By Roger Gros   Fri, Apr 02, 2010

Once upon a time, IGT did not dominate the slot manufacturing sector. For many years BIGT (Before IGT), Bally Manufacturing was king, but for a short time in the early 1980s, Universal Distributing blazed across the casino sky with innovative payoff programs and cutting-edge technology.

Universal ate up Bally market share until the rise of IGT, and then faded from the casino scene as its owners opted to focus on producing machines for the burgeoning pachinko and pachisuro business in the company's home market of Japan.

Last year, the company came back to the casino market in a big way via Aruze Gaming in Las Vegas, a private-company offshoot of the former Universal (which was renamed Aruze Corporation in the late 1990s) that has brought in high-powered slot development and marketing veterans to make its move into North America and other major gaming jurisdictions.

Aruze Gaming plans to capture that old Universal magic to grab a greater share of the slot machine market around the world. By using creative payback programs, advanced technology and business relationships, the company aims to make an impact on the market that will move customers and competitors alike.

Man with a Plan
The man behind Aruze (and Universal, for that matter) is Kazuo Okada, the company's owner. Recently spun off from the larger Aruze Corporation, which manufactures pachinko and pachisuro machines in Japan, Okada took Aruze private in order to make a significant investment in the company. The larger company was renamed Universal Entertainment.

If that's confusing, Okada's strategy is not.

"Aruze Gaming was part of Universal Entertainment, which is a public company," he explains. "Since I want to invest a lot of money in Aruze and the return might not come in for a few years, we decided to take Aruze Gaming Americas private so we can do what we have to do to make it a success and not have to worry about shareholder return over the short term.

"The only difference that operators will see is a more aggressive game development program and production of great games and systems."

Okada plans to draw on the experience he gained with Universal as he grows Aruze. 

"We were the first ones to use computer-controlled algorithms rather than mechanical technology," he says. "At that time, Bally was the big manufacturer and they were using all mechanical devices, so it was groundbreaking to be able to use a computer that had a random number generator inside."

Although Aruze has been around in one form or another since the Universal days, Okada has put his money where his mouth is by hiring former Aristocrat executive Kent Young, who left the Australian manufacturer in 2007, along with his partner and another Aristocrat expatriate, Scott Olive, to form his own content development company, True Blue Gaming. Young has no regrets about selling True Blue to Okada.

"I think we were very successful in the time we did it but it led us to Aruze, where we can accomplish bigger and better things."

Young says True Blue was working with Aruze on content before the acquisition.

"I believe Mr. Okada saw us as a really good fit with the company," he says. "We agreed to be part of the company and we're extremely happy with the results."

Young says the new ownership structure will spur the growth of the company.

"The way we are strategically moving into North America is probably the most apparent example," he says. "We're working to get into each jurisdiction, and that has a huge cost. We are also investing heavily in R&D and integration. It is fortunate that Mr. Okada understands you have to invest and re-invest in the business for it to be a success. We have to build the company the right way before we can be a true competitor in the marketplace."

More Time, More Entertainment
One of the ways Aruze plans to compete is by turning to Universal's tried-and-true strategy of creating innovative payback programs for players.

"When we installed the 95 percent-payback machines," says Okada, "the operators didn't understand that it would actually help them. We knew that the players would enjoy winning frequent small jackpots and would then put that money back into the machine. So we got a few of them to try it and they soon realized they could make just as much money if not more by using this payback system."

"Today, because of the economic downturn," Okada continues, "the operators want to raise the hold percentage because they want to make more money off their slots. But we still believe that if you return more money to your customers in small payouts they will put it back in and return again and again as loyal players."

A recent Aruze innovation is a machine that reduces the hold percentage as the maximum bet increases. For this to work for the operator, it must increase the number of players who make the max bet. Early indications are encouraging, says Young.

"Overall, the theory of what we're applying is working," he says. "The player will get a higher return with a higher bet. And they are learning this very quickly. We believe that in most cases, we will get that increase in wagers that will compensate for the higher return. It worked well during the Universal period, so we don't know why it wouldn't work today as well."

Another innovation that Aruze has been offering for some time is the "Rescue Pay" program that presents a bonus to a player who is on a losing streak.

"We know that there are some players who just can't win at the slot machines," says Okada, "so we designed this program to benefit them. Rescue Pay guarantees a payout for the players who don't get lucky enough to hit a large win for a certain number of games. The players will want to insure a return on their investment and bet max coins to keep Rescue Pay activated. The countdown feature that shows how many games until Rescue Pay pays out will keep players going. The players will feel more loyal playing at casinos that have machines that carry the Rescue Pay function, which will also attract players back to the casino."

Young says it's a plan that is now built into all of the company's products.

"It's not an added option anymore," he says. "It's incorporated into our base games. And it's been very successful. It just adds to the complexity of our products, and it's working very well."

One trend that Young has identified as a departure from the past has developed since the economic downturn.

"We're seeing with the state of the economy in particular, a lot of diversity from casino to casino," he explains. "One casino might have a high level of turnover that will compensate for the hold percentage; in others it won't. In the last few years, the market has been very de-fragmented. It used to be that if a machine was a success in one casino, it would also be in others. Not so much anymore."

Aruze's first licensed product, Rock You: Queen, was a hit at G2E in November and continues to perform well on casino floors.

"It has exceeded our expectations," he says. "It really stands out on the floor. The packaging is great. You always see people standing around it because it's very loud and has a lot of attraction with the bonus features. Plus, there's the music that everyone can identify with, even older people."

The Queen machine is the first of a line of licensed products, according to Young. Some will be released at next year's G2E, and Young says Okada's ownership of the company helps in these situations when negotiations are under way.

"Mr. Okada is very engaged in the business," Young explains. "He's very determined to get what he wants. So if he wants to go after something or someone, he'll go out and get it."

The Strategy
When Young joined Aruze, it was licensed in only two U.S. locations, Nevada and California. Since then, Young has opened sales efforts in six other jurisdictions: Oregon, Oklahoma, Mississippi, Florida, New Mexico and the Caribbean. But that's just the start.

"We want to be in 150 tribal and commercial jurisdictions by the end of this year," Young says. "We're focused on the 'key' jurisdictions-those that present the most opportunity for us and those where we can be licensed the quickest. It's part of our strategy to be extremely aggressive in our licensing."

Other goals that Okada has confirmed are simple. And branding the company to its customers is at the top of the list. Young believes that by providing quality products, timely and efficient service and winning machines, Aruze can crack the top level of slot suppliers.

"Building the brand is very important," says Young. "Mr. Okada refers to it as 'being asleep.' Well, now we're awake and we're focused on this. We have to assure our customers that if they make a purchasing decision to use Aruze that we're going to continue to support it. This effort is still in its infancy. We need to be in all jurisdictions, and that's an ongoing effort. We've made some significant appointments. We believe success will be a combination of product and people, so you need to invest in both."

Staffing Aruze for Young has been simply a matter of reaching back to his previous jobs and hiring the people he knew he could count on. He's brought in seasoned gaming executives Sean Evans (COO), Sam Basile (vice president, legal and compliance, and general counsel), Steve Walther (vice president, systems product management) and Ken Jolly (executive vice president and general manager, Australia, Asia, Africa and Europe), along with other experienced industry executives.

"Success in the gaming industry is about two things: product and people," he says. "Everything else falls to the wayside. I truly believe in that. We're very much a relationship-based and trust-based business, so bringing on people who the customers know and trust has made a huge difference. And just as important is having people who understand the business, so when we make decisions about what we're going to do with the business, we make informed decisions."

Young has eschewed a recent trend in the slot manufacturing industry of hiring people with non-gaming experience.

"While there is definitely merit to bringing in people from outside the industry to bring a fresh look at the operations, as a company where we are in terms of growing and making important decisions about what our next steps are going to be, I think it's important to have people on board who know the business and have the experience," he says.

International Experience
While Aruze's current thrust is focused on the U.S., its strength in Asia is an important factor in the company's growth. But even though there are some very popular Aruze games placed in Asia, Okada says the vision is more global than Asia-based.

"I would like to see our machines sold and enjoyed not only in Asia, but around the world," he says. "We have sales teams in place all over the world, and once we create the games people like to play, I'm sure we'll be one of the leading worldwide slot manufacturing companies."

Young says a good game can be translated into any language or culture.

"All our machines are for global applications," he says. "Like a lot of manufacturers for the past few years, we are specifically targeting the Asian market. But we now know that Asian-themed games are successful around the world, not just in Asia. A classic example is Shen Long, which performs exceptionally well in Asia, but also is a success in other markets. In South America, we'll translate Shen Long to Spanish.

"Generally speaking, our goal is to develop product that has global application. We don't tend to do market-specific products, although we will tweak our products to the benefit of a specific market."

Young says the Asia slot player, however, is different from a Western gambler.

"First and foremost is their adoption of technology-it's a lot higher and quicker than it is in the West," he says. "Macau, for example, totally bypassed the stepper, three-line, three-reel kinds of games. So they adopted a high level of technology very quickly."

In addition, the goals of the gambler are more likely to be driven by the final result.

"They are a lot more gambling-oriented rather than entertainment-oriented," he says. "That translates into a higher bet and a higher level of volatility. If you're going to lose, you lose. If you're going to win, you win significantly. This is probably like no other market I've ever seen, especially right out of the gate."

System Savvy
Most slot manufacturing companies also have systems that run their devices. While the advent of the Gaming Standards Association has allowed every company's systems to "talk" to each other, Young says Aruze will continue to develop product for the time being, while putting the development of a system on the back burner.

"Right now, we've very much focused on slot and multi-terminal product," he says. "We do, however, have some technology that is being developed through our past relationship with Aruze Corporation, which is now Universal. We have had some discussions about the systems business. In the long term, Mr. Okada would like to move into the systems business when the time is right and with the right type of technology."

It is those GSA protocols that give Young confidence that this strategy is the correct one.

"We're implementing all GSA protocols so our products will be able to join any system out there that's also developed to those G2S standards," he says. "I've learned that being able to interface is the most important thing. Ticket-in, ticket-out was a classic example where some manufacturers were kept out of a market because they couldn't interface with that technology."

Of course, the progeny of all systems today is server-based gaming. Young believes that SBG will eventually be a huge benefit to operators, even though it might not be evident today.

"There are some tweaks that need to be done before SBG has a more widespread application," he says, "but this is definitely the future. It's a new technology that does add value that can be enhanced, but without question, this is stage one. At the end of the day, it will be adopted across the board, but probably not as quickly as some in the industry and the analysts have predicted."

When the benefits of SBG become clear, Young believes the vendors need to do a better job instructing operators how to use it.

"On the system side, even now, there is so much functionality that is not being used," he says. "And the onus is on the manufacturer, not the operators, to spend time to show their customers how to get the most out of the system."

The ultimate "system" is, of course, the internet. While Young doesn't plan to emulate some competitors who have invested millions of dollars in online gaming sites and online-specific content providers, he does have a plan.

"We're in the process of prospectively doing some deals for putting our content online, of course subject to legal and compliance," he explains. "Putting the content online is a fabulous model because you don't have to invest so much money in the hardware and it goes directly to the bottom line. We're leveraging development that we've already capitalized and we don't have to invest in going full-fledged into the online space.

"But as a company we need to get there to learn about the internet space. I believe it's a matter of when, not if, online gaming will be legalized in the U.S. There's already a huge market there outside the U.S., but if you look at the gaming pie, we're going to need to be there."

Future Shock
Okada's goal for Aruze is simple: "In five years, I want us to be the number-one slot company in the world!"

Young agrees and further explains, "In five years, we can be a significant player, up there with the big boys in terms of providing product to the market. If we're getting a good share of new business, at that time, I would consider us a success."

But it all depends on how the company performs this year and the next.

"What we're doing right now is developing and investing so that we can be a major player in the market," he says.

Although he has doubts about the speed of the industry's economic recovery-he thinks the long-awaited replacement cycle won't kick in completely until 2011 at the earliest-Young has confidence that Aruze will be there to capitalize on it when it does occur.

"I think people are surprised at the depth of the products," he says. "We have a lot of bells and whistles in terms of the content, and that will continue to grow and develop in the very near future."

By Roger Gros   Fri, Apr 02, 2010

He just might be the most powerful man in gaming no one knows. Except Steve Wynn, that is. Kazuo Okada, the owner of Aruze Gaming, owns more stock in Wynn Resorts than does the man (or woman-his
ex-wife, Elaine) after which the company is named.

When Wynn decided to get back into gaming after selling Mirage Resorts to MGM Grand in 2000, he didn't want to go the public financing route. So he tapped into powerful and rich friends, business associates and clients to get Wynn Resorts off the ground. One of the richest of his friends is Okada. So after naming a restaurant after the Japanese pachinko king and naming him vice chairman, Wynn convinced Okada to become an investor.

When the company went public, Okada and Wynn had almost equal stakes, but after Wynn's divorce, Okada became the largest shareholder in the company at 19.9 percent. It's a relationship that has worked well. Okada provided the money and Wynn Resorts has provided significant profits, so far, particularly coming from Macau.

But the pot at the end of the rainbow is in Okada's homeland. For years, the Japanese government has flirted with casinos. Although the nation has an odd mix of gaming already legal (or semi-legal)-horse, motorboat, bicycle and motorbike racing, along with lotteries and the most Japanese off all forms of gambling, pachinko-casinos make sense in a country trying to expand its tourism base. The lessons of Singapore will not be lost on this island nation.

Last year, for the first time in 54 years, the Democratic Party of Japan won election and every issue was sent back to the drawing board, including gaming. Okada says he has been advising the new government on how to best legalize gaming.

"We have been waiting for many years to legalize gaming in Japan," he says. "We believe that it will extend the attraction of everything that Japan has to offer and draw many more tourists than we get today. I give the new government the truth about gaming and how it can be used to benefit the entire country. I think because the government is open to doing new things that there is a very good chance that gaming may be approved soon. Maybe not in 2010, but soon thereafter."

While no details about any gaming measure have been released, some experts suggest it could include four Singapore-style meta-resorts scattered in some of the country's major cities, including Tokyo.

"Politicians are very weak in showing the will to do something," says Okada. "Casinos should be opened, against the backdrop of employment and tax revenue problems."

Okada says opposition from pachinko parlor owners is not likely because the audience is separate and distinct.

"Pachinko attracts an entirely different kind of player for a different reason," he says. "Pachinko players go to the parlors several times a week, whereas the same player might visit a casino once every month or couple of months. So I don't believe casinos would be a threat to the pachinko market."

As for the Philippines, Aruze is committed to building an integrated resort in Manila on the site of Entertainment City, which the Philippine Amusement and Gaming Corporation (PAGCOR) is promoting. But there are some strings attached.

"We are expecting to be granted a special tax relief for building in an economic development zone," he says. "Once that tax break is approved, we will begin construction on stage one of what will be three or four stages. When completed the project will cost at least $1 billion."

It has been reported that Okada wants to own more than 40 percent of the development, which is currently prohibited by the Philippine government for a foreign company.

"If approvals are made officially, we are ready to begin construction quickly," Okada says.

By Richard Thalheimer   Fri, Apr 02, 2010

The history of racino gaming in the United States is one of gradual steps, from VLTs to slot machines to table games, all producing revenues that were designed to revive the sport of horse racing.      

Several economic analyses of the racino industry may give some insight into a number of economic issues, which the industry now faces. To better understand the reason for the rise of racetrack-casino (racino) gaming in the United States, consider that inflation-adjusted parimutuel horse-race wagering in the United States has fallen 52 percent from its peak in 1977 through 2006. This decline in wagering has occurred even with the introduction of market-expanding measures such as betting concurrently on live races being conducted at a racetrack and at other in-state and out-of-state locations which receive simulcasts of those races.

Reasons for the decline in wagering are well-known and include the introduction and growth of casino and lottery gaming throughout the United States.

Reversal of Fortunes
Concern for the decline in handle and revenue for the parimutuel racing industry has prompted a number of states to permit casino gaming at parimutuel racetracks. The number of states that permit casino-style gaming at parimutuel racetracks has grown from one-West Virginia in 1990-to 15 in 2010.

The map above indicates states which currently permit state-regulated racino gaming. Since to be eligible for racino gaming, a state must already have parimutuel horse-race wagering, all of the states indicated in yellow on the map are potential future candidates for racino gaming.

The initial premise behind permitting casino gaming at racetracks in states with parimutuel racing and wagering was to preserve and promote horse and dog racing. The parimutuel racing industry was recognized as having been adversely affected by competition from other forms of gaming. Specifically, provisions were included that required a percentage of slot machine revenue to be allocated for payment of purses, to owners of racing animals at the racetrack, and in some cases breeders of racing stock in the state in which the racinos were located.

Purses are the lifeblood of the racing industry, providing revenue to horse owners for their racing operations and to breeders through an increase in the value of their breeding stock. For the wagering customer, purses are a measure of the quality of the racing product on which they bet. The theory is that an increase in purses leads to an increase in wagering and racetrack revenue.
    

Evocative Impact
Sufficient time has passed since the introduction of racinos to draw conclusions as to attaining the states' goal of preserving and promoting the racing industry.

The impact of a large increase in purses on jobs and spending provided by the horse race industry can be illustrated using Penn National Gaming's Charles Town racino in West Virginia as an example. A study of the horse-racing side of that racino documented the impact of the Charles Town race horse industry on the local economy in 2005. From 1995 through 2005, purses at Charles Town increased dramatically from $27,000 per racing day to $166,000, largely as a result of the contribution from slot machine revenues.

The increase in purses had a very positive effect on the race horse industry there (racetrack, horse owners and trainers, breeders). The industry was found to account for $173 million in spending and 3,700 full-time year-round jobs in the West Virginia economy. In addition, the number of race horse breeding farms increased from 55 in 2000, when a previous economic impact study was conducted, to 140 in 2005. This has resulted in preservation of green space, and a tourist attraction in the area.

Statistical analysis of racino betting has shown that when slot machines are introduced at a racetrack, parimutuel wagering decreases significantly, on the order of 20 percent to 40 percent. This indicates that, on net, existing racetrack customers and new customers attracted to the racetracks will bet on the slot machines at the expense of parimutuel horse-race wagering.

On a more positive note, betting on simulcasts of a racino's live races to other locations around the country has been found to increase significantly when purses have increased as a result of funding from slot machine revenues. We have also found, through statistical analysis, that betting on slot machines increases significantly when live horse races or simulcast horse races imported from other racetracks are being conducted at the racetrack. In fact, slot machine betting may increase enough that the increased revenue pays for purses at the racetrack.

Still, even with increased horse racing simulcast revenues, slot machine revenue normally accounts for 90 percent or more of total racino revenue. This points to the dilemma that while slot machines at racetracks have resulted in increased revenue to the racing industry-and while racing, in turn, has increased slot machine revenues-the decline in parimutuel betting and loss of racing customers is discouraging for the long-run viability of the racing industry.

More is Better
Another issue of current interest to the racino industry is the pursuit by racino operators of the expansion of the gaming product to include table games. Beginning in 2004, table games such as poker, blackjack, craps and roulette were permitted at racinos in Iowa subject to local option. West Virginia was the next state to permit table games at racinos beginning in 2007. Most recently, two other states, Delaware and Pennsylvania, authorized table games at racinos. It is likely that more states will follow.

Statistical analysis has shown, however, that slot machine wagering decreases on the order of 8 percent to 13 percent in the presence of table games. On the other hand, total revenue has been found to increase when table games are introduced.

If the shares of total gaming revenue going to government, racetracks and purses are the same from table games as they are from slot machines, then each stakeholder will benefit equally from an increase or decrease in total revenue. This is the case for the Iowa racinos, where no distinction is made between revenue distributions to stakeholders from table games or slot machines. In fact, all regulated casinos in the United States distribute revenue to stakeholders from gross (slot machine plus table games) revenue.

Adding table games to the existing racino product only becomes an issue when the revenue shares to stakeholders from table games are not the same as shares from slot machines. In the extreme, take Pennsylvania, where the share to government from table games is greatly reduced from its slot machine share and, even more, the share from table games to purses for horsemen has been eliminated. In this case, a system of "winners and losers" may be created. For example, if slot machine revenue decreases with the introduction of table games, revenue to purses for horsemen will decrease with no offsetting increase from table games revenue. This will have a negative effect on racing and breeding operations in the state.

So, while the introduction and growth of racino gaming has been a mixed blessing to the race horse industry, it has been a boon to the casino business. It has had the intended effect of increasing purses with resulting increases in spending, employment and preservation of green space by the industry in state and local economies. Further, the presence of live and import simulcast races at racetracks has been found to increase slot machine wagering significantly.

On the other hand, on-track parimutuel wagering has declined in the presence of slot machines and table games. In the long run, both racing industry entities and racino operators must find ways to increase wagering and resulting revenues from the parimutuel product for racing to survive. Potential growth areas such as supplying an attractive live race product to internet wagering venues hold promise for racing's future, depending on the share of revenue going back to the industry.

Since we know that live racing both benefits the race horse industry and augments gaming revenues at racinos, finding ways to attract more customers to the racino using the live race product as a marketing tool has a two-sided benefit. Significant research is needed to investigate these and other potential areas of growth that will result in preserving the long-run future of horse racing as intended by the original enabling racino legislation.

By Frank Legato   Fri, Apr 02, 2010

Before this year even started, Pennsylvania was already the hottest gaming jurisdiction in the United States-racino or not.  

For the fiscal year ended last June, the eight casinos that were operating in the state at the time recorded a 25 percent year-on-year increase in gaming revenues. The ninth operating casino opened in August, and September year-on-year figures showed a 30 percent jump. 

Considering the current state of most gaming jurisdictions, these numbers are staggering, to say the least. And, for the most part, they form the greatest success story in the relatively brief history of the racino genre. Six of the eight properties recording that 2008/09 revenue jump were racetrack casinos. The most successful property in Pennsylvania, Philadelphia Park, is a racino.

And the really amazing part of Pennsylvania's racino success story is that it only stands to get better this year and next. Yes, the next several properties to open will be stand-alone casinos-two in Philadelphia and several smaller resort casinos. But there is still one major racetrack casino, Valley View Downs & Casino, to open. Its developers are currently searching for the financing needed to complete the seventh and final racino in the state.

While that happening soon is certainly not a lock-its parent company, Hoosier Park owner Centaur Gaming, filed a voluntary Chapter 11 bankruptcy petition last month-Pennsylvania stands to remain the premier racino jurisdiction in the country for some time to come.

The main reason? Table games. In January, Pennsylvania Governor Ed Rendell signed table-game legislation into law. Pennsylvania's properties will become full-blown casinos starting, in all likelihood, before the end of the summer.

It is a development that has been heralded by Pennsylvania operators-if perhaps lamented by those in Atlantic City, who have been hammered by revenue losses because of the current, slots-only Pennsylvania casinos. "We're going to kill them when tables come in, just like we're killing them with slots," predicted Philadelphia Park President Dave Jonas at the recent Pennsylvania Gaming Congress.

While in 2004, the state imposed one of the nation's higher slot tax rates of 55 percent, the Pennsylvania legislature got it right this time, keeping the tax rate on tables to a modest 16 percent, which will drop to 14 percent in two years. Those numbers include 2 percent for host cities. By comparison, the racinos in neighboring West Virginia pay 35 percent tax on table games.

The first Pennsylvania property to add tables likely will be Mohegan Sun at Pocono Downs, which was the first to submit a petition for a license to operate the games to the state Gaming Control Board. However, all of the properties will likely have complete table game operations in place by the end of the year.

Tables will change the competitive picture for the state's racinos. The Philadelphia-area racinos-Harrah's Chester and Philadelphia Park's Parx Casino-stand to have the most immediate effect on Atlantic City, while Pittsburgh's Meadows racino and Presque Isle Downs near Erie will provide stiff competition to the West Virginia racinos and any Ohio venues that open later.

The biggest benefits from table games, though, may go to those racinos farthest away from any table-game competition-the Hollywood Casino at Penn National Race Course near Harrisburg, and Sands Casino Resort Bethlehem, which will provide Manhattan gamblers a much easier commute to tables than Atlantic City.

Any way you slice it, tables mean Pennsylvania will remain the U.S. hot spot for racinos.

By Rich Geller   Fri, Apr 02, 2010

During the week of the annual G2E show in Las Vegas in 2007, an incredibly ambitious project for Spain's arid northeastern region is unveiled. With a staggering €17 billion/$25 billion price tag and featuring 32 history-themed hotel-casinos, dozens of cultural attractions and theme parks, numerous facilities for shopping, sports, recreation and various levels of holiday accommodations, all packaged in a comprehensive and Utopianesque urban plan, the working name of the project-Gran Scala-is an understatement.

No leisure attraction of this magnitude has been tried from scratch anywhere before, let alone Europe. But it is 2007 and the casino resort industry is booming worldwide. Macau is on the verge of overtaking Nevada as the largest-grossing casino jurisdiction and the Cotai Strip is still to come. Multibillion-dollar mixed-leisure developments are being built in Singapore and touted in Vietnam. In Las Vegas, CityCenter is rising. There is no shortage of investment for bold, expensive projects.

Still, willing investors aside, Gran Scala is asking a lot in the way of suspension of disbelief. The regional government will need to give developers the nod in the face of politically sensitive environmental issues. Land owners will need to be convinced to sell. And again, this being Europe, some wonder if there is a market here for a Las Vegas/Disney World/City of Tomorrow.

Two years and a couple of months later, the world of property development has changed significantly. But despite delays, International Leisure Development PLC, the engine of Gran Scala, is still forging ahead.

Three major theme parks, including a world-class movie theme park bearing the name of a major Hollywood studio, are planned to open in Phase 1. The exact number of casinos that will be ready in this phase is not available, but the campus will feature a minimum of 8,000 gaming machines. ILD has preliminary agreements with a number of operators and is in discussion with others, but signed contracts are awaiting approval by the regional government of the updated plans, which are being finalized.

The updated plans are scheduled to be submitted to the government in May, and as they differ from the original concept basically in layout only, it is expected they could be approved before the summer recess.

When first introduced, the schedule called for a 2012 opening of Gran Scala. However, to satisfy the original timeline, the government of the autonomous region of Aragon would have had to approve all plans and permits, and ILD complete all land purchases needed for construction, sometime in 2008. As it happened, the law that allows development of such a grandiose project only came into force in July 2009, and it had been deemed too risky to proceed with land purchases and infrastructure improvements without such a law in place.

The legislation in question is known officially as the Law of Leisure Centers of High Capacity. Passed by the Aragon regional government, the law applies to any tourism, cultural or sports project that develops an area of at least 1,000 hectares, creates 3,000 jobs minimum and builds 8,000 or more hotel rooms. Because the law was the direct result of the proposed project, it is known colloquially as the Gran Scala Act.

By mid-March, ILD had purchased 35 percent of the land needed for the project to move forward. Arrangements are in place to obtain another 40 percent, which would bring the total area in hand to the mandated 75 percent of the total 3,000 hectares. When the government has given final approval to the project, the outstanding parcels will be purchased. If all goes smoothly from here on out, Gran Scala is expected to open in 2014.

The delay has given developers time to fine-tune aspects of their initial concept. For example, instead of the circular layout of the hotel-casinos, the decision has been taken to go with a more conventional strip format, which is better suited to the site's topography.

Another potential benefit of postponement has been found in the matter of transportation infrastructure improvements. Gran Scala will be built on land near the town of Ontiñena, which is 425 kilometers from Madrid and 225 kilometers from Barcelona. The main highway between the two major cities passes around five kilometers from the border of Gran Scala land and only requires construction of on- and off-ramps and a five-kilometer stretch of road for easy access.

The existing Madrid-Barcelona high-speed rail line, which runs about four kilometers from the site, will see construction of a local station. Both the road and rail projects are said to have been worked out between the regional and national authorities. Three airports serve the region: Huesca, about 50 kilometers distant, is operational; a new airport at Leida, just 15 minutes from the future town, is in its final stage of construction; and the existing international airport at Zaragoza is about 100 kilometers away.

Gran Scala and the New Normal
The worldwide economic crisis may have delivered its own unanticipated boost to Gran Scala's prospects, in the arena of potential investors. Construction of the massive Dubailand leisure park has been put on hold due to the financial problems in Dubai. In a recent interview with Spanish news source El Heraldo, Frederic Bouvard, vice president of the leisure parks division of ILD, noted that some participants in Dubailand were now looking at Gran Scala as a possible opportunity. Some of these potential investors required a Sharia compliance process, which was recently completed, and negotiations are expected to be finalized in the spring.

For the government of Spain, where unemployment hit 18.3 percent at the end of 2009 and is expected to go to 19 percent this year, the prospect of new jobs has to be alluring. In February, 50 percent of all jobs lost were in the services sector, followed by 10 percent in construction. The government is so desperate that it recently presented a plan to create 350,000 construction jobs by cutting the value-added tax on home improvement work.

In contrast, Gran Scala would provide "real" construction jobs in the building phase, jobs that would also satisfy the government's desire to move away from the so-called speculative construction of the previous decade, which helped lead up to the current slump. Together with the mandated creation of at least 3,000 permanent jobs, which would be mainly in the service industries, the matchup of Gran Scala to these specific and ailing job sectors is a good fit.

The big question that remains to be answered involves the viability of mixing a casino gaming product with the more family-oriented theme park and cultural activity offering. The model has worked at Genting Highlands in Malaysia and Resorts World Sentosa in Singapore, but nothing similar exists in Europe. According to Bouvard, ILD has already performed the necessary market research and determined that the model will work.

The study, carried out by a firm described by Bouvard as one of the world's top two in market research, was conducted all over Europe and involved 16 focus groups in six markets and 7,200 surveys completed in seven markets. The economic crisis was already under way when the studies were performed, and still the results were positive enough to encourage ILD to continue with the project. The volume of research produced results that provide a confidence level of 95.5 percent, which is of a similar accuracy to those used in political polls.

The next step for ILD is to produce its revamped plan for the layout of Gran Scala, submit the plan to the Aragon government for approval and make the details available to potential investors and partners, and the general public. The ILD website at www.ild-plc.com still hosts details of the original plan, including the names of partners and companies that had previously agreed to be involved. It will be interesting to see how many of those names are still present when the new plan emerges.

By Rich Geller   Fri, Apr 02, 2010

One of the original partners still planning to play a major role in an operational Gran Scala is theme-park developer SpacePortLeisure WorldGroup.

SpacePortGranScala will provide a future-oriented entertainment experience. But don't expect to find just the usual park rides dressed up with spacey graphics. The developer is creating entire scenarios around a fictional history, one that includes alien spacecraft crash-landed on Earth and humankind's inevitable journey outward. Visitors will be able to share in a variety of experiences that indeed include various rides but also interactive educational displays.

SpacePortLeisure is not limiting itself to just family-oriented amusement. The company also has the rights to develop the futuristic CasinoYear2100 and Casino Year3000 gaming properties, complete with associated hotels and museums.

Group President and CEO Raoul Katovsky, head of both SpacePortLeisure WorldGroup and SpacePortGranScala, is bullish on the development.

"We plan to open Phase 1 of SpacePortGranScala on Day 1 of Gran Scala, with SpacePortGranScala being designed for an initial capacity of 3.5 million visitors per year building to 5 million visitors in year five," says Katovsky.

Katovsky says his firm has arranged for the necessary financing to keep pace with Gran Scala's opening schedule. For theme-park content creation, he points to high-profile owners of intellectual property "who are very keen, interested and willing" to finalize licensing agreements with SpacePortLeisure WorldGroup.

SpacePortLeisure intends to use the Gran Scala theme park as its base for future projects elsewhere, including a potential park in the Shanghai district near the planned Disneyland site there.

By Frank Legato   Fri, Apr 02, 2010

When radio-frequency identification first made its way into the manufacture of gaming chips more than 15 years ago, the main advantages of the technology related to security: Just as in the retail industry, RFID microchips embedded in gaming chips, plaques and jetons constituted a means to battle loss from internal theft, to deter counterfeiting and to aid in tracking chip inventory.

Since those early days, in addition to security uses, RFID-embedded gaming chips have evolved into a key element in functions more related to marketing-the tracking of wagers for the purposes of table-game player tracking-and in table-game operations, as a way to speed up the game through bet recognition and chip-tracking in poker.

The French supplier Bourgogne et Grasset, now a division of table-game supply giant Gaming Partners International Corporation, began the development of RFID chips in 1993, and sold the first gaming chips embedded with RFID in 1996, to the Regina Casino in Canada.

While there were a few suppliers at the time marketing the technology, it was Gaming Partners International, formed in 2002 through the merger of Bourgogne et Grasset, Bud Jones Company and Paul-Son Gaming, that embraced and developed this style of chip. GPI holds licenses to patents giving it the exclusive right to produce and sell RFID gaming chips in the U.S., and, according to GPI President and CEO Greg Gronau, commands more than 80 percent of the market worldwide for RFID-embedded chips.

Gronau says that while the U.S. patents are important, that exclusivity is not the main factor in its burgeoning business in RFID chips. He notes, for instance, that the sheer volume of the table game business in markets such as Macau means a high priority for security, a role RFID fills like no other
technology.

The first chips sold with radio-frequency identification were designed for inventory control-internal security, to keep the chips from "walking" from the back of the house-and for verification. In the beginning, GPI's chips used a low radio frequency of 125KHz, but before long the company offered a higher-frequency chip as well, at 13.56MHz.

The two frequencies offered differences initially in both price and performance. The lower frequency was less expensive but was very simple yet robust and easy to deploy, making the chips good for security, chip-counting and inventory tracking. The higher frequency was more expensive and more sensitive-special shielding was required-but offered faster performance, making the chips better for table-top applications such as player tracking and chip-value verification in poker and other games.

In the 15 years since their initial development, the price has come down significantly for RFID technology, and nowadays, the choice between low-frequency and high-frequency RFID gaming chips relates mainly to how the chips will be used.

Changing Usage
According to Gronau, most of the gaming chips embedded with RFID technology are currently used solely for security, automatic chip-counting and inventory tracking. "These chips offer the highest level of security you can get," Gronau says. "This is the currency of the casino. I would recommend that all casinos take care of their chips with RFID-at least those of $25 value and up."

RFID chips also are being used for real-time counting of chips at the tables, which allows ongoing tracking of the casino's chip float. An increasing number of the high-frequency chips, though, are being used in applications that didn't exist when GPI first developed RFID gaming chips. Some of the newest applications involve bet recognition in various table-game applications.

For instance, one of the hits of the recent International Gaming Expo in London was GPI's new "RFIDPoker" platform, which uses high-frequency RFID chips to improve the accuracy and speed of the poker game. The system comes in a package that is easily added to any poker table, with a reader that automatically tracks the total amount of pots, accurately calculating the casino's rake. "This provides error-free, automatic and constant reading of the poker pot, calculates charges and rakes, and provides essential data and statistics such as game analysis, table performances, round-ups lists and daily totals," Gronau explains. "The system also helps to speed up the game, and has proven to increase hands per hour by as much as 30 percent, improving revenues for casinos and reducing wait times for players both at the game and waiting for a table."

GPI also offers a "Progressive Poker" system that adds an incrementing jackpot to the mix, linking several Texas hold'em tables to a jackpot incremented by automatic rakes from pots at all the tables. The system comes with an LCD display that shows the incrementing jackpot.

Other new applications of RFID technology include GPI's "RFIDRoulette" system, which automatically monitors and tracks bets, game activity and chip-change operations at roulette tables. It's all part of a product line GPI calls "RFID TableSolution."

GPI also works with third-party partners like IGT to provide RFID chips for player-tracking systems, such as IGT's iTable product. The common thread in all of these newer applications, according to Gronau, is that they improve the casino's bottom line. "As you get into player tracking, there's got to be a value proposition for the casino," he says. "That's one of the things we work on with partners like IGT. "   

Growing Product Line
In addition to the software suites, RFID-embedded gaming chips have led to the creation of an entire genre of ancillary hardware products. GPI offers table-top authenticators; tip-box readers; video interface units that place chip activity in a frame on closed-circuit TV screens; readers for use in Texas hold'em, roulette and blackjack float trays and other applications; cage readers; chip bank readers; and electronic chip surveillance systems that place sensors at exit doors to prevent employee theft of chips.   

At the IGE show, GPI displayed a new countertop reader for its RFID Cage application that allows the operator to accurately read chips, whether they're in stacks, chip racks or even a pile.

GPI has played a part in developing much of the RFID technology in use today, both on the software and hardware sides. "It has taken some time to develop solutions that are right for the customer," says Gronau, "and for costs to come down so the value was more in line for the customer. We continue to work on the cost side every day. We believe in this technology."

He adds that the company continues to work on new ways for RFID to add value to a pit operation. "Our R&D team works very closely with our suppliers to deliver the most effective technology that will improve operations and increase security for our casino customers. 

"GPI is constantly surveying and evaluating technologies, and will continue to focus on working with our customers to provide additional applications."

By GGB Staff   Tue, Apr 06, 2010

In a cruel twist of fate, less than a year after opening the highly successful Firekeepers casino in Battle Creek, Michigan, Laura Spurr, the tribal chairwoman of the Nottawaseppi Huron Band of the Potawatomi Indians, died of a heart attack while attending a conference in California.

The 64-year-old Spurr was instrumental in the process that required the tribe to petition the government to take land into trust for the casino, one of only four times that has occurred. Then, she directed the construction and financing of the casino, especially difficult during an economic downturn.

But after the casino opened last August, it was immediately successful and contributed hundreds of jobs for the tribe and the surrounding communities. But she wanted to see the tribe's economy diversify even more.

"Hopefully we will have communities that want to work jointly with the tribe, and potentially there are things we could do together down the road-possibly small manufacturing for people who can't get into the gaming industry because of past history," she told the Western Michigan Business Review in 2008.

Spurr's accomplishments, however, went far beyond the casino. She graduated from the University of Michigan in 1967 with a BS in nursing and for more than 40 years, she worked as a nurse in different practice settings in the cities of New York, Washington, D.C, Chicago and Grosse Pointe.

By GGB Staff   Mon, Apr 05, 2010

Hot-button issues surrounding what is arguably the strongest U.S. gaming jurisdiction were discussed and debated in February when the sixth annual Pennsylvania Gaming Congress and Mid-Atlantic Racing Forum was held at the Valley Forge Convention Center in King of Prussia.

The conference, organized and produced by Spectrum Gaming Group, centered largely on the new game in the state, as nine current casinos prepare to add table games to their slot operations within the next several months and new facilities prepare to open as full-blown casinos. Other highlights included the prospects and plans for the remaining six casinos authorized under the law-notably the two in Philadelphia and the resort casinos that are now being licensed-and Pennsylvania's growing stature in the overall gaming industry, as the state surpassed Atlantic City for the first time in December as the third-highest gaming revenue-generator in the U.S.

Another highlight was a luncheon keynote address by Philadelphia Mayor Michael Nutter, who originally opposed casinos on the Philadelphia waterfront, but who now says the city "is welcoming of the two new casinos."

At the opening keynote panel discussion, Kevin O'Toole, executive director of the Pennsylvania Gaming Control Board, noted that $1.19 billion has been given to property tax relief since the first casino opened in 2006. O'Toole also heralded the job creation thanks to casinos in the state, which currently employ 8,082 in nine casinos, with "family-sustaining, living-wage jobs," a number expected to at least double with the addition of table games, not to mention the opening of five new casinos in the next two years and a sixth in 2017.

The challenge of getting table games up and running was addressed not only in panels featuring lawmakers and operators, but in a regulatory panel, during which Doug Sherman, chief counsel of the gaming board, estimated that full implementation of tables will take six to nine months.

At the panel of operators that ended the conference, Philadelphia Park President Dave Jonas predicted that table games will "kill" Atlantic City. Asked to predict the reaction of Atlantic City casinos to the addition of tables in Pennsylvania, Jonas said, "They haven't even responded to slots. No one (in Atlantic City) has spent any money since Pennsylvania started hammering them."

The keynote panel, which kicked off the gaming portion of the conference, featured key Pennsylvania lawmakers who addressed the issues surrounding not only table games, but regulatory reforms included in this year's new table game law.

Pennsylvania Auditor General Jack Wagner, a former state senator and current gubernatorial candidate, noted at the panel that the gaming law was sold to the General Assembly with three key purposes-the first being to save the state's racing industry; the second to create jobs; and the third to give state residents property tax relief.

Much of the keynote lawmaker's panel dealt with the amendments in this year's gaming law, designed to reform the 2004 law but criticized as loaded with special-interest amendments. Rep. Dante Santoni, Jr., the House Democratic leader, defended the bill against attacks from Rep. Mike Vereb, who said he voted for earlier versions of the legislation, originated as Senate Bill 711, but changed his vote only after several provisions were added to please certain lawmakers' constituents.

A prime target of Vereb's criticism was the provision added to the compromise bill at the last minute that gave the gaming board the authority to extend the deadline for the Foxwoods Philadelphia partners to submit a financing plan-a provision that may be rendered moot if the board approves the takeover of majority ownership in the project by Wynn Resorts, a development announced only as the conference ended.

Vereb also criticized the heavy-handed tactics of Pennsylvania Governor Ed Rendell, saying he held the state's colleges and universities "hostage" by refusing to release education aid until the table-game bill was approved, and then held state employees hostage by threatening 1,000 job cuts without passage of the law-cuts he said would not have actually been necessary even without table game revenues.

Santoni defended Rendell's tactics as standard practice for state chief executives, and defended the overall gaming reform/table game package as "overall, a terrific bill."

Other highlights included a panel of Wall Street analysts who gave projections as high as 15 percent for revenue increases this year in Pennsylvania, even with table games not expected for six to nine months. Projections on the impact of Pennsylvania table games on Atlantic City casinos ranged from 3 percent all the way to 15 percent.

The analysts said the strongest results for Pennsylvania will come if hotels are added, particularly for those like Sands Bethlehem that are away from urban areas.

By Frank Legato   Fri, Apr 02, 2010

Manufacturer: Bally Technologies
Platform: Alpha Elite
Format: Five-reel, 25-line stepper slot
Denomination: .01, .02, .03, .05, .10, .15, .20, .25
Max Bet: 200
Top Award: Progressive; $5,000 reset
Hit Frequency: 33.79%
Theoretical Hold: 11.62%-14.28%

With this game, Bally offers a novel new use of its V32 video platform, which features a vertical 32-inch video screen. (It is the format popularized by Bally's video roulette game and Fireball video slot.) A three-reel, 25-line base game sits underneath a video display dominated by the upper-right side of a standard bonus fortune wheel.

What makes this application of the wheel bonus unique is a feature called "U-Spin." When a bonus symbol appears in any position on the third reel, the player gets one spin of the wheel, which contains spaces for various bonus amounts, a free-game bonus, or one of two progressive jackpots-a "Minor" resetting at $100 or a "Major" resetting at $5,000. With the U-Spin feature, the player physically touches the wheel and gives it a spin. The wheel "reacts" to the force of the player's spin. Audio replicates the sound of a fortune wheel as it slows down. It is an innovative effect.

The base games use Bally's "Interactive Reels" technology, in which a video overlay on the reels causes animation to float  across the mechanical reel set during bonus rounds. The player must wager a minimum of one credit per line plus a 15-credit "U-Spin Bonus Bet" to activate the bonus feature.

In addition to the free-spin bonus activated through the wheel-12 free spins with all pays doubled, except for the progressives, with the ability to re-trigger the free games up to 60 total-there is a second-screen event triggered by three scattered bonus symbols. In the "Money Bag Bonus," the player selects one of three money bag symbols on the reels to reveal a hidden credit value ranging from three to 50 times the total bet. This bonus also can be triggered during a free spin.

By Caitlin McGarry   Fri, Apr 02, 2010

Product: i-Deal shuffler
Manufacturer: Shuffle Master

As the gaming industry's first automatic card shuffler that includes card recognition as a standard feature, Shuffle Master's i-Deal single-deck specialty shuffler offers a high level of security to games like Three Card Poker with high odds and jackpot payouts.

Featuring a low-profile design with flush-mount load and unload ports, a programmable multi-game function and the ability to shuffle cards approximately 40 percent faster than previous models, the i-Deal aims to increase specialty table game revenue by improving win through increasing hands per hour and productivity.

The i-Deal also helps enhance game security by eliminating shuffle tracking and deck manipulation, and has the ability to reconstruct hands-enabling fast jackpot verification. Its mechanical shuffling process reduces card wear and tear, making cards last longer while enabling the dealer to re-sort decks of cards during daily closing procedures.

According to Shuffle Master, incorporating card recognition technology in the product has opened the doors for alternative uses. Being able to verify that all cards are present or to identify specific cards that are missing or have been added is an important security feature, but now the company's shuffler is able to help dealers set table game hands accurately and quickly according to preset house ways on games like pai gow poker.

The i-Verify is an LCD touch screen display that is embedded into the table between the chip tray and player betting positions, and when used in conjunction with the i-Deal, it tells the dealer exactly how to set his hand according to the prescribed house procedure. This innovation removes a common barrier to dealing complex games like pai gow poker because it eliminates the need to have the dealer memorize complex house way rules.

Additionally, the i-Verify can also be used by the dealer to show players how to set their hands according to the house way. It provides increased security and reduces and/or eliminates dealer training for house way games like pai gow poker, and can even be used with other house way games like Fortune San Lo Poker and Ultimate Draw Poker.

For more information about the i-Deal shuffler, visit www.shufflemaster.com.

By Caitlin McGarry   Fri, Apr 02, 2010

Canada and the United States share a geographic border, but when it comes to issues like health care and internet gambling, the two countries have vastly disparate philosophies. Internet gambling operators are prohibited from accepting American bets, and have even been prosecuted and jailed for doing so, while Canadians are able to access offshore gambling websites, and will soon be able to place bets on government-run gaming sites.

The British Columbia Lottery Corporation and the Atlantic Lottery Corporation both offer limited casino games on their websites, but the two organizations recently announced a partnership with Loto-Québec to create a state-sponsored online gambling portal for six provinces represented by the three entities. Ontario has also expressed interest in launching its own gaming website.

With Canada moving toward the legitimization of internet gambling, many are wondering if other countries-like the United States-will follow.

The Plan
Loto-Québec, the B.C. Lottery Corp. and the Atlantic Lottery Corp. announced plans for the internet gambling platform in February, and though few details have been released as to the logistics of the project, Loto-Québec officials did say the portal is expected to launch by the end of the year.

The project, which is expected to offer a wide variety of games that include slots, poker and blackjack, will be the first government-regulated Canadian internet gaming site in history. The B.C. Lottery Corp. offers "pseudo-poker" on its website, according to gaming lawyer Michael Lipton of  Dickinson Wright LLP, but Lipton says the limited number of games offered and the low stakes-betting limits were recently raised from $120 to $9,999-render the B.C. Lottery Corp. unable to compete with offshore gambling sites. While the British Columbian organization may not be interested in competing with offshore sites, the new six-province portal seems to be aiming higher.

"The new proposal is going to be a more varied and larger scope of games," Lipton says. "But then again, they're going to have limitations, because it's restricted to certain provinces in Canada. I think they're going to be up against some well-established operators. I don't see a lot of people migrating from so-called offshore sites to government sites. I don't see them doing that on a long-term basis." 

Loto-Québec estimates that the website will take in $50 million by 2012, and while it remains to be seen if the new portal will be successful, the B.C. Lottery Corp., Atlantic Lottery Corp. and Loto-Québec will benefit from the pooling of players and resources from six provinces on one platform. However, each province will see returns on only its residents' bets.

"Each jurisdiction protects its fiscality," Loto-Québec CEO Alain Cousineau told the Montreal Gazette. "The revenue generated by Quebecers will return to Quebec."

Loto-Québec and its partners have not yet selected a software developer for the portal, but according to the Gazette, British company Orbis Technology is a contender.

After Loto-Québec's announcement of its partnership with the B.C. and Atlantic Lottery Corporations, new Ontario Lottery and Gaming Corporation Chairman Paul Godfrey said he was also interested in developing a state-sponsored gambling site.

"When you see what's going on in British Columbia, Quebec and the Atlantic provinces, it's something I would explore," Godfrey said at a recent news conference. "Money is going out of this province to other provinces as well as offshore sites."

Ontario Premier Dalton McGuinty has also expressed interest in establishing a government-run gambling site.

"The difference is we can control whether or not there is corner store sales for beer or wine," McGuinty told the Ottawa Citizen. "Internet gambling is taking place. It's already there. The issue is what we want to do in the face of that."

Lipton says it seems likely that Ontario will partner with Loto-Québec and the B.C. and Atlantic Lottery Corporations.

"I think Ontario didn't want to be the first," Lipton says. "The premier of the province has said it should be considered. I think there's a very good chance that Ontario will go along and join in with BCLC, Quebec and the ALC. I think Alberta and Manitoba are very close to announcing as well."

Gambling in Alberta and Manitoba is governed by the Western Canada Lottery Corporation, and spokesman Kevin Van Egdom told the Edmonton Journal that the organization has no intention of developing a gambling website.

"Nothing has been written off forever, but we have no plans to do that," Van Egdom told the Journal. "We're responsible for offering lottery games and selling lottery products through authorized retailers, where you buy them in person. Each region makes its own decision and Quebec's doesn't play into ours."

The Problems
There are a variety of issues that Canadian provinces must consider before launching state-sponsored gambling websites. Lipton says the competition the provinces will face from the already- established and highly developed offshore sites should be of great concern to Canada's gaming organizations.

"There's a lot of competition which they have with the very successful operators," Lipton says. "They have databases that I'm sure are quite expensive. The nature of their software is first-class. They have far fewer restrictions in regard to from whom they can take bets. The Canadian organizations are limited to taking bets only from provinces that have an agreement to permit these types of operations. For all these reasons, there's serious competition, and there's limitations that are imposed on Canadian operators that may have an impact on their liquidity. They're going to have a very interesting time to be able to establish successful financial operations."

However, Loto-Québec has pointed to Sweden's success with government-run internet gambling as proof that state-sponsored online gaming sites can compete with offshore sites. After the country launched its gaming website, it quickly garnered 20 percent of the market share, a feat that Loto-Québec hopes to repeat.

Loto-Québec and its provincial partners also face a problem in opposition from public health experts. Dr. Jeff Derevensky, co-founder of the International Center for Youth Gambling Problems and High Risk Behaviors at McGill University, told the Regina Leader-Post that if provincial governments legitimize online gambling, it will lead to an increase in problem gambling.

"It's our governments that are the most addicted to gambling," Derevensky told the Leader-Post. "They're addicted to the revenue. There is no great social consciousness. This is a money-making operation; that's quite clear."

Derevensky's center recently conducted a study that found 8 percent to 10 percent of children and young adults are at risk for developing problem gambling behaviors, something he told the Leader-Post he is concerned that online gambling will encourage.

The specter of problem gambling is a powerful one, but Lipton says that Quebec has indicated that it intends to establish safeguards to discourage problem gambling.

"What Quebec has said is they want to have best practices with respect to helping people who have compulsive gambling issues, such as limits of betting, certain time frames for betting, things of that nature," Lipton says. "They want to adopt these best practices. They're recognizing that the genie is out of the bottle and that internet gaming is already being pursued by a number of people in Canada, including people who've got compulsive gambling problems. I think the governments are seeking to protect the vulnerable, and hopefully those who do play on the sites of the government will have the additional protection with respect to responsible gaming."

Lipton also says if Canadian provinces take cues from offshore gambling regulations, they will be able to protect their residents.

"A number of offshore sites like Alderney, United Kingdom, Gibraltar, Malta, I think are certainly tier-one type of sites with respect to regulation," Lipton says. "The games are fair, the public is protected, crime is kept down, the vulnerable are protected.

"From a regulatory perspective, there's already a so-called gold standard out there. I think the Canadian jurisdictions will follow that particular gold standard. From my point of view, I think regulating online gaming is easier than regulating land-based gaming. It's easier to protect the public; it's easier to protect the vulnerable; it's easier to protect against money laundering and things of that nature."

Canada's provinces are continuing down the path toward government-run internet gambling, and their successes-or failures-may influence the future of online gaming in Canada's neighbor to the south.

By GGB Staff   Fri, Apr 02, 2010

A new operator with international potential is taking shape in South Africa.

The new Gold Reef/Tsogo Sun entity will become the 36th largest listed company on the Johannesburg Stock Exchange. The company will have a market capitalization equal to about $2.7 billion. Its 14 casino resorts in South Africa and 90 hotels in Africa and the Middle East will make it a formidable player in the international gaming and leisure market.

An all-stock deal will see Gold Reef acquire Tsogo Sun Group from Tsogo Sun Investment Holdings (TIH) and SABMiller (SABSA), which currently hold 51 percent and 49 percent of Tsogo Sun Group, respectively. Gold Reef will issue 888.26 million new shares, of which 41.3 percent will go to TIH, 39.7 percent to SABSA and 19 percent to existing Gold Reef shareholders.

Steven Joffe, CEO of Gold Reef, said, "We believe this transaction is a great outcome for our shareholders to participate in a larger and more diversified group. It opens up a number of growth opportunities as well as improves access to capital and new talent. It is a win-win outcome for all concerned."

The Financial Times speculates that SABMiller will ultimately sell its position in the new company to devote itself to its core business, which is the beverage industry.

"This transaction heralds the creation of a significant entity in the gaming and hospitality industry and in corporate South Africa," said Jabu Mabuza, CEO of Tsogo Sun. "The merger of two quality portfolios and listing on the JSE provides investors with exposure to diversified markets and geographies. We will look to capitalize on the new growth opportunities that this merger brings."

By GGB Staff   Thu, Apr 01, 2010

France-based Accor has decided to sell its stake in French casino operator Lucien Barriere. The company expects to sell its 49 percent stake in Barriere for between €500 million and €700 million.

The Financial Times reports that the move is part of a larger effort at restructuring Accor that is primarily centered around a divestment of the group's hotel business from its services and vouchers business.

In 2009, Accor increased its stake in Barriere, acquiring an additional 15 percent of the casino company for €271 million.

Accor also intends to speed up its plan to sell off its physical hotel properties. The objective is to raise cash and continue moving toward a franchise-and-management-contract business model. Accor still owns about 40 percent of its hotels, but wants to reduce ownership to 29 percent by 2013. So far, the company has raised 25 percent of its 2010 goal of €450 million in cash. The target is €1.6 billion in cash by 2013.

The Accor board intends to have the hotels division repay €1.2 billion of the total €1.6 billion of debt by the end of 2011.

Gilles Pélisson, executive chairman of Accor, said of the divestment plan, "We wanted to have two companies which would be well-rated within their environments. We want to have two stars and not one dog and one star."

Shareholders will have the opportunity to vote on the plan on June 29.

By GGB Staff   Thu, Apr 01, 2010

Another Aqueduct racino deal is dead.

Embattled New York Governor David Paterson, who chose the Aqueduct Entertainment Group to build and operate New York City's first casino, conceded last month that his choice did not pass muster with state licensing officials. Though several controversial investors jumped ship days before the announcement, it was too late to save the lucrative deal, which would have added an immediate $300 million in upfront fees to state coffers.

According to a senior administration official, AEG supplied insufficient financial details for some of its investors. In other cases, the New York Post reported, the state's Lottery Division was "not comfortable" licensing some of the investors.

The decision was made just days after one of New York's most powerful African American pastors announced that he was longer part of AEG. The Reverend Floyd Flake, who owned a minority stake in the company, supposedly had considered endorsing Paterson in a re-election bid rather than his previous choice, Attorney General Andrew Cuomo. The Queens pastor's choice of gubernatorial candidate became moot when Paterson announced he would not seek re-election.

Penn National Gaming, which lost to AEG even though it submitted the highest bid, has made no secret of its ongoing interest in the racino, which will include 4,500 slot machines.

"We're hanging around the hoop and remain interested in Aqueduct, but we have to see how this plays out," said Penn National Vice President Eric Schippers.

By GGB Staff   Thu, Apr 01, 2010

Doubts about the depth of the Singapore market are slowly ebbing away as it becomes apparent that the first few weeks following the opening of Resorts World Sentosa have been an unqualified success. The Genting property opened on February 14 and it has been busy ever since.

Union Gaming Group last month reported that it believed RWS was winning between $7 million and $8 million a day, with EBITDA margins between 40 percent and 50 percent. Even more encouraging, according to Union, is that the revenues are split evenly between the mass market and the VIP market, which is a much more difficult business than it is in Macau, although the tax rate is much lower, at 5 percent vs. almost 40 percent. The mass-market revenues in Singapore are taxed at a 15 percent rate.

"To say these numbers are encouraging is a monumental understatement," wrote Union Gaming's Bill Lerner in a note to investors, "especially without the influence of junket operators. Two offsetting variables will be interesting: 1) RWS has yet to ramp up, as it has only been open since mid-February, and 2) Marina Bay Sands hasn't opened, which could suggest such numbers for RWS are not sustainable. If RWS was able to sustain these play and margin levels, when taking into account the contribution of non-gaming revenues, we estimate total revenues would exceed $3.2 billion with EBITDA of $1.4 billion-well beyond consensus expectations."

Gamblers' blogs tell of queues, crowds, over-the-shoulder betting and round-the-clock action at the casino of Resorts World Sentosa.

By GGB Staff   Thu, Apr 01, 2010

Connecticut's two Indian tribes are warning legislators that Governor M. Jodi Rell's plan to have the state lottery offer keno may violate the state's compact with the tribes, putting its share of slot machine revenues at risk.

"It's an awfully risky proposition moving forward with the game in such an unsettled area," said John Meskill, director of
the Mohegan Tribal Gaming Commission, before members of the General Assembly's Public Safety Committee.

Under the terms of the compact, the Mohegans and Mashantucket Pequots pay 25 percent of their slot revenues to the state-a $400 million annual windfall. According to the Associated Press, an attorney for the Mashantucket Pequots said the tribes won't be obligated to pay that money if anyone else in the state, including the Connecticut Lottery Corp., is permitted to operate similar games.

"If keno is a commercial casino game, then the payments no longer have to be made," said tribal attorney Jackson King.

Rell suggested keno as a way to raise $60 million per year for the state. She hoped to instantly raise $400 million to help close a $1.3 billion state budget gap, by borrowing against future keno revenues.

Chuck Bunnell, chief of staff for the Mohegan tribe, told the Hartford Courant his tribal council "would be deeply concerned about 600 to 1,000 gaming parlors opening up around the state of Connecticut." Bunnell said it would be perceived by the tribes as a "violation of an agreement that was entered into in good faith."

Anne M. Noble, president and CEO of the Connecticut Lottery, said keno "is one of the oldest games of chance," dating back to the third century in China. "Keno is fun. Keno is easy to play. It's played no differently than any of our other draw games." She added that keno is nothing like slot machines and casino-style games, and thus poses no competition for the tribes.

By GGB Staff   Mon, Apr 05, 2010

New Jersey-based slot supplier AC Coin & Slot has launched a new bonus slot called the "QH" (for "Quick Hit"). The game places a high-frequency bonus event on top of an IGT Double Sizzling 7s pay table in a five-reel, 25-line stepper format.         

The mechanical top-box bonus features the familiar bonus-game display originated in the game "Bankroll," now part of what the slot-maker calls the "Big Roller" series.

As the name implies, the bonus events are remarkably frequent-every seven spins, on average, with maximum bet wagered, the player goes into the Quick Hit Bonus with two "QH" symbols scattered on the middle reels. The top box bonus amounts remain stationary, and all the amounts light up. They go out one by one, and the last award square illuminated goes to the player. The average bonus on this event is 149 credits.

Every 63 spins on average, a "Double Bonus" event is triggered with three scattered bonus symbols on the middle reels. The bonus display's 16 award values scroll as the middle multiplier strip spins. When the strip stops, the award squares randomly go out. The last one to stay lit is the winning amount. Then, the multiplier squares flash until one is lit to combine with the amount for the multiplied bonus. The average bonus in this event is 1,553 credits.

"We built the QH on our proven Big Roller platform," says Jason Seelig, AC coin's executive vice president of sales and marketing. "We expect it to follow in the very successful footsteps of 'The Munny Returns,' which we launched six months ago."

By GGB Staff   Mon, Apr 05, 2010

Daniel J. Little, a member of the Mashantucket Pequot tribe, was appointed last month to the National Indian Gaming Commission, bringing a full contingent of three members for the first time in two years. George Skibine, a member of the Osage Nation of Oklahoma, serves as acting chair. Steffani A. Cochran, a member of the Chickasaw Nation of Oklahoma, joined the commission in January and serves as permanent vice chair.

Skibine was appointed acting chair in October when immediate past chairman Phil Hogen resigned after six years in the post. His appointment is for a limited time and the Obama administration is expected to announce a successor within the next two months and return Skibine to his post at the Interior Department's Bureau of Indian Affairs.

Little was most recently the director of national government affairs for the Mashantucket Pequot Tribal Nation, and has gained a wide knowledge of the Indian Gaming Regulatory Act and the regulatory processes governing casino operations.

A notice published in the Federal Register in February said, "This experience has given Mr. Little a thorough knowledge of the laws and regulations governing Class II and Class III gaming and casinos.By virtue of his work on gaming issues and his extensive knowledge of relevant laws and regulations, Daniel J. Little is eminently qualified to serve as a member of the National Indian Gaming Commission."

By Frank Legato   Fri, Apr 02, 2010

Manufacturer: Aristocrat Technologies
Platform: GEN7
Format: Five-reel, 50-line or 100-line video slot
Denomination: .01
Max Bet: 125, 250, 500, 1,000, 2,000
Top Award: 50-line, 5,000 times line bet; 100-line, 10,000 times line bet
Hit Frequency: Approximately 50%
Theoretical Hold: 5.01%-12.2%

Aristocrat has expanded both its 50-line and 100-line game groups, and this game is available in either configuration. The 50-line version activates a payline for every credit wagered; the 100-line version activates two paylines for one credit. Intricate artwork dictates a haunted theme with ghosts, bats, mansions and the like.

This game also follows Aristocrat's recent trend of feature-packed game programs. There are four different bonus events-three second-screen events and a free-spin event. The Jackpot Manor Free Game Feature itself leads to one of the second-screen events. The feature awards six free games. A candelabra on the screen displays a random multiplier amount for each free spin round. If three gate symbols land on a free spin, that triggers a secondary bonus, called "Feature of Wealth." Twenty question marks appear on the screen, and the player selects one to reveal a credit value.

Three gate symbols on a primary-game spin trigger the "Feature of Fate!" bonus event. The players select from 20 question marks to "choose their fate." The question marks hide credit values, keys and tombstones. The key and the tombstone each lead to another bonus screen. The key triggers a Jackpot Manor free-spin round. The tombstone leads to the other second-screen event, the Tombstone Bonus.

In this event, the screen displays 16 tombstones. The player is prompted to touch a tombstone to reveal bonus credits, a multiplier or a key. The key leads back to the free-spin bonus.

If the multiplier is revealed, the player picks again for credit amounts. He keeps selecting credit amounts until a skull-and-crossbones symbol is revealed. That ends the bonus, and the player is awarded the accumulated credits times the multiplier amount.

By Caitlin McGarry   Fri, Apr 02, 2010

Product: Advantage Revolution
Manufacturer: Konami Gaming

Konami Gaming recently unveiled its Advantage Revolution slot cabinet, and has already installed the cabinet at Southern California's Sycuan Casino.

The Advantage Revolution's most unique feature is its reel box, which revolves according to the game being played. It has three mechanical reels that can rotate to a mechanical wheel or to an LCD screen, depending on the game's bonuses. The cabinet also uses the Advantage 5 attract-mode lighting system to draw players.

Ross O'Hanley, Konami's senior director of marketing, said the company was excited about launching Advantage Revolution at Sycuan Casino last month.

"Konami is proud to partner with Sycuan Casino to launch Advantage Revolution," O'Hanley said in a statement. "We are thrilled that Advantage Revolution has garnered so much attention from Sycuan customers, and look forward to continued success at the property."

Sycuan Director of Slot Operations John Dinius said the new slot cabinet is already a hit with the property's customers.

"At Sycuan, we are always looking to offer our customers the latest and greatest in gaming," Dinius said. "Konami's new Advantage Revolution is certainly a product unlike anything our customers have ever seen before. The response to Advantage Revolution has been overwhelmingly positive. On the day of the launch, customers were standing in line to play the games."

For more information about the Advantage Revolution slot cabinet, visit www.konamigaming.com.

By Frank Catania   Fri, Apr 02, 2010

Distress flags are flying in Atlantic City, the city with the motto "Always Turned On." And it is not because of the recent snowy weather. The proliferation of gaming in neighboring states and the resulting competition for gaming dollars is looming as the biggest challenge to Atlantic City's future.

When Resorts opened in 1978, Atlantic City was the only game in town in the Northeast. Only two other places in the United States, Las Vegas and Puerto Rico, had casino gambling. Today, gambling has spread to all the states surrounding New Jersey, which means patrons don't have to spend time and money traveling to Atlantic City or other gaming destinations to play. So, for the first time in its history, Atlantic City has fallen from theNo. 2 spot in slot revenue to No. 3, behind neighboring Pennsylvania.

New York has introduced video lottery terminals at some racetracks. One racetrack, Yonkers, is just a little north of the George Washington Bridgein northern New York City, and has over 5,000. VLTs have become so advanced that most players don't even know or care that they're not playing a slot machine. So the question becomes: Why would slot players, who comprise most of the gaming public, travel hours to Atlantic City when the same gaming action can be found a whole lot closer to home?

One reason could be to access non-gaming attractions, such as big-name performers and shows, luxurious spas, fine dining and shopping. The problem is that Atlantic City already offers these amenities, yet is still losing market share to neighboring states. As Albert Einstein observed, the definition of insanity is "doing the same thing over and over again and expecting different results."

Finding the Answers
Clearly, then, to get a different result, Atlantic City must try something different, either by offering a new product or attracting an underserved patron base. Internet gaming-which is not presently legalized and regulated in any state-is something that can potentially do both.

Younger people, those in their 20s and 30s, have long been an underserved slice of the casino market, which has only recently begun to be tapped with casino concerts, nightclubs, pool parties and similar events. This group is obviously tech-savvy, and utilizes computers as an essential element of their everyday lives. Studies have also shown that this group likes to play all kinds of online games, particularly poker. In light of this, internet gaming is the perfect product to appeal to the younger player, and thereby to expand the Atlantic City market at a time when contraction is the prevailing trend.

Legislation proposed by state Senator Raymond Lesniak would achieve this result by authorizing Atlantic City casinos to offer internet wagering. Since the New Jersey Constitution mandates that all casino gambling take place in Atlantic City, the legislation requires that all gaming servers be located in licensed casinos. To comply with federal law, such gaming, which could consist of any and all authorized casino games, would be available only to players located in New Jersey.

A few years ago, such a restriction would have been difficult to enforce. However, following passage of the Unlawful Internet Gambling Enforcement Act in 2006, several online gaming companies determined for legal reasons to exclude players from the United States. To do so, they developed "geolocation" software that can reliably locate players' computers and screen out players from prohibited jurisdictions. Similar technology can be used to block players located outside New Jersey.  

The bill would require personal account registration at an Atlantic City casino. A player would then be issued a user name as well as a password, assuring that the player would be the only one allowed to participate in the casino's online games. This process would also serve to preclude any play by minors.

The number of existing online poker players in New Jersey has been estimated at over 200,000.  Still more online players prefer bingo, casino or skill games. If the Lesniak bill is enacted, New Jersey and its casino industry will be able to achieve the ultimate trifecta: offering a new product; expanding into a new market; and creating economic benefits such as jobs and taxes arising from online play.

By GGB Staff   Thu, Apr 01, 2010

Britain's Rank Group Plc wants to see a single tax rate of 15 percent for all sectors of gaming. The move would create a level playing field on taxes for all activities currently regulated by the U.K. Gambling Act.

"At the moment the gaming and betting activities of U.K. consumers are subject to a patchwork quilt of taxation, without any apparent logic or relationship to social policy," said Rank CEO Ian Burke. "Some games are currently subject to a multiplicity of different tax rates, depending on where and how they are played."

For example, in a casino, the tax rate for table games and slot machines ranges from 15 percent up to 50 percent, depending on revenue. The same games played online with a U.K.-registered operator are subject to a fixed 15 percent tax, and with an operator working outside the U.K. there is no tax collected at all. Meanwhile, U.K. betting shops pay only a duty of £2,215 per fixed-odds betting terminal, which in effect is a slot machine.

The same tax inequalities hold true for poker, where the live casino/online U.K. casino/online non-U.K. casino rates are 15-50 percent/15 percent/0 percent, respectively.

Said Burke, "It is particularly concerning that the current system of taxation seems to be undermining the aims of the Gambling Act by imposing the highest rates of duty on those
venues which provide the greatest degree of supervision and have the lowest rates of underage gambling."

The proposal from Rank is titled "Responsible Taxation-Fairness, Simplicity, Sustainability," which in Brit-speak is so direct and to the point as to be the written equivalent of a torch-bearing mob descending on Parliament.

The document seeks to eliminate "arbitrary distortions" which hurt U.K.-registered operators and help those offshore, create more revenue and jobs for the U.K., save companies and government administrative costs, and increase consumer protection.

By GGB Staff   Thu, Apr 01, 2010

The high court of Bombay at Goa has issued an ad-interim order that prevents the state government from issuing any new permits to new casino vessels looking to operate on the Mandovi River.

The court move was sparked by the appearance of a lawyer for the offshore casinos, who told the court that state permission had been given to launch a new casino, with operations to begin soon.

Government factions have been battling over the shipboard casino industry for over a year now, although things had been relatively quiet in recent months. The court accused the state government of creating confusion by allowing new boats to operate on the Mandovi River.

Another hearing on the matter was to take place in late March.

Currently there is only one ship operating in Goa, Casino Royal. The other casinos have closed because business plummeted after the government raised the admission charge tenfold, from 200 rupees to 2,000 rupees (US$4.40 to US$44). In addition to the higher entry fee, some Indian gamblers are flying to Singapore to gamble at the new Resorts World Sentosa casino.

By GGB Staff   Thu, Apr 01, 2010

The San Pasqual Band of Mission Indians in San Diego County recently topped off the seven-story hotel it is building for its Valley View Casino. Expected to be finished in December, the hotel will begin accepting reservations in August.

The hotel, which is nearly one half smaller than originally planned, will be "modern and hip" and luxurious, according to a spokesman for the tribe. The original cost was $85 million, which has now been shaved to $72 million. It will still have a pool and waterfall, as well as a 5,000-square-foot showroom.

The hotel will allow the casino to reward its best customers with comped rooms, and will encourage those same customers to stay and play longer.

The reduction of the hotel wasn't just an economic decision. According to the spokesman, "the reduction in size of the hotel is due to a combination of a response to the community's concerns about the height of the hotel and just fiscal responsibility in today's financial climate."

If the economy rebounds soon, the tribe can always build a hotel addition, say hospitality industry experts.

By GGB Staff   Thu, Apr 01, 2010

A "green paper" submitted by Bermuda Premier Ewart Brown calls for the introduction of at least one casino, and adds that more casinos will mean even more revenue and jobs for the island nation. The paper argues against the introduction of a national lottery and online gaming.

According to local news source Royal Gazette, the report, produced by the Innovation Group, says that just one casino in Hamilton would produce $83 million in revenue for the government annually. The figure is based on a recommended gross gaming tax of 10 percent.

Allowing casinos in hotels of 100 or more rooms would raise the government's share to $130 million annually. With additional casinos in the towns of St. George's and Dockyard, the total for the government would go to $145 million.

Commenting on the green paper, Brown said, "Bermuda is at a pivotal stage in its 400-year-old story. How we approach the task before us on this issue of gaming will determine our economic future and our positioning in the increasingly competitive tourism marketplace. I look forward to hearing the views of the Bermudian people on this green paper and the specific questions that emerge from this comprehensive research."

Casino gaming would be a generator of new jobs, according to the report. The one casino in Hamilton could provide jobs for 1,278 people directly or indirectly. Adding casinos at St. George's and Dockyard could result in employment for 1,725 people. With casinos in hotels of 100 or more rooms, the number of jobs could reach 2,207.

Brown has been trying to introduce some form of casino gaming to Bermuda for some time, from establishing casinos on the island to allowing cruise ships to operate their own casinos while in port. 

The debate on casino gaming is scheduled for July.

By GGB Staff   Mon, Apr 05, 2010

Todd Moyer, former general manager of Iowa's Diamond Jo Casino, began a new job March 1 as general manager of Pittsburgh's Rivers Casino.

Moyer, who became known as one of the most innovative marketing executives in the business when he was a vice president of Trump Marina in Atlantic City, will fill the job vacated by the retirement of Ed Fasulo, who opened and staffed the Pittsburgh casino.

Moyer joined the Dubuque property as general manager as the riverboat completed an $84 million casino and entertainment complex in 2008.

While in Atlantic City, Moyer became known for creative promotions at Trump Marina such as offering player's club members the chance to roll dice for $1 million, and a variety of other innovative programs that brought players into the casino.

By GGB Staff   Mon, Apr 05, 2010

Jamie Odell, CEO of Australia's Aristocrat Leisure Ltd., had a simple message for investors late in February after reporting less-than-stellar 2009 results: The slot manufacturer's turnaround is on track.

After Aristocrat posted a loss of $157.8 million for 2009-compared to a $101.2 million profit a year earlier-Odell said in an interview with Global Gaming Business that early indicators are good for what he calls the company's "three-to-five-year turnaround strategy."

"While 2009 was a challenging year, and despite positive early signs 2010 will likely be a difficult year, we expect full benefits of what we're doing to come through in 2011 and beyond," Odell said. "Our No. 1 plan is to increase participation games in the U.S., and the participation games we launched in the fourth quarter have grown our installed base significantly during the past few months."

Nick Khin, president of Aristocrat Americas, said new slot games like "Beat the Bandits" and "Jeff Foxworthy's Redneck Rumble" are leading the way in the U.S. market with strong initial placements, as well as the original version of "JAWS," the participation game based on the blockbuster 1970s movie series. "We have 1,200 JAWS units out there now, and we just released the second base game, 'Night Hunter,'" Khin said, "which we're very excited about. 'Hit the Heights,' approved a month before G2E, is very promising as well."

Odell said that while operators and investors obviously want to see the "proof in the pudding" with improved results, Aristocrat's turnaround is well on its way. "We've made a lot of progress in North America," Odell said. "We have a new platform team in Australia and a new CTO in Las Vegas (former Slovenske Loterie CEO Julius Patta), and a great and established team in the U.S. with Nick and Seamus (McGill, COO).We have a lot of work to do in Australia, and our long-term growth is challenging.

"But in our key North American market, we've made solid progress in key areas. We're looking forward to the future."

By Frank Legato   Fri, Apr 02, 2010

Manufacturer: International Game Technology
Platform: AVP; S-MLD
Format: Dual five-reel, single-line video slots
Denomination: .05, .25, 1.00
Max Bet: 12, 60
Top Award: Progressive, $100,000 or $50,000 resets; stand-alone, $10,000
Hit Frequency: Approximately 50%
Theoretical Hold: 6.5%—11%

This newest version of the ubiquitous Wheel Of Fortune brand employs many unique new features, such as a disk-shaped wheel that tilts as it spins in a top box chamber, revealing multiplier amounts on the outer edge of the disk; and a sleek, space-age cabinet design.

This version of the Wheel game is in the MultiPLAY series, offering two independent games and two unique spins of the innovative tilting wheel. It uses the MLD technology, for multi-layer display-overlapping video screens create the image of two sets of spinning reels.

Each of the two base games is single-line, five-reel slot based on popular Double Diamond game math. The game is available in nickel, quarter and dollar denominations.

With the nickel configuration, the player can play one game at five credits or both games at 10 credits up to a maximum bet of 30 credits per game, or 60 credits for both games. With the quarter and dollar configurations, the player can play one game at three credits or both games at six credits. Maximum credit-bet is six credits per game, or 12 credits for both games.

When playing only one game, the bonus feature is the same as the original three-reel, single-payline Wheel Of Fortune game. A bonus symbol on the third reel on the payline initiates a spin of the wheel. The top box wheel spins once, and when it stops, the pay aligned with the indicator is awarded and the bonus ends. When both games are played, the traditional Wheel Of Fortune bonus may initiate in the first game, but a second "Secret Spins" bonus may also initiate on the second game, awarding one of the multipliers on the outer edge of the wheel in addition to the wheel bonus. The top box wheel tilts on its axis and spins to stop on one of the multipliers, which range from 1X to as high as 31X.

By GGB Staff   Thu, Apr 01, 2010

Despite the forced closure by police of an illegal casino in Moscow recently, gaming in illegal establishments reportedly continues to thrive in Moscow, St. Petersburg and elsewhere in Russia.

In February, a BBC reporter noted that it was relatively easy to arrange a visit to an illegal casino in Moscow, and that slot arcades were readily available, if not as easily visible as before the July 2009 casino ban.

Anecdotally, some operators utilizing local area networks of computers are said to have tens of thousands of terminals in play.

Russian police colonel Oleg Bolderov of the economic crimes department told the BBC his force had conducted thousands of raids since July.

"We have closed down 70 casinos and 4,000 slot-machine arcades... and have brought 600 criminal cases against those trying to organize illegal gambling," said Bolderov.

By GGB Staff   Thu, Apr 01, 2010

Pinnacle Entertainment last month celebrated the opening of its new $375 million River City Casino near St. Louis, Missouri, with champagne, red carpets and women costumed in riverboat regalia of a bygone age. A week later, the company agreed to close the President Casino in St. Louis and relinquish the license.

About 400 guests were invited to the soft opening that included the ceremony of the executive director of the Missouri Gaming Commission officially presenting the casino with its license.

"I was in awe. It's a beautiful facility. Very well done," observed commission Chairman Jim Mathewson earlier in the week.

The Lemay casino, one of the largest in the St. Louis area, has 2,100 slot machines and 55 tables of blackjack, poker and craps. Its décor recalls the 1904 World's Fair that was held in St. Louis. A hotel may be added in a $75 million second phase. It is expected to bring in about $17 million a month in revenue.

One week later, the company agreed to close the President Casino, adjacent to Lumiere Place, and give up the license. The commission will auction the license. The company will close the old riverboat casino by July 1.

Pinnacle had fought an earlier decision by the Missouri Gaming Commission to close the casino, and even won a court decision that ordered the commission to look at it again. However, in a statement, the company's interim CEO John V. Giovenco commented, "It is in the best interests of our shareholders and our company to settle this issue. We intend to focus on maximizing shareholder value at Lumiere Place and our new River City Casino."

By GGB Staff   Thu, Apr 01, 2010

After months of speculation, the official opening date for Marina Bay Sands was announced last month. April 27 will be the day that the second integrated resort approved for Singapore five years ago will debut.

"Nearly four years ago, we embarked on a journey we believed would define the future of our company and at the same time change the face of tourism in Singapore and the South Asian region for decades to come," Las Vegas Sands Chairman and Chief Executive Officer Sheldon Adelson said in a statement. "It seems both of those ambitions are about to come true."

Originally slated to open in December 2009, construction delays kept pushing back the iconic project. Owner Las Vegas Sands blamed difficulties in its unique construction-a "one-of-a-kind" project. With 963 rooms, the $5.5 billion project will generate $1 billion a year in profits, according to Adelson. Parts of the shopping mall and convention center and several restaurant outlets will also open on the April date. The "SkyPark," a three-acre pool and recreation area perched atop the three towers of MBS, will open in June along with the remainder of the shopping center. A theater housing a production of Disney's The Lion King will open in October. A museum will open in December.

The April 27 opening will be a "soft" opening, with the gala events scheduled for June 23 to celebrate the "official" opening, along with most of the other amenities.

The opening of MBS comes more than two months after Singapore's first integrated resort, Genting's Resorts World Sentosa, debuted on February 14. Although Genting won the race to open first, some analysts believe that MBS will have the ultimate advantage.

"Given Marina Bay Sands' centralized location and possibly a higher quality product offering, Resorts World will likely see challenges in attracting casino patronage," said Deutsche Bank analyst Aun-Ling Chia in a note to clients. "Resorts World needs to ramp up fast to fully leverage on the first-mover advantage."

By GGB Staff   Thu, Apr 01, 2010

The Shakopee Mdewakanton Sioux Community of Prior Lake is financing the expansion of the Upper Sioux Community's Prairie's Edge Casino Resort.

"The Upper Sioux Community would like to thank the Shakopee Mdewakanton Sioux Community for their continued support of our nation," said Upper Sioux Community Board Chairman Kevin Jensvold. "Through your generosity and commitment to assist other tribes, our casino-hotel project can move forward, and will allow the Upper Sioux Community to better attain our financial goals, thus improving the quality of life for our nation."

The $9 million loan and $1 million grant will fund the construction of 80 new hotel rooms, 15,000 square feet of meeting and casino space and renovations to the existing casino.

The Shakopee Mdewakanton Sioux Community has a history of funding economic development projects. In 2009, the tribe issued $129 million in development funds, and this year so far the tribe has loaned $54 million.

By GGB Staff   Thu, Apr 01, 2010

Toronto businessman Paul Godfrey took over as head of the Ontario Lottery and Gaming Corp. last month after a scandal caused a complete reorganization of the company's hierarchy.

Godfrey has played many high-profile roles in Toronto, including publisher of the Sun newspaper, head of the city's metro transit agency and president of the baseball team, the Blue Jays. He is now CEO of the National Post, Canada's national newspaper.

He has vowed to rebuild the reputation of OLG, with a potential sale, as mentioned recently by Ontario Premier Dalton McGuinty, not in the cards at this point. Godfrey says it was never mentioned to him, although he's aware of the idea.

"As we go down the road I will no doubt raise those questions," he told the Daily Observer. "But I wouldn't say that's a front-burner thing you should get excited about today.

"That's a decision that the government is going to have to make. It depends on whether you want to monetize or you want to privatize-two different questions. It is something that I no doubt will look at as time goes by."

With the OLG board reconstituted-it includes Dale Lastman, son of Godfrey friend Mel Lastman; former Toronto city manager Shirley Hoy; Onex Corp. co-founder Anthony Melman; tax expert Thomas O'Brien; and accountant William Swirsky-Godfrey says he would buy the company if he had the money.

But for an organization that generates $1 billion a year for provincial schools and hospitals, a sale is a remote possibility now, according to Finance Minister Dwight Duncan.

By GGB Staff   Mon, Apr 05, 2010

Cantor Gaming, an affiliate of the global financial services firm Cantor Fitzgerald L.P., has signed a deal with the Las Vegas Hard Rock Hotel & Casino under which Cantor's mobile gaming system will give patrons access to games on hand-held devices throughout the property's designated gaming areas, including the Hard Rock Beach Club Pool and the poolside Rehab nightclub.

Cantor Gaming's mobile gaming device, eDeck, offers customers hand-held versions of various table games, video poker and slots throughout public areas of the casino property, which includes bars, restaurants and lounges, as well as by the pool. Cantor has also developed proprietary games for eDeck including XtraOdds Blackjack and XtraOdds Baccarat, with extra propositional bets that dynamically calculate odds based on the cards dealt, giving players an extra opportunity to press or hedge their bets.

"We're pleased to bring mobile gaming to the Hard Rock," said Lee Amaitis, president and CEO of Cantor Gaming. "We've had an extremely positive response to eDeck since it was first launched last March at the M Resort. The ability to play casino games away from the casino floor adds a whole new dimension to the Vegas experience, and the flexibility of mobile gaming appeals to customers who are already used to the freedom of using mobile devices in many other aspects of their lives."

By Frank Legato   Fri, Apr 02, 2010

Manufacturer: WMS Gaming
Platform: CPUNXT2
Format: Five-reel, 25-line or 40-line video slot
Denomination: .01, .05
Max Bet: 200, 480
Top Award: Progressive, $500,000 reset; stand-alone, $12,000
Hit Frequency: 25-line, 43.91%; 40-line, 49.73%
Theoretical Hold: Progressive, 13.63%—13.85%; stand-alone, 4%—14%

WMS is set to capitalize once again on the sustained popularity of its video slot based on the classic film The Wizard of Oz with this, the second "Wizard" game to be offered in the manufacturer's "Sensory Immersion" format, with high-definition video and Bose surround-sound speakers embedded in a vibrating chair to take players inside the classic movie.

The surround-sound format is exploited through a lineup of four bonus events in addition to special features in a primary five- reel video slot in 25-line or 40-line configuration. The game is available in a wide-area progressive version with a top jackpot resetting at $500,000, or in a stand-alone version with a top jackpot of $12,000.

During the primary game, at random points after a spin, Dorothy's ruby slippers appear and click together to transform from one to all five reels into wild reels, sometimes with a multiplier of up to 10X added.

Each reel has different bonus symbols identified as characters from the film-Dorothy on the first reel; Scarecrow on the second; Tin Man on the third; Cowardly Lion on the fourth; and one of three symbols on the fifth-Wicked Witch, the Wizard, or the Crystal Ball. Combinations of these symbols trigger any of four bonus events. There are 45 different ways to trigger a bonus. The bonus events:

"Bonus Respins" places a bonus character on each of the first four reels and a bonus symbol on the fifth re-spins the reels to collect more characters. "Find the Broom" has the player selecting from broom symbols to find the "Wicked Witch's Treasure." "Emerald City Free Spin Bonus" awards free games with the triggering characters enabling different features such as wild symbols, wild reels, multipliers or extra spins.

The "Crystal Ball Bonus" lights up the top box with the famous crystal ball to reveal a credit award.

By GGB Staff   Thu, Apr 01, 2010

Foxwoods Philadelphia, the troubled casino project on Philadelphia's waterfront that has teetered on the edge of losing its license after missing financing deadlines, is set to get a new leader: casino mogul Stephen Wynn (left).

Wynn Resorts, the publicly traded operator that runs the Wynn and Encore resorts in Las Vegas and Wynn Macau, announced that the company has signed a letter of intent with Philadelphia Entertainment and Development Partners LP under which an affiliate of Wynn would become manager and managing general
partner of the South Philadelphia project.

Connecticut's Mashantucket Pequot tribe, owner of the original Foxwoods resort, had been the lead investor and was set to manage the casino. Should the Pennsylvania Gaming Control Board approve the deal, Wynn Resorts would take over as manager of the casino. Wynn would also take over as majority owner, purchasing shares from each of the partners.

That takeover is by no means certain. After a presentation by Wynn of his plan, some members of the gaming board remained skeptical.  

Wynn told the regulators he would finance the casino with $250 million of his own money, and would borrow the rest through banks he has used in the past. He is proposing a $600 million casino, and said he has retained the Keating Group, which is building the other Philadelphia casino, SugarHouse, as his construction contractor. He also said he will study infrastructure improvements such as adding lanes to two streets to ease traffic flow.

Gaming board members, though, were not ready to anoint Wynn as the savior of Foxwoods Philadelphia. For one, some members object to Wynn's timeline-the operator testified he would need an extension until December 2012 to open the casino. The board already gave Foxwoods a deadline of May 2011 to open at least a temporary facility. (Wynn told the board, "We don't do temporaries.")

Some board members also expressed skepticism at Wynn's overall plan. Board member Ken Trujillo called the plan "interesting, but completely lacking and certainly not the clear and convincing evidence this board needs."

The board also kept ongoing fines in place for the project, which has already paid $186,000 for missing financing deadlines and is being charged an additional $2,000 a day until financing and construction plans are submitted.

By GGB Staff   Thu, Apr 01, 2010

The Titan King Casino opened its doors last weekend in Bavet, a town in Cambodia's Svay Rieng province, about 120 km (75 miles) from Phnom Penh. Owner Kith Thieng, whose business interests include hotels, fast food restaurants, a mobile phone operator and stakes in a bank and television station, said he wanted to help Cambodia's entertainment sector rebound after the global economic downturn. The Titan King Casino employs 6,000 people.

"Most gamblers will be Vietnamese, but my goal is also to attract people from other countries," said Kith, who some have called the "Donald Trump of Cambodia." "I want to promote the fact that Cambodia has enough places for entertainment."

Kith's casino is just outside the 75-mile exclusion area reserved for NagaCorp, which has a monopoly on casinos in and around Phnom Penh.

By GGB Staff   Thu, Apr 01, 2010

The Passamaquoddy Tribe and Penobscot Nation of Maine want to put a proposed Washington County casino on the November ballot. The proposal would compete with the non-tribal Black Bear Entertainment's efforts to bring a casino to Oxford County, already approved for a public vote.

According to Maine law, the approval of one ballot initiative enables competing measures to appear. Voters will have the option of voting for either casino or rejecting both. If neither proposal wins a majority, the one that receives at least a third of the votes will go to the next statewide election.

In 2003, voters rejected a casino in Sanford proposed by the tribes, but approved a non-Indian racino, Bangor's Hollywood Slots. In 2007, voters turned thumbs down on a Passamaquoddy racino in Washington County.

In 2008, outgoing Governor John Baldacci defeated a bill that would have allowed the Penobscots to add 400 slot machines to their bingo hall. And later that year, voters rejected a Passamaquoddy Tribe initiative for a casino near the Canadian border.

Black Bear Entertainment, a non-tribal Maine investment group, collected more than 100,000 signatures to get its proposal on the ballot. Company spokesman Peter Martin said the tribes should be forced to collect their own signatures, not piggyback on theirs.

By GGB Staff   Mon, Apr 05, 2010

Anthony Sanfilippo, the former longtime Harrah's executive who has spent the past two years as CEO of slot manufacturer Multimedia Games, has been named the new president and chief executive officer of Pinnacle Entertainment.

Sanfilippo will succeed John V. Giovenco, who has served as Pinnacle's interim chief executive officer since November, when former CEO Dan Lee resigned. Giovenco will remain a member of the Pinnacle board of directors.

Sanfilippo has 25 years of experience in the casino industry, mostly with Harrah's, where he was president of the operator's central and western divisions a well as CEO of Harrah's New Orleans. As president and CEO of Multimedia Games, he has led the manufacturer's transition from a Class II operator into a Class III contender, bringing in executives such as former Harrah's marketing chief Ginny Shanks and longtime Bally sales VP Mick Roemer.

Multimedia announced that Chief Operating Officer Patrick Ramsey will assume the additional role of interim CEO, effective immediately. Stephen Greathouse, a director since April 2009, has been named vice chairman of the board. Ramsey joined Multimedia Games in September 2008, after serving for more than six years in various executive and operational positions with Harrah's Entertainment, Inc.

"Consumers today have an ever-increasing variety of options to fulfill their demand for entertainment," Sanfilippo said of his new job at Pinnacle.

"Our priority will be to fully leverage the portfolio of quality regional gaming properties that Pinnacle possesses with a commitment to offering a worldclass guest experience in order to capture increasing share of this demand. Providing an environment that is the destination of choice for our customers and our team members alike will serve as the cornerstone for building our foundation for near-term and long-term growth."

By GGB Staff   Mon, Apr 05, 2010

Table-game supplier Shuffle Master, Inc. has agreed to settle one of two groups of class-action shareholder lawsuits for $13 million. The lawsuits, filed in 2007, alleged that Shuffle Master and certain officers had engaged in fraudulent accounting practices, including the improper recognition of revenue from inter-company inventory transfers, to mislead investors about measures being taken to improve internal accounting controls.

The shareholders alleged these practices inflated the company's fourth-quarter 2006 earnings by nearly 50 percent and its full-year 2006 earnings by more than 30 percent.

Shuffle Master, which makes card shufflers and other equipment for casinos, was also accused of misleading investors about the success of Shuffle Master's acquisition and integration of Australian slot supplier Stargames. The defendants in the suits are the company, the chief executive at the time, Mark Yoseloff, and the chief financial officer at the time, Richard Baldwin.

The defendants denied the allegations, in part claiming that the alleged misstatements concerning Shuffle Master's acquisition of Stargames were protected as "forward-looking statements." However, according to court records, the company has agreed to settle the cases for $13 million.

Attorneys for the lead plaintiffs, the City of Tulsa Municipal Employees Retirement Plan and the Oklahoma Firefighters Pension and Retirement System, said the settlement covers potentially thousands of purchasers of Shuffle Master common stock between February 1, 2006 and March 12, 2007. Shuffle Master insiders who purchased stock during this period are not eligible to receive payments from the settlement.

By GGB Staff   Thu, Apr 01, 2010

Despite record revenues over the past six months for Macau casinos, leading to a 10 percent increase for 2009 over 2008, a report in the South China Morning Post contends that the leaders of the Chinese central government are not considering any measures that could slow that explosive growth. In the past, the government has imposed visa restrictions between Macau and its most lucrative mainland markets to suppress the growth in gaming revenues and subsequent social problems that have accompanied them.

But the real reason for optimism in Macau is that the central government has signaled it will continue to stimulate the economy and not crack down on the money supply, the fuel that runs the SAR's gaming halls.

And apparently no new visa restrictions are imminent either. The dreaded cutbacks limit visits from surrounding provinces to once every two or three months, rather than once a month. 

By GGB Staff   Mon, Apr 05, 2010

Leading slot manufacturer International Game Technology last month added two casino clients for its products and systems.

The company announced that Italy's Casino di Venezia is the latest European casino to agree to install its "sbX Experience Management" server-based slot system, along with 100 video slots.

The Venice casino's new networked setup will include the sbX Floor Manager, sbX Analytics and sbX Media Manager modules along with 100 new AVP slot machines and IGT Casinolink Bonusing functionality.

"We have always been extremely satisfied with the performance of our IGT premium and standard products, and we believe sbX will be no exception," said Carlo Pagan, Casino di Venezia's CEO. "We are going to configure our new sbX-managed floor in the most prominent position of our popular new area in order to optimize our slots operations."

"Casino di Venezia plans to implement sbX in combination with a powerful strategy that IGT terms Bettor Banked," explained Ali Civile, sales director for IGT Europe.

The sbX Floor Manager module provides access to the industry's largest server-based game library of more than 100 international themes, which affords operators the control to dynamically manage their slot floors. The sbX Analytics module will provide the operator with tailored performance data; and sbX Media Manager and IGT Casinolink Bonusing, together, will facilitate improved player communications, as well as system-driven rewards.

In Asia, the company revealed that Genting's Resorts World Sentosa, which opened as Singapore's first public casino February 14, includes a significant amount of floor space occupied by IGT products.

According to the manufacturer, the 15,000-square-meter casino includes premier IGT video slot themes including Wheel Of Fortune, Star Wars, Back to the Future, Alien vs. Predator and Indiana Jones, as well as the IGT Advantage casino management system, including EZ Pay ticketing and the company's RFID Chip Inventory System.

The manufacturer and the casino will collaborate this month to bring in celebrity impersonators to plug the new themed games, including "Storm Troopers" from Star Wars, "Indiana Jones," and "Marty McFly" and "Dr. Emmett Brown" from Back to the Future.

"We worked diligently with Resorts World Sentosa to facilitate a smooth go-live. And the successful opening of Resorts World Sentosa and the partnership we created with the casino are a true testament to our team's dedication to this project," said John Gomes, managing director of IGT Asia.

And finally, WagerWorks, the U.K.-based online gaming division of IGT, announced it has signed a deal to provide its entire library of branded slot games to Parlay Games Limited, an online gaming operator based in the British dependency Alderney in the Channel Islands.

"We are extremely excited to form a new supply relationship with Parlay Games Limited," said Oliver Lofthouse, director and general manager for WagerWorks. "This collaboration means WagerWorks games can now be made available to a greater range of players in the European marketplace and we are confident our games will bring increased revenues and interest to the Parlay client sites."

Parlay officials say they will offer players access to WagerWorks' entire library while allowing for immediate access to future games at launch.

"WagerWorks is a highly regarded organization, and is well-recognized for the quality of its branded and non-branded content, and Parlay is delighted to have formalized a close working relationship," said Perry Malone, chief technology officer for Parlay.

By GGB Staff   Thu, Apr 01, 2010

One of the key measures that MGM Mirage plans to use in its return to financial health will be kicked off in the third quarter of 2010, according to Chairman and CEO James Murren. The IPO that was announced several months ago is moving along as planned, says Murren, and should be ready to go by August or September.

"I'm confident we'll get the IPO done in the third quarter, probably in the August/September time frame," Murren told a reporter with Bloomberg Television.

In addition to the paperwork necessary to launch such an IPO, MGM Mirage had to settle the outstanding issue in New Jersey, where the state Division of Gaming Enforcement had rejected Ho as a partner for MGM Mirage and recommended that the Casino Control Commission require the company to either end that relationship or withdraw from the state, where it owns 50 percent of the Borgata. The decision was clear.

A proposal it sent to the commission last month was accepted, turning the company's equity into a trust until its interest is sold.

"We have the utmost respect for the DGE but disagree with its assessment of our partner in Macau," said Murren.

The DGE report charged that Pansy Ho is unsuitable because Stanley Ho has been and allegedly still is involved with the organized crime Chinese triads, and Pansy is still inexorably linked with him. Even though Stanley Ho has never been indicted or convicted of a crime, the report cited numerous government documents claiming the connection and even quoted former MGM Mirage Chairman Terry Lanni saying "perception is reality" with regard to Ho's involvement with organized crime. Both Pansy and Stanley Ho vehemently deny the charge.

Murren also revealed that the company will seek to sell bonds between now and June in a favorable climate.

"We can work on our time frame," Murren said. "Rates are fairly attractive right now and that will push out another big part of our debt into 10-year paper, plus will give us more flexibility in the near term."

The IPO will sell shares in the Macau partnership of MGM Mirage and Pansy Ho. It follows two IPOs last year by Las Vegas Sands and Wynn Resorts that raised more than $1 billion for each company. 

By GGB Staff   Mon, Apr 05, 2010

Strategy consulting firm the Fine Point Group and the Lucky Eagle Casino, owned by the Chehalis Tribe, recently announced that they plan to expand their strategic marketing partnership. The firm has worked with the tribe since 2008.

"We could not be happier about the results we have achieved with our partners at the Fine Point Group," said John Setterstrom, general manager of Lucky Eagle.  "Who could have imagined that, in this terrible economic environment, their strategies would have helped us achieve a 32 percent revenue increase among our active customers and a 36 percent increase in their visitation?"

"It has been an honor to partner with the Chehalis Tribe, Rochester Management and Lucky Eagle,"  said Marlene Reyes, executive vice president and chief client officer of the Fine Point Group. "When you combine the world's most advanced mathematics, a deep understanding of casino operations and great teammates like we have with John and his team, you can generate extraordinary results. We are excited about our collective achievements thus far, and look forward to continuing these successes in 2010 and beyond."

The Fine Point Group has used its database marketing strategies to re-launch the casino's players club and direct mail campaigns.

"The Fine Point Group did not just design our players club-they were on-site for weeks training our associates," Setterstrom said. "And in our second year together, we are deepening that relationship even further."

By GGB Staff   Thu, Apr 01, 2010

With planned sales of apartments in a section of the Four Seasons Hotel in Macau about to get under way, some legislators are objecting to the sales.

Las Vegas Sands Chairman Sheldon Adelson told the Deutsche Bank 2010 Hospitality and Gaming Conference that company subsidiary Sands China is ready to go.

"We had a problem in the Four Seasons apartment hotel tower," he said. "The building is built and we have model rooms and are ready to sell. We have 70 reservations, but for some political reason, which leaves me unable to explain it in logical details, the Macau government won't let us sell them as condos. But they do now let us sell them as co-ops."

Adelson says the sale of the apartments will be a positive for Sands China.

"If we proceed in selling co-ops, I believe that the future and the perception of our company will change for the better, dramatically," Adelson said. "We want to sell the apartments just to players who lock in their loyalty to where they own their apartment."

But some legislators are objecting because the land was sold to Las Vegas Sands at an attractive rate.

"Venetian acquired this piece of land at an almost negligible cost," said legislator Au Kam San. "If it is allowed to go ahead with the sale of serviced apartments, which will definitely command good prices, it would be a flagrant example of profiteering."

The plan, however, was publicly revealed nearly three years ago. In October 2007, Las Vegas Sands announced that the company had planned to sell these apartments at the luxury resort to be used as vacation retreats.

By GGB Staff   Thu, Apr 01, 2010

Shareholders in SJM and his family breathed a sigh of relief last week when billionaire Stanley Ho left the Hong Kong Sanatorium and Hospital. Daughter Pansy Ho, who partnered with MGM Mirage on the MGM Grand Macau, said Ho has regained weight lost before he was hospitalized and he has been walking.

"He's in very good condition and his health has fully recovered," she told Hong Kong's Cable TV News.

Shares in SJM rose more than 5 percent as news of Ho's release from hospital spread.

By GGB Staff   Mon, Apr 05, 2010

Spielo Manufacturing and Octavian International Limited have signed a licensing agreement whereby Octavian will use Spielo’s game development kit to create games for the Italian VLT market.

Spielo, a subsidiary of Lottomatica Group, recently entered the Italian VLT market, known by its regulatory designation as Comma B6.

Spielo President and CEO Victor Duarte said, “This partnership with Octavian supports Spielo’s strategy of providing the largest and most compelling portfolio of game content in Italy.”

The games initially will be available on machines operated by Lottomatica Videolot Rete S.p.A, a wholly-owned subsidiary of Lottomatica Group and one of Italy’s largest gaming machine concessionaires.

Octavian, an international provider and integrator of networked gaming solutions, currently provides top-performing games to the Comma 6A market, the designation for the AWP market in Italy.

“Spielo’s high-tech team provides world-class platforms, and their VLT and GDK are quite advanced,” said Octavian President Peter Moffitt. “When joined with Octavian’s winning content and Comma 6A successes, the end-product will definitely have a significant impact on the new Comma 6B marketplace in Italy. We look forward to seeing a large number of our games on the Lottomatica VLT network very soon.”

Lottomatica Videolot Rete CEO Guglielmo Angelozzi said, “This agreement between Octavian, a well-known provider of proven, high-performance game content to the Italian Comma 6A market, and Spielo, a longtime leader in international VLT markets, allows a more robust and complete offering to players.”

Octavian and Spielo expect to release the first games in the second half of 2010. This is the first of several content agreements Spielo expects to announce relating to the Italian VLT market.

By GGB Staff   Mon, Apr 05, 2010

Minnesota-based system company Table Trac, Inc. announced the signing of a letter of intent to install its Casino Trac casino management systems with the two Deadwood, South Dakota, properties owned by Celebrity Casinos.

"We compared many casino systems before choosing Casino Trac from Table Trac, Inc., and we found Casino Trac to have the perfect combination of value and innovation," said Robert Nelson, president & CEO of Celebrity Casinos.

"I am delighted to announce our opening of yet another gaming jurisdiction, especially in such a beautiful and historically significant location," said Chad Hoehne, Table Trac president and CEO. "Celebrity combines gaming with attractions like its collection of rare automobiles, movie memorabilia, world class hotel suites and the historic Deadwood setting. The addition of our award-winning casino and kiosk promotional features to this unique property is a perfect complement for the patrons of the Mint casino and Celebrity casino."

By Roger Gros   Fri, Apr 02, 2010

In October, Don Marrandino was appointed president of Harrah's Eastern Division, responsible for the company's Atlantic City properties and a racino in Chester, Pennsylvania. It was something of a homecoming for Marrandino, who grew up in a neighboring town and cut his teeth on casinos in Atlantic City. He later moved to Las Vegas, where he worked for the Rio, Station Casinos, Hard Rock, Wynn Las Vegas and finally as general manager of Harrah's and the Flamingo. Known for his entertainment expertise, Marrandino's latest claim to fame was bringing Donnie and Marie to the Flamingo, where their show has been a smashing success. In Atlantic City, Marrandino confronts a shrinking market with even more competition arriving daily. He spoke with Global Gaming Business Publisher Roger Gros at his offices in Atlantic City in December. To hear a podcast of the interview, go to www.ggbnews.com/podcasts.

GGB: What is your impression of the overall climate of the city since you've been here for a few months?

Marrandino: The great thing is we've established a rapport with the mayor and a lot of leaders in the community and businesses. We've formed a committee, and everyone agrees we really need to change the way we do business here. We need to do a lot of things to fix up Atlantic City and get on equal footing to Las Vegas in a lot of different ways. I think everybody agrees with that. The environment feels pretty positive. Anytime you have a problem, the hardest thing is to admit it, right? I think we all agree on a lot of the same problems that we have. And the great news is they're fixable.

Do you think Atlantic City needs to become very quickly the destination resort it has aspired to be for years?

Yes. The one thing we need to understand, too, is instead of saying, "Woe is me and there's all this competition," we're still the second-largest gaming economy in the country. We also need to realize that one-third of the country's population can get here within an afternoon's drive. That's another good thing. I've worked in environments where that wasn't the case.

On a positive note, we have the train service ACES coming from New York and back and forth to Atlantic City. I'm also really feeling optimistic about the airport, the Atlantic City International Airport. That airport looks to be doing some pretty brisk business in certain areas-Atlanta, Boston, Toronto and some flights to Florida. It's amazing how good of a service it is. You're only on the tarmac seven minutes in Atlantic City. I've flown, unfortunately, a lot of out of Philadelphia lately, and the average time is 34 minutes.

In Vegas, you used entertainment to turn around Harrah's and Flamingo. Obviously, you can't have the resident acts like you did in Vegas, but how do you want to use entertainment to get more attention to Atlantic City?

Harrah's did quite well forever. We just added to that. I think entertainment is the most important thing that we can do here, in that it speaks to people who wouldn't normally come to the city.

Every time there's an event at Boardwalk Hall that sells out 14,000 seats, it brings an excitement to the entire city. Will we see more boxing events like those that drove the market in the 1980s and '90s?

Absolutely. Unfortunately, there's not many great boxing events now, but Atlantic City used to own them. Hopefully boxing has not become a secondary, tertiary sport.

Unfortunately, we haven't had UFC. I think Atlantic City would be a great place for it.

Do you believe it's the non-gaming amenities that are really going to make Atlantic City stand out, now that everybody's got gambling in every state surrounding the town?

It has to be.

One of our problems has been you can never get a hotel room on a Saturday night. Well, you can now. We're making sure that we're pricing our rooms for the people who want to buy them. We've priced our restaurants here in the city for comps, not for cash people. We need to change that. We need to add more entertainment to people who are not necessarily just gamers. We're doing that. We need to get the Boardwalk Hall to be a flourishing concert venue. It hasn't been, and it needs to be. When we can get 14,000 people here-the bartenders, the waiters, the busboys, you name it-we all make money. Not just the casinos. Everything that I've said since I've been here has been talking about the city, not talking about our properties. If the city doesn't prosper, it's not going to be a great story. I think that's what we're really preaching.

What does it mean for you to be coming back here? You started your career here and spent so many years in Vegas being successful at different companies, and you're coming back here to revive the fortunes of the company you work for. Is that important to you?

That's a bit overstated, but I think there's an opportunity. If I was a football coach, and somebody said, "Hey, Belichick's retiring, do you want to go coach New England?" I don't think I'd be too psyched about going to New England, because if I lost five games, I'd be a bum.

My dear friend (Penn National Gaming President) Tim Wilmott recently made the comment about the "death spiral of Atlantic City." Well, wouldn't it be nice to have him come up and say, "Wow. You guys did a great job?"

Our team's focused on it. There's going to be hard times in the near future. The Pennsylvania table games will really be a body shot to our table-game employees here. I think it's important that we all work together. We're going to keep swinging really hard.

By Frank Legato   Fri, Apr 02, 2010

A few years ago, slot manufacturer Casino Technology began branching out from its home base of Sofia, Bulgaria, on a quest to become a well-known force in the worldwide gaming industry.

With a little help from a strong reaction to last year's sudden loss of two of the respected manufacturer's key markets in Russia and Ukraine, those efforts have been accelerated, with Casino Technology product well-received in Central and Western Europe, and in several markets in South America and Southeast Asia.

North America is next, as the Bulgarian slot market leader stands ready to spread its innovative games across Native American markets in the U.S.-with this month's NIGA show as a springboard of sorts.

Casino Technology is wrapping up a year-long celebration of its 10th anniversary as a company. While the first part of that decade was spent building up the company's leading position in Eastern Europe, the last five years have been years of expansion, the success of which is a testament to what has been a sustained burst of creativity from the company's research and development team.

Over the past few years, the company has launched a parade of innovative platforms, cabinets and game groups. The first two launches constituted a complete revamping of the way Casino Technology's games look and play. The Gemini Sensa Plus cabinet comes loaded for the future, with dual 22-inch, wide-angle monitors, "sound enclosure" speakers and ergonomic design including specially placed buttons to maximize player comfort.

For operators, Gemini Sensa Plus offers "Eyesight," a multimedia application window featuring a 10-inch touch-screen monitor for use in networked applications by the casino-promotion functions, special games as player rewards, player tracking, etc. It also is tech-friendly, with inner workings designed for trouble-free maintenance and the "Tough Ryder" platform, featuring a user-friendly push-out mechanism and front-panel diagnostic LED display.

Launched along with Gemini Sensa Plus was Tangra Touch, a slant-top cabinet featuring the same advantages as the Sensa Plus upright.

The timing of the two new products couldn't have been better. Trade shows, word-of-mouth in the industry and a concerted sales effort have spread Casino Technology's name and reputation to new markets around the world, and updated, innovative technology is precisely what is being sought in those markets.

"Gemini Sensa Plus and Tangra Touch respond to the newest trends in the industry," says Sonia Nikolova, the company's sales and marketing director. "Both employ many enhanced features, modern technology, ease of maintenance, ergonomic and space-efficient construction, and great design. Most of the changes we have made to the platforms have been implemented to enhance player comfort and operator needs."

PRO Performance
The talk of 2010 for Casino Technology is a new product group that was an unqualified hit with operators at the recent International Gaming Expo in London. Called the PRO Series ("PRO" for "Progressive"), the new line of 25-line, 50-line and 100-line video slots features a common multi-level mystery progressive jackpot system and a boatload of special bonus features. The new Pro Jackpot feature triggers a winning  combination that can lead to several internal progressive jackpot  levels.

Individual games like "Gourmet de Paris," "African Moon" and "Hello Galapagos" have unique features outside of the mystery progressive jackpots. For instance, certain combinations will trigger a random "screen fill" feature in which the entire game screen fills with the same symbol, giving the player big credit wins on all the paylines. Some of the games also feature a "Super Free Games" round in which only the highest-paying symbols appear.

"The underlying concept is to offer groups of themed video slots with the same general theme, featuring the same jackpot symbol, available in the different games," explains Nikolova. "Those machines are linked to a mystery progressive system, which is visualized on the original jackpot displays with themed video streaming and celebration events, corresponding to the main theme of the group."

The PRO Jackpot feature occurs randomly on any machine of a linked bank-a jackpot controller feeds the top combination to one of the machines, leading to one of four incrementing progressive jackpots. Operators also can implement the PRO Jackpot as a stand-alone feature on any of the games in the series.

The mystery jackpot system also will allow the connection of base games from any other manufacturer, through a special interface controller. The four jackpot levels are operator-configurable.

"PRO Series was launched recently with the intention to employ the original design, which provides unique branding for this series, and at the same time recognizable and familiar themes for clients," Nikolova says.

One of the first themes in the series to hit U.S. casinos will be "Motormania." The common multi-level jackpot system in this product features a racing theme involving motorcycles, cars and off-road trucks, all presented in quality 3D animation. More than 20 new video slots will be placed in the Motormania theme, including appropriately themed games like "Born To Ride," "Monster Wheels," "Princess of Speed" and "Desert Kings."

According to Nikolova, the variety of slots provided with the Motormania system will all feature a common thread of some kind of racing. "This provides the players a quick and easy way to move to the next game," she says, "as they are already familiar with the theme and how to play the game. This allows them to feel more comfortable switching games and enjoying the theme variety. At the same time, the exclusive 3D graphics bring new dimensions of entertainment to keep players' attention longer. The newest video slots linked to Motormania will provide a community feel.

"The interaction with the games is provided through the additional bonus feature of the jackpot, where the player enters an additional bonus and plays for the jackpot levels-Lead, Bronze, Silver or Gold."

She adds that the graphics are designed to reflect a game style akin to home video games in quality and entertainment value. "Motormania was created to complement the linked base games, and enhance the sensation of the main game through lavish graphics and sounds," she says.

In all, it is a new direction in entertainment-based bonusing for Casino Technology, with feature-rich bonuses added to the strong program math for which the company has been known for years. "The classic casino game, with a more and more refined math model, stays at the center of the system, remaining true to the preferences of more conservative players," says Nikolova, "but at the same time it's been enriched with more interaction, appeal and multi-functionality."

U.S. Success
Nikolova says Casino Technology executives hope the Motormania product, and the PRO Series in general, will give the company the kind of momentum in U.S. Native American markets that the company has enjoyed in markets like those in South America.

"Our products have a well-established presence in South America, where we have had a presence for five years," she says. "The products of Casino Technology are very well accepted, and a lot of operators trust the quality and performance of our products in Peru, Venezuela, Panama, Colombia, Mexico, Argentina and other countries. For the U.S. market, we hope to achieve the same success among the Indian operators."

She adds that many Native American operators in the U.S. will also be getting their first look at the Gemini Sensa Plus and Tangra Touch platforms at the NIGA show, where she expects the same positive acceptance of the products as in Europe.

If the past is any indication, that assessment is likely right on the money. Casino Technology's products have crossed over successfully to new jurisdictions around the world. "We have never relied on one specific market or region," Nikolova says. "We are very proud that our products prove to be capable and well-accepted around the world. We have been working for a long time to build good and quality products with brand recognition and solid reputation. We hope we will achieve the same in Native American jurisdictions, as we know the opportunities this market provides."

The company is certainly not done with its expansion efforts in other parts of the world. Casino Technology products are finding success in new Western European markets including Italy, Switzerland and Portugal, as well as new markets in Asia, growing sales in South America and of course, continuing domination in the company's Eastern European home market. 

The U.S., though, is the next big frontier for Casino Technology.

"For us, the U.S. market provides a great opportunity for creativity, meeting the requirements of one of the most well-developed player bases in the gaming business by trying to take into consideration the trends and player preferences typical for this market," say Nikolova. "We think the advanced and serious players always accept any smart option or feature of a game that brings excitement and prizes. That is why we are convinced that the concept of our PRO Series will be very successful in this market."

By Frank Legato   Fri, Apr 02, 2010

In the course of the usual exhaustive research that goes into writing this column (hey, it took me nearly an hour this month), I came across a column by the Philadelphia Inquirer's architecture critic, Inga Saffron, who had some good advice for one Stephen Wynn, should Wynn succeed in his quest to take over the Foxwoods Philadelphia casino project and make it his own.

Saffron claims most of Pennsylvania's casinos employ the architectural principle known as "decorated shed," and she implored Wynn to avoid throwing up a Sam's Club with neon signs and slot machines. She said Wynn should look at "Civic Vision," the plan for the Philadelphia waterfront that was drawn up by PennPraxis, a consulting firm employed by Mayor Michael Nutter back when he was dead-set against any casinos on the waterfront-which, amazingly, concluded that there should be no casinos on the waterfront.

This all begs an obvious question:

How do you become an "architecture critic?" Does the entire job involve looking at architecture and saying, "It stinks!?"

Does it pay well? Does every major metropolitan newspaper have an architecture critic? Editor-in-Chief, Managing Editor, Copy Editor, Architecture Critic?

Wait, that's not the obvious question. The obvious question is whether or not the writer has looked at what Wynn has done in the past. As our own Roger Gros told her in an interview, "he does it better than anyone else."

Wynn has never done anything that fit into the pack of properties in any market. Whatever he does is going to be different than anything else.

Still, I have to admit that a Sam's Club with a casino sounds like a heck of an idea. You could save money, and then dump it into a slot machine. And then you could go see something historic in Philadelphia.

Or in Gettysburg.

Yes, my old boss, Dave LeVan, is engaged in another effort to get a casino approved near Gettysburg.

(He is my old boss, you know. I worked for Conrail in one of my past incarnations, writing briefs for the arbitration section when Dave was chairman of the company. I used to write stuff like "notwithstanding the foregoing," "non adimpleti contractus" and "non compus mentus doofus." And a lot of other stuff that's way too long to put in parentheses.)

LeVan, if you recall, spent much of 2006 locked in battle with Susan Star Paddock, who created a group called No Casino Gettysburg, which was credited by some for convincing gaming board members that putting LeVan's Crossroads casino half a mile from the Gettysburg battlefield was just this side of putting a brothel at the Vatican.

His new project would put a resort-class casino in the Eisenhower Inn, to be called the Mason Dixon Resort. Pennsylvania Governor Ed Rendell, a friend of LeVan, said last month that this idea's better than Crossroads, because it's farther from the battlefield. Of course, it's only about half a mile farther from the battlefield. No Casino Gettysburg is already lighting the torches and calling the bürgermeister.

Creating a resort-class casino means adding a maximum of 600 slots and 75 tables to an existing hotel. It's supposed to be a low-key affair, but LeVan's newest battle of Gettysburg promises to be anything but low-key. He had to remove the word "Gettysburg" from the name of his first project in 2006, and likewise, this one isn't supposed to have anything that banks on the name of the historic battle.

But isn't that pretty much what "Mason Dixon" does? Doesn't it give me an excuse to roll out all my old, bad jokes about a Gettysburg casino again? Like, how it should have cocktail servers in tight-fitting blue and gray outfits? And F&B outlets like the Rebel Yell Bar & Grille, Hooker & Meade's Cantina and Bobby Lee's Bagels?

(Actually, Bobby Lee's Bagels is a new one.)

One may think that the chances of the Mason Dixon casino landing a license is roughly the same as Pickett had with his charge. However, there is one factor that could turn the tide: jobs. There are a lot more people out of work now than there were in 2006, and that could be a big factor in bringing people over to LeVan's side.

Still, there will be no convincing the opposition of that. They're dug in like the First Rhode Island at Little Round Top.

Hey, I just remembered another one: The Little Round Top Steakhouse. Fresh round is the only cut they use. Just don't eat it if it's blue or gray.

Maybe they should call the casino Wynn Gettysburg. At least the place would be well-designed.

By Jeffrey Lowenhar and Andrea Jones   Fri, Apr 02, 2010

We've all noticed it. Fewer customers and smaller spend. So what do you do about the often-complex and multi-faceted question of why customers (often very good ones) simply disappear?

Over the last 20 years, the dramatic expansion of legalized gaming in the United States and beyond combined with extraordinary advances in technology has allowed casino (and casino-hotel) operators to dig deep into the world of consumer behavior activity on the casino floor.

Both holding onto and expanding the marketplace for customers at your property or properties are at the heart of the retail and casino marketing mission. So why do once active "good customers" disappear? What are the myriad reasons? And if we can identify the reasons, can we fix the situation? A continuing challenge for operators, all the more so as most gaming markets are experiencing tough economic times.

Defining Inactive Customers
Over a number of years and a number of research projects completed by Gaming Research, Inc., it is clear that what may or may not constitute "inactivity" depends upon a number of critical factors. For example:

• Whether a particular legalized casino (or even riverboat) is catering to a local, regional or tourist-driven marketplace.   

• Depending upon level of player worth (ADT), different definitions of time and inactivity are often put in place.

• Adding more complexity to the question, the demographic-behavioral correlates of gender, age, distance, historical frequency and favorite game type need to be part of the definition as well.

The question of real vs. imagined inactivity demands a detailed micro-level analysis of the existing database, at the individual property level as well as across property(s) levels for entities in multiple jurisdictions. This is not an easy task, but necessary if one is to understand inactivity, which is always defined by the relationship of frequency vs. recency and combines both art and science.

In the final analysis, defining inactivity in a local casino in Las Vegas vs. inactivity in a local casino in Chicagoland or inactivity in a quasi-destination market like Atlantic City or the ultimate destination markets of Las Vegas or Macau is a formidable challenge.

This is the heart of the matter. What is critical here is the application of a scientific approach to both the sampling plan and survey construction to be used in understanding marketplace behavior.

In the context of investigating marketplace dynamics (changes over time from active to inactive), there are two important and related ideas.

First and foremost, within any defined market there is a "natural" exogenous impact on patron activity-those things not in the control of an operator which impact individual and ultimately marketplace
behavior.

So, part of the research findings center around such exogenous (external) factors as money and credit available, changes in geography, changes in wealth, changes in health, changes in employment or possibly even changes in family life cycle. All of these areas can be "scored" and evaluated in the context of an organization's specific market definition.

Furthermore, the "big picture" level this analysis, if done correctly, offers senior management what might be called the "natural marketplace" behavior that always occurs, whether in local, regional or tourist-driven markets.

Finding the Answers
Research has identified reasons once active, good customers simply disappear. The key for all operators (large and small) is to separate the natural market displacement that occurs (external factors) from the critical marketplace competitive forces that moved some of your customer base (by segment) to the competition. The following questions are critical, and can only be answered by an effective (and often ongoing) research commitment: 

• Why have some of your patrons migrated to the competition? What have we done wrong? What do we have to do to win some of these patrons back? What are the financial implications for putting in place a separate marketing plan for attacking our lapsed patrons?   

• All of the above and more needs to be analyzed by the critical correlates of demographics and behavior: Is the problem (challenge) similar across all segments or is it a female vs. male issue? Or possibly a question of age appeal? Or is it the need to simply change first-favorite status-the whole question of "boredom?"

• Lastly of course, a question most operators pay lip service to: the global issue of customer service. Is it relentlessly improving, staying the same or declining on the 50-60-plus service elements that patrons always experience during a visit?

So, once the research is completed-usually a six-week task once started-the hard part is follow-through. This requires a SWAT-team concept to put in place and sometimes revitalize commitments once thought to be impervious to competitive attack.

It also means that to win some of these patrons back (after all, divorce in the casino world is often forever), the blame game should be absolutely prohibited. Listening and learning why once-active good patrons leave is the beginning of a multi-step program to patron redemption.

By Frank Fantini   Fri, Apr 02, 2010

The stocks of gaming equipment suppliers, especially the Big Three slot- makers, could be in for a ride over the next several years.

They have two things going for them right now:

1.  they're cheap compared to most casino operators and against overall fundamental
   measures; and  
2. they have the chance to ride the waves of gaming expansion and the inevitable replacement cycle.
   

Let's look at valuations first.

Three of our favorite measures appear below with figures from the time of this writing and might have changed some when you read this.

They are price to earnings, price to earnings growth and enterprise value to EBITDA.

Price to earnings, or PE ratios, of 14-16 times expecting earnings are in the middle of the ballpark, or even a bit conservative. The S&P 500 PE, for example, has been running around 22 times.

Of course, PE is valuable only if measured against growth. After all, a company with a 15 PE is overvalued if its earnings are only growing 3 percent, or not growing at all.

That is where price to earnings grow-PEG ratio-comes in. Any ratio under 1 means earnings are expected to grow faster than the stock is currently priced.

By the PEG measure, Bally, Shuffle Master and WMS are undervalued, and IGT is in a comfortable range for investors.

Finally, there is enterprise value to EBITDA. Put another way, this is the stock market value of the stock plus its net debt compared to cash flow. In this measure, Bally is inexpensive, IGT and Shuffle Master are OK, and Multimedia Games is dirt cheap.

But the point is clear: Bally, IGT and WMS have low PEs, and for Bally and WMS especially relative to their growth.

Put all together, and the Big Three slot makers-Bally, IGT and WMS-are attractively valued even in normal times. But they are especially so now, before consumer spending turns up and begins driving up their recurring-revenue games and before casinos begin their next round of slot purchases.

Then there is the absolute growth in orders that slot companies can expect. Consider the new markets coming on and their significant size:

Italy: Nearly 60,000 VLTs
Mexico: 50,000 Class III slots
Brazil: 100,000 slots initially and maybe  250,000 over time
Ohio: 20,000 slots; 37,000 if racetracks get slots, more if bowling alleys do
Illinois: 20,000 to 50,000 depending on the estimate
     
And those numbers do not count smaller but certain new markets such as Kansas and Maryland, or growing existing markets such as California, Oklahoma and Pennsylvania. Nor do they count other possible markets like Kentucky, Massachusetts and New Hampshire. Nor do they count all the individual casinos being built in Las Vegas, Macau and various Latin American countries.

Then there is that North American replacement cycle, whose absence has been so frustrating but by which every day's delay means more pent-up demand on an ever-bigger base.

A lot of things will drive the replacement cycle. There is the need for casinos to remain competitive. Rapidly changing technology is profoundly changing the slot machine experience. It isn't just graphics and sound effects or even bonus rounds. It's now community gaming, mystery jackpots, application of player skill, sensory technology, 3-D-all that makes old-fashioned slots look like Tin Lizzies next to a Lamborghini.

And technology will help players spend more money in the casino, such as by allowing customized promotions right at the machine. And technology will help casinos spend less, such as in using less electricity.

But the sheer power of the replacement cycle comes in the size of the installed base of slot machines in North America.

There are more than 900,000 slot machines in North America, a number that is steadily growing. Yet replacement sales last year totaled only 40,000 units. That implies a life for each slot machine of more than 22 years. Slot machines simply aren't built to last that long.

Even if they were replaced at the rate of one every 10 years, replacement sales would more than double.

So far, the cycle has not kicked in. It always seems to be six months off until that six months passes, then it's said to be another six months.

And so it is this year, with a pickup now forecast to begin slowly in the second half of 2010.

But when the cycle does kick in, it could do so with a fury, given the pent-up demand.

By Frank Fahrenkopf   Thu, Apr 01, 2010

In February, the American Psychiatric Society made headlines when it announced proposed changes to its encyclopedia of mental illness, the Diagnostic and Statistical Manual of Mental Disorders, or DSM.

The DSM-arguably one of a clinician's most important tools-dictates the diagnosis and treatment of thousands of mental illnesses, from adjustment disorders to sleep disorders. Changes to the manual influence not only the field of psychiatry, but also have profound implications for the academic, pharmaceutical and legal communities.

But how do changes to the DSM affect our industry? Essentially, the proposed revisions include adjustments to the way pathological gambling is labeled, classified and diagnosed.

Most lay people consider pathological gambling to be an addiction-one that is characterized by compulsive or out-of-control behavior. However, the clinical definition of pathological gambling is far more nuanced.

Among the most important proposed adjustments to the definition is a change in nomenclature. In the DSM-V, the term "pathological gambling" would be replaced with "disordered gambling," a less pejorative label that is more consistent with how other mental illnesses are listed in the manual.

Also, once considered an impulse-control disorder, the condition would be moved to a new classification, Addiction and Related Disorders, along with drug and alcohol addiction, among others. The new classification would include a separate category called "Behavioral Addictions." Because it is a substance-less addiction, disordered gambling would be the sole condition within that category.

Disordered gambling was first recognized in the DSM-III, which was published in 1980. Unfortunately, the initial diagnostic code for the condition primarily was based on the observations and experiences of a few psychiatrists, rather than on empirical research. The definition included in the subsequent edition, DSM-IV, was an improvement upon the original version, though many researchers and clinicians still consider it to be flawed.

Specifically, many have long questioned the DSM-IV classification of disordered gambling as an impulse-control disorder, a label that does not seem to fit. For example, individuals with traditional impulse-control disorders-such as kleptomania or pyromania-do not gain pleasure from the activity in question. Rather, they are overwhelmed by an impulse to act and feel a sense of relief after doing so. This is not the case with disordered gamblers, who enjoy gambling and typically experience distress only afterwards.

And contrary to the DSM-IV definition, disordered gambling is not typically a "persistent and recurrent" condition. Rather, treatment providers have found that individuals with the condition tend to fluctuate between varying states of health and addiction.

Since the DSM-IV was published, the field of gambling research has grown exponentially, and the scientific community's comprehension of disordered gambling has increased by leaps and bounds. In recent years, we have learned a great deal more about both the nature and prevalence of disordered gambling.

For example, research clearly demonstrates that, despite the exponential growth of the gaming industry during the past 30 years, the prevalence rate of pathological gambling has held steady. Approximately 1 percent of the population suffers from pathological gambling, and an additional 2 percent have problems gambling.

A growing body of evidence also indicates that people with gambling disorders most closely resemble alcoholics-as opposed to kleptomaniacs or pyromaniacs-in both internal and external manifestations of the condition.

In fact, research suggests that all addictive behaviors are part of a larger addiction syndrome. As such, individuals with addiction tend to share certain neurobiological and genetic factors that may predispose them to the illness. We also have learned that people who struggle with gambling problems tend to have other psychological problems, or other addictions, as well.

Similarly, research has found that things-such as food, the internet or even slot machines-are not inherently addictive. Instead, addiction is widely understood to be a relationship between a vulnerable person and the object of his or her addiction. Vulnerabilities might include psychological problems, social problems or an inherited neurobiological disorder.

Many of these research breakthroughs have been made possible by contributions from the gaming industry.

Our support of the National Center for Responsible Gaming-which has infused millions of dollars into this crucial field of study-has revolutionized the way the condition is identified, prevented and treated. And, in turn, research has informed our industry's approach to responsible gaming.

To those familiar with the gambling research field, the proposed revisions to the DSM are hardly surprising; in fact, they are expected. Quite simply, they are evidence of the great strides researchers have made during recent years-progress encouraged by the gaming industry.

And yet, some gaming opponents-always eager for an opportunity to attack-have suggested that the proposed changes somehow reflect poorly on our industry. In fact, in a recent interview with the Washington Times, a gaming critic falsely claimed that the DSM revisions impeach our industry's contention that disordered gambling is a personal weakness, rather than a legitimate psychiatric condition.

Such an assertion has absolutely no basis in fact. Instead, it reflects a deep misunderstanding about both the gaming industry's stance on this issue and its substantial contributions to the field of gambling research. Our industry has never claimed that disordered gambling is an illegitimate condition. In fact, as anyone with even a superficial grasp of this issue would agree, the changes to the DSM definition of disordered gambling are, in many ways, a direct result of research funded by our industry.

Disordered gambling is an issue the gaming industry takes very seriously-one in which we have invested considerable resources and attention. Therefore, we will continue to closely monitor the development of the DSM-V. In the meantime, however, we must be prepared to vigilantly deflect whatever unfounded criticism comes our way.

The proposed changes to the DSM do not diminish our dedication to this issue; on the contrary, they only strengthen it.

By Roger Gros   Thu, Apr 01, 2010

They say that if you notice the umpire or referee at a sporting event doing his job, he's not doing it very well. That's almost comparable to the gaming regulator. Except that if you notice the regulator doing his job, you are usually doing your job wrong.

Regulators are the umpires and referees of gaming. They usually go about their business and you don't notice them because you are abiding by all the rules and regulations set down in the statute. You rarely hear a peep out of the regulators unless something is going wrong.

The one exception to that rule occurs every March in Las Vegas at the GLI Regulators Roundtable. And this year was no different. They get together to discuss the issues facing regulators and how they each approach them.

There is no blueprint for regulators. A system in one state is usually only good for that one state. New jurisdictions setting up regulations are wise to examine many regulatory models and pick and choose options that fit their particular situation.

Regulators are critical to the success of the gaming industry. For the business to thrive, regulators must be on the job and be diligent. They safeguard the integrity of the games and the gaming operation. They ensure that players get a fair shake and that investors can entrust their money to gaming companies in good faith.

Of course, the genesis of the gaming industry-at least in the United States-was with organized crime. That's one reason regulators are so important. The cleansing of the gaming industry took several decades, and was only fully accomplished after gaming expanded outside Nevada to other states where there was zero tolerance for organized crime involvement. But the perception remains in all gaming jurisdictions, so regulators remain the first line of defense in battling this old saw.

But today, as demonstrated at the GLI Roundtable, many challenges remain. The international expansion of the gaming industry makes licensing that much more difficult. New Jersey's rejection (as opposed to the approval of Nevada and Mississippi) of the partnership of Pansy Ho and MGM Mirage is one case in point. While regulations and procedures are different from state to state, should each jurisdiction hold its licensees to disparate standards? Is there a different definition of "integrity" in different jurisdictions?

Another challenge is the rapidly changing financial structure of the gaming industry. From the entry of private-equity companies as owners to the takeover of casinos in default by lending institutions, these are situations that often were not envisioned by the framers of any state regulations. Institutions that never considered being actual owners of casinos are now being forced to take over to avoid losing their entire investment. How do regulators handle the licensing requirements?

And then there is rapidly developing technology and its impact on gaming. At the GLI conference, there were sessions describing hybrid games, facsimile machines, technological aids, server-based gaming and even internet gaming in a few states considering the online betting systems. For cash-strapped states, gaming regulatory agencies are usually not at the top of the priority list when it comes to precious dollars. So regulators must do more with less.

But of course, just as the financial support of the state declines, the problems increase. For tribal gaming operations, the constant battle with the National Indian Gaming Commission is on hold while new commissioners take over. Acting Chairman George Skibine has only a couple months left on his "acting" title, and we've already got two new commissioners.

In Pennsylvania, the industry is booming while the unilateral approach of the gaming commission continues to be criticized. New Jersey is under pressure to reduce the size of its two agencies as gaming revenues continue to freefall. The same is true in Nevada.

A new Casino Control Board in Singapore has drawn a bright line in the regulations on what is acceptable and what is not. Some Asian nations are struggling just to keep up with gaming regulations as the industry booms.

And in Bulgaria, a regulator claims one casino chain has "thousands" of violations. We're left to wonder whether it's more surprising that those violations exist or that a regulator used a public forum to call attention to it.

Yes, regulation is a thankless job in most cases. It's kind of like the umpire in baseball who can make thousands of calls and no one notices, but one questionable call and everyone yells "kill the ump!"

You just can't win.