By Dean Macomber   Wed, Feb 03, 2010

Genting Berhad is a company with a 45-year history and business dimensions unequaled in the gaming industry. After all, besides casinos, what other gaming company has been involved in such diverse activities as genome research, oil palm plantations, oil and gas exploration, power plants, paper production, real estate development and cruise ships?

And, there is more, much more. Despite this amazing past, a seminal event that will shape Genting's future is about to occur-the opening of Resorts World Sentosa in Singapore, a mega-mixed-use casino-resort destination.

There may be no other company in the gaming industry as fascinating or with the future of Genting. This is its story.

The Visionary
Bill Harrah, Benny Binion, Sol Kerzner, Sam Boyd, Steve Wynn and Tan Sri Lim Goh Tong... All of these are patriarchs of start-up companies catalyzed by a spot-on vision for what consumers needed and wanted, but what the industry was not providing. These visions were all executed by the inner force of personality of their leaders, a requisite needed to overcome the challenges to initially succeed and then to continue to accelerate growth in the complex, competitive and capital-intensive gaming industry.

While historically not a household name in the Western gaming industry, the Chinese-Malaysian founder of Genting, Tan Sri Lim Goh Tong, deserves to be in this company-and, one might also say, vice versa. (Note that Tan Sri is a rare Malaysian honorary title bestowed upon him. Lim is the family surname, appearing first in the Chinese tradition, and Goh Tong are the given names that follow.)

The force Lim embedded in Genting can be well understood when one understands the forces that shaped the life of its founder. Upon his father's death he was forced, at the age of 16, to leave Fujian Province in China and emigrate to Malaysia with nothing but a suitcase and $175. Tragically, soon after he arrived in Malaysia, the Japanese occupied the country, found Lim, and sent him back to China. Ironically but tragically again, Japan occupied Fujian Province, forcing Lim to once more return to Malaysia.

Once settled in Malaysia, Lim began his business career as an engineering contractor. As fate would have it, while working on an engineering project he visited Cameron Highlands, a mountaintop resort made popular by British colonists seeking to escape the heat in the cities below. Lim decided that he, too, wanted to build a retreat for his family and other Malaysians, but one that was closer to the population center of Kuala Lumpur.

In searching for a site, he found what he was looking for only 36 miles away and 5,900 feet above sea level. But, in what elusively seems to differentiate true visionaries from wannabes, Lim saw the potential to build a full-scale resort.

To secure the site from the government, Lim was forced to build a road to the almost 15,000-acre site with his own money.

In a twist of fate, this proved fortuitous, because Lim completed the construction of the road on time. As the thankful prime minister of Malaysia was helping to lay the first cornerstone, he surprised Lim by offering to give him a country-wide monopoly license for a casino that still exists today. While this may not have been initially seen as a great boon, because Malaysia is a Muslim-majority country whose religion forbids gaming, Malaysia also has a large and wealthy Chinese community with no such restrictions. And, little did anyone know, through Lim's vision and drive, the initial inauspicious 200-room resort that opened in 1971 with a 30-table casino would morph into one of the largest and most prestigious resort, gaming, entertainment and meeting/convention destinations in Asia by the end of the century. The casino would cater to Chinese-Malaysians and foreign tourists, and the non-gaming activities would appeal to everyone, including non-gaming Muslim Malaysians.

The original Highlands Hotel is now known as Resorts World Genting, and offers some 500 table games and 3,000 slot machines; six hotels with 10,000 hotel rooms; some 30 restaurants and bars offering everything from lattes to haute cuisine; over 50 thrill rides contained in both outdoor and indoor theme and water parks; a Snow World, climbing wall, cineplex, Ripley's Believe It Or Not Museum and bowling alley; 170 dining and shopping outlets; an array of entertainment venues that include a showroom, arena, hall, convention center and a number of informal venues; 150,000 square feet of business convention facilities; a 6,117-meter, par-71 golf course; a gym, a spa, and too many other activities and events to count.  

The resort often first appears to newcomers as an apparition-castle-like hotels peeking through early morning clouds. It is other-worldly, unexpectedly impressive, and gets your heart pumping faster with anticipation before you even fully arrive. As testimony to Genting's ability to understand the needs and wants of its target markets, Resorts World Genting hosted almost 20 million visitors in 2007.

Less known but also influential in the gaming industry have been Genting's gaming development and management agreements in Australia, the Philippines and the Bahamas; stakes taken in Canada's Pacific Lottery Corporation; United Kingdom's Rank PLC and London Clubs International; and start-up funding of Foxwoods in Connecticut and the Seneca casino in Buffalo, New York. Genting's diversification outside of gaming started in 1976 and continues to this day (see sidebar, page 26).

Lim retired in 2004 and died in 2007. However, the bloodline's vision and vigor continued seamlessly and steadfastly with the stewardship of the company by his son, Tan Sri Lim Kok Thay, as events after 2004 demonstrate-and as the impending opening of Resorts World Sentosa will decidedly reinforce.

A Seminal Event
The dramatic changes in casino development over the last 30 years have gone from seven-figure to 10-figure investments, and from single-billion to multiple-billion-dollar projects. And nobody blinked. Resorts World Sentosa is approximately a US$4.5 billion project. It is a mega if not a meta project.

To place the project into scale, the site encompasses approximately 121 acres, about four holes short of what it takes to accommodate an average golf course. It will take somewhere in the neighborhood of 10,000 employees to operate the mega-resort when fully open. The list of activities reads like a list of leisure, entertainment and recreation activities for a major destination with multiple resorts, not a single project. (See Resorts World Sentosa sidebar, page 30.)

Resorts World architects and designers have developed a clever master plan, and emotion-evoking architecture and design that will complement and amplify employee-generated "This Trip Experiences" and create visual memory glue for years to come. Indeed, Resorts World Sentosa is the next new must-see gaming, leisure and entertainment destination.

In one bold move, Resorts World Sentosa propels Genting from being essentially a one-project, Malaysian gaming operator with some "other" gaming operations thrown in to being a two mega/meta-project, gaming-centric operator with combined investment equivalent to 12 or more typical gaming operations of its peers.

Often historically under-noticed and under-appreciated by most Westerners, Genting will soon become too big a competitor to ignore-in Asia or, for that matter, anywhere else in the world. Long overdue but overdue no longer. And, the industry is the better for it.

Producing Results
Even if Resorts World Sentosa is indeed the absolutely, unequivocally, stunningly world-class resort it strives to be, in capitalism, winning design awards or even moving the emotions of the purchasing public means little unless such actions achieve target financial results.

This is problematic because Resorts World Sentosa was conceived in broad strokes by the government of Singapore and then dialed in and detailed by Genting prior to the onset of the current economic crisis.

The government chose to issue only two casino licenses as the carrot to require each winning bidder to conceptualize and build a world-class, iconic integrated resort. The objective was to recover Singapore's slippage as one of Asia's top visitor destinations and, specifically, to increase visitor count from 10 million to 15 million by 2015.

These goals implicitly raised the ante of the casino license, but when combined with the bidding frenzy, they led to the submittal of the two intended iconic resort proposals (albeit at a very high level of investment). Post-bid, the investment went higher still, as the costs to execute the dramatic designs were realized, the concepts were fine-tuned, and construction encountered some unexpected increased costs.

No one would probably have said much had the world and regional economies continued to march forward at pace. They did not. And now this project and, for that matter, every other project around the world of this magnitude that began construction pre-economic crisis, is being met by the headwind of the direct and indirect effects of this crisis. Birthed in an era of bigger-is-better, build-it-and-they-will-come mentality, we may not see projects like this again for some time to come.

So, what is or should be the desired result for Resorts World Sentosa? Mere company survival is a significant accomplishment these days for any development of this size. Being able to pay down debt without triggering debt covenants is another.

On the equity side, it may simply mean having a stock price finally hit bottom and start to show signs of recovery. Taking it up a notch, returns on invested capital that provide some spread, any spread over cost of capital that would not have been considered inspired performance before the economic crisis (e.g., EBITDA return on invested capital or ROIC of 12 percent to 13 percent) but in 2010 will be welcome by many.

For projects of this size in today's economy, mid-teen ROIC during a start-up period would be cause for applause. And, long-term prospects of a high-teen ROIC for a mega-project such as this today would make most investors giddy. In short, for the time being, the efficacy of Resorts World Sentosa should be evaluated based upon recalibrated expectations.

Even so, given all of the uncertainty that exists within the marketplace today, can the financial performance of Resorts World Sentosa fit into a lowered but tighter and realistic financial performance expectation matrix? The answer is a definite "yes" over the long term, up to and including the possibility of performance returning to the high end of the performance envelope.

It is a highly probable "yes" over the immediate term based upon recalibrated expectations. The initial opening period is less certain given the uncertainty of world and regional economies. Certainly a "yes" answer is a likelihood, but if a material threat or combination of threats conspire unexpectedly, it could also be a temporary "no" until Genting can fix it. Speculation aside, the actual outcome will be a function of the following Singapore and Resorts World Sentosa dynamics.

Singapore Potential
Here is what some of the analysts are saying. Their fully open and stabilized forecasts of total gaming revenue for both Singapore casinos seem to cluster in the mid-US$2 billion to US$4 billion range, although some are saying the upside market potential could be as high as US$6 billion with an outlier of US$9 billion.

Splits between the two licensees seem to range from an even 50:50 split to 55:45 tipped in favor of Marina Bay Sands, because of a perceived more favorable location, presumed positioning toward the upper end of the market and more serious gambler, and less focus on family and other less gaming-synergistic amenities. The results for 2010 vary from here based on when a given analyst feels each property will open, what activities will be available in Phase 1 (the Singapore government imposed a 50 percent "readiness" quotient to open the casino), and how quickly the remaining activities will build out.

The bulls of Genting Singapore stock, the subsidiary where Genting holds Resorts World Singapore, tend to justify their "buy" recommendations by gravitating toward the high end of Singapore market forecast and/or use the high end of Asian gaming stock price/earning ratios to get to a stock price with enough upside over the recent trading range of US$0.75 (S$1.00 to S$1.10) per share.

This translates into Singapore market annual gaming revenue in the US$4 billion range and/or P/E ratios of 15 times or more. The bears argue for less. There are many sub-arguments in between the major assumptions.

Stepping away from the analysts' recommendations, using easy math and some generally accepted industry metrics, to achieve a 15 percent EBITDA return on invested capital on the US$4.5 billion investment in Resorts World Singapore requires an EBITDA of US$675 million. Assuming an EBITDA margin of 26 percent, this implies $2.6 billion in annual total revenue. Continuing with an assumed ratio of annual gross gaming revenue to total revenue of 70 percent, this results in a target annual gross gaming revenue of approximately $1.8 billion.

If Resorts World Sentosa produces 50 percent of Singapore's combined gaming revenue, then the annual combined Singapore gross gaming revenue would need to be in the US$3.6 billion range in a 50:50 split with Marina Bay Sands and in the US$4.0 billion range in a 55:45 split with Marina Bay Sands.

Notwithstanding financial performance, there will be an underlying strategic value to opening a mega-integrated resort in Singapore. This includes not only marketing synergies with Genting's other gaming operations-Resorts World Genting, Star Cruises, and its other international casino operations-but also the boost such a prestigious project operating in the squeaky-clean environment of Singapore will mean to Genting when bidding on what is certain to be a rekindled interest in new and expanded gaming venues throughout Asia and beyond-e.g., Japan, Taiwan, Thailand, Philippines and someday, perhaps mainland China.

No matter what third parties say, the initial high performance at Resorts World Sentosa is not a company life-or-death issue for Genting. The company is large, diversified and sitting on a fair amount of cash. In terms of risk management, the company has not overly leveraged the Sentosa project, is taking a phased approach, and has unspoken-for land yet to develop. And, as already mentioned, its executives are seasoned in gaming, operating and marketing in this specific region, and adept at working through challenges.

As this article was going to press, Genting announced that it planned to open the Crockfords Tower, Hotel Michael and Hard Rock Hotel on January 20, translating into 1,350 available rooms and 10 restaurants. The casino opening is predicated upon Resorts World Sentosa receiving approval to open Universal Studios Singapore. This is expected early in 2010. Opening of the remaining facilities will take place in 2011.

Genting can be proud in winning one of the two Singapore casino licenses, and even more proud of what its development team has conceptualized and executed, a truly stunning project. The "bones" are there. So are the inspiration, creativity, innovation and passion.

Under the careful stewardship of Genting, Resorts World Sentosa will be a great, memorable and emotion-evoking place to gamble, dine, imbibe, attend a meeting, shop, play with your kids (and be a kid yourself!), vegetate, cogitate, relax and just plain visit. Slow or fast, but inevitably, Resorts World Sentosa will fulfill its purpose for all of its stakeholders.

It would be unreasonable to ask for more or assume less.

By Dean Macomber   Wed, Feb 03, 2010

By Dean Macomber   Wed, Feb 03, 2010

By William R. Eadington and Meighan R. Doyle   Wed, Feb 03, 2010

When the debate for legalizing casinos comes up, the general public typically assumes that "casino" is a well-defined and unambiguous term, a place where bets and wagers are made at traditional table games and electronic gaming devices. Casino legalization is a decision that will result in a mix of social and economic benefits and costs, and variations in the details of the law are often viewed as relatively unimportant except for determining who the major benefactors from legalization might be.

When the casino legalization issue becomes active, proponents, opponents and the media actively engage in debating the benefits and costs, as well as other implications, of casinos. The various parties argue that casinos will either substantially benefit the jurisdiction authorizing them and the customers who will frequent them, or alternatively, that the outcomes will be substantially deleterious to exactly the same groups.

More moderate analysts suggest that the impacts will be mixed among the many stakeholders, with legalization creating some winners and some losers, and with some impacts too difficult to evaluate. Such debates can become extremely contentious and emotional, with advocates of whatever position grasping for and presenting whatever evidence that supports the positions that, in their hearts, they know to be correct, regardless of underlying evidence to the contrary.

In such debates, far too little attention is paid to the differences among different types of casinos and different structures to the legislation and how well-or how poorly-the broad objectives of the legislation will be fulfilled. Advocates typically champion the economic gains to be had from casinos, in terms of jobs, direct foreign investment, tax revenues to be generated, and the catalytic effects such casinos can have on tourism, economic development or redevelopment, or even the image of the jurisdiction as perceived by outsiders.

Opponents, on the other hand, cite the increased incidence of crime, family difficulties created by excessive gambling, traffic congestion, the dislocation of existing businesses, the immorality of gambling, and other horrors that may or may not be realistic in light of the proposals.

Arguments are typically formulated in an advocacy manner rather than a scientific approach; there are few, if any, disinterested observers seeking objective and valid evidence that will paint a realistic picture of what will transpire after casinos are legalized. In all the flurry over the "yes" or "no" decision to be made on casinos, the nuances of differences in approach to the casino question can easily be shuffled aside.

Finding the Framework
The book Integrated Resort Casinos provides a conceptual framework for making such differentiations, and also points out the difficulties, deceptions and challenges that arise in the heat of the debate.

The book is a collection of learned papers that examine a variety of impacts of casinos, based on the attempt by the American company Harrah's and the Slovenian company Hit d.d. to develop a €1 billion integrated resort casino (IRC) in western Slovenia, close to the Italian border. From 2005 until 2008, Harrah's and Hit jointly explored developing a project in Slovenia that does not have an equivalent anywhere in Europe: a destination integrated resort casino.

The Slovenian IRC project would have had a number of favorable characteristics relative to existing Slovenian and other regional casinos. It would have been a substantial project, in terms of capital outlay, in the provision of non-gaming amenities such as high-quality hotel rooms, convention facilities, golf courses, retail outlets, restaurants and showroom entertainment, and it would have targeted a largely international clientele-many from Italy, but with the hope and expectation of becoming a continent-wide tourist attraction.

For a variety of reasons, the deal fell through. Both companies considered themselves to be highly competent, and Harrah's-which was expected to put up the majority of financial capital-would also need to be able to have a larger ownership stake than the prevailing laws permitted. (This necessitated changes in the Slovenian gaming law.)

As a government-owned company, Hit would have had difficulty justifying the kind of capital investment the project would require. However, there was clearly reluctance within Slovenia to allow a foreign company to own more than 50 percent of a major integrated resort casino operation, and it was unclear that Hit could be transformed from a government-owned company to a private-sector company quickly or easily.

There were also economic and political interests in Slovenia and in the region that were threatened in one way or another by this project. Management at the existing casinos, and the labor unions that represented their workers, may have feared that the new integrated resort casino would take customers away from their facilities, and damage their economic and employment prospects in the immediate future.

Operators of gambling saloons, especially those in western Slovenia, probably viewed the potential competition from an integrated resort casino as particularly threatening. It would not be surprising that such entities would use their knowledge of local politics to shift sentiment away from such a proposal based on whatever means of persuasion that would work.

The failure of Harrah's and Hit to consummate the deal notwithstanding, the lessons learned in Slovenia still have substantial relevance for other jurisdictions, such as Massachusetts, Ohio, Taiwan, Japan and Thailand. Key to these lessons is grasping the differences between integrated resort casinos and more generic "gambling-centric" casinos.

Back to the Basics
The essence of the integrated resort casino argument is the following. In most jurisdictions where casinos are to be found, casinos are places where one goes to participate in table games and play slot machines (or more accurately, electronic gaming devices). Such facilities typically provide limited food, beverage, entertainment, and sometimes hotel offerings, but these are usually no more than conveniences offered for the gamblers: feeding stations and rest stops to accommodate those who are there for the gambling, and who otherwise might wander off the property to fulfill these basic needs.

The non-gaming activities are clearly secondary; such facilities often generate 80 percent, 90 percent or more of all their revenues from their gaming products. As such, these casinos are clearly gambling-centric; their appeal is almost strictly to gamblers.

Integrated resort casinos are different. They offer a wide variety of leisure and entertainment products besides casino gaming. They all have iconic, sometimes "over-the-top" architecture. They require capital investments in the hundreds of millions or billions of dollars. And they have become major attractions for both domestic and international tourist markets.

Indeed, they often serve to define or substantially alter the perception of tourist or urban destinations by becoming important and sometimes dominant attractions. Think of Las Vegas, Macau, Biloxi and Atlantic City, all with multiple integrated resort casinos, and all defined as casino cities by their IRC facilities. In the case of Foxwoods and Mohegan Sun (Connecticut), Sun City (South Africa), Kangwon Land (South Korea), Crown (Melbourne), and Marina Bay Sands and Resorts World (Singapore), IRCs are important economic drivers for their metropolitan areas or regions, as well as iconic symbols for their respective jurisdictions.

More often than not, IRCs offer five-star accommodation and Michelin-quality fine dining, world-class live entertainment and Rodeo Drive-quality retail shopping. Most IRCs have leveraged their economies of scale and scope to become highly diversified and prominent in various leisure and tourist product offerings beyond gaming, including restaurants, entertainment, convention services, outdoor recreational offerings, spas, retail shopping, and sometimes aquariums, museums, theme parks, movie theaters, live theater and sports arenas.

Integrated resort casinos compete for the high-end leisure dollar far more effectively than gambling-centric casinos. By providing such a variety of activities, they appeal to many who have little desire to gamble, but who enjoy the other attractions. IRCs have become increasingly preferred venues in the convention and meetings business, and they compete head-on with traditional destination resort industries such as those found in Hawaii, the Caribbean, Florida, the south of France, in Bali, and on cruise ships.

IRCs employ thousands in their round-the-clock operations, and-because of the diversity of offerings and the related specialized services required-they hire substantially more highly skilled and professionally trained employees than do gaming-centric casinos.  

Major Mutations
In many respects, IRCs are major mutations from "gaming-centric" casinos and gambling saloons that have become commonplace in many parts of the world. IRCs are "one-stop" entertainment centers that also have casinos, and as a result they attract many segments of the leisure market that have little or no interest in gaming.

It is important to note that potential economic benefits-and social costs-generated by IRCs are radically different from those created by gambling-centric casinos. The lead article in Integrated Resort Casinos by William Eadington and Eugene Christiansen provides a historic, global overview of this differentiation. A later article by Eadington and Peter Collins further delineates and defines various grades of casino gaming options.

They argue that a high-capital-investment, multi-faceted integrated resort casino inherently will have a much higher benefit/cost ratio than a gaming-centric urban casino, and a staggeringly higher ratio than convenience gambling (such as gaming machines in bars and taverns). When gambling is legalized, however, due to the visibility and symbolism of IRCs, political pressures often encourage legislative bodies to authorize less visible, but certainly less desirable, casino alternatives. If this book's findings are taken seriously by decision-makers, such outcomes will be far less prevalent.

Understanding the historic, political, economic and social environment of a jurisdiction is an important first step in any campaign to legalize casinos. The article by Dusan Luin presents how the changes to gaming regulation are reflected in the economic and social environments of Slovenia, how the public has reacted to the introduction and expansion of gaming offerings over the years, and how casinos and politicians have responded to changes in public opinion.

Not incidentally, the part of Slovenia that now houses Europe's largest casino (Casino Perla in Nova Gorica) has a tradition of gaming that dates back over two centuries, and as such has been subject to dramatic political shifts, changing social perceptions and differing levels of legality.

An article by Anton Gosar notes that the integrated resort casino, had it gone forward, would have complemented the many under-appreciated tourism assets within Slovenia. Such tourist attractions, largely undiscovered and relatively unknown in the West, include the spectacular Julian Alps, medieval villages along the Adriatic Sea, the fantasy setting of the medieval town of Bled, the charming capital city of Ljubljana, the spectacular Postojna caves, the historic Soca River
valley, the hilly vineyard regions, and vestiges of the Austro-Hungarian Empire, including the Lipizzaner horse stud farms to be found in Lipica.

Most potential tourists are also unaware that Slovenia is so close to Venice and to the remarkable Dolomite Alps in northeastern Italy. Arguably, the IRC project might have served as a major and important catalyst to better integrate Slovenia into mainstream European tourism.  

Other articles address some of the social science impacts that can be anticipated with casino development and the casino debate. Hugo Zagoršek and Marko Jaklic, in their contribution, provide a broad analysis of the economic effects of gambling-and tourist gambling-within the context of existing Slovenian casinos.

The contribution by Matej Makarovic, Borut Roncevic, and Klavdija Zorec notes that during the public debate, a frequent criticism of the project was a lack of information about social costs of gambling (quantifiable costs generated by problem gambling, such as unemployment, divorce, bad debts and cost of treatment). Such criticism was initially justified; fortunately, these researchers rectified the situation by conducting the first in-depth survey in Slovenia of the social costs related to gambling.

They also estimated the effect of responsible gaming education programs on the social costs of gambling created by the proposed integrated resort casino, and they drew the conclusion that such programs are essential to any type of gambling development; in the case of Slovenia, with existing gambling (and problem gambling), such educational programs could even reduce the social costs from their present levels.

As in other jurisdictions, the Catholic Church had difficulty in allowing such a visible project with casino gaming at its core to move forward unchallenged. Allowing a globally visible integrated resort casino within the shadow of the patriarch of Venice-a likely contender for the Papacy-may not go down well with those who consider such symbols of propriety as important in the broader scheme of things. This is also perhaps one reason why opposition to this project arose from the archbishop of Ljubljana.

Thus, ironically, Slovenia experienced a substantial expansion of gambling saloons and so-called convenience gambling since 2000 without any significant opposition by the church, whereas the Harrah's/Hit joint venture project-which would have arguably been far more benevolent than the existing alternatives-became a target for ecclesiastical opposition.

Articles by Peter Collins and Bogdan Vidmar highlight the ethical dimensions of authorizing casinos by citing arguments from philosophers and theologians that have been around for centuries, with Collins making the case that government's role should not be prohibitive, and that people should be allowed to make their own decisions, even if they may turn out badly. Vidmar, on the other hand, attempts to summarize the Catholic Church's historic opposition to gambling and place it into a context of how Slovenia, as a predominantly Catholic country, should adapt its policies to the positions of the church.

In summary, in its contributions from a wide variety of researchers, Integrated Resort Casinos captures much of the essence of the public policy debates that center around legalization or liberalization of casinos. Though many of the articles address issues in Slovenia, the issues are easily applicable elsewhere. The experience of the entire world with respect to casino legalization can be drawn upon to make better public policy decisions, but as this book readily points out, the difficulties of achieving good public policy are many and substantial.

Whatever the actual dynamic that led to the demise of the Slovenian integrated resort project, it did create an environment where the local and national community participated in a vociferous debate on the merits and risks of permitting the project to go forward. The research papers in this book provide excellent insights and perspectives on the scientific, social scientific, political and ethical issues that were raised in Slovenia, and are usually raised when a jurisdiction is given the opportunity to choose to permit such a project.

When evaluating whether to permit casino gaming within their borders, jurisdictions should be careful to distinguish among the various types of casino gaming they could introduce, and be sensitive to the benefits, costs and ethical implications such alternative choices imply. Integrated Resort Casinos provides a particularly good roadmap for such an endeavor.

By William R. Eadington and Meighan R. Doyle   Wed, Feb 03, 2010

Edited by William R. Eadington and Meighan R. Doyle

Institute for the Study of Gambling and Commercial Gaming
University of Nevada, Reno, 2009

$39.95, plus shipping and handling

www.unr.edu/gaming/publications.html

The last quarter-century has seen prolific but often eccentric legalization of many types of gambling-especially casino-style gaming-all over the world, with results that have varied from commendable to acceptable to regrettable. This is a book that discusses "how to get it right," along with a sober and realistic description of the political pitfalls and difficulties that arise when attempting to do so.

By GGB Staff   Wed, Feb 03, 2010

The importance of the security and surveillance departments of the casino industry was again emphasized last year as a severe recession gripped the industry and made it even more important to prevent cheating, scams, thefts and criminal activity on the casino property.

With no letup in sight, these departments are charged with doing more-often with less. The responsibilities of the departments are varied and the response is precise, so the need for good information provided by quality sources is crucial.

This year's Global Game Protection special section contains articles that will inform security and surveillance professionals about some of the important issues in the industry today.
    With the severe economic conditions, employees are tempted more than ever to steal from their employers. Darrin Hoke explains their motivations, justifications and methods in his excellent piece on page 38.

Al Zajic explains the importance of cooperation and communication between the security and surveillance departments on page 42, while Caitlin McGarry outlines the important new area of "dataveillance," which uses a variety of technologies to help apprehend the guilty.

And finally, Willy Allison, the producer of this month's World Game Protection Conference (February 21-23 at Caesars Palace in Las Vegas), interviews Ted Whiting, the director of surveillance at Aria, the groundbreaking casino at MGM Mirage's CityCenter, on how he set up the industry's most cutting-edge surveillance department. Keeping tabs on the bad guys in Las Vegas' newest mega-property is a true challenge.

By Caitlin McGarry   Wed, Feb 03, 2010

Every few years, a new technological buzzword (or phrase) begins to circulate throughout the gaming industry: TITO. Server-based gaming. RFID. And now: dataveillance.

Dataveillance is a new kind of technology that allows a database to pull data streams from video surveillance feeds, access control systems, cash register transactions, time clocks, slot machines-any information generated by the casino and its multiple systems-and mine the data for events of fraud or theft.

The end result is a streamlined surveillance process that uses all of the information at a casino's disposal in an integrated, sophisticated manner.

The Initiative
Dataveillance is not a new concept, but it has only recently gained ground in the gaming industry due to a push from Synectics Network Systems. Last year, the company partnered with Darrin Hoke, director of surveillance for L'Auberge du Lac Casino Resort in Lake Charles, Louisiana, to turn dataveillance into a reality.

Hoke discovered a case of comp and cashback fraud at his property in 2007, and throughout his investigation, he manually pulled data from the casino's systems in order to find patterns. Hoke says he felt like "we had to build a better mousetrap to capture these fraud indicators by tying data to video." He reached out to Synectics, and now the company is currently developing a product to do what surveillance directors like Hoke need to detect theft or fraud.

"Part of what the dataveillance-type application does is it creates a common database environment where we can import data from totally disparate systems and platforms into one common database environment," says Synectics North America Chief Operating Officer John Katnic. "Once we have the data within the dataveillance environment, then there's a set of tools-basically database logic tools-that allow you to mine data, either from a single system or in combination with multiple systems."

Casino operators can equip the database to set off an alarm when an event or multiple events occur simultaneously. Hoke worked with Synectics to develop a set of guidelines for alarms.

"We have created a number of metrics that aid the surveillance department in identifying trends and patterns associated with fraudulent behavior," Hoke says. "This information is then used by surveillance and compared against the actual events caught on video."

For dataveillance to succeed, third-party companies would need to export their data to an application like the one Synectics is developing. Video analytics company ObjectVideo is one of the third parties that is partnering with Synectics to make dataveillance a reality.

"Video analytics rules can be created to pinpoint certain actions and behaviors, then output those in real time as events," says Bob Cutting, ObjectVideo's vice president of product management. "Those events-whether they are alerts for security violations or counts of people-become yet another complementary stream of data for a dataveillance platform. ObjectVideo's job is to convert video into that useful stream of data that can be monitored in real time alongside other operational data, such as point-of-sale data, slot usage data and so on."

As the casino floor becomes increasingly networked and more streams of information are generated by the casino and its systems, converging those streams seems like an inevitable evolution.

"I think the big-picture justification for applications like this is just the ever-accelerating amount of data that people have to consider for security applications," Katnic says. "You need tools that sift through all the benign noise, which comprises 99 percent of the security data that's generated. Less than 1 percent is actually of any value in terms of possible theft or events. You just need something to manage all these mountains of data that are being generated from these systems."

The Advantages
The primary function of an upgraded and expanded surveillance system is the ability to detect fraud and theft at a higher rate. Combining data with the visual observations of surveillance staff could boost a casino's fraud detection rate by pulling information that may be invisible to the naked eye.

"What may appear as a benign event using one security system may no longer be benign when it's combined with data from another system," Katnic says. "Let's say at a cash register, a staff member issues a refund. That's a benign event in and of itself. We have a people-counting camera that tells us how many people are in the queue, and that system happens to tell me that no one is in line. Again, a benign event. But if those two things are combined-there's a refund, but no one's in line-we have a high probability that the person behind the cash register is pocketing money."

But casino operators can use dataveillance for purposes beyond simple fraud detection. Cutting says dataveillance technology can be implemented to boost a property's performance as well.

"Our position has always been that video itself, and the events that an ObjectVideo-enabled system can automatically generate in real time, has significant value, but there is greater value to be achieved when that data is used in a complementary way with other business systems," Cutting says. "We have a retail customer that recently installed an intelligent system to count people entering their stores. But having that data is not the ultimate value for them. They use that data to generate daily sales performance metrics per store by combining it with point-of-sale transactional data so they can monitor traffic-to-sales conversion, which is a powerful performance indicator."

Slot machines also generate data that can be used by a dataveillance application to monitor the success of a casino.

"Dataveillance benefits the casino operators and their slot floors by providing 'deeper' information about the slot floor and slot player," says Jeff Baldi, the Western-region director of systems sales for slot manufacturer Aristocrat Technologies. "For example, traditional slot analysis uses accounting or casino player information from a previous period. By overlaying this accounting information on a CAD package, slot managers make assumptions about traffic patterns, group play, etc.  

"Dataveillance replaces assumption with concrete data providing facts about how jackpots impact players around the win, or why players linger in certain areas, for example."

The Future of Surveillance
Katnic, Hoke, Cutting and Baldi participated in a panel discussion on dataveillance at Global Gaming Expo 2009. The panel, called "Dataveillance: The New Breed of Casino Surveillance," covered the concept behind dataveillance as well as its advantages in an increasingly networked world.

Hoke says the discussion was well received by G2E convention attendees, many who were eager to learn when an applicable product would be on the market.

"I received a lot of positive feedback from the people who attended the G2E panel," Hoke says. "I also heard from many that this initiative is long overdue and they can't wait until the technology is available."

The World Game Protection Catwalk online newsletter recently conducted a poll of casino employees, asking what percentage of internal theft is detected by surveillance. Forty percent of the 163 respondents said less than 5 percent of theft is picked up by traditional surveillance techniques, and 36 percent of those surveyed said between 6 percent and 20 percent of theft is detected by surveillance. Hoke says the results of the poll indicate that more sophisticated surveillance techniques are needed to detect theft.

"I guess the real question is whether casino operators are OK with these numbers, or should they be giving surveillance more tools to protect the sizable assets of a gaming business," Hoke says.

Synectics is driving an initiative to educate casino operators about the benefits of dataveillance, and Katnic says those who attended the panel discussion were open to the possibilities dataveillance can offer.

"It's a very new idea to actually take data from multiple databases and correlate them to find things that you don't see otherwise," Katnic says. "What we saw were a lot of wheels turning, people thinking, 'How could I use this? What sort of things do we want to apply this tool to?'"

Synectics showed a beta version of its dataveillance application at G2E, and Katnic says the company expects to have the first beta application ready to be tested at a property by midyear. Synectics plans to roll out its dataveillance application by the end of 2010.

By Willy Allison   Wed, Feb 03, 2010

Editor's Note: Willy Allison, president of World Gaming Protection and publisher of the Catwalk newsletter, visited the new Aria Casino Resort in Las Vegas in January to find out how the surveillance department will oversee the activity in the massive casino resort.

Over the years, frequent visitors to Las Vegas have become accustomed to the ever-changing landscape that is the Strip. It's not unusual to see a new mega-resort pop up from the sand of the desert floor, or from the rubble of grand old gambling palaces. But today, as you fly over Hoover Dam and start your descent into the 15th busiest airport in the world, you can't help but notice-there's a new town in town.

CityCenter is the mega of all mega-complexes ever to be built in Las Vegas. Since construction began in 2005, Las Vegas residents have watched the massive glass towers rise above neighboring properties like royal chess pieces beside their pawns. Reported to have cost over $8.5 billion, the complex is set on 67 acres on the Strip and consists of four hotels, a casino, residential condominiums and a retail and entertainment district.

The project is the largest privately financed development in U.S. history, and is a partnership between MGM Mirage and Infinity World Development Corp., a subsidiary of Dubai World. CityCenter is adjacent and connected via monorail to the Strip's first $1 billion dollar property Bellagio, which opened in 1998 and is also owned by MGM Mirage.

Located in the center of CityCenter is the Aria Resort & Casino. Aria opened on December 16. The spectacular fireworks display was a fitting celebration for a project that employed thousands of workers over the last few years and will provide thousands of jobs and a much-needed boost to a depressed local economy. The casino opening was the last in Las Vegas for the decade. Some skeptics are saying it could be the last for a long time.

Aria stands 61 stories high and has 4,004 hotel rooms. The casino floor has 145 table games and 1,940 server-based slot machines. Under the 150,000 square feet of gaming space, somewhere in the maze of back-of-house offices and support functions, is the casino surveillance operation.

Ted Whiting is the director of surveillance at Aria. Whiting knows every square foot of the new casino. He's spent the past three years knee-deep in opening project planning, camera system design and overseeing the operational setup of the new surveillance department. At the same time, he managed to hold down his "day job" as director of surveillance at the Mirage, an MGM Mirage sister property.

Fresh off a successful opening, Whiting was kind enough to give me a tour of his operation and answer a few questions I had about his new surveillance baby.

Willy Allison: How big is your monitor room in terms of square feet, number of consoles and monitors?
Ted Whiting: The surveillance monitor room at Aria is approximately 5,000 square feet. We have 64 total monitors and seven individual work stations. We also added a separate viewing room for other departments to review video without disrupting our primary operation.

Can you explain the rationale behind the design of the room?
I was very lucky with my surveillance room, in that I was involved with the design from right after the time we broke ground on the CityCenter project. My very early involvement from the ground up enabled me to create an environment that was sure to promote productivity. We took a very ergonomic approach to the surveillance room's design. We were able to get temperature control in the room, so we can keep the room temp at the perfect 72 degrees. The operator consoles are built specifically for video observation, and the wall monitors were all mounted at the optimal distance based on the size of the monitor and their distance from the operator. Comfortable operators are the most productive operators.

How many cameras are in the system, and what type are you using?
We put several final candidates through the wringer before we settled on Honeywell as our CCTV manufacturer. When we first began this project in 2006, most people assumed we would be building an IP camera CCTV system. The problem was that in 2006 (and really until late 2009) IP cameras just did not compare to analog cameras. What I mean is that IP cameras were more expensive, they did not provide the same image quality as analog, and we had no idea how long they would last before needing repair or replacement.

We felt we should use the best of the mainstream technology (analog cameras) and blend in the things that work well from the IP world. The IP cameras we are most excited by are the 360-degree cameras we have throughout the casino floor. These cameras allow us to record events on nearly 100 percent of the casino floor, something that has never been done before. We also installed megapixel cameras at choke points in the casino. These cameras will provide ID shots, better than we have ever had in the past.

We are currently beta-testing a new fixed HD IP camera from Honeywell. This camera provides a true HD image that works great in even our low light conditions. The detailed image is what grabbed me initially, but it was the fact the data streams at 2.5 mbps that really got me excited-2.5 mbps is the same as an analog camera after it has been encoded. This means we do not need to buy any additional storage to use these vastly superior cameras.

Who were the installer, consultant and suppliers?
Honeywell is our main manufacturer, but we also bought cameras from Grandeye and Arecont. North American Video is our integrator.

Can you describe how the system works from camera to monitor?
The architecture of this CCTV system is fairly unique to Nevada casinos, but I think will serve as the model for most future camera projects. The system was designed as "video on demand." What I mean is rather than bringing every individual analog camera feed back to the surveillance equipment room, we bring back only what is called for on the front monitors. We might have 300 analog cameras landing in a comm room, but only 64 come back at once. Why does this work? Since we have only 64 monitors, we will never need more than 64 live video feeds at one time.

All the fixed cameras are still being recorded digitally in the head end, so there is no loss of functionality. The surveillance operators don't even know the system was configured this way; to them the process is exactly like what they have used for years.

The advantage of this type of configuration is that we saved money on hardware and labor by eliminating all those direct one-for-one connections between the comm rooms and the surveillance head end. As a side benefit, troubleshooting was made easier for the technicians. This configuration saved us valuable space in the equipment room as well.

What challenges in general (technical or operational) have you had to overcome to set up such a large operation?
There were, of course, many challenges, ranging from making sure we hired the best people to personally verifying the conduit was going to the correct comm room. I found the experience of building a CCTV system literally from the ground up fascinating and extremely educational. I now understand what architects mean when they ask for "camera dimensioning." They didn't want a camera spec sheet; what they were looking for was where I was going to cut holes into their beautiful ceiling. I also learned a lot about LEED certification, purchasing and contracts.

When designing the system and camera
layout, what considerations did you have to take into account to ensure all areas of risk were covered?
My team and I have been involved with surveillance for many years, so we started with a pretty good idea of what and how to protect our assets. Also, early in the process of designing camera coverage, I consulted with the Nevada Gaming Control Board. I asked them what they expected and then set out to do more.

We did not want to just do what we have always done. We took this opportunity to push the technology envelope as far as we could. We looked at existing CCTV systems and asked, "What do we wish we had?"

We wished we had more recorded coverage of the casino floor, we wished we had ID shots inside the slot kiosks, we wished we had better integration between IT data systems and our video. Those are just a few examples on our wish list.

Our first wish did come true, with the 360-degree cameras. Now, rather than recording every PTZ (for pan-tilt-zoom) on a multiplexer at 1.9 frames per second and covering only a fraction of the casino floor, we use technology to cover almost 100 percent of the floor at double the frame rate and half the cost. 

We were able to meet with the slot kiosk manufacturer early on, and had cameras installed inside the kiosks before the machines were installed.

We have an IT team working with us to get the most we can from the various data sources on the property. We have F&B point-of-sale monitoring linked to our video, and will soon use that same concept with casino points of sale.

Can you give any advice to any other surveillance directors thinking about setting up a mega-casino surveillance operation?
The best advice is to stay personally involved. You have to "walk the job." Get out to the field while there is still time to correct mistakes. Also, you need a good camera/IT tech on your team from the beginning. This is the person who will catch the things that you miss.

By Darrin Hoke   Thu, Feb 04, 2010

In 1986, I caught a slot employee stealing money from inside a slot machine. I was lucky-right place at the right time. It was exciting, and I couldn't wait to catch someone else. For the next several years, I caught one employee after another. Along the way, I became curious about what had made these employees steal from the casino.

In the beginning, I believed that employees stole from the company because they needed the money or because they wanted something and couldn't pay for it. In time, through experience and research, I learned that many other factors contributed to counterproductive behavior in the workplace.

The "Fraud Triangle" is a very succinct way to describe how the process works:

• Financial Pressure/Motivation-the reason the employee commits the act.

Think of the four "Bs":  Beer, Boobs, Betting and Borrowing. The pressure is often created by one or more of these items. Alcohol addiction, sex addiction, gambling addiction and spending addiction.

This is not applicable during a recession, and we must consider the real financial impact that employees are facing.

• Rationalization-the mindset of the employee that justifies the commission of the act.
  Never underestimate the ability of the mind to rationalize anything.
  

• Opportunity-the situation that enables the act to occur, often a result of complacency.
  

This is one area that the company has the ability to control. Opportunity is the means to steal, whether it be a lack of physical security like cameras and locks or an ineffective internal control and segregation of duties.

There is an adage that suggests 10 percent of the population is very honest. They will not lie, cheat or steal, no matter what. Another 10 percent have larceny in their hearts and should be behind bars. The remaining 80 percent are on the fence, and given the right circumstances and the right opportunity, they will behave unethically.

In today's economic climate, that 80 percent should be the greatest focus of concern.

Factors that Impact
When thinking about the factors that impact a casino employee's decision to steal, some are shocking and others not so shocking. A lot seem to come in cycles.

Seasonal Cycles: In Northern Nevada, our business dropped dramatically in the winter months. The feeder market was California, and very few people wanted to make that trip over the mountain and risk getting caught up in a snowstorm. In southwest Louisiana, it's the "damn months"-too damn hot and too damn humid.

Complacency Cycles: This is an area perhaps more prevalent than any other. Business is good and everyone is happy, so no one is paying attention to what is going on around them. This is where occasional fraud occurs, and the perpetrator doesn't seem to have any real motive to commit the act, but the act is rationalized by the fact that business is doing well.

Economic Cycles: The national economy is currently being impacted by the recession and, as a result, there are fewer people traveling and fewer people gambling. This has an effect on the local economy as well, and the day-trippers will curtail the number of visits they make.

More important is the cause and effect that the economy has on the behavior of employees in the casino industry. Fewer customers equal slower business. Slower business equals reduced hours and fewer tips. A reduction in hours and fewer tips equals less money in the employee's pocket. Less money equals motivation and rationalization. The uncertainty of the future is a significant driving force behind employee theft and fraud, and 2009 has been a big year for theft and fraud across the United States.

The casino industry is especially vulnerable to fraud and theft during these times and when employees have motivation, and when they can rationalize the act they will ultimately find the opportunity to commit the act. We also have to remember that it's not just employees who are stealing during these times, but also our guests. This is complicated further by guests stealing from other guests. We want to retain our good guests, so a lot of effort goes into making them happy. As a result, more time is spent investigating these incidents.

Putting It In Perspective
One might argue that a person would have to be crazy to try and steal from a casino, with all the surveillance cameras and internal controls designed to deter theft. Right?

The Four Bs Casino has 50 table games, 1,000 slot machines, three restaurants, two retail shops and a 500-room hotel. Four Bs employs 1,000 people (100 honest, 100 dishonest and 800 on the fence). A casino of this size will conduct hundreds, if not thousands, of cash and credit card transactions per day. No one could possibly be looking at every one of these transactions. The second part of this is the simple fact that an internal control or procedure is only as good as the person who follows it.

Most surveillance professionals suggest we are only catching 10 percent to 30 percent of the crime that occurs in our organizations. Some I have spoken with have stated they believe the number to be as low as 5 percent, but none have suggested that it is higher than 30 percent.

The Four Bs Surveillance Department employs 15 people (five per shift), is 20 percent effective and has an average of 20 employee theft incidents per year. This means there are an additional 80 incidents that went unnoticed or unreported during a normal year. This also means that each person is watching 10 table games, 200 slot machines, one outlet, 100 hotel guests, a few hundred regular guests and a little less than 100 employees.

Due to the economic condition, they are seeing a very conservative 20 percent increase in overall employee theft that was actually caught or reported (24 incidents). This means there were 96 additional incidents that went unnoticed or unreported.

So how does your casino stack up to these numbers? The numbers are probably a lot worse than you think. Why? Because most national surveys suggest that internal theft and fraud is up by 60 percent. Because security and surveillance jobs are also subject to cuts, and investments in these areas are not high on the priority list. Because training dollars are also cut back, and in some cases the surveillance department has never been exposed to some of the methods of theft being used in your casino. Because in uncertain times, it is very difficult to maintain a culture of integrity.

Making a Difference
So what can surveillance do about it right now? Sometimes surveillance is like a junkyard dog in a room full of hubcaps-we just run around and bark at everything. Sometimes we are more like a hunting dog-focused on the task at hand with purpose. It's all about patience and being methodical.

Audit-Based Surveillance
I have been conducting audit-based surveillance since 1995. I started out with pen-to-paper checklists that were based on each department's policies and procedures and applicable internal controls. We also threw in some customer service-related items for a complete measurement of performance and execution.

Today, we are using software that not only has the checklist but retains the data associated with every single audit we conduct. We can run reports by a variety of criteria and, more importantly, we can identify trends that lead to internal theft and fraud. This has been the cornerstone of our success for many years because it is focused with purpose. Remember what we said earlier: An internal control is only as good as the person who follows it.

Audits create real-time accountability. They let the employee know that someone is watching and that they are paying attention. While this method can't impact a person's perceived pressure, it can certainly impact rationalization to a degree, and will definitely create doubt concerning the opportunity to get away with it.

Audits also address weaknesses in the operation by identifying ineffective internal controls or procedures. They are also a great training tool or coaching opportunity for management. It lets the employees know that management is vested in their success and engaged in the process. They create opportunities for communication and this reduces complacency on everyone's part. I have learned that when you tell people what the expectations are and hold them accountable to those expectations, they will generally respond positively in their actions.

Integrity Culture
We have all heard the phrase, "It all starts at the top." This means we do as our bosses do. If the executive-level management has a culture of integrity, then so will the employees. This is also called leading by example, being honest about your expectations and holding yourself to those expectations as well.

Any casino can make itself an incubator for disgruntled employees primed for crime, or it can recognize the problem and proactively create an environment in which employees thrive and the business prospers.

Be transparent, not invisible. When times are tough, management sometimes has the tendency to avoid confronting the issue with the staff. An environment of honesty is much healthier for everyone involved, and creates a level of understanding so the staff isn't always guessing about what is going to happen next. 

Be the voice of reason. We have all had a couple of employees who love to stir things up based on rumors and speculation. These are the people down in the cafeteria doing all the talking and getting their co-workers angry at management. If you aren't the one doing the talking and setting things straight, then it is only natural for employees to become suspicious of your lack of communication-and they will listen to the person who doesn't have all the facts.

Training
A few years ago, our casino got hit with a false-shuffle scam. The supervisor on duty called me at 5 a.m. and told me something was wrong on the game, but he couldn't figure it out. I woke myself and drove to the casino, and within five minutes I realized what had happened. The supervisor felt bad because he didn't recognize the scam. This guy had 10 years experience, and I took it for granted that he must have known what a false shuffle looked liked. I was wrong. His 10 years experience was in a market that was never trained and had never been exposed to a false shuffle.

There is a significant difference between time on the job and experience. Experience comes from training and having an understanding of the different issues we are asked to investigate. This is especially true with internal theft and fraud. When surveillance and management are trained on what to look for, it becomes a lot easier to recognize.

The casino industry is stretched very thin with experienced management, and it only stands to reason that they haven't been exposed to the many methods an employee will use to commit fraud and theft. The return on investment in this area is also very significant.

The Four Bs Buffet does an average of 500 covers for dinner. Each dinner is valued at $20. The cashier, Bill, has a taste for the ladies and ends up at the local strip joint three times a week ("Boobs"). To support his evening activities, he steals $100 a day, or five covers (1 percent). That is an annual loss of $25,000 just for Bill, and he is not alone. Think of the training you could get for $25,000, and what that buys in terms of peace of mind and keeping that 80 percent honest.

 
Technology Initiatives
There is another survey that suggests high-tech fraud goes unreported or unnoticed 90 percent of the time. So how can surveillance possibly catch high-tech fraud?

The short answer is we can't. We can't because most casino organizations haven't done enough to make this a priority. Think about all of the different systems a casino uses-slot system, table games system, point-of-sale system, hotel system, time and attendance system, surveillance system, etc. Who is watching all of these electronic transactions? Do they make sense based upon what is actually happening in the real world environment?

Bringing these systems together and creating analytics that help identify internal theft and fraud will go a long way in pushing the numbers closer. For some casinos this is a technology initiative for 2010 and, in my opinion, will be the future of casino surveillance: analysts looking at data and comparing that data against the actual event caught on CCTV, and creating actionable intelligence.

Darrin Hoke is the director of surveillance at L'Auberge du Lac Hotel & Casino in Lake Charles, Louisiana. Hoke has also held various positions in security management, investigations and law enforcement, and has developed a number of surveillance classes and programs over the past 10 years. He has been a regular instructor with the University of Nevada, Reno gaming management division as well as a guest lecturer at the 2007 World Game Protection Conference.

COMBATING EMPLOYEE THEFT

• We cannot stop it, we can only manage it.
• Implement audit-based surveillance programs. This is the single most proactive thing you can do right  now.
• Create an environment of integrity. This must come from the top and be consistent.
• Be a great communicator and
• listener. We learn more from
• listening than we do by talking.
• Train the management team in theft and fraud awareness and introduce the concept of integrity culture.
• Implement technology initiatives that focus on identifying internal theft and fraud.
• Track the progress. Circle back and review how effective a particular training session was or how effective a new initiative was.
• Track the investigations. Examine how much the incident cost the organization, what could have been done better, what could have been  done to prevent it from happening and what you can do to prevent it from happening again.

By Alan W. Zajic   Wed, Feb 03, 2010

Top management in the casino industry frequently relates concerns about security and surveillance working together and getting along, based on complaints lodged by each. They are also quick to praise the individual departments and the abilities to accomplish people and asset protection individually.

Both departments have a tendency to exclude each other, until after an investigation is completed, rather than prior to and during a critical one. As a result, the gap tends to widen, rather than narrow and encourage cooperation.

In many instances the department managers have a lack of respect for each other, or sometimes feel that the other is out to make them look bad in front of the boss. Although both departments are critical to a successful outcome in an investigation, they sometimes feel too competitive during the process.

Although the respective directors and executives understand the concept that they are separate, the rest of the world does not. In the eyes of the legal community, for example, security and surveillance are the same, and have the same legal duties to the customers and employees of a gaming facility. In reality, the gaming industry is one of the very few that promote the operational separation of security and surveillance.

In reality, most casino operations have some form of communication gap between security and surveillance. Certain jurisdictions where regulators promote the isolation of surveillance tend to promote the communication gap as well. In many operations, the directors will seem to get along on the surface, but the secondary management and line employees do not-or will have obvious friction between them as a result of the management not emphasizing the importance of communications.

There seems to be some distrust between these protective functions that is sometimes encouraged at the supervisory level. The operation suffers as a result. The failure of managers to communicate can also actually create liability rather than reduce it. If each director wants to exert control over the incident rather than work cooperatively as a team, it also presents an unprofessional work product.

Security and surveillance directors and managers certainly need to exercise positive people skills, just like any professional manager. This can be accomplished without damage to the operation or the structure of internal controls that are necessary. Here are a few suggestions for executives and managers who want to improve the relationship.

Clear Understanding Of Responsibilities
In many instances, the cure is as simple as memorializing the duties and responsibilities in a clear and concise written document. As an example, having a written policy and procedure involving who is charged with conducting what part of an investigation can go a long way in preventing misunderstandings. Fostering a team concept, rather than a competing one, will prevent animosity and distrust.

The investigative function in a gaming environment is conducted by various persons, depending on the regulatory and management environment. In a lot of tribal environments, an independent arm conducts all facets of an investigation. This actually makes it easy for the security and surveillance departments, which merely provide their expertise to the investigation arm of the operation.

In land-based or other environments that do not have the independent department that conducts investigations, it becomes much more challenging. Frustration occurs, for instance, when the security representative interviewing a suspect, though he may be a good interviewer, is not aware of the details or specifics of table game crimes or cheating methods. The surveillance director watches the interview live, and becomes immediately frustrated because in their mind the right questions are not being asked. When there is not a law enforcement investigator involved, the case can be damaged by the lack of knowledge.   

Another example is when a surveillance agent calls down to security and tells them to detain a person, but does not communicate why or if they can handcuff the suspect if he refuses. Security personnel will certainly be concerned about committing legal torts like false imprisonment and will ask why. The response from surveillance is typically curt, also out of frustration.

Clear and specific written responsibilities should help in these situations. Who conducts the interview, completes the written report, collects the evidence and follows the case through termination of an employee or prosecution of a suspect should be very clear.

Weekly Meetings
A good start to effective cooperation is having the directors meet every week at the same time and discuss projects, concerns and communications between themselves. This can be over a cup of coffee or in an office somewhere away from the department employees. Regardless of what is going on, this meeting is critical to the successful operation of the overall protective function.

There is a tendency to avoid meetings if there is a belief that nothing is going on that needs to be communicated. In reality, this is not the case, and if both are willing to open up a little, the outcome will be quite obvious and rewarding. Selecting a particular department or recurring issues will help stimulate the meeting.

In extreme situations, the general manager or tribal council representative attends to make sure that the departments are talking and that the integrity of the operation is maintained. Information should be shared on routine investigations that do not directly involve security or surveillance.

The next step is to require the shift managers or supervisors of each department to meet on their respective shifts. This might require some creative mandates, and is sometimes prohibited by the regulators based on local issues and concerns. The key is to communicate and understand each other's jobs, and how each can assist and make the job easier.

As the process is integrated as a routine, the necessity of the executive attending and acting as a moderator will decrease and communications will become two-way-as it should be.

Trading Information
Each department should share investigative information that does not involve a management employee or each other's departments, and obvious "need-to-know" confidentiality. At least the directors should be aware of the basic investigations that are under way by each, to ensure proper response once the incident is presented.

If surveillance has been working on an internal theft investigation where an employee is using some form of device to dump a game to a customer, security should be aware of the basic circumstances prior to the arrest, to preserve any potential evidence or crime scene. This does not necessarily mean that each security officer should know, but at least the supervisors should all be in the loop.

Daily reports should also be shared to allow each department the opportunity to share observations or offer assistance to each other. Guidelines for what information should be disseminated to positions lower than the director are certainly appropriate. If either person violates the confidentiality of the reports, individual consequences should be addressed-not a knee-jerk reaction of stopping the flow of critical information.

Training Each Other
Security personnel should be trained in very basic game protection. They should be aware of the terms of art and devices involved in each, so they can assist surveillance. Strict rules regarding this knowledge should be enforced.

Surveillance should be trained in the laws of arrest, elements of crimes, and the rules of evidence in criminal and civil courts, to fully understand the dangers of detention, false arrest and false detention. The value of this training will become obvious.

Design Communication Codes
I would suggest that the two departments put together some basic communication codes.

The code is designed to quickly communicate a series of sentences that allow for a quick response by either department. As an example, the code "G1" might be the code that surveillance uses to communicate to security that they have video evidence of cheating occurring, have notified the proper regulatory agent and have probable cause to detain the suspect. This communicates the vital information in simple terms to reduce the apprehension for response.

In security, when they are getting ready to evict an undesirable or respond to an incident where an ejection from the premises is imminent, a code of "T1" might be used to designate a trespass warning. In this case, the code and location is called to surveillance, and they would attempt to capture the events and follow protocols for making a video clip or composite of video. Sending these video clips back to the security director-whether a report is generated or not-also improves the communication process and demonstrates that both departments are communicating. Surveillance should also try sending positive video clips to the director and boss to show security doing something positive.

As in any work environment, the positive relationship between departments starts with communication. It continues with learning to work together for a successful outcome-instead of complaining about each other to the boss.

By GGB Staff   Thu, Feb 04, 2010

Leading slot manufacturer International Game Technology recently completed an order of 650 games and implementation of the EZ Pay coin-free system for the 1,000-machine Club Hotel Casino Loutraki near Athens, Greece.

The order included a variety of video, reel-spinning and video poker games, including favorite IGT titles like Double Diamond, Red, White & Blue, Wolf Run and Coyote Moon, and new formats such as Multi-Level Progressive.

"During these times of crisis we decided to focus on driving revenues and optimizing the operation," said Loutraki Group General Manager Roni Aloni, "instead of taking the short-term approach of purely reducing costs. We have to plan the future according to the needs of our clientele."

"And to complement the well-balanced mix of the latest approved video, poker and reel slots that will be on the casino's floor," added IGT Europe Sales Director Ali Civile, "Loutraki also ordered 30 Classics MLP games. Classics MLP games are already successful among Greek multi-level progressive players, and will be an excellent addition at Loutraki."

By GGB Staff   Thu, Feb 04, 2010

Aruze Gaming America is again strengthening its global management team by tapping a familiar source.

The slot manufacturer entered the North American market last year with the help of General Manager Kent Young and Chief Development Officer Scott Olive, both formerly longtime executives (marketing VP and head game developer, respectively) of slot-maker Aristocrat Technologies. Last month, Aruze announced that it has appointed Ken Jolly, another longtime Aristocrat executive who most recently was general manager of Asia-Pacific for that company, as its new executive vice president and general manager for Australia, Asia, Africa and Europe.

According to the company, Jolly will be a "pivotal member of Aruze Gaming's senior management team," responsible for new business and strategic development in key international markets. He will oversee international operations and sales and guide Aruze's penetration into new markets in his four regions of responsibility.

By Frank Legato   Thu, Feb 04, 2010

Manufacturer: Aristocrat Technologies
Platform: Gen7
Format: Five-reel, 25-line video slot
Denomination: .01
Max Bet: 150, 300
Top Award: Progressive; $1,000-$1,199 range
Hit Frequency: Approximately 50%
Theoretical Hold: 6.19%-12%

This is one of Aristocrat's most feature-rich themes to date, with an extensive lineup of interactive animated bonus games putting the players in Old West scenes.

This is a revival of the slot-maker's "Bonus Bank" series, which means the player is required to cover the paylines plus a five-credit ante to activate a series of bonus events.

With the ante bet made, the "Beat the Bandits" feature can occur at random during any spin. "Madame Red" appears on the screen and rolls dice. The player is prompted to touch the screen to roll his own pair of dice. If the player's dice total is greater than the Madame's, a bonus is awarded. If either the player or the Madame rolls a double, it unlocks the three-level progressive jackpot feature, and the player enters one of three interactive bonuses-"Granny," "Bandito" or "Gambler," each with an associated progressive jackpot.

The "Granny Jackpot" feature is a shooting contest between "Granny" and the  player. The scene on the screen is a fencepost with cans and bottles at various points. The player touches a can or bottle, and his gun shoots at it. Each hit unlocks a bonus amount. If the player's score is higher than Granny's, the corresponding jackpot is won. If Granny wins, the player gets bonuses for his hits and the jackpot amount increments significantly for the next contest.

The "Bandito Jackpot" feature gives the player four chances to find the Bandito in a jewelry store. You touch windows on the building to win bonuses or to find the Bandito to win the jackpot. The "Gambler Jackpot" is a game of stud poker. The player touches five of seven cards to reveal the hand. The jackpot is won by beating the Gambler with a pair of Aces or better.

Progressives start at $14.70 for the Granny; $32.60 for the Bandito; and $100 for the Gambler.

A mystery progressive that can be hit at any time. It resets at $1,000, and always hits before the prize reaches $1,199.

By Caitlin McGarry   Wed, Feb 03, 2010

Product: MAXPRO Video Management System, HD3MDIP camera
Manufacturer: Honeywell Security Group

Honeywell Security plans to debut two of its newest products, the MAXPRO Video Management System and the HD3MDIP IP camera, at the World Game Protection Conference this month, and the company's executives say the new additions to Honeywell's product line will help advance the surveillance field into the future.

The MAXPRO VMS provides a common interface from which to manage multiple video streams, using client-server architecture and customization to integrate video surveillance equipment on one platform. Honeywell's latest video management system has been deployed at the Las Vegas Strip's newest resort complex, MGM Mirage's CityCenter.

"(MAXPRO) allows you to integrate a variety of subsystems," says Mike Harvey, Honeywell's senior video marketing manager. "People might have a video system and a Pro-Watch access control system they might want to integrate, or they might have a mixed and matched set of video recorders and video operating systems, and that requires these operators to switch between these multiple systems, whereas when you use our top box, now the operators have one interface, and they can look at, operate and control all these subsystems from a single location."

For casino operators who have invested in pan-tilt-zoom cameras and are migrating to IP cameras, MAXPRO allows continuing use of analog equipment while also incorporating digital elements within a single application.

"This provides a smooth migration from older legacy systems; it allows you to expand the digital side while still maintaining all of your control on the analog side," says Marek Robinson, Honeywell's video systems sales manager for the West Coast.

The HD3MDIP indoor fixed mini-dome IP camera provides 720p, high-definition video streams that provide an increased resolution compared to that of an analog camera, yet the camera is able to compress the video, so it requires the same amount of storage space that an analog stream would require.

The HD3MDIP removes noise from its images using digital noise reduction and 2D edge enhancement, which is useful in casino environments where low lighting conditions-particularly over table games-typically create noise.

The HD3MDIP camera has been installed in CityCenter.

For more information about Honeywell's latest products, visit www.honeywell.com/security.

By GGB Staff   Tue, Feb 02, 2010

Last month marked the 10th anniversary of the handover from Portuguese rule to Chinese oversight of Macau, which was immediately dubbed a "Special Administrative Region" of China.

The anniversary was marked by celebrations, the inauguration of a new chief executive and the visit of Chinese President Hu Jintao. The Chinese government has clamped down on Macau's explosive growth over the past two years, slowing gaming expansion and regulating visits from residents of the mainland.

Hu suggested that even tighter controls might be installed over the casino industry, as he said the city should be "strengthening and improving the management of the gambling sector."

Hu said "officials should utilize fully the series of measures that the central government has already adopted to support Macau," noting that the economy should be diversified, living standards should be improved and educational opportunities expanded.

In addition to the celebration, Hu was in town to attend the ceremony installing Fernando Chui Sai On as the second chief executive under Chinese rule. Chui replaces Edmund Ho, who had led the SAR from the handover, but whose ethics were questioned toward the end of his administration.

Chui praised the Chinese government for its benevolent oversight of Macau.

"We have been unswervingly implementing the principle of 'one country, two systems,'" he said, which referred to the relative autonomy granted to Macau and Hong Kong, compared to the rest of China.

While praising the gaming industry for creating jobs and opportunities in Macau, Chui said he would "actively promote the diversified development at an appropriate level."

Part of the diversification, said Chui, was an emphasis on tourism, conventions and meetings, cultural and creative industries, and upgrades to existing industries.

Lawrence Ho, the co-chairman of Melco Crown Entertainment, is fully behind this effort.

"For Macau to take the next step," he says, "it must have more non-gaming revenue. There are people who go to Vegas who never go to a casino. In order for Macau to go there, it is really going to be supply-driven, so we need more rooms."

By GGB Staff   Tue, Feb 02, 2010

The two-year bankruptcy saga of Detroit's Greektown Casino Hotel could be nearing an end. Under a plan approved last month, a group of bondholders that invested in the casino prior to its bankruptcy will end up with most of the equity and the operations.

A new seven-member board of directors was also announced that will oversee operations at the casino. And a new management company, Warner Gaming of Las Vegas, will be responsible for day-to-day operations. Warner is controlled by former Station Casinos executive Bill Warner.

Greektown had been managed by the Fine Point Group until the end of 2009, and the former board had appointed Isle of Capri Casinos to operate the property, a proposal that was rejected by the court.

In the meantime, the casino is being run by the casino's former owner, the Sault Ste. Marie Tribe of Chippewa Indians, until the final details of the agreement are hammered out at a February hearing.

The new ownership of the casino will be split between four firms: MFC Global Investment Management, New York-based Oppenheimer Funds Inc., New York-based Brigade Capital Management, and New York-based Solus Alternative Asset Management. The exact percentage of ownership has not yet been revealed.

All companies must be licensed or receive a license waiver by the Michigan Gaming Control Board before the deal is finalized.

The seven board members include several people who have had previous gaming experience in Detroit, including George Boyer, the former president and COO of MGM Grand Detroit, and Yvette E. Landau, the former chief legal counsel for the Mandalay Resort Group.

By GGB Staff   Tue, Feb 02, 2010

The gaming commission of South Africa's Eastern Cape province has issued a draft request for proposal for the sole casino license for the region known as Zone 2. The license is currently held by Hemingways Casino, but will expire around the end of September 2011, according to news source Dispatch Online.

The Eastern Cape Gambling and Betting Board issued the RFP at the end of the second week of December. Serious proposals should include hotel and restaurant elements, plus allow for the inclusion of so-called "empowerment" shareholders from the province.

A bidders' conference was planned for the board's offices on January 2. A final RFP will be issued soon. Proposals are tentatively due May 7, but that date is subject to revision after the final RFP is issued.

The board's CEO, Mabutho Zwane, said, "The province's existing casinos have, among other benefits, brought much-needed infrastructural development and created sustainable employment."

By GGB Staff   Tue, Feb 02, 2010

The government of Russia will not be spending public funds to develop the country's four new gambling zones.

"We are not going to pump state funds into this business," said President Dmitry Medvedev. "But we would welcome private investors if there are such."

That was one of the main messages on gaming delivered by Medvedev while answering questions on a variety of topics posed by television journalists during a year-end review on government policy held in late December.

The other point stressed by Medvedev was that the total ban on casino gaming outside of these special zones will remain in force.

When the questioner mentioned the popular view that gaming had merely gone underground or morphed into poker clubs and lotteries, Medvedev disagreed.

"I think that is an exaggeration," he said. "We have, to a significant degree, cut off oxygen to this business which previously used to operate along different lines."

The president said that these other forms of gaming that have sprung up due to loopholes in the law will eventually be shut down as well.

"In essence, it implies the same kind of gambling for money but only under different names. Such clubs must simply be shut down," said Medvedev, adding, "I will give an order to go through the legal system to exclude these opportunities."

Another subject for scrutiny will be online gaming, which Medvedev said "is as illegal as instant lotteries."

The president plans to go through the legislation carefully and come up with amendments to close all the loopholes.

"Will that be enough?" Medvedev asked rhetorically. "We shall see. If they invent anything else, we'll shut this business down and punish those who are engaged in it once again."

By GGB Staff   Tue, Feb 02, 2010

The Obama administration has indicated that it supports efforts in Congress to reverse or "fix" the Carcieri v. Salazar Supreme Court decision that prevents tribes recognized after 1934 from putting land into federal trust.

"There is a problem here that needs to be fixed," Interior Secretary Ken Salazar said last month during a news conference.

The Supreme Court last year ruled that the Indian Reorganization Act of 1934 expressly provides for putting lands into trust for tribes that were recognized during or before that year. This, despite the fact that the Department of the Interior has put land for many tribes into trust since that year.

The president recently met with tribal leaders from all over the country. Many of them are pressuring congressional leaders to pass a bill that would allow tribes such as the Narragansett Indians of Rhode Island, recognized in the 1980s, to move forward with their land applications. Although that tribe's particular case did not involve putting land into trust for the purpose of building a casino, most tribes pursuing applications have just that in mind.

Rep. Nick J. Rahall II, chairman of the House Resources Committee, has held hearings on the issue since summer and supports two drafts of legislation. Senator Byron Dorgan, chairman of the Indian Affairs Committee, has been following  the same path in the Senate. Both have voted bills out of committee.

Not everyone is happy at this prospect, however. Connecticut Attorney General Richard Blumenthal commented that without the protection provided by the Carcieri decision the Department of the Interior has almost unlimited discretion in taking land into federal trust.

"The current system is lawless, without standards, without guidelines," Blumenthal said. However, supporters of bills being considered are digging in their heels at the notion of widening the scope of the legislation in order to reform the process for putting land into trust. Critics of the tribal practice of looking for parcels of land closer to metropolitan areas derisively call it "reservation shopping."

Senate Majority Leader Harry Reid agrees with Blumenthal. He has said he won't allow any legislation to reach the Senate floor unless it addresses the issue of off-the-reservation casinos-something that Reid, looking after the interests of commercial casinos in his state of Nevada, opposes.

By GGB Staff   Thu, Feb 04, 2010

Cantor Gaming recently announced that it is expanding its mobile gaming offerings to include casino games as well as in-running sports wagering. Cantor's "pocketcasino" is offered at the Venetian and Palazzo resorts in Las Vegas.

"We are delighted to be expanding the reach and the content of pocketcasino at the Venetian and the Palazzo," said Cantor Gaming CEO Lee Amaitis. "The initial reaction to our in-running sports wagering product has been incredibly positive, and the addition of casino-style games on the mobile device adds a further dimension for patrons."

Using Cantor's pocketcasino, guests at the Venetian and Palazzo can play casino-style games such as blackjack, video poker and slots, as well as bet on sports, while meandering through the casino's restaurants, lounges and race and sports book.

"Pocketcasino gaming is the perfect way to enjoy the excitement of the casino without missing the fun your friends are having at the bar, lounge or in one of our amazing restaurants," said Venetian and Palazzo President and COO Robert Goldstein. "It's a multitasker's dream come true."

By GGB Staff   Thu, Feb 04, 2010

Slot manufacturer International Game Technology has named Susan Macke chief marketing officer. Macke comes from Hewlett-Packard's handheld business unit, where she was vice president of global marketing. She has extensive experience in the telecommunications and IT industries, leading customer-focused marketing strategies, brand development, integrated marketing communication and thought leadership on a global scale.

"IGT's new attitude calls for a new way of looking at how we market our products," said Eric Tom, IGT executive vice president of sales and marketing. "Susan's track record is in line with our goal of being a marketing-driven company. She's been integral in the development of customer-focused solutions, strategic communications and profitable partnerships for some of the biggest players in the telecommunications and IT industries, making her yet another asset to IGT’s diverse library of smart and influential executives.”

By Frank Legato   Thu, Feb 04, 2010

Manufacturer: Bally Technologies
Platform: Alpha Elite S9E
Format: Five-reel, 40-line video slot
Denomination: .01
Max Bet: 200
Top Award: Progressive; $250,000 reset
Hit Frequency: 46.88%
Theoretical Hold: 11.87%-13.44%

Bally's latest wide-area progressive offering features a wide-screen reel-spinning format-it is the "CineReels" platform-and a new top-box bonus feature called "MegaReels." A set of three giant reels embedded in the top box is activated buy reel triggers for a bonus round.

The primary game is a 40-line, 200-credit stepper with four proprietary progressive levels and a top wide-area progressive resetting at $250,000. (It is one of the games currently in the multi-denominational "QuarterMillion$" progressive link.) The top progressive is won by lining up nine stacked "Instant Fortune" symbols on the three middle reels.

Those symbols also trigger the in-house progressives. Three or four symbols on the middle reels return static awards of five credits and 10 credits, respectively, times the total bet. Five symbols trigger a progressive resetting at $10; six symbols, $20; seven symbols, $100; and eight symbols, $1,000.

Three bonus symbol on the middle reels trigger the Mega Reel Top Box Bonus Feature. The giant top reels spin automatically until a winning combination triggers one of four bonus amounts-five credits, 10 credits, 50 credits or 500 credits, each times the total bet. The player is guaranteed a win on the big bonus reels, which are triggered every 64 spins, on average.

By Caitlin McGarry   Thu, Feb 04, 2010

Product: PEK, PEK Plus
Manufacturer: Automated Currency Instruments, Inc.

Technology related to kiosks placed around casino floors has ramped up substantially over the past several years, as ticket-in/ticket-out redemption has joined the traditional ATM and cash-advance functions in player-convenience terminals.

Neal Jacobs, CEO of Pennsylvania-based Automated Currency Instruments, Inc., got into the currency-handling business around 2002, with an eye toward capitalizing on the growing need for convenience kiosks on the casino floor. According to Jacobs, he and his partners went to casinos around the country specifically to see where long lines still formed-lines which could potentially be eliminated with a simple kiosk.

The lines that jumped out at them were not at the cashier's booth-they were at the player's club. Crowding at player's club desks, mostly arising from players forgetting or losing their cards, was ripe for a solution. ACI soon launched the PEK, or Player Enrollment Kiosk.

PEK provides player's club members with standard ID the opportunity to print a replacement player's club card in seconds. It also allows players to enroll in the player's club, check or redeem points, enter sweepstakes events and do other club functions without waiting in line.

In April, ACI will launch the next version of the terminal. Called PEK Plus, the new kiosk will offer all standard cash-access, TITO and marketing functions as well as the player's club functions. TITO ticket redemption, ATM processing, credit-card cash advance and wager account processing will join player's club card, sweepstakes and promotion functions on the new kiosk, which also includes a link to a comprehensive reporting and accounting system provided by ACI.

For more information on PEK and PEK Plus, contact ACI at 1800-ACI-TITO or visit the company's website at   www.aci-inc.biz.

By GGB Staff   Tue, Feb 02, 2010

With non-gaming projects under way in China and Abu Dhabi, MGM Mirage last month announced it was close to agreements to build several non-gaming hotels in India.

"India is one of the fastest growing regions for both business and leisure travel. In the next few months, we would launch two of our brands-Bellagio and MGM Grand-in the country," said Rishi Kapoor, VP of development, India, at MGM Mirage Hospitality, gaming company's hotel division. "We are in the advanced stage of talks with developers for the same."

Like most of its non-U.S. developments, MGM Mirage will invest no capital, but will provide the brands and management for the properties.

By GGB Staff   Tue, Feb 02, 2010

Although the bid for Isle of Capri to operate the Greektown casino in Detroit fell through, the company remains active in bids to manage casinos for other owners.

It was revealed last month that Isle had reached agreement with a group of Station Casinos debtors to take over management at four of the company properties if a judge rejects a lease arrangement on the properties that was part of the deal when Station Casinos went private in 2007. The "PropCo" properties-Palace Station, Sunset Station, Boulder Station and Red Rock Casino Resort-would be turned over to the debtor as a result of the Station Casinos bankruptcy proceedings.

The Isle agreement is independent of an offer by Boyd Gaming to buy the company, which Boyd increased late last year. Station has an exclusive agreement with the court to propose its own reorganization plan until March 25.

In Pennsylvania, the company announced it would bid on one of the final casino licenses-a "Category 2" resort license-at Nemacolin Woodlands Resort in Farmington, Fayette County. There have been few bidders on these secondary licenses because of various restrictions, but changes to the legislation included in the table game bill signed last month by Governor Ed Rendell made it feasible to operate now.

Nemacolin Woodlands President and Owner Maggie Hardy Magerko said the reduction of the patron expenditure aspect of the bill from $25 to $10 and the addition of more slot machines for each property made the licensing "a very attractive opportunity."

Isle President and COO Virginia McDowell told Global Gaming Business that the developments were part of the strategy developed by the company about a year ago.

"Our plan was to seek management contracts and transitional consulting agreements," she says. "We have a very talented group of executives with experience in more than 75 major gaming properties in every major jurisdiction. It requires little to no investment from us and produces revenue, so it's a win-win for everyone involved, especially our shareholders."

By GGB Staff   Tue, Feb 02, 2010

Sun International has opened its first casino in Nigeria, inside the recently refurbished Federal Palace Hotel on the upscale Victoria Island, part of the Lagos conurbation.

Sun acquired a 49 percent stake in the 146-room Federal Palace Hotel and the linked, 224-room Federal Towers Hotel in April 2008. Following a $10 million upgrade of its accommodations, the Federal Palace Hotel officially joined the Sun portfolio in December 2008.

A complete renovation of the Federal Towers, which is currently closed, plus work on a spa and conference center that was originally planned to start in January 2009, is expected to commence soon with refurbishment of the Olympic-size swimming pool, according to news source AllAfrica. Total investment was originally put at $150 million.

The casino features 195 slots and electronic terminals plus eight gaming tables. The casino employs a cashless system for electronic game play, whereby a player can load credits onto a smart card either at the cash desk or by feeding banknotes into a machine's bill acceptor. Wins are loaded onto the card at cash-out and then paid at the cash desk. The card can also be used to purchase chips at the gaming tables.

Casino guests pay an entry fee of $20, which includes $15 in slot credits or non-negotiable chips and a $5 deposit for the smart card.

By GGB Staff   Tue, Feb 02, 2010

A U.K. businessman and football club chairman has revealed his plans to partner with Casinos Austria International for one of the eight "large" casino licenses-specifically, the license granted the town of Milton Keynes.

Besides the casino, in which the 2007 Gaming Act allows 150 slot machines plus any number of tables, project developer Pete Winkelman wants his entertainment center to include restaurants, bars, a nightclub and a small movie theater.

The Milton Keynes Citizen reports that the new entertainment center is planned to sit adjacent to the stadium where the Winkelman football club, the Dons, plays its home games. On the opposite side of the stadium a new arena is currently under construction.

Winkelman, a former music producer, says his plan is a good complement to the sports stadiums and the Doubletree Hotel. He also sees the location as being favorable in societal terms.

"There is a lot of political support for out-of-town casinos as people shouldn't just fall straight
out of a pub into a casino," said Winkelman. "You have to make a conscious decision to go to an out-of-town casino."

This is the third project that has been announced as being in the running for the Milton Keynes license. The other two are from Leisure Plaza and Xscape.

The city council is now studying the plans. The competition will begin in earnest in spring 2010.

By GGB Staff   Tue, Feb 02, 2010

As Alabama's commercial casinos work to ensure that their electronic bingo machines meet state Supreme Court standards that differentiate them from slot machines, the state's tribal casinos say those standards don't apply to them.

Indian casinos, the tribes say, are regulated by federal rather than state government, an official with Poarch Creek Indian Gaming told the Mobile Press-Register.

As a result, PCI Gaming's casinos could enjoy a monopoly on slots. According to the Press-Register, that stronghold could grow if Alabama's gambling opponents, led by Governor Bob Riley, issue stricter rules to state-regulated casinos.

"If Riley prevails in his quest, he creates an absolute monopoly for the Native Americans," said Ronnie Gilley, developer of Country Crossing, the new gambling and country music venue in Dothan. It opened December 1.

In an October letter to state lawmakers, Riley said the monopoly claims amounted to a "bald-faced lie."

That assertion was reaffirmed by Riley's policy director, Bryan Taylor, who said the Indians "don't have those exclusive rights. Any operation that continues to run illegal gambling in the face of clear law or clear precedent against it does not have a monopoly."

PCI Gaming President Jay Dorris countered that Alabama's Indian casinos are subject only to federal law.

"I don't think that the governor can speak for what happens on federal trust land," said Dorris.

November's Supreme Court ruling indicated that true bingo games require more player interaction, and the major state-regulated casinos-including Country Crossing and Victoryland-changed their machines to require players to press a button multiple times to play. PCI Gaming operations, such as the Wind Creek Casino in Atmore, still offer the original version, which play from start to finish with one press of a button. 

By GGB Staff   Thu, Feb 04, 2010

Christopher Bell, who has led  U.K. gaming giant Ladbrokes for almost a decade, announced he will step down from his position as CEO by summer. The company has launched a search for a replacement.

Bell has been with Ladbrokes for 20 years, the last nine as CEO.

By GGB Staff   Tue, Feb 02, 2010

The long wait is over for the two Singapore casino operators. Ever since it was announced that gaming would come to the island nation more than five years ago, there has been speculation what role the VIP market would play. Since Singapore is within an easy flight of mainland China, whose VIP market fuels gaming in Macau, it was suggested that these players would be a main target for Singapore as well.

But as regulations were written for Singapore, it became clear that the Casino Regulatory Authority of Singapore would take a more rigid licensing stance over VIP operators than the Macau government does. And since Macau gaming has long been connected to the criminal Triads, it is unlikely that many VIP operators could pass a regulatory muster.

When the regulations were finally issued last month, it became clear that the Singapore government has included rigid regulatory oversight of the VIP market. Just some of the provisions are:
    

• Full licensing for junket operators and their representatives. Requirements for licensing include the revelation of details of their financial history, among other things.

• Junket operators must provide the authorities with documentation and any information in their background on demand.

• A list of licensed representatives employed by junket operators must be submitted to the authorities yearly and their departure noted within seven days.

Casinos must also comply with strict rules:     

• Casinos must endorse a junket operator's license application by signing an agreement, which spells out the commission to be paid as well as other details of the agreement. Junket operators need this agreement to apply for a license.

• Casinos must issue identification cards for junket operators and representatives, who will need to wear them at all times while in the casino.

Penalties for non-compliance include a $400,000 fine, with an additional $10,000 for each violation. Both the casino and the operator could also be subject to a loss of license for a serious violation.

One regulation the CRA did not impose was a cap on the commission structure or suggest how it should be paid. In Macau, the commission to the VIP operators is paid on the buy-in of the entire junket, removing any risk for the junket operator. In other countries and in Las Vegas, the junket operator gets a fee, sometimes supplemented by a percentage of the money lost by the junket players.

Melvyn Boey, an analyst with Bank of America Merrill Lynch, says he was not surprised by the announcement.

"I am not inclined to change my revenue projections," he said. Boey expects total gross gaming revenue from the casinos at Marina Bay Sands and Resorts World at Sentosa to hit S$4 billion in 2011, the first full year of gaming operations there.

By GGB Staff   Tue, Feb 02, 2010

Lawmakers in Pennsylvania finally passed final legislation last month to add table games to the state's slots-only casinos. Governor Ed Rendell signed the bill into law January 7.

Under the new law, larger casinos-Category 1 racetrack casinos and Category 2 stand-alone casinos, each with 5,000-machine maximums-get up to 250 table games each. The smaller, 500-machine resort casinos will each be permitted to add up to 50 table games. The legislation also provides for an extra 100 slot machines at each of these venues, which are added to established hotel operations, and eases regulations that restricted play to hotel guests.

Approved table games include blackjack, craps, roulette and poker, with a provision included to allow casinos to run poker tournaments.

Passage of the legislation marks the end of a long and contentious process for Pennsylvania lawmakers, in which House Democrats and Senate Republicans haggled over license fees, the tax rate, and a number of provisions placed into the bill to funnel local municipal cuts of table revenues to what are seen by many as pet projects of certain lawmakers.

In the end, the new law taxes table game revenues at 16 percent, with 14 percent going to the state and 2 percent to be split between the local county and municipal entities. The state tax rate will drop to 12 percent within two years.

Casino owners say table games will be up and running within six months. New regulations also must be formulated for table game operations.

In addition to legalizing table games, the new law makes a few significant changes to the state's 2004 gaming law. In a compromise to what was a controversial issue, the bidding will be re-opened for the last remaining current resort slot license, and a third resort license will be added in 2017-bringing Pennsylvania's total venues to 15.

The law also reinstitutes a ban on political contributions by casino owners; allows casinos to extend credit to patrons, a practice formerly banned in the state; and tightens restrictions on outside employment by current and former gaming board members.

By GGB Staff   Tue, Feb 02, 2010

Newly proposed slot machine restrictions could push Australia's high-volume players out of the local club-and-pub circuit and into the nation's casinos.

The new measures would limit those slot machines not located inside casinos to accepting a maximum of A$20 at a time, the Sydney Morning Herald reports. At present, slot machines in New South Wales can accept up to a hundred A$100 bills, thus allowing a player to load A$10,000 into a single machine before beginning play. In Victoria, the limit is A$1,000 per machine.

Casinos are expected to be exempt from the new limits.

The proposed rule change is one result of a national study by the Productivity Commission, which released its draft report in October.

Whether or not the attempt to reduce the flow of cash through the machines takes hold will be known when the commission releases its completed report on February 26.

By GGB Staff   Tue, Feb 02, 2010

The Leeds City Council has rejected a project that would have seen France's Lucien Barrière group establish its first casino in the U.K.

The plan called for a casino, restaurant, music performance space, dance club and conference facility to open inside the historic Majestyk Cinema building, situated on City Square in the middle of Leeds. The investment was pegged at £14 million.

For the project, Barrière was teamed with Luminar Group Holdings plc in a company called Waterside Limited, which owns the cinema site. Luminar owns and operates some 90 nightlife establishments in the U.K. that feature dining, drinking and dancing.

Waterside Limited is now reviewing options, reports the Yorkshire Evening Post.

Andrew Duckworth, spokesman for Luminar, said, "We are of course very disappointed at the outcome and believe that this is the wrong decision. Our proposal was about providing something truly new to the people of Leeds, generating new jobs in the area and also helping complete the regeneration of Leeds City Square."

Kevin Grady, director of Leeds Civic Trust, a city heritage advocate, wants to see the building house a live music venue.

Grady said in a statement, "The people of Leeds are constantly crying out for more live music venues in the city center."

The Majestyk Cinema opened in 1922 and was one of the U.K.'s largest movie theaters, seating almost 2,400. In 1969 it was turned into a bingo hall, and in 1993 the Majestyk nightclub opened. The building has been closed since June 2006.

By GGB Staff   Tue, Feb 02, 2010

January's Western Gaming Conference, organized by the California Nations Indian Gaming Association, demonstrated a rift between tribes when approaching the issue of internet poker.

Last year, the Morongo tribe had joined with the California card rooms to propose the legalization, regulation and taxation of online poker to expand their gaming options and provide revenue for the state. The effort was suspended as the state legislature moved on to other, more pressing issues, but it's back for the 2010 session with a promise of more than $1 billion in taxes for the state. 

But not all tribes are in favor of the proposal. At the conference, there was unanimous opposition to the federal bills being proposed by U.S. Rep. Barney Frank (D-Massachusetts) and others that would approve online gaming for states and tribes that wanted to participate.

"Online gaming is the biggest threat to tribal gaming in the last 20 years," Daniel Tucker, the new chairman of CNIGA, told the audience (see Casino Communications on page 54 for more remarks from Tucker).

Robert Martin, the chairman of the Morongo Band of Mission Indians, explained his reasons for supporting the measure to approve internet poker.

"This is an industry that is already active," he said. "Millions of dollars are going to companies located in foreign countries. We need to get our share of this gaming market. It's an assault on our sovereignty."

By GGB Staff   Thu, Feb 04, 2010

Slot and system manufacturer Bally Technologies announced a comprehensive systems and server-based technology contract award for the new Boot Hill Casino & Resort in Dodge City, Kansas, which opened in December.

Bally is providing an array of system and server-based solutions for the new casino resort, including 579 "iVIEW" interactive touch-screen displays; the Bally SDS Version 11 Windows-based system for slot accounting; the CMP player-tracking and marketing solution; and "Power Promotions" to enable casino customers to convert points and promotional dollars to playable credits.

Bally's new SDS Windows provides customers with a competitive and scalable slot management system utilizing a modern scalable architecture. The SDS Windows solution delivers flexibility, easy maintainability, and horizontal and vertical scalability for any size of casino operation.

"Having Bally as our systems technology partner gave us a lot of peace of mind as we opened the doors to the public," said Mike Tamburelli, Boot Hill general manager. "Bally's marketing, player rewards, and bonusing technology will help us quickly build a loyal player base, while the SDS system provides years of proven reliability, security and powerful data collection. Bally's customer support is world-class, and we feel confident that Bally's engineering depth will provide a steady stream of technology innovation as we continue to grow and expand our operation."

By GGB Staff   Tue, Feb 02, 2010

The Panamanian subsidiary of Thunderbird Resorts has been assigned a new board of directors by the nation's gaming control commission. The subsidiary, International Thunderbird Gaming Panama, owns the Fiesta brand of casinos.

Giselle Brea, executive director of the gaming commission, appointed Alberto Tiles as board president, Manuel Mata as secretary and Leris Bustamante as treasurer.

The move follows an audit last October that revealed financial problems with parent Thunderbird Resorts, according to reports from La Estrella and Yogonet. The gaming commission justified the action by claiming there were some irregularities with taxes.

International Thunderbird will be responsible for paying the new board monthly salaries. The president will receive $8,000, the secretary $4,000 and the treasurer $2,000 per pay period.

The gaming commission will decide how long to maintain the new arrangement.

By GGB Staff   Tue, Feb 02, 2010

Sweden's monopoly operator of lotteries and sports betting has established a single age requirement for those wishing to play any of its games. The regulation limiting sales to those 18 and over will take effect this year.

Previously, state-owned Svenska Spel allowed some of its products to be purchased regardless of the customer's age.

The move comes at a time when legal advisers to the European Court of Justice have been showing support for member states that have elected to stay with the sole-operator model when it comes to gaming. Among the factors being cited as legitimate reasons to allow a monopoly are protection of the consumer-a duty which is hard to claim if lottery products may be purchased by minors.

By GGB Staff   Thu, Feb 04, 2010

Outgoing New Jersey Jon S. Corzine, in the final days of his administration, nominated retired State Police captain Edward J. Fanelle to the five-member New Jersey Casino Control Commission.
Pending confirmation by the state Senate, Fanelle will fill the board seat vacated by Michael A Fedorko, who resigned last year to become public safety director of the Port Authority of New York and New Jersey.

Fanelle is currently public safety director for Camden County. He served on the state police for 25 years, part of that tenure supervising the governor's security detail.

By GGB Staff   Tue, Feb 02, 2010

Delaware's three racinos have a simple message for lawmakers: Three is enough. State officials, however, have another message: Five is enough.

On the eve of a push in the Delaware legislature for votes on several different proposals for new casino venues, the state's three current facilities-Dover Downs, Delaware Park and Midway Slots at Harrington Raceway-have launched a public relations campaign to sway votes away from creating any new casinos.

Owners of the three current venues have bitterly opposed any new venues as market saturation that would severely threaten their businesses. They have launched a website touting a self-commissioned study they say shows the state's citizens to be in agreement with them.

Meanwhile, a separate study report empanelled by Governor Jack Markell says two new casinos would be "most advantageous" for Delaware's revenue picture. That study was sponsored by the Sports and Video Lottery Commission, a panel comprised of seven state lawmakers, and was conducted by contractor TMG Consulting, with the goal of examining the potential economic impact of adding new casinos in the state.

While favoring new stand-alone casinos, TMG's report recommended that no new racetrack casinos be created-a finding intended to protect purse money at the three current racinos and prevent saturation in the racing industry overall. It specifically recommended against approval of one of the two proposals supported by powerful lawmakers, the DelPointe racetrack and resort in Sussex County, which the panel said would be too close to Maryland's Ocean Downs.

Supporters of new casinos-they have been proposed on the waterfront in the city of Wilmington in addition to DelPointe and elsewhere-criticized the poll as slanted in its language. For instance, critics say, respondents were told that "as many as eight additional casinos have been proposed" and were asked simply if they were in favor  of that or not.

The operators pointed to other results showing that majorities of respondents stated opposition to the main proposals in Sussex County (53 percent opposed) and the city of Wilmington (63 percent against).

By GGB Staff   Fri, Feb 05, 2010

California-based printer manufacturer FutureLogic, Inc., announced the launch of "Eclipse," a universal ticket and receipt printer designed to handle outdoor applications.

According to the company, Eclipse was developed in response to continued industry demand for robust outdoor printing solutions. The new printer excels in the most extreme operating conditions and in a broad range of applications.

The Eclipse heavy-duty thermal printer delivers an industry-best throughput of 250mm per second even in the harshest environments (-20 degrees C to +60 degrees C and 10 percent to 85 percent RH, non-condensing), making it what FutureLogic calls the most reliable roll printer in its class.

The Eclipse printer is equipped with USB 2.0 and RS-232 interfaces. It also offers multiple printer and paper roll mounting positions that can accommodate paper widths of 80 or 82.5mm and paper rolls of 100, 150, 200 and 250mm in diameter. This equates to over 770m of paper, enabling the Eclipse printer to provide 5,000 6-inch receipts on a single roll.

To optimize security, the high-speed printer features a rugged presenter and advanced "eject and retract" technology that allows for storage of unclaimed receipts in an auxiliary tray.
Bulgarian Company Chooses MEI City Casino Group of Bulgaria has selected the Cashflow SC83 bill validator from payment mechanism specialist MEI to be installed as standard equipment on all new slot machines.

City Casino operates over 1,200 slots and other electronic gaming tables at 17 venues around the country, with plans to expand further in 2010.

Georgi Stefanov, project manager at City Casino, said, "Our strategy is to be acquainted with the premium product manufacturers in the casino industry. We had heard so much positive feedback from casinos specifying the MEI Cashflow SC83 that we were very keen to take part in a VAT."

"VAT" is MEI shorthand for "value-added trial," which allows an operator to test the quality of MEI products under live-action conditions.

"The ease of entering the banknotes is paramount-the experience with note rejection and
note jams, leading to machine downtime, had a negative impact on our business in the past," said Stefanov. "The MEI Cashflow SC83 has solved this problem for us. It has been reliable since the first day in operation."

By GGB Staff   Thu, Feb 04, 2010

City Casino Group of Bulgaria has selected the Cashflow SC83 bill validator from payment mechanism specialist MEI to be installed as standard equipment on all new slot machines.

City Casino operates over 1,200 slots and other electronic gaming tables at 17 venues around the country, with plans to expand further in 2010.

Georgi Stefanov, project manager at City Casino, said, "Our strategy is to be acquainted with the premium product manufacturers in the casino industry. We had heard so much positive feedback from casinos specifying the MEI Cashflow SC83 that we were very keen to take part in a VAT."

"VAT" is MEI shorthand for "value-added trial," which allows an operator to test the quality of MEI products under live-action conditions.

"The ease of entering the banknotes is paramount-the experience with note rejection and
note jams, leading to machine downtime, had a negative impact on our business in the past," said Stefanov. "The MEI Cashflow SC83 has solved this problem for us. It has been reliable since the first day in operation."

By GGB Staff   Thu, Feb 04, 2010

Isle of Capri Casinos announced it has hired Robert Wyre as the new vice president of Greektown Hotel-Casino in Detroit. Isle has contracted with Greektown to provide marketing and operational consulting services for the property, which is preparing to emerge from Chapter 11 bankruptcy protection.

Wyre will oversee Isle of Capri's marketing and operational consulting services to Greektown. "We are optimistic about the possibilities ahead for Greektown Casino-Hotel, and I am confident that Rob Wyre is exactly the right professional to lead the charge," said Isle of Capri President and COO Virginia McDowell. "He is a seasoned veteran with an outstanding variety of experiences and successes across our business and will bring outstanding value to our clients and our company."
    

By GGB Staff   Thu, Feb 04, 2010

Former Hilton Hotels CFO Robert M. La Forgia recently announced the creation of Apertor Hospitality LLC, a hospitality asset management and advisory firm that will tailor services for new hospitality businesses as well as struggling hotels and casinos.

Apertor is comprised of several hospitality professionals, including Carlos Garcia, Bill Sherlock, John Mazzoni, Greg Cross, K. Allen Anderson and Tony Santo.

"Uniting such a knowledgeable and battle-proven team of industry professionals from hotel and gaming operations, revenue management and distribution systems, marketing, finance, mergers and acquisitions, real estate, construction, legal and government affairs is very timely and represents a unique marriage of experts suited to help clients maximize the potential of their investments," La Forgia said.

Apertor will offer services such as rapid assessment, asset management, creditor advisory, transaction due diligence, turnaround and restructuring, litigation support and expert witness testimony, operational auditing, design, architecture and construction and opinion of value.

"With the current magnitude of economic challenge, a hotel or casino asset stands a much stronger chance of success if it engages a highly specialized asset management or advisory team with the depth of experience to uncover opportunities to maximize cash flow and deliver actionable solutions promptly," La Forgia said.

By GGB Staff   Thu, Feb 04, 2010

JCM Global has appointed Kip Haverman to the position of North America sales director. Haverman has been with the company for nine years, most recently serving as the company's Western regional sales manager.

Haverman is a gaming industry veteran of almost 20 years, having worked for AC Coin and Slot and Sigma Gaming prior to his time with JCM Global.
    

"We are thrilled to promote Kip to this new position," said Mark Henderson, JCM Global's vice president of sales. "In his time with JCM, Kip has proven himself to be an invaluable part of the JCM team, and has served as a mentor for other sales representatives."

By GGB Staff   Thu, Feb 04, 2010

Class II slot manufacturer Video Gaming Technologies signed an agreement with U.K.- based Innocore Gaming under which new VGT games will incorporate an exclusive Innocore DPX hardware platform.

Under the agreement, Innocore will develop a custom DPX-S420 hardware platform based on the specific requirements of VGT in current and future markets.

"We have looked at various suppliers in the market," said Jon Yarbrough, CEO and founder of VGT. "There are only a few good ones for this mission. We found Innocore's offering to be the most attractive to us at this time. They have proven product capability, and a good price/performance ratio.

"We have been dealing with Innocore for a longer period and they have developed a good understanding of our specific needs, working closely with our engineering team. The communication has always taken place well within our comfort zone and we are looking forward to the next steps in this exciting project."

Edward Price, managing director of Innocore, added, "The agreement with VGT is a significant one for Innocore and a great reference for some of our key selling points-reliability, know-how of the gaming industry and a proactive approach to customer service. Our global footprint provides support for VGT in North America, on both technical and operational matters. We are very pleased to be working with such a key player as VGT and we look forward to a successful partnership over the coming year."

By GGB Staff   Thu, Feb 04, 2010

Gasser Chair Company announced that Mark Gasser has assumed the role of company president previously held by brother Gary Gasser, who is the company's CEO.

In his new role, Mark Gasser will be responsible for all day-to-day business operations and remain active in sales activities with an emphasis on new product development. Gary Gasser will continue to serve as Gasser Chair's CEO and chairman of the board.

Mark Gasser began his career at Gasser in 1973 working in all aspects of the business, and has served as executive vice president since 1985. He is also a member of Gasser's board.
 

By GGB Staff   Thu, Feb 04, 2010

Joseph D'Amato, former chief financial officer for Empire Resorts, has been promoted to CEO of the company. D'Amato is replacing Joseph Bernstein, whose contract ended in 2009.
    

D'Amato assumed control of the company on January 1 and is expected to fill his new position until 2013. He served as Empire's CFO beginning in September 2009. He joined Empire Resorts from Mount Airy Casino Resort in Pennsylvania, where he was that property's CEO.
    

Empire Resorts currently operates a racino in Monticello, New York, and plans to build a new property in Kiamesha Lake.

By GGB Staff   Thu, Feb 04, 2010

Slot manufacturer Atronic International announced the installation of its first games in Mexico. The company installed a group of its "Stargate SG-1" and "King Kong Cash" games at Casino Life Del Valle in Mexico City, which opened recently as the 19th operation of the Pringsa group.

The Stargate game, based on the popular science fiction series, a new type of linked gaming to Mexico, its five bonus events and four progressive levels contrasting the traditional Class II offering in the country.

"We are of course delighted that Pringsa has chosen Atronic as machine supplier for their new Casino Life Del Valle operation," said Oscar Londono, Atronic general manager for Latin America. "With the combination of our latest linked gaming concepts, licensed titles and e² machines, the casino has a unique combination of games which is sure to excite their players. We wish Pringsa and Casino Life all the best and great success with their new casino."

By GGB Staff   Thu, Feb 04, 2010

Slot supplier Elixir Gaming Technologies announced an agreement with NagaWorld, a subsidiary of Hong Kong-listed NagaCorp, under which it will place an additional 200 electronic gaming machines on a participation basis at NagaCorp's NagaWorld casino resort in Cambodia.

The deal also amends an earlier agreement to increase the overall average revenue share to Elixir Gaming to 25 percent and extend the duration of the contract.

Elixir currently operates 440 gaming machine seats at NagaWorld, which achieved average win-per-unit per day of over US$200 for in November and December.

Clarence Chung, chairman and CEO of Elixir, said the company is pleased to expand its slot floor operations with NagaWorld. "With these additional units, Elixir Gaming will have gaming machines installed covering most of the currently available prime ground floor space at NagaWorld," he said. "Given NagaWorld's position as the exclusive casino license holder in the Phnom Penh area and our demonstrated success with our current slot operations at NagaWorld, we feel confident that we can continue to drive strong growth in participation revenue and cash flow with these additional placements."

By GGB Staff   Thu, Feb 04, 2010

California system supplier DEQ Systems Corp. announced that it has installed its award-winning G3 Progressive Jackpot and Bonusing System on nine specialty poker table games at the Barona Resort and Casino in San Diego, California. Barona has installed the G3 on three Three Card Poker tables, one Caribbean Stud table, one Let it Rid table, one Mississippi Stud( table, one Four Card Poker table and two Pai Gow Poker tables.

The system adds a side-bet feature to offer progressive jackpots and bonus payouts on the table games.

"We are excited to see the entertainment value that the G3 can bring to Barona players," said Mike Patterson, vice president of table games at Barona. "The G3 is getting rave reviews and we are very impressed with the quantitative metrics we have seen from other major casinos, notably in Las Vegas."

"It is a well-known fact in our industry that Barona is a trend-setter that other casinos look to for innovative new technology ideas and products," added DEQ President and CEO Earle G. Hall. "It goes without saying that having this showcase in Southern California will be a key element to the introduction of the G3 in this and other regions. We are very proud to be installed at this prestigious, world-class venue."

By GGB Staff   Thu, Feb 04, 2010

Pennsylvania's Mount Airy Casino Resort has launched an option for players to order their own comps while at the machine. The "SmartPlay" system is a patented computer module developed by two Mount Airy executives, property President and CEO George Toth and Special Events Coordinator Sharon Kopin.

Mount Airy customers use the system to "build their own rewards" through a resort dollar bank, according to a press release from the property. Kiosks allow patrons to withdraw the resort dollars for use in paying for hotel room reservations, newsstand purchases, golf course fees, spa treatments, concert tickets or for meals at any of Mount Airy's four restaurants. The most popular option, according to the casino, is one allowing players to transfer up to half of weekly earned resort dollars to slot dollars for use in free slot play.

"You will not find this in Atlantic City or Vegas," said Toth. "This exciting new feature is exclusive to Mount Airy and allows our players the ability to choose where and when they want to redeem their player rewards."

Kopin, who holds the patent along with Toth, said the idea came from what she saw as a need for something unique in player rewards. "As someone who's been involved with the gaming industry for many years, I asked myself: 'How many clock radios can you possibly give away?' That's when I got the idea for SmartPlay," Kopin said.

By GGB Staff   Fri, Feb 05, 2010

Danny Tucker has been involved with the development of Indian gaming in California for much of his career in the government of the Sycuan Band of the Kumeyaay Nation. He was chairman of the California Nations Indian Gaming Association from 1995 to 2001, when clashes with the state and federal governments were numerous and legendary. He built CNIGA into a powerful force in the state with his unique talent for persuasion and compromise. He was recently re-instated as chairman of CNIGA at a time when challenges are re-emerging for the organization, including proposals to legalize online poker for Indian tribes and card rooms. He spoke with Global Gaming Business Publisher Roger Gros at the CNIGA conference in Palm Springs, California, in January.

GGB: When did you decide to run for the leadership of CNIGA again?
Tucker: I was approached at the NCAI (National Congress of American Indians) conference a couple months ago, and I told them I'd think about it. So I started looking into it kind of nonchalantly. It wasn't the highest thing on my radar screen because we were doing budgets at the time. I had my doubts because it's an election year too for me at home, so I've got to be very careful with my time. On the other hand, if we don't know what's going on outside our reservation, we know nothing. If we can help, probably not control it, but be in the middle of it, it's very important to me.

Did you see a need that someone with your experience needed to come back in and grab the reins?
Some of the chairmen asked me about it. So I thought maybe it was time for a change; for some new visions, if you want to call them that.

Anthony Miranda did a tremendous job with what he had. My hat's off to him, because he had a pretty difficult time, a time when the economy fell on its face. But he held it together because that's the kind of man he is. I appreciate everything he's done.

It's kind of a crucial time in the Indian gaming industry in California. Let's start with the compacts: Are you pleased with the way the process has gone?
Grey Davis started in 1999 with us, and that was great for us at the time. At the time, it was either close the doors or keep them open. We went to Proposition 5 and Proposition 1a, and we changed the constitution in California, which is a pretty big task. When you work together as a team, and work with heart and have the same visions for Native Americans in this state, it was something that we just had to do.

Let's talk about the charity bingo machines. There have been some charities in California that have offered bingo machines that are essentially Class II slots. The bingo machines are now out. Can you explain how that went, and are you concerned that it will come back at some point?
Everybody has the right to do what they have to do, but the Ninth Circuit Court of Appeals said they had to come out, so they came out this week. That's just a law. We didn't write the law; we have to deal with the laws just like everybody else. That's what we're doing. We don't want to hurt anybody, but on the other hand, we don't want to get hurt either. I have constituents like any other tribal chairman in this state does, or in this country, and they have to protect their constituents too. And the deal has been made, so the Ninth Circuit, as far as we're concerned, made the right decision.

Let's talk internet gaming. There seems to be some disagreement among the tribes. Some of them want it; Morongo has a proposal out that would legalize it, but other tribes are not so sure about it. Is that something that you want CNIGA to attack head-on and come up with a unified stance?
Everybody's heard about the Barney Frank bill, and we're not supporting that. But we still have to look at it. Where is internet gaming going? Is it going to happen? How does it impact us? We've got to think all these things out, but you can't think them out by sitting behind your doors at home and not realizing what's going on outside... Right now, everything's offshore with this internet gaming industry. Something's going to happen. So do we want to be on the outside looking in? Do we want to be there when it does happen? Each tribe has to make up their own mind and do what they have to do.

California is the birthplace of the Indian gaming industry, so you really have a legacy to protect here as head of CNIGA. Do you take that into consideration when you try to get the tribes together and try to get them as members of the association?
Of course. Being Native American in this country has come a long way. Being a Native leader has significant meaning to me. Now that we have gaming and we have a little income coming in, it doesn't change the fact that we're a government. That's the most important thing people have to understand. Gaming is a means to an end, but it's not the means to a whole answer, because we still have a government to run. At CNIGA, we've been at the forefront, and we're going to do the right thing. We're going to make sure we do our homework, we're going to make sure we understand what we're doing and make sure that it's going to be a positive for all natives, and our community as well, the community around our reservations.

By Frank Legato   Wed, Feb 03, 2010

I just read about how casinos try to develop their own smells, and how customers are influenced by fragrances. It's one of the more ingenious ways they get into the heads of us gamblers and toy with our little brains.

I'm just kidding. (Our brains aren't really that little. Compared to, say, a schnauzer.)

The article referred to the smells that casinos have pumped into their gaming floors for decades, and included an interview with Mark Peltier. Peltier is president of AromaSys, one of the pioneering firms in what the old-timers call "smelling the joint up."

Peltier related how the art and use of smell in casino environments has changed since AromaSys placed one of the earliest such systems at the Mirage in 1991. Since then, casinos have had distinct smells pumped through the ventilators.

In the past, I had always thought the fragrances pumped through the ventilation systems were solely to induce a sense of well-being-a relaxed mode in which, even if you lose your money, everything's just swell. Apparently, ventilation also gives each casino its own distinct aroma, something pleasant that will evoke sweet memories, like the smell of frying garlic and olive oil make you remember your grandmother. (Or at least my grandmother.)

According to the article, by Brendan Buhler of the Las Vegas Sun, "The Mirage smells Polynesian, Mandalay Bay smells Southeast Asian and the Bellagio has the scent of Northern Italy." The aroma at the Venetian in Las Vegas is actually produced by AromaSys. It's called "Seduction."

If I ever open a casino, I'm going to ask AromaSys for a classic scent: "Stale Pall Mall." It will give customers that old-timey casino feeling.

Peltier concedes that the Venetian probably has the volume jacked up a bit too high on the "Seduction" scent at the Venetian, although not as high as claimed by Buhler, the Sun reporter, who likened the scent to "an old man who has been wearing the same cologne for 40 years and steadily adding more."

Speaking of stink, how about those Steelers?

Sorry, I just ran out of riffs on the smell thing and I needed a segue. I have nothing to write about the Steelers. Not until September, at least.

Next on our agenda of mirth is a security guard story, since this is the month of our big special section of action-packed security and surveillance stories. ("Back off, dirtbag, or deal with my 360-degree megapixel HD IP camera... It's a PTZ at 1.9 frames per second, punk!")

This security story, which I just got off the Associated Press wire (that's right, wise-guy, I have an old-timey news ticker right here), has nothing to do with cameras or pixels or panning and tilting. It's about a security guard from California's Thunder Valley Casino who survived after his car went into a creek by shooting the windows out of the submerged vehicle and swimming through eight feet of chilly waters to safety.

First of all, congratulations to the guy for escaping-it sounds like a scene from a movie, and he's really brave. Just one thing bothers me: It says here that the security guard was driving home uneventfully from his casino shift when he was "startled by his hands-free cell phone device," thereby causing his car to plunge off the road and into the water.

Is it me, or is he just a little bit high-strung to be a casino security guard armed with a loaded pistol? His phone makes a sound and he goes berserk and loses control of the car?

"Beep."

"AAAGGGHHHH!!"

Did the phone make a moose-call sound or something? A vicious dog bark? The 1812 Overture? Like I said, I do admire the guy for focus and instincts and courage, really, in the face of death. And I'm glad he's alright. But I do believe the man should look into a new ringtone. Maybe a nice bird call or something. I wouldn't want to see him gun down a slot machine after jackpot noises.

I know I may be overreacting, but the next time I go into to the Thunder Valley Casino, I'm putting my cell phone on "Silent."

In other security news, a man was thrown out of a nightclub at Foxwoods and later detained by tribal police after spitting on a security guard and urinating on a soda machine. Or was it the other way around? Anyway, the guy was apparently under the influence of the fragrance that is pumped into Foxwoods. It's called "Drunken Idiot."

Hey, I think I've smelled that before.

By Rich Geller   Wed, Feb 03, 2010

Company: Connective Games LLC
Business: Online gaming software development
Location: Tomsk, Russia

The talent behind Connective Games LLC has been providing clients with online gaming software for the past decade. Now, with gaming via the internet already a proven winner worldwide and with plenty of room still to grow, the company is looking to become one of the top five players in the B2B market for online gaming.

Connective Games is an offshoot of Intrice LLC, which has provided so-called "off-shore" software development services for all kinds of industries since 1996. Past clients have included international insurance and financial firms, auto makers, accountancies and consultants.

Although Intrice was already producing software for a number of online gaming clients, in 2006 then-Marketing Manager Konstantin Zubarev proposed to bundle all the gaming business into a separate brand. Connective Games was born, with Zubarev ultimately becoming its CEO.

One reason behind the push to grow the gaming side of the business was that general software development was increasingly moving to China and India, due to the incredibly cheap labor costs there. Intrice and Connective Games are situated in Western Siberia, in the Russian city of Tomsk, where labor costs are still very competitive compared to those in most industrialized nations. However, the focus on a single category of software product created an added benefit with more weight than just discount pricing.

As a result, today, almost all development work has moved to the Connective Games entity. The company employs 65 full-time staff supported by several external teams. Separate, designated departments exist within the company to work on innovative development, the assembly of standard online gaming packages, and marketing and technical support for clients. Connective Games does not offer its own brand of online casino or poker to players, choosing instead to supply turn-key solutions and software components to independent operators and gaming networks.

Siberia might seem an odd location for a company looking to become a world leader. But Tomsk is in fact the second most important center of science and technology in Russia, trumped only by Moscow, which is a four-hour flight away. The Russian Academy of Science operates a branch in Tomsk, and there are six universities and more than a dozen research centers within the city of only 500,000 inhabitants. Tomsk is a center for R&D in biomedicine, nuclear science, precision engineering, information technology and software.

Zubarev, 35, graduated Tomsk Polytechnic University with a master's degree in computer science. Connective Games maintains working relationships with several of the local universities, training potential future employees while still at school and then hiring them after graduation. The average age within the company is 25.

Though much of the talent is young, the background of working with clients from all kinds of industries has provided Connective Games with a lot of experience in customized projects. Intrice has ISO 9001 certification and Connective Games employs the same methodology in its own work.

"We focus on the client's needs," says Zubarev. "Unlike some of the bigger players, we offer more than just standard packages. Our partners always receive what they want; we turn their ideas into reality."

Specifically, Connective Games supplies both standard and custom systems for online casinos and poker rooms. The systems contain all aspects needed for operation, including payment processing, game security and player support in the target language. The systems are scalable and expandable, so the client can start out with a smaller product to handle, say, a few hundred players and later just add more server capability to be able to host thousands of players at the same instant. It is a good feature for new operators looking to test the waters before making a substantial hardware investment.

"Land-based casinos and online casinos are absolutely different businesses," says Zubarev. "If you want to start an online business using the same approach as you would for land-based, you will fail. You want to extend your land-based service to the online world, to bring yourself closer to your clients even when they are sitting at home or traveling elsewhere. One good usage of the online representation of your brand is to allow players to win tournament entries and VIP packages, which will bring them into your physical property."

Connective Games also customizes its product. For example, for slot games, any proprietary games or signage to which the land-based casino has the rights can be implemented in online versions, adding depth to the reach of the brand.

Another consideration, when looking at online poker or other multi-player games, is whether an operator wants to be part of a larger, existing player network or prefers to build a new and unique network from scratch. Especially for the latter, it can be advantageous to work with a provider experienced and specialized in custom work.

Although time-to-market will naturally vary greatly depending on the level of customization involved, Connective Games promises to have a standard, client-branded online gaming package up and running in about six weeks.

Connective Games continues to work on adding new products to its mix. Games that will appeal to the Asian market are being developed, as well as mobile device adaptations of existing online products. The company is not averse to working with other developers if the cooperation makes sense.

"We are currently talking to a mobile gaming developer from Hungary," says Zubarev. "They have a very interesting mobile poker application, and if we can work with them, we won't have to spend thousands of hours attempting to develop pretty much the exact same product. And we can offer them a faster route to a wider market than they might achieve on their own."

By GGB Staff   Wed, Feb 03, 2010

Responsible gaming is an important part of our day-to-day work in the casino entertainment industry. We strive to help our patrons, employees and the public understand the importance of keeping it fun and setting appropriate limits through a variety of tools-from informational pamphlets and brochures to employee meetings to broader public education campaigns.

Perhaps the foremost reason these efforts have been so successful is that they are grounded in sound science. Relying on findings from the leading research in the field of gambling disorders and responsible gaming, we have been able to develop and implement world-class tools for education and awareness. This research also has led to a much greater understanding of gambling disorders, and paved the way for more effective methods of prevention and treatment.

Much of this groundbreaking research has been supported through grants funded by the National Center for Responsible Gaming, the American Gaming Association's affiliated charity.  Last year, with the founding of the Institute for Research on Gambling Disorders and the selection of the nation's first NCRG Centers of Excellence in Gambling Research, the NCRG began the process of once again revolutionizing this field of research. That process continues this year as the NCRG and the Institute implement important changes to help increase the number of researchers actively working in the field and raise awareness about gambling disorders and responsible gaming.

Chief among these changes is the newly re-envisioned Project Grants program, a highly competitive program that provides researchers from around the world with access to important seed money for innovative, high-quality research projects. Through the newly refined program, the Institute will award twice the number of grants it has in the past. By providing a greater number of smaller grants, the Institute will help spark investigators' interest and encourage a greater number of scientists to conduct research in the field.

The expanded number of grants available also will provide a wealth of new opportunities for investigators just starting out in the field to begin building their expertise. In addition, new researchers will be offered an unprecedented level of technical and professional support from the Institute and its Scientific Advisory Board, including mentoring by established researchers in the field. This new approach also will empower researchers to seek partnerships with experts in other disciplines to explore questions about gambling disorders from a fresh perspective. Finally, the process of soliciting grant proposals and selecting grant recipients will be updated to reflect recent changes in the National Institutes of Health process that always has served as a guidepost for NCRG's grants program.

Complementing the changes to the Project Grants program will be enhanced public education and awareness efforts. Representatives of the NCRG and the Institute will work to raise the profile of gambling disorders within the larger addictions community and engage with this audience on a broader scale. Members of the Scientific Advisory Board also will be working to increase awareness of the importance of this field by meeting with leading federal research organizations like NIH to explain the value of providing federal funding for gambling research.

The NCRG and Institute already are finding new ways to help gaming industry professionals, treatment providers, regulators and other key stakeholders learn about gambling disorders and responsible gaming.

Building on the strong foundation laid by the annual NCRG Conference on Gambling and Addiction, the NCRG last fall expanded its education efforts with the creation of the G2E Webinar Series. This year-round initiative provides free online educational opportunities designed to help individuals better understand and address critical issues related to gambling disorders and responsible gaming.

The NCRG already has planned several webinars for 2010, including one during Responsible Gaming Education Week in August. For gaming industry professionals, the webinars offer the opportunity to interact with some of the leading experts in the field-from researchers, to regulators, to leading responsible gaming professionals-and provide practical, take-home advice.  

If you are looking for additional year-round resources on gambling disorders and responsible gaming, I recommend connecting with the NCRG through its social media sites. When you become a fan of the NCRG on Facebook, you'll be kept abreast of the latest news and developments in the field. I also encourage you to visit the NCRG's page on SlideShare, where you can download presentations, speeches and  other resources for use in your own efforts on this subject. Visit the NCRG's website-www.ncrg.org-for direct links to both of these resources. Lastly, the Institute is expecting to launch a new blog this spring to cover a variety of issues affecting the field of research on gambling disorders. Be sure to visit the Institute's website-www.gamblingdisorders.org-in the coming months for further details.

It may seem difficult at times for those of us working in the industry to see what value to our daily lives the complex research findings made possible by the NCRG actually have. But as long as our industry operates, problem gambling will remain one of our most significant challenges.  Promoting responsible gaming must remain a top priority, and a clear understanding of the issue is vital to making progress in education and treatment efforts that can help our employees, patrons and even our own family members. More researchers in the field-and a more robust field in general-will hasten this understanding.

Many changes are under way, and it is clear we are entering an exciting new era in the field of research on gambling disorders and responsible gaming. With the support of the gaming industry, through the NCRG and the Institute, I have no doubt we will continue to see incredible, groundbreaking discoveries and increased understanding of gambling disorders in the years to come.

By Frank Fantini   Wed, Feb 03, 2010

Gaming stocks have had a rough couple of years after a decade of outperformance, but business volumes appear to have stabilized and valuations have come down to levels approaching historic norms.

Still, there is no clear growth theme as there was when riverboats began to proliferate, or when big companies began buying out the riverboat operators, or when Las Vegas casino operators decided to become developers of lavish real estate projects and euphoria drove stocks to the point of the collapse from which we're now recovering.

Thus, without tides to lift or lower all boats, 2010 and the foreseeable future look like a stock- picker's market. Still, there are events and trends to watch in doing that stock-picking. Here are some things to watch:

Singapore
Genting and Las Vegas Sands are making multibillion-dollar bets on an untested market and resort model. Analysts are projecting each will generate in excess of $700 million a year in cash flow. That would be an extraordinary number.

If they are right, it's off to the races for Genting Singapore and parent Genting Bhd, as well as LV Sands.

It also would become a model other nations, such as Japan and Taiwan, would probably emulate, and that would spell opportunity for Genting, LV Sands and other mega-resort developers, such as Wynn.

Unemployment rates and consumer sentiment
These are the two economic statistics that casino operators follow to project trends in their consumer-discretionary industry.

The reasons are pretty clear. A jobless person doesn't have money to spare and a worried consumer doesn't want to spend what he has.

United States gaming expansion
States legalizing casinos is no longer a certain driver of higher profits. There are so many casinos in so many states that new properties now cannibalize others to a greater or lesser degree.

But expansion is good for companies that get casinos in big markets like Ohio, where Penn National has landed two casinos.

Massachusetts will be lucrative for whoever ends up there if the Bay State legalizes resort casinos.

International gaming expansion
Suddenly, Latin America is hot with Mexico becoming a Class III market, Brazil about to legalize casinos, and Italy out of nowhere becoming a 57,000-machine VLT market.

All of that expansion is great for gaming suppliers and, although they are priced higher than casino companies right now, there is no fear of cannibalization. And we might be in the early stage of the greatest worldwide proliferation of gaming ever.

Las Vegas and Macau make the headlines, but combined represent less than 10 percent of the market for suppliers. As a top executive at one of the leading suppliers told us, growth in Native American gaming is more important to his company than what happens on the Las Vegas Strip.

Las Vegas
The belief has become so pervasive that 2010 will be bad for Las Vegas that it is tempting to take a contrarian view.

And, indeed, there are signs of improvement. Las Vegas gaming revenues grew in November for the first time in two years, though the market was basically flat factoring out baccarat.

Visitation to Vegas was up too, while the decline in hotel rates slowed appreciably.

And 2010 got off to a good start with a strong New Year's and a Consumer Electronics Show that attracted 120,000 attendees, a 6 percent increase over last year and 20 percent higher than expected just weeks before the show.

Visitation and stronger convention and trade show business can be harbingers of more normal times ahead, especially for the big mega-resort operators whose business models rely on non-gaming revenue and who have big debt service to pay for all the borrowing that financed their palaces.

Unfortunately, it isn't just about visitation and gambling revenue. It's also about capacity, customer spending and discounting.

The upscale end of the market has grown 21 percent through the opening of CityCenter. It is slated to grow another 17 percent as Cosmopolitan, Fontainebleau and Caesars' Octavius Tower open. That's a lot to absorb in one market segment, especially as consumers are not spending as lavishly anymore.

And if casinos are luring customers with low room rates, free meals and hefty enough rebates and other enticements to high rollers, a lot of that revenue disappears into expenses.

One encouraging sign for Las Vegas was the November jump in revenue in the locals market. If that is sustained, it will be good news for Boyd. And it could mean that the Las Vegas economy is finding a bottom from where it can resume growing.

Earnings leverage
Almost all gaming companies have significantly cut expenses to the point that when revenues start growing, the bottom lines should enjoy big improvements.

It has become conventional wisdom in recent months that, between the weak economy and increased competition, regional casino companies face a tough future, except for those that have expansions ahead, such as PENN next
year in Ohio and Pinnacle this year near St. Louis.

But Isle of Capri and Ameristar have been especially resolute in reducing costs and stand to gain outsize benefit of higher revenues when consumers return.

By Roger Gros   Tue, Feb 02, 2010

You can't hear it. You probably couldn't see it. But maybe you can feel it. I did. I could feel the paradigm when it shifted and I believe we all saw the impact.

It began last March when the economy cratered and the high-flying gaming stocks like Las Vegas Sands, MGM Mirage, Boyd and others came crashing down. It turns out we had been living a dream for the past five years and at that point we were forced to confront reality.

But it wasn't just the comparative value of the companies that changed; it was everything, from the way we operate to the way we view the future.

But let's start with the value of companies. The truth is, this still hasn't shaken out to any great extent, so we're not completely sure if the rise in the prices of gaming stocks over the past year is real or fantasy again. It comes down to the value of the individual properties. We got to a point where we would factor in the real estate value to the value of the operation itself. So the perceived value of the property turned out to be much more than it actually was.

Let's take a couple of examples. In Atlantic City, the Tropicana was built for about $400 million in the 1980s. Various expansion projects over the years, including the massive Havana tower and Quarter shopping area in 2004, created investment of an additional $1 billion-plus. When Columbia Sussex bought parent company Aztar at the top of the market in 2006 for $2.75 billion, the price reflected that value. But when Columbia Sussex executives proceeded to trash the Tropicana by cutting costs, and slashing cap ex and maintenance, they angered New Jersey regulatory officials so much they lost their license. And after two years trying to sell the Tropicana, a bankruptcy court settled the sale at $200 million.

In Las Vegas, Boyd Gaming recently made an offer of $2.45 billion to buy all 18 casinos owned by Station Casinos. Now, Green Valley Ranch, Aliante Station and Red Rock Resort alone cost more than that to build, so, while Boyd Gaming says the offer reflects today's economic realities, the value of each individual property clearly is just a fraction of what they once were.

So it's clear that the values of casinos have changed so dramatically that a new paradigm has to be established before any new casino or expansion projects can be undertaken.

Operationally, things will never be the same either.

No longer can you just throw open the doors to a casino and expect the gambling public to show up. In the U.S., we've officially reached the "saturation" point. Even though there are a couple of big dominos to still fall, when they do, they'll have a detrimental effect on at least one other jurisdiction. Gaming jurisdictions are going to have to more clearly identify their markets and develop non-gaming amenities that will provide customers with much more than just slots and tables.

Internationally, there is still room for growth-particularly in Asia. But changes in the way customers respond as a result of the economic downturn will require a similar change in operations.

And these changes have an impact on every department in the casino-marketing, human resources, security and surveillance, hotel, food and beverage and more. So the changes will be required at every level of the casino industry.

Even my business is changing fast. Newspapers are folding left and right, while magazines aren't far behind. That's why we're continuing our commitment to migrating our content online. Starting when we launched our GGB Podcast nearly five years ago, we believe the interactive nature of the internet can make the information we provide even more valuable by getting the feedback of the very professionals we seek to serve.

So we've recognized that the paradigm has shifted. We understand that it will never again be "business as usual." And most of all, we know that we must provide complete and up-to-the-minute information that will help our readers and subscribers make the decisions that will transform this industry. Because we can be proud when we continue to provide the entertainment, the jobs, the tax revenues and the security of a good career for the many millions of people who depend on us.