By Roger Gros   Wed, Dec 21, 2011

It’s no mistake that the two most successful gaming companies over the last decade have been Wynn Resorts and Las Vegas Sands. And it’s also no mistake that the leaders of those two companies have been frequently labeled as “visionaries.” Steve Wynn’s vision is legendary, starting back when he was a brash young businessman barging into Atlantic City, which at the time was the only legal gaming jurisdiction outside of Las Vegas—the “Macau” of its day.

So when Sheldon Adelson brought his version of vision to Macau in the early part of the 2000s, he proved that he is at least on the par with Wynn. But it was Adelson’s concept of a Cotai Strip in a waterlogged, desolate area of Macau—and his ability to communicate that idea to the leaders of Macau—that sets him apart from every other casino operator in the SAR.

And all this from a man who practically backed into the casino industry. Adelson has been successful at many businesses, but just prior to the casino industry, he ran one of the most successful trade shows in the world, Comdex, which displayed the latest consumer electronics devices. Held each year in Las Vegas, the exposition had outgrown the Las Vegas Convention Center to such an extent that it was being held at 10 separate locations around town.

“I decided that I had to consolidate those locations, and I would build my own convention center,” Adelson explains, “which is what I did; it’s now called the Sands Expo and Convention Center, and I built that in 1990.”

Adelson says he realized that it didn’t make sense to build the center next to an existing hotel.

“Entrepreneurs are not in the business of making other people successful,” he laughs.

So he settled on the Sands, which had endured hard times despite being located across the street from Las Vegas’ newest attraction, Steve Wynn’s Mirage. Adelson hired several executives to run the property for him, but 18 months later, he took it over himself.

“I thought the business was kind of interesting,” he says. “In the meantime, however, in addition to the Mirage, MGM (now Bally’s) and several other casinos put up 1,000-room-plus towers, and I realized that garden-style units, and small properties, couldn’t compete with those businesses.”

Different Profit Centers

The decision made to implode the Sands and build the 3,000-room Venetian (which is now 7,000 rooms with the addition of the Venezia tower and the Palazzo hotel), Adelson launched a new day for Las Vegas.

“I taught Las Vegas that money is fungible; that money can be made in non-gaming amenities, and still be the same as the money you make from gaming,” he says. “But I saw the handwriting on the wall, that gaming would play a lesser role, in terms of profitability, than it did previously. And although gaming revenue wasn’t declining at that time, I think gaming was absorbing a lot of the disposable income.”

With his extensive background in conventions, Adelson says he created a model that depended on meetings and conventions.

“It’s not just part of the plan,” he says. “It is the plan. If we have to build hotel rooms to accommodate players on the weekends, what am I going to do with the rooms mid-week? I always wanted to change the paradigm and bring the income and the room rates that we experience on the weekend to the weekday. And that’s what we do. That’s why we’re the most successful company in gaming.”

Adelson points out that Las Vegas Sands is not only successful in gaming; its revenues exceed that of the combined revenue of four of the biggest hotel chains: Marriott, InterContinental/Holiday Inn, Hyatt and Starwood.

“My business model, of building integrated resorts with casinos, is a far better business model than managing other people’s hotels,” he says. “I don’t understand why they’ve gone out of this business; I would never have done that. I mean, the guys who are making the money are the owners, not the managers.”

Making It In Macau

The opening of Macau following the handover from Portugal to China was a milestone in the corporate history of Las Vegas Sands. With three concessions and three sub-concessions, competition was fierce. LV Sands was not granted a concession but won a sub-concession through a deal with Galaxy Entertainment. But the company was the prime mover, getting Sands Macao open in a matter of months, and earning enough revenue that the property was paid for in less than three years.

But it was the concept of the “Cotai Strip”—which is a trademark that belongs to LV Sands—that brought the company success and renown in the gaming industry and with governments across Asia. One of the principal reasons the Chinese government decided to open up the gaming industry following the handover was to grow the city’s mass market—those visitors who did not arrive via a VIP operator. Throughout the 20th century, the vast majority of the gaming business in Macau was delivered via VIP operators. China wanted to change that, and Adelson’s idea to bring in visitors for shopping, dining, entertainment and the MICE business was just what the doctor ordered.

Progress toward that goal will be advanced when Cotai Central (sites 5 and 6) opens early this year.

“When we won the concession in 2002,” says Adelson, “the government wanted internationally known hotel brands to be included, and I knew that these companies wanted to be there. We started with the Four Seasons, adjacent to the Venetian, but we had plans to put in all known hotel brands on the other sites.”

LV Sands announced that Sheraton and St. Regis, along with Shangri-La and Traders, which are both owned by Shangri-La Hotels and Resorts, were slated for Cotai Central. When the project was put on hold, however, in 2009, Shangri-La announced it was leaving the partnership.

“We had Hilton and Conrad for lot 7,” explains Adelson. “Since we weren’t sure that we were going to be able to build lots 7 and 8, we added that brand to replace Shangri-La. The Holiday Inn brand, owned by InterContinental, which was scheduled for Lot 3, was brought in to replace Traders. It was an upgrade. Traders is a three-star hotel, and the Holiday Inn is a four-star hotel and well-known in China.”

And since LV Sands is operating the hotels, it is only responsible for a fee to license the brand, bringing more profits to the company’s bottom line.

Like its neighbors, the Venetian, Four Seasons and Melco Crown’s City of Dreams, Cotai Central will include all the amenities, including retail, dining of all sorts, spas, two large casinos and more. But Adelson knows he needs more than that.

“The Venetian Macao is already a must-see property,” he says, “and we know we need to make this a must-see attraction as well.”

To do that, LV Sands is borrowing another page from Las Vegas. The signature attraction of Cotai Central will be a conservatory, but larger than the ones offered at Bellagio and Wynn Las Vegas.

Cotai Central will be connected to the Four Seasons shopping area via an air-conditioned overhead walkway that will direct customers through all LV Sands properties without the need to go outside.

Singapore Swings

While the Macau developments of LV Sands have been impressive, it has really been the development of Marina Bay Sands in Singapore that has established the company’s reputation as the foremost gaming developer in Asia.

In a complicated—but transparent—bidding process, Las Vegas Sands and Genting won the two available licenses, beating out such industry powerhouses as Wynn Resorts, Caesars Entertainment and MGM Resorts.

While Genting’s Resorts World Sentosa opened a few months before Marina Bay Sands, the business at MBS has far surpassed the competitor. While it was always anticipated that MBS would be the more profitable location, being close to downtown Singapore, with a huge attached convention center, it’s the building itself that has attracted the most attention.

Three 55-story towers are topped with an eight-acre “Skypark” that includes an infinity pool, spas, restaurants, lounges and an observation platform. In addition, the property includes a million square feet of MICE space, a three-story shopping mall, complete with the Las Vegas Sands signature canals and gondolas, many kinds of restaurants and an Art-Science Museum designed as a giant lotus flower. The building is an iconic part of the Singapore skyline, and doesn’t disappoint upon closer inspection.

Asked if he is gratified at its success, Adelson says, “It’s more than gratifying to me; I’m really euphoric. Nothing could have come out better.”

One thing that could have come out better, says Adelson, is the cost of construction. MBS ran more than $2 billion over budget, when problems with the site were compounded by a shortage of cement early on. But despite that, MBS will still be an economic success for LV Sands.

“Based upon what we’re anticipating for 2012, we think we might be able to pay it off within three years,” says Adelson, which is two years sooner than he anticipated.

The convention business was good right from the start, says Adelson, but is even getting better.

“We have about 40 shows this year,” he says. “Next year we’ll have 50, and that will fill it. We have the ballrooms and the meeting room complex all full for the first six or eight months, and filling up for the rest of the year. They have shorter booking cycles in that part of the world, so everything is running on all cylinders.”

The restaurants, says Adelson, are also doing land-office business. The celebrity chefs in the hotel—Jason Tek, Daniel Bouland, Wolfgang Puck, Thomas Heller and others—are experiencing full bookings. An initial concern was about the property’s buffet, where they charge $50 for breakfast. But no one has batted an eye, he says.

“I thought people would think we were gouging them,” he says. “But then my people told me that all the other hotels in town charged around the same price, so as long as we’re within the market, it should work. And it has. We’re on track to do $38 million in that one restaurant, with 650 seats.”

Gaming has also been a huge success, with the casino full almost 24 hours a day. Unlike Macau, where more than 70 percent of the business comes from the VIP segment, Singapore gaming revenue is evenly split with the mass market.

A quirk in the Singapore casino regulations requires that VIP operators be licensed and approved by the Casino Control Authority. This has effectively prevented any of the VIP junket reps who operate in Macau from being licensed. Because gambling debts are not recognized in China, the Macau operators extend credit to the VIP reps, who in turn extend it to the players. Adelson says he didn’t really think it was a problem right from the start. 

“I was the guy who said, don’t worry about it,” he explains. “I have reason to believe that the concept of ‘face’ in Asia will force the people to pay their debts. Because the consequences of failing to pay debts will be that they get embarrassed and lose face. Everybody told me that’s just an old wives’ tale. But today they’ve come back to me and said, ‘You were absolutely right.’ This was a major, major decision. And I felt completely confident making that choice.”

Adelson believes it was that decision that has given MBS the edge over Resorts World, which has been struggling to attract the VIPs.

“Look, at Genting Highlands, they depend on the VIP operators to be a success,” he says. “So when they discovered in Singapore that they wouldn’t have access to those operators, they didn’t know what to do. And they still don’t.”

Asian Options

The Singapore model has become the bellwether that has inspired other Asian countries to consider similar integrated resorts that would be tourism and business magnets. But not every country is right for Las Vegas Sands, says Adelson.

“We’re looking at four countries,” he points out. “We’re looking at Japan, Korea, Taiwan and Vietnam. But we have to get Korea and Vietnam to say the locals can participate.”

Each country has its advantages for LV Sands.

“Korea has one locals place,” he says. “It’s about a seven-hour drive from Seoul, and they’ve had a bad experience with it because they put a very tempting product in a very poor area. But they have about a dozen other casinos open only to foreigners. We have been doing a very extensive lobbying effort. We have people representing us in all these countries.”

Taiwan is attractive because its society is so prosperous.

“There are 26 million people in Taiwan, and they’re all middle class. So the mass market and the high-end market could be just out of sight.”

Taiwan’s model for integrated resorts—gaming on small islands around the main island of Taiwan—isn’t something Adelson likes, however.

“I would not go to the outlying islands,” says Adelson. “We went to Penghu, and there’s no infrastructure there to build our type of resort. There’s nothing to do. You have to stay in one hotel because there’s nothing better. It’s really just a fisherman’s village.”

With Penghu rejecting gaming in a referendum, the other islands available are even worse, according to Adelson.

“The only islands left that are interested in having gaming are Kinmen and Matsu,” he explains. “And they’re pretty small islands, well under a million people combined. There’s no infrastructure, but they’re only five miles from the mainland. That’s a risk I don’t think I want our company to take. We would be 100 percent dependant upon the mainland. So if the mainland at any time decided to reduce or even halt travel to one of these islands, we’d be out of business. But if we had a guarantee that they’d allow people to come forever, I’d go there in a heartbeat.”

While everyone believes that Japan is the crown jewel of Asia, Adelson isn’t so sure.

“The propensity to play isn’t so clear to me,” he says.

He cites the difficulty in traveling between the three main islands, and is concerned about mixed messages being sent by pachinko parlors, which are now dominated by pachislot machines.

“There’s nothing pachinko about the slots,” he says. “They’re exactly like our slot machines—just different characters, different bells ringing, and a different language on the face plate. But, they’re slots. A slot is a slot is a slot.”

He compares them to racinos or slot parlors in the U.S., and is concerned that an integrated resort which may be required to charge an entry fee to Japanese citizens might not be able to penetrate this market.

But whatever he decides, Adelson believes LV Sands will have the inside track.

“Our business model includes a convention-based marketing strategy,” he says. “My paradigm is to fill up the mid-week rooms at weekend prices. And the only way to do that is to do conventions, and we know conventions better than anybody. We created the concept of marrying all these amenities together: the shopping, the shows, the spas and the casino.

“There’s no government that doesn’t want conventions. And that puts us dramatically ahead at the starting line. It gives us the major advantage over our competitors. Nobody can compete with us.”

Even in the U.S., integrated resorts are starting to become the paradigm. In Florida, Adelson is interested, but only under the right conditions. He is critical of the groundwork that Genting has made in Miami.

“They’ve spent a lot,” he says. “They’ve got 65 lobbyists. We have two. And they make exaggerations that three properties will employ 100,000 people. They’re making exaggerations that we’re disowning. At the Venetian in Las Vegas, we have 7,100 rooms, the equivalent of two IRs. And we only employ 7,000 or 8,000 people. How are they going to add one more, half again, and employ 100,000 people?

“They’re losing credibility fast in Florida. And besides, the law says that if they do anything wrong and go back to Malaysia, they have to waive extradition defenses. So they can be called back if they break any laws. They’re not going to like that.”

If Florida is serious about IRs, Adelson says there’s one way it would work spectacularly. He suggests three resorts be approved around the Miami Beach Convention Center, all within walking distance, creating a small Las Vegas Strip.

“You then create the environment for critical mass,” he says.

In Massachusetts, Adelson’s birthplace, LV Sands would only be interested in one location.

“Knowing Massachusetts like I do, I believe the best location is at the junction of the MassPike and 495,” he says. “That way, I get people from the west, I get people from downtown Boston, who’d rather drive out to Marlborough than to go through the tunnel in rush hour to go to Suffolk Downs. It’s the only site with no risk.”

Adelson says he hasn’t decided whether to bid because the choice will be politically influenced. He believes the Suffolk Downs racetrack will get the Boston license because the owners are politically connected. Even though there’s a bidding process, Adelson believes the fix is in.

“It’s just rife with opportunity for corruption,” he says.

Online Opposition

Adelson’s views about online gaming were unknown until this interview, when, in his own words, he came out of the closet.

“Officially, I’m neutral,” Adelson said in mid-November. “Unofficially, I am vehemently against it because I am convinced that the technology that would prevent kids from gambling isn’t enough. I see from my own young children, that they know how to get around all the restrictions that any techie is going to install to prevent kids from playing. I am not as concerned with young adults; I’m concerned about children, underaged children.”

Adelson is aware that many casino executives are pushing hard for online poker, but he doesn’t really understand it.

“PokerStars is the biggest and most successful online gaming entity in the world,” said Adelson, “and the most they made in a year was $440 million. Now, how is $440 million divided up among several other players going to make a difference? It ain’t going far.”

A chance meeting with European Casino Association Chairman Ron Goudsmit at G2E in October cemented Adelson’s view when Adelson asked how online gaming had affected the performance of European casinos.

“He told me that online gaming has had a significant impact on the brick-and-mortar casinos. I asked him if he could quantify it. He said he didn’t know exactly so I said, ‘Give me a guess. 5 percent? 10 percent?’ He said, ‘Yes,’” Adelson reported, indicating that he considers that range would have a substantial impact to the employees of the industry.

“How many people do we employ (in our industry)?” he asked. “Half a million people? If 10 percent of them lost their jobs, I think that would be terrible.”

Adelson also believes that it could lead to gambling problems for young adults.

“People who are young adults, who are of legal age, may get online and start getting addicted to playing poker, because they get a lot of peer pressure from their friends,” he said. “And whether they’re underage or not underage, I don’t think it’s good for our society.”

Adelson is also not buying the fact that online gaming would be limited to poker.

“Poker will absolutely lead to full casinos,” he said. “If it will be a full casino, the business as we know it today will gradually diminish, and get to the point where there’s a break-even, where you start losing money. And when you’re at that point, there are a lot of companies that will go out of business.”

Ron Reese, a spokesman for Las Vegas Sands, stressed that Adelson’s view was, at this time, strictly his own and not the official stance of the company board, which has been neutral for the past several years.

The impact of Adelson’s views will be wide ranging. Many observers considered Adelson the key to the legalization of online gaming in Congress. A longtime Republican supporter, Adelson could have used his goodwill with House Republicans to get them to agree to online gaming legalization. But he doesn’t agree with that assessment.

“Republicans fundamentally are against gambling,” says Adelson. “Why does everybody say that Sheldon Adelson has got the key?”

Nonetheless, Adelson stopped by the office of Republican Senator Jon Kyl of Arizona following his meeting with the AGA’s Frank Fahrenkopf. Kyl has reportedly been meeting with Democratic Majority Leader Harry Reid of Nevada on a bill that would approve online poker. Adelson doesn’t believe his influence is that important, however,

“I know a lot of those people, but there are a lot of other people,” he says. “Look, I know Harry Reid. And we’re very friendly. And we abide each other, even though we know we’re 180 degrees opposite each other on political issues. But I like him, and he likes me. And we have a 23-year history together. But I don’t control Harry Reid.”

Independent Operator

Like at other crucial moments in his gaming career, Adelson is bucking the system when opposing online gaming.

“I’ve been a loner all my life in making decisions,” he says. “And because I am a strategic thinker, and I’m looking at the strategy of this, I just don’t get it.”

Adelson says he goes on instinct in making decisions, and therefore takes some big risks.

“If I change the status quo, by looking at it differently and doing what other people don’t do, that requires a lot of risk-taking,” he says. “So, what I see as risk-taking, a lot of corporate executives don’t have the feel, because they’re afraid that if they lose their stock options, the kids can’t go to college. But I’ve been taking risk all my life. I’ve won a lot of them. I’ve lost some. But I’m not afraid to fall down, knowing I can get back up again.”

Adelson has had success in several industries, but believes his gaming role has been his biggest accomplishment.

“I love this industry because I could see the results of the educated and experience-based risk-taking,” he says. “And I see the results. I’m not an entrepreneur to make money; I’m an entrepreneur to create accomplishments. That’s what all entrepreneurs are after; they’re not in it for the money. Money is just the measuring stick. It’s the report card. So this industry is always easier for me, because I look at what it takes, how people would do the industry again, if they had to design it from the beginning, knowing what they know. And that’s the way to get into an industry and change the paradigm.”

Even at 78, Adelson is looking to the future. He’s set some “reasonable” goals over the next five years.

“In the next five years I’d like to be in at least two more Asian countries. And I’d like to see our first phase within the next five years of a three-phased Europa Vegas in Spain, for the European market. For the dozens of countries and almost 800 million people at least, the market is underserved. We see the equivalent of half the Las Vegas Strip—12 3,000-room properties, integrated resorts with shopping, with second-home condos, entertainment and more. I think we could be triple the size we are today.”

Don’t bet against him.

By GGB Staff   Thu, Dec 22, 2011

Whew, 10 years for 25 People to Watch! That’s right, 250 people have now been honored by the Global Gaming Business annual January feature celebrating the best and the brightest in the industry. That’s 250 people who have truly made a difference in the gaming industry. That’s 250 people who have shaped gaming and increased the professionalism, raised the bar, and defined excellence for everyone who works in the industry. And 250 people who lead the way; who demonstrate that it’s people who make this industry, even more so than the spectacular projects, the cutting-edge technology and the creative marketing of the gaming business.

The 25 People to Watch for 2012 fit right into those categories. Architects and lobbyists. Operators and manufacturers. Executives and policy makers. Young and old alike. The gaming industry is nothing if not flexible. The ups and downs of the past few years have been challenging but also they also create opportunities for creative and aggressive individuals who can take advantage of any situation.

Next year, as the promise of an economic rebound seems tantalizingly close, these 25 people will make an impact on their companies and constituencies, their clients and patrons, and on their industry. They will help to determine the future direction of gaming, next year and beyond.

Where possible, we have recorded the interviews with some of the People to Watch. To access the podcasts, just click on the profile and the podcast button appears at the top.

By GGB Staff   Wed, Dec 21, 2011

Slot machine testing was born in the early days of slot machines, with regulatory agencies doing the testing to determine if the machines met manufacturer specs, and the manufacturers waiting with bated breath to determine if their devices had passed.

Today, manufacturers submit the machines to independent testing labs to determine before submitting them to regulators so they know going in that the devices will pass. In fact, some of the independent test labs have established such an unblemished record for integrity that they now actually do the work for some regulatory agencies.

But the world of testing for online gaming sites is still very much in the early stages. With limited resources, testing is hit-or-miss, and the “independent” test labs are often not so independent.

The need for reliable labs for online applications is not new. Financial websites need top security, and test labs have been operating in that space for years. But often, those labs don’t understand gaming or the processes that amplify the need for gaming-specific online labs.

Two years ago, when Gaming Laboratories International, the industry standard for slot testing, bought TST, a Canadian company involved in online gaming testing, the gaming lab bought it as much for the expertise and reputation of Salim Adatia, the owner, as it did for the technology he brought to the table. Adatia says it was a match made in heaven.

“GLI has a level of assurance, integrity, experience and knowledge that is unmatched in the testing of land-based gaming products and systems,” he says. “At TST, we bring those same characteristics to the table, so we believe we’ll be the logical choice for any company or jurisdiction that wants these kinds of services.”

Although the fees from online gaming testing lag behind those of land-based technology, Adatia says the current markets are growing, and if the U.S. legalizes online gaming or online poker, all bets are off.

“There are markets in Europe that are expanding because they see opportunity,” he says. “They see their citizens utilizing i-gaming sites in other jurisdictions and want to keep those people home.”

With the U.S. Congress currently debating the wisdom of legalizing online poker, Adatia says GLI doesn’t take a position on whether legalization at the federal or state level makes the most sense.

“There are pros and cons to each scenario,” he says. “As an independent lab, our concern is not so much who is doing the regulating or who is doing the operating—lotteries, tribes or casinos. Our concern is that it is implemented in a manner that is fair, secure and auditable, that includes robust technical standards in the systems we test.”

Adatia seeks to set the minds of the American legislators at ease when it comes to the control any online gaming operator would have over underage or problem gamblers accessing their sites.

“There are appropriate age and identification controls and mechanisms that are available,” he explains. “I-gaming has been operating in jurisdictions such as Australia and Europe for numerous years now with minimal access—close to nothing—by minors. Of course, nothing is 100 percent foolproof, but risk is mitigated by the use of a layered approach so you’re not really putting all your eggs in one basket. It isn’t just the use of a third-party security program or a robust registration process; it’s all approaches and procedures in concert that make it almost impossible for minors and problem gamblers to access an online gaming site.”

By GGB Staff   Wed, Dec 21, 2011

While it’s not often that a nomination for the “25 People to Watch” comes from outside the gaming industry, it’s entirely appropriate for Dr. Miriam Adelson. As the wife of Sheldon Adelson, the chairman of Las Vegas Sands, Adelson would immediately qualify because she brings complete support of her husband in his business endeavors.

She says that when Sheldon Adelson comes home and discusses business, she is very attentive.

“He talks about it in a general way,” she says. “I rarely offer advice because he’s the genius in that field.”

Adelson, however, may be a genius in her own field, research and treatment for those addicted to drugs. Prior to meeting her husband, she worked in the emergency room of a hospital in her native Israel. She formed a connection to those who came in with desperate drug problems and vowed to help them if she ever got the chance.

After meeting and marrying, the couple decided to found the Dr. Miriam and Sheldon G. Adelson Clinic for Drug Abuse Treatment and Research with two locations: Las Vegas and Tel Aviv, which specializes in treatment of opiate addictions (heroin and painkillers) by instituting a regiment of methadone.

Adelson recently added treatment of teens to her program after getting requests from some clients for their children.

“Teens are often ignored when it comes to drug addiction,” she explains. “We spend a lot of time with teachers, principals and guidance counselors to make sure they know about our services and the help we offer.”

Maybe Adelson’s concern for teen drug addicts comes from her own children, two grown daughters from a previous marriage and two teenage sons with Sheldon Adelson. The boys attend the Dr. Miriam and Sheldon G. Adelson Educational Campus, a preschool-through-high school environment founded in 2006 that offers a quality Jewish education, but is open to all students.

Adelson is instrumental in choosing the charities that she and her husband support.

“We have the same values and the same desire to help,” she says. “So when we recognize a cause that needs assistance we both usually agree.”

One cause that has the full support of both Adelsons is the Wounded Warriors Vacation at the Venetian. For the last five years, the Venetian has flown in at least 75 wounded veterans of the post-9/11 conflicts and their families to enjoy a weekend in Las Vegas. Hundreds of Venetian employees and guests line the impressive lobby at the hotel and applaud the vets as they arrive. Adelson says it is a very emotional time for everyone.

“In Israel,” she explains, “every veteran is a hero. We like to think that America recognizes their courage and sacrifice as well, so we are honored to produce this event.”

By GGB Staff   Thu, Dec 22, 2011

As often is the case with Wall Street, politics in Washington, D.C., is often defined by young people with a passion. Whit Askew was one of those people for nine years. After graduating from the University of Tennessee-Knoxville, Askew arrived in Washington to take a job with the National Republican Congressional Committee, where he worked on several campaigns, research assignments and fundraising initiatives.

After a stint with an insurance political action committee, he joined U.S. House Republican Leader and now Speaker of the House John A. Boehner (R-Ohio), where he served as executive director of The Freedom Project. Askew was in charge of Boehner’s political campaigns, when, in 2010, he was part of the team that helped lead House Republicans to win 63 net congressional seats, giving them their first House majority since 2006.

Since joining the AGA in February 2011, Askew has played a key role in the organization’s efforts to legalize online poker. While it looks like a federal effort to legalize the activity seems to be dead, Askew warns not to count it out yet.

“Many members of Congress believe that adult individuals should be able to spend their money the way they choose in a responsible way,” he says. “There are millions of Americans who are playing online currently with non-U.S. companies. We need to provide them with safeguards. We would like to see legislation that will enable states to choose if they want to license and regulate online poker in the U.S. so people who live within the boundaries in those states can play in a safe and responsible fashion.”

That’s the message the AGA has been trying to spread: Legalized online poker will protect the consumers and crack down more effectively on the illegal foreign operators.

“In all the congressional hearings we’ve had this fall, that message has resonated,” Askew says. “So, I think Congress is gathering all the facts and concerns so they can make an educated decision on what the best policy would be.”

The announced retirement in November of online gaming’s champion, Rep. Barney Frank of Massachusetts, will only make it more difficult to get it through the House. But Askew says he’s certain someone will take Frank’s place.

“While I can’t point to any one congressman,” he says, “there are a handful of members who may step up. There are members who share concern about the current environment for online poker play. Someone will step up and accept that challenge, I’m sure.”

Askew says the traditional Democratic support of gaming causes is no longer so cut and dry as it once was.

“I think the positive story we have to tell about gaming and the benefits it brings to communities has changed a lot of minds,” he says. “It’s not a partisan issue. A good number of public officials, regardless of the letter behind their name, have been able to see some of the positive impacts of gaming in their states. Over my short time at AGA, they understand the economic value gaming has brought. And that’s the most important thing.”

By GGB Staff   Wed, Dec 21, 2011

Triple sevens come up again for Dike Bacon and his Memphis-based Hnedak Bobo Group. The nationally recognized casino resort design and planning company, which prospered handsomely by serving the lucrative Indian gaming niche for the past few years, has laid the foundation for its next jackpot.

Hnedak Bobo created DreamCatcher hotels late last year, and will unfurl the first property in that line, a 400-room hotel for the Coushatta Tribe in Louisiana this spring. The company will design and build the facility and will likely create more hotels in future years. Although some clients may not be tribal companies, many figure to be.

While DreamCatcher materializes, Hnedak Bobo continues cashing in with its tribal alliances, forged from a strategic decision made several years ago.

“We set a goal to leverage our history in hospitality and with commercial gaming companies like Harrah’s into becoming a leader in Indian gaming,” Bacon says. “This is now a $26 billion industry, and our decision to build our brand in Indian Country has been rewarding from a design and relationship standpoint.”

Indian gaming projects enabled Hnedak Bobo—which works with or for more than 25 of the nation’s most prestigious tribes—to increase its workforce by one-third to 88 people last year. Bacon is a principal for the company, which handles complete planning and design for projects of all stages.

The Native American gaming dynamic is varied. Some tribes wish to instill their culture overtly, others subtly. What ties them together is the need to compete in a tight marketplace.

“Gaming is an activity people are just not going to give up,” Bacon says. “Some people play golf. Some go to a casino. They just spend less right now.

“Our job is to keep them engaged and spending. The biggest change right now? Whereas you may have added a four-star amenity in the past, now it’s a three, not because you want to affect quality, but because you need to deliver this project at a price point that can get it financed. We laugh about how it used to be the legal guys who told us what to do. Now it’s the banks.”

In 2011, the firm completed a renovation project for the Sycuan Band of the Kumeyaay Nation in San Diego, adding amenities like a high-end sports bar.  It also designed a new facility for the Pokagon Band of Indians in Hartford, Michigan. The property has 500 machines, a snack bar and restaurant, tailor-made for a specific market.

Another crowning jewel is Wind Creek Casino Hotel, which opened in 2009 in Alabama. Hnedak Bobo design blends cultural references with modern materials on this property.  The casino’s high woven ceiling inside reflects an abstract rendition of wind movement.

Hnedak Bobo, founded in 1979, has captured over 200 design and industry awards. It designed the Gaylord Palms Resort in Florida and the Gaylord Texan resort outside Dallas, Texas, to the combined tune of $1 billion. It is also one of the rare design companies to own a hotel, the Westin in Memphis.

By GGB Staff   Wed, Dec 21, 2011

It hasn’t taken long for Eric Berg to make his mark as president of International Game Technology. Brought in to oversee day-to-day operations at the slot manufacturing giant, Berg, on the job less than six months, has quickly grasped the advantage the company has over its competitors in the industry: Size matters.

“The scale and our global breadth allows us to deliver to our customers a unique value proposition,” he says.

Despite its size, however, Berg says IGT is attuned to the local markets.

“We’re able to localize our product offering,” he says. “We have very strong brands and underlying game mechanics and math models. We have a two-tier strategy of catering to the different cultures with games that speak to them, but we also have some games, like Sex and the City and The Hangover, that really transcend cultures and borders.”

In Asia, Berg is confident that the market will continue to expand.

“We’re already seeing the slot floor grow in Asia,” he says. “I think this notion of culturally specific games is going to play a big role in that growth, certainly in Macau. We have a significant effort under way to understand how the players break into different groups, not only to give us insight into how to localize in those markets, but also to understand the different segments so we can make games that satisfy them.”

Berg, however, is most excited about a new effort launched in December that will consolidate all IGT offerings in a “cloud” and reduce the need for hardware and software on the casino floor.

“We’re creating a connected experience for the player,” he says, “a 360 view of his desires and aspirations. Similar to what Apple has developed in the consumer space, we can be the master integrator in the gaming space. The casinos would rather spend their time, effort and money creating programs that are uniquely positioned for their patrons, rather than trying to figure out how to integrate disparate technology. It’s a unique position for us in the marketplace and it fills a real need.”

Berg says IGT’s cloud-based initiative was inspired by a mega-trend in the information technology industry.

“Instead of requiring operators to build big, expensive data warehouses, buy servers and storage and manage the complexity of a technical infrastructure, we take all of the infrastructure and plumbing under our roof and provide the application and service over the web. This removes all the barriers to entry and adoption. This will provide us with a significant advantage over our competitors because it enables us to deliver our full portfolio of games and systems directly to the casino more seamlessly.”

The potential advantages to operators are significant, according to Berg.

“First, it’s going to dramatically reduce the startup costs,” he says. “They won’t have to make a multimillion-dollar investment. They’ll just have to launch an application. It will allow customers to pay as you go and turn a big capital expense into an operating expense.”

The impact on server-based with this plan would be substantial, as a customer would have access to the full library of IGT titles.

“It’s just a different delivery vehicle for all of our services,” he says. “As it’s now offered, server-based gaming requires the installation of a server and a certain level of customer proficiency. A vast amount of that technical complexity and up-front cost goes away with this initiative. It essentially eliminates the risk of trying server-based gaming. We think it’s going to a major accelerator for adoption.”

By GGB Staff   Wed, Dec 21, 2011

Ciarán Carruthers remembers the post-handover gaming industry in Macau, which makes him something of a rarity in the business. As an early member of the Galaxy Entertainment executive team, Carruthers became adept at discerning the demographics, trends and nuances of the Chinese gambler. It was that knowledge that allowed this upstart gaming company that—against all odds—won one of the three government concessions  to prove itself worthy of competing with the strongest and most savvy casino corporations in the world.

With a family in Australia, Carruthers left Galaxy in late 2009 to spend more time with them. But business beckoned again and Carruthers formed Asia Pacific Gaming in early 2010 to provide consultancy and management services to the global financial community and Asian gaming operators. Along with several other experts who have at least 20 years experience in Asian gaming, and a dozen or so researchers, APG produces detailed monthly reports on the gaming business in Macau and offers consulting services of all varieties.

APG’s clients are mostly financial institutions that want to know what the trends are, which company’s promotions are working or not working, and how to find the little things that will predict future success.

“It’s a very competitive market,” says Carruthers. “We concentrate on the mass market but also provide reliable data from the VIP rooms.”

APG is also beginning to evaluate the non-gaming attraction of Macau.

“This used to be a pure gaming experience,” says Carruthers. “That perception is changing, and with the opening of Sands China’s Cotai Central, the critical mass is just expanding.”

Carruthers’ excellent reputation with Galaxy and APG has helped the company win a management contract with Leisure & Resorts World for the Belle Grande in Manila, one of four billion-dollar-plus integrated resorts slated for PAGCOR’s Entertainment City next to the giant Mall of Asia. The majority owner of Belle is the SM Company, which also owns and operates the mall. Phase 1 will include six hotel towers in the four- and five-star variety with a 180,000-square-foot casino.

“Our primary target is the international tourist market,” he says, “along with the VIPs. We have an excellent relationship with some of the most important junket reps in Macau, so we believe we’ll do very well. We won’t replace the Macau trips, but we’ll be a great secondary choice for those players.”

He doesn’t discount the locals market in Manila either, given the success of Resorts World Manila, a Genting project that has experienced remarkable success since opening a couple of years ago.

“Resorts World has proven that there is a desire for a quality gaming experience in Manila,” says Carruthers. “While it won’t be our primary market, we believe we’ll give those customers another high- quality choice.”

APG’s research in Macau showed that 70 percent of players visit two or more casinos. Carruthers says he believes those numbers will hold true at Entertainment City, as well.

“If a VIP player is on a losing streak,” he explains, “they often want to change where they are playing. That’s difficult if you have a stand-alone casino somewhere in the middle of nowhere. But in Manila, we’ll have four casinos in close proximity, so while our players will stay with us most of the time, they have the chance to visit another if they hit that losing streak, and having that option is important to players when making a decision to travel to gamble.”

One thing is certain: Carruthers and APG will be on a winning streak for a long time to come.

By David Ross   Wed, Dec 21, 2011

John Harte says the purpose of Mapetsi Policy Group (Mapetsi means “red bird” in his native San Felipe Pueblo, and was his mother’s maiden name) is “to provide a direct link for tribes to federal policy makers in D.C., knowing that, more than any other factor, federal actions affect Indians.”

That was why Harte came to Washington. “My grandfather worked in tribal politics his entire life. I always wondered why he came to D.C. and why the federal government affected our lives so much,” he says.

Mapetsi is a lobbying group of attorneys, founded by longtime Indian Country advocate Debbie Ho, with expertise in Indian law and the relationship between tribes and the federal government.

Harte comes from the U.S. Senate Committee on Indian Affairs, where he was policy director for the chairman, North Dakota Democratic Senator Byron Dorgan. Harte staffed the effort to pass the Tribal Law and Order Act (TLO) of 2010.

“When Senator Dorgan asked tribes what their priority was, they answered tribal safety and justice,” says Harte. “The criminal justice system in Indian Country is a complete mess, a maze of jurisdictions. Tribes rely on the federal and state governments to investigate and prosecute crimes. Unfortunately, the law doesn’t hold them accountable. The new law holds the government to a higher standard, and requires it to share information with tribes and submit annual reports on crimes it declines to prosecute. It enhances the power tribes have so they can prosecute these crimes at home.”

Previously, Harte was general counsel and legislative director of the National Indian Gaming Association, focusing on federal legislation and litigation relating to Indian gaming, taxation, economic development, and the right of tribes to participate in the political process. He helped defeat legislative attempts to treat tribes as corporations. He was deputy director of the Office of Tribal Justice within the U.S. Department of Justice and worked to implement President Clinton’s Indian Country Law Enforcement Initiative. He also worked with the Office of the Solicitor General to develop the government’s position on Indian law cases.

Almost all tribes Mapetsi represents operate gaming, but most of its work focuses on immediate needs like health care and infrastructure. A recent success was the Hoh Indian Tribe Safe Homelands Act, which helped the Hoh tribe of Washington state place 500 acres into federal trust so they could relocate from land subject to flooding.

Mapetsi is closely involved with efforts to pass a “Carcieri fix,” to undo a recent U.S. Supreme Court decision, which Harte calls a “direct attack on a core aspect of tribal sovereignty.” The court decision ruled that tribes recognized after the 1934 passage of the Indian Reorganization Act cannot take land into trust. Critics of off-reservation gaming applauded the ruling, but in fact, less than 5 percent of the requests to take land into trust involve gaming of any kind. Harte hopes to find some legislative solution to the problem.

By Frank Legato   Thu, Dec 22, 2011

Most slot manufacturers have research and development departments that work on the next big thing for the slot floor. Bally Technologies takes the concept one step further, actively seeking out technology that has never been considered as a slot machine feature, and bringing it into the slot space.

It’s called the Innovation Lab, and it’s the Bally corporate-level R&D group focusing solely on the future. The Innovation Lab is outside the main business units and is responsible for searching the wider world of business for technologies that can be applied to the casino industry. It is headed by Bryan Kelly, who is Bally’s senior vice president of technology and networked gaming.

Kelly has a job like few other slot manufacturing executives. Along with his team, he travels the world seeking technology at conferences, workshops and other venues, as a sleuth of sorts for what can be done to make slot machines and casinos more exciting and efficient. When he finds something, his team often builds a prototype and then brings it to the other Bally systems and game divisions to commercialize. Eventually, some of the technology will appear on a new Bally slot machine.

You may have heard of the iDeck programmable button deck—the multi-touch display pad that not only substitutes for slot buttons, but transforms into an interactive bonus input device used for everything from shooting at objects on the main screen to playing the piano. The idea came from the Innovation Lab. Another innovation that was incubated in the Innovation Lab was the iVIEW Display Manager.      

The Innovation Lab was conceived by Kelly and then-Bally Chief Technology Officer Bob Luciano around five years ago. Like many of the slot sector’s innovators, Kelly had come from the arcade and internet amusement game business, and was working with Luciano to apply amusement-style game functionality to the slot space. Kelly says they were literally days away from the launch of the Innovation Lab when Luciano fell ill with a stroke in 2007.

Bally CEO Richard Haddrill saw the value of what Luciano and Kelly were on to, and gave Kelly the go-ahead to launch the Innovation Lab in April 2008. “My job is to search for transformational technology. I’ll go out into the world, attending 50-70 technology conferences a year. They can be in banking, computer, mobile or any other industry. My team’s job is to figure out which technology will apply to the gaming space in the future.

“A technology cycle in our industry is 18 months. My people look for technology that will be commercially viable in anywhere from 18 months to five years.”      

Kelly is full of stories about how his team’s finds have led to groundbreaking Bally technology. The iDeck button panel, for instance, resulted from Kelly’s attendance at a boutique computer technology conference. “I happened to be sitting right next to a couple of Apple engineers,” he recalls. Kelly deduced Apple was mapping out what would eventually become an iPad-like device, but what caught his attention was the multi-touch gesture-capable display. “Because of my arcade background, I knew I could use that to create a much more interactive experience on the slot machine.” It’s one of many intriguing Innovation Lab stories.

Most recently, Kelly’s team and Bally’s business-development staff have worked heavily to incubate the new Bally Interactive Group, the division working on placing Bally content on a variety of distribution channels. It’s likely only one of many more stories to come from the Innovation Lab.

If you want to know what’s next, you’ll have to wait. Or go to some tech conferences yourself.

By GGB Staff   Wed, Dec 21, 2011

Sometimes being the son of a famous father can be a burden, but even more so when the father is the chairman of the company where you’ve chosen to start your professional career. But Sean Lanni says serving under his father, the late Terry Lanni, was an honor and a privilege.

“At home, around the dinner table, he was a normal dad. He never brought home the burdens he had at work,” says Lanni. “But in the office, it was all business. I saw an entirely different side of him.”

Lanni says working in the gaming industry was the farthest thing from his mind when he got out of college. He saw himself as an investment banker or an entrepreneur living in Los Angeles.

“My dad made me the man I am today, but I never wanted to work for him,” Lanni laughs.

Nevertheless, he did take his father’s advice, at the same time joining his company. “The future is in Asia,” the elder Lanni told his son. So that’s where he went. When MGM Resorts (then MGM Mirage) bought a sub-concession in Macau and partnered with Pansy Ho, Lanni was sent over to help with the development of the first property, MGM Grand Macau, and worked for Bob Moon, who was president of the property prior to opening.

“Within three months, I got the bug,” he laughs. “Every day was something new. Talking to Bob and my dad, I was able to see the big picture. That really made a difference in deciding what I wanted to do with my life.”

Lanni got exposed to all sides of the business.

“One-third of my time, I was doing corporate development,” he explains. “Another third was getting involved in international marketing and how it would work with Las Vegas. I spent time doing investor relations. I was all over the place.”

Later, Lanni worked with the company’s hospitality group on potential projects in India, but then it got serious.

“I was in Beijing with (MGM Chairman) Jim Murren and (then-corporate counsel) Gary Jacobs when I got the call telling me that my father had been diagnosed,” he says. “Jim offered to fly me home that day, but I wanted to get back to Hong Kong and pack up. I needed to go home.”

Lanni says the support the company gave him during that time was invaluable.

“I was able to spend a lot of time with him during those days,” he says. “That was so important to me, and I can never thank MGM enough.”

When Lanni came back to work full-time, he picked up where he left off in impressing his superiors. He joined the effort to develop relationships with like-minded companies—other hotels, cruise ships, nightclubs, sports and entertainment—to grow the company’s M Life players club, creating robust partnerships that have paid a corporate dividend.

He has recently been promoted to executive director for international business development, which will keep him traveling for much of the year.

While Lanni understands it could be years away, he’s ambitious about his future.

“I’d love to be the guy in charge, either at a casino or a company,” he says. “Right now, I’m happy in my job and my life. It’s been a very tough year and not quite the time to look to the future in any depth. But that time will come.”

By GGB Staff   Thu, Dec 22, 2011

It’s a bit ironic, but people who start working in the casino rarely get to run the casino. Rick Mazer is the exception. After breaking in as an original craps dealer at Caesars Atlantic City, Mazer began a slow and steady climb in a career that has mainly been focused in the Midwest.

For 15 years, he worked his way up through several organizations until he was running the Horseshoe in Hammond, Indiana, the most successful Chicagoland casino, and Horseshoe in southern Indiana. His expertise at operations and his regard with members of upper management increased during that time.

In 2009, an important position opened on the Las Vegas Strip, and Mazer was appointed to lead not one, but five properties in the center of the world’s most famous casino street. Harrah’s Las Vegas, Imperial Palace, O’Sheas, Flamingo and Bill’s Gambling Hall all fall under Mazer’s operations. It’s like operating one of the largest hotels in the world, with 10,000 hotel rooms.

But if that wasn’t enough, soon after he took over, Caesars Entertainment announced an aggressive plan to transform that side of the Strip (opposite its flagship, Caesars Palace) into yet another Las Vegas must-see attraction. The Linq project will “link” Bill’s and the Flamingo with the other three properties via a very unique mall that will include innovative retail, restaurants, bars and other entertainment attractions. At the very end of the Linq will be one of the world’s largest observation wheels, giving Las Vegas visitors a breathtaking view of not only the pulsating lights of the Strip but also the majestic mountains that ring the valley.

Also included in the project is a complete redesign and re-theming of the Imperial Palace and room upgrades in the IP and the Flamingo.

Mazer says the Flamingo will once again become one of the top casinos in Las Vegas.

“It has a very dynamic history, notorious in its own right,” he says. “It’s a great casino environment that just needs a little tender loving care, which we are addressing at a very measured pace.”

With the Linq project, however, all bets are off.

“This is going to create a corridor of highly engaging food and beverage product with some retail outlets, along with the world’s largest observation wheel,” Mazer says. “Just by virtue of its location, it is going to be very well received by visitors to Las Vegas and be yet another reason to stay on the Strip.”

The wheel, says Mazer, will be a truly unique experience.

“It has pods that can hold up to 40 people,” he says. “In addition to just doing a ride, we have had numerous requests from people who want to be married in the wheel. You can rent out one pod or the entire wheel. We can offer conventions and meetings a truly unique experience complete with food and beverage.” 

Another new element, the Margaritaville casino inside the Flamingo, opened in October in what was once a dark hallway.

“Margaritaville is a very strong brand that is more than just a place; it’s a state of mind,” Mazer explains. “To re-create that in a themed gaming environment was the trick. We used the Margaritaville designers and customers have been very receptive to it.”

The wheel and Linq project is expected to be completed late next year.

By GGB Staff   Wed, Dec 21, 2011

It’s a long way from Connecticut to China, but in changing times, the road to success is clearly marked in both jurisdictions. And the road signs say, “Diversify.”

Gillian Murphy, former senior vice president and general manager of MGM Grand at Foxwoods, and now senior vice president of non-gaming operations at Galaxy Macau, understands the dynamic very well.

At MGM Grand in Mashantucket, Connecticut, Murphy touted the property’s non-gaming amenities—restaurants, nightclubs, pools, spa—to lure a broader, younger demographic including a healthy contingent from New York, thus creating what she called a “strong complementary market” for the gaming-centric tribal resort.

In Macau, Murphy is charting a similar course. It’s all in keeping with Galaxy Entertainment’s stated vision: to be Asia’s “leading gaming and entertainment corporation.”

For Murphy, the accent is on entertainment.

“Galaxy is the first property of its kind with true resort features, including game-changing amenities and services,” she says. They include a 52,000-square-meter Grand Resort Deck with a white-sand beach, the world’s largest skytop wave pool, three five-star Asian hotel brands, and 50-plus F&B outlets.

Guests have responded with enthusiasm. “Our hotels are running at very high occupancy,” Murphy says. “Galaxy Macau has quickly developed a reputation as a foodie destination, which is no accident since we invested so heavily in this aspect of our operations.”

The Banyan Tree Spa, the only such facility in the Pearl River Delta, is often fully booked, “and our offerings for meetings and incentives are unbeatable in the market, which is due largely to the integrated nature of Galaxy Macau,” Murphy says.

In other words, every comfort is close at hand; besides sightseeing, there may be no reason to leave the resort during a stay—and that’s good for the bottom line.

Murphy says her tenure at Foxwoods, as well as three years with Harrah’s in Las Vegas, equipped her to work in the world’s fastest-growing gaming market.

“Foxwoods’ diversity of product offerings, including the addition of the MGM Grand, helped prepare me for the opening of Galaxy Macau—also the richness of its culture and the Mashantucket heritage,” she says.

“Harrah’s provided a sound appreciation and education of the gaming side of the business,” she continues. “Their systems, processes and commitment to service excellence are a solid foundation to draw upon.”

The growth of non-gaming amenities is also important to the Macau government, which is awash in gaming revenues—which soared 40 percent to 50 percent last year—but wants to shore up its tax base by attracting more families and leisure travelers.

Murphy, with more than 28 years of hotel and resort experience on her résumé, foresees an increasingly beneficial partnership of gaming and non-gaming enterprises. 

“I spent half my career working with luxury destination resorts before seizing the opportunity to join gaming,” she says. “Gaming will certainly continue to play a large role in the Macanese economy, but we believe non-gaming—particularly the type that Galaxy Macau brings to the market—has a real future as well.”

By GGB Staff   Wed, Dec 21, 2011

Rob Norton enjoys the thrill of pressure. He has found the right place.

The 18-year gaming veteran, named president and general manager of the $500 million Maryland Live! Casino last fall, directs its opening set for summer of 2012. Maryland Live! will sport approximately 5,000 slots and electronic games, restaurants, a live entertainment venue and top amenities.

The Cordish Company is developing the facility, which draws from the most densely populated market in the country. Several million potential customers—from Washington, D.C., Baltimore, Annapolis and Philadelphia—live within a two-hour drive.

Maryland Live! is supported by the Arundel Mills shopping district, which already claims 14 million annual visitors, 5,000 nearby hotel rooms, a busy airport and 10,000 parking spaces at its mall. Maryland Live! will hold an additional 450 parking spaces.

Norton, whose father Steve was an industry pioneer and among the group that launched Atlantic City’s gaming in 1978, draws the biggest spotlight of his career. He presides over an industry rarity these days—an opening.

“This is a very exciting opportunity for me,” he says. “There are only a handful of properties in the country that will embark on a project of this magnitude. We are one of a very few at the top of the food chain. The Cordish Company is a one-of-a-kind organization. They presented such a nice opportunity that it made sense for me to come here.”

The offer he couldn’t refuse entails overseeing all aspects of the property’s operations, including gaming, finance, marketing, human resources, hospitality and information technology. This will be a heavy drive-in market, with the airport supplying a bonus customer stream.

Maryland Live! wasn’t given perfect conditions, however. A whopping 67 percent tax bracket, one of the largest in all of gaming, provides a stiff challenge. Norton’s property seeks to capitalize on the size of its slot parlor and on being one of the first big players in a lucrative, yet lightly tapped market.

“Our research indicates that the housing market was not affected nearly as much here as in other parts of the country,” he says. “Unemployment hasn’t been nearly as prominent as it has been elsewhere in the nation. These are strong factors for us. Unfortunately, with the tax bracket we have to think differently than we normally would. We have to take all the cliché answers to heart, like incorporating automation, being more internet-based with our marketing, being disciplined with the hiring and staffing, etc.” Maryland Live! has begun hiring a staff of 1,500.

Norton has succeeded in difficult conditions before. He served as COO of MTR Gaming from 2009 to 2011, growing the company’s earnings each year, despite over $1 billion of competition entering the market. MTR owns and operates casino and racetrack facilities in West Virginia, Pennsylvania and Ohio.

Prior to MTR, Norton held a variety of top executive positions and opened four properties for Isle of Capri Casinos from 2000 to 2009.

By Frank Legato   Thu, Dec 22, 2011

Konami Gaming, Inc. has been one of the industry’s most remarkable success stories of the past few years. In 2008, Konami’s executive management team announced the company’s goal was to reach the “podium,” meaning the goal was to become one of the top three slot manufacturers in the industry.

Never mind that the industry was at the beginning of its worst revenue slump of modern times. Three years hence, Konami is very close to stepping on that podium.

The reason has been the K2V slot platform, and its new follow-up, KP3—not to mention the Konami Casino Management System, one of the fastest-growing casino management systems on the market. Surging sales have defied the recession, putting Konami squarely in the top five slot-makers in the market—and by some measures, at No. 4.

And at the center of the revenue surge has been Ross O’Hanley, Konami’s vice president of domestic game sales and marketing. Like many of the slot sector’s best sales and marketing pros, O’Hanley comes from the operational side—and also like so many slot-sector executives, from Caesars Entertainment. O’Hanley entered the industry as an MBA student in the President’s Associate Program of the former Harrah’s Entertainment, followed by positions with Harrah’s Atlantic City, the Venetian and Harrah’s corporate offices before joining Konami just as the push toward the podium started in 2008.

“It has helped to understand what it’s like to be on the customer side of the table,” O’Hanley says. “Having had people sell to me, I remember what was important to me as an operator. I wanted the sales representatives to partner with me to make my slot floor more successful. I always keep that in mind in my current role.”

It also helps to have a great product. While the new KP3 platform is state-of-the-art, the K2V product is still at the height of its popularity. “It’s a good problem to have,” says O’Hanley. “K2V is still robust, and still one of the top-performing platforms out there. There is excitement about the advanced graphics and processing power of KP3, and some of our customers want that new platform, but others still want the tried-and-true K2V performers. It’s great to be able to offer them both.”

In 2012, things promise to get even better for Konami. Near the end of 2011, the company’s ship share was up to 15 percent in North America—it was hovering around 6 percent in 2007 before the “podium drive”—and O’Hanley hopes that will go up further next year. Meanwhile, the systems division continues to grow, and Konami’s recurring-revenue game placements have gone from 1,500 three years ago to more than 6,000 today.

O’Hanley says Konami’s success can be traced to a simple strategy: listen to your customers. “We’ve succeeded by really listening to what our customers want,” he says. “We’re not off on a tangent trying to create ‘cloud’ capabilities for gaming, or trying to lead the way with server-based initiatives.

“Some of our competitors have stayed focused on the floor of the future—at Konami, while we are keeping a close watch on applications for future technology, we’ve stayed focused on the floor of the present.”

By GGB Staff   Wed, Dec 21, 2011

The Casino Reinvestment Development Authority was set up in 1984 to bring some of the benefits of the casino industry directly to Atlantic City, which had no access to any revenue except for property taxes. The additional 1.25 percent gross gaming revenue “investment” was supposed to be dedicated to Atlantic City, but in reality went to other parts of New Jersey in addition to Atlantic City. In time, the agency became a political plum.

No more. With Governor Chris Christie’s commitment to improving Atlantic City, the CRDA was given complete authority over the city’s tourism district, as well as several other organizations, including the Atlantic City Convention & Visitors Authority.

The man put in charge of the CRDA is an outsider with no ties to the city (although he did grow up in New Jersey). John Palmieri spent a career in urban redevelopment, taking charge in Boston, Providence, Rhode Island and Charlotte, North Carolina.

Palmieri’s first order of business is developing a master plan for the tourism district. The CRDA has hired a firm to develop the plan, and then Palmieri will go to work.

“We’re going to identify the low-hanging fruit and go after that first,” he says. “I’ve told our consultants that we have to focus on what we can do realistically in the next year or two. We want to hit the ground running.”

While Palmieri has only been in office a few months, he understands the basic need to reposition the city.

“Obviously, we want to create a destination that goes beyond gaming,” he says. “We want to do things that will create jobs outside the casino sector.”

A group called the Atlantic City Alliance, an organization of casino companies that will be funded with the $30 million that will no longer go to the state racetracks, will be responsible for marketing the city. Palmieri says he’s already established good relationships with its new CEO Liza Cartmell.

“By spending $30 million a year over the next five years through advertising and public relations efforts, together we are going to create some momentum,” he says.

Part of Christie’s vision for Atlantic City was the creation of different districts—arts, entertainment, shopping. Palmieri says that is a key goal of his organization.

“The biggest assets that we have are the Boardwalk and the ocean,” he says. “We want to create corridors to the water that will feature good pedestrian links, nice retail, enhanced security and more. That will involve discussions with the private sector, which have already begun. It’s part of the overall plan.”

Although Atlantic City Mayor Lorenzo Langford has expressed aggravation at losing control over the tourism district, Palmieri is confident that he can work with the city.

“This thing isn’t going to work if we’re not in sync,” he says. “The mayor and I are not children. We know there will be disagreements. But I want him to understand that I’ll do everything I can to make the relationship work.”

By Rich Geller   Wed, Dec 21, 2011

The gaming industry was not on the radar for Joc Pečečnik when he founded Interblock parent Elektroncek in 1989. The Slovenia-based company originally produced and installed security systems, then moved into general computer hardware and software solutions.

One day, Pečečnik was asked by a local casino if the firm could repair a gaming machine.

“During the repairs I discovered a potentially lucrative niche in the industry, the automation of classical casino table games like roulette,” recalls Pečečnik. “This is how ‘Princess,’ our first product, was born in 1997.”

The electronic roulette prototype was introduced at London’s ICE trade show, where the device received “impressive market response,” says Pečečnik. “From that time on, the Interblock brand has stood for highly reliable and sophisticated gaming solutions.”

Today, Interblock produces a variety of automated table games, including electronic roulettes in real and virtual wheel formats, dice games and electro-mechanical card games. The devices have found success internationally in venues ranging from small arcades to mega-casinos.

“Different traditions require different play options,” says Pečečnik, who besides his role as company chairman also oversees R&D and business development at Interblock.

At home, Pečečnik has taken an active role in society. In 2006, he bought the local Ljubljana football (soccer) team and stadium with the goal of creating a modern, professionally competitive club—not coincidentally, now also named Interblock.

Pečečnik has also established the charity foundation Red Ball, the main purpose of which is to restore dignity to the less fortunate, providing jobs and financial assistance to young athletes, the disabled and others in need.

Interblock also owns and operates the Kongo Hotel & Casino, just outside Ljubljana. Besides functioning as a gaming venue, the electronic casino serves as showroom and test facility.

“Kongo gives us an opportunity to present our freshest products to clients and business partners, right on the floor,” says Pečečnik. “It also gives us insight into the problems a casino might face.”

At present, Kongo is Interblock’s only involvement as an operator. But, says Pečečnik, “If our operations in the U.S. go as well as planned, there could be a new ‘kingdom of entertainment’ in Las Vegas.”

Interblock’s North American business was recently boosted by the addition of an Organic Island multi-game installation with 120 terminals at Genting’s new Resorts World Casino New York at Aqueduct Racetrack. A second, larger installation is planned for the second phase of the casino.

Pečečnik credits the success of the company “to the whole Interblock team, to my family and my friends.”

That sense of loyalty and appreciation seems to run both ways: five of the six people who started with Pečečnik in 1989 are still among the firm’s 300 employees.

By Frank Legato   Wed, Dec 21, 2011

For Richard Pennington, taking over as CEO of Aruze Gaming America in December 2010 presented a unique opportunity—to apply skills honed working for an industry behemoth to an upstart, rapidly growing slot manufacturer.

Pennington had been vice president of corporate strategy and product development at International Game Technology, where he had worked for nearly 20 years. When he was tapped for his current job, Aruze was making headlines as the “new/old” kid on the block. Kazuo Okada, chairman of Aruze of Japan, had instituted a resurgence of his company (originally known as Universal) in the North American slot market. Aruze Gaming America was successfully translating the Japanese parent company’s acumen in the pachinko/ pachislo market of its home country to slot machines in the U.S.

Pennington says he was excited about the transition from a huge company to a small-but-growing one, and, as he says, “trying to create your own momentum.”

“At IGT, it’s a battleship—it has momentum; you have brands; you have intellectual property,” Pennington says. “You had an infrastructure that doesn’t need day-to-day attention like you find in a smaller, more aggressive company. But there are advantages in the smaller company. There is quicker decision-making, and a much faster cycle between what’s occurring in the field and when you make your decisions, and the implementation of those decisions.”

Pennington has spent his first year at the helm of Aruze establishing the slot-maker’s identity, and that has resulted in an expansion of Aruze’s market footprint. “It’s been about positioning our products and understanding what is most important for our customers and our players,” he says. “Once we established who we are in terms of a brand, and started putting games out that reflected that, it’s been quite remarkable.”

What has been remarkable is Aruze’s increasing market share, which surged dramatically in the last three months of 2011. “Now, we have to work on the other side,” Pennington says, “on getting those products to customers on a timely basis.” To that end, Aruze has tripled its sales force and went from one to five sales offices. “We’re working on all of the other aspects, including significantly increasing our game output, our production capacity and our support capacity.”

It has helped that Aruze’s game quality is second to none. Runaway hits like “Paradise Fishing” have been joined by hybrid arcade-style games in the G-Deluxe series and the company’s new stepper product. “Our growth has been very balanced between linked products, stepper and video,” he says.

Pennington says the currently slow replacement cycle in the slot sector is more of a problem for the big boys like IGT and Bally than Aruze, “because they can’t grow significantly without it. We can grow significantly by taking market share. Our opportunity to gain market share is about creating products that are unique.

“We understand better today how to position our products for both our customers and our players. As a result, we’re having an enormous amount of success.”

It’s likely that success has only just begun.

By GGB Staff   Wed, Dec 21, 2011

Tribal attorney Gary Pitchlynn has spent most of his career helping Indians find equal footing in the casino industry. The self-described “half-breed” (his father was Choctaw) was among the first to take on the National Indian Gaming Commission in the 1990s, when it tried to limit the freedoms affirmed by the Indian Gaming Regulatory Act by shutting down electronic bingo in his native Oklahoma.

As lead litigator for a dozen tribes, Pitchlynn helped rebuild the dismantled industry, betting that sufficient gaming revenue would allow the Indians to defend against any enforcement by the NIGC and the Department of Justice.

Over time, most of the tribes “withdrew from the battlefield,” Pitchlynn says. He fought on, alongside the Absentee Shawnee tribe of Oklahoma and the Seminole Nation. It took years, but the strategy succeeded.

“The last of our litigation was in 2001 or 2002,” says Pitchlynn, “and the first compacts were in place by 2004.”

Pitchlynn was not always so deeply invested in tribal matters. Growing up on the exhausted oil fields of Wewoka, Oklahoma, among full-blooded Seminole and Creek Indians, “we didn’t feel like we belonged anywhere,” he says.

He never learned his tribal language, and did not feel an affiliation with his heritage until the 1970s. After a brief stint in law school (“I hated it,” he says), he worked at the Native American Center in Oklahoma City. “I became interested in all things native,” he says. “I wanted to learn all about my community and culture.” Newly inspired, he returned to law school with the express purpose of representing native clients.

Now a specialist in tribal gaming, Pitchlynn has an insider’s grasp of the industry’s promise, its perils—and the politics that could stunt the development of tribes striving for economic parity.

Internet gaming “is certainly the newest of the threats,” he says. “Tribes must have a seat at the table, be written into any law that might open internet gaming, and assert that they already have that authority under IGRA.”

As existing compacts expire, he warns, “expect the states to try to solve their financial problems on the backs of the tribes.” As a fallback position, some tribes could revert to a primarily Class II industry, and thus prohibit the states from taking a share of the revenue.

Tribes must also beware of efforts to reclassify their more lucrative Class II games as Class III, and safeguard their gaming interest through “natural alliances at both the state and federal levels,” says Pitchlynn. “But as the targets move and change, it will always be important to weigh the potential for new alliances.” In the future, he suggests, “our alliances might be with labor interests, education, law enforcement, local and county governments and other gaming interests.”

No matter how the landscape changes, expect Pitchlynn to stay in the game. “He’s been around for decades on all tribal issues, starting in poverty law,” says tribal gaming expert Kate Spilde, of San Diego State University. “As young guns and fair-weather friends and the Abramoffs of the world come and go, guys like this have staying power.”

By Frank Legato   Wed, Dec 21, 2011

When Patrick Ramsey took over as interim CEO of slot manufacturer Multimedia Games in March 2010—an appointment made permanent in September—former chief executive Anthony Sanfilippo had only recently begun a growth plan for the slot-maker.

With a few very important twists and turns, Ramsey has used his first year at CEO to turn Multimedia Games into one of the fastest-growing slot manufacturers in the business.

Multimedia was well-established as one of the top suppliers of Class II machines in several important markets. Sanfilippo had tapped slot industry veterans like Mick Roemer to lead the company’s push into the more traditional Class III gaming markets.

With a creative team in the company’s Austin, Texas headquarters that is clearly one of the best in the business, Multimedia began last year to make serious inroads in many Class III markets. However, where Ramsey altered the company’s course a bit was in splitting the management focus between its new Class III jurisdictions and its traditional markets.

“When I started out, we were quite focused on Class III and the new jurisdictions, but we found that concentrating on our core markets and customers in core markets like California, Oklahoma and Washington, where we once dominated, was much more important in the near term,” Ramsey says. “The other markets will be slower builds.”

Keeping the company’s best Class II customers happy comes natural to Ramsey, who, like his predecessor, was an operator first. “Coming from casino operations—especially Harrah’s—makes us focus on listening to customers,” says Ramsey, who was a corporate vice president for the former Harrah’s Entertainment and slot VP for Caesars Atlantic City. “Our customers in Oklahoma helped us refocus, and it has really helped us turn our company around.”

Luckily, the creativity pouring from Multimedia’s game designers applies to both classes of slot machines, more so because of both recent improvements in technology and the company’s expertise. “We have gotten to a point where we can go from Class II to Class III, and even VLTs, very easily,” says Ramsey. “We can focus on our core technologies, and use some of our best content to get into the new markets.”

Multimedia slots have been popular in both markets, as Ramsey says is obvious in jurisdictions such as Oklahoma and California that have both Class II and Class III games. “Several tribes have been looking at expanding their Class II product, and Class II is getting more and more attractive to the operators—the tribes,” Ramsey says.

“It’s a great option when the Class II games can perform as well as the Class III games. Years ago, there was a performance gap between the two. Now, we’re seeing some markets where Class II actually out-performs Class III.”

Meanwhile, Multimedia continues to impress an expanding number of slot executives in the traditional Class III jurisdictions with its product. Ramsey is likely to spend 2012 jetting back and forth among the team in Austin, new customers in Ohio, Florida and elsewhere, and the investment community.

“With a company our size, we clearly have to be telling our story quite a bit,” Ramsey says. “And, putting up the results to support that story.”

By GGB Staff   Wed, Dec 21, 2011

With an undergraduate degree in international affairs from Universidad Central de Venezuela, an MS in development economics from Boston University and an MA in public administration from Harvard University, Beatrice Rangel has made her career occupying key positions in both the public and private sectors.

She held a variety of high-level posts within the government of Venezuela from 1972 through 1992, in directorial and advisory capacities, eventually becoming chief of staff for the minister of the secretariat of the presidency.

From 1993 through 2004 Rangel was with the Cisneros Group of Companies, one of the largest privately held media, entertainment, telecommunications and consumer products organizations. Rangel was hands-on in developing business strategies for high-profile media and communications projects.

As senior VP of corporate strategies until 2000, she developed key components of the company’s long-term strategic plan. In the role of senior adviser to the chairman from 2000 through 2004, Rangel’s duties included overseeing development in the U.S. Hispanic market and providing support to the chairman and CEO and to the president of the Cisneros Group on corporate relations policies and strategies.

Rangel’s time at Codere began in 2007, with her appointment as corporate director for institutional relations, a position she still holds. The Spain-based gaming and entertainment company was preparing to go public and needed to build a new business model based on creating share value. They turned to Rangel, who since 2004 had been heading her own consulting firm in Miami, AMLA Consulting, specialized in growth and partnership opportunities in the U.S. and Hispanic markets. Today she also holds the title of president for Codere’s two most important Latin American territories: Argentina and Mexico.

“From a business performance point of view, Argentina is the most important market,” says Rangel. “From the growth potential point of view, Mexico is our most important market.”

In Argentina, in Buenos Aires province, Codere has 14 bingo halls with over 5,000 slots, which altogether generated almost €403 million in the first nine months of 2011.

But it is Mexico that Rangel sees as offering the best potential for growth. Codere has received government approval for an acquisition that will increase its operations in Mexico from a 49 percent owner of 42 gaming halls to an 84 percent owner of 95 venues. Codere intends to turn all of the newly acquired properties into entertainment destinations. And if Mexico can eventually get its regulatory act together, growth could be significant.

“For the government, it is very important to understand that insofar as they do not enforce regulations, they are losing revenue,” says Rangel. “It is a pity, because Mexico is one of the countries in Latin America that is creating middle classes constantly, and these emerging middle classes tend to attend gaming halls to socialize.”

By GGB Staff   Wed, Dec 21, 2011

After 23 years with the same company, most executives are looking forward to a retirement party and the easy life. Not Anthony Sanfilippo. After rising through the ranks at Harrah’s Entertainment, serving as the Western and Central Division president, he left in 2007, becoming CEO of Multimedia Games in 2008. Despite some spotty performances in the past by executives who move from operations to manufacturing, Sanfilippo’s tenure at Multimedia took the company from Class II to Class III, using his knowledge of operators to nudge the company forward. Sanfilippo says he would have still been there if it wasn’t for the entreaties two years later from Pinnacle Entertainment.

“I loved my time at Multimedia,” he says. “But when the previous CEO (Dan Lee) left Pinnacle, I thought that would have been a great fit for me. At heart, I’m still an operator.”

So when Pinnacle called to talk, Sanfilippo jumped at the opportunity.

Sanfilippo began by cutting costs and eliminating non-core assets. He sold the company’s casinos in Argentina and canceled plans to build a $2 billion resort in Atlantic City. At the same time, he expanded the company by buying the River Downs racetrack outside of Cincinnati as a defensive move that will lessen the impact on Pinnacle’s Belterra property in Indiana of a Horseshoe casino going up in the southwestern Ohio city.

Surprising some analysts who thought the Argentina sale signaled a pullback from international markets, Pinnacle reached an agreement last year with Asian Coast Entertainment to buy 25 percent of the company’s Ho Tram Strip development in Vietnam for $95 million, and a management contract to operate the second resort slated for the site, after the MGM Grand Ho Tram, which will open early next year.

“It was a great opportunity for us to get our feet wet in that market for a very reasonable investment,” says Sanfilippo. “So this gives us a chance to help develop a property while we watch a very experienced MGM team operate a property in the same location.”

Pinnacle also reached an agreement with Wynn Resorts to give its players club members the opportunity to stay at Wynn properties in Las Vegas.

“The biggest complaint from our customers was that we did not have a property in Las Vegas where they could stay on their trips to the Strip,” he says. “So not only do we now have a place where they can stay, they can stay in two of the best properties in the entire city. It encourages our players to give us all their play when they’re at home for the chance to visit a Wynn property in Las Vegas.”

One problem the company had when Sanfilippo arrived was a lack of a core brand. With L’Auberge in Louisiana, Lumiere Place in St. Louis and Belterra in Indiana, the company had great properties but no core brand. The answer, says Sanfilippo, was to brand the players club.

“We discovered that most of our customers didn’t know we had other properties in those markets,” he explains. “But we can’t change the names of those resorts because they are branded in those specific markets. And ‘Pinnacle’ is a rather standard corporate name, so that wouldn’t work.

“So we decided to brand the players club, MyChoice. It’s tiered and aspirational like most clubs, but the top level, the Owners level, is quite different. We give customers who reach that level 100 shares of Pinnacle stock—so they really are owners—and a two-year lease on a Mercedes. All they are responsible for is their own insurance. It’s had a tremendous reception.”

By GGB Staff   Wed, Dec 21, 2011

Raised in the shadow of Steve Wynn, it’s really no surprise that Seth Schorr fell in love with the gaming industry. Schorr’s father, Marc, has been a Wynn top executive for more than a decade, so Seth comes by his affection for the industry honestly.

His experience with Wynn Resorts in several different capacities led to a career of entrepreneurism that was launched when Schorr and a group of advisers and investors bought the gritty North Las Vegas casino Speedway, which he rechristened Lucky’s. But after Schoor took over in late 2007, Lucky’s became unlucky. Schorr learned his first hard lesson in the gaming industry. When the Las Vegas construction industry crumbled, many of the Hispanics who lost their jobs at that time moved on to communities that offered more opportunities, and the once-healthy core of customers disappeared.

But by cutting costs, combining job responsibilities (cocktail waitresses also became slot hosts and technicians) and creating unique promotions, Lucky’s was able to survive those tough years.

“Things have gotten better in 2011,” Schorr said. “We’re growing in the single digits, but at least we’re going up.”

Schorr’s company has also added two more properties, the Silver Nugget and the Opera House in the unique market that is North Las Vegas.

But in 2011, Schorr’s Fifth Street Gaming was named as the management company for a shuttered Downtown Las Vegas property, the former Lady Luck, now owned by the CIM Group.

Now known as the Downtown Grand, the property is uniquely positioned between the Fremont Street Experience and the new Mob Museum, slated to open in early 2012. In addition, the corporate headquarters of the innovative shoe retailer Zappos.com is moving Downtown to the old Las Vegas City Hall, steps from the Grand. Add to that the synergy being created in the Downtown market with an expanded Golden Nugget, a massively redesigned Plaza and several other upgrades, and the Grand is the right place in what will hopefully be the right time.

“Although they are our competitors, we root for the Golden Nugget and the Plaza,” he says. “That said, we believe our property will be as nice if not nicer than anyplace in Downtown.”

With 10 restaurants and 10 bars and lounges—including several facilities in the same block if not the hotel itself—Schorr says it’s going to bring a new customer Downtown.

“All my friends can’t wait to have someplace to come in Downtown,” says the young Schorr, who grew up in Las Vegas. “It’s going to be the place to be with an energy unlike any place in Vegas.”

Schorr says the Grand and the North Las Vegas properties are just the start.

“We’re looking to acquire and manage a wide variety of properties,” he says. “We’re just getting started.”

But the ambitious plans for Fifth Street Gaming are just a reflection of what Schorr likes best about the gaming business.

“Creating experiences that hundreds of thousands of people can enjoy and remember is something very special,” he says. “To be able to do that and make money—especially with a limited checkbook—in a creative and innovative way is very rewarding.”

By Rich Geller   Wed, Dec 21, 2011

As Ireland works to revamp antiquated laws on gaming and betting, the person overseeing those efforts is Minister for Justice, Equality and Defense Alan Shatter of the Fine Gael party. The work tenuously begun by the Department of Justice and Equality under the previous government, which was replaced by a Fine Gael-Labor coalition following elections in February 2011, appears to have been taken on seriously by Shatter.

In September, Shatter announced that the government had agreed to his proposal to begin working immediately on new gaming and betting legislation. Existing laws covering the activities date from 1931 for horse racing and sports betting and from 1956 for casino gaming. The new legislation is intended to address both sectors as well as online gaming, all under the collective term “gambling.”

In the September announcement, Shatter presented a down-to-earth, business-friendly approach to the task.

“The series of decisions taken by the government will bring clarity and certainty,” Shatter says. “This will assist anyone planning to locate business here. They can be assured they will be operating within a comprehensive, modern regime.”

At the same time, Shatter emphasizes the need for legislation to be responsible socially, saying, “More importantly, the new system has protection of the vulnerable as its primary objective. It will also give customers greater entitlements within a well-defined system, and in that and many other ways, it will serve the public interest.”

The 60-year-old Shatter is described by the Ministry of Justice and Equality website as “an advocate of radical legal, social and environmental reform.” A lawyer by trade, he specialized in family law and has written several books, including a novel, with reform of such legislation as their focus. As a deputy in the Dail—a representative in Ireland’s Lower House of Parliament—Shatter has been heavily involved in getting reform legislation dealing with family law passed.

On the anticipated gambling legislation, Shatter’s September statement dashed hopes for those who sought to bring large-scale casino resort properties to Ireland. Instead, the government decided “only casinos of modest size” were desirable. Although the government recognized the employment benefits accompanying the creation and development of a casino resort industry, it was thought they would attract negative activities that put vulnerable people at risk.

The new legislation will create a unified enforcement structure across all gambling sectors. Licensing and inspection will be under the minister for justice, equality and defense.

Shatter expects to present a full draft of the legislation to the government in spring 2012.

By GGB Staff   Wed, Dec 21, 2011

Karen Sock moved to Mississippi in June 2005 to become vice president and assistant general manager at Harrah’s Grand Casino Gulfport. Ten weeks later, that casino and many others on the Gulf Coast were destroyed by Hurricane Katrina. The catastrophic storm moved on, but Sock stayed put.

“Katrina devastated many of our 6,000 employees,” says the Cleveland native, who earned her stripes at properties in New Orleans and California as well as Mississippi. “I remained and helped with the recovery.”

Like so many others, says Sock, “we lost everything we owned. While the losses were painful, it placed new emphasis on what is really important.” Working side by side with her new neighbors, she says, “I fell in love with the spirit of the people and decided to stay.”

Now general manager and chief operating officer at Biloxi’s Margaritaville Casino & Restaurant, due to open this summer, Sock cut her teeth in the hotel industry, working for the Sheraton, Marriott and Holiday Inn hotels before becoming the first black female casino manager (at Harrah’s Tunica) in 1996.

She told Jet magazine at the time, “I am very proud because I know people of color and women and others will look to me for leadership. But it is only my performance that will determine my future success.”

That performance has been impressive. Sock has effectively managed hundreds of millions of dollars in revenues for casino companies including Harrah’s (now Caesars) and Grand Casinos. Perhaps as important, she’s made a deep personal investment in the communities where she’s worked, and in the employees she’s shepherded up the ladder.

“At the end of the day, business is about people,” Sock says. “The wisdom others shared with me helped me in achieving my goals, and it’s a priority in my professional life to mentor others.”

A pivotal mentor for her was industry veteran Tom Brosig, now president and CEO of Margaritaville Biloxi. The two first worked together in 1997 in Tunica; in 2010, Brosig tapped Sock to consult on the Jimmy Buffett casino, and quickly added her to the executive team.  

Some thought the Biloxi casino would never be built. Margaritaville originated in 2007 as a Harrah’s/Caesars project on the city’s famed Casino Row. It was shelved in 2008 when the economy went south, and then revived as an independent venture. Along the way, it was scaled back from a $700 million palace to a $48 million Back Bay property with swaying palms and 27 boat slips. The latter is far more reflective of Buffett’s laid-back, gone-fishin’ ethos—and it’s better suited to the economy. With 26 acres, there’s room to grow, and Margaritaville’s independent management company, based in Orlando, Florida, hopes to draw Buffett fans from across the U.S. (5 percent of the population listens daily to Margaritaville radio, Sock says).

“It’s is the perfect model for our community,” says Sock. “When you think of Jimmy Buffett and the whole escapism lifestyle, this is the perfect fit, ideal for the Gulf Coast.”

Sock fits right in too. Describing the Margaritaville team and brand as “powerful,” she promises, “We’re going to hit this one out of the park.”

By GGB Staff   Wed, Dec 21, 2011

When the economic situations in Greece, Belgium and Germany began to affect Casinos Austria properties there, CEO Karl Stoss decided to assume direct responsibility for the future of the versatile gaming group’s international business activities.

“We began immediately with an analysis of the status quo and rapidly established a new road map and a clear set of necessary measures,” says Stoss, who has headed up the gaming group since 2007.

The response was second nature for Stoss, an experienced mountaineer who recently climbed the 7,045-meter Mount Lhakpa Ri in the Himalayas. As such, he is used to making life-or-death decisions based on rapidly shifting circumstances.

“On tours like my recent trip to the Himalayas, you really have to concentrate on what you are doing in the here and now,” says Stoss. “This really gives you a chance to clear your head and stop turning the same issues over in your mind. You are totally focused. I find it very relaxing and it gives me the energy and clarity I need to deal with the challenges that lie before me.”

Back at Casinos Austria, those challenges include a variety of changes in the casino, lottery, sports betting, online gaming and VLT sectors—in all of which the company is active, at home and abroad. The firm has already won a 15-year extension to its license to operate Austria’s national lottery.

“The renewal of the lottery license represents a key step for the future of our group,” says Stoss. “But we can’t simply rest on our laurels. The national casino licenses in Austria will be re-tendered in 2012, and in addition to the 12 existing licenses we currently hold, we will also be bidding for the three new casino licenses and the new poker license.”

Internationally, the group has 60 gaming operations in 18 countries. These include diverse casinos, slot parlors and VLT outlets, as well as lottery operations in the Russian Republic of Bashkortostan and the Argentinean Province of Salta.

“Our international business is very important for Casinos Austria, and we want to remain a key player in the international gaming industry,” says Stoss, “particularly in the South American and Asian markets, where we feel there is good potential for growth.”

Like all operators, Casinos Austria faces a crowded environment.

“Increased competition from illegally operated online casinos and the liberalization of the gaming machine sector in Europe have posed significant challenges to the established, licensed gaming companies and initiated a restructuring of the entire gaming market,” says Stoss. “At Casinos Austria, this has meant a reorganization of our corporate group to provide us with an organization that will allow us to maintain our leading position in the industry in the years to come.”

By GGB Staff   Wed, Dec 21, 2011

Tools for a lobbyist: be practical, pragmatic and persuasive.

Larry Werner embraces those characteristics and more. For nearly three decades, the Albuquerque, New Mexico native has been a premier journalist, government legislative director, and, for the last 12 years, lobbyist. He represents tribal interests in government, both gaming and non-gaming, as a senior vice president for mCapitol Management, a Washington, D.C. company specializing in government relations.

Werner’s 2012 focus concerns tribes seeking to offer online poker.

“It will be important for them to have a level playing field for entrance into the marketplace,” he says. “Tribes will also have to protect their sovereign status in relation to gaming states like Nevada and New Jersey, not to mention state lotteries.”

How does he lobby? Push for one side of an issue, but look at both.

“My role for the tribes is to communicate to federal policy-makers rational reasons why tribes should not be steamrolled,” he says. “Non-tribal gaming interests need to agree that Indian tribes, provided they can effectively regulate the games, should have the same start line. For their part, tribes should be willing to work with the federal government to agree on effective regulation levels without sacrificing their sovereignty.”

Werner appears destined to become immersed in federal policy. His background for constructing a logical argument came from a journalism stint with newspapers in Las Vegas, and Seattle. He was featured on the ABC Nightline program in 1985 for a story he wrote detailing mysterious illnesses among Boeing and Lockheed workers at aerospace plants.

In Nevada, as a political reporter, he met then-Congressman Harry Reid. Werner ultimately became deputy campaign manager for Reid’s first Senate campaign in 1986. It was successful, despite three visits to Nevada by President Ronald Reagan on behalf of Reid’s opponent, Jim Santini.

Werner served as Reid’s legislative director from 1992 to 1998, and Reid became the highly influential Senate majority leader. In Washington, Werner faced high-profile lobbyists and gained an education about how to effectively become one.

“You appreciate how to communicate with people who currently work on the Hill,” he says. “I remember when lobbyists used to come in and try to bully their way into getting what they wanted. That definitely didn’t serve their interests. So, I work very hard in my current role to show respect to the staff. The No. 1 rule of lobbying is to not go around the staff.”

Rule No. 2? Contradict the stereotype of lobbyists seeking only to make rich people richer.

“One issue I worked on with a number of other tribes was to prevent the IRS from taxing as personal income the health care benefits that tribes provide their members,” he says. “Keep in mind that the federal government often does not fully meet its trust obligations to provide health care to Indians. Tribes that had the means stepped into the vacuum and provided Health Care to members. The IRS was contemplating taxing those benefits, and we acted to prevent that from happening.”

By GGB Staff   Wed, Dec 21, 2011

After I published No Work & All Play—The Audacious Chronicles of a Casino Boss, many people asked me what motivated me to write such a book.

Frankly, I did it for a variety of reasons. First of all, I think everybody would like to write a book. They just don’t know how. I felt the same way, and the only way to find out if I could do it was to start writing.

A lot of people keep diaries or journals. I simply kept notes. These were notes about people, events and memorable times in my career. I told myself years ago that some day I would reflect back on these notes and write my memoirs.

When I retired from the gaming-resort business in 2010, I began writing the draft of my manuscript as a transition from working full-time to gradually enjoying a life of leisure.

Secondly, I wanted my book to serve several purposes beyond just being a memoir for my family. I wanted it to pique the interest of young people considering the hotel and casino business for their careers. I also wanted to acknowledge by name the many people who affected my life during my very long career in this wonderful industry. They are the reasons I never dreaded going to work one single day of my career. I loved the business and I wanted to write about what made it so much fun.

 Lastly, I wanted to pay tribute to Jack Binion. I was 51 years old when he hired me, and I truly was born again under Jack’s mentorship. I knew the business pretty good up until then, but Jack showed me how the casino entertainment business should really be run. I have dedicated this book to Jack and his wife, Phyllis.

The UNLV Hotel School played a big role in helping me both select and shape a career in gaming hospitality, and I am delighted to donate half of the royalties from the sale of my book to the Hotel College. For that reason alone,

I hope the readers of Global Gaming Business will purchase a copy. No Work & All Play—The Audacious Chronicles of a Casino Boss is available directly from the publisher, Outskirts Press (www.outskirtspress.com/bookstore/ 9781432777241), and it is also available at Amazon.com and Barnes and Noble, including the Kindle and Nook downloadable versions.

 
Born Again at 51

The two Horseshoe properties in the South operated like well-oiled machines. It was so nice to finally be involved with an organization that did not require a huge bit of tinkering just to pay some past-due bills. The Horseshoe was rolling in cash. The showrooms were featuring the likes of Don Henley, Ringo Starr, Jay Leno and Tim McGraw. The two casinos were hosting a huge array of million-dollar customers. Jack Binion’s Mid-South Poker Tournament was just coming into its own as a new event to rival the famous World Series of Poker.

Jack himself was the center of his own commercials and was becoming a celebrity in his own right all over Mississippi, Tennessee and Louisiana. When asked by a member of the press why his smaller casino did so much better than his larger competitors, Jack answered by saying, “I use my facility 24 hours a day, while most of my competitors use theirs for 12 or less.” That proved to be a key to the higher profit margins we enjoyed at Horseshoe. We had lower odds and higher jackpots than our competitors. Our live entertainment was the best and the most expensive in the region. But with a promotional environment that required us to use our facilities around the clock, we were able to spread the costs of all our programs and higher payroll expenses over a full day, and at the end of the month we just generated more cash and better profits.

While most casinos had stringent policies for the issuance of complimentary services to patrons, Jack Binion’s policy was to empower his employees to make judgment calls and not be controlled by a computer or some rule set in stone. Many of you who frequent casinos know what I am talking about. You ask for a comp only to be advised that you need to play for another 10 or 15 minutes before you qualify. When you are a loyal customer and also hungry, that response will tend to piss you off. The Horseshoe policy was almost the exact opposite. The first time I observed it in person, I was afraid it was far too liberal and maybe uncontrollable. Yet, the public relations value of Jack’s comp policies alone were worth millions in free advertising. In fact, it was folklore in Memphis that Jack trained his casino bosses and hosts to use the “smell test” when deciding who to comp. When I first heard about it, I inquired, “What is the smell test?”

I was informed that it was Horseshoe policy to comp any customer who smelled like he had money on him. If a customer bought in with a $100 bill, the pit boss smelled money and immediately asked the patron if he would like dinner in the buffet. Sure, there were some people who knew the policy and took advantage of it, but the volumes of patrons that liked the no-hassle comp policy more than made up for the occasional guy who worked the system.

Free booze was another trademark at the Horseshoe. It is well-known that liquor is the lubricant for free and easy gambling, and therefore our rules involved a no-hassle policy for getting booze to the customers. In the South, the customer liked the long-neck beer bottles and was not particularly happy drinking the more economical draft beer. Nonetheless, all our competitors poured draft beer. Not Jack.

Bottled beer was more expensive. Bottled beer took up more space and required more employees to move it about. But that is what the customer wanted so that is what we gave them. Likewise, if a customer wanted a name-brand liquor, that is what we poured him. It was a major violation of Jack’s mantra to ever substitute an alternative brand to satisfy a customer’s request. The casino bars in the Tunica casino were stripped of their cash registers because the cost of auditing so little cash sales was not worth the effort. Ringing up comp booze sales in the cash register was more red tape the customer did not need.

The Horseshoe training programs were easy to understand and simple to teach. They did not consume large amounts of time in boring classrooms, and they did not require the employees to learned “canned scripts.” Jack Binion’s service training followed the simple Golden Rule: Every employee could be him or herself around a customer. Employees were encouraged to treat each customer as an individual, recognizing that each customer has a different set of criteria that makes them comfortable in a casino.

The employees, as a team, all sensed that they were a surrogate Jack Binion, and they should act on behalf of the owner when dealing with each and every customer. Jack would constantly remind employees, “If you let a pissed-off customer walk out the door, you’d better go outside and bring him back in or just keep on walking out with him.” Jack Binion was truly embarrassed when we screwed up a customer’s visit. Yet he also knew that some of the best relationships with customers are forged through adversity. Therefore, he encouraged us to sometimes create small adversities for customers that we could quickly fix in such a glorified manner that both the affected customers and the people (including employees) around them would witness. Fixing these small grievances quickly and in such a glorified manner cemented customer ties and continued to exemplify the customer service focus of Mr. Binion and his Horseshoe casinos.

Jack also went out of his way to never let his family or his executives displace his customers. Unlike my days at Trump when we would vacate an entire floor of patrons just to take care of Marla’s family and friends on a moment’s notice, or even with MGM or Del Webb when the chairman of the board would demand the penthouse suite during a busy convention, Jack Binion proved to be the opposite. I recall my first visit to Tunica with Jack, where we learned that the Horseshoe was oversold and may be required to turn away some patrons with reservations. Binion and I gave up our rooms and rented accommodations at the Gold Strike Hotel next door.

I also noticed that Jack never occupied a suite in the hotel, even when demand permitted him to do so. When his wife, Phyllis, traveled along with him, he would occasionally book a suite, but only if it did not displace a customer. Thankfully, Phyllis agreed with his policy and she was always a gracious guest whatever room she occupied and regardless of the fact that she was also an owner of Horseshoe. But I guess that’s why the employees all respected the Binions.

Every company has a culture. Some cultures are negative and some are positive, but a culture of some kind always exists. A culture is developed and evolves based on the vision and behaviors of the leadership. Jack Binion had a vision that his casinos would create an environment for the serious gamblers where they could come and indulge themselves without apology and where there would be little if any red tape.

Everybody understood that he successfully achieved his vision. Without a doubt, the culture at the Horseshoe under Jack Binion’s leadership was the most unique ever to occur in the gambling industry. It has never been replicated, and the size and scope of the gaming operations today and leading into the future probably will never see the type of culture that led the Horseshoe Gaming Company to its rapid and successful merger with Empress Casinos and then its ultimate sale to Harrah’s. Employees and customers all called Mr. Binion “Jack.” Hardly anybody referred to him as “Mr. Binion,” and that just doesn’t happen anymore in the current world of casinos.

By Frank Legato   Wed, Dec 21, 2011

Nearly 30 years after the first slot accounting and player tracking systems appeared, some 95 percent of casinos have their slot machines linked to an online card-based loyalty program. However, many casino marketers have yet to realize the full value of the data generated by such systems.

Database marketing is still maturing three decades after the databases were created. Customer loyalty programs are still maturing as well, often with consulting assistance from some of the professionals who pioneered such programs.

Meanwhile, the newest technology available has enabled casino marketers to mine and exploit the mountain of information generated by casino management systems with an immediacy not even imagined when companies like Bally, Aristocrat, IGT and Konami began their system partnerships with casinos.

The key, of course, to effectively using the technology allowing real-time offers and promotions is to know the customer. Casinos of all sizes have turned to consultants such as Randall Fine to help them mine the data being generated by casino management systems. Fine gained prominence in the marketing field at the former Harrah’s Entertainment, where he was one of the architects of the industry-standard Total Rewards national players club program. His Fine Point Group, founded in 2005, offers consulting and operations help in all management disciplines, but its core function has always been to help casinos develop effective customer loyalty programs.

“Most of our business is consulting to typically smaller operators who want the sort of horsepower the bigger operators get, but who can’t afford it,” Fine explains. “We have the ability to bring world-class loyalty marketing and analysis to smaller properties that can’t afford the full-time people to do those kinds of things.”

The Fine Point Group starts with the database that was created by a casino’s card-based loyalty program, and separates the customers into segments—unique groupings of customers based on frequency of visit, gender, age, marital status and other demographics. The goal, says Fine, is to customize the marketing for each group. “There are lots of ways we can group customers and speak to them in a more customized way,” he says. “Each customer can be sent a perfect set of offers for them, but almost no casinos are doing that. They send everyone four cash coupons.”

Fine says a good player loyalty system will offer personal demographic information, and track what customers play and when they play it, as well as what other amenities each customer likes. “Once you have all that raw data, you can figure out what to send that customer,” he says. “Operators should be sending each customer a unique offer based on them.”

Keeping Score

The more data collected and analyzed, the more tailored those marketing programs can be to each customer. “The first thing any casino needs is some kind of data reporting where every single transaction of the customer is tracked,” says Marco Benvenuti, principal of Duetto Consulting, which recently built a comprehensive strategic marketing platform for Tucson’s Casino Del Sol and has been involved in major customer relationship management projects for other large casinos.

Benvenuti, who created business intelligence and marketing platforms as an executive of both Wynn Resorts and Caesars Entertainment, says the starting point for customer loyalty programs should be establishing a way to calculate a score that gauges each customer’s total worth. “We all know what to do when we evaluate a gaming player—you look at ADT (average daily theoretical), and that’s how you calculate the worth of that player. When you look at everything, it becomes a little more complex. We come in and help operators develop their own score, which we call average daily theoretical profit.”

The theoretical profit combines assumptions on what a customer will lose at the tables or slots with assumptions on what the customer will be spending on F&B, the spa, entertainment and other non-gaming profit centers. Duetto’s Revenue Management Tool Kit uses the scores to forecast demand based on past transactions, and produce pricing recommendations for different customers. “This particular customer gets your casino rate, another may get an offer with F&B or spa or gaming chips, another gets a comp, depending on what they’ve done before,” he says.

Gifts That Fit

In addition to customizing promotions, information in an operator’s customer data warehouse can be used to customize gifts. This is where companies like Rymax Marketing Services come in.

New Jersey-based Rymax creates customized incentive programs that casinos can use to offer loyal players gifts from a selection of 250 brands and more than 1,000 products. Currently, Rymax offers such services to MGM Resorts properties around the country.

“We have all name-brand, high-aspiration products,” says Paul Gordon, vice president of sales for Rymax. “Brands like Salvatore Ferragamo, Apple and Samsung are driving play, because the products are highly desirable by the end user.”

He says Rymax also gives casinos web-based programs that will permit customers to view the products from home—and, of course, come back to the casino to redeem the gift. Gordon says it’s a relatively new phenomenon that’s steadily gaining steam in the casino industry. “Eighteen months ago, operators were still saying, ‘We want to give away 5,000 muffin tins,’” Gordon says. “That’s not going to bring people in. People want something that’s hot at the moment.”

The Here and Now

Gordon says the biggest success stories among Rymax’s casino clients involve casinos using all available media, to engage players online, using mobile devices, or at the property itself.

It’s part of a trend now emerging to bring marketing full-circle from what was once available only in the mailbox to bring promotions and communication to the player, regardless of where that player is at the moment. Large companies like Bally Technologies are going in this direction—Bally Interactive, formed after the company acquired a mobile platform, is dedicated to helping casinos interact with customers in all media.

One company helping casinos add the mobile element to the marketing mix is Joingo, LLC. The company was founded in 2008 by biotechnical industry pioneer John Finney and Stephen Boyle, the telecommunications wizard who co-founded the company that first brought data services to cellular phones in the 1990s.

Joingo offers casinos a ready-made mobile platform to add to their customer loyalty programs. The groundbreaking Mobile Loyalty System, with five patents pending, gives casinos what Boyle, the company’s CEO, calls “the capability to create their digital front doors today.” The company also is working with slot manufacturers to offer their games on mobile devices for free play, with the natural evolution to for-wager play to be made quickly where mobile gaming is legal.

However, for now, one of the biggest advantages offered to casinos by Joingo is the ability to make communication and player rewards immediate, from the casino to the player, on the customer’s mobile device.

Boyle says the key to doing this effectively is to use the information in the patron database. “We have a system that taps into the patron management system, and we can look at that live information, and our customers have the ability to create an infinite number of demographic segments, and then target those segments independently or in combination for promotions,” he says. “And because it’s mobile, you can see it within a matter of seconds; you can do very time-sensitive things.”

Brenda Boudreaux, Joingo’s vice president of sales and marketing, adds that mobile marketing allows casinos to quickly personalize promotions for a customer while he’s still on the property—reward them for their play with dinner at their favorite restaurant, give them a quick birthday present, or any of an infinite number of other possibilities. “You can talk to them about things that are happening at the hotel, and give them information relative to their location,” she says. “This gives you the ability to react, and you don’t have to wait until they get home and find something in their mailbox.”

The other channel for instant, real-time promotions is the ticket printer on each slot machine. Companies like FutureLogic, Inc. and TransAct Technologies have developed thermal printing products that link to a property’s computer network to send players comps, gifts or other rewards before they even leave the slot machine.

South Point in Las Vegas recently installed FutureLogic’s PromoNet couponing solution. According to Nick Micalizzi, FutureLogic’s vice president of sales and marketing for North America, one of the main objectives of the solution is to help casino operators identify valuable players, whether carded or not. “One of the main objectives is to reward valuable players who have not yet joined the club,” Micalizzi says.

When play reaches certain pre-set triggers, players are issued a coupon through the ticket-in/ticket-out printer as an incentive to join the club. “We created an intelligent couponing system that links promotions, in real time, to game play, and delivers promotions exactly where and when they are needed,” Micalizzi says.

TransAct’s Epicentral system also allows casinos to make relevant real-time offers to players while they are at the slots. “The offers are intelligent, and personalized based upon the link between the player tracking system and Epicentral,” says Tracey Chernay, vice president of sales and marketing for TransAct. “With Epicentral’s Campaign Center and its view into the player tracking database, Epicentral can manage limitless types of offers, but tailor them directly to a specific player who qualifies based on a tier or a designated trigger such as time on machine or coin-in.”

Epicentral recently completed casino floor testing on 1,100 slots at Connecticut’s MGM Grand at Foxwoods, and Chernay says the company is set to go live with another 1,000-plus installation in the near future.

As more new technologies appear, the sophistication of customer loyalty programs will increase even more. Any way you slice it, we’ve come a long way from depending solely on the casino host and the snail-mail coin coupon.

By Rich Geller   Wed, Dec 21, 2011

Now that Spain’s online gaming legislation is fully in force, the regulator will need to fine-tune policies to create a successful industry—and perhaps do the same for the nation’s ailing land-based casinos.

Spain officially published its law on online gaming in May and the law came into effect the very next day. It laid down broad generalities to be followed by those who would later create the specific regulations, many of which as of this writing are still pending. Absent the detailed regulations, unlicensed operators were allowed to continue to serve the Spanish market through December 31, but with conditions.

According to an overview of the law prepared by Blanca Escribano, partner at Olswang Spain LLP, and Ellen Martinez, associate at Olswang Spain LLP, the legislation applies to gaming via the internet, mobile phone, television, telephone or any other such “electronic, interactive and technological” devices. The law also governs the games and all delivery means used by the existing monopoly lottery operators LAE and ONCE.

In contrast to the regional laws that cover land-based gaming, the new law operates at the national level. It is an attempt to head off problems that could arise by having a confusion of disparate regulatory regimes created by the 17 autonomous regions. However, the law still allows the autonomous regions to set most of the policies and regulations that pertain to gaming within their territory.

As a starting point, the law prohibits any and all types of gambling unless allowed by law or regulation. Allowed forms of gambling are:

• sports betting by pool, fixed odds or betting exchange;

• betting on horse racing by pool or fixed odds;

• other types of betting by pool, fixed odds or betting exchange;

• raffles, competitions and random combination games; and

• other games.

“Other games” includes any game that comes with a chance to win or lose money or some other item of value. According to the Olswang report, the law names poker and roulette as an example of this category, which by extension most likely would include any casino-type game.

The tax rate for online gaming varies per game and activity. When details of the law were being hashed out, there were those who wanted the tax for all forms of gambling activities to be based on turnover rather than gross gaming revenue. Ultimately, the law was published with a gross gaming revenue tax for most activities ranging between 10 percent and 25 percent, depending on the product involved. However, sports pool betting, horse racing pool betting and parimutuel betting are subject to a turnover tax, at the rate of 22 percent for sports and 15 percent for horse racing.

In addition to the federal tax, each of the autonomous regions is allowed to put in its own tax for gaming that takes place within its borders. They may raise the federal tax by a maximum of 20 percent. This rate would only apply to wagers made by the given region’s residents.

No value-added tax is to be charged on bets and wagers. There is, however, an administrative fee of 1 percent of the operator’s annual turnover, to be paid as a lump sum.

There are three other types of entities that can be held liable for tax payments if they do not hold a license to provide gaming to residents of Spain. These are the operator providing the gaming activity, anyone profiting from the gaming activity, and the ISP or other service provider if it is judged they should have known their services were being used for gaming.

This somewhat odd rule may have to do with the way existing online gaming providers were tolerated even after the law came into effect last May. Operators were legally allowed to continue to provide their services without a license up until January 1. The one requirement was that they pay taxes and fees quarterly as if they were licensed.

One important change in the law from the initial draft was the removal of the limit on the number of licenses that could be issued. All licensing decisions would instead be the province of the National Gambling Commission, which could decide to limit the number of general licenses but only based on reasons of public interest, such as protection of vulnerables or prevention of compulsive gambling.

Operators are required to have a general license, valid for 10 years and renewable for another 10. Applicants must be Spanish public limited companies established for the sole purpose of operating gaming. Those companies registered in another E.U. member state must have a permanent representative or agent in Spain. The operator will only be allowed to offer games to Spanish residents via a dot.es website and must redirect to this website any Spain-based clients who enter through another of the operator’s sites.

In addition to the general license, an operator will need a separate license for each type of game offered. These licenses are valid for one to five years.

A third category of license is available for those who will occasionally be offering gaming activities to the public.

Operators will not necessarily be required to locate their central gaming server within Spain. However, the National Gambling Commission will need to be able to monitor the server, wherever it is, and may decide the operator needs to locate a secondary server in Spain, for verification reasons.

The Olswang report points out that the Spanish Tax Agency might consider a server based in Spain as “a relevant economic presence of the operator in the state,” in which case the server would double as a permanent establishment for tax purposes.

Three government bodies will oversee various elements of the online gaming industry. The three are the Economy and Treasury Ministry, the National Gambling Commission and the Gambling Policy Council.

The Economy and Treasury Ministry will issue rules for each permitted game, according to criteria established by the Gambling Policy Council. The National Gambling Commission will grant licenses and generally manage the day-to-day affairs of the market, including making sure that operators are in compliance with the law.

The National Gambling Commission will also interact with the Gambling Policy Council, which will coordinate regulations in effect at the national level with those of the autonomous regions.

In the area of advertising, the law as published only allows licensed operators to promote themselves to the Spanish public in any way, shape or form. The law did provide a transition period, designed with sponsors of sports teams in mind. Such sponsorship, advertising or promotion deals signed before January 1, 2011 were allowed to continue until January 1, 2012.

As the end of 2011 approached, a license to operate an online casino was granted by local authorities to the existing Casino Gran Madrid. The casino started with just a dozen games, including blackjack, roulette and slots. But by the end of the year it was expected that Gran Casino Madrid Online would be offering hundreds of games, including poker.

For other potential operators seeking a national license, a first round of submissions was being accepted from November 19 through December 14. Although the National Gambling Commission will have up to six months to review the applications, it is expected that many licenses will be issued much sooner, even in January.

Opposition to Online Gaming

The move to legalize online gaming has not pleased everyone. The Spain-based but internationally active Codere Group in particular has come out strongly against what it sees as a rush to legalization.

Codere Foundation Chairman José Antonio Martínez Sampedro, speaking critically of the online gaming law at a conference of government and industry figures in late November, told those gathered that “the new scenario is completely subversive for the established order.”

Martínez Sampedro said that gaming has traditionally been subject to principles of consumer protection, high taxation, limited offer and restricted advertising, with positive discrimination in favor of the national lottery organizations LAE and ONCE—but that now, with online gaming, all that will change.

A different complaint was heard from the Spanish Casino Association. Rather than turn back the clock and eliminate the law, the SCA is more concerned that the government harmonizes the tax rates for land-based casinos with those for online casinos. Namely, whereas online gaming will be taxed at a maximum of 25 percent, land-based casinos can find their table game revenue taxed as high as 55 percent.

According to the SCA, the 43 land-based casinos in Spain provide 7,000 jobs directly and generate almost €105 million in taxes for the autonomous regions. But a fairly recent smoking ban has caused an average 15 percent drop in revenue in addition to the general decline in business experienced over the last decade and a half.

The SCA wants the recently elected Popular Party government to review all gaming legislation, with a view to equalizing tax rates among the various sectors but also to correct what it sees as the “19th century regulation” under which it functions.

Advertising restrictions on land-based casinos is one area that needs revision, according to the SCA. The organization argues that advertising was originally prohibited to control demand and prevent the growth of operators. However, the proliferation of online gaming, along with television game shows, lotteries and other forms of entertainment related to gaming, make such prohibitions obsolete.

The land-based casinos will need to do something to stay competitive. According to a study presented at the iGaming Summit Madrid in October, about one-third of all gambling in Spain currently takes place online. And with legal online operators advertising their services in the coming years, that figure is not expected to go anywhere but up.

By GGB Staff   Thu, Dec 22, 2011

International Game Technology is moving into the internet “cloud.”

The company announced the “IGT Cloud” solution last month at its investor conference in New York. By placing game content on its proprietary internet cloud, casinos will be able to have access to the IGT game library seamlessly using land-based, mobile and online devices.

The IGT Cloud solution also will enable casinos to implement server-based gaming without the investment in a physical server for each property.

“IGT is leading the cloud computing transformation in gaming by offering operators innovative solutions to optimize their operations and casino floors,” said Chris Satchell, IGT’s chief technology officer. “Utilizing the IGT Cloud will let casino operators focus on what is important to them: players, games and performance.”

The IGT Cloud’s Software as a Service (SaaS) program offers initial private, secure IGT Cloud services that will enable casinos to manage game content using IGT Floor Manager to access what is the largest game library in the industry. The sbX Analytics module will empower casino operators to increase marketing productivity and maximize floor-wide performance with a variety of reporting tools.

The IGT Cloud solution is the result of a collaboration between IGT and CA Technologies.

The same day it announced the launch of the IGT Cloud, the company announced the debut of the IGT Cloud Partner Program, to market the technology shift with a key set of casino operators and CA Technologies. Spanning EMEA and Latin America, the IGT Cloud Partner Program includes Gala Coral, Olympic Casinos, Evian Casino and Codere.

Program partners will have access to private, secure IGT Cloud services which initially will allow casinos to manage game content using IGT Floor Manager and maximize floor-wide performance leveraging sbX Analytics.

“We are seeing the benefits of using IGT sbX to expand the player experience,” said Mark Sergeant, managing director of Gala Casinos. “With IGT Cloud, we will be able to efficiently accelerate the expansion of the sbX benefits to our properties and players.”

“IGT Casinolink casino management system has allowed us to manage the slot floors, table games and gaming operations at more than 60 casinos,” said Indrek Jurgenson, chief operating officer of Olympic Casino. “IGT Cloud will give us the powerful control of seamlessly analyzing and configuring our casino floors to meet evolving player demands.”

“With Codere properties throughout the world, we will be looking at IGT Cloud to provide distributed capabilities to remotely analyze, configure and optimize casino floors and provide new player experiences over time,” said Felipe Ludena, Codere’s chief information officer.

Union Gaming Group, in notes to investors after the IGT conference, gave the manufacturer good marks, saying the company’s core business is “healthy and improving,” and that the company “continues to invest in opportunities that support core business and drive growth.”

The note cited recent improvements in themes, its redesigned cabinet portfolio and enhanced game design as reasons investors should remain confident.

By GGB Staff   Thu, Dec 22, 2011

With this game, Aruze gets back to basics with a simple five-line game in a dollar denomination. It is part of the manufacturer’s “98% Gamble Stepper” series, which uses the stepper format to offer a payback percentage around 98 percent at max bet.

Aside from the fact that the game is a five-reel stepper as opposed to a three-reel game, it is designed in a classic reel-spinning format, with bar symbols, cherries and “7” symbols dominating the pay table. There are a few intriguing differences form the classic stepper format, though, the most prominent being that all five paylines—set up in the traditional style with three horizontal and two diagonal lines—are active regardless of the wager.

The player has the option of wagering one, two or three credits per spin. However, the progressive jackpot, which resets at $1,000 and is very frequent, only applies with the maximum $3 wager. Five “7” symbols on a payline at max bet return the progressive.

The “Cherry Chance” symbol appears on reel three only. When it does, the word “CHANCE” appears at the top left of the reels, and begins flashing. When that symbol is flashing, an altered computer program increases the odds for the “7” symbol to appear—and thus increases the chance at the progressive.

The CHANCE light continues to flash for a random number of spins, up to a maximum of eight games. The credit wager remains the same as the triggering spin during these enhanced spins.

In addition to triggering the enhanced spins, the Cherry Chance symbol combines with regular cherry symbols to award scatter pays.

Manufacturer: Aruze Gaming
Platform: 98% Gamble Stepper
Format: Five-reel, five-line stepper slot
Denomination: 1.00
Max Bet: 3
Top Award: Progressive; $1,000 reset
Hit Frequency: Approximately 20 percent
Theoretical Hold: 1.97% at max bet; 8.55% at one- or two-coin bet

By GGB Staff   Thu, Dec 22, 2011

This release is one of the first video-reel games in IGT’s “OnCore Progressives” family, which places a three-level, mystery-driven communal progressive jackpot on any IGT core game. Each style of game placed in this series has its own unique merchandising package to create unique banks.

The operator is afforded the choice of base games to link to the progressive. Initial games being recommended in a four-game bank include player favorites Golden Goddess and Black Widow and new base games such as The Mighty Atlas and Vivaldi’s Seasons. Each base game features stacked wild symbols and its own game-specific free-spin bonus event.

When the random trigger kicks in for the mystery progressive bonus round, bolts of lightning strike across the screen to reveal a jackpot, which is then awarded to one of the players on the bank. Jackpot levels are configurable by the casino, but as an added attraction for play, each jackpot carries a messaged guaranteeing it will hit by a certain level. In the model pictured, the Bronze jackpot is guaranteed to hit by $25, the Silver by $150 and the Gold by $1,199—guaranteeing a win with no W2G form to fill out.

The overhead LCD screen enriches the entertainment experience for the entire bank and entices players to join in.

Manufacturer: International Game Technology
Platform: AVP
Format: Five-reel, 40-line video slot
Denomination: .01
Max Bet: Varies by game
Top Award: $1,199.99
Hit Frequency: Approximately 50 percent
Theoretical Hold: 2%—11%

By GGB Staff   Wed, Dec 21, 2011

Bo Bernhard recently was named executive director of the International Gaming Institute at the University of Nevada-Las Vegas Harrah Hotel College. The non-profit IGI offers research and educational programs for the global gaming industry. In 2010, Bernhard was named executive editor of the UNLV Gaming Research Journal and a Lincy Fellow at UNLV’s Brookings Mountain West. In 2009, he received the Spanos Award, one of the university’s top teaching awards. And in 2008 he was named the UNLV Harrah Hotel College’s Boyd Distinguished University of Nevada-Las Vegas Professorship for Research as the top researcher in the college. Bernhard’s research career began at Harvard University, where his undergraduate thesis was on the community impacts of the gaming and tourism industries in Nevada. He earned a Ph.D. at UNLV.

GGB: More than 10 years ago, the late Shannon Bybee and Stan Fulton had the vision of a great academic institution doing research and teaching about the gaming industry. Do you think they’d be proud today of what it’s become?

Bo Bernhard: I think they’d be thrilled. With, for example, the fact that the International Gaming Institute exists not only here, but in South Africa. We just got back from presenting the first Pan-African gaming regulator symposium to people from all over the continent. And that was the vision, after all, wasn’t it.

I think the goal was twofold: to spread Las Vegas’ unique take and unique expertise on the global gaming industry to the globe, but also bringing the globe here. Just today, we have the entire Swedish gaming control board here because this is where you have to come to study. The vision was a beautiful thing. And as somebody who works in these offices every day, I get to learn a lot about the global gaming industry because it does come to our doorstep.

What plans do you have to change anything or upgrade some of the offerings that IGI has for the university, the students, and for the industry itself?

We have a number of exciting developments. This is about to become, we hope, the centerpiece of a new hospitality campus. Our facilities in the hotel school, in the heart of campus, are quite old and beaten up. So we’re looking to move out sometime soon, where this really then becomes the heartbeat of the entire hospitality community.

We’re also looking at two primary initiatives for the global gaming industry. One would focus on the internationalization of the bricks-and-mortar industry. The other one is the internet-ization of this product. As Bill Eadington, my colleague and mentor at UNR, has put it, it will be interesting to see if we follow the path of theaters, where these 2,000-seat theaters where we used to consume the movie product have faded away. One wonders whether the cathedrals of gambling consumption might face a similar challenge, moving forward, as gambling is consumed in different spaces.

Non-gaming revenue is becoming such an important part of the industry. The IGI is part of the hotel school, so will there be an increased emphasis on the linkage of the gaming and non-gaming areas?

One of the nice things is that we can offer courses on, for example, integrating the convention business or food and beverage, entertainment, or retail along with the casino business. This is where the term “integrated resort” has come to be used so extensively. That’s one of the things that we’ve done well in the past, and I think we can do even better, as we expand.

Certainly UNLV is very famous for its research. What is your personal agenda for research, now that you’re head of IGI?

The casino operations research, for which we’re very well-known, will continue, certainly. We have some of world’s best researchers in the field on staff here. The gaming industry is not like the furniture industry, where you can sort of open up shop anywhere you like. It’s one of those rare industries where the government gets to decide how, where and when you open up shop. As a result of policy research, all the things that are associated with, again, what I would call “walls outward” considerations in the gaming industry will still be important. That was Shannon’s passion. Shannon really was sort of a policy guy.

The sociology of gaming is getting a lot of attention recently. Is that a passion of yours?

I teach a course on the sociology of gaming, which examines what is increasingly a global gaming industry. This semester, we covered no less than 77 unique jurisdictions in that global tour. Sociologists have a lot of tools to examine all sorts of things. Things like culture, the challenges associated with exporting our Las Vegas product to new shores, and the sort of cultural understanding that’s necessary to do those sorts of things. That’s all sociology.

You’ve been involved with the National Center for Responsible Gaming. Is it possible to be an advocate for problem gambling treatment as well as the industry?

I think so. I think that clearly, this is a product—like many products—that hurts some of its customers some of the time. So the question becomes, for modern businesses, how do you handle the social costs? How do you deal with this? And in many ways, when you look back at the gaming industry, and compare it to the alcohol industry and the cigarette industry, I think the American gaming industry has done quite well.

By GGB Staff   Wed, Dec 21, 2011

TCSJohnHuxley announced the appointment of Catherine (Cath) Burns as global chief executive officer. Burns brings 20 years experience, holding senior positions in several worldwide gaming and technology companies. She comes to TCSJohnHuxley from Bally Technologies in Macau, where she had served as vice president Asia Pacific since 2006.

Burns replaces David Heap, who will be stepping down as group chief executive effective March 1, when he will take a position as adviser to the portfolio of companies and business interests of the family of Bertil Knutsson, the company’s chairman.

Heap began with the company in 1996, when he was appointed CEO of TCS. In 2003, he was instrumental in bringing TCS and John Huxley together, and has since steered the company to become the global leader in the manufacture and supply of live table gaming products and services.

For Burns, it’s the culmination of an impressive rise in the industry.

At Bally, Burns established the company’s Asia Pacific head office in Macau for both its gaming and systems business operations. An incisive leader with a talent for driving change and growing profits, she was responsible for expanding the company’s business into new markets, creating year-on-year growth with a multimillion-dollar turnover. She forged excellent relations with distributors, suppliers and customers internationally as well as managing large-scale systems installation projects for the Venetian Macao, Galaxy Macau and Starworld, the Grand Lisboa, Casino Lisboa and Marina Bay Sands Singapore. Burns is also credited with achieving the company’s re-entry into the Australia and New Zealand gaming markets.

New Executive Director Named at NIGA

When Ernie Stevens was re-elected to a sixth two-year term as chairman of the National Indian Gaming Association last April, it was not without changes in his administration. Last month, Mark Van Norman was replaced as executive director of the association that represents gaming tribes in the nation’s capital. Jason Giles, previously NIGA’s general counsel and deputy executive director, was named to replace Van Norman.

In 11 years with NIGA, Van Norman spoke forcefully and effectively for Indian gaming. His sometimes-strident defense of tribal sovereignty was well-known.

Giles, a member of Oklahoma’s Muscogee (Creek) Nation, is a well-respected legal expert who attended the U.S. Military Academy and graduated from law school at the University of Wisconsin-Madison. Giles began his legal career as an associate attorney at a labor law firm in Honolulu, Hawaii, where he focused on labor law, real estate law and bankruptcy issues.

By GGB Staff   Wed, Dec 21, 2011

When Ernie Stevens was re-elected to a sixth two-year term as chairman of the National Indian Gaming Association last April, it was not without changes in his administration. Last month, Mark Van Norman was replaced as executive director of the association that represents gaming tribes in the nation’s capital. Jason Giles, previously NIGA’s general counsel and deputy executive director, was named to replace Van Norman.

In 11 years with NIGA, Van Norman spoke forcefully and effectively for Indian gaming. His sometimes-strident defense of tribal sovereignty was well-known.

Giles, a member of Oklahoma’s Muscogee (Creek) Nation, is a well-respected legal expert who attended the U.S. Military Academy and graduated from law school at the University of Wisconsin-Madison. Giles began his legal career as an associate attorney at a labor law firm in Honolulu, Hawaii, where he focused on labor law, real estate law and bankruptcy issues.

By GGB Staff   Wed, Dec 21, 2011

Slot and system manufacturer Bally Technologies announced that Vice President Srini Raghavan has been named to oversee the company’s games and systems activities in the Asia-Pacific region in addition to his continued role as managing director of Bally’s development centers in India and managing the systems operations in South Africa.

Kurt Gissane has been promoted to managing director of Asia-Pacific, headquartered in Macau, to manage the day-to-day business operations and customer relationships.

Raghavan joined Bally Technologies in 2005 to serve as managing director for the company’s India operations, a role that he will continue to hold. Raghavan was responsible for establishing Bally’s India Development Center, recruiting the initial core team and overseeing the center’s growth to nearly 1,000 full-time employees. He has also led the delivery of various product releases and established the company’s systems sales and support operations in South Africa.

Gissane joined Bally in 2009 as associate director, business development and operations for the Asia-Pacific region, overseeing the region’s daily operations and successfully managing relationships with distributors, suppliers and customers. He was promoted to director of sales and operations early this year. Gissane was invited into Bally’s President’s Club for outstanding sales his first two years with the company.

By GGB Staff   Wed, Dec 21, 2011

Connecticut’s Foxwoods Resort Casino has named Rebecca G. Carr as its new chief marketing officer, reporting directly to CEO Scott Butera.

Carr was formerly head of global marketing for Verizon Business, and before that, was vice president of marketing for MCI Communications.

Carr, a 25-year marketing veteran, will be responsible for reshaping and promoting the Foxwoods brand in an increasingly competitive Northeast gaming market. She will be responsible for all aspects of marketing and communications, including strategy, competitive intelligence, advertising, brand, segmentation, direct marketing, interactive (web) and social media, events, promotions, loyalty programs, sponsorships and public relations.

By GGB Staff   Wed, Dec 21, 2011

Douglas Florence, former vice president of security and surveillance at the M Resort in Las Vegas, has joined Avigilon to help the megapixel surveillance camera manufacturer move deeper into the gaming industry.

Florence’s new title is business development director of global gaming.

Florence is a 35-year veteran of the security industry. In addition to his position at M, Florence was also the executive director of security at the Hard Rock Hotel and Casino in Las Vegas and the director of surveillance at the Mirage.

By GGB Staff   Wed, Dec 21, 2011

Rymax Marketing Services, Inc., the largest manufacturer’s representative in the incentive industry, announced the promotion of Paul Gordon to the position of vice president of sales. In his new position, he will focus on expanding the company’s primary growth segments and leading multiple sales channels.

Gordon previously was senior director of sales for Rymax, a position in which he has a record of developing new customers and marketing programs. He brings more than 25 years of marketing experience to his new role.

By GGB Staff   Wed, Dec 21, 2011

Gaming testing organization BMM Compliance announced that November marked its 30th anniversary. Launched in Australia in 1981, BMM has grown to become one of the world’s leading providers of gaming product certification. Since 2005, BMM has expanded its operations internationally from two to 12 countries to service gaming customers worldwide.

“BMM’s original gaming technical standards for Australia, written in 1992, became the basis for all standards used today in gaming around the world,” said Martin Storm, BMM’s global president and CEO. “As such, BMM continues to be the lab of choice for regulators wanting new gaming standards. This success has translated into unprecedented growth in 2011, particularly in our North American business, where we have established the industry’s strongest leadership team yet.”

BMM has many initiatives planned for 2012 as the 30th anniversary celebration year. “BMM staff across the globe will celebrate this special occasion, and we are planning an entire year of events with educational workshops, special exhibitions, presentations and awards,” said Marketing VP Wendy Anderson. “As part of this celebration, BMM is sponsoring a student scholarship program which will commence in 2012.”

Also last month, printing supplier FutureLogic, Inc. announced that BMM Compliance has completed the evaluation of the company’s PromoNet promotional couponing system, and determined that it does not impact areas of regulatory concern.

PromoNet uses pre-set triggers to evaluate play and issue coupons to entice players to join a player’s club, and can print other coupons for marketing and promotional purposes through the ticket-in/ticket-out system. To comply with the evaluation, FutureLogic submitted to documentation to BMM along with a fully functioning system, which BMM evaluated and tested in a controlled laboratory environment.

By GGB Staff   Wed, Dec 21, 2011

Slot and system manufacturer Bally Technologies announced that the Seminole Tribe of Florida Inc. is implementing Bally’s iVIEW Display Manager and Elite Bonusing Suite solutions at its Seminole Casino Coconut Creek.

As part of its major casino expansion at the property, the Seminole Tribe is implementing the iVIEW DM player-user-interface on the majority of the casino’s 2,400 games across the casino floor. Used together, iVIEW DM and the Elite Bonusing Suite applications enable interactive, floor-wide player-bonusing applications such as instant slot tournaments, virtual-racing events, and U-Spin real-time bonusing (on most gaming devices with a touch-screen display) without interrupting base-game play.

The Seminole Tribe’s investment in iVIEW DM and the Elite Bonusing Suite follows an enterprise-wide agreement that they signed last spring to upgrade their operations with Bally’s SDS Windows slot-management and slot-accounting system at six casinos in Florida.

Along with the new investments in Bally products, Seminole Gaming is using a host of other Bally solutions throughout its operations, which boast the largest high-speed game-to-system (G2S) network in the gaming industry using Bally’s systems since 2007.

Every one of the more than 11,000 games in the Seminole casinos features Bally’s iVIEW player-user-interface display, and the Seminole Tribe also uses Bally Command Center for centralized upload of iVIEW content; eTICKET for ticket-in/ticket-out, Bally Power Bonusing for bonusing, gaming, and promotions; Tableview for real-time table ratings and table management; and CMP for casino accounting, financial audits, reporting and compliance, player ratings, and management of player loyalty programs.

By GGB Staff   Wed, Dec 21, 2011

Leading race and sports book operator and supplier Cantor Gaming announced a long-term agreement to operate the race and sports book at the Palms Casino Resort in Las Vegas, beginning in the first quarter of 2012.

Under the terms of the agreement, Cantor Gaming will build a new race and sports book that offers signature Cantor features such as in-game proposition wagering and mobile betting across the entire resort, including hotel rooms.

Cantor Gaming will operate in the existing race and sports book area through the 2012 “March Madness” NCAA basketball championship tournament. Construction of the new race and sports book will begin in April and is expected to be completed in time for the 2012 football season. During the interim period, Cantor will operate an ancillary sports-only book near the Mint High Limit Lounge located on the main floor of Palms.

By GGB Staff   Wed, Dec 21, 2011

Thermal printing supplier TransAct Technologies announced that it has signed an agreement to partner with Walker Digital Table Systems, LLC to find ways to combine Walker’s networked table games system, Perfect Pay, with TransAct’s Epicentral Print System.

“We are very excited about the opportunity to work with Walker Digital to enhance their world-class networked table games system by integrating our Epicentral Print System,” said Bart C. Shuldman, chairman and CEO of TransAct Technologies. “Walker Digital is at the forefront of bringing innovations in game performance, security and business intelligence to the table games floor previously only available from slots systems. We look forward to working with Walker Digital on testing and finalizing the combination of the Epicentral Print System with Walker Digital’s Perfect Pay networked table game system.”

The Epicentral Print System is an easy-to-use, cost-efficient software system that enables casinos to internally develop marketing programs and promotional coupons to be distributed to customers on a real-time basis at a slot machine. The system works with all existing slot systems and games.

By GGB Staff   Wed, Dec 21, 2011

Slot manufacturer Aristocrat Technologies announced that its mobile “play-for-fun” application, on which players can sample new games for free using their smart phones, has just reached the milestone of 100,000 downloads.

Several of Aristocrat’s most popular titles from land-based casinos are available now on the App Store, including Dragon Emperor, Fire Light, 5 Dragons, Geisha, Imperial House, Miss Kitty, Sun and Moon and Wicked Winnings II. 

Creating play-for-fun mobile app games is one part of Aristocrat Online’s larger strategy, including its new online platform nLive, which powers fully branded play-for-fun virtual casinos for leading brands such as Maryland Live! Casino and Island Resort Casino.

By GGB Staff   Wed, Dec 21, 2011

Software supplier and consultant NEWave announced that the first installation of its “myCompliance” software suite will be at an unnamed existing NEWave client casino in the state of Washington.

The myCompliance Suite is designed to protect a casino’s bottom line from fines by taking cumbersome compliance issues and obligations and streamlining them into automated processes. Specifically, the myCompliance Suite completes, files and archives all federal, state and locally mandated forms for money laundering, suspicious activity and taxes. Additionally, myCompliance products validate identification documents, verify tax identification numbers, and provide alerts for OFAC and other watch lists.

“There is no greater compliment than when a client expands their relationship with us, and we are thrilled with the trust the tribal casino has shown in NEWave and in our myCompliance Suite,” said NEWave COO Tom Bechtel. “The myCompliance Suite will enable the casino to stop worrying about filling out compliance forms and do what they do best—serve their customers.”

By GGB Staff   Wed, Dec 21, 2011

Leading table game supplier Gaming Partners International Corporation announced that its board of directors has unanimously authorized a program to repurchase shares of the company’s common stock. The board approved the repurchase of up to 5 percent, or approximately 410,000 shares, of the company’s outstanding common stock.

These repurchases will be made from time to time in open market or in privately negotiated transactions. The timing and amount of share repurchases will be determined by the company’s management based on its evaluation of market conditions, the trading price of the stock, applicable legal requirements and other factors, subject to periodic approval of the board.

The program does not obligate GPI to acquire any particular amount of common stock or to acquire shares within any particular timetable, and the program may be suspended at any time at the company’s discretion.

By GGB Staff   Wed, Dec 21, 2011

London-based table game supplier TCSJohnHuxley announced that the new Aspers Westfield Stratford City, which opened December 1 as England’s first “Super Casino,” chose the vendor as the turn-key supplier for table game equipment.

TCSJohnHuxley supplied all of the casino’s table games, including 24 poker tables, 24 card tables, 12 American roulette tables, one dice table, one money wheel with table and one double-ended MultiPLAY table. There also are 80 Novo Unity II TouchBet multi-game terminals, automated roulette, and automated bingo, manufactured by Novomatic but distributed by TCSJohnHuxley.

“As with everything related to the project, the equipment had to be designed, manufactured and supplied in record time to ensure there were no delays,” said David Heap, TCSJohnHuxley group chief executive. “Meeting the time scales alone was a huge task, but added into this mix were all the logistical challenges presented due to the venue being located within the security cordon of the Olympic Village. Every delivery vehicle and person entering the site had to undergo the most stringent security checks. As a result of these restrictions, Aspers realized it would be much more beneficial to use one supplier to coordinate the whole logistics process.”

By GGB Staff   Wed, Dec 21, 2011

Acting on the popular premise that that the future of marketing lies in mobile applications, Joingo LLC has released a system that allows casinos to take marketing programs mobile in less than 30 days.

Joingo’s Mobile Loyalty System acts as the central hub connecting a casino management system with robust mobile application marketing services, extending the casino brand and leveraging it for increased revenue and deeper, more profitable customer relationships.

Easily integrated with casino management systems including IGT, Aristocrat, Konami and Bally, Joingo enables casinos to create interactive, highly personalized, branded mobile applications in a matter of days, without any coding. Operators don’t need technical expertise to execute the application; users simply drop branding and other creative assets into place.

The Joingo Console allows for easy adaptation of content based upon preferences, total value, purchase history and more.

Easy-to-use web-based campaign management tools allow for targeted messaging to groups of customers. Expansive analytics reveal how the audience is responding at the group or individual level, allowing operators to quantify campaign performance and optimize it. 

With a live connection to real-time data, casino patrons have direct access to their loyalty club accounts, including points, comps and offers. Patrons can even choose to redeem comps on the spot through their mobile phones, using an integrated POS application. For instance, a casino patron can place an order from a mobile phone for drinks and pay for it using loyalty points or with funds from a cashless wagering account.

The opportunities for customization are practically limitless, according to the company. Operators can allow patrons to connect immediately with personalized concierge services and other exclusive amenities reserved for them, utilize location-based services to instantly send an offer to patrons currently on the property, or send a different offer to patrons outside the property but within the city limits. Messages can target demographic segments by sending messages in their native language (Spanish, Chinese, and more). Integration with social networks like Facebook and Twitter offer additional marketing opportunities.

Joingo works with all mobile devices, including iPhone, Android and Blackberry smart phones, as well as all standard cell phones.

For more information, visit www.joingo.com.

By GGB Staff   Wed, Dec 21, 2011

CATCO Gaming has introduced an advanced line of custom plastic and paper-based playing cards, specifically designed to withstand the rigors of the 24/7 gaming floor.

After two years in testing and development, CATCO’s proprietary plastic “Hyperflex” technology is what the company predicts will become the new industry playing-card standard.

“These handsome and durable playing cards feature unsurpassed flexibility and durability, offering casino operators 100 percent longer table time than the competition,” says a statement from the company. “Additionally, these cards resist dents, creases and moisture problems, and will not jam shufflers.”

With its unique paper stock formula, CATCO’s line of embossed paper playing cards with patented “Easy Glide” finish feature a durability that extends the life of the cards far beyond what is currently available.

CATCO Gaming offers two distinct brands: Triton and Warrior. Triton playing cards, available in both paper and PVC plastic, are perfectly suited for extended everyday casino use. The Warrior brand was specifically designed for the Native American gaming market, with unique artwork that captures the spirit of Indian Country.

Both Triton and Warrior brands are in stock and available for immediate delivery in a wide range of sizes and colors, from Standard and Jumbo to Super Jumbo and TechArt/No Peek. Custom cards and logos are available. CATCO also provides overnight shipping, if required.

For more information or to order, call 818-341-8900 or visit www.catcogaming.com.

By Frank Legato   Wed, Dec 21, 2011

Exactly four years ago, I wrote a bit in this space about how I inadvertently went to Las Vegas during National Finals Rodeo week and found myself surrounded by cowboys, all a-hootin’ and a-hollerin’ and a-singin’ about how their gal had left them and done run off with a chartered accountant from Manchester. (That was a song by Toby Keith, wasn’t it?)

Well, last month, I did it again. I like to go to Las Vegas when it’s normally cold in the East, so I booked my Vegas flight and looked for rooms. Never mind that it was freezing that week in Vegas. My normal spot, the South Point, was all booked.

As it turns out, it was booked with cowboys. Rodeo week. But that’s OK, because I could just stay at Sam’s Town, the place once known as “Sam’s Town Gambling Hall, Saloon and Western Emporium.” No cowboys there, right?

Anyway, I knew I had done a column on this subject before, so I decided to search for it, since I don’t ever want to do the same jokes in two separate columns, because that would be against my motto, which is: “Never The Same Joke In Two Separate Columns.” (Wait a minute. Did I do that joke before?)

The first thing I noticed after instituting a Google search for “Frankly Speaking” and “cowboy” was that there are a lot of columns, books and other pieces of prose titled “Frankly Speaking.” Practically everyone named Frank who has a column calls it Frankly Speaking. (If they don’t call it “Perfectly Frank,” which is the name of the other monthly column I write.)

I had known about my fellow gaming writer Frank Scoblete’s column—which I found out about shortly after we named this one Frankly Speaking. (Sorry about that, Frank.) But there’s also Frank Jordan’s Frankly Speaking newspaper column in Liberty, Texas (hence finding one with the word “cowboy”), Frank Villadinar’s Frankly Speaking internet column (he did one called “A Cowboy Named Bud”), and the Frankly Speaking Buffalo Bills blog, in which the author calls himself “the voice of a weenie in the wilderness.”

And my two personal favorites: “In My Diary,” by Anne Frankly Speaking (I swear I didn’t make that up); and the book Circumcision: Frankly Speaking. (Ouch!) I didn’t read the book to find out how cowboys figured into that one. (Probably just as well.)

I eventually found my January 2008 column by simply searching the archives on our own website. (Duh!) So, anyway, I’ll try not to repeat any jokes. But as I said back then, I’m not anti-cowboy (I just don’t want my babies to grow up to be them), and I love the West. One of my favorite movies four years ago was 3:10 to Yuma, and this year, it’s Cowboys and Aliens, which I feel will make one heck of a slot machine some day.

In any event, all of Hank Junior’s rowdy friends were in Vegas that week. I walked into the casino (or “casinah,” as the cowboys say), and I was in the middle of Sam’s Town Saloon, Western Emporium and Gol-Dern Fancy Hootenanny. The first thing I saw was a mechanical bull. It was a temporary mechanical bull, apparently shipped in from a mechanical corral somewhere, set up in the middle of the casino, surrounded by an inflated structure that I believe is called a “BEE-hind Catcher,” for when the bull throws you on your BEE-hind.

Every night I was there, Sam’s Town was awarding $500 to the cowpoke who stayed on the mechanical bull the longest without getting thrown on said BEE-hind. I know this because every 10 minutes while I was sitting at my video poker machine, a loudspeaker blasted the chief cowpoke’s voice out calling for new contestants, at a volume I can only describe as the probable volume of the voice of God. It scared the bejesus out of me.

No, I didn’t try my luck on the bull. I’ve got a weak back. (Since about a week back.) (Sorry.) Seriously, I even quit riding amusement rides with my kids after I slipped a disk back at age 34. Thirty seconds on a mechanical bull would turn me into a hideous, twisted freak.

Eventually, I got used to playing video poker at the continuous hoedown, and even got used to the ubiquitous twangy cowboy music. I had a great time. And I won money. That always fixes everything, doesn’t it?

So, to all you cowpokes out there, have a rip-roarin’, shin-diggin’, GIT-tar strummin’ happy new year.

And here’s hopin’ yer gal don’t leave you.

By GGB Staff   Wed, Dec 21, 2011

As the gaming industry enters a new year, it is time to reflect on just how much it has changed and how much more change will affect investors in the future.

Perhaps the biggest change is simply size, and the resulting Law of Big Numbers. The other major changes we see are globalization, cannibalization and technology.

The Law of Big Numbers

Casino companies are much bigger today.

No longer does the opening of a riverboat casino or even a Las Vegas mega-resort dramatically move the needle for big operators.

It now takes huge increases, such as the two mega-resorts of Singapore, which will generate nearly $7 billion in gaming revenue, to make a big impact on a company’s bottom line.

A decade ago, a few hundred million dollars might have doubled the size of a company. Today, it’s just an incremental gain for many of them.

Companies like Las Vegas Sands and Genting now look for multibillion-dollar opportunities to grow appreciably, thus their focus on legalizing gaming in Florida, Japan, India, Korea and the like.

Twenty percent annual growth, and 20 percent returns on investment, get harder as the revenue base gets bigger.

One result was seen in the last recession. Unlike previous downturns, casino stocks followed other consumer discretionary stocks down.

Previously, casino operators grew independent of the broader economy on waves of gaming expansion in a world of unmet demand.

Cannibalization

In the United States, gaming proliferation still means opportunity, but no longer is a new casino a slam-dunk to transform penny stocks into mid-size entertainment companies.

Indeed, cannibalization has become an expansion theme. The calculus today is not just how much revenue and return a new casino can generate, but how much business it will take from competitors.

The new Penn National casinos in Ohio, for example, are clearly positives for that company, but how much will their gains be offset by the business Pinnacle’s new Baton Rouge takes away from Penn’s Hollywood casino when it opens next year?

And how much is Pinnacle’s Belterra in southeast Indiana hurt by new Ohio casinos?

The poster child for cannibalization is Atlantic City, which has suffered monthly revenue declines for more than three years, and which is down around 40 percent from its 2005-2006 peak.

Globalization

Is it the sure road to prosperity, or gaming’s version of The Proud Tower?

To say that the numbers projected for international expansion are compelling is an understatement.

Look at Las Vegas Sands’ Singapore property. Estimates are that this one casino will generate $1.8 billion in EBITDA next year. The biggest companies—in their entirety—didn’t do that a decade ago.

And the prospects assuming more global gaming expansion are just as stunning.

We know the potential: 1.3 billion Chinese, 1.2 billion Indians, Japan the third largest economy in the world, and so on.

Over the past five years, international gaming revenues have risen at an annual compounded rate of 15.4 percent. The United States has declined.

Look at projected annual growth in gross domestic product of 7.5 percent in Asia and 6 percent in Latin America vs. 4.2 percent in the U.S. and Canada.

Las Vegas Sands CEO Sheldon Adelson has said there could be a dozen Macaus internationally.

But nothing is certain, and the world outside of North America and the United Kingdom has been unpredictable in every region in the lifetimes of many now alive—Nazism and World War II in Europe, the Communist revolutions in China and Eastern Europe and the destruction of Imperial Japan are all examples.

The Soviet Empire once appeared permanent and unassailable. It crumbled in months.

History writer Barbara Tuchman wrote The Proud Tower some years ago describing the internationalization of the late 19th and early 20th centuries that everyone was certain had changed the world forever and for the better.

It dissolved into the hideous trenches and epidemics of World War I that, in turn, led to the Communist tyrannies and to World War II.

We would be wise not to think that a government-granted license to print money in a casino today can’t be taken away tomorrow.

Technology

Internet gaming and integrating functions from accounting to promotion to player development into slot machines are well-known.

And the revolution continues, with the likes of mobile gaming, and IGT introducing cloud computing to what previously was the slow advance of server-based gaming.

And technology is now fast advancing in the most conservative space—table game pits.

The revolution in table game electronics will continue in all of its aspects—e-tables, hybrids with live dealers, side bets, bonuses, progressives, and the kinds of accounting and player tracking systems long familiar on slot machines.

New technology is often touted as a way to get more money from players—promotions at the slot machines, more hands per hour at e-tables.

But the real value for brick-and-mortar casinos might be in efficiencies—lower marketing costs by focusing on productive players and lower personnel costs with e-tables and hybrids are examples.

Finally, technology allows more people to gamble while eroding the prohibitions against it.

Consider poker. It was new television camera technology combined with the internet that made the World Series of Poker prime-time TV and minted millions of online poker players.

It was the 2006 law against financial transactions facilitating online gambling that created an uproar among American poker players and was the catalyst for what many expect to be the inevitable legalization of internet poker. And after that, other internet gambling, including sports betting.

By GGB Staff   Wed, Dec 21, 2011

The Massachusetts legislature passed a final version of a gaming expansion bill that authorizes three regional casinos and one slot parlor. The final bill was approved 118-33 by the House and 23-14 by the Senate. Governor Deval Patrick signed the bill a few days later, commenting, “A long chapter in the debate around casino gambling is about to close.”

The first casino could possibly open within about three years, according to some in the industry. One will be put in western Massachusetts, one in the southeast and one near Boston. The slot parlor could be open within a year.

The casinos will pay a 25 percent tax rate, while the slot parlor will be 49 percent, a 9 percent increase from the original House and Senate bill. Casino developers will be required to invest a minimum of $500 million and pay an $85 million license fee. The slot parlor developer will pay a $25 million license fee and be required to invest at least $125 million.

Towns where the casinos will be located will need to approve casinos via a referendum, but only if it’s a small town. In larger cities, only “neighborhoods” or wards of cities, not the entire city, will be allowed to vote on whether a casino would be allowed there. This provision is seen aimed at East Boston, where Suffolk Downs proposes to build a casino, and has much political support.

The final bill took out an amendment passed by the Senate that would have allowed casinos to give away drinks, as long as bars and taverns could do the same. In the final wording, casinos will be limited to serving free drinks on the casino floor. Restaurants and taverns will still be banned from offering them at all.

The ban on lawmakers working in the gaming industry for one year after leaving office, which had been passed in the Senate, also stayed in the bill.

Competition for the licenses started immediately. But in reality, two licenses are almost locked up.

Connecticut’s Mohegan Sun, whose development arm has been lobbying strongly to build a casino, including a 600-room hotel and spa on 152 acres in Palmer that it hopes to lease, is the favorite in the western Massachusetts region. Other announced bidders in the casino license competition include Hard Rock International, which has partnered with Paper City Development LLC to propose a Hard Rock Hotel and Casino in Holyoke, with Penn National Gaming and Ameristar also likely to bid.

In the southeastern region, the license is reserved for the Mashpee Wampanoag tribe, as long as it negotiates a compact with Patrick by the end of July.

Cedric Cromwell, chairman of the tribe, reacted ecstatically to the news. “I really want to see the Wampanoag tribal nation rise and leave no Mashpee Wampanoag behind,” he said, according to the Cape Cod Times. The tribe has the financial backing of Genting bhd of Malaysia.

KG Urban Enterprises, which is exploring proposing a casino in New Bedford, has filed suit against the state, claiming the bill gives the tribe an unfair advantage.

The real competition will be for the license in the Boston area. While many politicians—including House Speaker Robert DeLeo—want the license to go to Suffolk Downs, a major competitor emerged soon after the bill was signed when Wynn Resorts Chairman Steve Wynn visited Robert Kraft, the owner of the New England Patriots, to propose a casino next to Gillette Stadium in Foxborough.

Wynn’s plans may be derailed, however, because the Foxborough town council has resisted changing zoning laws to permit a casino. A referendum could be held by mid-year.

Las Vegas Sands may also bid, with Sheldon Adelson telling Global Gaming Business that he believes only one location would work (see cover story on page 22).

Meanwhile, Patrick, Attorney General Martha Coakley and Treasurer Steven Grossman began the process of picking the people who will serve on the independent commission that will choose the location of and oversee the selection of the operators for the state’s three regional casinos and one slot parlor.

The officials promised that the process for picking the five commissioners would be transparent and rigorous. The law gives the officials four months to name the commissioners. The governor will name the chairman. The treasurer and attorney general will name one each, and the three of them will pick the final two. No more than three commissioners can come from the same political party.

According to Grossman, quoted by the Boston Globe, “We have only one chance to get this right.”

By GGB Staff   Wed, Dec 21, 2011

For four years, he tried and failed to get the legislature to approve casino gaming in Kentucky, and now newly re-elected Governor Steve Beshear is ready to try again.

Speaking before the annual convention of the Kentucky Farm Bureau, Beshear said, “We are still in tough times, we still have too many people out of work, we still have too many families who are suffering.”

One of his remedies for the problem is the introduction of casinos. But Beshear is reluctant to battle again with a divisive legislature.

“It is a much easier vote for everybody if we put the question on the ballot and let people in the state vote on it,” says Beshear.

Beshear has been stymied by Senate President David Williams over his first term in office. But Beshear beat Williams handily in the governor’s race last month, so he may now have the upper hand.

Beshear says he’s open to any bill that would legalize gaming, including one that designates stand-alone casinos, as long as racetracks are included.

By GGB Staff   Wed, Dec 21, 2011

Kerzner International Holdings Ltd., which built the Atlantis resorts in the Bahamas and Dubai, has turned over ownership of its flagship property in Nassau to Brookfield Asset Manage-ment as part of a debt restructuring plan.

According to Bloomberg, Toronto-based Brookfield will forgive $175 million of junior debt in exchange for ownership of the Atlantis and the Bahamas One&Only Ocean Club, along with a 50 percent interest in the One&Only Palmilla in Mexico.

Kerzner also made a deal with lenders to restructure its operating debt, Bloomberg reported.

“This transaction will permit Kerzner to move forward as a management company,” Chairman and CEO Sol Kerzner said in a statement. It allows the company “to get back to doing what we do best—designing and managing world-class destination and luxury resorts under the Atlantis and One&Only brands.”

Kerzner International was taken private in 2006 for $3.6 billion by a group led by Kerzner. Owners include Dubai World’s Istithmar, Goldman Sachs Group Inc.’s Whitehall Funds and Colony Capital LLC of Los Angeles.

The 76-year-old Kerzner built what his company calls the “mythical city of Atlantis” on a property in Paradise Island once owned by TV host and businessman Merv Griffin.

A $1 billion expansion, launched in 2007, added hotels and a new dolphin habitat and expanded the Aquaventure water park. The properties acquired by Brookfield had about $2.6 billion in debt when negotiations began in 2010. That is reduced to about $2.3 billion under the deal, with Brookfield’s forgiveness and a $100 million payment that was part of a maturity extension.

The Kerzner company will continue to run Atlantis Paradise Island and the One&Only resorts, according to the statement. Atlantis the Palm in Dubai, jointly owned with Dubai World, is not affected.

By GGB Staff   Wed, Dec 21, 2011

Despite strong opposition by anti-gaming groups, the Vancouver City Council voted to approve a rezoning that would allow the Edgewater casino to move from its former site to a planned hotel complex beside B.C. Place.

The matter, which has been debated for months, now allows the casino to move its operations on False Creek to a larger facility in downtown Vancouver. The project includes two hotel towers with 650 rooms and 1.2 million square feet of retail space. It doesn’t, however, allow for an increase in slots or table games. Council approved the development but restricted the casino size to 600 slot machines and 75 tables, the size of the current Edgewater license.

The controversial vote came amid a storm of protest, as the province’s leading anti-gaming group, Vancouver Not Vegas, insisted that the matter be open for public debate and not treated as a simple zoning procedure. The group filed a petition before the B.C. Supreme Court claiming that the move by Edgewater fell under the Gaming Control Act, and a full public hearing was required. They asked that the vote be delayed while the court considered the matter.

But it was not enough to delay the vote, with all but one city councilor approving the measure.

“Despite the protestations of various councilors, it’s clear that two football fields of casino floor has just been approved by this council,” said Vancouver Not Vegas co-founder and former mayoral candidate Sandy Garossino.

Council member Andrea Reimer, however, defended the action. “The motion that we passed was quite explicit that we will not entertain a proposal for expansion,” she said.

Reimer, along with other council members, claim that the approval was part of a commercial zoning procedure, and that any request by Edgewater to expand their gaming would have to go through a permit hearing.

If that happens, the casino may be in for a bigger fight. PavCo, the provincial Crown corporation, and Paragon Gaming, the owners of Edgewater, had originally wanted to create a mega-casino on the B.C. Place site that included 1,500 slot machines and 150 table games. That measure was shot down in April in a bitter and marathon council session that had both supporters and opponents weighing in. 

Mayor Gregor Robertson has vowed to block any expanded gambling in Vancouver while he holds office.

By GGB Staff   Wed, Dec 21, 2011

A preliminary piece of legislation, known as private member’s Bill C-290, sponsored by MP Joe Comartin, would allow single-game sports wagering in Canada. The bill recently survived a second reading in the House of Commons. Currently, only parlay sports betting is permitted.

Comartin’s bill reasons since $10 billion-$80 billion is wagered quasi-illegally in Canada every year on single-game sporting events, that money should be regulated and taxed in legal gambling halls.

Nick Eaves, chief executive officer of Woodbine Entertainment Group, which operates Woodbine and Mohawk horse racetracks, said, “Horse racing customers are sports bettors, generally. If it were an option, we are certainly of the belief that Woodbine and Mohawk are logical places for a sports betting facility from the standpoint of them being complementary businesses. We think it’s a natural fit. There has always been a strong partnership between racing and sports betting, much closer perhaps than other forms of gambling.”

Eaves said he has talked to Comartin to “be involved in a supportive way in the dialogue.”

Comartin has mentioned the Windsor and Niagara Falls casinos as logical places since they already offer parlay sports books, as well as WEG’s Woodbine racino, which opened in 2000 and recently expanded to offer more than 2,000 slots. Bringing slots to the track has helped raise purses significantly and dramatically turned around a struggling business.

By GGB Staff   Wed, Dec 21, 2011

The first casino with a license under the U.K. 2005 Gambling Act has begun operations.

Aspers Casino Westfield Stratford City is the first of the so-called “large” casinos authorized under the 2005 Gambling Act. It is located inside what is billed as the largest in-town shopping center in Europe, in an area receiving extra redevelopment attention in connection with the 2012 London Olympics.

Aspers is a joint venture between Australia’s Crown Limited and Damian Aspinall, whose father John Aspinall ran the Clermont Club in Mayfair in the 1960s.

The Westfield casino welcomed 30,000 visitors in its first three days—more than four times the number anticipated, according to news site ThisIsLondon. Aside from the gaming, the casino served more than 18,000 meals and drinks and issued 6,000 loyalty club cards over the three days.

The 65,000-square-foot casino offers 40 gaming tables, 92 electronic gaming terminals, a 150-seat poker room, sports betting and the maximum-allowed 150 slot machines. The casino is open around the clock.

Richard Noble, CEO of Aspers Group Limited, told the Guardian that the gaming model is “high-volume, low-spend,” with projected average stake per person of £15-£20.

“We call what we do ‘entertainment betting,’ rather than particularly aiming for high-stakes, professional betting,” said Noble. “We class this as a space for fun entertainment, that’s all.”

Noble said that Aspers has “robust policies to prevent lowlife from entering—despite the 24-hour opening, no one in hoodies or tracksuits can enter, or anyone we suspect has been drinking heavily.”

Noble said that the casino will attract an additional 4.2 million people to the Westfield shopping center and even more people to the town of Newham, which awarded the casino license.

By GGB Staff   Wed, Dec 21, 2011

The five casinos owned by the German state of Schleswig-Holstein are being sold off.

The state finance ministry has begun a Europe-wide bidding process for the casinos in Kiel, Flensburg, Schenefeld, Lubeck-Travemunde and Westerland, reports news website Welt Online.

Bidders can apply for one or more of the casinos separately or for the company Spielbank Schleswig-Holstein GmbH, which owns all five properties.

At the start of November, the ruling CDU/FDP coalition presented a bill to privatize the casinos, which the state legislature is expected to vote on in March.

The vote is important, as under current law, outside companies would not be able to own the casinos.

Future operators will be required to maintain the existing program measures designed to prevent compulsive gambling. Operators will also need to guarantee the 250 jobs which the casinos together provide.

The finance ministry is selling the casinos in the hopes of improving their results, which are down almost 50 percent since 2007.

By GGB Staff   Wed, Dec 21, 2011

Genting Malaysia has bought the formerly independent Fox Poker Club in London for £7.75 million.

Genting Malaysia is the parent company of Genting Casinos U.K. Limited (Gencas), which owns and operates over 40 casinos in the U.K., including the brands Circus, Maxims and Mint. Genting Malaysia also owns and operates Resorts World Genting in Malaysia and is a sister company to Genting Singapore, which has Resorts World Sentosa in that country.

Malaysia’s Daily Sun reported that Genting Malaysia told the local stock exchange, “The price was financed by internally generated funds and Gencas will not assume any liabilities (including contingent liabilities and guarantees) pursuant to the acquisition. The acquisition was completed immediately after the execution of the agreement.”

The Fox Poker Club was founded by Chris North and Ian Hogg in 2005 in response to demand created by online poker and television. The club received a full U.K. casino license in 2008 and opened in September 2010 after securing funds of around £1 million.

The Fox is London’s only fully licensed and dedicated poker club. It currently employs over 80 staff and has signed more than 20,000 members in just over 12 months. The club’s website reports it is making a “healthy profit and is experiencing record week-on-week trading.”

North, managing director of Fox Poker Club, said of the sale to Genting, “It was always a dream of mine to open a poker club in London, and although it’s been a real challenge, with delayed openings and not getting our 24-hour license until July this year, I’m extremely proud of what we’ve achieved.”

By GGB Staff   Wed, Dec 21, 2011

In a bill addressing amendments to betting regulations, Ireland has decided to keep its tax on land-based betting shops at 1 percent of turnover instead of raising it to 2 percent.

However, the bill also would extend the 1 percent tax to online gambling operators and bets taken over the telephone.

Betting exchanges have been assigned a gross profits tax—a tax on GGR—of 15 percent.

The government hopes to get an additional €10 million in taxes from online gambling for its budget in 2012.

A final draft of the bill is expected to be published early this year. The bill would then go to the European Commission for comment, at least three months before coming into effect.

More extreme plans that seem to have been rejected for the time being included doubling the turnover tax to 2 percent and imposing a tax on players’ winnings.

The Irish government is currently in the process of a comprehensive overhaul of all gaming legislation, which could result in further changes to tax rates in the future.

By GGB Staff   Wed, Dec 21, 2011

Secretary of the Interior Ken Salazar and Assistant Secretary-Indian Affairs Larry Echo Hawk have announced a new tribal consultation policy for the Department of the Interior that will offer American Indian and Alaska Native tribes a greater voice in federal policy that would affect Indian tribes. The new tribal consultation policy will include any regulation, rule, policy, guidance, legislative proposal, grant funding formula change or operational activity that may significantly impact a tribe. It was developed in close coordination with tribal leaders, including meetings in seven cities with more than 300 tribal representatives.      

The consultation policy fulfills President Obama’s directive that all federal agencies develop ways to improve consultation with tribal leaders. It provides detailed guidelines to ensure Interior officials and managers are using the best practices and most innovative methods to communicate with tribes. Based on information received from the bureaus and offices, the secretary will issue an annual report to the tribes on the tribal consultation policy, and establish a joint federal-tribal team to make recommendations to improve the effectiveness of the policy.
       
Salazar said, “This comprehensive initiative reflects President Obama’s commitment to strengthening the government-to-government relationship between the United States and tribal nations and recognizing their fundamental right to self-governance. The new framework institutionalizes meaningful consultation so that tribal leaders are at the table and engaged when it comes to the matters that affect them.”

By GGB Staff   Wed, Dec 21, 2011

Democratic lawmakers in Washington state have proposed tax increases to help fill the state’s $2 billion budget gap. Republicans, however, oppose tax increases and favor offering non-Native American casinos the chance to have the same slots as tribal casinos, with a percentage of revenues going to state coffers.

Proponents say the move would generate $160 million next fiscal year and $380 million two years after that. Bills soon will be introduced in the House and Senate that would allow a limited number of electronic slot machines in 60 existing licensed card rooms, with a maximum of 7,875 machines statewide.

Rep. Gary Alexander, the ranking Republican on the state House Ways and Means Committee, said, “This to me seems like a pretty lucrative option. Besides generating significant amounts of money, it also hits the other major issue we’re addressing, and that is putting people back to work.”

Senator Jerome Delvin, who plans to sponsor legislation in the Senate, said Republicans want to make it easier for small, non-tribal gambling operations to compete with tribal mega-casinos. “If you are going to have gambling, it should be equal between non-Indian and Indian,” he said.

The state’s 28 tribal casinos do not pay a percentage of revenues to the state, nor do they pay local gambling taxes and business and occupation taxes like non-tribal casinos. In fiscal year 2011, tribal casinos had an estimated $1.95 billion in net revenues, up from $1.57 billion in 2009.

Arguing against the measure is Democratic Governor Chris Gregoire, who said, “If I had my way, we would not have any gambling in Washington state at all, on or off reservation.”

Last month, at the request of Republicans, Gregoire held an emergency meeting with the leaders of 24 tribes to see if they were “interested in revenue sharing or something short of revenue sharing. I laid out the crisis that we’re in, and the cuts that I was going to make are going to impact not just all of the non-tribal folks in the state, but the tribal folks. Then I simply said, ‘Bottom line, is there anything you can do to help us?’”

Gregoire said she still has not heard from the tribes.

By GGB Staff   Wed, Dec 21, 2011

The Eastern Band of Cherokee Indians and North Carolina Governor Beverly Perdue have finalized an agreement that will allow new table games with live card dealers at the tribe’s Harrah’s Cherokee Casino, and will give school districts a portion of the profits from the new games. Currently the casino only offers electronic video games.

The finalized deal was forwarded to lawmakers for their review. Republican legislative leaders want more time to look at the compact. House Speaker Thom Tillis wrote to Perdue while negotiations were going on to tell her lawmakers would be willing to reconvene in Raleigh to consider changes to gambling laws that would be required to implement the compact.

The agreement also must be sent to the U.S. Department of the Interior for approval.

Opened in 1997, the casino currently employs 1,760 people. The new games will add 400 new jobs. Brooks Robinson recently was named general manager and will continue to oversee the casino’s $633 million expansion begun by Darold Londo, who has taken a position in Caesars corporate offices. Robinson came to Cherokee from Harrah’s Louisiana Downs casino, where he was vice president of operations.

The agreement also would:

• require a revenue-sharing agreement between the state and the tribe that would give the state up to 8 percent in gross revenues from live table games if the Eastern Band builds any future casinos;

• set minimum and maximum levels on wagering amounts, based on standard industry parameters (currently there are no limits on bets on the casino’s electronic games); and

• require the tribe to notify a county manager if it will build a gambling facility on tribal lands in the county; however, notification will not impinge on the rights of the tribe as a sovereign nation.

By GGB Staff   Wed, Dec 21, 2011

Shares of Macau casino operator Melco Crown Entertainment Limited began trading on the main board of the Stock Exchange of Hong Kong on Wednesday, December 7.

The company already trades on the NASDAQ under the symbol “MPEL.” The new Hong Kong listing is in addition to the NASDAQ and does not involve the issuance of any new shares at this time.

Lawrence Ho, co-chairman and CEO of Melco Crown Entertainment, in a press release announcing the move, said, “We believe our proposed dual listing on the local bourse will not only put us on a par with our competitors, but will also provide our existing shareholders with enhanced liquidity and enable local and Asian investors to directly access investment opportunities in our company, thus broadening our investor base.

“We believe a listing by introduction is consistent with the company’s disciplined and proactive approach to managing its capital structure, providing the company with an additional channel, via the SEHK’s mature and liquid platform, to raise future capital.”

In a separate announcement dated November 29, the company said the shareholders’ loans provided in 2006 by wholly-owned subsidiaries of major shareholders Melco International Development Limited and Crown Limited had been converted into 40,211,930 ordinary shares of Melco Crown Entertainment Limited at the conversion price of $2.87 per share.

Ho said in the SEHK dual listing announcement, “As evidenced by the recent conversion of shareholder loans into equity, we continue to have the full commitment of our controlling shareholders, which demonstrates their confidence in the long-term prospects of Melco Crown Entertain-ment and the Macau market as a whole.”

Sterne Agee Analyst David Bain, writing in a note, said, “Outside of Macau Studio City, equity requirements of which can be done out of cash on hand, the only other relatively near-term capital requirement of significance is the company’s $360 million RMB Bonds due May CY13, which can also be paid out of cash on hand or refinanced, in our view.”

By GGB Staff   Wed, Dec 21, 2011

The Chinese government last month cut the reserve ratio for commercial lenders, allowing them to offer more loans to small businesses in China. The move is seen as an effort to stem a possible downturn in the country’s economy that may be impacted by the flailing European and stagnant American economies.

“It’s a surprising move,” said Shi Chenyu, an economist with the Industrial and Commercial Bank of China. The market was not expecting the central bank to cut the reserve ratio so fast. The move sends a clear message that the central bank is ready to relax its policy stance.”

The Chinese banks have not been as liquid lately after the central bank widened the ratio required between deposits and loans. It was the first time in three years the government has acted to cut the percentage.

Analysts had been concerned that the Chinese economy was slowing, as growth declined to 9.1 percent in the third quarter, its weakest performance since the second quarter of 2009.

It’s good news for the Macau gaming industry, according to Sterne Agee analyst David Bain.

“We view China’s lowering of the reserve requirement ratio as positive for Macau names, especially given investor concerns for promoter/ junket liquidity,” he wrote in a note to investors.

Macau-based Union Gaming Group said the cut may not impact the casinos as much as analysts might believe.

“As the People’s Bank of China began its tightening measures in December 2008, conventional wisdom suggested that Macau revenues could be negatively impacted as liquidity was being systematically taken out of the market,” the company wrote in a report. “However, this did not appear to be the case as Macau gaming revenues grew between 2009 and 2011… With this in mind, we suspect that this reversal in policy could have a greater impact on sentiment than on market forces.”

Union says the cut should have a larger impact with companies that depend more on the VIP market, starting with Galaxy (90 percent), Wynn Macau (77.55 percent), MPEL (78.6 percent), SJM (70.1 percent), Sands China (56.3 percent) and MGM China (50 percent).

By GGB Staff   Wed, Dec 21, 2011

Facing $245 billion in reconstruction costs, Japan might be ready for casinos.

That is the view being expressed by operators with an eye on the casino market estimated to be worth ¥3.4 trillion—about $44 billion.

Bloomberg reports that the leader of the group of 150 legislators looking to introduce a gaming bill believes the need for reconstruction following Japan’s devastating earthquake and tsunami this year makes a strong case.

“It would be an engine for fiscal revival and job creation that wouldn’t require raising taxes,” said Takeshi Iwaya.

Bills were being considered late last year.      

A number of major operators are interested in the prospect, including Las Vegas Sands, Melco Crown Entertainment, Caesars Entertainment, MGM Resorts, Genting Singapore and Wynn Resorts.

Among those wary of creating a casino industry is Keiko Itokazu, an independent legislator. Itokazu expressed concern that organized crime would exploit casinos for prostitution and selling drugs.

“The yakuza would certainly get involved,” she said.

Takashi Kiso, head of consulting firm International Casino Institute Ltd., based in Tokyo, said it could not be assumed that Japan would be as successful as Singapore at controlling vice. Kiso pointed to Singapore’s small size and strict rule of law, which make it easier for authorities to act.

There is also the view that unless Japan could attract foreign gamblers, the casinos would have no positive effect on the economy overall.

By Frank Fahrenkopf   Wed, Dec 21, 2011

If you have picked up a newspaper, turned on a TV or looked at a website in the past nine months, you know that 2012 is an election year, and given those circumstances, the political climate and agenda on Capitol Hill in the coming year is likely to be dominated by the upcoming election.

The presidential election will get most of the media coverage, and some of the key issues debated during the campaign—taxes, health care, immigration, regulation and budget reform—will significantly affect the business community and could greatly impact how gaming companies operate.

Despite the anticipated dominance of election-year politics in 2012, work in Washington will continue, particularly as leaders grapple with how to facilitate improvement in the still-weakened national economy. On the Hill, the AGA will continue to represent the commercial casino industry on gaming-specific issues such as online poker, off-reservation gaming and other issues that affect the industry, while also protecting the industry from unfair regulation and taxation.

A key legislative priority in 2012 will be the AGA’s continued support for legislation to allow states to license and regulate online poker, so Americans who play can do so safely with responsible, law-abiding operators. Establishing federal guidelines to allow state-licensed and regulated online poker also would effectively keep minors from gambling online, prevent fraud and money laundering, address problem gambling and ensure players aren’t being cheated. American consumers deserve to be protected, and the AGA will work to ensure members of Congress are educated about the issue and the risks of the current online gambling environment.

In addition to the significant work the AGA has planned on the political front for 2012, the AGA will continue its work of telling the story of the modern commercial casino industry. A key part of that story is the important work that gaming companies put into corporate social responsibility (CSR) activities, making the communities where they operate better places to live, work and play.

On the heels of the release of a major study of the economic impact of the gaming industry, the AGA will focus on the industry’s community and philanthropic impact with the release of a report that will detail the industry’s CSR record, providing insight on charitable contributions, volunteer initiatives, environmental stewardship, diversity and other related activities.

The commercial casino industry has a tremendous record of volunteer service, and the AGA will work in 2012 to aggregate, promote and coordinate those efforts at the national level. We plan to leverage national events like National Volunteer Week and National Days of Service, and will work to highlight the various philanthropic activities of its member companies in a dedicated corporate social responsibility section of the AGA website.

Responsible gaming is a significant part of the gaming industry’s CSR efforts all year, and the 15th annual Responsible Gaming Education Week once again will serve as a catalyst to help gaming companies educate employees, patrons and the public about the importance of responsible gaming. The ongoing activities of the AGA’s affiliated charity, the National Center for Responsible Gaming, also will galvanize industry CSR efforts.

A focus on the importance of employee and supplier diversity has always been a hallmark of the gaming industry’s CSR efforts, and the AGA has a number of activities and initiatives planned for 2012 to promote and publicize the industry’s work in this area. The AGA is looking forward to the expansion of its new Global Gaming Women (GGW) initiative. Launched last fall, GGW was created to nurture emerging female leaders in the international gaming industry. By fostering stronger relationships between top female executives and promising managers, GGW will create an opportunity for women in the industry to learn from each other, share ideas and take advantage of mentorship opportunities.

Also on the diversity front, the AGA will conduct and release the latest edition of its semi-annual Employment Diversity Snapshot report, which measures diversity in hiring by gaming companies and compares the data with other industries. The employment diversity snapshot was last conducted in 2008, so this year’s report will be the first to analyze industry hiring practices since the recession. The AGA also will continue to present its annual Diverse Vendor of the Year Awards, which gives AGA members the opportunity to recognize top minority, woman and disadvantaged business enterprises doing business with the gaming industry.

In addition to standing up for the industry on Capitol Hill and shining a spotlight on its CSR activities, the AGA will continue to create business opportunities for the gaming industry worldwide through the Global Gaming Expo family of events. In 2012, G2E Asia will move two weeks earlier on the calendar, settling into its permanent date pattern in late May. G2E Las Vegas, the flagship G2E event, will continue in its early October date pattern and return to the Sands Expo and Convention Center for the second year. These changes will space the industry’s largest trade shows evenly throughout the year to the benefit of suppliers and purchasers around the globe.

Communicating the work of the AGA and the gaming industry as a whole is a large part of the AGA’s work, and stakeholders will continue to have the opportunity to engage with the AGA in the social media space through its Twitter feed (@AGAUpdate), its Facebook page (facebook.com/americangaming) and the premier of a new AGA blog. These are all great ways to keep up on not only AGA activities, but news from around the industry.

The coming year looks to be a busy one not only in Washington and at the AGA, but for the entire gaming industry. We look forward to working with our members and the broader industry to ensure it is a success.

By Roger Gros   Wed, Dec 21, 2011

As casinos eye the possibilities of online gaming—or should we say online poker, with gaming most likely following—they are enthralled by its possibilities. Of course, while the revenue that possibly can come from online poker is attractive (see the comments from LV Sands Chairman Sheldon Adelson in our cover story), it’s the ancillary benefits that really interest casino executives.

The ability to market their land-based casinos to online gamblers in a way that would induce those players to visit has been touted as a real benefit. In addition, the ability to keep a land-based player’s wallet within the walls of a virtual casino when they don’t want to take the trip to the bricks-and-mortar casino is obviously a benefit. Who would slog through an icy rain in mid-February to go to a casino if you could enjoy your favorite games by your fireside? So, the casino executives love the idea of “touching” their players on a daily basis.

With Congress seemingly at the end of the road in considering legalized online gaming at the federal level, the future is a bit ominous for the casino industry. With prospects for reconsideration next year very remote due to the presidential elections, the states are poised to jump in to legalize intrastate online gaming/poker, which means we’ll potentially have 50 different kinds of online gaming legalization under consideration.

Actually, that number is 51, because the first jurisdiction to consider legal online gaming has been Washington, D.C. And most problematic for the casino industry is that the publicly owned lottery organization in D.C. is taking the lead.

This is a trend that the industry has been ignoring, at its own peril. Now that legalization at the state level will proceed, it is very likely that the state lotteries will want to get into the game in a big way.

Now, lotteries and casinos have had a very tenuous relationship over the years. In Nevada, it’s more than tenuous; it’s confrontational. Nevada remains one of the few states in the U.S. without a lottery. That’s because the casino industry was legalized first and has consistently opposed the introduction of a state lottery in Nevada. In most other states, it’s the other way around. But the conflicts remain and the wounds are real. So the potential for renewed conflict over online gaming is also real.

The main reason most states will consider the legalization of online gaming is the potential for tax revenue. But to be successful, states will have to cap tax revenues at 20 percent or they won’t get the critical mass of players that will make it feasible.

So states will quickly realize that they will make more money by allowing the lotteries to run online gaming than if they simply approve casino companies with a 20 percent tax rate to do the job. After all, the states will understand that they are already in the gaming industry via the lottery organizations that they own. So why not simply extend the lotteries’ ability to accept bets within their states and keep all the profits? Certainly, the lottery directors will be pushing for this because it means more power and revenue for their organizations.

Remember, in many states, lotteries already operate VLTs—South Dakota, New York, Delaware, Louisiana, West Virginia and others—which we know are just slot machines in disguise. So it’s just a small jump from those gaming pieces to online gaming.

Fair Play USA, the online poker advocate of the U.S. gaming industry, recently released a self-serving study that said online gaming would not affect lottery sales. Maybe not now, because there are currently only a few states that permit the online purchase of lottery tickets. But once online gaming is legal, the lotteries will want a piece of the action. But the action they’ll be looking for is operating all online gaming within their states.

What’s the solution? I’m not really sure, but maybe an agreement to allow the lotteries to sell their tickets online, while casino operators run the online poker rooms. Possibly creating an online portal that would steer players to either the poker room or the lottery store?

It’s a difficult issue, but the casino industry had better pay attention to it, because there are likely to be many different discussions in all the different states. The industry needs to be aware and ready to respond to the proposals the lotteries are sure to bring to the table.