences throughout the world, and a determined commitment to quality in all of its endeavors. Most importantly, it is the only truly international gaming lawyer organization in the world.
In 2010, the IMGL launched its fourth gaming law magazine, La Ley Del Juego. It has been a rousing success thanks to the dedicated efforts of the IMGL’s Spanish speaking members in Mexico, Central America, South America and Spain. Next on the horizon: a gaming lawyer publication focused on the rapidly growing market throughout Asia.
The strength of the IMGL rests in its ability to bring together private practice gaming lawyers, in-house gaming lawyers, regulators and consultants on a truly worldwide basis to discuss the gaming law issues that are systemic to all jurisdictions. By way of example, as the North American market enters Internet gaming (led by several Canadian provinces), our European members are able to share their jurisdictions’ practical experiences in the regulation of Internet gaming. As the gaming market expands in Asia beyond Macau and Singapore into Southeast Asia, western gaming lawyers are able to provide valuable insight into the challenges, opportunities, and solutions in developing a strong, secure, financially successful gaming market in Southeast Asia.
Entering 2011, what is most apparent is that gaming is truly an international market. What happens in Macau and Singapore has an impact in North America. What happens in Europe impacts Asia and North America and vice versa. In other words, in the larger sense, what happens in Vegas really does not stay in Vegas. Western European gaming development impacts Eastern European gaming development. South and Central America and the Caribbean are dynamic gaming areas that receive little worldwide attention but are growing rapidly. The IMGL brings all of these jurisdictions with their diverse cultures, laws and regulatory standards—or lack thereof—together under a single tent for observation and vigorous discussion. The net result: A far better understanding of the problems and, most importantly, potential solutions to problems faced by the gaming industry, its regulators, and its customers.
The members of the IMGL view 2011 as a very important year for gaming. It is a year in which there will be a significant expansion of Internet gaming. It will also be a year in which the manufacturing industry will continue to make strategic leaps forward designed to address the entertainment interests of a new generation of gamers who have grown up in the electronic age of Twitter, Facebook and other social networking environments. The impact of this new generation of gamers should not be underestimated—it will be huge. This future presents major challenges for (1) legislators who are charged with the responsibility of regulating an industry that they do not remotely understand, (2) regulators who are charged with regulating an industry with outmoded laws and regulations when the industry is changing at an incredible pace, and (3) gaming lawyers (both in-house and private practice) who are charged with educating legislators and regulators, as well as their own chief executives, and protecting the gaming industry in a manner that reflects both economic responsibility as well as social responsibility.
This leads me to my final observation regarding 2011. There are two words that the industry will increasingly hear throughout the world: Social Responsibility. These words are not just casual words that gaming industry representatives throw into a conversation to look good and keep the anti-gaming crowd at bay. These are words that an increasing number of companies in the gaming industry (both manufacturers and operators) are taking very seriously. The American Gaming Association has been funding social responsibility initiatives for a number of years because it recognizes the significance of this issue to the general public and to the political class. The IMGL’s members are already playing an important role in the Social Responsibility arena—addressing the issue directly with proactive solutions to problem gaming. Virtually every conference that the IMGL conducts includes substantive discussions regarding the importance of social responsibility in the gaming industry. The IMGL’s publications address social responsibility issues directly and proactively. This is one more example of the important role that the IMGL plays in the gaming marketplace.
The bottom line is very simple and direct: the IMGL is excited about the opportunities that 2011 will present and is looking forward to assisting its members in playing a dynamic role in the continued development of a robust, socially responsible, financially successful gaming industry throughout the world.
Wes Ehrecke
President and CEO
Iowa Gaming Association
On Nov. 2, the citizens in counties where casinos are located voted in an every-eight-year required referendum ballot question whether to keep their casino in existence. The result was they all passed by significant margins of an average of 78.5 percent—over 4 percent higher than the average in a similar vote in 2002! This is a strong indicator that these citizens recognize Iowa’s commercial gaming industry is considered a viable part of the state’s economy with its wages, taxes, purchasing Iowa-based products and services and annually providing millions of dollars in charitable grants. Plus, they are creating value in the tourism sector, becoming premier entertainment destinations offering many amenities beyond table games and slot machines.
Looking ahead to 2011, the 18th state-regulated casino license is scheduled to open July 1 in the far northwest corner, close to Sioux Falls, S.D. Also, the State Legislature will convene their 2011 general assembly with a new Republican majority in the House as well as a new GOP governor. It is anticipated that there will be no changes to the existing gaming tax rates or to the current smoking ban exemption on the gaming floor.
Bills that could be introduced include authorizing an intrastate Internet poker network established for casinos as well as consideration to repeal the eight-year referendum vote requirement. However, it is too early to predict what might happen with those proposals next session. The members of the Iowa Gaming Association (IGA) will also watch with interest the emerging discussion in other states and Congress to consider Internet gambling legislation and what future trends there might be for online gaming. The IGA properties also will continue to comply with a new law passed in 2010 requiring casino members to be in the debt collection business; by checking a state database on every jackpot of $1,200 or more to determine if any type of debt is owed. It is projected in the first year that casinos will collect $5 million in debt owed.
The crystal ball forecast for Iowa’s economic recovery from this recession is still not entirely clear, but there are positive indicators that anticipate we will continue to gradually improve over the next year. This hopefully will equate to heightened consumer confidence to then increase citizens’ discretionary entertainment budgets, resulting in more casino admissions and improved revenue.
Barry Thalden
AIA, Partner
Thalden • Boyd • Emery Architects
Overall, 2010 has been a good year for Thalden • Boyd • Emery Architects. The highlight was being ranked “No. 1 in Client Responsiveness” in a nationwide client survey. While we were shocked to win this prestigious PSMJ award, considering there are over 77,000 architecture and engineering firms in the U.S., we were not surprised to find out that our clients are happy with our services. Among the numerous reasons that were given, we believe the most important are our commitment, our process of creating teamwork and communication, and our understanding of our clients’ business and their customers’ desires. We have appreciated this award and focused our G2E booth on our “Ask Us Why We’re No. 1” slogan. Not to be complacent, having won this first place award, we have actually been inspired to search for ways to be even better in the future.
The good news regarding the economy is that the recession is over. The not-so-good news is that it doesn’t feel a lot better. It’s a lot like banging your head against a wall. It still hurts when you stop. The economy does continue to get better, but this obviously will be a slow recovery.
The most encouraging part is that there does seem to be a significant shift in mental attitude. The mood at G2E was upbeat and positive—even hopeful. That compares to two years ago when those that showed up were depressed, and many didn’t even bother to come. I felt like going home and shooting myself. This is a significant change, since I believe that most of the recession was caused by negative media hype and pervasive fear which is no longer infecting us.
Locals casinos, including Native American casinos, are already producing better numbers, as people are finally taking their money out from under the mattress and are confident the banks are not going to close next week.
Like the stock market, which has already risen to 80 percent of its’ 2007 peak, architecture is typically a leading indicator of the economy. Our firm has numerous casino projects—both ground-up and major expansions—that are in working drawings or under construction and scheduled to open in 2011. The frequency of new project interviews has increased from the past two years, a good indication that the casino industry is moving forward again.
What happened in 2010 seemed to verify my previous “crystal ball” predictions, such as:
“The worst is over.” “The recession will be declared as ‘officially over’ in the summer (actually June) of 2009, and the ‘gloom and doom’ talk is over. However, the struggle to climb out of this hole will continue. The effects of this deep recession and the cost of getting out of it will be felt for quite some time.”
“Las Vegas will start a turn-around.”
“Management will concentrate on being more efficient in its operations and facilities, providing better customer service, eliminating “fluff” both internally and externally and being the “best that they can be.” It will become leaner, stronger and more solid and secure by concentrating on those things they can control, even though they may have neglected them in the past.”
What can we expect for 2011 and beyond? Here’s what I see.
Gaming revenue will continue to increase both in locals casinos and in Las Vegas, and revenues will set new high records, even in Las Vegas, by 2012.
Asia will continue to take a lot of the spotlight as revenues in Macau and Singapore shatter even the highest expectations. Gaming companies will build additional properties, chasing the huge Asian gaming market.
Gaming bonds that have fallen into default over the past two years will all be reconstructed as gaming companies issue stock and Native tribes negotiate revised terms with their bondholders.
While we are clearly in recovery mode, there will still be a lot of “recession talk,” particularly related to politics. However, unemployment is not an indicator of recession; it follows it. In 1982, unemployment was at 10.8 percent. It took until 1987 to drop to 6 percent—that’s five years. That’s typical after a recession. So at that rate, we can anticipate unemployment at about 8 percent at the end of 2012, when politicians will be still blaming a bad economy.
International tourism will increase as the value of the dollar continues to fall due to the continuing increase in the U.S. deficit. While that is not generally good news, it will be good for Las Vegas, since a cheaper dollar always brings more international tourism.
After two years of self-deprivation, people are anxious to have a “fun experience.” Going through a recession is depressing. Everyone wants to enjoy themselves again. Those casinos that can provide customer-focused fun times will do well.
Financing, which has been virtually frozen for two years, will begin to thaw. Good projects will again move forward. However, most projects will require a combination of debt and equity, with emphasis on the latter. And cash flow will be critical, as debt-coverage ratios will be very conservative.
Looking back, this past year, we continued to open new projects. The rebranding of the Cherokee Casino to the Hard Rock Tulsa and this year’s opening of The Joint, a 2,700-seat concert venue have been extremely successful. The rebranding along with new amenities and the 19-story Hard Rock hotel tower, has elevated the property from a locals’ casino to a regional destination.
Looking forward, in 2011, we will be opening several new casino projects from New York to Oregon, both in commercial gaming and for Native tribes. These projects are currently on the drawing boards or already under construction.
We will be expanding our revolutionary casino performance strategy that has proven to increase gaming revenues from 30 percent to 300 percent in existing casinos. This strategy bridges the gap between casino design and casino financial performance.
This year, we will have the excitement of celebrating 40 years in business. It’s hard to believe that four decades have passed while our firm has been busy designing interesting buildings.
While the economic recovery will be slow, it will benefit us all and hopefully be long-lived.
John Dominelli
President and CEO
NRT Technology Corp.
NRT Technology is the globally recognized leader of innovative cash handling solutions and products. 2011 will be another great year for innovation at NRT as it is in our DNA. Along with being the market leader in ticket redemption kiosks for more than 10 years, NRT launched its cash access solution Centre Payment Systems™ in 2010 to complete the enterprise solution it pioneered back in 1999. Centre Payment Systems is a world-class ATM and cash advance solution for the casino industry. This proven payment technology currently is the largest ATM processor in Canada for non-bank ATM services with NRT’s network of 15,000 ATMs, processing more than 50 million transactions annually. Our fully integrated solution enables flexibility, accountability and reliability that performs the entire suite of modern functionality casino operators are looking for. Centre Payment System is the up-and-coming cash access service the casino industry is looking for. This end-to-end solution, from the kiosk level to the cage, running on one platform allows the casino operator more visibility and efficiency of their entire cash access and ticket redemption solution.
NRT’s innovation is second to none in the gaming industry with its award-winning products like the QuickJack 2™, a multifunctional ticked redemption kiosk that provides ATM functionality and can been seen at the most prestigious casinos in the world. For 2011, you will see another first in the gaming industry that is currently being developed by NRT and its partner JCM Global. The QuickTable™ is a device that will be used at the casino tables by the dealers that would provide a casino guest the ability to move seamlessly from the slots to the tables with its TITO ticket. This solution will break down that barrier and enhance the guest options when leaving the slot machine with a TITO ticket. The QuickTable product gives the dealer the ability to accept TITO tickets in a buy-in situation at the table as well as accepting cash and, for the first time, recording and validating the cash at the table. The QuickTable device can also cash you out in a form of a TITO ticket at the guests request, improving the total guest experience. This technology enables a casino operator to know exactly how much cash is at each table in real time, something that today, is non-existent. This minimizes fraud as well as the time and effort spent in the count room counting, because the cash is recorded and validated at the table. NRT feels that this technology will be the next game changer for the casino floor as was the QuickJack™ in 1999. NRT is extremely excited in this new technology and its acceptance on the casino floor.
NRT Technology earned its reputation as the premier cash handling solutions provider through innovation and execution and holds itself to a very high standard. With groundbreaking innovation, NRT will continue to push the bar and continue to meet its valued customers’ expectations. We look forward to an exciting 2011.
Tina Stehle
Senior Vice President & General Manager
Agilysys Hospitality Solutions Group
We see a couple of major trends shaping the hospitality and gaming market in the coming year and beyond. First, we see an increased interest in mobile applications in both full-service and self-service environments. In fact, mobile technology is one of the biggest growth areas for 2011, and we are focused on integrating these applications into several of our products.
One of the most intriguing uses of smartphones and other mobile technology in the hospitality environment is as an extension of the point-of-sale system in the food and beverage area. Here, this technology can be used as an order-taking device, offering a practical and cost-effective way to streamline service in restaurants, bars and poolside. Just as with standard POS terminals, smartphone technology enables servers to open guest checks, select menu items and send orders to the kitchen, but with greater speed and efficiency.
We’re currently developing an iPod touch® version of our InfoGenesis™ POS, so servers can simply key in food and beverage orders anywhere on property. The application includes all employee-level security, menu items and modifiers and offers the ability to configure promotions and daily specials. We’re also working on incorporating manager reports that are similar to terminal reports. So, rather than food & beverage managers having to go behind the bar area and take over a terminal in order to view reports, they can simply use an iPod touch device to view open checks and see what’s happening with the business.
Also, guests are increasingly demanding mobile applications that save time and speed delivery of services. In response to that demand, we recently announced the launch of our Mobile ResNet application, which enables guests to book rooms directly into the Lodging Management System™ (LMS) property management solution via any Web-enabled smartphone as well as an iPad™ or iPod touch device. The new mobile application enhances guest service and offers a more personalized guest experience.
In the coming year and beyond, gaming properties will also look for ways to utilize staff more efficiently while maintaining a high level of guest service. Self-service kiosk solutions can enable them to do both.
Self-service kiosks shorten lines at the front desk and perform all the basic functions of check-in and check-out, such as encoding and dispensing room keys and printing receipts. Yet, kiosks can also perform more sophisticated functions, such as allowing guests to select rooms, make dinner reservations and obtain copies of their folios at any time during their stay. Kiosks can produce hotel maps, print event schedules and generate special messages based on management-defined criteria.
Self-service kiosks can even market the property. Many can be programmed to up-sell room categories or make special offers. Kiosks can also run applications that enable guests to exchange loyalty points for room upgrades and run applications that provide comp redemption for the casino.
The Guest Express kiosk solution by Agilysys enables properties to utilize employees more effectively, perhaps by reassigning some front-desk staff to jobs that provide long-term benefits, such as managing guest loyalty programs. It also can enable staff to devote extra time to guests who prefer traditional check-in or need extra assistance.
At Agilysys, we are working on solutions that will enable our gaming customers to prepare for the future. We started out in the casino business, and as the industry has changed over the years, we have been there and have progressed along with it. As a result, we have an understanding of the casino business that few companies can match. We will continue to bring our customers a depth of knowledge that only comes with experience, helping them prepare for the eventual economic recovery and the changes in demand that will result.
Kelly Shaw
Vice President – Systems Sales and Marketing
Aristocrat Technologies
From the systems perspective, the forecast has never been brighter for Aristocrat. We had an extremely successful 2010, wherein we expanded our business into the Caribbean and into Canada, and now we serve more than 270 casinos in North America, far greater than any of our competitors. Additionally, our 2010 Oasis Summit attracted more than 300 operators—our highest attendance ever—and the reaction was extraordinary.
There was a critical moment in 2010 that had a profound effect on our systems business. We found ourselves in an RFP process, competing for Ameristar Casinos’ business, an account we had had for years. The discussions were sometimes heated and sometimes frustrating for both sides. And then came the moment that changed everything—both sides started truly listening to each other, and we instantly found our common ground. We were like a marriage with a 7-year itch, and once we began refocusing on the relationship, we realized we weren’t as far apart as it seemed; in fact, we were closer than ever. We won the RFP, and recommitted ourselves to have an even better dialogue with each customer. We care, passionately, and we are committed to making sure our customers know it.
In 2010, we spent more money on systems research and development than we have in our history, resulting in two new powerful tools for operators. First, nVision™ is a business intelligence tool that gives operators access to a unique gaming experience for players, access to meaningful performance information for decision-makers and access to enhanced toolsets for your analytical resources.
Next, nCompass™ is an interactive touch-screen display and a powerful engine for profitability with new technology that includes expansion capabilities, greater processing power and greater storage capability for multi-media content.
In 2011, we will be communicating even more closely with customers, helping them make the most of the current modules they have, while also helping them plan a pathway for their future that is as individual as they are. Here’s to an incredible 2011!
Ramesh Srinivasan
Executive Vice President – Systems
Bally Technologies Inc.
For more than seven years, networked and server-based gaming has been heralded, discussed and anticipated as the next groundbreaking technology in the gaming industry. But the fanfare waned, and many began to wonder if such a concept would ever be fully realized, and most important, if it would ever be able to truly deliver acceptable return-on-investment (ROI) levels to casino operators.
At Bally, we realized early on that this concept could not be achieved by developing just one miraculously great product. Technology transformations such as networked and server-based gaming have to follow an evolutionary process and will involve multiple, well-integrated solutions. A strong foundation that includes high-performing slot floor and casino-management systems; well-designed high-speed networks; sophisticated business-intelligence tools; technology that enables game download and configuration; a player-user-interface network capable of delivering meaningful and compelling bonusing and patron-services-related applications; directed messaging capabilities; media management; very configurable and creative bonusing and other marketing applications; dynamic tournament capabilities; integration technologies that facilitate solutions from different vendors working well together—all such components working in a synergistic, controllable robust environment can create the kind of ROI that operators have long been looking for.
As we enter calendar year 2011, practically everything is in place. Solid core products based on modern technologies that are configurable, open, scalable and internationalizable. Backward compatibility. GSA and computer-industry standards. A player-user-interface—iVIEW and iVIEW Display Manager™ (DM)—that enables communication, self-service and bonusing at each gaming device and can be “directed” and controlled from back-end servers as necessary. The Elite Bonusing Suite™—an arsenal of powerful floor-wide bonusing applications that enable dramatic new levels of excitement and interaction across the casino floor; a state-of-the-art media-management solution (CoolSign®) integrated with the rest of the product suite; a comprehensive business intelligence solution; and GSA-protocol-powered Bally Command Center™ directing the floor. We have truly reached the tipping point.
When used together, Bally’s iVIEW, iVIEW DM and Elite Bonusing Suite applications deliver the ROI that casino operators have been seeking from server-based gaming. Everyone knows that iVIEW DM can provide a convenient means to deliver information directly to the player, but it needed to become a much more versatile means of delivering this compelling content. This interface has now evolved from being just an interface to show player account information and marketing messages, to serving as a self-service kiosk, enabling players to carry out many functions, including ordering drinks, requesting their car from valet, and redeeming their offers. As a point-of-sale device, it enables players to conduct banking functions, purchase lottery tickets and place race/sports wagers without leaving their seat at the game. Streaming video even allows players to watch live sporting events and TV programs.
But the real benefit is the way this technology can add dramatic new levels of excitement and anticipation to game play. When combined with the Elite Bonusing Suite’s floor-wide, interactive promotions, iVIEW DM offers a second-chance-to-win and the ability for players to earn valuable rewards, all without interrupting play on the base game. These interactive applications enable players to spin wheels, select and root for their favorite contest-driven car or horse, receive instant rewards on their birthday and participate in floor-wide slot tournaments. And this is only the beginning of what these robust and highly configurable applications can do across the casino floor.
Bally augments its iVIEW DM/Elite Bonusing Suite solution with other powerful new tools for marketing, customer service, and rewards, including the Bally TV™ in-room communication system; CoolSign resort-wide media-management technology; the cutting-edge mobile applications that enables casinos to offer real-time access to player’s club and casino resort information on smart phones and mobile devices; and Service Tracking Manager™, a web-based dispatch system that interfaces with handheld mobile devices such as the iPod Touch® and iPad™ for faster routing of casino-floor personnel to customers.
The tipping point is here. Now it is up to us, in partnership with our customers, to demonstrate, realize and capitalize on the full potential of all these groundbreaking technology components. Greater returns for operators and more fun and excitement for players—the future is now here!
Andrew Cardno
Chief Technology Officer
BIS2
This year for BIS2 with its now substantial, if not market-leading position in the gaming analytics space, is a clear statement from the industry that analytics of what customers want and why products are working is now central to the operation of a gaming business. BIS2 is building an exciting network of partnerships, ranging from world-class consulting and data cleaning services. It is through this network of partnerships that much of our growth will be supported in 2011. For example, through our partnership with WebTrends, we will bring fully integrated social networking analysis, or through our partnership with industry data online, we bring a combination of online data services and executive level consulting.
It is my belief that 2011 will be the year of analytics. It is the year that the industry will embrace business intelligence; the ground work for this embrace has been laid in 2010 with what seems to be an extra ordinary focus on data warehousing in the industry in the last few years. This drive for perfect data, coupled with what I think is the most dramatic shift in profitability that the industry has ever seen, has made good decisions an essential part of good casino operations. To meet this demand, BIS2 is heavily focused on tools to assist in two main areas—first in the area of multigame analysis and second in the area of customer behavior on the gaming floor.
Market Resistance
2011 will see the continued resistance from existing system providers as they attempt to preserve their one vendor that provides all strategy. Clearly as a leading specialist in the intelligence space, BIS2 is competitively placed against each system provider this highly competitive landscape has pushed the gameViz product line to higher levels. In 2011, we will continue to expand the products ability to derive value from the capabilities of the system providers. Paradoxically, it is the proven ability of BIS2 to leverage the existing investment in systems and games that is enabling us to create such a significant impact in the market.
New Solutions
Our slotViz product is a powerful new addition to our analytics offerings. This product provides a clear view of these complex and highly configurable devices. On the customer side, we are highly focused on social network behavior, and our socialViz product offers a powerful way of gaining insight into customer behavior.
Gaming technology is changing at a faster pace than ever. The question is, are the customers? It is my belief that many customers are slow to change. In fact, one of the common patterns that is emerging in gaming is the preservation of existing assets. At BIS2, we are often challenged with questions such as how to measure the incremental revenue of new games or how we can measure the life cycle of games. Our existing product line combined with our 2011 new offerings provides the tools to enable operators to answer these questions.
The Release of V6
2011 will see the release of our V6 product that broadens our platform support and further extends the mixed workload analytical capabilities. Our goal is to provide the perfect interface for operators who have massive databases where there is a need for broad understanding and very specific drill down operations. This opening of platforms provides a more immersive experience the data. It’s through this immersion that BIS2 plans to broaden its use base in our existing install base.
Other Industries
BIS2 has demonstrated our world-leading gaming solution in other industries, and this work has lead to significant opportunities in other industries. These opportunities include network analysis and social network analysis In 2011, BIS2 will leverage this cross-industry work to deepen our solution in gaming.
Summary
2011 promises to be an exciting and eventful year for BIS2. We find ourselves in a very competitive landscape—a landscape where operators are asking questions that are driving them to compete on analytics and to derive the maximum value from their cresting capital investment.
George Levine
Executive Director, Sales and Marketing
Casino Data Imaging
2010 was a positive year for CDI with consistent sales and, more so, extensive product development. We fulfilled a previous goal of reinforcing our product development team through additional headcounts and solid top tier technology partnerships. The results were quite visible at the recent G2E with CDI demonstrating our iGuide™ digital media suite, CasinoTLK™ CRM SMS hosting program and new advancements with CasinoCAD© data visualization.
In 2011, in addition to CasinoCAD slot data visualization, we will introduce a new .NET reporting and data visualization platform that, in addition to slot analysis, provides new “plug-in” modules for table games, player data and other features along with unique analysis dashboards. The new platform has been designed to utilize a common data model that significantly streamlines the data collection process. The additional resources that have joined CDI bring considerable expertise concerning data integration, business intelligence reporting and sophisticated analysis. This combined with a proven product and support track record allows CDI to bring to market an elegant multifaceted analysis and marketing solution at reasonable pricing. This value proposition is a core value for CDI and attributed to our ongoing success. In addition to accelerating development, we also see great value to interact with other CDI products (i.e., CasinoTLK) and third party programs.
2011 will also see the rollout of several new products including CasinoTLK SMS-CRM Hosting and new iGuide Web Finder. Regarding CasinoTLK, people read SMS messages and respond to them faster than any other form of communication. SMS is the perfect way to not only market to an individual, but also attain feedback from that individual. CasinoTLK key features include lead generators, personal casino concierge, dynamic pricing, bulk and one-on-one communications, interactive database management, interactive marketing and more. Regarding product synergies, CasinoTLK will interact with our new analysis suite allowing casino marketing to query customer information and send out applicable offers and messaging.
CDI’s iGuide Web Finder, also in rollout mode, is the perfect and seamless solution for any casino wanting to provide a casino games search feature on their website. CDI would place an icon button (casino branded) with link on the casino’s website allowing customers to search for games, allow the casino to promote their featured games and then show where the games are located. iGuide Web Finder can also interface to a slot system’s games database for automatic updating. Future version updates will bring in table games, progressives, promotions and advertising.
Our Casino iGuide Pro Mobile applications continue to evolve and, similar to our award-winning iGuide Wayfinder technology, an exciting and easy way to stay informed, navigate the casino and make good use of SMS, built in URLs and much more. From the phone the end user’s ability to sign up for the players club, register for slot tournaments, find their favorite games, reserve show tickets and more is a beautiful thing.
Our award-winning iGuide “on-floor” Wayfinder Plus will appear at several major U.S. casinos this year. The core development allowed us to adapt certain features to the web finder and mobile media programs. Key for all iGuide products is a user interface (console master) that can easily manage content. Through our Software as a Service program, customers rest assured they will always enjoy the latest technology coupled with a proven and respected CDI customer support program.
2011 is also CDI’s 10-year anniversary proudly serving the casino industry. We not only celebrate our longevity, but also our investment in product development and new technology team.
Jonathan Seigle
Vice President Casino and Resort Division
MICROS Systems Inc.
While indicators show that the hospitality industry in general is beginning to experience an economic turnaround, it remains to be seen if this will extend to the gaming industry. Some operators are starting to see upticks in revenue, while others predict that our sector will continue to experience “tough sledding” in 2011. MICROS believes that gaming is beginning its comeback. With this economic turn, casino operators will see an increase in production costs and consequently will begin to phase out deep discounting that gaming consumers have come to expect as casino operators gradually raise prices in the recovery. As a result, operators will need alternative ways to attract customers and maintain loyalty. They will look to technology to help understand the true enterprise value of each guest and to continue to drive cost reductions.
Gaming continues to proliferate around the United States, with new jurisdictions such as Ohio and Maine coming online over the next few years. This competitive landscape requires casino operators to recognize and reward their most valuable guests—both on and off the gaming floor. MICROS’s Enterprise Solutions including OPERA and Simphony, MICROS’s first hospitality solution using a Services Oriented Architecture (SOA) and Software as a Service (SaaS) model include powerful customer relationship management features, which track guest activity from a central database. Solutions that enable casino operators to recognize high-value customers and feed guest-specific data to casino data warehouses help operators build guest loyalty.
Earning and maintaining customers through loyalty solutions will be vital to fortifying a positive bottom line in 2011. Another critical way that gaming operators can drive loyalty is by enabling guests to control their experience—before, during and after their visit. MICROS anticipates growth in the number of guests utilizing tools that enable them to self-manage their experience. The use of solutions such as MICROS’ webHotel provides guests with the ability to initiate an online search for reservations and book from one website. Guests can then utilize tools like MyStayManager to self-manage all aspects of their stay, from conveniently making dinner reservations to scheduling a wake-up call and even responding to targeted marketing messages that advertise promotions. We predict that continued integration of gaming and hospitality data will result in a convergence of guest-facing tools, enabling guests to manage their entire casino experience in one place—from trip itinerary to comp/point accounts.
To thrive in a still-shaky economic landscape, operators also need solutions that improve business operations and efficiency. Today’s casino is about more than just slots and table games. Many casinos derive more than half their revenue from non-gaming sources like hotel, food & beverage, retail and spa operations. They seek comprehensive hospitality solutions built on industry standards with capabilities to share information across the enterprise. MICROS’ complete gaming solution has been recognized for its value in increasing operational efficiencies and decreasing total cost of ownership. In November 2010, MICROS was honored with Casino Enterprise Management’s Hospitality Operations Technology Award in the category of Employee Productivity and Efficiency for pioneering an approach to achieve new levels of employee productivity and efficiency.
MICROS has been a leader in the industry for decades because we value feedback from our customers. MICROS received the Harrah Excellence in Innovation Award from UNLV for a continued commitment to pursuing inventive approaches to solving hospitality-related issues and problems. MICROS was recognized for its industry impact and design of creative, original products that have ease of replication and broad scope. It is this modern approach to technology that gaming operators will need to help drive the recovery during 2011.
Mick Roemer
Senior Vice President
Multimedia Games
This past year was a pivotal one for Multimedia Games. We announced a new CEO, Pat Ramsey; we paid down significant debt and strengthened our balance sheet to the best it has been in years; we entered the Class III gaming market for the first time; we sold almost 1,000 games in our first year of actively pursuing a for-sale revenue model; we saw a significant improvement in our game performance due to our renewed focus on all of our game development efforts including Class II, Central Determinant and Class III; and we assembled one of the best teams in the industry. All of this translates into MGAM being able to focus over the next few years on our mission to become one of the leading suppliers of top performing gaming content and technology in the industry.
As Multimedia Games looks ahead to 2011 and the future, we think that it is important to provide our customers with a very broad and full product line—video slots, 3-reel mechanicals and 5-reel mechanicals, wheel games, slant tops, multi-level progressives, specialty games and server-based type applications. Last year we introduced our Player HD® high definition video slot, and this year we brought out our 5-reel mechanical, 3-reel mechanical hybrid games and our new SLX™ slant top. Each year we will continue to expand and add variety to be able to service a wide variety of customer requirements.
One thing that was obvious at this year’s G2E show was the abundance of technology on everybody’s machines. The industry seems to be moving toward building in more and more bells and whistles—adding additional monitors, lights, intelligent button decks, gadgets, you name it. MGAM is stepping up to the bar to provide all the technology our customers want, but we are also cognizant that the cost of the machines is increasing with each new shiny thing that’s added. We’re not convinced in every case that this always adds up to greater performance after the shine wears off. We try to remember that the customer wants a great game experience, and for us that starts with the game mechanics and math. If technology adds to that experience and the customer responds by playing the game longer, then we are all over it.
G2E is always kind of a look into the future and what’s coming. For us, this year’s show was spectacular. Along with the cool new hardware, we introduced 10 pretty significant product lines including our newest version of our award-winning automated tournament system, TournEvent™ 3.0, as well as games like Side Action™ Slots, Ice On Fire™ and Mega Meltdown®. Over the last year or so, we have been steadily building our game development engine and it is really starting to take hold. Our pipeline of new products is getting stronger every day and we are confident that in 2011 and 2012 we will see the rewards of all that effort. For now, MGAM is about steadily expanding our footprint and putting out high quality games that make a lot of money for our customers.
As we see the economy start to stabilize and we look out over the next few years, our strongest asset is our people. It is the positive energy and “can-do” environment that we have been able to foster in Austin, Texas, that will solve all of those technical and creative challenges ahead. We are pleased with our recent successes in states like California, Washington, Minnesota, Louisiana, Mississippi, Kansas and Oklahoma, and we are looking forward to continuing with our expansion plans throughout the country. If you ever want to see what the next great gaming company looks like, come on down to Austin. I will personally show you around.
Russ Ristine
Vice President
Radical Blue Gaming
As the independent technology providers to the gaming industry for GSA’s G2S and S2S protocols, we are offered unique insight into the progress being made throughout the world as the industry moves toward standard protocols and networked gaming floors.
In a nutshell, there was a lot of early activity amongst the North American gaming product developers during 2008. Things got rather quiet during 2009 and much of 2010 while the developers worked hard on their new implementations. In the last few months, however, new activities have started popping up all over the globe, which we perceive as the early signs of a renewed push toward a modern gaming environment, most notably in Canada, South America, Europe and Australia.
In the manufacturer’s arena, we see more and more gaming machine and system manufacturers implementing G2S and S2S in their products. Most recently, teams in Eastern Europe have started to ramp up for efforts in South America (as a resurgence in Russia is not on the radar), teams in Australia are gearing up to support new trends “down under,” and developers in North America are focusing on the Canadian lottery conversions and a few early adopters in the American gaming industry. Speaking of the American development teams, we now see their efforts moving from initial development to product testing to make sure products can be deployed with minimal quality issues. This is evidenced in requests for more comprehensive automated-testing tools (fortunately, we had just finished developing a whole suite of them), coupled with requests to GSA to finalize certification programs, so new implementations can get certified as being correct before being deployed all over the world.
In the operator arena, many of the provincial lottery operators in Canada attended an executive overview of G2S and S2S several years ago, and subsequently decided that a future world designed around G2S would be much more interesting to their players than the old, slow, proprietary solution they currently use. Many joined GSA’s Operator Advisory Committee to learn more about the new protocols and to provide operator requirements that drive the efforts of the technical committees. Now, several have selected new systems, using a high-speed WAN and GSA protocols, that will give them the future they envisioned.
As part of this effort, the lottery operators have come up with a series of requirements for the integral Player User Interface (PUI) window that is appearing in many of these new networked gaming devices. Being engaged and forward thinking, they are interested in pushing for content-delivery standards for the PUI to ensure that they can develop new content once and then deploy it across their gaming environment (even though there may be multiple EGM manufacturers employing different display technologies in the PUI solutions). A series of use cases describe a diverse set of unexpected activities happening in the PUI, including online wagering, playing server-based games, informed player interactions, hotel and restaurant reservation screens, and many more. Most of these far surpass the typical player interactions found in current player tracking solutions.
In the test lab and regulatory world, most of the independent test labs now have their ISO certifications to test and certify manufacturer’s implementations of G2S and S2S. As a result, operators should start seeing certified products soon. In the state labs, some of the forward-thinking technical leaders are starting to look at how they can use the open communications provided by the new protocols to make their efforts more efficient and effective. Since the new technology and paradigms are coming fast, many of the state labs are working hard to get up to speed on the technologies involved so they will be ready when networked gaming comes to their jurisdiction.
Over the last few months, we here at RadBlue have seen testers requesting advanced test tools and operators asking for sessions to help them understand what all this really means to them. We have also had requests from numerous teams for training and help in coming up to speed on the technologies of this new world. We’re eagerly looking forward to 2011 as G2S and S2S technologies continue to be refined and continue to move the gaming industry toward an exciting future.
Tammy Farley
Principal
The Rainmaker Group
As I think back to when I was writing my “forecast” for 2010, I recall the optimism I held for what I hoped would come following such a dismal 2009—and for the most part I believe it held true. But now, as I sit and contemplate what will be in 2011, I am even more optimistic and am happy to say I don’t feel alone with this perspective. We are hearing it from the operators, our customers, and we are seeing it in the market from their customers, the guests, the players and the conventioneers. It does, in fact, seem that everyone is “feeling better.”
We have been fortunate to work with our customers over the past year in close partnership to find ways to add incremental value and do more with less. We are hopeful that in 2011 there will be less pressure on reducing costs and more focus on finding ways to improve processes and increase revenue. But as we move into this new way of the world, we have had to find ways to package our products differently to get traction in the market. We realize there are many smaller hotel/casinos, particularly Native American properties, for which hiring a dedicated revenue manager is not an option, yet they still want to take advantage of the same software being used by larger properties with more resources. As a result, we have introduced a program that bundles the software as well as the services of a revenue manager to provide oversight and reporting to the property team. We’ve seen interest for this grow and will see this continue in the coming year.
Also, as we expected last year, there has been a growing interest in business intelligence and reporting. With new focus on performance, market position and other key performance indicators, there is tremendous need for the sharing of data and transparency of numbers from our system throughout the enterprise. As a result, we continue to work on dashboards and datamarts as tools to be used to make this data more readily available to senior level executives.
Finally, we see 2011 as an opportune time to extend our analytics and optimization to the casino floor. We have developed robust models and algorithms that can be leveraged to produce analytical and optimization tools to maximize profits not only for the hotel side of the business, but also the gaming floor.
In our view, 2011 promises to be the beginning of the upswing in the gaming industry, but we realize the recovery will be slow and our business model has changed for good. Our customers will continue to challenge us to add value and to partner with them to make sure they are poised to benefit from the recovery as quickly as possible.
Rory Fagan
Director, Hospitality & Gaming
SAS
As the gaming industry begins to transition from the economic downturn, we expect an increase in the use of advanced analytics and predictive modeling in marketing. Marketers are looking to improve the response rates on offers and increase patron loyalty, especially as competition increases. Not only are casino operators planning to automate many of the marketing functions such as campaign management, but operators are increasingly interested in optimization of the offers and controlling patron reinvestment costs.
Casinos want a more consolidated view of their patron with not only gaming data, but also including ancillary revenue data. Casinos are striving to obtain a full view of their patrons and improve the flow of accurate information. As casinos grow and new data sources become available, we are seeing a drive for more complete data integration including capabilities for enterprise data access and processing across systems and platforms; integrated data quality, which is critical to providing accurate, consistent information; and a data integration development environment that enables collaboration and reusability across the organization. Enterprise data integration can bring in data from all systems, provide data in a timely manner and ensure data integrity.
Innovative casinos are starting to use SAS Analytics in other areas of the operation such as casino floor optimization, food & beverage forecasting and social media analytics.
We expect a dramatic increase in social media analytics across the hospitality & gaming industry and recently launched SAS Social Media Analytics to help casinos act on intelligence gleaned from online conversations occurring across professional and consumer-generated media sites. It enables organizations to attribute online conversations to specific parts of their business, allowing an accelerated response to shifts in the marketplace.
We are also seeing a convergence of casino marketing and revenue management functions. Previously, these departments were organized into silos and had limited communication. Besides closer organizational alignment, there will be a stronger need for integrating the marketing automation and revenue management systems. Marketing automation solutions include campaign management, analytics, data integration and business intelligence capabilities, along with flexible deployment options to empower marketers to create and deliver the right campaign at the right time. Revenue optimization solutions include pricing, forecasting and optimization capabilities to help casinos understand, anticipate and react to changes in hotel consumer behavior in order to optimize revenue and profits.
2011 will be the year of reinvestment in analytics technology. Analytics deliver real-world business insights for every knowledge worker up and down the casino’s organizational chain. Whether redesigning service offerings, improving retention, launching loyalty programs or pricing to maximize revenue and profit, having in-depth knowledge of patron behavior, market conditions and competitor influence is a necessity. With SAS for Patron Value Optimization, gaming and hospitality companies can apply advanced customer analytics to gain that deep understanding of patrons’ needs, preferences, value and behavior.
Andrew Zarnett
Managing Director
Deutsche Bank Securities Inc.
For 2011, our industry outlook is somewhat optimistic, as the domestic recession ends and the year-over-year comparatives get even easier. Nevertheless, we are still concerned as to the impact from the wake of the global credit crunch, higher unemployment and still lower residential housing prices. Longer-term, we are worried as to the crowding-out effect that higher state and federal taxes will likely have on discretionary spend. Looking to industry demand, we believe visitation and spend will be stronger than 2010 but still impacted by dubious economic trends including reduced consumer wherewithal and high unemployment. On the flip side, a lower priced U.S. dollar and better convention volumes, we believe, will help 2011’s performance. On the supply side, capacity additions in Las Vegas (The Cosmopolitan) and Atlantic City (Pennsylvania capacity additions including SugarHouse and table games as well as Maryland gaming and Aqueduct) will be detrimental to operators in a hesitant demand environment, in our opinion. Thus, we believe the combination of sizeable new supply and moderate demand will provide for a challenging operating environment. Yet, we estimate the regional markets will experience a low single-digit increase in revenues along with higher EBITDA. In 2011, we will be watching how companies further align their cost structures to perhaps slightly higher revenues after rapidly reducing costs in 2009/2010. We expect little can be done to further reduce costs, and some operators may have to add expense to fill gaps left behind as significant cost cuts were implemented. We note, in the future when we look back on gaming, it will be clear, gaming is absolutely recessionary.
Our review of the regional market clearly indicates that regional gaming properties continue to hold up better than Las Vegas or Atlantic City. Over the past 12 months (same store basis), Missouri (SS ex-River City and President) at -4.5%, Iowa (excl. Diamond Jo) at -2.3% and Detroit +2.8% have been relatively stable during the downturn, while other regional markets such as Louisiana -6.4%, Illinois at -6.2% was down in the mid-single digits, indicating the relative stability of these markets relative to Las Vegas (SS excl new capacity) (-10%) and Atlantic City (-9.4%). Looking ahead into 2011, we expect regional markets to continue to out-perform Las Vegas and Atlantic City, as we believe they will benefit from a modest recovery in the economy, easy year-over-year comparatives and consumers’ preference toward inexpensive regional alternatives to Las Vegas. Further, many of these markets have little supply additions compared to Las Vegas/Atlantic Coast market.
During 2010, the continued growth of properties in Pennsylvania and the introduction of table games had a decidedly negative impact on the performance of Atlantic City assets. In fact, November 2010 marked the 27th consecutive month (and 32 out of 35 months in 2008, 2009 and 2010) of overall market revenue decline as Atlantic City operators continue to struggle with competition from Pennsylvania and New York. In addition, Atlantic City has been impacted by the higher unemployment in Atlantic City’s key feeder markets (New Jersey unemployment was 8.9 percent in October, while New York unemployment was 8 percent in October, 2010 and we believe this will move upward after the temporary hiring for the holiday season is let go of in Q1 2011) of New York and New Jersey and a continued soft regional economy. Our view of continued declines into 2011 remains intact as Pennsylvania supply continues to grow and existing casinos ramp up marketing efforts and undergo expansions to lure the day-tripper away from Atlantic City. With a recession well underway and unemployment on the rise, we think Pennsylvania casinos will have the upper hand versus Atlantic City. And as supply continues to come online in Pennsylvania, we believe Atlantic City gaming revenues beyond 2010 will continue to trend down. Expected supply includes Pennsylvania table games and SugarHouse that will not anniversary until July 2011 and September 2011, respectively. Further supply will come from the opening of Aqueduct in New York and many Maryland casinos expected to open in 2011.
From 2007-2010, Las Vegas operators have spent over $21 billion investing in new projects. Our capital estimate includes approximately 20,000 new rooms, which includes CityCenter, The Cosmopolitan, Hard Rock, Palazzo, Palms Place, Planet Hollywood’s Westgate, Trump and Wynn Encore. Now, the asset that remains is debt with significantly below-market cost of capital. Currently, much of that debt is becoming due and needs to be replaced or is being replaced with capital that is priced much higher than the original pricing levels. Clearly, the high levels of early 2009 are behind us but cost of capital is still higher than the cost issuers got used to in 2006. The result, for many, is an upside-down balance sheet with way too much debt and a P/L burdened with too much interest expense. Private equity believed these assets could be burdened with considerable amounts of debt but seemingly failed to take into account true cost of capital and other fixed charges that these assets need to maintain the physical plant. There is no doubt to us that many also failed to take into account the likelihood of a recession.
Another key reason we are seeing more capital raises and refinancing at higher rates at this time is due to the fact that operators are proactively looking to address debt maturing two to three years (for the right price) from now, well in advance, thanks to attractively priced capital markets. This is likely being done to avoid the difficulty operators experienced in 2008-2009, to address near-term debt maturities. While these capital raise events are certainly helping operators push out debt maturities by three to four years, we note these transactions are also having a dual impact on the P&L by increasing the interest expense burden and reducing free cash flow. As an example, MGM Resorts International raised capital via 10 percent senior unsecured notes 2016, proceeds of which were used to pay-down a portion of the revolver due in 2011. Another example is the recent transaction by Boyd Gaming, who refinanced its 7.75 percent sub notes 2012, reduced its bank facility by $1.5 billion and extended the bank maturity by one year to 2015. This refinancing was achieved, in part, by issuing $500 million of new 9.125 percent senior notes 2018, which was used to tender a portion of the 7.75 percent sub notes 2012 and pay-down a portion under the existing credit facility.
A key issue that raised its head this year was the potential legalization of Internet gaming in the United States. At the state level, New Jersey seems extremely close to becoming the first state to legalize Internet gaming for residents residing in New Jersey only. While the potential legalization of federal online poker appears to be losing traction at this time, we do not see a renewed effort heading into 2011/2012, especially given the Republican party-controlled House of Representatives. While online gaming may appear to be a huge opportunity, we believe it is too early to estimate revenues generated from the online gaming business and capital invested, given the lack of clarity with respect to rules and regulations and passage either on a state or federal level.
Grant Govertsen
Principal
Union Gaming Group
Stability and growth are the two words that we believe might best describe the gaming industry in 2011. Stability largely applies to the United States and growth applies to markets like Asia. While there will be some pockets of growth and expansion domestically, we would consider it a victory if downward pressure on the consumer were to subside and gaming revenues were to begin to recover.
On the Las Vegas Strip, most of the relevant data points that investors pay attention to are showing signs of life for the first time in three years. Most of these metrics, like the number of visitors, room rates, occupancies and, more importantly, gaming revenues, have all been increasing modestly over the last several months. As we look into 2011, we believe these trends will continue to improve, although it will likely take several more years before we see casino-resort cash flows close to the 2007 peaks. Another important thing to watch is the strength of the convention business, which has been critical to midweek business in Las Vegas over the years. For economic and political reasons, the convention business suffered greatly over the past few years, but appears to be heading into recovery mode as most operators have indicated bookings are up notably in 2011. This is important as not only will it benefit occupancy rates, but mid-week room rates as well. It is this increase in room rates—whether mid-week or weekend—that will really help put the Las Vegas Strip on the road to recovery as most of the increase in room rates will flow through to the bottom line given that almost no costs need to be added back into their businesses as room rates increase. This largely holds true for entire casino-resort operations; they all have significantly reduced their cost structures through the downturn and are running much leaner operations. As a result, they will be able to generate peak cash flows even without a return to peak revenue levels.
In the regional domestic markets, we think gaming expansion will be a key focus for many state legislatures as they deal with staggering budget deficits and a populace that is in no mood for tax increases. For many, the concept of gaming expansion will be presented as a partial means to address these budget gaps. As always, we think that it will be very difficult to pass this legislation. The gaming industry is particularly focused on Illinois, Kentucky, Louisiana (final license), Maryland (Baltimore license), Massachusetts, Ohio and Texas, to name just a few.
Like last year, we believe that Asia will continue to garner significant attention and the biggest headlines. 2011 will represent the first full year of casino-resort operations in Singapore, which is likely to overtake the Las Vegas Strip in terms of gaming revenues from just two integrated resorts. Macau, of course, had an amazing 2010 with spectacular growth propelling it to be four times the size of Las Vegas. Next year will also see the last significant new supply come online in Macau at least for the next several years, with the openings of Galaxy Macau early in the year and Las Vegas Sands / Sands China’s projects late in the year. As the gaming revenue base continues to grow, we expect year-over-year growth to begin to moderate, although remain impressive by just about anyone’s standards.
Finally, we still think the domestic environment for gaming equipment suppliers will remain difficult in 2011 given a limited number of new casino openings and expansions, as well as casino operators who are still reluctant to expend significant capital on new slot machines. There are, however, a few bright spots, like the video slot expansion in Illinois, which should benefit the back half of the year and the opening of a temporary facility at Aqueduct.
Union Gaming Group is very excited about the outlook for the gaming industry and feels fortunate to be a part of it.
Claudia Winkler
President
G.H.I. Solutions Inc.
We have spent 2010 “bouncing along the bottom,” but we are starting see signs of life. In the fourth quarter we finally started seeing marginal upticks in revenue in most markets and many publicly traded companies are reporting encouraging results. Another bright spot was that G2E was very busy this year. Operators and the vendors expressed optimism that we are turning the corner. All signs are pointing to 2011 being a year of slow growth.
I live in Las Vegas, the market hardest hit by the global meltdown. Recent observations give me a reason to be optimistic about 2011. Today’s Las Vegas Review Journal (Dec. 10, 2010) reported that for the first 10 months of 2010 Strip gaming revenues are up 5.4 percent. Personal observations tell me that the airport is getting busier. Driving back from Los Angeles on the Sunday after Thanksgiving, the traffic going west on I-15 could only be described as a “parking lot.” Local Las Vegas traffic is getting more congested, and the parking lots at the local shopping malls have been packed for the upcoming holiday season.
What is driving all the traffic? Big discounts and pent-up demand. We were all shell shocked after the markets crashed in late 2008. We all went into austerity mode. Belts tighten, capital dried up and companies reorganized and downsized. We all know that consumer spending drives our economy. With all the bad news in 2008 and 2009, consumers stopped spending, 8 million jobs were lost and many people became unemployed or under employed. We have a long recovery ahead. It’s going to take some time to replace those jobs and get consumers spending again.
But, we will have prosperity again. Americans are by nature resilient, creative and optimistic. We now have the “new normal.” The past couple of years have shifted our spending patterns. We are always looking for the value proposition. Today, if it’s not on sale or a “great deal,” we are not going to buy. Technology has advanced to the point that we can comparison shop with the click of a button or have offers automatically sent to our smartphones via SMS or e-mail.
The “new normal” and the advances in technology require casino and hospitality operators to have a renewed focus on customer service, customer loyalty and communicating a compelling value proposition message. Customers want a great guest experience and value for their money. Just because a customer has your player’s card, no longer guarantees that they will stay loyal. Ask your good customers if their wallet is full of your competitors’ player’s cards, too.
This is where we find ourselves in the proverbial Catch-22. Operators have cut staff to the bone since the majority of their operating expense is labor. That means that delivering a great guest experience just got more difficult. Marketing budgets have been slashed, so getting the word out becomes more challenging. And IT budgets have been shredded. But, there is good news related to the technology spend. CIOs and CFOs are willing to look at technology that will support or enhance the guest experience, increase revenue or reduce labor as long as it supports a solid ROI.
Vendors and suppliers must be able to document a compelling business case for their products and services. The ROI must be fully developed. Telling a CIO or CFO that a solution will save an FTE 10 percent of their time or drive increased traffic to their property is not a compelling business case. Reducing staff by a full FTE or increasing revenue because the solutions will drive the right customers through the door or increase the operator’s share of the customer’s wallet are the models and the metrics that must be provided as part of the sales process.
The “new normal” requires an intense focus on high-value items. This includes understanding the value proposition of your technology and software portfolio, leveraging the technology and software that you already have to extract the maximum value and ensuring that new technology requirements are fully defined as part of the selection process.
We are building our team of professionals and positioning our services to assist clients to achieve these requirements. Knowing what you bought, how to use it, how to implement it and critically evaluating the requirements and value of what you might buy tomorrow are key success factors in the “new normal.” Failure is not an option. We have to get everything we can out of what we buy!
Linda Gordon
Director of Marketing
SCA Gaming
We know the faltering economy has had an impact on the gaming industry that is unprecedented. Reports of revenue increases in major markets in the third quarter of 2010 along with projections of controlled growth in 2011-2014, is nothing but good news for gaming operators. It is remarkable that an industry that has been impervious to economic downturns in the past has had to respond in ways they never imagined, albeit some operators and markets have been able to respond better than others.
Gone are the days of “build it and they will come.” Throughout the recession, gaming companies have had to find new ways to attract and retain customers. As business levels dropped, competition increased, creating a need for innovation in casino operating and marketing plans. In a sense, the recession, as painful as it has been, has provided opportunities for casinos to learn how to market more efficiently. Smart operators understood that simply controlling expenses wasn’t enough. Lower operating costs at the expense of customer service and an imaginative and compelling marketing plan may be forgivable in the short term, but cannot and should not be sustained.
At SCA Gaming, we developed promotion concepts that gave our clients the flexibility to react to market conditions and adapt accordingly. In an advisory capacity, we were able to predict what promotion or initiative would work best in reaching the casino’s marketing goals based on trends and successes we were seeing throughout the industry. We continue to respond with promotions that are scalable, from retro-themed floor promotions to technology solutions via interactive kiosks with multi-platform game offerings and player tracking interfaces.
For 2011, I feel that “everything is on the plate.” I anticipate that gaming operators will need to continue to market aggressively as well as manage the expectations of their players. Marketers will continue to walk the fine line of customer reinvestment vs. acceptable profitability. I recommend vigilance with regard to offer consistency and a priority on unrelenting customer service.
Saverio Scheri
Managing Director
WhiteSand Gaming
2011 rolls in with hope and anticipation of the recovery we expected last year. Although the last major gaming resort has opened in Las Vegas for the foreseeable future in The Cosmopolitan, hope springs eternal in Atlantic City and in other locations around the country. Also, acquisition rumors have steadily increased, leading us to believe that banks are willing to come back to our industry and a number of properties will finally change hands this year.
We hope to see fewer bankruptcies this year as well, but we also believe that much of the market is very tenuous and some casinos continue to teeter between sustainability and failure. No longer able to weather increased competition, market downturns and fickle customers, some casinos must pray it doesn’t rain because they weren’t able to fix the roof last year.
As ever the optimist, I believe this year will be better than last year, and we will see some important benchmarks begin to notch up. Room occupancy, ADR, win per unit and top-line revenue are all poised to see upticks. Granted, it won’t be any major rebound, but it will start heading in the right direction.
Since the development market has dried up, investment banks will be looking to make their money through transactions and IPOs. Look for money to come back to the market to allow key acquisitions and companies that had gone private to become public once again.
In 2008, I wrote that some people were predicting that the recovery for the gaming industry could happen in mid-2009, or as late as 2012. I was hoping for 2009, but it looks like 2012 might be the year. So as they say in sports, 2011 will be a rebuilding year. Look for us to win the World Series in 2012.
Jody Lake
Senior Vice President and General Manager
M Resort Spa Casino
Our goals for the coming year begin with the same focus and approach that we had in 2010—develop our database, fine-tune our marketing objectives and deliver on our Forbes 4-Star service. We are excited to move into the New Year under the Penn National umbrella. Penn offers a tremendous wealth of experiences, knowledge and resources that can only help us to grow in 2011.
For the M to grow in the coming year and position itself as a leader in an ultra-competitive market, we need to continue to understand the market—what our competitors are doing and what the guests want—and execute on our plan to “please the guest” through excellent service. The service initiatives and core values implemented by Anthony Marnell are seen throughout the property and our team believes in these values. We know our culture is part of the overall guest experience, and going into 2011 we will continue to deliver our service culture to the guest.
To remain profitable as an operator, cost-effective marketing ultimately is the name of the game and will continue to be for quite some time. In the past, operators had the ability to “throw ideas against the wall” and test what worked and didn’t work and move forward. With the decrease in spend from guests over the past five to six years, the decrease in cash-flows, and the general burden of increased operating costs, the ability to spend outside the norm isn’t available as it may have been in the past.
As we do now, we will spend more time this next year with the guests, speaking to them, understanding what offers they prefer, what offers they don’t, as well as what separates us from our competitors. Our competitors are smart operators and can draw from years of experiences that we don’t yet have; however, with Penn we are able to look at their experiences in many different markets and bring cost-effective ideas that have worked elsewhere to the M. With their keen insight into our marketing programs and reinvestment strategies, we are applying new tactics that we believe will yield better results for us as well as our guests. Rather than offer every guest freeplay, point multipliers, gifts, food, etc., we will focus our efforts on reinvesting in each segment with offers specific to their desires that ultimately will drive increased visitation and do so at a better reinvestment to the property.
As a new property in a down economy, it is challenging to grow a database. We anticipate, and are already experiencing, growth with respect to our out-of-town segment. Adding Penn customers will continue to drive this segment and we hope to see the repeat visitation out of those customers as we have seen from our current OOT segment.
We will continue to drive our player development strategies through high-touch events and focus on making the M the home property for as many players as we can on a daily basis. With respect to the slot floor in 2011, we’ll continue to expand the ability of the slot system, add bonusing features throughout the floor and provide incentives to specific game-types thus appealing to a broader audience versus the traditional separation of offers for video poker and non-poker players.
The M has many advantages that come from being a new property. Our facility is new, fresh and clean and we maintain it in such a way that sets us apart from our competitors. With a new property comes newer technology—the latest and greatest slot products, LCDs, etc. It helps to have 1,900 of the latest units on the floor with the newest features right from the start rather than having to convert, replace or purchase new product to keep up with the changes over the past several years. We will continue to maintain our facility, products and service levels to continually separate ourselves from the market.
Jim Murren
Chairman and CEO
MGM Resorts International
I’m looking forward to 2011.
We’ve finally reached a critical juncture of this recession and are beginning to see some turn-around after the “bottoming out” of Las Vegas tourism. I’m eager to leave the economic devastation behind and step toward some brighter horizons.
Looking ahead, I’m pleased to see the momentum of stabilizing Strip occupancy rates, gradually climbing ADRs and forward-booking trends gaining traction. We are recovering, but it is a slow, tough recovery.
At the end of the third quarter, I told Wall Street that our newest resort, ARIA at CityCenter, has begun to emerge in its rightful place as a luxury prime property here in Las Vegas. CityCenter is now on the positive side of the balance sheet, and ARIA has continued to enhance its market share.
I don’t see us having to wait very long to find our first bright light in 2011. One of the most important aspects of our recovery, our convention business, is showing strong bookings on the Las Vegas Strip, beginning in the first quarter 2011. Before the end of the first week of the New Year, the Consumer Electronics Show, one of the biggest shows of the year, will bring tens of thousands of guests to town.
To put the convention business numbers into context, Las Vegas had about 6 million convention visitors in 2007. The recession saw that figure drop dramatically to about 4.5 million convention visitors in 2009.
Fortunately, companies that hold conventions are coming back and they are now venue-shopping more aggressively, realizing that Las Vegas is a more cost-effective destination. In turn, our company has become more competitive and innovative in managing this essential part of our business. As a result, we expect to see those numbers to jump in 2011 and for our resorts take their share of that business.
One of our greatest challenges still lies in improving hotel room rates. Our customers now expect a greater value and a bigger bang for their buck than they ever have, and our goal is to continue to provide them with an unparalleled hospitality entertainment experience.
MGM Resorts is actively cross-marketing the attractions offered at our many properties, and we’ve made it easy for guests to enjoy a variety of attractions beyond the four walls of the resort where they stay.
Our new customer loyalty program, M life, will go far in placing our resort portfolio in the center of the spotlight. Already successful at our Mississippi and Detroit properties, 2011 will see M life launch at our Las Vegas resorts. The biggest difference from our old players club is that M life will offer real-time recognition. It also offers a tier-structured membership that will better reward our loyal guests and allow us to better leverage our portfolio of assets. M life gives members access to rewards, privileges and members-only events at 15 participating MGM Resorts destinations.
We will continue to use enhanced state-of-the-art technology to enable our company to market our products more effectively.
The New Year will also see MGM Resorts International broaden its global scope and presence, opening two new resorts in China under our MGM Hospitality division. They will be the first of many new facilities that will expand our famous brands to all corners of the world. MGM Grand Sanya, a non-gaming resort in Sanya, China, is scheduled to open in the fourth quarter. Other developments are underway which will bring the MGM Grand, Bellagio and Skylofts brands to such places such as Egypt, Vietnam, India and the Middle East.
I’m confident that 2011 will prove an interesting time to be part of this industry. Along with the 62,000 employees of MGM Resorts International, I am looking forward to an exciting and prosperous year.
Buddy Frank
Vice President of Slot Operations
Pechanga Resort & Casino
There are signs that the worst is over. As I write this in early December, there is breaking news of year-to-year gains in slot revenues in downtown Las Vegas for the first time in 28 months. Here in Southern California, many operators have enjoyed modest year-to-year growth for the last nine months or so. Many; not all. From my perspective, it appears that those casinos that made some recent investment in their slot products have been receiving a bigger share of the small piece of economic recovery than those that did not. There’s nothing unusual about that; except that when things were headed down, there seemed to be complete equality. We all went down together. Why the seeming discrimination on the way up?
I have a theory that has a lot to do with great products that have been waiting for the right opportunity. And about some bad ones that hid under the excuse of recession. Let’s start with the negative. About three years ago, the designers at several manufacturers had an attack of minimalism. Cabinets were streamlined and anything resembling blinking lights or shiny surfaces were eliminated. The results were crisp, clean cabinets. Colorful belly glass, backlits, neon and any form of flashiness was seemingly forbidden. Since so many machines emerged simultaneously in this genre; someone must have liked them. But it was soon clear that slot players weren’t fans.
IGT’s early AVPs were the first offenders, but others followed blindly like the Bally Alphas, Aristocrat’s Viridian and few others. These machines escaped immediate consequences of their weak design because nothing—old or new—was working as we moved in 2008.
I think G2E 2010 proved my case. Nearly every manufacturer has modified and repackaged their games … and the early results indicate they’re doing great. Two specific cabinets led this revolution back to excitement last year: the Konami Podium and the Bally V32. The Podium had startling bright lights. The V32 had an oversized, HDTV-like screen. They were highly visible, and they were both instant hits.
Now, IGT’s Sex and the City looks like a Times Square billboard, the new Bally Alpha 2 now has wider screens with colorful side lights. Rockin’ Olives from Aristocrat has chrome molding that lights up like a rainbow. And Konami started their features spinning in a different direction with the Revolution. The old cabinets said subtle. The new cabinets say “Play me.” And it’s not just the big guys getting in the act. Colossus (from ex-CDS founder Steve Weiss), the Gold Series from Rocket and the new cabinets from pioneer Len Ainsworth are all promising a return to more excitement. These new machines are terrific. And if you invest now, I’ll predict you’ll be getting your share of the emerging and growing demand.
Combine these new cabinet appeals with some solid playability features such as inventive bonuses, multiple progressives, flexibility in setting average bets and more volatile math and you’ve got the formula to escape the last grasps the great recession of ’08-09. So for the first time in three years, I’ll predict that you can do it all without buying a server-based system … at least for the next few months.
Sim Bielak
VP of Sales and Business Development - Casino Gaming
Crane Payment Solutions
This has been a very busy and sometimes challenging year for us. However, with some good opportunities this last quarter, strong attendance at G2E, and customers talking about real projects, I think we will see 2011 as being a much better year. Some positive news from us is that Crane Co., our parent company, has acquired Money Controls and is now part of the Payment Solutions division. Money Controls is among the leading payment solution providers to the casino gaming market and the global payment solutions industry. We will continue with our commitment to focus on delivering best in class customer service and solutions for your business.
In terms of the markets, we will continue to focus internationally where we have a lot of support from our customers. We also want to expand on the presence we have created here in the North American markets. We see opportunities in the VLT markets in Europe and further growth in the Asian casino gaming market.
We are very excited about the prospects for next year now that we have a larger product portfolio to offer to our customers. The Ardac Elite from Money Controls has cornered the market in South America and can now be offered alongside the CashCode one™ bill validator. This gives us the opportunity to offer our customers a broader range of products versus just offering them a singular solution. 2011 will be a big differentiator for us as the acquisition has made Crane Payment Solutions the second largest payment solutions provider globally.
Product wise, the Ardac Elite has some very innovative features such as state-of-the-art imaging technology and includes unique “last bill” technology. Money Controls also has several coin hoppers ideally suited for the gaming markets and cover 95 percent of the world’s coin sets.
The CashCode brand has successfully introduced the 2500 Note Cashbox for redemption kiosks as it has been very well received by many operators, cutting their drop time by more than half. Even more impressive is that collection time has fallen by 250 percent in some locations where we’ve had it on trial. We will also be promoting our 800 Note Cashbox, which was launched at G2E. For casino properties that have a higher utilization of certain machines, the 33 percent more capacity will help them reduce emergency drops. Crane Payment Solutions also continues to offer the oneCheck™ system as a no-cost, performance and cash management system stemming from the CashCode one™ product family.
Technologically, we are very excited to have such a broad range of bill & coin validation options, bill & coin recycler options and the coin dispense & hopper options to offer customers. We really are the only true full payment solutions provider for the global gaming industry including casino gaming and VLT applications as well as AWP since there is a requirement for both bill and coin to be accepted and dispensed in many of those markets.
The acquisition of Money Controls has not only provided us with a broader range of products, but also a larger sales and support team. From this perspective, we feel the larger team will create greater opportunities for us to be able to spend more time with our customers to ensure that we are looking after their business needs and make sure that when we’re looking at new technologies and what we can do to improve customer’s business, that we are doing it firsthand. It also gives us an opportunity to accelerate some of the growth plans that each company had as independent businesses now that we have come together as one team.
Overall, there definitely seems to be more optimism looking into the New Year compared to previous years. Many operators have improved their balance sheets and are looking to start spending some money again to grow their business. Specifically for the casino gaming business, there were some positive initiatives identified in this last quarter and moving into 2011. There are quite a few new properties coming online—less than in the past—but again, it’s growth in the market which is positive for not only manufacturers and operators but suppliers as well. We’ve endured the last three years and now everyone has a much more optimistic view of the future, and that is very encouraging.
Craig Askins
Executive Vice President Operations
Cole Kepro International
Everyone associated with the gaming industry is aware of how the worldwide economic slowdown has negatively impacted gaming in 2010. However, we at Cole Kepro International (CKI) are very optimistic that 2011 will see a gradual upswing in the gaming industry as well as the overall global economic health, and we believe we’ve positioned ourselves to assist our customers for this anticipated upswing. We have a loyal customer base that we are extremely thankful for, and their satisfaction with our products is always our top priority. We work closely with our customers to ensure they get the product they need and expect as well as getting it when they need and expect it. Our sales, engineering and operations staff work with our customers to keep their product current when it comes to technology and trends. Many of our existing customers have been with us for quite a number of years and we’ve built a relationship based on mutual trust and cooperation. Our success depends on their success.
In the last two years (particularly the last year), CKI has made a strategic effort to increase our international business. We have targeted the European, Asian, and Central and South American markets. We believe that we can assist customers in these markets by offering them the same services we presently provide our existing customers. Our efforts in these international markets are still new, but we are very pleased with the reception our products have received to-date. We are extremely optimistic in regards to these markets and we plan to continue and expand our international sales and marketing efforts.
Gaming in the North American market has changed recently with new states passing various gaming initiatives and/or expansions. As our customers grow their market share in existing or into new jurisdictions, it is our responsibility to be ready for them with the products they need and want for each location. Although there are typically many starts and stops with new jurisdictions, timing is important and we have to be prepared to supply the needs of our customers to their specific schedule. To accomplish our goals—domestic and international—we recently completed a management realignment under the direction of our President Glenn Wichinsky. At the same time, we have had a small increase in our strategic staffing to better serve our existing and potential customers. Although the global economy may be down, we have not, nor do we plan, to reduce our efforts or staffing associated with research & development.
One of our existing methods of assisting our customers is via our Fast-Track® concept. This is a product that allows our customers the ability to change motherboards and/or software platforms quickly and easily without the need to buy new or re-engineer any existing cabinets they might own. To make things easier for our customers, we anticipated that change will happen and we designed our hardware to be “modification friendly.” Our engineers have experience with many different brands of motherboards, so we have integrated this concept in order to assist our customers in meeting their need to get to market fast, make quick changes, and at the same time not create a financial burden for them.
We are presently working on some new concepts planned for release in 2011 that we believe will also prove very beneficial to our existing as well as potential new customers.
We believe in workforce stability along with organizational esprit de corps and we’re very proud of all our employees. One of the methods we use to maintain employee morale is offering internal advancement to the highest levels of our organization. We presently have three vice presidents (Dirk Haton, VP product development; Leticia Ochoa, VP operations; and Keith Ewy, VP sales & quality) who have been with CKI for many years and have risen up through the ranks to their present VP positions. While we’re not against new blood and ideas, from time to time we do believe offering employees growth opportunities is an excellent way to build teamwork, ownership and good solid morale.
We strive to provide hardware to meet our customer’s requirements (quality, delivery, technology and price). Our existing customer base includes many small customers as well as some very large customers in the gaming industry. It is our goal to satisfy each and every customer who believes in us enough to place an order with us. We take each and every order very seriously and we believe with our new organization and team in place we can supply the right product at the right time to every customer who comes to us. We anticipate a good 2011 for CKI, for the gaming industry, and for the economy in general.
Murtaza Amiji
Director of Business Development
Tyco Electronics, Elo TouchSystems
If obstacles are great incentives, then the past few years have offered the gaming industry unlimited encouragement to innovate and recalibrate in order to weather one of the worst economic downturns it’s seen in decades. Most affected have been the traditional gaming hubs in the U.S.—namely Las Vegas and Atlantic City—destinations that overdeveloped and dramatically extended themselves under the assumption that the “bubble” would last. Adding insult to injury was the self-preservation activity of states (and other emerging markets) to increasingly subsidize gaming as an additional source of revenue, so indigenous populations that once traveled to gaming destinations were offered more local, close-to-home choices.
Add to these challenges the fact that the traditional gaming demographic, primarily baby boomers, has found itself with significantly less discretionary income due to the recession. This said, it is the younger generations, particularly Gen-X and Gen-Y, that need to be seduced into destination travel in order to make up for the older consumer base that previously kept Las Vegas and Atlantic City thriving.
Yet Gen-X and Gen-Y have typically not found these gaming “meccas” of their parents and grandparents particularly appealing. Tomorrow’s customers are extremely advanced in their use of new technology and have become increasingly more discerning about where they spend their entertainment dollars, making it essential for gaming operators to deploy equally sophisticated and differentiated gaming offerings. Floors need to stay fresh and abreast of the most compelling options to drive play and maintain an edge over the competition. Luckily technological progress was spectacular in 2010. Systems are interfacing in new and holistic ways to combine interactive video, lighting, sound and signage. This convergence of interactive displays, dynamic game content and systems-based technology is fertile ground for industry-changing products and a new generation of consumers. It reflects a transformational approach to gaming technology, where the player experience—rather than the game—is becoming the focus.
On this note, 2010 was an impressive year of touch technology advances from Tyco Electronics Elo TouchSystems revolving around the gaming, hospitality and retail industries. In fall 2010, we introduced the Elo TouchSystems Interactive Digital Signage (IDS) portfolio, a state-of-the-art line of high-definition, large-format interactive displays offering superb customer engagement and content measurement capabilities. These highly configurable, stylish and durable large-format displays can be utilized for interactive way-finding, video directory and “virtual” concierge services for casino properties, and provide the added bonus of delivering game-performance data and customer feedback—data that can effectively influence floor operations, keep content nimble and even direct future game development and purchasing decisions. We predict that casinos will increasingly invest in enhanced interactive signs and displays because this medium provides innumerous opportunities to solidify brand loyalty, communicate brand experiences and deliver relevant, revenue-generating data.
We also launched our new B-Series All-in-One (AiO) touchcomputer family, a portfolio that answers the retail and gaming industry’s need for a compact, ruggedized touchcomputer platform while supporting a wide range of POS, POI and casino game management applications. The B-Series offers outstanding transaction flexibility, automation and efficiencies, making it a system of choice for high performance and processing power in back-end casino operations management. Additionally, the B-Series, alongside its sister D-Series portfolio, recently launched versions pre-installed with Microsoft Windows 7 and POSReady 2009 operating systems for added configurability, productivity and application longevity.
But wait, there’s more. Coming in early 2011, Elo TouchSystems will ship the first 22-inch open-frame touchmonitor (2242L) complete with our proprietary multi-touch surface acoustic wave (SAW) touch technology, IntelliTouch Plus. This new product will provide OEMs and design engineers the ability to develop multi-touch applications compatible with Windows 7 for dynamic, reliable touch-enabled gaming, hotel concierge and other guest-engagement hospitality experiences. Finally, Tyco Electronics recently acquired Sensitive Object, a company focused on the development of touch technologies and an organization we expect will bring significant new R&D capabilities for the advancement and expansion of our touch solutions offerings.
With so many dependable and scalable monitor and display advancements at our fingertips, Elo TouchSystems sees 2011 as a time of new and worthwhile touch technology investment. Quite simply, advances in interactivity applied to casino floor, hotel and retail operations not only enable operators to optimize their operational configurations, but revolutionize the game conversion process and provide customers with the experiences most relevant and compelling to them.
Nick Micalizzi
Vice President of Domestic Sales and Marketing
FutureLogic Inc.
As a technology company—and not simply a printer manufacturer—FutureLogic is well positioned going into 2011. Although the global economic slowdown will continue to pose challenges to the industry as a whole, FutureLogic will continue to focus on fulfilling our customers’ need for the best technology and global support. With more than 1.3 million TITO printers shipped to casinos around the world, and with 14 industry awards since 2003, we have firmly established ourselves as the leader in new technology and productivity-enhancement solutions for the gaming industry. Our leadership position is a result of working closely with EGM customers, casinos, regulatory agencies and players to monitor trends and develop the interfaces needed to make play faster, easier and more convenient for casino patrons. Our collaborative relationships also make it possible for us to anticipate technology trends and “future-proof” our products, facilitating migration to emerging technologies and applications.
We continually conduct studies around player behavior, looking for ways to create new products and applications that help build loyalty and enhance the gaming experience. In addition to providing robust hardware and software solutions, our service-oriented management approach reflects our goal to be our customers’ best technology resource. By partnering with global EGMs and maintaining a nimble, flexible operation, we will continue to deliver the pioneering designs, high-performance products and world-class support that will be needed to advance in this market.
Our ongoing commitment to gaming technology is evidenced by our new product introductions. For example, at G2E 2010 we showcased our patent-pending, cost-effective PromoNet® promotional couponing solution. This hands-on demonstration allowed attendees to see, first hand, the ease-of-use and flexibility of our solution on gaming machines from Aristocrat Technologies Inc., IGT, WMS Gaming, ATRONIC and SPIELO, Bally Technologies, Konami Gaming Inc. and Novomatic.
Promotional couponing has clearly revolutionized the casino environment and created new opportunities for printer manufacturers. The ability to issue a bar-coded promotional coupon to both carded and uncarded players helps casinos attract and retain customers. For players, these offers provide valued savings and incentives, thereby enhancing their casino/resort experience. With non-gaming revenue becoming more important to casino resorts and complexes, linking reward programs across multiple leisure experiences, as well as casino floors, has become an important initiative for marketers.
By directly linking promotional campaigns to specific player actions, activities or behavior, TITO printers become a multifunctional marketing tool. FutureLogic’s PromoNet promotional couponing solution allows casinos to automatically trigger a marketing campaign based on game play metrics, player tracking information, POS systems and redemption terminals. For instance, a player who has just hit a number of pre-determined triggers may be issued a bar-coded promotional coupon that can be redeemed at any of the bars or restaurants within a resort.
Another example of our future-proof technology was introduced in November 2010: the new GEN3 Evolution® printer. Designed specifically with promotional couponing in mind, the GEN3 Evolution printer doubles the print speed and offers more than twice the ticket capacity as compared to other gaming printers. It is also the first gaming printer equipped with separate processing environments for TITO and promotional couponing. This product takes printing to a new level with the latest printing and communications technologies providing photographic-quality printing for eye-catching coupons, increased ticket capacity to 450 tickets that can save operators up to 30 refills per printer per year, and a print speed of eight inches per second to deliver a ticket in less than one second. Soon after its introduction, the GEN3 Evolution printer took an “Honorable Mention” in Global Gaming Business annual Gaming & Technology (G&T) Awards.
Also in 2010, FutureLogic was awarded patents on a Dual Port gaming printer that is connected to both a gaming machine and to a promotional host. And in early 2010, we introduced the Eclipse™ universal ticket and receipt printer, which is designed for video lottery terminals (VLTs), betting terminals and unattended kiosks. In addition to these products, FutureLogic is also the manufacturer of the game-changing TableXchange® printer/scanner. This revolutionary printer/scanner connects table games to the casino’s existing TITO network by scanning and printing TITO vouchers at the table.
Since it was founded in 1983, FutureLogic Inc. has developed many of the ticket in/ticket out (TITO) gaming printer’s features and functions that have become today’s industry standards. Since then, FutureLogic’s printers have evolved with the cashless gaming industry, setting new standards for reliability and innovation. By leveraging the latest printing and communication technologies, and by collaborating with our EGM customers, casinos and regulatory agencies, we are effectively providing “tomorrow’s innovative printing solutions today.”
Bob Yabroff
President
Gary Platt Manufacturing
Gary Platt Manufacturing had a solid 2010 and we see many of the future projects that we have been working on coming to fruition in 2011. We think 2011 is going to be an interesting year. We finished 2010 strong, and activity for 2011 seems to be higher than it was in the beginning of 2010. We are very optimistic that the industry is heading back in the right direction.
We provide companion seating for most of the U.S.-based slot manufacturers. We will be concentrating on distributing our seating in additional areas of the world through expanded representation. We are looking into foreign markets in 2011 more than ever before. Latin America has shown interest, Mexico is still expanding, and we also see more expansion in Canada. The Eastern Europe market is also moving forward. We will be attending the ICE show in London in January for the second straight year and we hope to introduce our seating products to additional European markets.
In 2010, we saw more interest in our designer series seating and will expand that niche in 2011.
We specialize in the X-Tended Play line of seating for slots, blackjack and poker for all casinos worldwide. Our newer designs incorporate the X-Tended Play construction that we are noted for and they provide the design community with additional options for seating that will give casinos and their players extra comfort.
We will be attending the following gaming shows in 2011: ICE, NIGA, Canadian Gaming Summit, Southern Gaming Summit, Great Plains/Midwest Gaming Show, Northwest Indian Gaming Conference, Oklahoma Indian Gaming Association and G2E.
We continue to believe that 2011 will be a solid year for supplying seating for participation games for slot manufacturers including Aristocrat, Bally, Cadillac Jack, IGT, Multimedia Games, Shuffle Master, WMS and others.
Mark E. Gasser
President
Gasser Chair Co.
Gasser Chair Co. is encouraged by the level of customer interest and pre-sales activity demonstrated at the recent G2E show, as well as inquiries from our national and international sales organizations.
Many of our customers were hit hard by the global recession, particularly the tightening of credit financing and a significant drop in player visits from 2008 through 2010. We are now seeing requests for updated quotations, newly initiated seating requirements and new construction related inquiries. Many strong operators who held off making capital expenditures during the weak economy are now confident enough to move forward with renovation plans and furniture replacement. Some multi-property operators that historically allocated several million dollars for upgrades in past years had budgeted “zero” capital for furniture replacement over the past 2 years.
In an effort to stretch our capital expenditures, some operators have opted to purchase Gasser’s unique factory refurbished “Proven Solutions” seating, in lieu of buying new, saving between 20 and 35 percent on their seating investment. This program offers chairs and stools that Gasser has taken back in trade and performed an extensive “frame off” restoration process that renders furniture in a “like-new” condition that is difficult to distinguish from new. One drawback to this option is that the program is limited to those models on hand.
Gasser took advantage of a lower demand on production time to upgrade and increase its manufacturing capabilities by installing a state of the art powder coat line for metal components and a spray finishing system for wood chair frame components in our facilities. In addition, new product development was put into high gear and several new models and features were added to our product line in 2010.
Our new ‘Floating Disc’ base for slot seating was introduced at G2E, to great enthusiasm by casino managers. This innovative stool base greatly reduces the common complaint of difficult mobility issues associated with desirable, yet problematic circular stool bases. Increased customer and staff satisfaction can be expected as a result of its ease of movement.
Also at G2E, we introduced the “Park Avenue” seating collection, featuring unique styling and plush comfort, as well as new models to the popular “Players Choice” casino seating.
Overall, we anticipate 2011 will have stronger economic activity all around as many customers stated that they look forward to the opportunity to equip their casinos with the new model offerings.
Tom Nieman
VP of Global Marketing
JCM Global
Thankfully, signs are pointing to recovery, slow as it might be. The Dow is up, the AGEM Index is up, and the spirits were up at G2E. There was clearly a more upbeat attitude than in 2009. 2011 is shaping up to be a great year for JCM as well.
Our award-winning iVIZION® is now available and is being installed. Everywhere it is running, operators are reporting back tremendously positive results, and we couldn’t be happier that the industry is catching the “vizion.” With an aging large population JCM WBAs, operating inside an aging population of slots on the slot floor because of slowed replacement cycles in North America, we expect iVIZION to be the go-to replacement product. We are also thrilled to be a strategic technology partner with IGT, and to announce that IGT has named the iVIZION its default product in all of its devices, globally.
We designed iVIZION to be the foundation of intelligent validation, so the industry can expect additional applications and innovations to be added to iVIZION in 2011 and beyond.
In 2011, we will also be introducing our newest innovation, the iPRO™. iPRO is a new secure and flexible way to increased profitability because it comes with surface-mounted LED (SMLED) technology, one of the most sophisticated sensing and anti-fishing packages we have ever created. iPRO’s modular design means it can quickly and easily replace an existing WBA or UBA transport. We anticipate the iPRO will be most well received in Latin America because of its superior sensing package, the sealed bill path and the proven anti-stringing capabilities.
In 2010, we successfully brought some key IP litigation to a close. Now, we are expanding our research and development internally and through key alliances with IGT and Leap Forward Gaming, and we expect to see some exciting announcements in 2011, based on these strategic investments.
The downturn taught us two things: First, consumers still love cash. With credit sparse, cash became the undisputed king again, which meant operators had to rely more than ever on the power and ability of their validation equipment. Second, the downturn taught us that when cash is hard to come by, criminals become much more creative in their counterfeiting and stringing attempts. Fortunately, our products defeated cheats globally, and we can move into 2011 more confident than ever in our new and existing products to deliver the most robust security available to our operator partners.
From all of us at JCM Global, Happy New Year.
Tom Nugent
President - Gaming and Retail
MEI
It is always better to be an optimist rather than a pessimist. After three very difficult years for our industry, there now may be reason for optimism.
Some of that optimism was on display at November’s G2E show. It has been awhile since I have heard so much enthusiasm for an upcoming year. As good as that was to hear, that’s not to say that 2011 will be a return to the glory years. The signs of growth are beginning to appear.
The economy is improving in many parts of the world. Although it’s not as fast as anyone would like, and problematic European countries continue to emerge, there is an emerging sense of financial stability in many economies. Australia and Canada are rays of hope. Ultimately, our industry can’t totally recover until customers globally have the financial wherewithal to return. That process appears to be beginning.
The large capital projects, which were conceived when the economy was much better, are now largely complete and generating revenue. This has had two positive impacts: 1) the new properties are now generating opportunities for industry suppliers, and 2) large operators have begun to reinvest available capital into existing properties as opposed to funding construction efforts.
New jurisdictions continue to open. The Italian VLT market offers 57,000 games worth of opportunity. Singapore has proven to be a great example of how a country and its operators can both benefit from the introduction of gaming. In the United States, where many states are struggling to balance budgets, Pennsylvania continues to expand and offers a model for states like Illinois and Ohio to convert slot machines into revenue. Numerous other states continue to consider a foray into gaming, as well as potential large installations like Greece and Brazil.
Although server-based gaming has yet to become the impetus for reinvestment as was predicted, technological advancements are beginning to yield operational efficiencies that improve profitability. MEI has taken a leadership role in the evolution of bill acceptors from being a component to a means for a cash management system. MEI EASITRAX Soft Count, an integrated software/hardware solution places information collected in the CASHFLOW SC bill validator into a database that can be networked to multiple locations and be accessed to analyze slot floor performance, offered the required efficiencies to operators and was installed in over 64,000 games in the past two and a half years.
Incremental improvement won’t bring back previous levels of profitability in isolation. It will, however, lead to gradual improvement. And that is reason for optimism and something the industry can build upon.
The gaming industry has always been a willing adopter of superior technology. Our product, CASHFLOW SC, is a great example. Operators have embraced a better ROI resulting from improved note acceptance, jam rate, security and cost of operation. Competition will continue to drive enhanced technology through feature-laden peripherals, superior game design and, ultimately, a base of products and processes that lead to more capital to be invested.
The industry isn’t standing still. Innovation will continue to create improved efficiencies and, when combined with an improved global economy, drive reinvestment. As successful as CASHFLOW SC has been, having just reached the milestone of 1 million units sold, it too must evolve.
Next year will mark the introduction of the next generation of CASHFLOW SC—the MEI® SC® Advance. This product makes a great product even better by improving the features that yield the highest benefit. And it does so why achieving backwards compatibility, allowing legacy product and the next generation to work hand-in-hand to create the highest possible value.
Is gaming back to where it wants to be? Clearly, the answer is no. Though 2011 won’t be the year associated with a return to profitability, it will represent a bridge to better days—a bridge constructed by an improving foundation and fortified with emerging technology that will offer a payback for years to come.
Tracey Chernay
Executive Vice President, Sales and Marketing
TransAct Technologies Inc.
In 2011, we at TransAct Technologies are taking a forward-looking, investment-focused approach to the global casino and gaming markets. We see significant opportunity to expand our business in 2011, and we are poised to take advantage of the growing global gaming markets as well as to build upon our growing domestic and international market presence with the introduction of a new software product.
We will continue to expand upon our industry-leading portfolio of Epic printer products with our groundbreaking new software solution, Epicentral™, that we launched at G2E 2010. Additionally, we’re scaling to meet demand in both domestic and international markets with increased direct sales representation, expanded distribution coverage and a world-class customer support team. Through this increased coverage we will build upon our strong relationships with our global customers in markets such as Europe, South America, and Asia-Pacific as well as expand our presence domestically. With Epicentral we are driving new conversations with existing customers as well as in new opportunities around the globe.
The Epicentral Print System is driving a huge amount of excitement from casinos in all markets. Epicentral allows casinos to create promotional coupons and marketing messages and to print them in real time at the gaming device. This elegant, simple and intuitive system enables the casino team to internally develop marketing programs and promotional coupons to drive targeted “on property” player behavior.
Through Epicentral, the casino team can drive higher slot-floor revenue, incremental on-property spend and produce new advertising income for the property. It can also be used to actively reduce expenses, all through a customer-centric print system designed to reward, recognize and leave players feeling appreciated.
Based upon the feedback from operators around the world, we believe Epicentral will be a major factor in driving our business in 2011 and beyond.
We’re expanding our global sales and technical team significantly in 2011 with the recent addition of key staff members in Asia, South America and the U.S. We have established a new office in Macau, staffed by our Vice President of International Sales Andrew Hanley, and our Technical Sales Manager for Asia Sonny Su. Additionally, we have significantly grown our South American presence with the addition of Mike Medlin as our South American sales manager and Diego Mejia as technical sales engineer. At the same time, we continue to grow our domestic coverage with additional sales and technical personnel to support our growing list of Epic customers.
So we’re confident that 2011 will bring us continued opportunities for growth in global gaming markets and in a new area of the business for us as we begin the rollout of our new software solution Epicentral.
Robert W. Stocker II
Chair, Gaming Law Committee
American Bar Association
Three years ago, the gaming industry was thought to be recession-proof. That mantra is one more example of conventional wisdom proven wrong. Assuming that Europe’s current financial crisis does not drag the world into a so-called double dip recession, the financial state of the overall gaming industry in the United States appears to have bottomed out, stabilized to some degree, and is very slowly (think years in some states) working its way back to a healthy business. This is a state-by-state issue. Nevada has been hit very hard, while Michigan’s commercial gaming industry adjusted gross receipts have remained relatively stable notwithstanding the bankruptcy of Greektown Casino, which was very highly leveraged prior to its reorganization under entirely new ownership. Of course, there have been some interesting defaults, bankruptcies, restructurings, mid-development shut downs, and resultant bottom fishing along the way.
In many respects, the financial crises in Indian country gaming has been the most interesting considering the complexity of the uncertain relationship between concepts of tribal sovereignty and the United States Bankruptcy Code. That interrelationship has yet to be fully sorted out. In stark contrast to the situation in Indian country, the working relationship between gaming regulators and the bankruptcy court has generally been worked out in a responsible manner that has focused on the survival of the casino in stronger economic hands.
The general economic freefall in the overall gaming industry in the United States has resulted in a complete rethinking of loan structures and related lending terms. It has also been a basis for regulatory receptiveness to alternative sources of capital (i.e., mutual funds, hedge funds and foreign investment) in the absence of ready access to direct bank financing. As a general rule, gaming regulatory agencies have approached the regulation of these alternative sources of capital in a manner that has not caused these sources of capital to dry up. While these alternative sources of revenue have proven very useful in the intermediate term while banks exited the lending business, the entry of these additional alternative sources of capital investment will also be a positive force in the long run for the gaming industry.
Calendar year 2011 and beyond will present challenges and opportunities for the United States gaming industry on a variety of fronts: (1) continued expansion of land-based gaming jurisdictions in the United States and throughout the world; (2) Internet gaming; (3) rapid changes in slot and table game technologies, as well as back-of-the-house software technology, raising fundamental questions such as who is a gaming equipment manufacturer and can budget-strapped state gaming labs adequately police and timely respond to the demands of the gaming manufacturing industry and the casinos seeking to remain competitive in a highly competitive market; and (4) increased government-mandated focus on social responsibility in the gaming industry. It is absolutely crucial that the gaming industry and government regulators address these issues in a pragmatic, responsible fashion that does not unduly restrict the gaming industry in the United States as the competitive environment continues to increase worldwide.
As this forecast is being written, Nevada Sen. Harry Reid’s i-poker bill is being circulated in Congress. By the time this forecast is published, we will all know if the federal government has taken the first step to legalize commercial Internet gaming in the United States by legalizing Internet poker on a fairly restricted basis. If Reid’s bill is not successfully attached as a rider to legislation passed in Congress’s lame duck session, then federal Internet legislation is essentially dead in the water until after the 2012 presidential elections. In that event, several states will move forward and adopt commercial intrastate Internet gaming legislation that will in some cases focus on just Internet poker and in other cases focus on all aspects of commercial gaming except sports books. The battle between a state’s right to manage its own affairs and the federal government’s attempt to restrict Internet activity will then be joined and ultimately resolved. As I said in my forecast last year, the Internet train left the station a long time ago. The only remaining question is when and how will the United States—or individual states—get on the train.
The good news in all of these issues and challenges is that the gaming industry in the United States is full of talented professionals who have a breadth and depth of expertise that cannot be matched anywhere else in the world. The wise utilization of the skills and knowledge of these professionals will bring the gaming business all the way back from the depths of the economic freefall and result in a stronger industry that is capable of successfully addressing all the challenges it will face in 2011 and beyond.
Gabriel S. Galanda
Partner
Galanda Broadman, PLLC
In the coming year, state and local government will aggressively attempt to tax tribal governmental gaming proceeds. The states are facing a $112 billion budget deficit maelstrom, and desperately looking for novel revenue sources. Offices of state governors, treasurers and revenue agents and local tax assessors, not to mention state legislators and county officials, are already looking to the tribal gaming industry to replenish state coffers.
Congress has declared that Indian gaming activities cannot be taxed. Period. States must remember that the United States Constitution vests the federal government with authority over tribal “commerce,” in recognition of the inherent sovereignty of tribal governments, and as such, Indian tribes and tribal members are exempt from state taxation within tribal territory. Period.
For these reasons, the federal appellate courts have time and again foreclosed efforts of states like California that demand a percentage of a tribe’s net gaming revenues, most recently saying that such a revenue-sharing demand constitutes not only bad faith, but an illegal tax on Indian gaming.
Still, as long as tribal governmental gaming is profitable, “rational actors” in state and local government will attempt to impose “fees” on tribal gaming manufacturers, distributors and service suppliers. To be clear, “fees” that resemble taxes on Indian gaming proceeds have also been struck down by the federal circuit courts. But that will not stop states from assessing fees and forcing the issue of whether the fees are illegal taxes into a state or federal—meaning non-tribal —court. They will tax now, and sort out the illegalities later.
State and local tax collectors will also look for any opportunity to tax those net gaming revenues that tribes use for economic development (as expressly intended by IGRA) in partnership with private industry. Whether the subject of state or local taxation is tribal cigarettes, hotel rooms, concessions, or even property, the state tax man cometh.
Accordingly, tribal governments and their gaming enterprises and business partners must redouble their efforts to prevent taxation of the tribal treasury. Indian gaming leaders should re-evaluate the terms of their business partnerships, and related federal, state and tribal tax law, to make sure the deal is bulletproof regarding non-tribal taxation. If necessary to prevent against the possibility of non-tribal tax assessment, deals should be restructured. Do so now rather than wait for the inevitable attack.
Tribal leaders should legislate what matters are, and are not, taxable, as a matter of tribal law. The tribe may desire to impose excise taxes on the on-reservation sales of various commodities, such as cigarettes, fuel or lodging, yet explicitly bar any taxation of certain business activities or of any form of property on tribal lands. In this way, the tribe will help exclude state and local taxation of reservation-based transactions.
Tribes and their gaming business partners must also be vigilant in attacking any state legislation or administrative rulemaking that seeks to impose taxes or “fees” against tribal gaming vendors.
Will your tribe and tribal gaming enterprise be ready when the state tax man cometh in 2011?
Lorenzo T. Langford
Mayor
City of Atlantic City
The challenges facing the Atlantic City gaming industry include declining revenue, due to the poor economy and increased competition from other gaming jurisdictions, especially in nearby Pennsylvania. However, I am optimistic and believe the industry will turn around as the economy improves and visitors have more disposable income to spend on entertainment.
To respond to the specific needs and concerns of our casino industry, I formed the Mayor’s Strategic Planning Committee in 2009. The committee is comprised of major stakeholders working in a cooperative manner. In fact, for the first time in the history of Atlantic City, the level of cooperation between the casino industry and the city has never been better. We all realize just how important it is to work together to promote Atlantic City and make sure that our casino industry remains competitive.
The Mayor’s Strategic Planning Committee addresses the cleanliness and safety of Atlantic City, economic development and promotion and regulatory reform, as well as important issues which impact the entire city. We are about partnership and collaboration, and it is working.
Furthermore, I am excited over recent progress reported by the Atlantic City gaming industry. Our visitors are spending more on non-gaming amenities (hotels, dining, shopping, nightlife and entertainment). More people are visiting Atlantic City by airplane, or to attend conventions. As of the end of October, airport passengers increased by more than 31 percent over the first 10 months of 2009. Also, reservations to attend conventions in Atlantic City over the next few years are up by an impressive 73 percent. Our convention industry is doing well.
The third phase of Atlantic City’s highly successful shopping outlet, “The Walk” is underway. Gomes Gaming recently completed the purchase of Resorts Casino Hotel, and its dynamic president, veteran gaming executive Dennis Gomes, brings new energy, talent and a renewed commitment to Atlantic City, and he plans to re-brand Resorts with a Boardwalk Empire theme.
The Revel Casino Hotel remains an important part of Atlantic City’s skyline and I am hopeful that this $2.5 billion project will soon move forward. Additionally, Trump Entertainment Resorts successfully restructured its company, and Caesars Entertainment, the largest casino operator in the world, continues to dominate Atlantic City by hosting major entertainment venues and special events. Legislation to allow Atlantic City casinos to open with 200 hotel rooms offers the opportunity for more development. Atlantic City is poised for growth.
Also, last July, Gov. Chris Christie announced his vision to create a “Tourism District” in Atlantic City. While plans have not yet been finalized, it is anticipated that the spirit of cooperation that now exists in Atlantic City will be embraced by the governor and help to further our growth and progress.
In closing, Atlantic City is a unique town with much to offer. And, as the economy improves, so shall our gaming industry. In the meantime, we’re all working together to create a world-class destination and a “must-see” attraction for the city that’s “always turned on!”
Anthony Cabot
Partner
Lewis & Roca, LLP
The new theme for Las Vegas for the coming year has to be “Staying Alive” as the deep recession enters its third year and the city continues to make everyone’s list of the most impacted locales. While the talented and experienced casino operators continue to come up with new and unique ways to increase revenues, decrease expenses and restructure balance sheets, so too must Nevada regulators rethink regulations and their impact on the state’s largest industry.
Simply, Nevada needs to re-emerge as the epicenter for gaming innovation. We need to rethink how product is brought to market in terms of timing, expense and regulatory burden. Technology continues to reshape the gaming industry. If Nevada hopes to remain a market leader, it must modify its approach to get new technology to market quicker and at lesser costs. Smaller technology companies cannot be faced with insurmountable licensing costs that keep them from relocating to and serving the Nevada market. More resources need to be directed toward streamlining the approval process so that products can get to casino floors in Nevada before or contemporaneously any other regulated jurisdiction. Nevada needs to actively encourage technology companies to co-locate in designated gaming technology parks with the full panoply of services from creative design to security. Technology is the future of gaming and the future is now.
I. Nelson Rose
Professor
Whittier Law School
Last year I predicted that the “future of the gaming industry for the next few years depends upon which letter of the alphabet prevails.”
We now know a little more. And it looks like there will be more than one letter. Remember Alphabet Soup?
The stock markets continue to look roughly like the letter “V,” and have won back almost everything they lost during the Great Recession. The profits for many industries, other than destination casinos, is like a “U.” Revenues may not have completely recovered, but costs are down, since employees don’t have to be given raises, or even rehired. In fact, employment still looks like a “J” on its side. The days of 600,000 jobs being lost month after month during the end of the Bush bust years have at least been stopped. But the 15 million unemployed are not celebrating Obama’s first two years.
And nothing much is going to be done to help them, or the 46 states that rely on income, property and sales taxes to balance their budgets. Bizarrely, while economists and historians plead that what we need now is more federal stimulus money and aid to states, the Republicans were triumphant in making it seem that the nation’s number one worry is the federal deficit and (non-existent) inflation.
This is both good and bad news for the gaming industry. The good is that state governments always turn to legal gambling as a painless tax in times of need. So, the Third Wave of Legal Gambling has, once again, turned into a tsunami, aided by the growing public acceptance of gaming.
The 2010 general elections were the first time in American history that state voters approved more measures to expand legal gaming than they defeated. Even places where Tea Party craziness and conservatives were winning, so were casinos. In Iowa, voters removed three state Supreme Court Justices who had approved same sex marriage. At the same time, every one of 17 Iowa counties voted in favor of keeping their casinos.
The next steps for states desperate for new revenue are more racinos, more VLTs, adding table games to slot parlors, and the big breakthrough: intrastate Internet gambling, particularly poker. The New Jersey Senate even took it one step further, by approving intrastate and international betting.
Once states like New Jersey, California, Iowa and Florida have online gaming, they will ask Congress to let them opt into interstate gaming with each other. And even though the Republicans were rewarded for being the party of “No,” it is doubtful that the party of states’ rights will block something that the states want and need.
And there is a precedent: In December 2000, Congress amended the Interstate Horseracing Act to allow states to decide for themselves whether their residents can bet from homes and offices by phone and computers on horse racing. If the states are competent to decide pari-mutuel betting on horse races, why should they be stopped from deciding betting on poker?
But there are downsides to the continuing economic strains. States cannot have deficits, and they can’t cut services anymore, so they have to raise taxes. And the easiest taxes to hike are the so-called sin taxes, on alcohol, tobacco and gambling.
But the greatest danger is the continuing high unemployment rate. People without jobs, or who are worried about losing theirs, do not take expensive vacations.
I believe that gaming is, mostly, recession-proof. So, regional casinos are and will continue to do well. But gamblers won’t drive by a closer casino in, say, Pennsylvania, Delaware or Maryland, to get to a further one in, say, Atlantic City.
And the big question is whether the multi-billion-dollar destination resorts on the Las Vegas Strip will ever completely recover. It will be years before they can raise room rates to pre-recession prices. But will there ever be as many people as before willing to spend $16,000 on leather jackets and $280 on Cirque du Soleil shows?
Heidi McNeil Staudenmaier
Senior Partner
Snell & Wilmer, LLP
The economic downturn will continue to impact the tribal gaming industry in 2011. The terms “bankruptcy” and “restructuring”—heretofore unheard of in the tribal gaming world—shall remain in the limelight and call for creative solutions by both the tribes and the financial community.
Tribal gaming revenues were slightly down for the first time ($26.5 billion in 2009 compared to $26.7 billion in 2008). Revenues are expected to remain stable, with possible continued growth in the Oklahoma and Pacific Northwest areas. The California and Southwest regions saw revenues decrease, so they are hoping for stability rather than further decrease.
“Reservation shopping” will remain a contentious issue. The Obama administration finally unveiled its directive for processing lands eligible for tribal gaming in June 2010. The pronouncement did not specifically overturn the prior administration’s “commutable” distance rule for “off reservation” applications; instead the Department of Interior (DOI) simply declared that it would continue to process eligible pending applications for gaming on Indian lands while consulting and collaborating with tribal leaders in making land-into-trust determinations. As a result, the DOI approved several land applications, while rejecting or returning a number of other applications.
Late in 2010, California Sen. Dianne Feinstein entered the off-reservation gaming fray when she proposed legislation requiring a tribe to demonstrate both a “substantial direct modern connection” and “a substantial direct aboriginal connection” to the lands sought to be taken into trust for gaming purposes. Opponents of the Feinstein proposal contend that the standards will be “impossible” for almost any tribe to meet. Both the DOI and Feinstein have been criticized by failing to develop the legislation through the tribal consultation process—as had been promised by the Obama administration in its efforts to be transparent and inclusive.
Feinstein has asserted that she will not support “Carcieri fix” legislation, without passage of her off reservation language—in essence, holding “Carcieri fix” hostage. The “Carcieri fix” would remedy the U.S. Supreme Court decision from 2009, whereby the DOI’s authority to take land into trust for tribes recognized after 1934 was called into question. As of late 2010, legislators were trying to attach the “Carcieri fix” to an appropriations bill, and Feinstein was seeking to do the same with her language. With a new Congress coming on board in January, it is anyone’s guess as to how and whether this issue will be resolved.
Of interest to the off-reservation controversy, the Bay Mills Tribe of Michigan ignored the land-into-trust application process entirely, and opened up a tribal casino on newly purchased lands held in fee in late 2010. The tribe contends the lands were purchased as part of their land claim settlement rights and therefore they had the authority to commence gaming without further approvals. The tribal gaming world will watch this situation in 2011 as it could certainly establish a new precedent for off-reservation gaming. Other controversial off-reservation projects involve several sites in California (of particular interest to Feinstein), an Arizona tribe’s quest for land next to the Arizona Cardinals football stadium near Phoenix, and a Wisconsin tribe’s proposed casino in the Catskills of New York.
The National Indian Gaming Commission (NIGC) saw a new chairwoman and two new associate commissioners come on board in 2010. The new commission has an ambitious agenda on tap, which includes a comprehensive review of all regulations promulgated to implement the Indian Gaming Regulatory Act. The NIGC is conducting tribal consultations in early 2011 and seeking the submission of written comments by mid-February. A formerly hot issue—Class II gaming—likely will remain on the NIGC backburner. The NIGC extended the effective date of Minimum Internal Control Standards for bingo until October of this year.
Although much attention will remain focused on potential new tribal casinos coming online through newly recognized tribes, restored tribes, or other means—a number of existing tribal casinos will continue to fight for survival. Last year, a number of tribal casinos, including the Mashantucket Pequot’s Foxwoods Casino in Connecticut, engaged in restructuring and refinancing discussions. Due to tribal sovereignty and related unique attributes, bankruptcy is not a viable option in the tribal gaming context. As a result, tribes and the financial community have had to collaborate on creative solutions in working through financially distressed situations.
Further workouts are anticipated during 2011, which will require review from the NIGC to assure the enforceability of such agreements. Based on the issuance of the Wells Fargo Bank v. Lake of the Torches Economic Development case in early 2010, the financial community has approached all tribal gaming deals with great caution. In that case, a Wisconsin federal court ruled that a $50 million indenture was invalid and unenforceable due to lack of approval by the NIGC.
Internet gaming will continue to pose a challenge to tribal casinos, as both federal and state legislative proposals are brought forward. Tribes will need to be vigilant and innovative to remain competitive in an ever-tightening gaming market.
Martin Storm
President and CEO
BMM International
2011 promises new opportunities for the gaming industry. Considering the grave economic events that developed over the last decade in the U.S. and their viral impact across the northern hemisphere, it is ironic that mostly conservative governments will drive new forms of gaming to increase tax receipts. For gaming operators and equipment manufacturers, this market expansion is the “band” that plays optimism for the near future. Optimism, albeit cautious at the moment, is the first step in our industry’s recovery. Of course many economies like China/Macau and Australia are booming, thinking more about how to manage growth rather than catalyze it. However in the U.S., whilst significant economic “clouds” remain, the economy looks on track for a return to real growth in 2012. With slow, but sure, increases in employment, and the banking system beginning to contribute to economic activity again, we can look forward to improving conditions for gaming expenditure and investment over the next two years.
Of course, innovation thrives in the hands of the driven and ignores economic despair. At BMM, we have seen wonderful new products coming from all of the major manufacturers, as well as some very creative offerings from much smaller companies. The power of systems technology is becoming more apparent to the market in many different solutions, and games content is finally taking big steps forward. On what device a game is played or a bet made is now almost technologically immaterial. The promise for the player now is an even greater gaming experience. As the world’s best gaming lab, we have never enjoyed our work more in product certification and that has a lot to do with the use of more modern computing technologies and methods.
A major challenge for our industry is having enough educated gaming and technology resources amongst government regulators to deal with what is here now and what is coming. With tight government budgets, BMM stands ready to support regulators in the U.S. as they continue to struggle with these capacity issues. Importantly, our 30 years of technical and regulatory experience in gaming has taught us that regulators should seek more than one opinion. A second opinion in the U.S. would be more than helpful to regulators and the industry at large, particularly with the onset of remote gaming, new media and new devices, in the context of their compliance, performance and integration.
BMM is committed to innovation for all industry participants with the objective of improving product certification both in regulatory compliance terms and economic performance. We, too, remain optimistic for the coming years in the gaming industry for all.
Nick Farley
President
Eclipse Compliance Testing
As we welcome 2011 with open arms, there remains a level of uncertainty of what is to be expected in this desperately needed New Year. Surely one of the more interesting, but not totally unsurprising, moves in 2010 was the AGA’s change in direction regarding Internet gaming, along with the more recent buy-in of large casino operators such as Harrah’s (now Caesars Entertainment). Sen. Harry Reid was re-elected in Nevada, keeping a gaming-friendly proponent of the world’s gaming capital on Capitol Hill. There is more balance of power in Washington with a new Congress seated, but still there remains a continuing need for more state and federal income. So, could 2011 be the break-out year for i-gaming in the U.S.?
Mobile gaming appears to be catching on, which will further push gaming beyond the confines of the standard casino floor. From ticket purchases, dinner reservations and other concierge-type services, the mobility of the customer/player is broadening significantly. This appears to be enough of a potential hotbed that industry behemoth IGT has established a mobile gaming division to focus energy and resources into this growing sector.
Games of skill and sweepstakes have been gaining momentum and attracting attention throughout the nation. These unique forms of entertainment and promotion have legislators, regulators and magistrates working hard to regulate and/or litigate these games that resemble gaming devices but do not possess all of the three essential elements of gambling: consideration, chance and reward (prize). Many local municipalities have taken it upon themselves to establish a licensing scheme or a form of oversight for these games. As states grapple with widening budget gaps, revenues derived from licensing and taxing of skill games and sweepstakes is very attractive. I believe that 2011 will see skill games and sweepstakes gaining popularity, but facing legal challenges as law enforcement officials struggle to determine the appropriate classification of these new forms of entertainment.
Beyond the new horizons also lie the continuing expansions of tribal gaming operations throughout the land. However, new openings and/or expansions are not limited to Indian country as Maryland has recently entered the high-stakes market and table gaming has made its way into places such as Pennsylvania.
With all of this upbeat news comes the hope that the job market will also continue to rebound, although many citizens may disagree with the term “rebound” depending on where they live regionally.
So, on the surface, things seem to be heading in the right direction.
As an ISO accredited independent testing laboratory, Eclipse Compliance Testing is well positioned and disciplined to support the expanding needs and interest of the market. We remain optimistic about 2011 and the opportunities ahead. In November 2010, we celebrated our 10th anniversary and we will continue the celebration through mid-2011. Who knows, by mid-year we might all have something more to celebrate!
James Maida
President
Gaming Laboratories International
We live in an incredibly exciting era. Yes, the economy has been brutal and has affected every aspect of the industry. However, it has been fascinating to see companies focus even more intensively on R&D during this downturn, laying the groundwork for the future.
We all know that technology advances daily and those advances bring amazing new opportunities for gaming to become increasingly more entertaining and engaging. Of course, those advances bring new and interesting challenges for regulators. We are ready for these new technologies, and are poised to address new technologies in games, systems, i-gaming, mobile gaming and hybrid products. More importantly, we are ready to help regulators address new these technologies and their potential effect on each unique jurisdiction.
At GLI, we have spent the last year further solidifying our corporate structure to be even more prepared for the future, putting us in an even stronger position to serve our regulatory and supplier clients. For example, in mid-2010, we acquired TST and its global resources to test and certify interactive gaming equipment, including online gaming. That acquisition brought our total number of labs to 15, and has already been a boon to regulators globally, particularly in Europe. Then in December, we fully integrated our three Australian labs, enabling suppliers in the region to take full advantage of our exclusive tools, such as Point Click Transfer and GLI Link, and to therefore achieve global transparent access to all markets.
Additionally, not only did we avoid layoffs; we have been hiring employees to further expand our capacity to serve our clients. Between acquisitions, integration and new hires, our total number of employees has grown to more than 550, the number of jurisdictions we serve has grown to more than 455, and our financial outlook for 2011 remains on very solid ground.
Conversely, the downturn has meant that regulatory offices around the world have to do more work with less money. To help, we have been very proactive in developing proprietary tools to help regulators do their jobs more efficiently. For example, GLIAccess is the password-protected back-end of our website where regulators and suppliers can check status of submissions, certifications and revocations as well as receive critical updates. GLI Verify is a hand-held tool that lets regulators take the lab with them to the gaming floor to quickly and easily verify that the device or system in operation on the floor is the same as what was certified in the lab.
In this economy, suppliers need test labs to be facilitators into new markets, not barriers to entry, and our exclusive GLI Link allows suppliers to link their device(s) to any system from any GLI lab. So instead of shipping devices and systems all of over the world, the testing can be done over the Internet, saving incredible amounts of time and money.
Then our Point.Click.Transfer. feature enables suppliers to quickly and easily transfer previously certified devices and systems to other jurisdictions with the click of a mouse. This allows for quick, easy entry into the global marketplace. We are thrilled to announce that as of this writing, all three of our Australian labs now have complete access to GLIAccess, GLI Verify and GLI Link, and in March, clients in those labs will also be able to take full advance of Point.Click.Transfer., opening to doors to the world for Australian suppliers.
In 2011, as the economy continues its fragile recovery, it will be important for suppliers and regulators to be sure the choices they make will have as high a return on investment as possible, because managerial scrutiny will continue to be at a high level. That is why in 2011, it will be important for both regulators and suppliers to choose a test lab where they can make the most of their investment and get everything they need done in one place. Making the right decision and making the most of the tools you have in your tool box will mean the difference between a successful 2011 and being left behind.
We are optimistic about gaming’s future—terrestrial and Internet-driven—and we will be there every step of the way to help both regulators and suppliers make the most of what they have to achieve every success possible. Here’s to a very happy 2011.
Larry Gregory
Executive Director
Mississippi Gaming Commission
The Mississippi Gaming Commission takes a pragmatic approach to new technologies, balancing the needs and desires of the industry and its patrons with the need for appropriate regulation. The Mississippi Gaming Commission welcomes technical innovation, particularly in areas of patron experience, convenience and ease of use, but these technologies must conform to the highest standards of fairness, security, reliability, auditability and safety.
From time to time, a new technology takes the industry by storm, such as ticket in/ticket out and downloadable credits. But, often as not, the next great technological leap is accomplished through incremental changes and improvements. Several new technologies come to mind, including, but not limited to mobile gaming, “hybrid” games, and last, but not least, server-supported and/or server-based gaming.
With some of the newer technologies and “advances,” we see limited application in Mississippi. For example, mobile gaming in Mississippi is of limited value due to the fact that gaming is restricted to casino floors only. Hybrid games, those incorporating electronic wagering and limited or no human interaction with conventional table games, have met with a degree of success here in Mississippi, particularly in some of our smaller venues.
Server-supported and/or server-based gaming, though highly touted, is still in its infancy, and though we have some of these systems operating in our casinos, they are still evolving technologically. Their cost and the lack of clear cost/benefit data make casino operators reluctant to switch from the tried and true combination of stand-alone slot machines coupled with traditional slot accounting systems. We anticipate migration to these server-supported and/or server-based systems to be gradual.
The Mississippi Gaming Commission maintains close ties with fellow regulators, manufacturers, properties, independent test laboratories, and keeps abreast of the latest technologies through these channels. Through rigorous product testing in our laboratory and at our licensed ITLs, we insure that these technologies of interest remain fair, secure, reliable and auditable.
Kevin O’Toole
Executive Director
Pennsylvania Gaming Control Board
The Pennsylvania gaming market has been recognized as one of the few gaming jurisdictions to weather the tough economic climate in a positive manner in terms of revenue and jobs.
In fact, during 2010, the Pennsylvania gaming market obtained the top ranking in the amount of tax revenue generated through casino gambling.
Certainly, a tax rate significantly higher than some other major gaming jurisdictions was a primary driver of that achievement. However, just as important was the steady growth of total revenue being produced through slot machine gaming and, within the past four months, revenue now being produced from a new table games market.
This has been an exciting and challenging year and half since I became executive director of the Pennsylvania Gaming Control Board. When I arrived, there was talk, but no legislative action, on adding table games to our casinos. When it did occur through legislative action in January of 2010, the hard work of our staff helped successfully usher in table games in a six-month period culminating with a roll out of tables at nine casinos within a 10-day period this past July.
The preliminary indicators after four months of table games activity is showing that the interest by patrons for this form of gaming has been exceptional. Albeit we are still in the early stages, it also appears that slot machine revenue has been enhanced by the introduction of table games. In 2011, we believe that the revenue performance will continue to gradually increase for both slots and tables.
This financial success continues to drive another important byproduct of gaming—jobs. With expansion, Pennsylvania will continue to be a fertile market for job seekers, especially for those who have gaming experience in other jurisdictions that has seen a decline in jobs.
During this coming year, the PGCB will also focus on the potential opening to the public of the first two resort amenity casinos. Different from the casinos open thus far which have thousands of slot machines, are permitted up to 250 tables and have no restriction on who can access the gaming floor, these smaller resort amenity casinos do carry restrictions. Each can operate only up to 600 slot machines and 50 table games, and only persons who are a patron of the resort’s amenities, can access the floor and gamble.
All the while, Pennsylvania is keeping an eye on neighboring states that are expanding or entering into the casino gaming industry. Fortunately, Pennsylvania casinos have been geographically well-situated and have placed emphasis on providing top-notch guest services. For those reasons, we are confident that Pennsylvania casinos will keep both its own citizen/players within its borders and successfully attract gamblers from outside the state to patronize their facilities.
Finally, we have recently expanded the size of our gaming lab in Harrisburg to meet the challenges associated with the demands by casinos to add both the newest slot machine technology and associated equipment for table games. In particular, some Pennsylvania casinos are actively moving toward the implementation of server-based slot machine games, and also requesting that our lab review and approve hybrid table games, such as i-roulette, which combines a real wheel with electronic wagering.
As we now look to 2011, our agency will continue to fulfill the expanded gaming market in this Commonwealth, and looks forward to doing so in partnership with a new executive government administration led by Gov. Tom Corbett. As a long-time gaming regulator, it is always beneficial to have a “fresh set of eyes” to help be a catalyst for improvement in how we do business.
Robert R. Russell
Gaming Analyst
Regulatory Management Counselors PC
The ongoing struggles of the U.S. economy have continued to deliver a significant blow to the state of Michigan. Problems with the state’s already faltering housing market, increasing unemployment and the credit crisis that has forced the U.S. automotive industry to seek government loans, have all played substantial roles in the economic downturn. During 2011, projections are that there will be incremental job growth. However, the state lost 843,000 jobs during the last decade, and thus a full recovery will take several additional years of positive job growth. The three Detroit casino operators, as well as the 11 Native American tribes that collectively operate 19 Class III casinos in the state have likewise been unable to avoid the economic downturn. Casino operators will be focused on developing more efficient, cost-conscious business models that will serve to bolster the state’s increasingly important gaming, convention and tourism industries.
This year, the Detroit commercial casino market is projected to see a slight increase in revenues of 2009, and has fared relatively well in comparison to the other gaming markets across the U.S. Greektown Casino Hotel successfully emerged from Chapter 11 bankruptcy on June 30, 2010, and the casino’s Chapter 11 plan of reorganization was also confirmed. MGM Grand Detroit and MotorCity Casino continue to operate their permanent casino complexes.
In 2011, Michigan will also see a continued push for a new tribal casinos across the state. At the end of 2009, the new FireKeepers Casino opened between Battle Creek and Marshall, Mich. The $340 million casino includes a 230,000 square foot casino, and a parking structure with over 2000 spaces. The opening of the new gaming facility illustrates the prominent role that Native American tribes continue to play in the Michigan gaming industry. The tribe has also begun expansion plans for FireKeepers Casino. The casino complex opened on Aug. 5, 2009, in Battle Creek, Mich., and rests on 78 acres. The current facility utilizes approximately half of this property.
In early November, 2010, the Bay Mills Indian Community opened the doors to a Bay Mills Resort and Casinos’ gaming facility on a 47-acre parcel of land purchased in August 2010, in Vanderbilt, Mich., just north of Gaylord. Several Michigan-based Native American tribes have raised legality issues regarding the opening of the casino. In addition, the state’s attorney general are in the process of completing a legal review of the casino’s status.
Also in November 2010, groundwork started on Four Winds North, a satellite gaming facility of the Pokagon Band of Potawatomi Indians (Tribe), owners of the Four Winds Casino located in New Buffalo, Mich. The casino will be located near I-94, just west of the city of Hartford in Van Buren County and include an initial 500 slot machines, nine table games and a 100-seat casual restaurant. Once operational, the tribe has the option of adding up to 500 additional slot machines. It has a tentative opening in late 2011 or early 2012.
The Gun Lake Band continues construction on its Gun Lake Casino into early 2011. Phase I plans call for a 83,000 square foot facility that will feature 1,200 slot machines, 36 table games, an entertainment lounge and a casino bar. It will be operated by the tribe’s management partner, MPM Enterprises, LLC, owned by an affiliate of Station Casinos Inc., as well as private investors from Michigan. The tribe’s tentative opening date for the Gun Lake Casino is set for early 2011, and during the first week of December of 2010 the first games were shipped to the casino.
As the Michigan gaming industry has expanded over the past decade, it has taken form as a critically important source of jobs and a key part of Michigan’s tourism industry.
Once the credit crisis eases, and the auto industry is able to rebound, the Michigan gaming industry appears to be well poised to service the demand for gaming in this region of the country. It is unclear to what extent competition from neighboring Ohio will have on the Michigan gaming market once the voter approved casinos open in Cincinnati, Cleveland, Columbus and Toledo. As part of the Ohio constitutional amendment, Penn National Gaming Inc. and Rock Ventures, LLC will each control two properties in the state with Penn National controlling the Columbus and Toledo sites and Rock Ventures controlling the Cincinnati and Cleveland sites. The casino operators have indicated that certain facilities will have tentative opening dates in 2012.
John Acres
Founder
Acres 4.0
How many people will visit your casino for the first time today? What percentage of those will join your players club? And what percentage of your club members actually gamble regularly? Do you know? Most managers are so busy serving “regulars,” they never think about those that visited and never returned.
That’s a real problem for 2011 because the number and size of competitive casinos is increasing. They target exactly the same player as you and they’ll lower price, raise comps and spend lots of advertising dollars to win their business. This identified pool of aging gamblers has more choices of where to spend their limited funds, expects to lose less and demands more comps than ever before. It’s not surprising that your win-per-day is threatened.
Speaking of win-per-day, there’s no measurement more widely used or poorly suited for deciding game purchases or placement. WPD is simply a popularity contest among existing players that measures little more than how revenue is shifted from one game to the other. The metric you need is incremental profit: the true additional revenue a new game brings. For example, a game earning just 50 percent of house average, all from new players that otherwise would not visit your casino, is a far better investment than one winning twice house average drawn solely from existing players who would have spent the same amount playing other machines.
How can you properly measure incremental profit?
How many new games will you buy this year? Can you get a reasonable return on investment? In 1980, personal computers cost $6,000, while slot machines sold for $1,600. Today, a vastly more powerful computer costs just $600 while that slot machine sells for upward of $16,000. A year from now, that computer will do even more and cost even less while slot machine prices will continue to rise. Can you afford to ignore this fact?
The games you do offer are limited in appeal. Is there a game more boring to play than a slot machine? Certainly the ability to wager mitigates somewhat the mind-numbing boredom of watching reels spin. Wouldn’t it be better though, to offer games with elements of compelling entertainment as well as gambling value?
Internet gambling is coming and only the arrival date is in question. How will you draw gamblers to your casino when they can stay home and play the same games for a lower hourly cost? How can you use the power of the Internet to improve your casino games and meet new players?
These are questions that keep me up at night and you’ve likely considered many of these same issues. If so, you undoubtedly realize that it’s easier to pose the questions than to find their answers. That’s why I founded Acres 4.0.
We’re building answers that help you meet the very challenging times ahead. We are fortunate to possess a successful history of creating inventive solutions for the casino industry. Over the past 30 years—at EDT, Mikohn and Acres Gaming—we invented player tracking, modern progressive jackpots and bonusing.
We’re not yet ready to deploy industry-wide solutions, but we are quietly and diligently working in close partnership with casinos that are truly motivated to seek profit by radically improving the recreational gambling experience of consumers. If you want to pursue such a partnership, drop me an e-mail at john[at]acres4.com.
Paul Lofgren
Vice President of Business Development
American Gaming Systems (AGS)
To call 2010 a year of change at American Gaming Systems (AGS) may be the understatement of the year in the gaming industry. We transitioned to 100 percent ownership by respected private firm Alpine Investors. We hired an experienced and credible management team, led by Chairman and Interim President and CEO Bob Miodunski. We streamlined operations to improve our customers’ overall experience. We entered new markets and submitted licensing documents for many more. We enhanced our marketing and public relations efforts to reintroduce ourselves to the industry. And we boosted our game development creativity and output.
It’s important to talk about last year as we begin to forecast what is to come in 2011. Without the changes we made last year, the potential of the next 12 months would not be possible. Our roots in the gaming industry date back to 1996, and as a leading designer, manufacturer and operator of gaming machines, we have more than 7,000 units currently in operation and feature a technology lineup that includes Class III, Class II, server-based gaming and wide-area progressives.
We plan to leverage the strength we have in a variety of markets by introducing exciting, new content for the installed base we enjoy. This will involve a dramatic ramp-up in both the quality and the quantity of our game titles, led by new Vice President of Game Development Olaf Vancura. He has already made significant improvements to our game design studio headquarters in Toronto, and he expects to have a total of six design studios up and running by the end of the year. It’s very important to note that with our existing installed base, our flexibility and our focus on speed to market, AGS is better positioned than most gaming machine companies to work with third-party game developers.
Vancura and the entire AGS team are committed to a powerful enhancement to both the hardware and software of our machines. You can expect a platform upgrade—code named “Roadrunner”—and new cabinets by mid-year. All of this effort is ultimately focused on delivering better quality to our customers and an improved gaming experience for the players. This is especially true in our leading market of Oklahoma, where Vice President of Operations Norm LeDoux is committed to quickly responding to the needs of the operators who have been so loyal to AGS over the years.
Another key initiative for AGS and many others in the industry is a successful implementation of the Illinois Video Gaming Act. The delays in Illinois last year were very frustrating for all of us and we’re hopeful machines will be up and running by mid-year, though there are many factors that may delay that timeframe. Either way, AGS will be ready. We have a strong team on the ground in Itasca, led by Illinois President Todd Cravens, and a very unique product plan that has been developed specifically to allow operators to maximize the revenues from each location.
Danny Gladstone
CEO
Ainsworth
It has been a tremendously exciting 2010 at Ainsworth. In fact, the company has never been stronger since opening the doors 10 years ago.
The strong growth in recent years has been outstanding, and all of us inside the business know the best is still to come. The secret to our success is attributed to highly focused investment in research and development under guidance of a very strong team of industry professionals with over 200 years of combined gaming experience. In Australia, we have been consistently tagged the No. 1 performing product in the market for the last two years according to many close to the industry, including numerous high profile investment banking analysts who have been avidly monitoring Ainsworth.
In North America, the company is now licensed in more than 20 jurisdictions and has product installed in more than 80 casinos. Ainsworth has found strong success in the max-bet link progressive product Players Paradise®, a Las Vegas-themed 4-Level jackpot product with multiple bonus and progressive prizes triggering an average of every 10 games. In addition, Ainsworth has received a resounding response from impressed operators commenting on their player’s enjoyment of very high frequency 5-of-a-kind pays combined with generous bonus payouts.
It can be said the key to furthering Ainsworth’s global success, and in particular North America, has been the recent release of the newly developed A560™ gaming machine family. The A560 product range is now approved and achieving very encouraging sales in Australia, Asia and the Americas after it was successfully exhibited at the recent G2E gaming exhibition in November 2010. The A560 will also be launched for the European market at the coming ICE show in January 2011.
We are very excited by the A560 range of widescreen cabinets, featuring an enhanced GamePlus™ game library, state-of-the-art technology and a dual widescreen LCD platform. At G2E, we revealed more than 40 initial games for A560 with numerous titles already GLI approved for North America. Most pleasing was the overwhelming response to the A560, our customers were very excited by the huge new game range, the four distinct cabinet variants, including the unique triple screen Super A560™ version, the classic cabinet architecture and the striking new 19-inch LCD topper design with special game-driven LED lighting.
The A560 launch was headlined by the stunning WORLD OF JACKPOTS™ concept, a centralized overarching jackpot theme surrounded by three, four, five or more independent link progressive themes, all operated by a single jackpot controller and where each theme is easily interchangeable using numerous progressive options including; Rio Grande Rapids™, Jackpot Zone™, Rapid Strike™, Lights Camera Action™ and Players Paradise®, plus many more due for release during 2011 and all available in the triple screen Super A560™ cabinet.
In addition to WORLD OF JACKPOTS™, Ainsworth has aggressively expanded the highly successful GamePlus game library with more than 25 new titles across its the proven brand range of Triple Shot™, Double Hit®, Super Game™ and Play 100Lines™/Play 50Lines™/Play 40Lines™ with 2 lines for 1 credit play option, and the special release of the all new Hot Reel™ concept. All games are now available in Ainsworth’s spectacular new widescreen A560 cabinet range, catering for all cabinet configurations: the 22-inch dual widescreen A560, a single screen A560 Lowboy with 19-inch LCD and the unique triple screen Super A560 cabinet.
The entire Ainsworth team is highly excited by the results in Australia and our emergence around the world as a major slot vendor. We are all very focused on proving our dedication to providing outstanding service across every market we enter and continuing our commitment to be known as the No. 1 Australian product provider globally.
Nick Khin
President, Americas
Aristocrat Technologies
Without question, the last two years have been challenging ones industry-wide. However, if the air at the recent G2E were to serve as a barometer, the industry at large seems to be cautiously optimistic about 2011 than last year.
We at Aristocrat had a tremendous G2E show. We said going in to G2E that it would be our best in 10 years, and we absolutely fulfilled on that expectation. Across the board, customer reaction to our products was the most enthusiastic we have heard in years. I also believe we have demonstrated to our customers our absolute commitment on ensuring we are focused on developing new, creative and innovative products for the North American marketplace.
Aristocrat is world-famous for our math models, and we introduced new math models designed to keep players entertained and engaged longer. We showed entirely new game categories, including the advanced technologies of MEGA PAY™, where one game can become four games; REMIX™ with our unique symbol and reel shuffle features; and WIN YOUR WAY™ that allows players to choose their volatility.
Our new cabinets were huge hits with our customers, in particular our VERVEhd™ cabinet with the amazing new Mission Impossible™ and Lord of the Jungle™ games. And reaction to Crazy Taxi Fare 4 All™, our take on community gaming, was overwhelmingly positive.
Of course, like every supplier, we sized up our competition on the show floor, and we are absolutely confident in our ability to compete head-to-head with any other supplier in terms of our game offerings, our systems capabilities and in our vision of networked gaming. We are more ready than ever to deliver the best player experiences that will help operators improve their bottom lines.
We are closely watching potential growth areas throughout the Americas and Europe, and we are ready to serve them. For example, we are ready in the Mexican marketplace with a full-service sales office in the heart of Mexico City. We are ready in Illinois where we have our team working closely with our distribution partner, Moss Gaming. We are ready in Canada and in the Caribbean, where our systems teams are expanding our business into more and more casinos. We are ready in Indian country, with products to attract and retain players. And everywhere, we are ready with a unique vision for networked gaming that we believe will be the most effective path for operators.
We have spent the last two years building for the future, carefully planning the steps that will take us and our operator partners on a pathway to success, and we are ready. From all of us at Aristocrat, we extend our absolute best wishes for a happy and prosperous 2011.
Steve Walther
Vice President of Marketing
Aruze Gaming America
At Aruze Gaming, we are excited about the opportunities unfolding in 2011. We believe the industry is finally starting to awake from its stagnation and will begin to recover into measured growth next year. The last few years have been challenging for the industry, but there is optimism today that we have not seen in some time. Suppliers in the industry have taken their products to the next level, leveraging some amazing new technology, and the operators and their customers are ready to take advantage of all the new possibilities. Players are anticipating new excitement, operators are looking for great performance and suppliers have continued to invest in development to be ready to deliver.
While 2010 didn’t turn out to be a year of massive recovery, it has provided a nice respite from the declines. During this past year, Aruze Gaming continued its push as a strong contender as a gaming supplier around the world. Our fusion of classical gaming elements with innovative new concepts and presentations have made their mark on the industry and will continue to do so in 2011. At G2E, Aruze Gaming presented 50 percent more product than the previous year including show stand-outs like Paradise Fishing™, Lucky Big Wheel™ and our energetic and innovative steppers. The feedback we received from our customers was encouraging for a great 2011.
In an effort to capture the essence of the player experience, Aruze Gaming has balanced the strength of its mathematics with innovative and engaging game mechanics. As the technologies of competitive and cooperative gaming expand and new emersion experiences like Aruze Gaming’s Reel Feel™ Technology develop, players will seek out a more entertainment oriented product, rather than just pure gaming. The realism in highly interactive bonus games found in Aruze Gaming’s G-DELUXE™ Multiple Bonus Games Oiran™ and Cranky Condor™, provides players a satisfying and engaging experience that they haven’t had in previous years. Our key mission is to create a fun and rewarding experience for the player since they are the life-blood of our industry while balancing performance for the operator.
As Aruze Gaming continues to expand its product portfolio in 2011, we look to introduce players to our philosophy while growing into new jurisdictions around the world. We know that with the recovery the industry will be fiercely competitive and Aruze Gaming is prepared with innovative new technologies, exciting new concepts, and engaging products.
There is energy in the industry again and the operators and suppliers alike are looking to build momentum through to a strong recovery. Aruze Gaming already has momentum in its growing portfolio and first-rate player experiences. With a growing portfolio that is focused on superior player entertainment while balancing strong performance for operators, Aruze Gaming is strongly positioned for the exciting growth opportunities in the year to come. Good luck, everyone!
Richard Haddrill
Chief Executive Officer
Bally Technologies Inc
As we enter calendar year 2011, I’m bullish on Bally Technologies for three reasons: our level of innovation; specific initiative currently underway at our company that will benefit our future; and optimism that the global gaming market should improve.
Much of this optimism comes from the many new cutting-edge solutions in our games and systems product portfolio. I can unequivocally say that in my five-plus years with Bally, we have never had this much innovation, and I’ve never been so excited.
In our games business, there’s an array of new video and spinning-reel slots on our new ALPHA 2™ Pro Series™ cabinets. The new operating system, combined with our sleek new cabinet design, enables us to deliver an unbelievably interactive experience to players. We have a host of new U-Spin™ games, a number of new play mechanics, and we’re even bringing back the player-favorite Betty Boop in Betty Boop’s Love Meter™. Our award-winning iDeck™, a multi-touch fully programmable and downloadable video button deck, offers tremendous opportunity to add more interaction to the game-play experience with mystery bonus events, virtual shooting galleries and skill-based bonus games.
Our systems business continues to lead the industry. We are humbled that Bally Systems manages more gaming devices than any other company, and we have won 50 competitive system replacements in the past three years. Even with this kind of endorsement, we continue to evolve our systems technology to deliver greater operating efficiencies and ROI.
We are currently introducing a number of new applications in our Elite Bonusing Suite that enable casinos to do powerful floor-wide promotions, tournaments, and second-way-to-win events, through our iVIEW and iVIEW DM™ player-user-interface, and without interrupting slot play. We think these are the “killer” apps—a way for casinos to truly differentiate themselves and offer players more anticipation, excitement and rewards.
Server-based gaming initiatives continue to be a focus. Our ALPHA 2 Pro Series cabinets are fully networked and server ready, and we are building a significant library of downloadable games. Thirty-six of our systems customers are already using Bally Command Center™, which enables the download of game content, iVIEW content, and peripheral firmware updates from a central location.
In addition to the tremendous amount of innovation that we are developing and introducing at Bally, we have a number of initiatives underway that will continue our growth. We are entering the new Italy VLT market and the Illinois video gaming market, and we are re-entering the Australia market and building a team in that country. We’re also excited about the opening of the Aqueduct Casino in New York State, where we currently have 50 percent market share; our success in the current RFP process in Canada; the launch of our ALPHA 2 game hardware platform and our Pro Series cabinets; and the continued commercialization of iVIEW DM. We have a number of other initiatives underway in the mobile and online space.
If these initiatives continue to go well, we anticipate ramping up our hiring in calendar 2011, as we recently did with the acquisition of Aurora Design, a development team in Reno led by gaming veteran Randy Hedrick.
And finally, the economy. While no one has a crystal ball, we are seeing some positive indicators for the economy in general and gaming in particular. For instance, we’re seeing increases in Nevada gaming revenue and an uptick in visitation to Las Vegas, and we continue to see growth in regional Native American jurisdictions and in international markets. The growth of the VLT market in Italy is notable in this regard, and there are indications that Greece is considering a similar program.
Nonetheless, there will continue to be challenges. The replacement cycle remains a question mark. However, this poses opportunities to help casino operators minimize their capital expenditures by offering them a variety of ways to refresh their gaming floors with participation and revenue-sharing games, and secondary bonus events through our Elite Bonusing Suite and iVIEW player-user-interface technology that can be implemented across the floor. On balance, we are cautiously optimistic as we look toward the opportunities and challenges that await us in the New Year.
Even as we welcome new team members and expand our reach, our commitment to our core games and systems technologies will never change, and we will remain laser-focused on customer-driven innovation and partnership. The strong relationships we foster with our customers, our vendors and suppliers, and others in the gaming industry has been, and will continue to be, the reason for our success.
Paul Miller
Vice President, Business Development, North America
BetStone
At BetStone, when we think of the future of the gaming floor, we think of four words: out of the box.” By this we mean more capability and functionality built right into each slot machine and server, without having to resort to expensive and complex add-ons.
To wit: to run a traditional wide area progressive, it requires additional network infrastructure: SMIBs, controllers, extra cabling and servers. Not only is this expensive, it’s disruptive and potentially troublesome with the extra connections and hardware that can malfunction. It can also delay the go-live date by weeks or months as problems are identified and resolved. BetStone’s approach is to be able to offer “out of the box” wide-area progressives. Because the slot machines are already connected to a server, why replicate all that hardware and networking?
Here’s how it works: Let’s say an operator is running multiple venues, geographically dispersed across a country or region. It doesn’t matter whether it’s Italy, Mexico or Oklahoma—it makes no difference. Because all of the machines are already networked, it takes no extra effort or time to re-cable all of the floors, with the associated extra cost of having a network of networks. The network is already in place, and the WAP can be implemented through software functionality. So it’s quick, painless and low cost.
What about CMS functionality? Some casinos are reporting that with SMIBs, networking, servers and all the added software modules, the cost for having a functionally rich CMS can approach $20,000 per slot machine. For a 500 slot machine venue, that’s a total cost of $10 million. Again, BetStone offers CMS functionality right “out of the box,” and even more functionality can be added through software. And because we take advantage of cloud computing strategies, multiple venues can be linked through the cloud and run as one installation, with the flexibility to of granular reporting right down to each machine per minute. And web-based management consoles allow casino executives to drag & drop queries, and slice & dice data, all with the flexibility of a SilverLight user interface.
And should you wish to add more features such as rich reporting, TITO, player tracking, bonusing and so forth, these features can be added at your convenience and can be implemented by licensing the appropriate software modules. And this software is a “pay as you go” pricing model, so you pay a couple of dollars per slot machine per day rather than a lump sum of millions of dollars. So for our fictional 500-machine venue, the cost approaches $30,000 per month compared to a $10 million capital outlay. The aforementioned $10 million, if financed at 8 percent over five years, would cost more than $200,000 per month, and who knows whether such a system will still have currency in five years.
Finally, some words about content. BetStone is unique in having a rich multi-game platform. We’re not talking eight games or 16 games per box, but dozens of games or even 100-plus games. This gives the player absolute freedom of choice. It also gives the venue maximum revenue per square foot of floor space. So to continue the theme, BetStone offers well over a hundred game choices right “out of the box”—for each and every box on the floor. BetStone continues to evolve and develop this game library with approximately 20 new titles each quarter.
So how does BetStone view the trends for 2011? More game choices, more flexibility, more configuration options and more affordability—with better overall revenue performance—right “out of the box.”
Gene Chayevsky
Chairman and CEO
Cadillac Jack
As we enter the New Year, we are encouraged to see glimmers of an expanding economy and renewed energy in the gaming community. Casino operators are again investing in new products and technologies, and many U.S. and international jurisdictions are expected to open in the coming years. In terms of games and products, we see trends evolving toward more interaction with the players, a wider variety of skill-based attributes, and non-wager-based online gaming.
Faced with the difficult economy of the past years and the increasingly competitive market, I’m proud to say that 2010 was an extremely successful year for Cadillac Jack. We experienced significant growth in our customer base and machine placements, greatly expanded our product line, and achieved excellent financial results. Our record performance in 2010 may be attributed to our dedication to develop high performing products, our enthusiastic and extremely talented staff, the thoughtful approach we take to entering new markets, and our commitment to optimizing the performance of our products at our customers’ sites through proactive title mix management and floor optimization. At the beginning of 2009, we also retooled the company’s business model to reflect the slowdown in the economy and substantial constraints in capital expenditure budgets. We increased our operational efficiencies, dedicated much more funding to our product development efforts, and allocated more capital to enable Cadillac Jack to offer our products to our customers on an affordable operating lease rather than sales basis.
Cadillac Jack’s mission remained unchanged—to continue enriching relationships with our customers by providing high quality games, value added floor mix optimization consulting and promotional and marketing support with the single purpose of helping our customers achieve the best possible financial results with Cadillac Jack products. With our aggressive funding of our engineering efforts, we are also able to present our customers with a compelling roadmap of products for the future. The new products that we showcased at G2E provided our customers with a view into our product pipeline for the first half of 2011 and reassured them that the strong earnings already generated by our products at their facilities will continue to grow.
We have capitalized on our tremendous momentum with new products that enhance the player experience. Beginning with the launch of our new Genesis dual screen game cabinet at G2E 2010, we have developed a broader game library with deeper, richer content which will be rolled out on this platform. Our customers can expect high performing new multi-level progressives, multi-bonus games, a new 100 Line series, and new game mechanics including an ante bet game. We also plan to bridge the gap between traditional game functions and new interactive, skill-enhanced products. Initiatives which take the fun and excitement of the traditional slot machine game to the home PC or mobile devices are also part of our plan to extend the entertainment value of the game beyond the casino.
2011 will be one of great opportunity for Cadillac Jack. We are well-positioned to continue our rapid growth across all of our core markets and are prepared to enter new developing markets in the U.S. and internationally. The VLT markets in the U.S., particularly Illinois and other expanding commercial jurisdictions, hold much promise. Mexico is still far from achieving its potential in terms of market size, and casino operators continue to grow and invest in their business. Although much of Latin America represents a well established gaming market, Brazil may be a significant new jurisdiction to open in the near future. We are leveraging our expansive portfolio of products to allow potential expansion opportunities within some of the existing and new markets in Latin America.
I’m excited about the future—our customers, our new products and the gaming industry as a whole. The next several years may represent some of the most rapid growth in the overall global gaming market across multiple jurisdictions in some time, as well as truly innovative gaming products. We have built an exceptional team at Cadillac Jack to develop and market our innovative products, service our customers and provide the infrastructure to grow our business and increase our customers’ profitability. We have a clear focus on our mission and plan for 2011, and we hope you’ll join us for the adventure.
Bill Breslo
Vice President, Sales and Marketing
Diamond Game
Despite the continued difficulties in the economy for the gaming industry, Diamond Game is coming off its best year ever. As we look to 2011, we believe that we are uniquely positioned to succeed in this industry given the economic situation. With great challenge comes great opportunity, and Diamond Game’s development strategy over the last few years puts us in an excellent position to take advantage of the replacement cycle in traditional markets and the new state-regulated markets seeking alternative forms of revenue.
Diamond Game’s history and expertise in developing innovative products is an integral part of our company plan for 2011. Our Innovation Strategy is two-pronged: 1) We will continue developing unique product lines and improvements to existing product lines, such as our new LT-3 ticket dispenser for lottery and charity markets and 2) We will develop superior games by focusing on providing players with thrilling gaming experiences for all markets including Class III casinos.
Among Diamond Game’s unique product lines is our instant ticket vending machine, which provides state lotteries, racetracks, bingo halls, non-profit groups and Native American tribes an electronic gaming machine experience under existing ticket gaming laws. The interest in alternative gaming products grew steadily throughout 2010. The reception of our products in the market leads us to develop a new addition to our LT-3 product line for 2011. This latest addition features a sleek kiosk-style cabinet design, small-footprint, secure-ticket validation, fraud protection, decreased labor cost, automated accounting and multi-price ticketing. The LT-3 Kiosk ITVM provides state lotteries with an ideal vehicle to expand their market reach to bars and taverns.
Diamond Game is also channeling significant resources to its game development process for all its product lines—full RNG slot games, Class II bingo and pull tabs, SkilTab and more—with an emphasis on features that add excitement and thrills to the gaming experience for the player. We have continued to reinforce our game development team with proven and accomplished game developers and talented artists. The development of these games, made possible by our sophisticated Blue Diamond game platform developed in 2009, has opened up new market opportunities for Diamond Game including commercial casinos and VLTs. We are confident that the quality of games being developed for 2011 will provide casino operators and players unique gaming experiences. We anticipate significant expansion of our Class III placements in 2011.
Beyond the games themselves, Diamond Game has continued to improve on the physical look and abilities of our GEM cabinet by adding a sleek chrome finish, numerous player-attract features and bolstered security. Numerous optional innovations were also added, such as a remote play button, a mini-pull handle, an LED-lighted base, new seating options and more. The GEM cabinet, which comes standard with two LCDs and an optional third monitor LCD, allow for cross-monitor animation and is downloadable-ready.
With the team we have developed and depth of product line, we enter the New Year excited to bring our technologies and new games to our existing customers and players, as well as new customers and markets in 2011.
Eric Tom
Chief Operating Officer
IGT
Coming off of a few very challenging years for the gaming industry, IGT looks to 2011 and sees a year of opportunity ahead. This year will mark IGT’s 30th anniversary and we are proud of the accomplishments our company has made over the past three decades. As we celebrate this milestone, we are naturally looking forward to the future. With our talented team and customer-centric focus, we are already working to create the products that will help shape the next generation of the gaming industry.
At G2E 2010, we showed that it is a whole new game for IGT. Thanks to our talented global employee base, IGT is poised to dominate the market with the biggest and best games and systems for the market. From our thrilling new games and products to the forward-thinking business conversations with our customers, excitement was the epicenter of it all.
In 2011, IGT will continue its tradition of building great games, further strengthening our presence in international markets and continuing to put our customers first. We know that our customers need to be heard, now more than ever, and it is IGT’s top priority to listen to them. As a market-led company, we will consider what the market wants and create the very best products to help our customer’s thrive.
Our extremely talented design and studio teams will be continue to create industry leading products—filled with rich content, compelling experiences and engaging bonusing. The latest games that we have rolled out have created strong, positive reactions by customers indicating that IGT is developing products they want and need to enhance their businesses. The pure excitement generated at G2E by games such as The Dark Knight, Ghostbusters, Wheel of Fortune Triple Ultimate Spin, The Hangover and Godzilla tells us we’re on the right track. Games and products such as Hot Roll, Puppy Stampede, Frantic Antics, Reel Edge, Texas Hold’em and our portfolio of system products—sbX, IGT Advantage, IGT Casinolink—have great potential to enhance our new product performance.
As a global company, we are developing strategic plans for growth in every region with the products that support our international customers’ requirements. We know that our international customer base will play a crucial role in our success over the next year and well beyond.
And last, but certainly not least, in 2011 we will be accelerating our growth in the interactive market. IGT has more than 10 years of experience in the online and mobile gaming space working with some of the largest online gaming operators in Europe. We are excited for the opportunities that are ahead as new legalized markets begin to emerge worldwide.
What’s ahead of us is exciting. For IGT in 2011, it’s a whole new game.
Elaine Hodgson
President and CEO
Incredible Technologies
Incredible Technologies (IT) has dedicated several years to learning the gaming industry, studying the various market trends, opportunities and developing products that will make an impact on our customers and their patrons. As we enter 2011, IT is just beginning to introduce its Magic Touch products to the gaming industry. This accomplishment marks a tremendous milestone for the company and we’re prepared to accept the challenge that lies ahead regarding the state of the industry. IT did not experience things as they were before the recession, so we were forced to prepare a successful business plan within it. This means we are embracing this new era of gaming and structure of business. We’ve had experience creating successful products in a recessionary period before. In fact, we started the company during the last major recession and were able to build a fledgling start-up into the largest domestic manufacturer in coin-operated entertainment.
Currently we’re placing our second major iteration of Magic Touch casino games in various targeted test locations to refine our product offering before aggressively selling. We had much to learn from our first cycle of field-testing and we’re eager to test again. We’re taking a methodical approach in developing and launching Magic Touch to ensure the product performs at its maximum potential and meets operator and player demand. Being a private company is another strategic advantage of ours considering we’re not driven by the quarterly financial cycle that forces others to release and ship product before they’re ready. We will not jeopardize our reputation for a quick buck.
It is our goal to introduce quality gaming machines that excite players and speak to operators with powerful ROI. In terms of placement, this goal starts simple—we want at least one bank of Magic Touch games in each eligible casino within our target jurisdictions. In 2011, we will start this expansion with our testing partners and our current catalog of Class III video slot, poker and keno games. As we continue our rollout, constant research and development of new titles will run parallel to sales to prepare IT for long-term growth in the industry. At this time, we have licenses in order in various Midwestern and Southern states, in addition to tribal jurisdictions in California and elsewhere.
Furthermore, our plans for 2011 are focused on opportunities surrounding the passing of the Illinois Video Gaming Act. We are a company that designs, develops and manufactures all of its products in Illinois using as many locally sourced parts as possible. Route operators have been our core customers for 25 years and the Illinois market is one of our top states. Illinois route operators know the quality of our products and service. They also know our history and that we’ll be here for the long haul. This is an advantage we plan on capitalizing on when Illinois video gaming expansion finally gets underway in mid-to-late 2011.
Also as the state governments continue to look for more sources of revenue in 2011, we believe they will naturally look to expand gaming initiatives. Most recently we’ve seen this push in the legislature for gaming expansion in Illinois and there will be other states to follow. This will provide some good opportunities to introduce new equipment into markets where cash-strapped existing facilities aren’t budging.
Skill-based gaming remains another trend we will analyze in 2011. IT helped transform the coin-op industry with skill-based Golden Tee tournaments for cash prizes on interconnected arcade games across the U.S. and other countries. As the gaming industry continues to warm up to skill-based elements in gaming, IT will continue to explore the best ways of integrating our expertise to slot machines.
Finally, like many others in the industry, we will be keeping our eye on Internet gaming in 2011. IT is exploring ways to get our games into jurisdictions where Internet gaming is already legal in preparation for the inevitable expansion in the U.S. We have seen this disruptive technology change the music, film and video game industries and we’re anticipating the same in gaming. People still use juke boxes, movie theaters and coin-op arcades, but the majority of the audience has moved to downloadable or streaming content on their personal devices. When governments learn how to effectively regulate and tax Internet gaming, it will open up new markets and revenue streams. Incredible Technologies is—and always has been—platform agnostic. We’re nimble and we embrace change. In 2011 and beyond, we plan to provide video entertainment wherever the people are.
Walter Bugno
CEO
Lottomatica Group Gaming Division (SPIELO and ATRONIC)
If 2010 was a year characterized by caution in the North American casino industry, we expect that caution to be tempered with much more optimism in 2011.
During the course of 2011, ATRONIC and SPIELO expect operators to seek products that stand out from traditional slot video entertainment. For example, we anticipate an increased emphasis on specialized content, and in many cases we expect that content to be integrated with powerful brands.
Strategically, ATRONIC and SPIELO’s goal for North America in 2011 is to be the best-in-class manufacturer when it comes to community gaming and licensed gaming content. We’ll be honing our expertise in specialty gaming for the commercial casino market, and our licensed products will continue to deliver excellent value to our customers with high returns at a no capital cost. With our new linked community game, DEAL OR NO DEAL™ Join’N Play, as an example of this, we’ll continue to develop other innovative approaches with licensing partners, including brands found outside traditional media such as TV and film. We’re looking forward to announcing some exciting new partnerships in the first half of 2011.
As we progress beyond the New Year, we’ve been putting a new emphasis on two key performance-related elements in product development. The first is to deepen our player research. As our commercial casino customers aim to diversify their player base and attract new or underrepresented demographics, we recognize the need to study each of these unique player segments and fully understand their preferences and motivations.
The second element involves taking a more holistic view of our products. It’s easy for a manufacturer to perceive their hardware and their content as separate entities and develop them in isolation from each other. But players don’t experience our products that way. When they encounter our cabinets and games, it’s in a single experience. During that experience, the players want to immerse themselves by engaging as many senses as possible. As a result, our game content is being developed as a natural extension of our platforms and cabinets, and vice-versa.
From a R&D perspective, we’ve been continuing to increase our investment in foundational products through the development of our GameBoss™ controller, the delivery of our new sensys EP™ platform, and our ongoing research on what players will want in a cabinet beyond 2011. As well, the next evolution of DEAL OR NO DEAL Join’N Play is on the horizon.
While the need for developing new player bases will continue to drive the newest technology in 2011, that technology shouldn’t be driving the content. Manufacturers need to find the “sweet spot” where great content drives technology that’s still fresh and cutting-edge. The gap between console gaming trends and casino gaming continues to narrow as players are demanding more for their money.
This may cause some suppliers to forget about the core player base as they engineer their products to attract new players to the gaming floor. Some manufacturers have rushed to install games bursting with features and functions that may confuse and unintentionally drive away some core player segments. That’s why SPIELO and ATRONIC are focusing a part of our 2011 portfolio on innovative but easy-to-understand games. We’re creating these games on the building blocks of great math, graphics and features that won't overwhelm players who might otherwise feel intimidated by the technological advances hitting their favorite casino.
Overall, our 2011 portfolio will feature diverse titles that ensure the core players, as well as the next generation of players, are well-served with the features they love and the experience they crave. For example, game families like Bigger Bet Bonus™ and Cashpot™, as well as multigame products like Cash Eruption™ and feature-rich community games like Join’N Play will provide diverse appeal, so that multiple player segments can be equally engrossed in the game, whether they’re high-stakes gamblers or low-volatility players who prefer time on device.
In 2011, successful suppliers will be those who can see the big picture, and who parlay that broad vision into products that perform.
Pat Ramsey
CEO
Multimedia Games
Looking back over the last 12 months, I can say with utmost confidence that we at Multimedia Games have made great progress in continuing to move our company in the right direction. Given our current financial position, growing pipeline of proprietary products for a variety of markets that continue to garner more attention and the increasing excitement in our offices in Austin and elsewhere, there is a heightened level of enthusiasm throughout the company that we are well positioned to make great strides in 2011—a year in which Multimedia Games will celebrate its 20th year of serving the gaming industry. This is a great time to attack the opportunities that are right in front of us and we will not wait for a larger macroeconomic shift to occur.
As our licensing team feverishly worked to gain access to new markets, it was the intense and disciplined focus on our core markets that really drove a successful 2010. I see that trend continuing into 2011. Beginning in our largest market—Oklahoma—there are two great opportunities for Multimedia Games. First and most immediately, we are focused on providing the best Class II products to serve this important segment. At one point, we were a leader in Class II games and our ability to refocus on this category should be a driver of our business going forward. Second, we are successfully rebuilding key relationships in the state with multi-site operators. With a growing pipeline of products, coupled with a strong history and team there, we believe we are on the right track to increase our market share with our proprietary products.
Our confidence to achieve substantial progress in Oklahoma is enhanced when we consider our recent results in another core market—Washington. Apart from the incredible seafood offered there, I personally always enjoy visiting casinos in this market as I can clearly see the direct results of our recent investments in both our systems and games to address customers’ demands. As our new games have achieved impressive results, our customers continue to welcome our new products with enormous enthusiasm. We sold over 700 games in Washington State alone in our fiscal 2010, a great number for a company of any size. So whether it’s Oklahoma, Washington, or even California where we at one time had a much greater presence, we are thrilled about the opportunity to continue our re-emergence in key core markets.
In addition to a focus on our core markets and customers, it is critical for Multimedia Games to successfully enter new markets in 2011. After getting licensed this past year in Mississippi and Louisiana, we are currently conducting live trials at several properties in both states. These jurisdictions, and the many others where we find ourselves in various stages of licensing, will be highly important for our company in 2011 and beyond as we aim to take our products and technologies to customers all over the country. While we would be thrilled with any up-tick in operator replacement cycles, our prospects for growth in new markets are not dependent on a change in operator spending patterns. As we expand the number of markets Multimedia Games is licensed to serve throughout 2011, we plan to use live trials to show off our products, prove that slot players want to play our games, and grow our customer and player loyalties from there.
At the recent G2E show, I had the opportunity to speak to the CEO of a much larger manufacturer. While I expressed how pleased I was with the momentum of Multimedia Games, I noted that our primary focus was on growing our company. He looked at me and clearly noted, “We all need to grow …” It was reassuring to hear that coming from the leader of a company many times our size. When I later stepped back and looked at our products across the booth – from unique category segments such as Power Stacks™, to Maximum Lockdown®, to Side Action™ and then watched another one of our attention grabbing TournEvent™ tournaments, I felt more confident than ever that Multimedia Games remains on a great path to do exactly what we need to do—grow our company. Austin may be known for being a bit of a funky, laid-back city, but there is nothing laid back about our approach and enthusiasm for taking control of our own destiny, regardless of the industry or economic trends, and pushing Multimedia Games to being a premier provider of gaming technologies in 2011 and beyond.
Orrin Edidin
President
WMS Gaming
Looking back at 2010, I believe the year played out largely to our expectations. Notwithstanding the pace of the replacement market, WMS succeeded in differentiating itself throughout the year by having “must-have” products that feature unique entertainment experiences for players and driving increasing coin-in for casino operators. This is best illustrated in our consistent increases in ship share, installed base of participation games and average revenue per day.
While we’re entering 2011 with some of the same macroeconomic and industry specific headwinds experienced in 2010—a still-sluggish replacement market and lower spend-per-visit by casino patrons—we see indications that these headwinds are diminishing. At the same time, we also expect the same factors that have driven our success despite the challenging environment to be equally, if not more important going forward. The ability to consistently create new products that drive higher coin-in, improve slot floor differentiation and deliver operational efficiencies will remain the key determinants when casino operators look at their capital budgets and how they allocate them.
Our focus in 2011 will be to continue delivering next-generation product and platform innovations that bring players exciting new game experiences while driving consistent, sustainable returns for casino operators. Our Casino Evolved product development road map advances our commitment to deliver a premium value proposition to our customers. In this regard, the continued deployment of our WAGE-NET networked gaming solutions will be a significant focus for WMS in 2011.
Throughout the year, we expect to build upon the late 2010 introduction of innovative platforms such as our portal application game enablement solutions and Player’s Life Web Services. These products perfectly embody WMS’ focus on being first to market with innovative technologies that deliver immediate and lasting value for players and our customers. As an example, our first portal application family—Ultra Hit Progressive® (UHP)—has generated coin-in premiums of up to 37 percent compared to games with the same base game theme without the UHP application.
In 2011, WMS will introduce a second UHP theme along with initial themes for new portal families: Winner’s Share™, MetaScreen™ and Mega Multiplier®. By combining our deep portfolio of video and mechanical reel base games with multiple portal families, WMS is offering new value for our customers and differentiating itself from the competition as operators plan new game purchases and invest in technology to replace older themes and out-dated technology.
WMS will continue to work closely with our customers to create higher value for their gaming technology investments through the further adoption of our integrated networked gaming capabilities, including Remote Configuration and Download (RCD), FreedomPort™, and GamEdge components of our WAGE-NET solution. A key priority for WMS in 2011 will be to continue our interoperability leadership and the creation of open standards as we promote the rapid development of advanced solutions that provide casino operators with the added value and long terms technology solutions they desire and plug-and-play interoperability they expect. Joint initiatives with IGT and Konami highlight our ongoing commitment to support full product and system interoperability in the gaming industry which we believe will foster open and interoperable networked gaming solutions. We look forward to making progress on these initiatives in 2011.
This year will also see the continued shift in how consumers choose their entertainment options as they seek deeper connections to the brands they trust. WMS understands the phenomenal growth of social media, its impact on consumers’ lives and how it can be leveraged to further engage players and increase their loyalty to the casino. To facilitate this, WMS will introduce more than two dozen new games in 2011 that are integrated with our Player’s Life Web Services.
Our initial launch of Player’s Life in 2010 was a huge success, with over 100,000 members and a 70 percent time on device increase for players with a unique login as compared to those without. Player’s Life unlocks for the first time in this industry the highly valuable potential of social networks by providing social games, discussion forums and real-time player accomplishment notifications. Player’s Life Web Services leverages the expanded role of the Internet and mobile communication in players’ lives to connect them with some of their favorite games outside of the four walls of the casino. At the same time, it also provides new insights for casino operators that should help drive higher coin-in and increased player visits to casinos, as these players are incentivized to return.
To create new, innovative products, sustained investments in R&D initiatives are needed. In 2011, we’ll continue our commitment toward reinvestment to develop new platforms and solutions that create value for our customers. The success of these efforts are best illustrated in all the industry-first products WMS has introduced over the years: our Community Gaming, Adaptive Gaming, Sensory Immersion Gaming and Transmissive Reels platforms, our Bluebird cabinets, including the relatively new Bluebird xD for which we expect continued traction throughout the year; and, more recent products such as our Portal applications and Player’s Life Web Services. Late in 2011, we’ll introduce our new CPU-NXT3 operating system, a new platform that will revolutionize the slot experience.
For WMS, 2011 is yet another full speed ahead year! We’re excited about the future and on course to deliver future-forward and industry-differentiated solutions that drive increased market share and improved returns for casino operators.
David Krise
Senior VP of Product Development
DigiDeal Corp.
The key to success in 2011 will be flexibility—whoever is flexible and nimble enough to meet the changing market and jurisdictional needs will survive these tough economic times. DigiDeal is perfectly positioned to deliver. While the acceptance and recognized benefits of electronic table games continues to grow, requirements are a moving target. Many new jurisdictions first allow only electronic games then change to allow full felt table games. Some markets have traditional felt tables but want virtual chips, while others require virtual cards but want traditional chips. And in the midst of all this, today’s table game player still wants the social interaction that a live host or dealer provides.
With GLI 24 and 25 (electronic table game) and GLI 11 (slot machine) certifications, DigiDeal tables offer the perfect fit for any jurisdiction or pit. Our Digital Table System (DTS) offers maximum flexibility and increased operational efficiencies. Operators can choose from the DTS-C with six positions, virtual cards and traditional chips; the DTS-V with six positions, virtual cards and chips, and a wide assortment of money handling capabilities (cash-in, TITO or keyed on credits); or the DTS-X, our plug-and-play eight-player system with individual bill validators and ticket printers.
All DTS platforms feature the bells and whistles both operators and players enjoy. Our state-of-the-art touchscreen technology enables players to be part of the action with on-screen virtual chip selection and betting, real-time card peeking plus up-to-date player bank information. The DTS fits into existing casino infrastructures—a plus with operators—with full SAS network capabilities and back-end financial tracking and player reward system compatibility.
At G2E, we introduced the L2V (live-to-virtual) table. This table offers card scanning using almost any third-party card scanning device. Now operators can choose traditional or virtual cards, as well as traditional or virtual chips, for their DigiDeal tables. Plus, DigiDeal’s new L2V is the only e-table that enables the operator to switch between a hosted, live card mode and an auto host, virtual card mode in a single platform. Operators can offer live tables during peak hours and auto hosted tables during slower hours—all in the same location!
Flexibility doesn’t stop with the platform. DigiDeal’s Classic Series of games features multiple bonus bet options. Training, managing and dealing at a traditional table game with multiple bonus bets is problematic at best, but with the DigiDeal platform, no additional training or work is required—just select the option and you are now increasing your table revenue with each round. The Classic Series is available on all platforms and localized for the most popular gaming markets (English, Spanish or Chinese).
Bottom line: The e-table demand will continue to grow. New pit configurations are emerging as casino operators look for ways to reduce costs and increase holdings. DigiDeal’s electronic table games will become an integral feature for those casinos that want to maximize profitability and stay competitive.
With sales and support offices in multiple countries, DigiDeal delivers quality customer support of its e-table products around the world and continues to set the benchmark of e-table technology, innovation and flexibility.
Tom Mikulich
Senior Vice President of MegaJackpots
IGT
With the expansion of gaming throughout Asia and Europe, there has been resurgence in the popularity of table games. These global markets have traditionally been more table game oriented as opposed to slots focused. However, the cost factor of running a large number of tables can be prohibitive and has prompted operators to venture outside the normal table game options. The introduction of multi-player electronic tables has provided operators the option of a scalable gaming environment where players can place their bets on an individual terminal with game activity viewed on a central display, providing them the ability to offer players the table game experience 24 hours a day at a fraction of the normal operating cost. Massive customer acceptance has prompted casinos to allocate a portion of their gaming floors to be dedicated to multi-player station table games. With many of the overseas operators’ ties to the U.S., IGT is seeing a growing interest in electronic table games domestically as well.
From a casino operator’s view, what makes the multi-player station table games attractive is the ability to offer a traditional casino game with multiple side bet opportunities, at an increased hands-per-hour ratio with none of the normal security issues, and a higher win-per-unit-per-dollar and hold percentage. And when you add in an ever-increasing advanced customer base that are accustomed to playing multi-player games on computers along with a desire to play traditional table games, multi-player station table games becomes the ideal solution.
In addition, Class II and lottery markets are benefiting from multi-player station table games as well. Many jurisdictions that do not allow traditional table games have approved the electronic versions. This has increased the spread of this product immensely. In jurisdictions that recently approved live table games, there was an initial drop in multi-player station popularity. However, in these last few months there has been a rise in multi-player station table game play as the customer base is returning to the electronic version of their favorite games. This is because the game minimums are frequently lower than their live counter-parts and players are getting more decisions per hour than they would from a live version of the game.
The domestic popularity of multi-player station table games is also evident in the increased number of overseas vendors seeking product approval with GLI and other local gaming regulators. As operators are exploring additional business efficiencies and new ways to attract a younger demographic, 5 to 10 percent of a casino floor being multi-player station table game systems could be the norm in the not-so-distant future.
Mark Jones
President
INAG
It’s that crystal ball time of the year when we look into the future to forecast what we as gaming experts envision. INAG is one of the leading table game creation and placement companies in California and Oklahoma with the very popular and successful card version of roulette, craps and now big six. Our invention has been deemed a card shuffling device by the USPTO allowing it to be played in restrictive markets like California and Oklahoma. The company has grown over 600 percent this year alone, so there is hope for small table game creators.
While at G2E this year, it was quite obvious that many small vendors have given up on this type of venue due to the cost and obscurity amongst the slot vendors. I hope they have not given up on their game ideas as it is not the large companies that come up with the great games, but small inventors. There has been growth in automated table games as the operators are trying to cut labor costs, reduce deal error and increase hands per hour.
The real question is, are the players willing to gravitate to these devices? In some jurisdictions, they have no choice due to the gaming laws in those jurisdictions, but where live games are permitted this trend has a ways to go to get a good read on the player’s acceptance.
Table games managers as a whole have not taken the necessary step to try and maximize this technology by focusing on companies that can produce satellite betting terminals linked to live dealers offering more than one game at a time from that terminal. I know of one company that can place three dealers in the front of the room and keep six different games going at the same time so the players can play several different games at the same time. This is where we need to look for growth in this style of gaming. Allowing a player to only bet on one game like Rapid Roulette, for example, takes up too much floor space of one game. Allowing a dealer to deal two games in that same space will double your opportunity to increase the bottom line.
I look for the smaller developers to come together under one co-op or alliance to gain the strength to compete. North American Gaming Alliance was present at the show and had already, I believe, around nine slot companies on board to get it started. All their games will be offered at $10,995 so the casinos will eventually have over 500 titles available to them to play with. This concept is where I see small table games vendors joining Table Games “R” Us to get to the convention floor with a presence. I hope managers will continue to give their customers a good mix and assure product they want is on their casino floor.
Tim Richards
Vice President of Product Management
Interblock
Interblock sees electronic table games as a realistic and immediate means for driving new revenue in the 2011. While table games are experiencing a renaissance with the younger generations, operators are also realizing that the familiar pains of live table games do not diminish with growth. The cost of operating table games has only increased over the years, thereby making low minimum games almost extinct. To witness this, all you need to do is take a walk down the Las Vegas Strip on any weekday morning. At this slowest time of the day, you will be lucky to find a blackjack game with a minimum less than $15. If you happen to find a lower minimum game, it will not be a 3:2 blackjack game and the game will also have other unfavorable rules.
As casino operators look to increase revenue one of the few available options to accomplish this versus simply displacing existing revenue is electronic table games. Most operators have found that there is a segment of the market they are no longer serving. This segment is served by the use of electronic table games. Interblock feels that the trend of providing games that closely simulate live games but offer improved game play with much less hassle for the players will experience rapid growth in the North American markets.
In 2011, Interblock plans to fully release the fourth generation platform, Organic. This platform will include the already approved Organic Roulette, Organic Card Blackjack, Organic Card Baccarat, Organic Dice Craps and Organic Dice Sic Bo. Our new virtual game platform and live game platform will also be released early in 2011. This complete line-up of electronic table games will provide the industry with a new platform and product line unlike any other available.
Many operators are now sticking their toe in the water with electronic table games, and they like the way it feels. As more games types are released in 2011, the market will realize their great benefits. As the economy begins to recover, operators will be exploring ways to drive new revenue to casino floors while maintaining the previous cost cutting measures put in place over the past few years. For these reasons, the industry will see electronic table game play explode in 2011.
Jim Jackson
Senior Vice President, Business Development
Shuffle Master
2010: “It was the best of times, it was the worst of times…” (Charles Dickens). OK, maybe that’s a little melodramatic but it reasonably sums up the year for us at Shuffle Master. In a down but recovering economy, through our fiscal Q3 we managed to achieve record total revenues, record recurring revenues, and a record installed base of proprietary table games. We launched our 12-Point Pledge and rededicated our efforts to being a strategic partner to our customers, both internal and external. It was, at least on the surface, the best of times …
However, no degree of success or milestone achievements can fill the void or ease the pain of the sudden passing of our CEO, Tim Parrott on May 6, 2010. In my 25 years in the gaming industry, I can probably count on two hands the number of people I could honestly describe as being truly good. Tim was a good man. He was good to his soul and we will miss him, and the industry is a poorer place without him. May 6 was, without a doubt, the worst of times. But in our despair, we did what I’m sure Tim would have wanted us to do—we came together as a team and pushed forward. We redirected our emotions and we made sure that Tim’s legacy would endure. We have and will continue to execute on the initiatives Tim set in motion (The 12-Point Pledge lives!). Although we were only touched by Tim’s leadership for a short while, I feel that the company has changed, for the better, forever.
And that’s why we at Shuffle Master are encouraged about 2011. An improved company with motivated people, a strong balance sheet and innovative products has the right ingredients for success, especially in an improving economy. At November’s G2E, we introduced innovative products across all four product segments that demonstrate our continued commitment to provide value for customers and excitement for players. The i-Table Roulette adds meaningful value by eliminating dealer mistakes, increasing efficiencies and increasing productivity through a 50 percent to 100 percent pick-up in rounds per hour while maintaining the same footprint as traditional roulette. To keep both the operators and the players excited, we showcased an extensive array of new proprietary table game content such as Rabbit Hunter, Fortune San Lo Poker, No Flop Pineapple Hold ‘em and High Five Poker Progressive as well as progressive versions of some of our classics. On the Utility front, the MD2-CR continues the Shuffle Master tradition of delivering security, efficiency and productivity to table games with card recognition technology, faster shuffle times and less card wear and tear. And finally, on the EGM front, our customers in Australasia will be happy to see our sleek, new Equinox cabinet on their floors, loaded with new content.
What else can we look forward to in 2011? I’ll leave it to the pundits to prognosticate on gaming revenue growth rates or market expansions or new legislation, but on a macro basis, here are a few thoughts for 2011:
Go Lean or Go Home. During tough economic times, the best companies find ways to do more with less. However, those who continually strive for increased productivity and efficiency, even during periods of growth, will survive virtually any market condition. While 2011 is shaping up to be better than 2010, lackluster housing markets, high unemployment and ever-changing geo-political climates can easily undo any gains we might experience, so stay lean!
Asia Baby, Asia! Can anything derail the runaway train that is gaming in Asia? With the success of Macau and Singapore and the anticipated growth in the Philippines, can Taiwan, Japan, India or Thailand be too far behind?
When Harry Met Sally (on Facebook). Is your company active in social media? If not, it should be. By the way, have you noticed that the growth in social media parallels the recent growth in popularity of table games (which is by nature a social activity)? Coincidence? What better way to stay connected to friends than at your favorite table game!
Ch-Ch-Ch-Changes … Finally, while no one can accurately predict the future, 2011 will assuredly bring one thing: change. Since change is evitable, make sure you can adapt. To quote Jimmy Dean: “I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” Who knew the Sausage King could be so eloquent? Here’s to smooth sailing in 2011.
Roger Hawkins
CEO – The Americas
TCSJOHNHUXLEY
Just days away from the grand opening of The Cosmopolitan of Las Vegas (not yet open as of this writing), I wonder if it will be the last project of such scale the Boulevard sees for quite some time. The economy does not seem to be showing any signs of rapid improvement; in fact I am not sure it is showing any signs of improving whatsoever. Analysts speculate “no improvement until 2014,” but I guess nobody truly knows what the future holds in store.
What we do know is history and what we can do with history is review it, allowing us the opportunity to make improvements on any decisions that didn’t work out for us.
2010 pretty much delivered everything we all suspected during the year and did not throw too many surprises. For me, what it demonstrated was that business is still there for the taking if you really want it. The companies that had their teams knocking on doors, calling on customers and taking care of their requirements still enjoyed a relatively buoyant year under the circumstances. Just looking at the markets and a few of the stocks demonstrates that a couple of companies did very well, thank you!
During 2011, we will continue with our strong ethics, working hard with our customers, our partners, in developing solutions that meet the needs of each individuals business. The attendance at this year’s G2E and our own AAA event restored my confidence that people are popping their heads over the parapet to see what is going on and starting to further buying decisions to improve player opportunity in order to meet visitor demands, etc.
The continuation of operators looking for ways in which to maintain consistency, whilst delivering the experience for the player and drive some cost out of their business is more apparent than ever before. Interest in our products such as MultiPLAY and AccuPLAY deliver solutions to meet this demand in this ever-increasing polarizing market place.
What is certain for our business is the apparent resurgence of table games. Well-established properties are increasing their floor space for live table games. “Party pits” are becoming a fixture in more and more casinos. However, players are also demanding more from the experience. Technology will play a huge part in meeting these higher expectations which is why year after year we continue to drive our development teams to produce new initiative and propositions. In fact, 2011 will see a whole host of new innovations and further developments of existing products bought to market.
That being said, nothing is guaranteed and we will all have to work hard and fight for every sale that’s out there. Opportunities will have to be created and not taken for granted. Hopefully we will continue to see new markets become available and enjoy the additional business opportunities they offer.
Wishing you and your families a wonderful Christmas and all the best for the New Year.
Comments
I enjoyed this long article
I enjoyed this long article on “2011 Gaming Industry Forecast: Year of the ‘New Normal’ very much. It is packed with so many useful information which players who are into poker, black jack or roulette will want to know. In fact I think many are eager to check out the forecast for 2011. The various presidents' views and analysis on the gaming industry are handy.
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We have also recorded gaming industry forecast shows with industry leaders.
You can find our show with George Toth, of CanCan Development, here: http://www.casinoenterprisemanagement.com/podcasts/gaming-industry-forec...
You can find our show with Frank Fantini, of Fantini Research, here: http://www.casinoenterprisemanagement.com/podcasts/gaming-industry-forec...
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