By Frank Legato   Tue, Feb 05, 2008

IGT has maintained its lion’s share of the market for slot machines by continuously pumping millions into research and development. The slot leader has rarely found itself behind the technology curve as a result, and typically has dozens of major new releases in every slot genre, every year.
   
Here are five of this year’s new games that IGT officials consider to be among their strongest.

1. Indiana Jones and the Last Crusade is the introduction of “PureDepth,” a video technology licensed by IGT that provides a perfect solution for the problem of placing reel-spinners in downloadable, server-based systems. PureDepth places two overlapping LCD panels on a common light source, to create what the company calls MLD, for multi-level display. It provides a perfect illusion of spinning reels in a video image. Used in bonus rounds, the technique results in a true 3D effect.
   
The game itself is a 20-line, 200-credit slot with a 20-stop wheel in the top box for bonus rounds. The LCD screen incorporates 88 movie clips, which play after each win consecutively, eventually forming a sequence of the entire movie.

2. eBay is one of IGT’s new “community play” games. Five video slots in sleek cabinets are linked to a computer server, which controls a random, common bonus round. Players wager more to achieve increases in a bonus multiplier during their primary game, and each spin qualifies them for the bonus round for eight seconds (continuous play ensures bonus qualification). A random trigger causes all eligible machines to enter the bonus round at once—it is a free-spin round on a giant overhead display comprised of five individual 40-inch video “reels.”
   
Two base games are themed according to aspects of the famous auction website. They are a 25-line game called “Collectibles” and a “MultiWay” game (reels purchased instead of paylines) called “Fashions.”

3. Wheel Poker is a standard multi-game video poker unit, offering Triple Play and Five Play versions of all the most popular video poker games, but incorporating a “Wheel of Fortune”-style wheel on the top, with spaces for bonus awards ranging from 150 credits to 2,000 credits. After wagering the maximum five credits for each hand in the Triple Play or Five Play setup, the player can opt to wager an additional credit on any or all of the played hands for an equal number of chances at the Wheel Poker bonus.
   
With the ante wager made, any time the player lands a natural four-of-a-kind—either on the deal or the draw—on that played hand, the wheel spins for a guaranteed bonus amount. A “spin” button appears on the center hand, and the player presses it to spin the bonus wheel. The bonus is an added-value feature that does not affect the payback percentage, regardless of the pay schedule used.

4. Wheel of Fortune Super Spin/Five-Player is a five-player version of “Wheel of Fortune Super Spin.” Two years ago, IGT broke new ground with the original nine-player “Super Spin” version of its venerable Wheel of Fortune game. In that version, players sit at individual stations surrounding a horizontal wheel, and the games are timed so several  people go into the bonus round at once. This year, IGT brings the same concept to market in a version that requires less floor space, and which can actually be placed against a wall. On this version, the five play stations are in a line in front of a giant vertical wheel—the top half of the wheel can be seen over the bank, and each player’s terminal is assigned a color corresponding to an arrow on the wheel.

5. Star Wars MLP is a multi-level progressive slot, and another “community play” game in which individual machines—each shaped like the “R2D2” robot from the Star Wars films—are linked to a common bonus round.
   
Players make a side bet in the primary game that lets them accumulate points with certain symbols, and then everyone goes into the progressive bonus game at once—it happens every 10 minutes. Eligible players are each assigned a “Speeder bike” similar to the one in films, and they race on the overhead screen (and on each individual video screen) for one of the various jackpot levels.

By Roger Gros   Tue, Feb 05, 2008

For a company that’s been around for more than 25 years, International Game Technology is finally growing into its name.

Chairman TJ Matthews joined the company in late 2001, when IGT completed the purchase of Matthews’ former company, Anchor Gaming. It’s been nothing but growth since.

“We’re about triple the size we were six years ago,” he explains. “And that is not just on revenues; it’s in all the endeavors of the company—things like the technology initiatives and reinvestment in the company is so much more than times past. Also in the past five years, IGT has become more international and much more technological. So internally, we say the ‘I’ and the ‘T’ have become much bigger parts of IGT.”

Matthews joined the company as chief operating officer and later was appointed CEO in 2003. His role as chairman commenced in March 2005.

Joining Matthews at the top of the company in 2005 was Steve Morro, who currently serves as COO. Unlike Matthews, Morro is a home-grown executive, serving in many capacities since joining IGT in 1988.

The two have transformed a company that has long been the market leader, but sometimes lacked direction. Morro, who understands both the “old” IGT and the new regime, explains how that helps him.

“In the early ‘90s I thought we were becoming too big to be nimble, and we’re larger now exponentially since that point,” he says. “That’s one of the things we have to work on as we grow. We need to stay in touch with our roots as a small, Reno-based technology company.”

Technological Wonders - While IGT achieved success by creating innovative games and delivery systems, it is today known for its technological savvy. Morro says that kind of innovation is just beginning to ramp up for 2008.

“We have a full list of ‘firsts’ that we’re bringing to the market this year,” he says. “Our innovative game-play or group-play features. The multi-layer displays that we have in the Indiana Jones machines were one of the big hits of the G2E show. It really makes video look three-dimensional, with the look and feel of spinning reels. We have a round-top LCD machine. We upgraded our investment in table games with the Digideal and multi-player stations.

“But the big technology initiative involved sb gaming (server-based gaming). We’re doing some of this on our own and some in conjunction with Jay Walker and Walker Digital.”
Matthews agrees that the future of IGT lies in its technology innovations and that sb is poised to become the company’s “franchise” product in that realm.

“Server-based gaming is going to have the functionality that brings games and applications directly to a patron,” he says. “At some point, we’re going to wonder how we ever lived without it.”

IGT puts its money where its mouth is when it comes to technology, according to Matthews.
“We’ll spend something north of $200 million on R&D this year,” he says, “not only to bring the complete product line along, but also branding technology that you see in sb, MLD (multi-layer displays), LCDs, re-writable cards and other things that are indications that we’re going to continue to lead the industry in new technology.”

Market Share - From a high of over 70 percent just a couple of years ago, IGT market share has slowly slipped to around 60 percent in the North American market. Neither Matthews nor Morro is concerned about that slippage, although both believe that upcoming technology improvements will at the least stabilize that share.

“We think that our market share now is probably a sustainable figure,” says Matthews. “There is some difficulty in doing this, in that WMS, Bally, Aristocrat and others are doing a better job in product development. But this is being done in a relatively stable technology environment. Where we think we gain an advantage and have an opportunity to grow share is when a disruptive technology is introduced into the market. With ticketing, that was the case. We were prepared on the technology and system side for that, and you saw an up-tick in our share to over 70 percent. That’s declined because of the recalibration of floors in the interim, but now that server-based gaming is on the horizon, that and other technologies we’re working on have the potential to impact our company in the same way that tickets did. We’re more prepared to be compatible to those new technologies than our competitors are.”

Morro says the improved technology may have even caused some of that decline in market share.
“There were some unintended consequences from TITO that we did not anticipate,” he explains. “Before tickets, you really couldn’t do penny machines, and that was a market that we did not have a lot of experience in. Aristocrat did in Australia, and they came to the U.S. market with a full library of penny games—and to their credit, they capitalized on that. Ticketing also eliminated some of the mechanical advantages we had: hoppers, coin comparators, coin escalators… all things that needed a lot of engineering that IGT had perfected over the years. But those evaporated overnight with TITO, so it allowed some entry from new competitors.”
Market share is often spurred by the “replacement cycle,” a time when many casino companies realize that their existing slot machines are not state-of-the-art, and decide to upgrade. The industry is currently between cycles, and Matthews believes it won’t occur again until the issues surrounding server-based gaming are resolved.

“The two big questions surrounding server-based gaming are when will it happen and when will it matter,” he explains. “IGT is working to make it happen as soon as we can. We now have a field trial in five different casino locations trying to understand what it is that the operators, regulators and the players want. We have to satisfy all those constituencies, but ultimately it will be the player that decides how it will be used.

“I anticipate that by the end of 2008, we’ll be in the marketplace with a much more sophisticated capability, not only being able to manage real-time floors but also to bring certain applications to the player and really start to get feedback as to whether or not we can either increase the entertainment value in a way that causes them to spend more or at least bring efficiencies to the casino operators so they can decrease their costs.

“If we can do that all by the end of the year, I anticipate we can do full-scale, 100 percent deployment in ’09.”

SB Gaming - The questions about sb gaming are many, and IGT is trying to provide answers for operators. “If you talk to 10 people, you’ll probably get 12 different responses,” Morro laughs. “Its most fundamental part is commonly referred to as downloadable programs, and changing the configurations of the casino floor. We think that’s the core plumbing, and that we’ll be able to do that with no problem.

“We see the real value, however, in the gaming and bonus applications that will be accessed through our service window. And it’s that service window that is the portal to deliver those high-value applications directly to the player. There will be a couple of killer applications that will be developed for this system, and lots of other amenities that will be accessible through this window. To us, that’s the future of sb.”

One of the hurdles the company first has to surmount
is to determine how to market the technology and then assign a value. Morro says his direction to his sales staff has been simple.

“I can sum it up in one word,” he says, “flexible. There will be a combination of all different pricing models, depending upon the components. The base system may be a sale. But it could be based on the number of units that are hooked up to it. There could be applications that are transactional-based, sold for a one-time fee or based on volume. It’s so new and undefined, that we’ll try to tailor the business model around the needs of each customer.”

Matthews believes there’s not going to be much change from the pricing you see today.

“There’s been a recognition that there’s a big value to software over the big traditional delivery of a box,” he says, “and there’s a much greater emphasis on what systems can do to bring incremental functionality to the casino floor. But we’ll still be selling boxes and platforms that support games. We’ll still be selling games into those platforms, sometimes married on a one-to-one basis with the initial shipment or at other times dropped onto an existing install base.

“There will still be systems sales, but they will be bifurcated into an initial application called a front-end display, and separately, the application that will actually bring this incremental entertainment to the casino operation.

“There will be intellectual property issues to sort out, both among the competitors and our customers. We have previously taken the lead in this area, so I think we’ll continue to do so. GSA and some of the standards organizations have been very helpful in getting us to all talk.

“Once you have this networked environment, you have the idea that there are going to be some managed services that we can provide to our customers, but I truly believe there is going to be some great idea that doesn’t exist today that will really make a big difference. And of course, it’s IGT’s mission to discover that great idea.”

Another application that will benefit from sb is the application known as “community gaming.” IGT’s Wheel of Fortune Super Spin, released two years ago, was the company’s first attempt at the multi-player station. Parlaying the theme of the most popular slot game in the world, the company has introduced similar games themed on the Star Wars movie, the eBay internet auction site, the Indiana Jones films and more. Morro says sb will enhance the popularity of this form of gaming.

“With sb,” he explains, “people sitting next to one another or on the other side of the floor can compete with one another. I think that’s why table games are so popular. They are inherently social, and we’re bringing this to the slot areas, and our multi-player station platform is the standard for this.

“As we become more technological as an industry, we have the ability to allow players to collaborate, compete and cooperate towards some sort of common event,” adds Matthews. “It’s something that I’ve believed in for a long time. The idea of man-versus-machine at times can be a little cold compared to the somewhat warmer environment of the table games, where you really see people interacting. People go to a casino to some extent to be around other people. It’s a natural human desire in games to demonstrate your superior skill. So getting people together for a common event versus a common foe—the house—and having them share at times in each other’s success, is something that casino players have wanted for a long time.”

Guaranteed Profits - One of the impressive IGT rollouts at the 2006 Global Gaming Expo was a feature called “Guaranteed Play,” which allows players to buy a specific number of hands on a video poker game at a bargain rate. The idea can be extended to slot play and even table games, a concept introduced at the 2007 G2E.

The first test of the system was launched by Station Casinos in ’07 on banks of video poker machines in most of its Las Vegas casinos. The results have been spotty, but Matthews says it has been successful if for no other reason than to point out that the test wasn’t a full implementation.

“Any time you change practices on the casino floor, there is going to be some suspicion, especially when you mess with video poker,” Matthews explains. “Not having it server-enabled and not having it spread across the casino floor probably does not show this product in the best light.

“In our mind, the attraction of this product is you can package it with the rest of the casino experience and what the resort has to offer. It’s a huge step forward. When you can bundle all the activity in your resort into one common offering, it’s got to be a success. Whether that extends beyond promotions and packaging into a preferred way of playing games remains to be seen, but we are optimistic and believe it will.”

Morro emphasizes that the Station placement was just a test, and IGT learned much from it.

“We debated this vigorously internally,” he says, “putting it into the field before it is a full product. When you can sell full travel packages and time-restricted coupons, that will be the true test. At Station, we’re offering a stand-alone product that’s missing the key component that will make it a successful product. But we have learned things along the way—game screens, how it’s portrayed to the customers and more.

“Later this year, we’ll start selling it as a package that will include a hotel room, food and beverage and gaming in a coupon form. That’s when it will really hit its stride.”

The table game version, says Morro, has shown definite promise in a more appropriate setting.

“We’re testing Guaranteed Play on table games on cruise ships as we speak,” he says. “This particular incarnation doesn’t require technology. We’re able to test more of the product faster and make changes faster because it’s in an unregulated market. And every few days, we have an entire new group of players. What we’ve been seeing there is very encouraging and more in line with what we expect to see in the video poker and slot market.”

Matthews says casino executives were intrigued by the concept at the recent G2E.

“With the table game version,” he says, “there’s a lot of casino customer interest to see if it will interest their players. In my perspective, that interest is great to realize, but until you have it in front of the player who chooses to use it as part of his experience, it’s just interesting, not compelling.”

Matthews also takes issue with the perception that the experiment at the Station casinos was not a success.

“I would say that it has worked on video poker,” he insists. “The issues are the penetration rates and dedicated machines versus server-enabled functionality, and the ability to offer that across your entire floor. So I think the server aspect of this is more important than the game. But certainly, the idea of being able to package slot machine play where a player might be more interested in the consumption of time as opposed to being particular about the game itself, the video slot might work better.”

Video Steps - In the first games released after its pioneering video poker, IGT’s strength was the stepper slot. That has continued to be a strong market for the company, despite the recent proliferation of video machines. But IGT has made great inroads into the video area as well, and at G2E 2007, the company introduced its “PureDepth” line of slots, which are multi-layer displays (MLDs) that remarkably simulate stepper slots.

Morro says he expects these games to be popular in video-only markets like Minnesota or Rhode Island, but the company isn’t giving up on the stepper-slot market, either.

“The spinning reels will never go away,” Morro says. “With the five-reel spinning reel, the machines were able to increase their market share, and now we see a little bit of a comeback in all categories. I think it’s just stabilizing, and the market has found equilibrium. It continues to be a very big part of our product initiative. We unveiled our new AVP stepper at G2E with our digital service window next to the actual reels, so it can be deployed on all the machines in the casino.”

Reports of the death of the stepper slot were very premature, Matthews believes.

“At one point, there was a perception that the marketplace would become 100 percent video slots,” he says. “And maybe over a period of time we end up there. Today, casino floors have stabilized at around 35 percent to 40 percent physical reel-spinning slots. But players have also shown they still want all the entertainment value that comes out of the video slot space. Being able to increase line count, increase coin count, tie them into secondary bonuses, network them for common events, are all things that are possible now. Because we have such a large market share in reels—in excess of 80 percent—we want to come up with ways that will enable us to sustain that footprint as long as possible. If we do a good job in that area, we can develop physical reels for a long time to come.”

Developing new games is both an art and a science, according to Matthews.

“Technology is all about delivery,” he explains. “On the game delivery side, there have been a couple of instances where we’ve developed a franchise product, whether it be the S-Plus cabinet or the 80960 platform. We believe as we move to AVP or the MLD we’ve got some other franchises in the future.

“The game side is less predictable. As we look back at some very important times in the industry, and there are very few of them—Megabucks, certainly; Wheel of Fortune, Triple Play—video slots have demonstrated how an entire category has become important but no single game broke through. We’re constantly trying to figure out how to have a game that becomes a franchise.”

When designing a new game, the IGT development team depends largely on the tried-and-true elements of other games.

“When we develop a new game, approximately 80 percent of the things we introduce in a brand-new product reflects things that have worked in the past,” he says, “while maybe some of the remaining 20 percent distinguishes it from anything that has been previously introduced.”

In all subsequent games, Matthew says sb, community gaming, MLD and all other emerging technologies will be considered as a part of any successful game.

“All those are elements of game design we’re trying to bring into particular kinds of games,” he says. “The overall philosophy is that we’re trying to develop games that people want, whether it be video or reel slots.”

Fun in the Future - The redefinition of IGT has only just begun. A few years ago, Matthews approved the purchase of WagerWorks, an innovative designer of games and systems for the internet. Even though online gaming is not legal in the U.S., Matthews still considers it an important coup.

“We recognized that if you break our business into two components of game creation and game delivery, it has more applications than just casino gaming,” he explains. “It can be over the internet, over telephones and even over television in some markets. We want to understand that technology so we can deliver our games in markets where it is legal. So the WagerWorks buy was made to understand that world better, and then to understand if we can make money on that in markets where it is allowed. Even with those two limited objectives, WagerWorks has been a success for us. But where it becomes materially important for IGT is when large markets authorize other forms of non-casino distribution of games. That’s when WagerWorks becomes very important.”

These kinds of purchases of independent companies, along with some strategic alliances that have become an IGT hallmark, will continue in the future, according to Matthews.

“The biggest growth will come from internally generated efforts and our ability to bring new products to the market quickly. That’s what we’re focused on,” he says. “But when we have the opportunity to bring interesting technology, innovative intellectual property, game design not presently available to us, distribution reach into markets where we don’t have a large presence, we do that.

“Over the last few years, we’ve averaged three acquisitions a year, as well as a whole host of strategic alliances, so that will be a big part of our growth, as well.”

Challenges from competitors do not bother the company either. Morro says IGT’s size is its biggest advantage.

“We have a commitment to our employees, shareholders and customers to be number one and to be at the forefront of technology,” says Morro. “There is certainly increasing competition, but at the same time, as technology and intellectual property becomes more expensive, it will be difficult for manufacturers at all levels to remain competitive. At IGT, we invest millions in technology research, more than all of our competitors combined. That’s what we call a
competitive advantage.”

By Frank Legato   Thu, Feb 07, 2008

The gaming industry in 2008 finds itself at yet another technological crossroads. Vendors across the industry are developing products to fit into the new “networked” gaming floor, from software and system products to games that are adaptable to any new technology coming down the road.

At the recent International Casino Exhibition, Global Gaming Business honored the companies clearing the path to this new technology, in announcing the recipients of the fifth annual Gaming & Technology Awards.

The awards are the result of a joint effort between GGB and Spectrum Gaming Group to recognize the groundbreakers in gaming technology. We once again called out to the industry for nominations, and impaneled a group of distinguished industry veterans to evaluate the nominations at November’s Global Gaming Expo.

This year’s judges for the Gaming & Technology Awards competition included Robert Russell, editor, Michigan Gaming Law newsletter and principal of Regulatory Management Counselors; James Wortman, director of the Gaming Education and Research Institute at the University of Houston’s Conrad Hilton College; Claudia Winkler, president of GHI Solutions Inc. in Las Vegas; and Charles Lombardo, casino gaming operations consultant for Seminole Gaming, and former senior vice president of gaming operations for Seminole and senior VP of slot operations for Caesars Palace in Las Vegas.

As usual, our Gaming & Technology Awards are divided into three categories: Best Consumer Service Technology; Best Productivity-Enhancement Technology; and Best Slot Product. Finally, it was once again a close competition, so we have included “Honorable Mention” products in each category.

Here are the winners of the fifth annual Global Gaming Business Gaming and Technology Awards:

Best Consumer
Service Technology

1st Place EZ Pay Smart Card
International Game Technology

IGT has transferred its EZ Pay brand from ticket-in/ticket-out applications to the next step in
cashless slot technology. The EZ Pay Smart Card combines the functions of a player’s club card with electronic funds transfer, and adds hospitality functions as well. In this system, a player can deposit funds before checking into the hotel of a casino resort. Upon arrival, an EZ Pay Smart Card is issued that functions as the player’s hotel room key, card for any POS purchases at shops or restaurants, and pay method for playing slots. Players can move from machine to machine with the Smart Card, with funds withdrawn and deposited for losses and wins.

2nd Place iVIEW Media Server
Bally Technologies

Bally’s iVIEW customer portal has been one of the manufacturer’s hottest products during the past year. The iVIEW Media Server is designed to enable use of iVIEW to its maximum potential, to beam media messages in a variety of styles from the casino directly to the player via the small LCD iVIEW screen. Using either one of Bally’s slot management systems or a central server, the Media Server enables feeds of live video and audio, cable television, movies, DVDs, one of Bally’s “Live Rewards” promotional secondary video games, or any style of promotional message, directly through iVIEW to the player.



3rd Place PlayerVision
Las Vegas Gaming, Inc.

PlayerVision is the follow-up to LVGI’s second-place winner in last year’s awards, which was called PortalVision. PlayerVision is a proprietary multimedia system that uses existing VLTs or video slots to give players additional real-time wagering opportunities or as an additional marketing tool for promotions. The core suite of applications includes “PV-TV,” which provides a picture-in-picture view of a race or sporting event during a video slot game; “AdVision,” through which the casino can beam advertising as an additional revenue stream; and “NumberVision,” which can bring state lottery games right to the slot machine, as an up-sell to allow players to buy lottery tickets at cash-out.

Honorable Mention

AV Logica
Paltronics, Inc.

Paltronics’ AV Logica is a suite of software products centered around a personal service and entertainment window that can be mounted to the slot. The system provides bonusing games, streamed live video and marketing messages through the player tracking system to facilitate direct communication between casino and player.

Bonus Revolution
Multimedia Games

This is a package of server software for use in either Class II or Class III applications to provide what Multimedia calls “Community Bonusing.” The product provides common bonus events for as few as eight machines or as many as 250, and can accommodate either video or reel-spinning slots.

Best Productivity-
Enhancement Technology

1st Place sb Floor Manager
International Game Technology

IGT’s sb—for server-based—system is being built for use in a “open-architecture” system; machines from any manufacturer will work on it. The newest cog in that platform is a system to manage a networked operation consisting of a variety of manufacturers’ games. The sb Floor Manager permits seamless management of downloads, configuration changes, scheduling, and eventually, remote game ordering, all from a desktop computer in the back of the house. The scheduling module will allow operators to remotely configure the floor to maximize revenue, including exploiting periods of peak demand, creating instant slot tournaments, and targeting game styles according to customer demand.

2nd Place ACE Interactive Gaming Solution V4.0
Aristocrat Technologies

Aristocrat’s server-based solution is a true thin-client network that was initially developed for the Norwegian Lottery in 2003. Aristocrat acquired the company that supplied this system, ACE Interactive of Stockholm, Sweden, and has adapted the system for use in server-based casino settings. The system can manage more than 10,000 terminals simultaneously, delivering different games from multiple vendors to terminals on the floor through high-speed Ethernet supporting TCP/IP protocols. The V4.0 solution is designed to make a variety of game content available to players on demand, as well as permitting remote management of the entire slot floor.

3rd Place Game Maker HD Scheduler
Bally Technologies

This software module is embedded in the Alpha OS operating system that is now the standard for all Bally video and reel-spinning slots. It allows one of the primary operator functions of server-based gaming—adapting games to the players in the casino—on today’s analog slot floor, by permitting the casino to pre-program changes in denomination, percentage or game content and schedule the change for a specific time. In jurisdictions that have approved rules for remote changes to games, operators would simply submit their scheduled changes to regulators, and once programmed into the machines, they would change automatically—dollar games could become quarters, nickels to dollars, etc., without the door being opened. Bally is promoting it as a way to give the slot floor the same flexibility as the pit in changing buy-in levels.



Honorable Mention

Sona Gaming System
Sona Mobile Inc.

The Sona gaming System is a server-based gaming software package that permits slot games, video table games, video poker, and race and sports book wagering to be transmitted to hand-held device (including Blackberry units), or to any wireless terminal. Where permitted, players can take their games anywhere in a casino resort. Sona has partnered with Shuffle Master, Inc., to offer mobile versions of Shuffle Master specialty table games and standard table games on the wireless system.
Title 31 Accelerator eSubmission / Automated FinCEN e-Filing
Resort Advantage

Resort Advantage is offering this software to provide casinos a direct link to the processing servers of the IRS Financial Crimes Enforcement Network, or FinCEN, for the purpose of complying with reporting requirements of the Title 31 Anti-Money Laundering Act. The system eliminates paperwork and manual steps required by casinos to report transactions requiring registration under the law—reducing the manual steps in the process from 20 to only two, and the average time to report a transaction from 20 minutes to two minutes.

Best Slot Product

1st Place Viridian Gen7
Aristocrat Technologies

This is Aristocrat’s groundbreaking new video slot platform and cabinet. The platform represents a major technological advance over the current MKVI platform, featuring a more open architecture and modular platform to allow more flexibility and innovation in game design. MKVI games produced over the past few years can be upgraded to the new platform, which is the manufacturer’s technology on which its server-based products will be based. To that end, the Viridian cabinet
features a flexible dual-monitor presentation that will allow instant changeovers of games, including all artwork, in a server-based
system. (The top monitor substitutes as the slot glass.)

2nd Place Indiana Jones and the Last Crusade
International Game Technology

This game represents the debut of “PureDepth,” a technology purchased by IGT to bring the company’s reel-spinning platforms into the world of server-based, networked gaming, as well as providing a remarkable new way to create 3D graphics. The game itself is a multi-line video slot featuring bonus rounds utilizing clips from the Indiana Jones film. However, the PureDepth technology is the key to the presentation. Two video screens overlap to create the illusion of depth. In this case, it provides an uncanny replication of spinning reels in a video format—perfect for server-based applications. In animation and video presentations, PureDepth creates a stereoscopic
effect that could be the best-ever 3D technique.

3rd Place The Wizard of Oz
WMS Gaming

This incredible video slot is the second entry in WMS’ “Sensory Immersion Gaming” series, begun last year with “Top Gun.” The Wizard of Oz uses an arcade-like format, which sits the player in a seat surrounded by Bose speakers in what is essentially a virtual-reality experience that puts the player inside the classic film for various bonus events. The Yellow Brick Road, all the characters, Kansas and Oz are all reproduced with great flair. At the same time, the slot game itself offers a multitude of opportunities to win with various propositions, all involving some aspect of the film. There are even “Flying Monkeys,” which cruise onto the screen and transform reel symbols into wild symbols.

Honorable Mention

Fireball
Bally Technologies

This game marries Bally’s V20 video platform with a dramatic top box featuring a game-in-game player bonus. The slot is a five-reel, 40-line video slot under a themed top-box progressive bonus device. When the bonus is triggered, the player has the chance to win from one to eight separate progressive awards, based on the number of Fireball triggering symbols that appear. The 32-inch video display in the top box features blazing fireballs which ignite the individual progressive displays.

Quick Hit Platinum V32
Bally Technologies

This is a series of Bally “Quick Hit” video slots, which feature frequently hitting free-game bonuses and frequent progressive jackpots, all on the manufacturer’s vertical V32 cabinet. These are the first standard slot games to be placed on the V32, which was originally designed for a video roulette game (which also is very popular). Initial games including Black Gold Wild, Stars & Bars and Wild Jackpot Triple Blazing 777s. Each features bonus events awarding from five to 20 free spins at multipliers of 2X or 3X.

By GGB Staff   Thu, Feb 07, 2008

It is not unusual to hear casino executives speak of gaming as a unique and mysterious product. This notion also manifests itself in how casino managers think about the business of gaming. Unique, mysterious, unlike any other—these are the phrases often associated with the gaming business that are uttered by long-term casino managers. This is consistent with the belief that the only way to learn the business is to live the business, and see all of the unusual things that can happen on the casino floor and in the executive offices.
  
In reality, though, gaming is just a business like most others, one that can benefit from analysis of its fundamental economic characteristics, and by drawing from, and applying, principles and experiences from other businesses.
    
Product or Service? - How should one look at the business and products of gaming? Whether it be a table game, a slot machine, a sports bet or a lottery—what is it that is being sold? Referring to gaming as a leisure or entertainment product is certainly a reasonable general description and a good starting point. Casinos and other gaming operations sell “fun and entertainment” to the majority of their customers. More dramatic or superstitious customers may view casino games as an opportunity to “meet destiny,” to “test fate” or to determine if “God is smiling upon them.”
   
Some customers are attracted by the hope of “winning a lot for a little” or are chasing the “dream of a life-changing event.” Others view gambling as an investment of time and energy into a hobby where they believe—rightly or wrongly—that their knowledge and experience at the games and understanding of the odds provides them a better chance of winning than others. And some customers consider their encounters in a casino as “buying time on the machines or the tables.”
   
Before venturing further into descriptions, it is useful to define the gambling activity versus the business of gambling, and gambling versus investment. Casino customers gamble, whereas casino operators are in the business of gambling in the short run, and are investors in the long run. A simple definition of gambling is where the player’s long-term mathematical expectation from participation is less than zero, and the activity is freely entered into. (Jumping out of a window of a burning high-rise building also involves a negative expectation, but the lack of choice pushes it away from the category of a gamble.)
   
Operators in the business of gambling have a positive expectation on the monetary amounts they put at risk. In casino games, the operator derives a positive expectation from the games offered, and the house is selling a product at a positive price (the “house advantage”) whereas the customer is a gambler, paying the house advantage for the opportunity to gamble. Casino games are “zero-sum” games, so the positive expectation for the house is a mirror reflection of the negative expectation for the customer.
   
There are, of course, situations where the customer can alter this equation through “advantage play” techniques of various kinds—such as professional poker players, card counters, slot jackpot teams and professional sports bettors and odds takers. However, in general, the casino should always view itself as the purveyor of a service rather than as a gambler. “We are in the gambling business—not in the business of gambling.” This should be a mantra for every gaming executive, and one learned early on in one’s career.

Losers Mean Winners - Organizations in the gaming business are going to evaluate their capital outlays in terms of the expected return on invested capital, and such expectations have to be positive, and exceed some risk-adjusted minimum hurdle rate. In this context, one can invest in the gambling business. With the exception of advantage players, there are no investors among gamblers; in the long run, they all will lose.
   
Thus, gaming can be conceptualized as a generic entertainment and leisure product. Furthermore, gambling is an intangible product, which, like many other intangibles, is one where what is being purchased cannot be touched or held. It can also be described as an “experience good” where the consumer does not know how pleasurable—or unattractive—the product will be until after the act of consumption has taken place. (Indeed, as many gamblers will attest, the experience on any given outing can be pretty ugly.)
   
Other easily identifiable experience goods among leisure and entertainment commodities include movies, books, sporting events, concerts, visits to art galleries, and participatory adventure sports. With these products, customers are purchasing an experience and a “memory” of an event as well as the thrill, satisfaction, uncertainty or adrenaline associated with the activity at the time. They are also purchasing the “anticipation” of consumption, which is often an important ingredient in the decision-making process. Anticipation plays a role for a gambling adventure similar to that experienced in advance of seeing one’s favorite football or basketball team play.
   
For casino managers, it is important to view the gambling product in this light. If they consider themselves as purveyors running a business that provides entertainment and leisure services, they can better conceptualize the economic dimensions of the offers they are making to their customers. In general, consumers purchase commodities in various quantities, depending on prices, product attributes, consumers’ levels of discretionary income and time available, and various other important parameters.

Pricing Parameters - For gaming products, the price of the service can best be defined as the house advantage associated with the specific games. The house advantage is simply the long-run average amount won per unit of wager by the casino. More rigorous definitions can be found in various places, but the essence of house advantage is that it is the amount a gambler loses (“pays”) per dollar wagered to participate in a game.
   
For example, the house advantage on a single-number wager at single-zero roulette is 2.7 percent. This is a weighted average of the proportion of times the player will win in the long run times the amount to be lost to the player by the casino, and the proportion of times the player will lose times the amount to be won from the player by the casino. The weights for winning and losing are the respective probabilities (1/37 and 36/37) and the amounts to be lost and won by the casino are -$35 and +$1, respectively. Thus, the arithmetic is: HA = 1/37*(-35) +36/37*(+1) = 2.70%.
   
This result is positive when viewed from the casino’s perspective and of equal magnitude but negative from the player’s view. For every $1 of single-zero roulette purchased, the player can expect (mathematically) to lose 2.7 cents, and the house stands to win 2.7 cents. All gaming events have a similar price associated with them. Some other simple examples are craps (pass line bet) at 1.41 percent, baccarat (player bet) at 1.36 percent, keno (depending on pay scale) at around 28 percent, slot machines at between 3 percent and 15 percent and blackjack (with a player of average skill) at about 2 percent.
   
The quantity of gambling services that customers will purchase in a given period is measured by the
“handle,” the amount of money wagered. The amount of product sold, the handle, is determined by several factors. First are aggregate economic factors that might reflect the general purchasing power of the potential customer market. Such variables include aggregate personal income, changes in levels of income, prices of competing commodities (i.e. other entertainment and leisure activities), and prices and availability of complementary activities (i.e. gasoline prices, hotel accommodation prices, air fares, etc.) There are also attributes which are specific to the various games that affect handle: each game’s inherent house advantage, minimum and maximum betting limits, and game speed; as well as players’ preferences and gambling behaviors.
   
Because many consumers are buying entertainment at the casino games with the thought of buying “time at the table” or “time on the machine,” it is useful to estimate an expected cost of playing per hour, which to some extent can be controlled by the consumer. This can also be useful to the casino manager in understanding the returns generated when selling various gaming products. For example, consider a $2 minimum blackjack table with six players of average skill and a dealer who deals at a rate of 50 rounds of hands an hour. If all of the players make their wagers at the table minimum and the house advantage for each player averages 2 percent, then in an hour the average player can expect to lose $2, which is the casino’s expected win. (Each player has purchased 50 hands of blackjack at $2 per hand where the price per hand is 2 percent of the handle, or 4 cents). Thus, for the entire table, the casino can expect to win (only) $12 per hour.

When viewed in this light, casino managers can estimate the “rents” they are charging for chairs at the blackjack table or the space in front of a slot machine. Is $2 an hour for a chair at the blackjack table reasonable? The same consumer who pays $9 for a movie ticket for a 90-minute feature film at the local cinema is paying $6 per hour; the sports fan who pays $100 for his ticket to a three-hour NFL game is paying $33 per hour. Taken in this perspective, it is no wonder that $2 blackjack minimums, and even $5 minimums, are rapidly disappearing.
The same approach can be taken for evaluating slot machines. Consider, for example, a penny (1 cent) slot machine with a 10 percent house advantage. For each $1 of handle, the average price is 10 cents. The player who purchases 300 spins an hour (five spins a minute) with an average bet of 40 cents per spin will have purchased $120 in handle (quantity) at a price of 10 cents per dollar wagered for an expected cost for the hour of $12. Thus, the player has purchased—and the casino has sold—an hour’s worth of the entertainment service for $12.

Paying Probabilities - How might casino managers influence the rents they are charging to the casino’s customers? The house advantage (or price) of a particular game or device is dictated by the underlying probability structure and the various payouts for player wins; this is true for table games as well as slot machines. House advantage can be altered by changing the game’s rules, changes in the probabilities of winning and losing outcomes, or changes in the payout structure for winning and losing outcomes.
   
Several nuances arise when using this methodology for calculating price and quantity for gaming products. Quantities are typically bought in single units with a fixed price per unit associated with the game’s outcomes and the prizes awarded. It is not really possible to sell the products in discrete blocks—although IGT and Walker Digital’s Guaranteed Play product is an attempt to overcome this to some extent. Players are generally not forced to play at a given rate over a period of time, with the exception of minimum wagers and sometimes the dictated speed of the game.
   
A player on a slot machine could choose to hit the spin button rapidly, or alternatively might idly chat with neighbors between spins. Thus, in the same one-hour period, two customers playing exactly the same game could be purchasing very different quantities. The same is true at table games where some players might take longer to make required decisions or sit out certain events, thus not making a play every time the event is offered. Skill levels on certain games may also have an effect where the player’s skill level can impact price.
   
Multiple betting options on some games can also change the average price. For example, in the game of baccarat (known as punto banco in the U.K.) there are in fact three different betting options—“player,” “banker” and “tie”—and each has a specific price. A customer betting $100 on “player” and $10 on “tie” on the same round of play will effectively be purchasing $110 of the entertainment service at an expected price of $2.78 for that event. Another customer on the same game of baccarat with $110 wagered on “banker” is also purchasing $110 in quantity but at an expected price of $1.29. Thus, even on the same game, purchases of the same quantity (handle) can have very different expected prices.

Pricing Entertainment - In spite of such complications, it is still useful to think of gaming as an entertainment service and to estimate an expected or theoretical spend-per-hour per gaming position on the casino floor. For “back of the envelope” analysis, one can use average prices for games and average quantities purchased by customers based on historical experience. Consider a $5 minimum table limit blackjack game where the average bet is $10 and where the average rounds played per hour is 50. This implies the expected quantity to be sold per player per hour is $500.
   
If the price that the average blackjack player pays—based on game rules and skill level—is 2 percent then the expected spend per player per hour is $10. In other words, the casino is providing its blackjack entertainment services to such players at an expected price of $10 per hour.
   
Making such calculations for each important type of game within the casino, it is possible to map out a pricing structure for the entire casino floor at the property level. This allows management to go to the next level: to conceptualize a pricing strategy that maximizes the casino’s contributions to profits, for the casino floor. This leads to proper conceptualizing of the potential income-generating capacity of each gaming position, or each square foot of allocatable gaming space.
   
A guideline for optimizing contributions to profit for the casino floor is to equalize incremental profit per square foot over all categories of games. For example, if a casino floor would yield incremental profit of $100 per hour from adding one more blackjack table (requiring 150 square feet of casino space) versus $25 per gaming device (requiring 25 square feet per device), management will do better by increasing the number of gaming devices and reducing (by at least one) the number of blackjack tables, and to continue to do so as long as the contribution per square foot were out of balance.
   
The above discussion concentrates on average theoretical prices and purchased quantities of the services offered based on the games and player behaviors. However, this is indeed gambling, so “luck”—defined as statistical variation from the theoretical price—plays an integral part for each consumer’s (short-term) experience. As with house advantage, the volatility of a game or gaming device can also be measured, and used to predict the variations between expected performance and actual performance that can and will occur.
   
For any particular game (with well-defined rules, payoffs, and consumer skill levels and betting patterns), standard deviation measures can be computed. Statistical theory suggests that about 95 percent of results will fall within two standard deviations of the expected outcome.
    
For example, for a baccarat player playing for two hours at 50 decisions per hour and $100,000 per play, and playing only the “player” bet, it is possible to calculate not only the expected outcome but also a probability distribution for the entire range of possible outcomes. In two hours the baccarat player generates handle (purchases quantity) of $10 million, at an expected price of 1.36 percent for an expected loss of $136,000. However, the standard
deviation of the two hours of play is about $1 million, so there is a 95 percent probability the actual outcome for this foray at the table will yield a result between a $1.1 million win for the casino and a $900,000 loss. There is also about one chance in 40 the player will win $1 million or more, and about one chance in 40 the casino will win $1.2
million or more.
     
Clearly, there is a very significant disparity between what the expected cost to the player is in the above example, and what they will likely actually experience on an individual basis in the short term. In the long term, volatility gets overwhelmed by the expected price, so “luck” disappears and the standard deviation becomes insignificant compared to the house advantage. However, in some circumstances, a casino may not have enough handle to get to the long run before very bad things happen.

Luck No Factor - For a casino with hundreds or thousands of slot machines, there is virtually no volatility experienced by the casino over those devices even in relatively short periods of time; there is so much handle generated every day that, even though individual customers might be particularly lucky or unlucky, the casino as a whole will win very close to the amount of revenue that would be predicted by computing a properly weighted summation of house advantage times handle, over all relevant gaming device categories.
   
The same is true for grind play at the table games. The only exceptions occur with games that will not get to the long run quickly, i.e. the whale playing very high-stakes baccarat (much higher than other big players for the casino) or the super jackpot that is only rarely hit.
   
Besides such exceptions, what happens is that the “law of large numbers” takes effect as hundreds or thousands of customers make thousands or millions of wagers. Each wager’s outcome has only a miniscule impact on aggregate winnings for the month or week or day in the casino. All the volatility—all the “luck”—washes out.
   
Some other observations can be made with respect to pricing strategies and volatility risk in casinos. Tourist casinos (such as those found on the Las Vegas Strip) cater to players who have more money than time, whereas locals’ casinos (found in most casino markets) have a preponderance of their customers with more time than money. In the jargon of economics, demand is less price-elastic for tourists than for locals. As a result, pricing is higher in tourist-oriented casinos than in locals’ casinos. In a similar manner, pricing is higher in a monopoly casino than among casinos that must compete against one another for the same player markets.
   
At locals’ casinos, we can identify certain classes of players who are effectively buying time at slot machines. One relevant aspect of this discussion and analysis is the logic used in setting prices for slot games. Old-time casino managers often claim that players will react quickly and negatively to any increase in price. As a result, they keep prices low. That may have some validity with video poker game players, especially in locals’ markets; video poker has relatively transparent pricing. However, it seems much less likely that a modern-day (tourist) customer playing on multi-line slot machines with multiplier features would notice marginal increases in pricing.
   
The slot machine game designer can amend the probability-payoff math model in such as a way as to increase the variance and effectively mask the price increase. This has been particularly evident with the success of penny video slots in markets like Australia and North America—and has led companies like Harrah’s and others to experiment with optimal pricing models for slot games across their estate. It has also caused gaming machine manufacturers such as IGT, WMS, Aristocrat and Bally to recognize the importance of math models in their game design. Creating hit games is partly art and partly science, but game pricing and the math models involved are a highly relevant portion of the science.
   
Once we have established and measured prices for our gaming entertainment services and are able to monitor the relative quantities that players consume in given periods, we can then explore ways to enhance or modify the offerings. This might be accomplished by discounting the price through such things as loyalty program rewards, rolling chip commissions, rebates on loss, or free food and beverage while playing.
   
Coupons are an early version of such price discounting. Such discounting can be justified for bulk purchasers. As long as the cost of providing the service is relatively fixed, then bulk purchasers can be offered discounts because of the low marginal cost of increased production. For example, if a casino could increase the average wager at blackjack from $10 to $20 with no other changes, then incremental costs of offering the game would be near zero; if the costs of discounts were less than the incremental revenues from the increased quantity sold, such a move would be beneficial to the bottom line.
   
Server-based gaming and server-supported gaming are both new forms of slot machine systems that offer the potential to permit greater yield management on gaming floors in similar manners to the way hotels are managed. Higher prices should be charged in a casino at times of greater demand (weekends, holiday periods, Super Bowl weekend, etc.). New technologies, along with regulatory approvals, may allow more refined and sophisticated pricing variations in casino operations.
   
Thinking about gaming as an entertainment service with specific prices and consumption patterns is indeed a useful exercise and business strategy. With greater confidence in understanding the product—as a legitimate and popular entertainment offering—managers should be better able to determine what to charge for their offerings and what common business and marketing tools can be used to modify purchase behavior.
   
Gaming is not so unique that we cannot learn from airlines, hotels, movies, software companies and the like—but to do so we have to establish pricing models and be prepared to experiment and seek to optimize returns.

Andrew MacDonald is founder of urbino.net and is also executive vice president of gaming for Genting Berhad, based in Kuala Lumpur, Malaysia. He can be reached at andrew.macdonald@genting.com.

Bill Eadington is a professor of economics and director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada, Reno. He is an internationally recognized authority on the legalization and regulation of commercial gambling, and has written extensively on issues relating to the economic and social impacts of commercial gaming. Eadington can be reached at eading@unr.nevada.edu.

By GGB Staff   Thu, Feb 07, 2008

As a recent fan of digital photography, I wanted to learn more about how to improve my photos. I went to the book store to look for an instructional book.
   
I looked in the photography section and I purchased a book titled Digital Photography for Dummies, because it was written for an inexperienced new user. I have used the “Dummies” books before to learn about many new subjects of interest. Having worked in the casino industry for 30 years primarily in casino marketing, I realize that most of what I know today came from “on-the-job,” hands-on experience.
   
I receive numerous requests every month for help from young people who want to either break into the casino marketing field or who want to learn more to improve their present skills. There is not a great deal of information available for young people who want to learn about casino marketing. Therefore, following are what may be some helpful recommendations and suggestions.
   
First, it is important for people to realize that it is often very difficult and frustrating to break into casino marketing in one of the better positions unless you have some unusual skill set, have past work experience or speak a desired foreign language. Most of the larger casinos around the world usually try to promote from within to develop career paths for their own hard-working, dedicated, loyal employees.
   
Marketing seems to be one of the more glamorous, desirable positions that many people want. Consequently, one strategy is to just get hired first by your company of choice—hopefully, for a lower-ranked position within the marketing division, after which one can watch for any postings or listings of new open positions that the casino wants to fill. It is a great way to learn from within and to climb the corporate ladder to a higher, more desirable marketing position.
   
Second, one of the more important things to do once on the “inside” of a new casino is to begin to assess who is who and who does what. In other words, look for the leaders in the marketing department.

Getting Help - It also is strongly recommended to take advantage of the mentoring process. Most successful casino marketing executives or casino operations executives can usually attribute part of their success to having found a good mentor who helped them early on in their career. A mentor is someone who takes you on as a protégé, or just because they like you, and then they make an extra effort to help you, guide you and advise you.
   
Finding a good mentor is very important. You need to take the time to research this area very carefully and select someone who you think will be receptive to your request for help, and who will be willing to make the effort to actually help you and guide you. This is not an easy task, so view it as a challenge. As a challenge, you have the right to be selective and to change your mind should you find a better or more qualified mentor. Remember, you are the only one who can really control your own future, so manage your efforts carefully and selectively.
   
In addition, I strongly advise all new casino marketing career-seekers to read everything that they can get their hands on to either stay current on casino industry happenings or to learn from the experts. One great website with educational content is www.urbino.net. It was developed by Andrew MacDonald from Australia, and he has worked extremely hard over the years to solicit articles from some of the best talent in the industry. It is a great resource and contains incredible amounts of helpful information.
   
It is also important for young people to try to narrow their focus early in their careers so they can take advantage of the help of a good mentor who has either special skills or considerable experience in their desired subject or area. Marketing is a huge area, and can cover many different sub-segments ranging from slot marketing to table game marketing, direct marketing, advertising, public relations, casino promotions, special events, ethnic marketing, international marketing, etc., etc.
   
There are a couple of good textbooks available about casino marketing. The two authors are John Romero and Michael McNamee. Both have
considerable experience and their text books can help give one an initial overall awareness of many subjects under the casino marketing umbrella. However, these are textbooks, and should be treated as such. You will still need to get hands-on experience to really understand how and why things work in a casino environment. You also need to learn a little bit about human psychology and emotional intelligence.

Ethics and Ethnics - It is important to also briefly mention casino ethics. Ethics are unwritten rules that differentiate good from bad, right from wrong and honorable versus dishonorable methods. The casino industry is very highly regulated and structured in all areas, except for casino marketing. Some people may argue and claim that all areas in the casino industry are regulated and controlled, but from my personal experience this is not true, and definitely not true in many countries around the world.
   
This is the reason that I mention it here. Many people reading this article may live and work in fairly unregulated areas around the world. Nevertheless, ethics are still important for the overall success of both the casino and the employee. Always strive to do the correct or proper thing in all of your efforts. Don’t take the easy way, don’t take shortcuts and don’t cheat in your work efforts. Your reputation will follow you forever.
   
Ethics covers subjects such as honesty. I once wrote an article titled “Thou Shall Not Steal Except for in the Casino Industry.” The article was related to stealing customers and increasing market share. However, there are ethical ways to steal casino customers from a competitor casino and there are unethical methods.
   
The ethical methods include promotions, incentives, advertising and direct personal contact. The unethical methods include walking into a competitor’s casino and passing out your business cards or inviting customers on a competitor’s casino floor to come visit your casino. Another unethical method is to try to entice people to steal information such as player lists or other confidential information from a competitor casino. Always be ethical in everything that you do. This is important.
   
Another hot topic in casino marketing today is ethnic marketing. In the past, casinos did not pay much attention to ethnic or niche marketing, but as competition increases globally we are seeing more and more casinos beginning to focus new interest on ethnic marketing efforts.
   
One of the biggest ethnic markets is Asian marketing, but one also has to be careful not to generalize too much. There are many different areas of Asian marketing. One size does not fit all, and your efforts may even be offensive if not handled properly. I have lived in several different Asian countries and there is an expression that basically says, “Asia is not Asia.” Asia is a blend or a melting pot of many different cultures, languages and customs. Therefore, do your homework first, before you begin to market.
   
Seminars and conferences are also important vehicles for both learning and for networking with your peers. G2E in Las Vegas is the largest annual gaming conference, with over 30,000 attendees each year from over 100 different countries around the world. It is a great conference that is split between educational seminars and a vendor trade show highlighting all new equipment or services. One of the best casino trade shows is the ICE (International Casino Exposition), which is held in London each year and is a great event to view new releases of equipment or other related casino products.
   
In summary, there is no one simple solution for learning casino marketing. I wish there was a book titled Casino Marketing for Dummies, but there isn’t. Therefore, smart people will learn to make the most of a variety of different options available to them.
   
Successful casino marketing executives tend to multi-task numerous functions at the same time, with many of them operating in sync or in tandem with other functions. As a result, a good casino marketing manager learns to think quickly and react properly when under pressure or stress.
   
Casino marketing can be a very stressful occupation. It can also be one of the most exciting areas in a casino. Therefore, whatever time and effort that you invest now to prepare for the future will be well worth it. Good luck.

Steve Karoul is a regular contributor to Global Gaming Business and GGB Weekly. He one of the top casino marketing consultants in the world, with almost 30 years of experience with the best casinos both within the U.S. and internationally. Karoul can be reached at 1-860-536-1828 or by email: skaroul@comcast.net or www.euroasiacasino.com.

By GGB Staff   Tue, Feb 05, 2008

The United States and the European Union have worked a deal that will allow the U.S. to continue to shut out foreign operators of online gaming for the foreseeable future.

To compensate for the blocking of the open market where gambling is concerned, European Union member states will receive more opportunities in four other areas within the U.S. economy.

United States trade representative spokeswoman Gretchen Hamel released this statement on December 17: “We are pleased to confirm that the United States has reached agreement in the GATS Article XXI process with Canada, the E.U. and Japan. The agreement involves commitments to maintain our liberalized markets for warehousing services, technical testing services, research and development services and postal services relating to outbound international letters. These commitments meet our World Trade Organization obligation under the U.S. General Agreement on Trade in Services Article XXI to make a compensatory adjustment in our WTO services commitments. We now enter a 45-day period in which the remaining claimants have a right to request arbitration. We will continue to discuss this matter with the other claimants to explain how our proposal is consistent with our WTO obligations.”

In a very related story—in fact the story which created the need for the above solution—World Trade Organization arbitrators found in favor of Antigua and Barbuda in its online gaming trade dispute against the U.S., but awarded the Caribbean island nation much less than it was seeking. Much, much less. Where the plaintiff was requesting opportunity equal to $3.4 billion in annual missed revenues, the panel of three decided by a 2-to-1 vote that $21 million was the correct figure.

To make up the $21 million, the panel authorized Antigua to suspend its obligations to the United States in the area of copyrights, trademarks and other forms of intellectual property rights. In other words, Antigua can effectively host sellers of pirated DVDs, CDs and the like, to the tune of $21 million a year.

United States trade representative spokesman Sean Spicer released the following statement: “The United States is concerned, however, that the arbitrator agreed with Antigua’s request to suspend WTO concessions not just with respect to services, but also with respect to intellectual property rights (IPR). Any authorization pursuant to the award would be strictly limited to Antigua.”

Mark Mendel, the lawyer for Antigua who has led the case since it began, had mixed feelings about the decision. In a statement he said, “I am pleased that the panel approved our ability to cross-retaliate by suspension of intellectual property rights of United States business interests. That has only been done once before and is, I believe, a very potent weapon.”

He was not as happy with the much lower-than-sought damage award, but saw some positive in it.

“US $21 million a year in intellectual property rights suspension going forward indefinitely is not such a bad asset to have,” he said in a statement. “I hope that the United States government will now see the wisdom in reaching some accommodation with Antigua over this dispute and look forward to seeing efforts in this regard.”

The WTO dispute was originally filed by Antigua and Barbuda in 2003, when the U.S. blocked online operators based on the islands from taking bets from U.S. citizens. It was discovered that the GATS schedule unintentionally included market access to internet gambling operations based outside of the U.S. Although the U.S. maintained that its gambling laws predated the WTO and would qualify for a GATS exception for laws necessary to protect public morals or to maintain public order, the case was complicated by the fact the U.S. does permit betting on horse racing through domestic-based online gaming operators.

States Support Gambling Ban

Attorneys general from 43 states have come out in opposition to a proposal to repeal the Unlawful Internet Gambling Enforcement Act.
   
In a letter to congressional leaders, the National Association of Attorneys General said the UIGEA has driven off many illegal gambling operators, and they have “grave concerns” about repealing the ban.
   
The only attorneys general who did not sign the letter were Catherine Cortez Masto of Nevada, and those of Iowa, Kentucky, Massachusetts, Michigan, Nebraska and New York.
   
U.S. Rep Barney Frank said he was puzzled by the letter.
   
“It seems inconsistent that conservatives would want states to regulate the internet,” he said.
   
Regardless, Frank said his bill is unlikely to advance in 2008.
    
“We still don’t have enough support. We’re waiting to see if gamblers on the internet are going to generate that support,” Frank said.
   
An alternative bill from Nevada Rep. Shelley Berkley has more support, and she expects it to pick up in the new year. The bill calls for a one-year study of online gaming.
   
“I think my bill would be the appropriate first step,” Berkley said. “Otherwise, we are going to continue to legislate piecemeal without having any information from a study whatsoever.”

By Frank Legato   Tue, Feb 05, 2008

It wasn’t that long ago that the daily drops and counts at casinos were largely manual operations. Coin boxes from slots, and drop boxes from tables, all were carried to the back room, where coins were sorted and bills counted manually. While there was an assist from automated bill counters and sorters, soft counts were painstakingly verified by hand, and accounting errors (or worse) were not uncommon.

There are few areas of the casino, though, that have undergone more of a technological transformation during the past two decades than the handling of the main fuel of the casino, the cash.

It all started, of course, in the early 1990s, when the first embedded bill acceptors began appearing on slot machines. Within a few years, the once-familiar rolls of coins began to disappear from the casino floor as customers opted for credit play and use of the bill validators.

By 2000, the industry was ripe for more progress in the area of cash-handling. Within the first few years of the decade, ticket-in/ticket-out technology, or TITO, would all but eliminate coins from slot floors. At the same time, vendors and casinos alike were refining ways to bring the accounting and transaction-reporting accuracy of the slot floor over to the table game area.

Today, casinos can track each bill from a customer’s hand right to the armored truck or vault, and can have the kind of detailed information on every dollar passing through the floor that could never have been dreamed of even 15 years ago.

Leading the development of this technology have been a handful of vendors who have been at the forefront of development in bill validation, accounting and transport.

Port of Entry

The first cog in this wheel, of course, has been the bill acceptor itself, which in the casino industry has, importantly, been known by the cash-handing industry’s coined term, “validator.”

The earliest security risk of having money go into slot machines via soft currency was the same problem with coins—counterfeiting. Thus, producers of the acceptors that would be embedded in slot machines had to include the mechanism to accept a bill—even if folded, crumpled or ripped—and the ability to instantly recognize bogus bills.

The first vendor to carve a leading role in this space was JCM American Corporation, which introduced its World Bill Acceptor in the mid 1990s. By early this decade, the WBA had become the workhorse of the industry, with upwards of 850,000 units in the field in North America, and a market share the company estimated at around 85 percent.

JCM always prided itself on the ability of the WBA to both authenticate currency quickly and spot counterfeits. “The player wants a high rate of acceptance, and the operator wants a high level of security,” says Tom Nieman, JCM’s senior vice president of operations. “It’s a delicate balance.”

All the changes in currency technology—with new designs, watermarks, invisible ink and other advancements—have required the manufacturer to adapt it products right along with government changes in the money. The successor to WBA, called the Universal Bill Acceptor or UBA, is the type of dynamic product these changes require, according to Nieman.

“In working with the governments in all the covert and overt security features added to U.S. and other currencies around the world, we have to make sure the sensor package in UBA responds to the changes,” Nieman says. “We have to do that very quickly and accurately, and make sure the product accomplishes that while staying below a certain price point to fit into this market.”

During the past few years, JCM’s acceptors have met an increasing number of competitive challenges, notably from Mars Electronics Inc. The MEI Cashflow bill acceptor has been one of the fastest-growing in gaming recently, with double-digit growth over the past two years.

According to Eric Fisher, MEI’s vice president of gaming for the Americas, the Cashflow acceptor was developed over four years using digital technology tailored both to bills and the tickets used in TITO applications. He says the technology has allowed MEI’s presence in casinos to grow to 50 percent of the global market.

“MEI Cashflow is not the cheapest bill acceptor on the market, but we feel we’re the best-of-breed in our technology,” Fisher says. “Customers are converting because of the unit’s speed and accuracy. We have acceptance rates that are the best in the industry, and we show a great return on investment to the user.”

At the International Casino Exhibition in London, MEI launched a lower-priced acceptor known as MEI GEO, developed for use in rebuilt machines. Fisher says the company is targeting casinos in parts of Europe and Southeast Asia that are looking for a low-cost solution. “It completes our product portfolio,” he says.

Another competitor in bill validators is CashCode, which has been making inroads into the gaming market with its FrontLoad Bill Validator. According to Denis Antunes, the company’s global marketing manager, the FrontLoad acceptor has permitted operators to realize revenue increases of up to 30 percent because of higher first-note acceptance, minimal maintenance and jam-free performance thanks to the front-loading setup.

“What sets CashCode bill validators apart is excellent mechanical design, cutting-edge software and highly sophisticated sensing technology, which, together, increase acceptance rates,” says Antunes.

At the ICE show, CashCode displayed its products in conjunction with its distribution partner, Nanoptix Inc. Nanoptix and CashCode signed a deal last year to market the FrontLoad bill acceptor as a package complete with the Nanoptix Paycheck-brand thermal ticket printers.

Transport and Track

Along with advances in the equipment that accepts currency at the machine have come advances in technology dealing with the transport of that currency from the machines to the back room, and the secure counting and tracking of all of that currency.

JCM’s Intelligent Cash Box, or ICB, creates a double-redundancy in electronic tracking of bills. The casino has a record of the count when the box is placed in a slot, and the record of every transaction—every bill accepted—is sent in real time to the back-of-the-house computer. Thus, the casino has an accurate count already when the box is removed. The data is retained in the box itself in addition to the back-room computer. Therefore, a second electronic count is downloaded to the computer when the actual box reaches the count room, to reconcile with the real-time count. A third count can be done by hand.

“The ICB gives the casino a check-and-balance system,” says Nieman. “Real-time data and data retained in the cash box have to reconcile. We’re trying to give operators value-added features in the currency-counting process—three points of checks and balances.”

MEI’s newest transport-and-tracking equipment uses radio-frequency identification to keep track of currency. Called “Easitrax,” the system incorporates software using RFID technology in the cash box to track currency from the machine to the back-office count room. According to Fisher, the system gives each cash box an asset number and RFID tag.

“It allows you to track what drop box came from which machine, for control, efficiency and security,” Fisher says. “You can put the box on a reader, it reads the box, and you are free to put that cash box on any other machine. The box is not tied to any particular machine.

“The key to RFID is to track the cashbox through the entire slot floor process. It assures all cash is properly accounted for, that all cash boxes were dropped as scheduled. If a box is not counted, you can’t put it back in a machine. It will show an error message.”

Beyond the Slots

Manufacturers of bill validation equipment have been branching out of late, bringing the accuracy and security of validation and counts enjoyed by the slot department to other parts of the casino.

For JCM, this will be the first full-production year for Trident, the company’s bill validation, counting and tracking system designed specifically for table games. The old system, under which the dealer pushed bills into a drop box for later counting, is replaced by a slot that permits insertion and validation in the same manner as on a slot machine.

Just as the ICB does for a slot, the Trident system provides three points of checks and balances—a record goes to the back-end computer in real time for every bill inserted, and the drop box retains a record as well, which can be downloaded to the computer for reconciliation and checked again with a manual count.

“In the past, currency on table games was collected in a completely different manner than on a slot machine,” says Nieman. “Trident allows validation with checks and balances on the table side just as we do on the slot side.”

He adds that Trident also keeps track of non-cash events like markers and average bets, and fills of the chip racks. “When you request a fill, it sends an electronic message to the cage,” he explains. “The cage prints a ticket, and puts it in physically with the chips. If those chips don’t go where they’re supposed to go, they will be rejected. This eliminates the possibility of sending a fill to the wrong table.”

The cage is another area where the cash-tracking technology formerly reserved for the slots is being used. MEI’s new “Cashflow Defender” product, which the company officially launched at ICE, uses the same technology as MEI’s Cashflow acceptor to validate bills at the cashier’s cage. Fisher says the product was developed in six weeks, after a specific request from a customer.

The next steps for all of the manufacturers of bill validation and tracking equipment will be sure to take the security of the slots to other areas of the casino. It’s a natural progression—and one that will surely result in complete security for the cash that fuels the casino floor.

By Roger Gros   Tue, Feb 05, 2008

It is part of the history of Macau; the oldest casino still operating in the Chinese enclave. While SJM Chairman and CEO Stanley Ho said the original building will remain standing—the one which contains the unique casino—the rest of his Casino Lisboa will fall to the wrecking ball. An international competition will be held to decide how the resort will be rebuilt.
  
 “Since its opening in 1970, Hotel Lisboa has played an important role in Macau’s economic development. The rebuilding project ... accentuates our promise to further promote Macau’s economic prosperity,” said Ho.
   
The legendary circular casino, built faithful to the feng shui principles, was the center of Asian gaming for many years. When Macau opened up to international gaming companies in 2002, Lisboa quickly became outdated. Ho built the Grand Lisboa across the street from the original casino, but customers still frequented Lisboa as much as its much more opulent neighbor.
   
Despite the entry of powerful new gaming companies and fabulous properties, SJM remains the market leader. This new construction is a bid to remain so.
   
“As Macau’s gaming sector continues to develop we do not take our market leadership position for granted,” says Ambrose So, director of SJM. “SJM is taking this important step to ensure that its properties set the standard in gaming and entertainment in Macau.”
   
With the launch of the architectural competition, Ho expects to name a winner by early February. Demolition will take place in 2009 and the new property will debut in 2012.

By GGB Staff   Tue, Feb 05, 2008

MGM Grand Paradise, the equally owned joint venture of Pansy Ho of Macau and MGM Mirage of Las Vegas, has commenced operations at its first resort casino. And although some industry- watchers are already talking about “opening fatigue”—referring to the number of grand openings Macau has seen this past year—apparently nobody informed the crowd of hundreds who waited several hours for the doors to open and to get into action at the MGM Grand Macau’s virgin tables and slots.

MGM Mirage Chairman and CEO Terri Lanni says the opening marks a major milestone for the company and Pansy Ho.

“We have long anticipated this moment,” Lanni said. “It marks the beginning of a new era, both for our company and for the Macau gaming market. We’ve been eager to demonstrate the combined capabilities of our partnership, and this striking resort is testament to what we can achieve together. We are confident our efforts brought satisfaction to our many guests who celebrated with us tonight and will continue to do so for the many who visit Macau in the future. We look forward to showcasing to the world what we have created.”

He isn’t worried about fatigue or what some might perceive as too many providers in the market.

On the Monday before the opening, Lanni told reporters, “I’ve been in this business for 31 years and there isn’t a year has gone by that people aren’t saying: Aren’t you building one room too many and/or one casino too many in Las Vegas?”

“I suspect that the marketplace will sufficiently grow to meet the demands of the ever-growing casino population,” Lanni concluded.

Lanni pointed to the strong economic growth in the nearby mainland provinces, from which 85 percent of Macau’s players come. “They do have that 11 percent-12 percent GDP growth in those provinces and I don’t see that abating anytime soon.”

Pansy Ho seems to agree in principle, especially where the high-roller market is concerned. With 16 private gaming rooms, MGM is clearly aiming to be one of the destinations for this lucrative group of players. Ho believes the number of casinos offering high-end action presents “a really formidable proposition to all VIP customers that this should be the center of the high-rolling gaming experience.”

“Macau is the most important gaming market in the world,” Bob Moon, president and CEO of MGM Mirage International, told Agence France-Presse. “What you have is a mass market and a very aggressive government that is trying to make this a true international destination.”

Gross gaming revenue from all Macau casinos combined was 58.3 billion patacas, about US$7.4 billion, for the first three quarters of 2007. That is already more than the total of 56.6 billion patacas for all of 2006.

The $1.25 billion MGM Grand Macau has 600 rooms, suites and villas, with the main tower reaching 35 stories. Non-gaming amenities include a number of restaurants catering to a variety of international tastes, a top-quality spa, convention space, and a large central plaza that incorporates classic Portuguese architecture and which is capped with a glass ceiling 25 meters above the floor. The property currently employs around 6,000. There are reportedly plans to expand in the next year or two, to the tune of as much as 120,000 square feet for gaming and 80,000 for non-gaming facilities.

With the new property up and running, Macau now has 8,300 luxury hotel rooms, 4,400 tables and 12,400 slots. The property was designed by Wong Tung International Ltd., which also designed Crown Macau, as well as many other hotels and resorts in Asia.

MGM Grand Macau has much space for expansion and plans to add 120,000 square feet of gaming space and another 80,000 square feet of retail, dining and meeting space at some undetermined point in the future.

The MGM Grand Macau is looking to compete with the Wynn Macau and the Crown Macau for the high-end market, as opposed to the mass market approach being followed by Venetian Macao. Interestingly, the Crown is a joint venture between James Packer’s Crown Limited and Melco International Development Ltd., which is run by Lawrence Ho, who is the brother of
Pansy Ho.

Two days following the opening of the MGM, Wynn Resorts announced it would open its Wynn Macau casino expansion on December 24. Originally, the additional 85 tables and 551 slots were not scheduled to begin operating until a month later. The new games bring the Wynn Macau total to approximately 390 tables and 1,190 slot machines.

In January, Wynn is opening an expanded retail offering with 11 new high-end shops. Construction has already begun on the Wynn Diamond Suites at Wynn Macau, which consists of a resort hotel with over 400 luxury suites and villas, plus restaurants, retail space and, of course, more VIP gaming space. The project is expected to open in just over two years.
For Melco’s Crown Macau, the new MGM property represents one more challenge. Opened in May, the smaller resort casino has 220 tables, 500 slots and 216 hotel rooms, including 24 VIP suites. In a recent Forbes Asia interview, Lawrence Ho spoke of one big early mistake.

“We went away from my original vision—which was a high-roller, six-star, VIP property—and tried to squeeze in too many slot machines,” said Ho.

To correct the situation, Crown Macau now has a three-year deal with AMA International, solely to increase its share of VIP play.

None of these plans appears to worry Pansy Ho.

“There’s no end of creative ideas at MGM Grand Macau,” she said, addressing the local media.

And, in what would pass for a challenge in any language, she said, “I would urge our neighbors to watch out.”

By GGB Staff   Fri, Feb 22, 2008

By Roger Gros   Mon, Feb 18, 2008

By GGB Staff   Wed, Feb 06, 2008

Player’s Personal Window
PRODUCT: AV Logica suite
MANUFACTURER: Paltronics, Inc.

Paltronics Inc., which manufactures centralized casino gaming system solutions and display technology, is getting a lot of attention for its AV Logica, or AVL suite, which is one of the new components of its One Link Slot system.
   
The product received an honorable mention in GGB’s annual Gaming & Technology Awards.
   
AVL is a player’s personal service and entertainment window that can be used on existing hardware. It provides bonusing games (through its Random Rewards program, which is the other new component of the One Link Slot system); streaming media and live broadcast content; access to loyalty programs, amenities and property information; and marketing messages—all directly from the player station. Players can order drinks, make restaurant reservations, and get advertising targeted to their preferences.
   
This gives the player a direct link with his loyalty program at both slot machines and live table games anywhere in the casino. Players can take their bonus games and programs from the slot machine to table and pit areas, restaurants and fitness rooms—all presented by AVL at the player’s station, which talks directly to the player. Loyalty programs can be customized to draw players to those marketing programs that interest them most.
   
Because AVL allows messaging across many platforms, it provides a
powerful marketing tool to the casino, which can send a branding message across all areas of the property.  AVL also connects to table games, allowing players to bet credits  from their player credit meter on their AVL entertainment window just as they would on a slot machine. This can accommodate players who are comfortable with slot betting but a little intimidated by table games.
   
AVL allows the casino to tailor marketing programs, bonusing systems, customized promos and even direct marketing messaging down to the individual patron.
   
For more information visit the company’s website at www.paltronics.com or call 1-877-GO-1-LINK.

By Frank Legato   Wed, Feb 06, 2008

This is one of the newest games in Konami’s “Advantage 5” series, the new line of five-reel, multi-line stepper slots introduced at November’s Global Gaming Expo. Games in this series stand out on the slot floor because they are five-reel games, but use full-size reels, making the reels look huge within a standard-footprint cabinet. A 19-inch color video bonus screen is featured in the top box.

The top box of Advantage 5 games features a mirrored “Infinity” light box. Multi-colored LED lighting combines with mirrors to create an elegant cantilevered 3-D effect. It appears as if the front of the top box is transparent and you are looking inside at a festive light show. The reels are all back-lit, and the lighting changes colors according to different events in the primary game. Colors also change on the etched-glass belly of the slot according to different jackpot events in the game.

Thunder Warrior uses this format to wrap a story line around Thor, the Norse god of thunder. The base game is a 25-line game with a 250-credit max bet and a free-spin bonus event.

The free-spin round is triggered when bonus symbol appear in any position on the three middle reels. Once the event is triggered, the game’s computer randomly chooses one or more reels as wild reels—all symbols on the reel are wild, and the reel is frozen while other reels spin in the free-game event.

The player is awarded four free spins with the wild reel or reels. If the bonus symbol lands during a free spin on any reel not already held, that reel becomes a full-reel wild symbol for the remainder of the free spins.

Manufacturer: Konami Gaming
Platform: Advantage 5
Format: Five-reel, 25-line stepper slot
Denominations: .01, .02, .05, .25, .50, $1
Max Bet: 250
Top Award: 1,000 times line bet
Hit Frequency: 43%
Theoretical Hold: 1.77%—17.51%

By Frank Legato   Wed, Feb 06, 2008

This is Bally’s latest incarnation of the legendary Blazing 7s theme, on the wide-body Alpha Elite S9C cabinet and the popular “Frenzy” format, which utilizes a three-reel base stepper game with a fourth reel used exclusively for bonuses. There also is a small color LCD video screen just beneath the reels, used for the bonus event.
   
The base game in Fireball Frenzy is the classic Triple Blazing 7s, with a basic pay schedule including cherry and bar symbols along with four different “7” combinations—mixed, single, double and triple 7s, the latter yielding the top line jackpot. It is configurable by the operator with three, five, nine, 15, 20, 25 or 30 paylines and per-line wagers from one to 50 credits.
   
The fourth reel includes multiplier symbols of 2X, 3X, 5X and 10X, along with a straight 10-credit bonus award symbol and the Fireball Frenzy symbol, which triggers the bonus event. The fourth-reel bonus applies to winning combinations on any active payline of the first three reels.
   
When the Fireball Frenzy symbol lands on the fourth reel with a winning combination on an active payline on the first three reels, it triggers a straight bonus award. The player is prompted to select one of three fireballs appearing on the small LCD screen to reveal a bonus award.
   
The operator has a lot of flexibility in the configuration of the game, with wide ranges of theoretical hold, paylines and denominations—it is available in denominations ranging from pennies all the way to the $100 denomination.

Manufacturer: Bally Technologies
Platform: Alpha Elite
Format: Four-reel stepper slot; configurable paylines
Denominations: .01 through $100
Max Bet: 3—1,500
Top Award: 5,000 times line bet
Hit Frequency: 41.76%
Theoretical Hold: 3.98%—12.07%

By Frank Legato  

The newest game in Atronic’s series of video slots based on the popular “Game of Life” board game, “Career Choices” includes a feature-rich bonus game based on the familiar game board.
      
The base game is available in a variety of setups. The nine-line or 25-line game offers top jackpots that vary according to the denomination and the max-bet—from 15,000 credits for the nine-line, nine-coin version all the way up to 750,000 credits for a penny 25-line version with a maximum bet of 250 credits.
   
There are two separate wild symbols in the base game. The diamonds on reels 2 through 5 substitute for all but bonus trigger symbols. The dollar symbol is a “scatter wild,” which means it transforms all the symbols on a reel into wild symbols when it lands. When that happens, each additional dollar symbol multiplies the jackpot up to 16 times.
   
Three “Game of Life” symbols on an active payline trigger the main bonus event on the top screen. A spin dial appears, which the player touches to move around a game board on the screen. There are 20 spots on the game board, which award free spins, free spin multipliers or special mini-bonus games.
   
If the player lands on “Take a Break” or “Choose Your Job,” a “LIFE” tile is awarded with free games or multipliers. If “Business Trip” is revealed, an animated sequence results in one of three bonus credit wins.
  
This also is one of the games casinos can order with Atronic’s special “Mystery Magic” progressive jackpot. If the games in the bank are linked to this jackpot, the progressive can occur randomly at any time, regardless of any combination on an individual game.

Manufacturer: Atronic Americas
Platform: e-motion
Format: Five-reel, multi-line video slot
Denominations: All denominations available
Max Bet: 250
Top Award: 5,000, 50,000, 150,000, 300,000 or 750,000
Hit Frequency: 31.54% or 34.78%
Theoretical Hold: 4%—14%

By GGB Staff   Tue, Feb 05, 2008

Last May, Rick Kalm was appointed executive director of the Michigan Gaming Control Board. He comes to the MGCB at a transitional time, when the “temporary” casinos in Detroit are opening their permanent facilities. As executive director, Kalm—a 31-year veteran sheriff’s captain who was chief of staff of the Macomb County Sheriff’s Office—will manage the responsibilities of a volunteer and unpaid board. Thus, he plays a critical role in the daily oversight of the
staff of the agency to assure that the mission of the agency is accomplished. He spoke with Michigan Gaming Law Newsletter Publisher Dave Waddell
in December. For more information on the newsletter, go to www.michigangaming.com.

Waddell: What is your overall concept of the mission of your agency in connection with the regulation of the casino gaming industry in Michigan?

Kalm: It is very simple. The mission of the agency is to ensure the integrity of gaming in Michigan and the interests of the people of the state of Michigan. That is why we exist as a regulatory agency. If we are mindful of the mission in all of our various regulatory duties, it allows us to focus on what is necessary to accomplish the mission.
Michigan needs to ensure the integrity of the casino gaming. My goal is to provide the finest gaming control operation in the U.S., which will ensure the people of the state of Michigan that the commercial casino industry is honest and fair.

Do you foresee changes in operating philosophy for the agency under your leadership?

Subtle changes may occur as they would in any agency that undergoes a change in leadership. We will, however, adhere to the same mission that was established previously.

What are the main goals or objectives for the agency during the next year?

We are currently working through the requirements for fully operational status of the three Detroit casinos as they open their permanent locations. Our goals are to do that as fair as possible and as quickly as we can, to facilitate an impending tax rollback that favors the casinos. We are expediting the licensure of employees, and continuing to offer that service on-site at the casinos. I am committed to making our staff and myself as accessible as possible to the casino management and attorneys to solve regulatory issues before they happen, through dialogue.

Are there particular areas that the members of the Michigan Gaming Control Board have indicated a desire to have the agency seek to focus on?

We are focusing on some rule changes that are in need of re-tooling to make it easier to apply the act. Rule changes or modifications go through several steps before finalization, and this process takes time and resources to accomplish. This work is being
done while still conducting the ongoing business of the board.

What experiences do you bring from your work in oversight of a law enforcement agency that will shape the way you oversee the Michigan Gaming Control Board staff and operations?

I have been involved in the application and enforcement of laws on the public we serve. I understand the large amount of discretion as law enforcement officers or regulators that we possess. I truly believe that the application of the law must be fair and consistent without being over-enforced, with the intent and spirit of the law considered.

Do you have any advice for companies which serve as suppliers to the Detroit casinos with regard to steps that they can take to make the licensing and ongoing compliance process as smooth as possible?

Ask questions during the application process. Make sure you provide all the information requested, and if prompted for additional information, respond quickly. The largest problem with the processing of a supplier license is the time it takes to gather the required information to complete the investigation.

You and your staff have recently had to grapple with a number of complicated issues, including the potential closure of the casinos in connection with the state budget crisis, the renewal of all three casino licenses, and the recent opening of the MGM Grand Detroit permanent casino. Are things going to quiet down now a bit for your agency, or are there still some major issues on the horizon?

Two casinos have opened their permanent facilities to date. We are still monitoring the other construction project and licensing those suppliers. The type of regulation we perform requires 24/7 commitment of resources and by virtue of that generates activity for us. In addition, these complexes have increased their gaming areas, amount of machines and the volume of patrons. This increase will ensure that our work will continue at the same pace and will probably increase.

How often do you compare notes with regulators in other jurisdictions? What is your philosophy about doing so?

I/we speak regularly with other jurisdictions. Nevada Gaming Control, Missouri, just to name a few. We also collaborate with Native American casino regulators in other jurisdictions. My philosophy is that it is important to keep abreast of what others are going through in other areas of the country. Many times we can share information or adopt what they are doing, as it may be a proven way of handling a situation. We also know that some casino crime is occurring by the same individuals at a great many sites nationwide, and in these cases information sharing is extremely important.

By GGB Staff   Tue, Feb 05, 2008

Oswell named to head Fontainebleau

Audrey Oswell, former president and CEO of Resorts Atlantic City, has been named as president and chief operating officer of Fontainebleau Las Vegas.
   
Oswell will oversee all operational aspects of the new $2.9 billion, 3,812-room resort currently being built on the Las Vegas Strip by Fontainebleau Resorts LLC, which also owns the legendary Fontainebleau in Miami Beach.
   
Oswell  is a 25-year veteran of the Atlantic City casino industry. Prior to Resorts, she was president and chief operator of Caesars Atlantic City, where she began her casino career in 1979. After taking the top job at Resorts in 2000, she oversaw the construction and opening of the hotel’s Rennaisance Tower and the re-design of the entire casino.
   
Oswell most recently served as chief operating officer of the Cosmopolitan Resort & Casino in Las Vegas, where she established the start-up company’s organizational structure, assembled a senior management team and developed a marketing strategy.
  
 “Audrey is one of the casino resort industry’s most accomplished executives,” said Howard Karawan, chief operating officer of Fontainebleau Resorts. “We’re confident her vision and leadership will help drive Fontainebleau Las Vegas to become one of the world’s most spectacular
destinations.”
   
The Fontainebleau is slated to open in fall of 2009.

SkyCity finally has CEO

SkyCity Entertainment has named Nigel Morrison as its new CEO. The appointment comes months after the previous chief executive, Evan Davies, left in June.
   
Morrison is currently serving as chief financial officer of Macau-based Galaxy Entertainment Group. He has more than 18 years of experience in the Australian gambling industry, including having headed that nation’s largest private casino and gaming company, Federal Group.
   
Acting CEO Elmar Toime, who previously was head of New Zealand’s postal service, will stay on until the beginning of March 2008.
   
The appointment of Morrison does not mean the end of SkyCity’s search for a takeover, according to a Brisbane Times report. Likewise, Morrison has said that a takeover would not automatically mean his departure.

Former Station exec launches consulting firm

Lesley Pittman, former Station Casinos vice president of corporate and government relations, announced she has formed Sierra Strategies, a consulting firm that will provide government relations and strategic communications services to clients across Nevada.
   
“I’ve had a lifelong dream of owning my own company, and after 15 years of work in the communications and legislative fields at both the state and national level, I look forward to bringing my advocacy and communications expertise to clients throughout the state,” Pittman said.
   
At Station Casinos, Pittman was responsible for the development and implementation of the company’s government, community and public relations activities at the federal, state and local levels.
   
Prior to joining Station Casinos, Pittman served as government services communications manager and associate director of public relations for R&R Partners in Las Vegas, where she crafted communication strategies to help agency clients achieve public policy goals and devised campaign tactics to secure voter approval of several ballot initiatives.

Trump appoints PR manager

Trump Entertainment Resorts announced that Mary R. Moyer has been appointed public relations manager for all of the company’s casino properties.
   
Moyer, who most recently was advertising and public relations manager for Trump Taj Mahal, will be responsible for spearheading public relations campaigns to gain publicity for all Trump Entertainment Resorts’ entertainment, special events and community involvement.
   
Before joining the Atlantic City Trump properties, Moyer served as the advertising manager at Tropicana Casino and Resort, where she was an integral part of the marketing team that launched the Quarter retail attraction.
   
Prior to her casino career, Moyer, an Atlantic City native, worked in managerial positions for advertising agencies and corporate bank marketing departments.

Carnahan boosts Agua Caliente slot management

The Agua Caliente Band of Cahuilla Indians named gaming veteran Ken Carnahan as the new executive director of slot performance at the Agua Caliente casino in Palm Springs, California.
   
Carnahan, a 14-year veteran of the casino industry, spent the last  two years as director of slots at Agua Caliente Casino in Rancho Mirage, California. In his new role, he will be responsible for all slot performance activities at both Agua Caliente casinos. This includes slot analysis, strategy, purchases, contract negotiations and game-pricing. Carnahan also will provide support and guidance to management teams at both casinos.
 
Evans named CFO at Santa Ana Star

New Mexico’s Santa Ana Star Casino has promoted Nan Evans to chief financial officer. Evans, who has 11 years of accounting experience, will manage the casino’s day-to-day financial operations. She previously was the casino’s controller.
   
Evans’ responsibilities will now include overseeing the casino cage or cashier, the information technology department, the drop and count team responsible for counting the money from slot machines, compliance purchasing, and the accounting department.
   
“I am very excited about being promoted to chief financial officer. I look forward to my new responsibilities and the opportunities to learn more about the gaming industry and the departments I oversee,” Evans said.

Harrah’s names Condon as consultant

Harrah’s Entertainment Atlantic City announced today that Ken Condon, who recently retired as senior vice president and general manager of the operator’s Bally’s Atlantic City property, will serve as sports and entertainment consultant for the company’s four Atlantic City properties.
   
As head of Bally’s, Condon is credited with reviving boxing as a major draw for Atlantic City, arranging boxing contests at Boardwalk Hall in recent years that contributed to the venue’s rebirth as one of the top-grossing arenas in the country.
   
Condon has been a key executive in Atlantic City since casinos began in 1978. As chief at Bally’s, he oversaw a succession of key developments, including the opening of the Wild Wild West annex, the merger of Park Place Entertainment with Caesars, and the merger of the Claridge into Bally’s.
   
After the opening of the refurbished Boardwalk Hall in 2001, Condon led the charge not only to bring in major boxing events, but superstar entertainment into the venue.
   
“Ken Condon is a true visionary in the gaming industry and a well-respected negotiator of complex contracts related to the sports and entertainment industries,” said Carlos Tolosa, Eastern Division president of Harrah’s Entertainment. “In his role as sports and entertainment consultant, Ken will bring superstar boxing matches, concerts and sports events to Atlantic City and maximize Harrah’s, Bally’s, Caesars and Showboat’s role as leaders in A-list entertainment.”

Aruban Resort announces exec appointments

KL International, LLC announced the appointment of its executive timeshare sales and resort operations team for its Aruban Resort & Casino at Eagle Beach in Aruba.
   
Karen Hana was named as senior vice president of resort operations. Hana, a graduate of the Hague School of Hotel Management in the Netherlands, has more than 20 years of industry experience, most recently as hotel manager at the Princess Port de Plaisance in St. Maarten.
   
Named on the timeshare sales and marketing executive team are: Terry Calacino, senior vice president of sales and marketing; Robert Watson, senior vice president of operations; Garritt Watson, vice president, Latin American sales; Adriana Rodriguez, assistant vice president, Latin American operations; and Sabina Abelis, assistant vice president, special events.
   
The Aruban Resort & Casino at Eagle Beach, recently acquired by KL International, includes a 362-room timeshare and resort hotel, a 48,000-square-foot permanent casino, a restaurant (currently operating as a temporary casino) and recreational amenities.

Magna appoints COO

Magna Entertainment Corporation announced it has appointed Ron Charles to the position of chief operating officer, reporting directly to Chairman and Interim CEO Frank Stronach. Charles will be responsible for all operational aspects of MEC’s business units, including horse racing, gaming, XpressBet.com, AmTote International and MEC’s investments in TrackNet Media and HRTV.
   
Charles joined MEC in 2004 as executive director of MEC California. He is a past chairman of the Thoroughbred Owners of California.
   
“I am very pleased that Ron has accepted the chief operating officer position and taken on the added responsibilities that go along with it,” said Stronach. “In addition to his new corporate responsibilities, Ron will continue to play a vital role as executive director of MEC California. I have had a chance to work with Ron for a number of years now and he has my complete confidence.”

Harrah’s Entertainment appoints marketing chief

Harrah’s Entertainment announced it has named David Norton to the position of chief marketing officer, subject to regulatory approvals.
   
Norton will oversee all marketing activities for the company, and will continue to lead relationship marketing, which he has headed since 2003.
   
“In today’s complex multi-channel marketplace, we must continue to strengthen customer relationships and deliver high-quality brand experiences across our entire portfolio,” said Gary Loveman, chairman, CEO and president of Harrah’s Entertainment. “David has demonstrated outstanding leadership as senior vice president of relationship marketing
and is eminently qualified for this important role.”

By Frank Legato   Tue, Feb 05, 2008

Blue Blazes
International Game Technology

This is an intriguing new stepper slot from IGT’s Barcrest subsidiary. The base game is a simple three-reel, single-line slot game with tripling wild symbols. One 3X symbol triples the jackpot in winning combinations; two with a win multiply the jackpot by nine; three pay the top line jackpot of 2,500 coins. It is a quarter game with wagers up to five credits, or $1.25.

Embedded in the top box is a second set of reels, with a separate, more basic pay schedule and five paylines. It is the home of a free-spin bonus. A “+3 Free Games” symbol on the third reel increments a free-spin meter, and the player can accumulate free spins or press a button to collect them at any time.

The top box reels contain “BAR” symbols, 7s, “FREE GAMES” symbols and wild symbols. Bar symbols pay 10 times the wager; “7” symbols, 25 times the wager. The wild symbols pay 100, 200, 300, 400 or 1,000 credits, for lining up three on each one of the respective paylines, and three FREE GAMES symbols on a payline triggers an additional three free games on the top-box reels.

What makes the game unique, though, is that for a total wager of 10 credits, the player bypasses the base game and goes right to the top box. There is a fourth, bonus reel next to the primary reels that is activated with the 10-credit wager, with the symbols representing the six sides of a die. Landing 1, 2 or 3 on the die is a losing spin; a 4 spins again. A 5 or 6 on the die registers one or two free games on the top box, respectively. The player then has the option to play the free games or bank them and keep spinning.

According to the manufacturer, the player has a five-in-six chance of winning at least one free game on the high-paying top reels with the larger wager. It is designed to promote a very high average wager, particularly as it is offered in the quarter denomination. (It also is available in multi-denomination or denomination-selectable setups.)

Manufacturer: International Game Technology
Platform: S2000
Format: Three-reel, single-line stepper slot; mechanical bonus
Denominations: .25; configurable as multi-denomination
Max Bet: 20
Top Award: 5,000
Hit Frequency: 40%
Theoretical Hold: 2%—15%

By GGB Staff   Tue, Feb 05, 2008

Swiss Gaming gets first Caribbean order for Digi Playcards

Swiss Gaming Corporation has secured its first Caribbean order for Digi Playcards from the San Marco Casino on Curacao. The Playcards will be at the heart of a radio promotion surrounding the re-launch of the casino and hotel in downtown Willemstad.
   
The Digi Playcard is an electronic device about the size of a credit card, but thicker. It contains a microchip, EPROM, battery and LCD, and can also accommodate a solar cell, sound chip or timer for different applications. Basically, it can function as a miniature slot machine.
   
Each Playcard contains an accumulator game and a bonus game. The player must accumulate a certain number of points, and then becomes eligible to claim a prize onsite at the casino.
   
SGC is working with the San Marco to ensure the latest marketing techniques are used to create interest and excitement in the entire local population—not just among the people lucky enough to receive one of the Playcards.  
   
Several winning combinations of the bonus game will be released every day of the promotion. The peak will feature a raffle for all participating Playcards.
   
René Lindsen, president and CEO of SGC, is personally involved in assisting the San Marco in this promotion.
   
Founded in 2006, Swiss Gaming Corporation manages and advises casinos on everything from strategic development to concept realization. SGC produces a monthly international newsletter. For more information, go to www.swissgamingcorporation.com.

Sona, Station Casinos sign licensing deal

Sona Mobile Holdings Corporation announced it has entered into a multi-year development and licensing agreement with Station Casinos, Inc. for the joint development and integration of Station’s race and sports wagering applications. Under the arrangement, Station will have exclusive rights in the Las Vegas locals market for wireless products developed by Sona Mobile to allow remote race and sports book wagering.
   
The jointly developed products may be distributed by Sona worldwide outside of the Las Vegas locals market (Station has a five-year exclusive in its market).
   
Sona will receive application development fees and licensing fees, and the parties will share revenues from applicable race and sports wagers. From time to time, at its option, Station Casinos may elect to serve as Sona’s test site for certain products contemplated in the agreement.
   
“We are looking forward to working with Sona to leverage its existing race and sports application portfolio, which will provide additional wagering entertainment value, convenience and privacy for our customers. We like Sona’s vision and feel that it’s a very good strategic fit for our company,” said Art Manteris, vice president of race and sports book operations for Station Casinos.

Federal Group installs KISS

The Federal Group’s Wrest Point Casino at Hobart and Country Club Casino in Tasmania has installed the KISS Casino Information Software System from International Casino Services. Federal Group owns and operates tourism and gambling businesses throughout Tasmania and is the largest private casino and gaming company in Australia.
   
Wrest Point is Australia’s longest running casino, opened in 1973. It was recently renovated and operates 26 tables and 700 slots, a wide selection of restaurants, a conference center and a hotel with 269 rooms. Country Club has 15 tables and over 500 slots, conference facilities, a golf course, and a variety of accommodations and restaurants.
   
“The KISS package was developed for casino and gambling operations such as the Federal Group, with a strong focus on security and highly efficient chip movement control, table gaming reporting, soft count administration, surveillance and cash desk modules,” said Brian Colwell, director of operations at ICS.
   
Other features of the proprietary KISS software system include junket commission reporting, non-negotiable transactions, player tracking and collection of personal details, check cashing, credit control, a foreign currency module and a compilation of a wide variety of audit trails and management reports.
   
KISS has been installed in a number of gaming jurisdictions, including casinos in Australia, Macau, Vanuatu, the Solomon Islands, Tahiti, the Philippines, Cambodia, Russia, Vietnam, Tinian, and numerous cruise ships.

Lightning Poker secures patent

Lightning Poker, Inc., a wholly owned subsidiary of Lightning Gaming, Inc, announced that on December 11, the United States Patent and Trademark Office awarded the company U.S. Patent 7,306,516, titled “Electronic Game Table,” for automated poker tables having a center screen continuously displaying multiple community cards and betting information for each player to all the players.
   
Lightning Poker’s automated poker table, distributed by Shuffle Master, Inc., features 10 touch-screen player stations around a center screen which displays video of a live game. It includes 3D graphics and animation of card curls, chip flips and chip slides, along with all the attendant sound effects.
   
The Lightning Poker automated poker table plays Texas Hold ‘Em, Omaha High and Omaha High/Low.
   
“We are very pleased to see another of our patents issued from our portfolio of pending applications,” said Brian Haveson, Lightning Gaming’s CEO. “This patent protects a critical feature of our automated poker tables, the center monitor, which is a key component to the player experience.”

Atronic announces licensing deal

Slot manufacturer Atronic Group announced a new license agreement with Endemol International BV to continue developing slot games based on Endemol’s popular Deal Or No Deal TV game show.
   
The new agreement authorizes Atronic to continue developing new Deal Or No Deal-themed products on a worldwide basis. It replaces the recently expired original agreement, which had been granted through a third party.
   
The new agreement coincides with the launch of two new slot games based on the show, “Deal Or No Deal: The Experience” and “Deal Or No Deal: Mega Deal.”

GSA to celebrate 10 years

The Gaming Standards Association used the International Casino Exhibition in London in January to kick off a year-long celebration of the organization’s 10th anniversary.
   
GSA was formed in 1998 to promote standard protocols to permit the equipment and systems of various manufacturers to communicate with each other. At ICE, the organization kicked off its 10th year by discussing protocols that will enable, among other things, open architecture for server-based gaming applications. GSA’s technical committee met in Austria the week after ICE.
   
“We have made tremendous progress over the past nine years, and what better way to begin marking the 10th anniversary of our international organization than at the International Casino Exhibition?” said GSA President Peter DeRaedt. “It truly speaks to the global reach of GSA and the universal applicability of standards.”

Cyberview system granted patent

Cyberview Technology Inc. announced it was granted U.S. Patent No. 7,297,062, “Modular Entertainment and Gaming Systems Configured To Consume and Provide Network Services,” for a key component of the company’s server-based gaming system.
   
The patented architecture overcomes the critical technical and security limitations of present-day technology with respect to server-based gaming, while accommodating regulatory requirements as demanded by the most rigorous standards of gaming jurisdictions worldwide.
   
“We have patented the server-based command and control blueprints,” said Seamus McGill, Cyberview CEO. “If you’re building distributed gaming systems, with the intent to place your solutions in the highly regulated first-tier gaming markets, our technology will meet and exceed all of your requirements.”
   
“The technology of this patent gives the operators and the regulators the means for monitoring and control of networked gaming operations, presently desired, but not yet available,” added Thierry Brunet, Cyberview’s chief systems architect.

Nanoptix signs distribution deal

Nanoptix Inc., a leading supplier of printers for gaming applications, announced a distribution agreement with RGB Sdn Bhd, Asia’s leading supplier of casino gaming and amusement leisure equipment. Under this agreement, RGB will sell and provide service for the Nanoptix line of “Paycheck” ticket-in/ticket-out printers.
    
“We are very excited to be partnering with RGB,” said Jean-Louis Drapeau, vice president of sales and marketing for Nanoptix. “RGB’s highly qualified, well-trained technical teams are strategically based in key locations throughout Asia to ensure the best services are rendered to their customers. This gives us great confidence for success in the Southeast Asian market.”  

Regency goes to Mars

Mars Electronics International—MEI—has been chosen by Greek casino operator  Regency Entertainment Group to provide its CashFlow SC83 bill acceptors for all of Regency’s future slot machines.
   
Evaggelos Dimou of Regency Casino Mont Parnes said, “We wanted to make sure our decision was the best for the business. So, we took a look at the banknote readers which are the most well-known brands in Europe. After the trial, we concluded MEI outperformed their competitors by a favorable margin. To this end, we know we can make more money with MEI.”
   
Mark Greenawalt, MEI’s European and African gaming director, said, “We are absolutely delighted with Regency’s decision to specify MEI CashFlow on all new machine purchases.” He added, “We look forward to working with Regency now and with their expansion plans. With all of the major OEM slot producers supporting and offering MEI, we will be able to satisfy Regency’s future specifications and their performance demands.”

Palm Springs poker room goes automated

The Fantasy Springs Resort Casino in Palm Springs, California, has joined the growing trend of bringing in automated poker tables by adding PokerTek’s PokerPro tables to its card room.
    “PokerPro is a great addition to our casino,” said Lou Crescenzo, vice president of operations for Fantasy Springs. “Removing our manual tables to put in PokerPro was an easy decision for us considering the system’s capabilities and benefits to us and our players.
   
“The response so far has been great, and we’re just getting started.”
    
Table Trac gets South American orders

Table Trac, Inc., a gaming systems provider to small and mid-sized casinos, received an order and down payment for the sale of its systems to two casinos in Peru. The company has multiple system installations in Central America, but this is the first in South America.
   
“This makes three casino sales in the past two weeks,” said Robert Siqveland, the company’s director of marketing. “These two casinos are part of the

Thunderbird group and the order is indicative of our developing relationship with that organization.”
   
Chad Hoehne, president of Table Trac, said, “Our success and strong relationships in Central America have provided the credibility for Table Trac to continue to expand its market boundaries.”

Casino surveillance top job

A list of the 30-fastest growing occupations in the U.S. listed gaming surveillance jobs at the top, with an expected 34 percent growth over the next eight years.
   
David Schwartz, with the Center for Gaming Research at the University of Nevada-Las Vegas, said it’s not much of a surprise; more casinos opening and using better technology will require more people to operate the technology.
   
“With all the casinos opening up, this is probably a good time to get into the field,” he said. “Surveillance is something that the longer you do it, I think the better you get at it and you really have to have almost a sixth sense of what’s going on the casino floor.”
   
And unlike many jobs that are being replaced by machines, there is still no surveillance machine capable of making the judgment calls that humans do, he said.

Italian manufacturer debuts product in Cyprus

Rocks Casino in Northern Cyprus has become the region’s first customer to take delivery of the new Magic Dreams Slant Top 500ST as part of its major refurbishment program.
   
The 500ST is a 19-inch double-screen slant top model that has drawn much attention from the European gaming industry.
   
Rocks Casino Operations Director Ertan Ertekin commented, “We are delighted to be the first on the island to order the new 500ST from Magic Dreams and we appreciate the build and design quality. They certainly fit well into the newly refurbished casino and if they play as good as they look, they may not be on their own for long.”
   
James Illingworth, international sales director for Magic Dreams, said, “To receive an order from such an experienced operator as Rocks was very pleasing for MD and a sure sign that we are moving in the right direction in terms of quality. Our upright MDX 500 model is currently performing well on the island and we expect the same for the 500ST.”
   
Along with launches of new products, Magic Dreams is opening a new regional office in Buenos Aires, Argentina where Maria Laura Garcìa Casasola will be the new sales director.
   
“In these years Magic Dreams has enlarged its boards outside Europe and the South American market has immediately given a positive feedback to our products. We’ve chosen to have regional offices in Columbia and Argentina as we believe in the South American market and we want to be there with direct contacts,” said MD General Director Luca Gerardini, “granting the best service to our customers. Maria Laura has good experience in the gaming industry and her presence in Magic Dreams will be helpful to increase our expansion and development plans.”

Robinson & Associates releases white paper on organizational improvement

A new white paper from Robinson & Associates, Inc., has been published to help casinos understand what is involved in rolling out internal improvements that can result in greater success in the future.
  
 “One of the greatest challenges for gaming properties is to achieve and maintain consistent, positive organizational improvement–improvement that provides superior competitive positioning,” says Jennifer Privitera, author of the white paper and manager of client service at Robinson & Associates, a customer service consulting firm to the casino industry. “Although it requires effort, the ability to change and improve must be built into a casino’s strategic plan. It can and must be done.”
   
The white paper draws from nearly 20 sources to give an overview of organizational improvement and a positive work culture, explore cost versus investment in employees and address the benefits of employee training and development. It outlines the challenges casino managers face in a culture that emphasizes improvement and the skills they need to implement positive change.  The white paper also offers a brief case study of McDonald’s and its learning environment.
   
“Sustainable organizational improvement is an ongoing struggle for casinos, but it is a challenge that can be overcome,” Privitera says. “Gaming properties that embrace change and internal improvement will be amply rewarded as they become more effective, accountable, efficient and visionary.”
  
 To obtain a copy of the white paper e-mail Marilyn Kuhnert, Robinson & Associates’ client development specialist, at mkuhnert@casinocustomerservice.com or call 623-486-9090.

Krawczyk joins Orion

Orion Gaming last month announced the appointment of Henry Krawczyk as director of international sales. Krawczyk joins Orion with over 20 years of gaming industry experience.
   
“I feel privileged to have joined such a dynamic and innovative team at this stage of the company’s development,” Krawczyk said. “Although a wholly owned subsidiary of WMS, it is important to build and grow Orion as a unique, separate and distinct brand. There are always challenges in attempting to achieve the quite substantial goals we have set ourselves, but with the talent already at Orion, and when you add to that the support of WMS, the future looks extremely promising.”
   
Barry Greenberg, Orion’s managing director, said the company is lucky to have someone with Krawczyk’s background.
   
“The addition of Henry to our team will go a long way to ensuring Orion achieves the long-term strategies being put into place for sales, product plans and commercial focus,” said Greenberg.
SIP’s first install completed in Switzerland
Helmut Steffenini, managing director of Systems in Progress, a subsidiary of WMS, last month announced the first jackpot installation of SIP in Switzerland. The installation took place at the Grand Casino Bern, which is now able to offer its customers the first multi -level mystery jackpot in Switzerland over several different slot machines of varying types and brands.
   
Grand Casino Bern Technical Director Gerhard Stiegler congratulated SIP for a job well done for delivering the first successful and smooth installation in Switzerland.
   
SIP technology offers major advantages, eliminating the need for expensive servers and resources on site. The system has an auto sensing function of major machine protocols, auto detection of denominations and payouts while supporting the widest range of jackpot models (both local and wide area), progressive and mysteries, plasma displays, cash desk, player tracking, bonusing and cashless (card based).
   
WMS acquired SIP in 2007. SIP was founded in August 2003 by Steffenini and Franz Lechner, both with more then 20 years of experience in the global casino industry.  

By GGB Staff   Tue, Feb 05, 2008

Smiling Ceilings
PRODUCT: Grand Ice Chandeliers
MANUFACTURER: Creative Nightclubs LLC

Creative Nightclubs, a manufacturer of nightclub elements and materials based in Boynton Beach, Florida, has introduced a new lightweight chandelier that can create distinctive multi-colored ceiling effects that make the interior of a casino look like an ice palace, but for a fraction of the cost that such effects would have set you back just a few years ago.

Grand Ice Chandeliers can be used with LED, fiber optic or fluorescent lighting. Once installed they open up creative vistas that run the gamut from fixtures that look like melting ice to 16 million colors and 5,000 pre-programmed magical effects using LEDs and DMX controls. The effect, says the manufacturer, is more like a “light fountain” than a chandelier.

LED lights are revolutionizing illumination technology, and because they are so inexpensive to power they achieve the effects while cutting the electric bill. Right now, the only place where you find this particular effect is at Miami’s Kaffe Krystal.

The product is made from Illusion Flex Ice film wrapped around frames of metal or plastic that are so feathery that the chandeliers almost appear to float. Unlike ceiling effects and chandeliers that use heavy glass, these fixtures don’t present a liability problem. They are easy to install, clean and maintain.

Each fixture is custom-made for each customer’s specific ceiling. The fixture is delivered flat-packed in two boxes and assembles with two people in less than eight hours. It can be installed using cables. A custom-made assembly manual is included with each order. Prices start at $84 per running foot. Even though they are custom-made, the lead time currently is still about two weeks for delivery.

For more information visit the Creative Nightclubs website at www.creativenightclubs.com or call 1-877-657-7223.

By Frank Legato   Tue, Feb 05, 2008

You know, if I’ve learned anything in 20-odd years of doing whatever it is that I do, it’s this: When it comes to casinos, everybody wants a piece of the action.
  
 Even Egypt.
   
It says here that Zahi Hawass, who heads Egypt’s Supreme Council of Antiquities, has presented legislation to the Egyptian parliament that would let the country require payment from anyone replicating its ancient treasures.
   
That includes all the King Tut stuff at Luxor in Las Vegas—stuff that Zahi Hawass himself helped to create. If the bill goes through, the Luxor will have to pay royalties to Egypt on its exhibit replicating the contents of King Tutankhamen’s tomb.
   
Before Luxor opened in 1993, Hawass served as a consultant to its owner, then called Circus Circus Enterprises, in the creation of a collection of artifakes—fake artifacts, which look exactly like the contents of King Tut’s tomb as it was discovered in 1922. Visitors still fork over $9.99 a pop to view the artifakes. Egypt wants a piece of that.
   
So far, they don’t want Luxor to give them money because its hotel looks like a pyramid, or because there’s a Sphinx replica out front. Of course, that’s only because none of the pyramids at
Giza have hotel rooms or a light shining out the top, and the great Sphinx doesn’t have a casino in its belly.
   
Hawass has said he originally crafted the proposed law to prevent looting and illegal copyrights of Egyptian antiquities in China and elsewhere. I think there are some King Tut bobble-head dolls circulating around. (If not, there should be.)
   
But the Luxor exhibit would fall under the law, too, said Hawass. MGM Mirage, which owns the Luxor, is going to respect the law. Presumably, if the law passes, the casino will either pay Egypt royalties or disassemble the exhibit—or, according to what an MGM Mirage spokesman told the newspapers, they could change the exhibit to respect the law. “We try to be very sensitive, and if this law should pass and it should turn out we could do some good for Egypt by making changes as minor as dealing with the replicas in the museum, then we’d make those changes,” an MGM Mirage spokesman said last month.
   
Changes? What are they going to do? Put funny-nose glasses on Tut’s sarcophagus image? Spray-paint graffiti on the hieroglyphics? (“Skynyrd rules!”) Paint a smiley-face on the fake mummy?
   
Beyond the potential need to alter the Luxor’s exhibit, what effect will the precedent of Egypt’s law have on other stuff that is replicated in the giant movie set that is the Las Vegas Strip? Will MGM have to pay the city of New York for all the stuff at New York-New York? How will they “change” that?
   
“Come to the all-new Hoboken Casino Hotel!”
   
What about the Venetian? Will we hear from Italy now, saying they want Las Vegas Sands to fork over some dough for the replicas of the Venice architecture and canals? Will we hear from the gondola-pusher’s union in Italy? What about Harrah’s? Will New Orleans want a piece of that Mardi Gras casino action? Will Japan want a piece of the Imperial Palace? Will France tap into Monte Carlo? Will pirates sack Treasure Island? What about Hooters? I can see millions in royalties going to plastic surgeons across the country.
   
Alright, having milked the Egypt story for every lame joke I could possibly extract, let’s turn to another hilarious item in this month’s gaming news. It involves heart attacks. (Doesn’t it always?)
   
I just learned that you have a better chance to survive a heart attack in a casino than you do at a hospital. According to the New England Journal of Medicine, which, of course, I read religiously, you’ve got a 50/50 chance of surviving a heart attack in a gaming hall, and a hospital, you’ve only got a one-in-three chance. Apparently, casinos are Johnny-on-the-spot with the defibrillator when someone grabs his chest and keels over, and no one asks you to fill out an insurance form or anything.
   
That story makes me feel all safe. If you’ll excuse me, I’m going over to the buffet to eat something deep-fried, and then I’m going to buy a carton of cigarettes so I can take up smoking again. Then, I’ll play a progressive slot without having to worry about dying if a shocking jackpot happens. (Well, I’ve got a 50/50 chance, anyway. I like those odds.)
   
Then, it’s off to visit the Luxor, so I can see the funny-nose glasses on King Tut.

By GGB Staff   Tue, Feb 05, 2008

Here are a couple of quotes from Challenges that Confront Researchers on Estimating the Social Costs of Gambling by Professor Douglas M. Walker, professor of economics at the College of Charleston.
   
“Little progress has been made in researchers’ ability to adequately identify and measure the potential costs of legalized gambling.”
  
 “Despite the best efforts of researchers, the actual social cost of gambling is still unknown.”
  
 This year, decisions will be made in several states to determine whether gambling will be added to each one’s respective economic mix. This promises to trigger a flood of studies, surveys and information on all aspects of gambling that will dissect, inspect and scrutinize the activity in every way possible. And no subject will receive more attention than the social costs of gambling.
  
 Studies that have been conducted on social costs will be placed into the public arena for debate, and these studies will offer wildly varying “precise” cost figures. New studies will make an appearance, which are likely to offer still different ranges for social costs. The results will be showcased by the media and by contending groups of opponents and proponents.
   
At the very least, the results of any study that purports to predict the social costs of gambling should be viewed with exceeding caution, and most should be dismissed out-of-hand. These are the conclusions drawn by a white paper we at the American Gaming Association commissioned because we are perplexed that opponents of gaming continue to make claims that social costs outweigh the benefits, yet the communities where casinos exist remain our strongest supporters. We wanted to better understand the issues involved and to promote a meaningful debate.
   
Walker’s Challenges that Confront Researchers on Estimating the Social Costs of Gaming argues that researchers who have attempted to identify and quantify the socials costs of gambling have missed the mark by a wide margin. As Dr. Walker says in his study: “Early research estimated that social costs ranged from about $13,000 per pathological gambler per year in the U.S., up to more than $30,000 per year. A decade of debate in the literature and in political discourse has resulted in little consensus on the validity of any of the numbers.” He also notes that studies conducted on the effect and costs of casino gambling on crime are wanting and contends that before researchers can truly begin to estimate social costs, four critical elements must be addressed:

(1) comorbidity, or the idea that many pathological gamblers have other coexisting disorders;
(2) survey data validity;
(3) measuring government expenditures relating to the treatment of problem gambling; and
(4) the counterfactual scenario, which refers to “the situation that would have otherwise been.”
   
In the case of comorbidity, it has been discovered that people who are pathological gamblers often suffer from a number of coexisting disorders, such as drug or alcohol dependence. It is also possible that pathological gambling is a symptom of a more basic addiction disorder. Whatever the case, Walker points out that researchers have failed to “allocate the harm among coexisting disorders.” The result is that costs of the various disorders are generally dumped into a single basket labeled “social costs of gambling” regardless of whether the behavior leading to the costs was a result of problem gambling or drug addiction, or other coexisting disorders.
   
As to the survey data validity, Walker says estimates of social costs often result from surveys that use questionable methodologies, including those that ask problem gamblers to estimate what their problem has cost when it isn’t clear that respondents even understand how to accurately calculate gambling losses.
   
His issue with measuring government expenditures related to problem gambling goes to the point that, simply because government spends money on something does not make it a social cost. Otherwise, spending on education, research, public safety and unemployment benefits should be labeled social costs, but they are not.
   
Finally, with regard to the counterfactual scenario, Walker makes an interesting case that researchers who conduct studies on the social costs of gambling have failed to consider what would have been the case if gambling were not introduced into a community. What if another industry or none at all settled there? Would crime increase or decrease? Would tax revenues and employment figures go up or down? Until these issues are acknowledged and addressed, a fully accurate reading of social costs cannot be made.  
   
Indeed social costs are associated with any type of economic development, including bringing a casino into a community. But Walker’s paper very clearly shows there are deep flaws in current estimates attributed to gambling. These are complex issues that do not yield to easy answers. It is understandable that communities and researchers with good intentions turn to existing estimates to extrapolate what the impact might be, but Dr. Walker’s paper makes it clear that good, solid research has not yet been produced.
   
What we can rely on is what is happening in gaming communities. The continued support of gaming by people in places such as Iowa, where citizens continually reaffirm by overwhelming vote their decision to bring casinos into the state, is easily measureable. Can anyone really believe that gaming would continue to be supported if the social cost estimates of gaming opponents were true?
   
Researchers should be focused on finding real data that could inform policy decisions. For example, if a person is labeled a “problem gambler” and receives treatment for this malady without consideration given to the fact that his or her problem could result from a cocktail of challenges, the “cure” won’t take, and the effort and funding to help the person could be in vain. This result could have important policy implications for jurisdictions beyond those considering gambling. After all, problem gamblers are not exclusive to communities that host gambling. Furthermore, the lack of a methodology to allow a community to better understand what the result would be of not welcoming gambling into its economic mix leaves that community in a vulnerable position.
   
Dr. Walker has sounded a call to action for researchers working to identify and measure the potential costs of legalized gambling. He has identified areas that require attention and offered solid reasons to accord that attention. Walker does note that “there is currently no way to deal with these issues.” That is the challenge he lays out, and it is one that should be embraced by the research community.

By GGB Staff   Tue, Feb 05, 2008

With approval from the Nevada Gaming Commission and the National Indian Gaming Commission, the $17.7 billion Apollo Management and TPG Capital buyout of Harrah’s Entertainment cleared its final regulatory hurdles. The deal is now expected to close in early 2008. Harrah’s chairman and CEO Gary Loveman said the change to private ownership will not change the company’s direction or its plans. Loveman and the current management team will continue to handle day-to-day operations. The board of directors will consist of Loveman, four representatives from Apollo and four from TPG. • Dubai World increased its holdings in MGM Mirage after buying about 5 million shares from controlling investor Kirk Kerkorian. Dubai World now holds 6.5 percent of the company, up from 4.9 percent. The total sale price was $424 million, or $84.80 a share. The company now has plans to submit a nominee for MGM Mirage’s board of directors after increasing its investment in the gaming giant. The company has that right now that it has more than 5 percent control of MGM Mirage. In 2007, Dubai World purchased 50 percent of CityCenter.  • The Northern Marianas House of Representatives has approved $500,000 to develop a casino gaming industry on the island of Rota. In November voters approved casino gaming for the island.• The bill now goes to the Senate for consideration. • SJM is planning to rebuild its Macau landmark casino resort, Hotel Lisboa. The project will begin in 2009 and is expected to be completed in 2012. SJM will hold an international architectural design contest to select the architect for the project.  • The Ukrainian subsidiary of Olympic Entertainment Group has opened a new slot casino in Kiev. The 232-square-meter casino has 44 slots and a spacious bar area. It is the company’s 15th Ukraine casino under the Olympic brand. Five more OEG casinos operate under the name Eldorado.  • Miami developer Gregg Colvin has big plans for the dingy Gold Spike casino he acquired over the summer. Colvin is in talks to purchase the adjacent Travel Inn and add it to the property, and he is planning on building a spa and new suites at the Downtown Las Vegas property. Covin expects to spend about $5 million on the 100 rooms in the Gold Spike replacing furniture, carpet, paint and fixtures throughout the hotel. Upgraded rooms, he said, would be comparable to rooms at the Golden Nugget and similarly priced. In addition to room upgrades, Covin plans to renovate the Gold Spike casino, bringing back table games, adding new restaurants and possibly bringing in a sports book. Covin is planning to build the new suites in what is now the property’s parking lot. The bungalows would be 550 square feet each, and would surround a pool and one-story spa. • Now that the Kentucky legislature has opened its 2008 session, one of the big issues on its plate will be newly elected Governor Steve Beshear’s proposal to help solve the state’s budget problems by bringing in casinos. Democrat Beshear ran on that plank last fall, but his bill is just one of 1,000 or so being introduced in the General Assembly, and it is a constitutional amendment. The state has a budget deficit of $434 million this year with even higher numbers projected for 2008-2009. Beshear calls that situation a “crisis,” while GOP leaders in the Senate prefer to characterize it as “manageable.” Beshear opposes any tax increase, but wants to increase spending on infrastructure and says the only other way to raise revenues is through state-sponsored gaming. • Gulfstream Park in Hallandale Beach, Florida, opened its racing season on January 3, while putting the finishing touches on a revamped first-floor slot casino that is the beginning of the racino’s effort to transform its slot operation to profitability. The revamped first-floor casino includes 250 gaming machines, which are mostly high-payback video poker machines. It is part of a strategy by parent Magna Entertainment to reverse the fortunes of Gulfstream’s slot casino, which has been the lowest-grossing of the three racetrack slot operations in Florida’s Broward County. • It’s bankruptcy for Slovenia’s Casino Portoroz. In December the district court in Kopar accepted the ruling to initiate proceedings. Creditors must submit their claims by the end of January, after which they have 30 days to contest the claims of other creditors in writing. • A representative of Las Vegas casino mogul Steve Wynn is due to discuss a possible casino at Massachusetts’ Wonderland Park in Revere with the racetrack’s owner by the end of January. Wynn officials “think it’s a good market, and they would like to play in the market,” says owner Charlie Sarkis. Other companies seeking one of the state’s proposed three casino licenses are eying Wonderland as well.

By Roger Gros   Tue, Feb 05, 2008

BIA Ban

The U.S. Interior Department has denied 22 of 30 applications for off-reservation tribal casinos. The proposals range from the $600 million casino complex New York’s St. Regis Mohawks plan at the Monticello Raceway to 10-acre projects in Arkansas and Michigan.

Eleven died because the federal agency deemed the paperwork incomplete. Eleven more fell because Interior sees the proposed sites as too far from reservations.

“Commutability” was the main distance issue Interior listed in four-page, January 4 form letters killing plans for taking land into trust as far as 1,500 miles from a reservation: A reservation would not benefit if its residents moved away to take jobs at their tribe’s distant casino, the agency said.

The move follows the January 3 distribution of six pages of policy guidance to regional Interior offices from Assistant Secretary Carl Artman. For “two-part determinations” requiring state and federal approvals under the Indian Gaming Regulatory Act, policy now requires “greater scrutiny to the tribe’s justification of anticipated benefits” of a trust-land acquisition and “greater weight to concerns raised by state and local governments” about oversight and removing land from tax rolls.

“The way the Interior Department phrased this, this is a firm rejection of off-reservation gambling,” says Joe Monahan of the Committee to Protect Dona Ana County in New Mexico. The group, supported by Sunland Park Race Track and Casino owner Stan Fulton, opposed the Jemez Pueblo’s application, one of those rejected over commutability.

“We’re trying to sort out all the issues,” says a spokeswoman for Jemez development partner Gerald Peters. Her remark reflects the shock, anger and bewilderment experienced by affected tribes and their backers.

Interior’s move effectively kills perhaps $1 billion or more in planned construction. Also undermined are development plans for many tribes and some communities counting on jobs and service fees from completed casinos.

A report just before Interior’s letters went out listed two Romulus, Michigan, officials with February appointments on Capitol Hill in Washington to promote the Hannahville tribe’s casino plan. The site is too far from Hannahville’s reservation, Interior announced the next day.

Three days later, Michigan’s Lac Vieux Desert Band presented plans for a Muskegon casino, one of three off-rez proposals for the city. Odds against the project are high, with Muskegon about 400 miles from the small gaming tribe’s reservation. Interior sent back its application for a nearer Iron Mountain casino as incomplete.

The news also sent some backers’ credibility or stock prices plunging. Shares of St. Regis Mohawk backer Empire Resorts fell 54 percent, to $1.42. The Monticello track owner says it will fight the decision.

Interior’s action also created years of grist for attorneys, stifled possible competition for some existing casinos, and even raised a small issue for presidential politics. Some tribes say they may bide time for 12 months until a new federal administration is seated in Washington, then resume their efforts.

For reasons U.S. Bureau of Indian Affairs spokesman Shane Wolfe would not explain, BIA’s parent agency left alone applications for off-reservation casinos at Beloit and Kenosha, Wisconsin; Cascade Locks, Oregon; and five more.

Tribes with incomplete applications can submit them again. One, Washington’s Muckleshoot, pointed out that it filed its application to meet an April 2006 deadline and “preserve its options.” It has no current plan for a casino on land it owns at the Emerald Downs racetrack in Auburn, Washington, near the tribe’s active casino—one of the largest in the state.

Others say the new federal policy makes re-applying pointless. “Why move ahead if you don’t know what the rules are?” says Bill Johnson of North Dakota’s Turtle Mountain Band of Chippewa.

Tribes can also appeal the rejections within Interior or in federal courts. Many vowed to last month, lawyers in tow. “Our legal team is going to take a look at it,” says a spokesman for the joint Los Coyotes-Big Lagoon plan in Barstow, California. “Everyone seems to believe that this is just an attempt by the Interior secretary to get rid of politically unpopular applications. It’s a wholesale purging.”

Tribes rejected over distance all got letters that ended, “Please be advised that since this land will not be accepted into trust, the proposed site does not qualify for Indian gaming pursuant to IGRA. It is our hope that the department will be able to work with the tribe to identify economic development opportunities that we can support mutually.”

Retorted Los Coyotes spokesperson Francine Kupsch, “Changing the rules at this late date is a cruel and arbitrary act by Interior Secretary Dirk Kempthorne. He implies that tribal members would be better off poor and unemployed and living on the reservation rather than living off the reservation near the casino with a job. To invent new rules at this juncture and then apply them retroactively reeks of politics.”


DOWN AND OUT?

Jemez for 78 acres in Anthony, New Mexico, 293 miles away

St. Regis Mohawk for 29 acres at Monticello Raceway in New York, 350 miles away

Choctaw for 61 acres in Jackson County, Mississippi, 175 miles away

Lac du Flambeau for 20 acres in Shullsburg, Wisconsin, 304 miles away

Hannahville for 10 acres in Romulus, Michigan, 457 miles away

Chemejuevi, Los Coyotes and Big Lagoon for Barstow, California, sites 135, 115 and 700 miles away

Seneca-Cayuga of Oklahoma for 230 acres in Montezuma, New York, 1,500 miles away

United Keetoowah in Oklahoma for 10 acres in Fort Smith, Arkansas, 70 miles away

Stockbridge-Munsee of Wisconsin for 333 acres in Thompson, New York, 1,000 miles away

Tigua (Ysleta del Sur) for 10 acres in Dona Ana County, New Mexico, near the El Paso, Texas, gaming market

Turtle Mountain, for 40 acres in Grand Forks, North Dakota

Lower Elwha for 16 acres in Port Angeles, Washington

Lac Vieux Desert for 10 acres in Iron Mountain, Michigan

Kickapoo and Sac and Fox jointly for 40 acres in Wyandotte County, Kansas

Ho-Chunk of Wisconsin for 110 acres in Lynwood, Illinois

Dry Creek for 277 acres in Petaluma, California

Colorado River of Arizona for 75 acres in Blythe, California

Confederated Colville for three parcels in Wenatchee, Washington

Burns Paiute for 42 acres near Ontario, Oregon

Muckleshoot for 185 acres at the Emerald Downs racetrack in Aurora, Washington

By GGB Staff   Tue, Feb 05, 2008

Sky diving in New Zealand

Shares of Sky City Entertainment Group were running at a high for the year following speculation that the company was an object of desire for several unnamed bidders. But the fairy tale came to an end when the New Zealand Herald revealed that only one group, consisting of U.S. private equity firms TPG Newbridge Capital and Apollo Management LP, had assessed Sky City’s accounts by a given deadline.

As a result, the company’s share price fell almost 8 percent, to NZ$4.79.

It turned out that private equity group CVC Asia Pacific had been the only other entity performing due diligence on the company. CVC had a media joint venture with James Packer’s Publishing & Broadcasting Limited, which since split into two companies, one specialized in gaming and the other in media. The belief was that CVC had wanted to use PBL’s knowledge of gaming to run Sky City, but that this plan failed to materialize and so the group lost interest.

As the self-imposed deadline to receive an offer approached, last month Sky City announced it was extending the deadline.

In an update issued by the company in December, board chairman Rod McGeoch said, “The interested party advises that it has not been able to meet the timeframe requested by SKYCITY, but that it remains ‘highly optimistic of securing suitable financing in the very near term’ and remains hopeful of being able to provide a ‘compelling offer’ on an as soon as possible basis.”
McGeoch also said, “The board and management of the company continue to work on the strategic and business plans for the business, including the appointment of a chief executive officer, and to focus on present and future operations.”

Sky City became a takeover prospect after the company put its Adelaide casino and New Zealand movie theaters on the block. The plan was to get rid of poor performers and reduce costs, and to focus efforts on profitable casinos in the rest of the country.

CEO Evan Davies left in June after the company had cut profit forecasts.

“It’s a pretty good asset with good potential,” Craig Brown, at Walker Capital Management Ltd. in Auckland, told Bloomberg. “If you think it can be run properly then it could generate some damn good returns.”

South African license up for bid

The Herald reports that the sole casino license for the township of Nelson Mandela Bay, South Africa, may be sought by a new consortium when bids open up for its renewal next September.

The new group, Embo Project Management of Port Elizabeth, is led by
former diplomat, Mcebisi Msizi. Msizi has said that if the bid is successful, it could mean the construction of a new casino.

Currently, the casino license is held by Emfuleni Resorts, whose main shareholders are Sun International and Zonwabise, a consortium of black empowerment companies. Emfuleni is expected to try to retain the license. The casino, the Boardwalk, dates back to 1990.

Msizi wants to see proposals for a new casino and entertainment center in early 2008.

Nelson Mandela Bay was voted Best African City by the World Leadership Awards in 2007.

PBL becomes two companies

Australia’s Publishing and Broadcasting Ltd. will be splitting into two companies, one publishing and the other gaming.

Shareholders approved the split last month. The company majority shareholder is James Packer, considered to be the richest man in Australia. PBL was founded by Packer’s late father, Kerry, who was also famous for his huge gaming excursions in Las Vegas.

The publishing company will be called Consolidated Media Holdings.

Alberta’s gambling highest in Canada

Gambling per capita in Alberta is the highest in Canada, according to the Alberta Gaming and Liquor Commission. At the same time gaming revenues in the province are $60 million higher for the second quarter than anticipated. A total of $1.5 billion for the year is expected.

But critics say Alberta is not spending enough of that money on fighting gambling addiction. In part, says University of Alberta’s Garry Smith, that’s because it doesn’t conduct any studies to obtain statistics on the subject. Smith conducted his own survey in 2003 that allegedly found linkages between gambling and crime.

Smith alleges that because the government of Alberta makes a lot of money off casino gaming that it is loathe to conduct studies that might sully the rose-colored picture it promotes.

The government, he says, refuses to acknowledge the connection between crime and gambling, or to pressure casinos to do what they can to discourage gambling addiction. It has to be done at that level to be effective, Smith says.

A spokesman for Alberta’s top lawman, the solicitor general, noted that the province spends $1.5 million a year on gaming research.

But another critic, legislator Mo Elsalhy, says those studies look at the causes of addictions but not the results. She says that’s because the government itself is addicted to gambling, or at least its profits.

Its casino and international gaming company will be called Crown. It has holdings in Australia, China, the U.S. and Canada.

By GGB Staff   Tue, Feb 05, 2008

Japan: The next domino?

Japan’s ruling Liberal Democratic Party plans to propose casino legislation, according to a report from Jiji Press.

In June 2007, Seiko Noda, who led an LDP study group that was drafting casino legislation, said the goal was to pass a bill by the end of the ordinary Diet session in June 2008.

The bill is expected to call for the establishment of an independent watchdog agency with strong investigative authority. Inspectors from the authority would be charged with examining casino license applications, conducting employee background checks and onsite inspections, certifying casino equipment, and other typical oversight functions.

Funding for the authority would come from the casino operators themselves and not from the general treasury.

The proposal to open Japan to casino operations began as part of a broader plan to attract more foreign visitors, according to Noda. The government wants to boost annual foreign visitor numbers. In 2006 foreign visitors totaled 7.3 million. The government wants to increase that number to 10 million by 2010.

More money for the treasury is another attraction. Said Noda last June, “If there were three Las Vegas-style casinos in Japan, it could bring in 700 billion yen in tax revenues. At the same time, there would be investment, and employment would increase.”

One area where the casino issue is receiving mixed reviews is the prefecture of Okinawa, according to Japan Update.

In December, the LDP chairman of general affairs, Toshihiro Nikai, led an economic conference on Okinawa’s situation and promoted casinos as a way to boost the local economy. Meanwhile, Keiko Itokazu, a member of a small opposition party, the Social Democratic Party, who holds a seat on the House of Councilors in Okinawa, was attending the “Casino Matter Symposium 2007 Executive Committee” conference at Tiruru Center in Naha City. The symposium addressed concerns by women about possible problems casinos on Okinawa might bring to the community.

Responding to a presentation on Macau, Itokazu said, “Macau is usually very safe, and security maintained in keeping the peace.” But she added, “It will cost a lot to keep peace in Okinawa because police would have to work harder, and a lot more policemen would be needed to protect the country.” She believes that the added cost for adequate “protection” will negate any economic benefits from casinos.

Kazuo Okada, chairman of the Japan-based Aruze Corp., a major slot manufacturer, as well as vice chairman of Wynn Resorts, believes legalized casinos in Japan are inevitable.

“The important thing now is to get someone who will lead the effort,” he says. “If we get such a leader it will move forward faster. There are so many Asian countries now getting into the gaming industry, it won’t be long until the Japanese government becomes obliged to offer casino gaming. We think it will take a three- to five-year term to be realized.”

The LDP panel hopes to submit its bill as soon as it has drawn up specific regulations. To pass the bill will require the support of coalition partner New Komeito and the main opposition Democratic Party of Japan, the Jiji Press report said.

SJM goes public

Sociedade de Jogos de Macau has begun its $1 billion initial public offering. Shares were to be offered to institutional investors beginning January 15 and to the public on January 21. Eighty-five percent of shares were sold to institutional investors, 5 percent to employees and 10 percent to the public. Trading on the Hong Kong exchange will begin February 1, according to media reports.

The operator of almost two-thirds of Macau’s existing casinos, with some 37 percent of the market, SJM is 80 percent owned by Sociedade de Turismo e Diversoes de Macau, founded by Stanley Ho. Ho held the monopoly on gaming in Macau for 40 years, until 2002, after the former Portuguese colony had returned to Chinese rule.

SJM will raise the $1 billion from the sale of 25 percent of its enlarged share capital, according to Dow Jones Newswires. All shares will be new shares. Deutsche Bank will serve as manager for the offering.

Genting regrouping

Resorts World Bhd, one of five companies that comprise the Genting group, is offering to sell its entire stake in Genting International Plc, another Group company, to Resorts World shareholders.

Resorts World counts the Genting Highlands Resort among its leisure and hospitality businesses that include gaming, hotels, seaside resorts, theme parks and entertainment.

Genting International acquired Stanley Casinos in the U.K. in 2006 and is developing the second integrated casino resort on Sentosa Island, Singapore. In December, via subsidiary Palomino Limited, Genting took a 10 percent stake in U.K. gaming operator Rank. Another subsidiary, Genting Stanley Alderney Limited, is applying to Alderney for an online gaming license.

Resorts World currently holds over 593.7 million ordinary shares of Genting International, representing 6.16 percent of equity of that company. The offer price has not yet been determined.

Proceeds from the proposed sale will be used as needed for working capital, investments, acquisitions, and repayment of debt.

By GGB Staff   Tue, Feb 05, 2008

Baltimore wants full-blown casinos

A task force appointed by Baltimore Mayor Sheila Dixon issued a report last month promoting full-scale casinos as one of the best ways to reduce the city’s property tax, which is the highest in the state.

The study calls for full-blown casinos—tables and slots, not the slot-only casinos being promoted by Maryland Governor Martin O’Malley, who is Baltimore’s former mayor—with revenue dedicated to lowering the property tax.

Dixon convened a group of 26 business and civic community leaders to study ways to reduce the property tax. In its report, the panel said casinos could knock 17 cents off the property tax rate as well as bringing in additional tourists, presumably to the city’s Inner Harbor area.

Jody Landers III, executive vice president of the Greater Baltimore Board of Realtors and co-chairman of the task force, defended the proposal for full-scale casino gaming in an interview with the Associated Press. “We really felt in the overall scheme of things from the city’s perspective that full casino gambling would be much better for the city,” he said. “The city needs to have a strategy, and part of that strategy is to apply part of the gains that would come from either casino gambling or slots to meaningful property tax reduction.”

Some state officials disagree. A spokeswoman for state Comptroller Peter Franchot, who has been a persistent opponent of any legalization of slots in Maryland, gave the standard anti-gaming argument concerning the social costs of gambling in a statement.

“Slots and casinos are the wrong direction for Baltimore, and the wrong direction for Maryland,” the spokeswoman said. “Any revenue that may be generated by this predatory industry will be more than offset by increases in crime, addiction and the destruction of entire communities.”

Landers added that full casino gambling is actually a better idea than the slot casinos that will be voted upon in the November general election. “Full casino gambling draws on a population that has a wider spectrum of income levels,” he said. “Slots tend to draw more low- to moderate-income levels.”

Dixon said she will get feedback from the public on the proposal before examining all of Baltimore’s options.

Palazzo Opens Doors

A few delays pushed back the debut, but Las Vegas Sands Corp. officials celebrated a soft opening of the $1.8 billion Palazzo casino on December 31.

The timing couldn’t have been better. The next morning, a float depicting the property was featured in the Tournament of Roses Parade in Pasadena, California.

The casino and lobby areas were opened, but the more than 3,000 hotel rooms remain offline. They were not made entirely available until the official grand opening celebration, which was held on January 17, when the Shoppes at Palazzo opened.

The combined Venetian and Palazzo complex represents the world’s largest integrated destination resort, with 7,128 hotel rooms and 2.3 million square feet of meeting, convention and exhibition space.

Missouri could scrap $500 loss limit

If legislators won’t repeal the $500 loss limit at Missouri casinos, the casino industry wants voters to decide if they want the measure, which was enacted in the 1990s to save compulsive gamblers from themselves.

Casino interests have filed the papers for a statewide referendum on the limit, which critics say has driven high rollers from the state and invaded every gambler’s privacy by tracking their play.

According to the Missouri Gaming Commission, the limit hasn’t effectively curbed gambling by problem players. The commission estimates that only 2 percent of gamblers hit the limit (a $500 buy every two hours), and adds that a determined gambler can easily get around the restrictions.

The issue is a critical one right now in the Show Me State, because competition is springing up all around. Next door in Kansas, new casino resorts without wagering limits are being built, a new tribal casino will open this month, and the Woodlands racetrack is expected to add 1,000 slot machines this year.

Besides Kansas, an effort is under way to build a new casino in Sugar Creek just off Missouri 291.

But how many casino operations can the region sustain? Gaming Commission Director Gene McNary refuses to rule out more expansion in the state.

“It is not our job to protect anybody,” said McNary in a recent interview. “These are big boys and they’re in competition. Our job is to regulate and make sure there’s integrity in the games and that the various casino companies are economically viable. After that it’s the marketplace.

“If we can create a marketplace situation that is better for the state of Missouri than we currently have, then I think that’s the direction to go.”

Emerald quits fight for Illinois casino license

The way was cleared to auction Illinois’ 10th gaming license last month when Emerald Casino Incorporated “decided to cease further
litigation activities” to keep the long-dormant license. The Illinois Gaming Board revoked it in 2005, citing corporate mob ties and lies to agents.

The board expects to hire an investment banker by the end of February to help sell the license. Any Illinois community, teamed with a casino developer, would be eligible to bid on the state’s last available riverboat license. That would include Rosemont, the Chicago suburb near O’Hare International Airport where Emerald started building a casino garage, since demolished.

Chicago officials are eager for one of three or four new casino licenses under consideration in the Illinois legislature. Mayor Richard Daley doesn’t want the limited Emerald license, however.

By Roger Gros   Tue, Feb 05, 2008

We’ve heard the suggestions many times since the proliferation of gaming started in the early 1990s. Some analysts have insisted that casinos are “recession-proof” because their revenues don’t dip nearly as dramatically as other entertainment choices during bad economic times. The theory goes that people need diversions when times get tough, and other things get cut before the devoted gambler cuts his gambling budget.
   
But let’s step back for a moment and determine just what a recession is. Most economists define it as a period of general economic decline—specifically, a decline in gross domestic product for two or more consecutive quarters.
   
The problem is, however, that you don’t know you’ve been in a recession until you are deep into it or even out of it. The downturn in the early ’90s, particularly in the northeastern U.S., was quite severe, but we didn’t really understand how severe until the government compiled all the data that goes into determining whether we were actually in a recession. And then looking back on that time, we could see quite clearly that the economy took a severe hit that was reflected in all sectors, but it didn’t look as bad in the casino sector—which, at that time in the Northeast, was only Atlantic City.
   
But for those of us who worked primarily in Atlantic City in those days, we can tell you that it was a difficult time for everyone. The casinos were engulfed in what was probably the most competitive environment I have ever witnessed. Because Atlantic City in those days was primarily a bus market, the competition was brutal for that segment. Not only would customers get what was essentially free rides to the casinos, but they got “coin” when they arrived, “bounce-back” coupons for the next time they got a free ride, and an unbelievably high level of “cashback” for whatever coins they did slide into the machines.
  
 Those giveaways only heightened the pressure to keep up the “gross gaming win,” which was the only criterion that most analysts considered in those days. So the recession seemed to have bypassed Atlantic City when you looked at those impressive figures.
   
Fast forward to 2007. While most economists agree that it did not rise (or sink) to an “official” recession, the economy was clearly hurting, led by the real estate sector. The collapse of the housing market in most areas of the U.S. has caused homeowners to reconsider how they spend their money. The nest egg (the primary residence) of many people has taken a hit. One of the worst areas for declining home values has been Las Vegas. The value of residential real estate plummeted 20 percent and more in ’07. Even the value of commercial real estate (except for, possibly, the Las Vegas Strip) was down. But gaming did not decline, supporting the theory of a recession-proof gaming industry.
   
But back in Atlantic City, gaming took a hit in ’07. It was the first year since gaming was established in 1978 that gross gaming revenues did not increase over the previous year. Certainly, Atlantic City was impacted by slot parlors and racinos in Pennsylvania, which debuted in full force in 2007.
   
Another area of the U.S. hit hard economically has again been the Northeast. Would Atlantic City have had as difficult an economic year absent competition from Pennsylvania? I believe it would have, and for proof, just look at Connecticut.
   
In the last six months of 2007, the slot revenues (the only numbers those casinos are required to report) at Foxwoods and Mohegan Sun declined anywhere from 2 percent to 5 percent each month. There is no additional competition for Connecticut, unless you count a rather ineffective slot operation in Yonkers, New York.
   
It’s my contention that a weak economy has hampered revenues throughout the Northeast, and that includes racinos in New York state and Pennsylvania.
   
I believe that casinos are not at all recession-proof, and maybe not even recession-resistant. Each jurisdiction has its own dynamics but it appears that the most vulnerable gaming enterprises to economic downturns are the “locals” casinos that you find outside of Las Vegas. (Remember, Atlantic City is probably the biggest “locals” market in the industry, drawing most of its business from drive-in customers within three hours of the Boardwalk.) Las Vegas only has to worry about travel disruptions, like those that occurred post-9/11.
   
So for those who expect casinos to skate through any economic downturn or even a recession, take stock in who comes to your casino, and how they are affected by bad economic times. And please don’t make the mistake Atlantic City made in the 1990s and revert to death-march marketing strategies that only make the situation worse.