By Willy Allison   Fri, Jan 30, 2009

What does surveillance do? Usually when I ask that question, nine out of 10 people will pause for a moment and then answer it with another question: “Are those the guys that watch the cameras?”

I guess that response is to be expected outside the casino industry, given the shroud of mystique casinos have placed around surveillance over the years. But surprisingly, that answer is common even within casino organizations.

Surveillance has never been known for its transparency. Most people know what a casino manager does. Most people know what the hotel manager does or can guess what the security director does. Many surveillance managers go to great lengths to make sure people don’t know what they do. The obvious reason for the cloak-and-dagger strategy is so the casino doesn’t show its entire security hand. Upper management generally endorses this approach, as they prefer to keep an ace in the hole when it comes to who and what’s being watched in their organization.

But to take the blackjack analogy one step further, the problem with not checking to see if there is an ace in the hole is that over a long period of time, your casino can waste a lot of time and lose a lot of money.

Rewind

There is no standard qualification to be a surveillance manager in the casino business. As an industry, it seems this is the area where we should use the most discretion when choosing people for the job. Of course, this is not uncommon, as most management positions relating to gaming do not require formal qualifications.

It seems when it comes to gaming management, our industry has for decades been happy with a combination of the “next in line” or “who you get along with” approach. I guess this approach is OK as long as, all things being equal, the most knowledgeable individual with a record of performance, enthusiasm and leadership skills gets the job.

But not all properties have a pool of talent with all the necessary skills to manage a surveillance operation. Reasons often vary from lack of training and development to poor succession planning, or simply because of the non-competitive salaries being offered. (I recently almost choked on my vegemite sandwich when I saw an ad for a casino surveillance officer position for $12 an hour. I sometimes wonder if peanuts and bananas would be a more appropriate compensation package.)

For a lot of new casino jurisdictions, it is a challenge to find qualified surveillance managers to open and set up a surveillance operation. Normally, people are hired from another state or jurisdiction, and often they are not familiar with regulatory or cultural differences.

Back in the ’80s and ’90s when Indian casinos exploded onto the scene, there was no choice but to hire from established casino jurisdictions like Nevada. Unfortunately, a number of them had no choice but to take “third- and fourth-string quarterbacks” who had no experience in some of the new security and surveillance technologies, or in opening casinos in different jurisdictions. The main criterion for the position was casino experience, and a lot of them had no leadership or management experience. Unfortunately, a lot of the casinos are still paying for their fumbles today.

Surveillance by definition means close observation, esp. of a suspected spy or criminal. I am not a big fan of the name. It’s a bit “Secret Squirrel” for me. I’m not sure who decided to use it as a term for the casino industry, but I suspect it was someone from the Cold War or Richard Nixon era.

Almost like how they say people grow into the names they are given at birth, I sometimes think some surveillance employees grow into the surveillance name. Even though employees are mainly hired to protect the games, after they get the job title I think some actually think they are responsible for national security, protecting our freedom and stamping out communism.

Surveillance employees are still given titles like agent or officer. Why? Do they have shoe phones and rocket-firing joysticks? Enough already. They get paid to watch games.

Before I started in surveillance back in the 1980s, I first had to complete a comprehensive three-month training program. The program covered all aspects of casino operations, including knowledge of how to play and protect all the table games, slots, cage, count, casino systems of accounting and internal controls, department procedures and policies, operating the CCTV system and legal/regulatory compliance. After training I learned pretty quickly that watching the games was only a part of what surveillance does on a day-to-day basis.

Game protection and integrity is the core purpose of our existence, but over the years the role of surveillance has become broader. The reasons are a combination of many things: a litigious world, human resource challenges, the increase of internal theft and fraud and in some cases, incompetent management. Also, I think the capability of CCTV and new digital technologies has allowed us to assist our business in a variety of new ways.

Fast Forward

With high-tech threats, organized teams and increasing internal theft, game protection and integrity remain the highest priority, but new digital technologies are opening opportunities for surveillance to increase its value as an information hub and resource for the business.

I believe the role of surveillance is generally underutilized in today’s casino environment, but this could change dramatically if upper management realizes the potential of training and technology as a business driver and acts to introduce a new paradigm in casino surveillance.

To initiate change and increase the value of surveillance to the organization, the place to start is the name. Table games have evolved into “live games” and slots have evolved into “electronic games.” Surveillance’s expanded role would be more aptly named “enterprise intelligence.”

The Enterprise Intelligence (E.I.) department would be responsible for gathering, analyzing and disseminating data to ensure gaming integrity, legal and regulatory compliance, operational efficiency and profit protection. E.I. would be the hub for casino information through digital analysis of video images and information systems.

In essence, E.I. would expand its traditional role to include being a supplier of business intelligence to revenue-producing departments.

By expanding the role to provide business intelligence, E.I. would become a valuable resource for the casino. To achieve this would take an initial investment in new hardware/software technologies and interfaces with existing technology.

Alongside the capital expenditure in technology, the human resources would have to be reviewed in terms of numbers. With the measurable return on investment that surveillance would now enjoy, an increase in compensation for qualified, well-trained analysts (that’s my new name for agents and officers) would more than be justified.

Pie in the sky? Not really. The technology is out there. The bigger challenge is developing and establishing a new set of core competencies for E.I. personnel, and in particular surveillance managers.

So what are the core competencies needed to create the Surveillance Superman of the future?

1) Game Protection

The knowledge of game protection should not be lost in the transition from surveillance officer to E.I. analyst. Knowing the games and how to protect them is a dying art and a skill that is unique to our industry. Organized cheating teams continue to develop new technologies and collusion methods to beat casinos, so staying on top of new scams should remain a priority. In fact, in times of economic downturn, it becomes even more important as desperate people rationalize their financial situation and misfortune and turn to theft and cheating.

E.I. would continue to place a high emphasis on game protection. Stakeholders should not be concerned that expanding the role of surveillance would take them away from focusing on cheating and theft. I believe that the people charged with the responsibility for monitoring activity within the casino should be able to brush their teeth and chew gum at the same time. I also think that expanding the scope of monitoring to include more detailed investigation and analysis would result in more chances of detecting cheating and theft, because of the “no stone left unturned” approach—as opposed to the Baywatch approach.

2) CCTV

Closed circuit television, and more specifically, the power of video, has evolved leaps and bounds in the 21st century. Digital video is allowing for quicker access to more information through search engine technology.

Unfortunately, fundamental knowledge of CCTV principles and emerging technologies seems to be neglected by a lot of surveillance managers. The only explanation I can think of for this is that they trust and rely on their head technician, consultant or integrator to make the right decisions for them.

This approach may be OK in a casino with an existing system that was installed before their time, but when it comes to expanding and upgrading a system or opening a new property, Surveillance Superman should be well versed in current CCTV technology. It is the largest capital expenditure a surveillance director will sign off on in his or her career.

What makes surveillance directors unique as casino managers is their knowledge of CCTV. The organization counts on them to be the experts in this field and depends on them to spend the money wisely. Surveillance Superman should know the ins and outs of the jet he’s flying.

3) Business Drivers

There’s a scene in the movie White Men Can’t Jump where the two stars have a discussion/disagreement in the car on the way home from a basketball game. One accuses the other of not really being able to “hear” Jimi Hendrix playing on the radio. He claims most white people hear Jimi but can’t “hear” Jimi.

Casinos train staff to know the rules and procedures of the games, but very rarely do they teach them the math behind the games and what drives profit. This information is usually on a need-to-know basis or gained by buying a book.

Surveillance Superman should have a basic understanding of all the products being offered to casino customers and how time and motion, dealing efficiency, rule changes, table conditions and customer service can affect profit margins. Armed with this knowledge and a more business-minded approach to monitoring games that would include game performance along with protection and compliance, Surveillance Superman would be in a better position to not only monitor and report risk and threats but to also advise management on opportunities for increasing profits.

4) Data Analysis and Reporting

When Superman finishes flying around, fighting crime and protecting against evil, he returns to his day job as a reporter for the Daily Planet. His role is to get the stories and report the facts.

In the last decade, the casino industry has invested large sums of money in data-collecting tools. Customer loyalty programs and player tracking systems are common in most casinos today. However, it is widely acknowledged that generally we do a good job collecting data, but not such a good job working out what to do with it.

Surveillance collects a ton of data. Often dictated by regulatory mandates, the collection of video images created on a daily basis alone is enormous. There is a large cost and space requirement to store video information. The irony is that less than 1 percent of this information is ever accessed or used. It just exists for as long as the hard-drive storage capacity will allow it to, before it is rewritten with new information.

People are often surprised to hear that the industry standard for retaining video in casinos is seven days, but stakeholders should rest assured that with 95 percent of incidents or inquiries that require reviewing video, surveillance is advised within five minutes of the event. Surveillance also logs numerous calls and observations on a daily basis. A log is kept as a record for future reference and sometimes used to account for time.

New software systems currently being developed on the market run real-time analysis of video images. Video analytics is not new, but new applications have recently been developed to monitor blackjack and baccarat games. In essence, we are talking intelligent cameras that have the capability to analyze video data real-time, 24/7.

The potential for surveillance technology to play a major part in casino business intelligence strategies is exciting. This technology would ensure that all video data is being analyzed, and not just 1 percent.

Surveillance Superman would be an information and intelligence gatherer, data-miner, analyst and reporter for the organization. The role of surveillance should be more balanced in terms of collection of data and dissemination of data. Think of surveillance as the Daily Planet—reporters searching for the “scoop” through investigation and intelligence and breaking the story with in-depth report and analysis.

To create the surveillance Daily Planet, an emphasis would have to be placed on investigation, analysis, speed and reporting information that customers across the organization are interested in, and can use to assist them and their department to perform better.

To achieve this, it is obvious that a casino organization would have to establish an enterprise solution for data collection that would allow interfacing between all data entry points and mining capabilities to facilitate the process of providing business intelligence. The Daily Planet could effectively become the casino’s central intelligence agency and hub for information. Like any news organization, it is also important to establish external intelligence sources so your internal customers can stay abreast of what’s happening in the industry.

5) Leadership

The kryptonite for Surveillance Superman is bad leadership. A major shift in the surveillance paradigm will take strong leadership and support not only from the head of the surveillance department, but from the casino organization’s CEO or general manager, and the senior management team. We are, of course, talking about change, and that is always challenging in the traditional casino organization environment.

But maybe it’s time for change. Maybe it’s time for the mild-mannered surveillance director to come out of the closet and unleash his superpowers.

The economic challenges that face our industry over the next few years are numerous. Now, more than ever, would be a good time to change into the tights and leap tall buildings in a single bound.

Willy Allison is president of World Game Protection, producers of the World Game Protection Conference, March 1-3 at Caesars Palace in Las Vegas. Allison can be reached at willy@worldgameprotection.com.

By Bill Zender   Tue, Feb 03, 2009

Temporary downturns in the casino’s live-game or slot hold percentage do not constitute the occurrence of a distressed or turnaround situation.

Since casino revenue is based on games of chance, these outcomes are subject to normal positive and negative fluctuations. In many instances management overreacts to the dreaded, but still normal, downward swings and actually creates negative situations due to their overreactions.

Downward financial trends are usually brought on by an assortment of maladies resulting from a combination of factors, such as a consistent drop in revenue and an increase in costs, because of market changes and poor decision-making policies.

Identifying a Distressed Situation and Establishing a Turnaround Process

For a number of reasons, a casino operation can find itself suffering from declining profits that put it into a distressed position. This situation can be the result of continual revenue losses over an extended period of time or from a sharp downturn in profits during a recent, but relatively short, business cycle. A decline in profits can be attributed to any number of business and financial reasons resulting from factors both external and internal to the gaming operation. If the decline in profit is too great, cash flow dries up and the business becomes insolvent.

Several years ago I took over as interim general manager at a northern California card room whose business had become distressed. The card room had suffered from several different problems, which, over a three-year period, placed the operation on the doorsteps of closure and liquidation.

Internal factors ranged from poor management to corruption involving wasteful promotions, fraudulent cash disbursements, and improper hiring practices; external factors included a new no-smoking law and the overbuilding of card rooms in the San Francisco Bay area. Through the implementation of drastic cuts in unnecessary spending, the re-evaluation and overhaul of several marketing programs, and the termination of the previous management team, the card room continued to remain open for business while avoiding a trip to bankruptcy court.

External factors for poor profit performance may result from economic shifts in the immediate market base, competition, and nationwide changes in consumer economic-confidence levels. In order to cope with these shifts, the casino operation needs to be prepared to react in kind. In some situations, organizations that hesitate to take action and put off their decision-making will find themselves behind the 8-ball, unable to adjust to the problems in a timely manner.

Internal factors usually involve management’s inability to operate the casino in a profitable manner or inadequate cash flow; each usually exacerbates the other. In many situations, upper management doesn’t possess the operational ability to cope with problems, and actually creates additional problems though improper analysis and poor decision-making skills.

Although internal factors are easier to correct than external factors, management sometimes insists on following obsolete programs and/or stands behind faulty decisions until it’s too late to make the necessary corrections.

The primary objective for an organization during a turnaround situation is to conduct a concerted effort to stop the decline of profits and re-establish key business competencies that give the casino operation a competitive advantage. In order to accomplish the complete turnaround of an operation, management needs to begin a thorough reorganization known as “retrenchment.” Retrenchment allows the gaming operation to gain new strength from the streamlining of its operation and the elimination of waste. Retrenchment utilizes two primary methods of operational modification:

•    Cost reduction—decreasing the workforce through attrition and, in the extreme, layoffs. Elimination of elaborate and ineffective promotional activities and moving away from marketing to customers who provide a low margin of return.

•    Asset reduction—selling non-essential property, terminating low-profit contracts and leases, selling underutilized devices and equipment, and eliminating perks, such as executive expense accounts and executive leased automobiles.

Probably the most important element of a successful turnaround strategy is relative to upper management’s business-making ability. Several business research groups have attributed the primary factor for a successful turnaround to the replacement of key management personnel. The introduction of new management—executives who have a successful industry track record, especially with turnaround situations—provides the organization with a new and different perspective on the existing business situation.

New management teams have the advantage of getting a fresh look at the situation prior to developing a turnaround strategy. This perspective affords them the ability to facilitate drastic changes to existing business plans and previously established budgets and, in most cases, to raise employee morale by projecting a clearer picture of business recovery.

When several gaming executives and I took over the failing Aladdin Hotel-Casino in the early 1990s, we had our hands full. The casino had been in bankruptcy for several years and we were faced with not only poor cash flow, but also an aging property that needed an injection of money to bring it up to standards. All expenditures were analyzed and prioritized, mostly involving structural problems. Because of our situation and limited bankroll, not one penny could be spent unnecessarily on other areas, such as elaborate promotions or extensive advertising schemes.

It was at this point that we concentrated our attention on the only asset we had that could give use some competitive parity or possible advantage: our employees. We took great strides to increase customer service and understood the importance of what our customers meant to our turnaround strategy. We also worked hard to improve morale and provide the employees with a good working environment. Good personalities were rewarded, while poor personalities were sent looking for work elsewhere.

Sometimes the greatest obstacles to overcome are defeatist attitudes bred through continuing condescension of management toward employees. Negative attitudes only speed up the distressed property’s path to bankruptcy and liquidation.

Strategy for a Successful Turnaround Process

The main goal of the turnaround process is to achieve financial stability for your operation. In some situations, the need for financial stability is so immediate that failing to do so will drive the gaming operation out of business. The more severe the financial situation, the more drastic the retrenchment process becomes. Once the business situation has been properly analyzed and retrenchment strategies have been established, it shouldn’t be long before financial stability is reached. Total recovery then follows. It’s at this point that management has the ability to re-examine the gaming business, exploiting the core value strengths and capitalizing on market opportunities.

Some of the key points of the turnaround process are as follows:

•    Properly identify the cause and severity of the turnaround situation. Some situations may require the examination of inadequacies involving internal issues while other situations will require the consideration of both internal and external factors.

•    The severity of the situation is an important governing factor in estimating the speed with which retrenchment response is formulated. When the financial situation is high in severity, there’s an urgency to increase cash flow in order to keep the operation away from reorganization and/or bankruptcy.

•    The recovery phase of any turnaround strategy needs to be anchored on a solid retrenchment plan that will halt a decline in profits and achieve financial stability in the near term. This is the point where the turnaround goes from a strategy plan to an action plan.

•    A retrenchment strategy primarily involves cost reduction. The reduction of unnecessary costs, such as ineffective casino promotions, overtime expense due to poor employee scheduling, and inadequately structured comp policies, will provide sufficient cash flow for the operation when the severity of the distress is low.

•    Turnaround strategies that eliminate costs present an immediate return to the operation’s bottom line, while strategies to increase revenue tend to return bottom-line cash flows farther down the road and may place a greater strain on the operation during the period of distress. It’s widely known in the business world that you cannot spend your way out of dire financial straits.

•    When more extreme situations occur, retrenchment will also involve the reduction of operational assets. Asset reduction will provide the operation with an influx of cash from the sale or elimination of the assets, such as unused land and structures, unproductive gaming devices and equipment, and participation contracts that redirect earnings away from the operation.

•    Asset reduction is used in conjunction with cost reduction when cost reduction alone will not provide the operation with the necessary cash flow to stay solvent. It goes without saying that asset reduction is considered an extreme business-recovery measure.

•    Once financial stability is achieved, the next step is business recovery. Total business recovery is achieved when economic measures indicate the casino operation has regained its pre-downturn levels of performance.

•    The recovery phase of the turnaround process becomes the starting block for successful future operations. Management needs to develop a “going-forward” strategy that will concentrate on the efficiency of the business.

•    The next step is to position your organization in the market so that it takes advantage of one or more of its core values. This core value can result from your property’s market uniqueness, its ability to cater to a specific market niche, or from the strength and experience of your new management team.

Steps Toward a Successful Turnaround

Here are some steps our management team, JMJ Inc., used at the Aladdin Hotel-Casino in the mid-’90s to help turn around the previously bankrupted and extremely tired property:

•    Analyzed the business’ financial reports and chopped any expense not essential to the operation. We found waste in executive perks, overtime costs created by poor scheduling, over-comping casino customers, and unnecessary entertainment and participation agreements. The elimination of these costs freed up revenues and increased cash flow immediately.

•    Discontinued all promotions until we estimated their cost and potential for return. Many management teams throw more money at attracting customers when revenue starts to slide, and these “emergency” promotions are usually a huge waste of money. If it didn’t pencil out, we got rid of it.

•    Whenever possible, we stayed away from laying off employees. Layoffs and terminations, especially if they’re done over an elongated period of time, create morale problems, which you may not be able to rectify later. We allowed natural attrition to lower the staffing levels to a point where they became effective within a workable period of time. If layoffs were necessary, we were sure they were all done in the shortest time span possible (one day is best). We didn’t leave our employees waiting in agony for the other shoe to fall.

•    Encouraged employees to think in terms of success instead of failure. We focused on positive customer service and customer relations before spending resources on marketing and advertising. We knew that any money spent on bringing in new business would be wasted if our frontline employees were not providing above-average customer service.

•    We needed to spend money immediately on capital expenditures. Failing properties tend to sacrifice needed “cap-ex” spending as cash flows diminish. Many areas of the facility needed immediate attention in order to keep the business in operation.

Bill Zender is a former casino employee and president of Last Resort Consulting. This article is an excerpt from his new book, Casino-ology, published by Huntington Press.

By Caitlin McGarry   Tue, Feb 03, 2009

With technology moving at lightning speed, companies have to act quickly to capture the market’s need and release products that are innovative as well as multi-functional. That need is especially high for the gaming industry.

And no area of technology has served that need in so transformative a manner this decade as bill validators and ticket printers. The two areas combined have led to the elimination of coin-handling from casinos, and the institution of ticket-in/ticket-out technology has changed the very nature of slot machines, leading to a revolution of penny games and more volatile, higher-holding games.

Press Print

No company has been more important in the development of TITO technology than California-based FutureLogic, Inc. In 1999, the company released what would become the industry-standard TITO thermal printer.

The company’s latest printer, the GEN2 Universal, accommodates networked gaming and different game types with three ports, the RS232, NetPlex and USB2. FutureLogic also provides a promotional couponing product, PromoNet.

Nick Micalizzi, FutureLogic’s vice president of sales and marketing for North America, says PromoNet is yet another product that demonstrates the company’s emphasis on multi-functionalism and efficiency.

“By using a secure system approach, PromoNet ensures that casino servers are in full control of all communication with the printers and cash-out tickets,” Micalizzi says. “It also offers casinos of any size a flexible, cost-effective, real-time method for delivering targeted promotional campaigns.”

PromoNet can be used with any gaming machine that is equipped with the GSA-compliant versions of the GEN2 Universal or GEN2 VST Universal printers.

FutureLogic’s newest product may be its most innovative yet. TableXchange aims to eliminate the need to replenish chips at table games by incorporating the same TITO printing technology that is already in use in slot machines around the world. With TableXchange, players will be able to use tickets at both slot machines and table games.

The product was previewed at G2E 2008 to great enthusiasm. At the trade show, FutureLogic received feedback and tips regarding TableXchange’s functionality and efficiency, and incorporated useful advice into the final product, which will be released soon.

For FutureLogic, TableXchange is not just another product. Like the introduction of the TITO printer, the implementation of TableXchange could very well change a casino’s operations.

“We believe that this ability to print and scan vouchers at table games will change TITO gaming for several reasons,” Micalizzi says. “First of all, it will enable casinos to connect table games to their existing TITO networks and provide a common currency across the casino floor. Secondly, it will create a bridge between slots and tables and help casinos identify valuable crossover players. Thirdly, we think the device will help streamline casino operations by virtually eliminating the need to replenish chips at table games.”

The product will also have the ability to process rewards cards, enabling players to receive points by playing at tables just as they do at slot machines.

TransAct Technologies, Inc., another leading printer supplier, has also been adding to its product repertoire. The Epic 950 printer, which was introduced in 2004, will now play host to the company’s new ServerPort technology.

ServerPort, which can also be added to existing printers, was also launched at last year’s G2E. It links a casino’s printers to a server-based network. TransAct’s senior vice president, Tracey Chernay, says ServerPort is intended to enable Epic 950 printers to be multi-functional—the new technology even connects to promotional couponing systems.

“The idea behind ServerPort was to be able to provide the capability for casinos to upgrade their printers to connect to a network,” Chernay says. “What we wanted to do with ServerPort was provide them with the flexibility and protect their investment by adding a component, which is basically what ServerPort is.”

Protecting investments is significant for the gaming industry, especially amid the current economic climate, when upgrading to a new batch of printers may not be financially feasible for some operators. Those with Epic 950 printers can choose to keep their printing capabilities as is, or upgrade to the new ServerPort technology.

ServerPort adds to the Epic 950 printer’s existing ease in serviceability and reliability by enabling operators to automatically download software or firmware to each printer and game on the casino floor, no technicians required.

The Epic 950 is also easy to rack in and out of a slot machine—a simple latch is used to connect and disconnect the printer when it is need of service. And, of course, the Epic 950 can be placed in any brand of slot machine, preventing the need for casino operators to purchase different printers for different machines.

The ease of the Epic 950 is what operators looked for when TransAct’s Epic 880 printer was introduced at last month’s International Gaming Expo. The Epic 880 will service gaming devices like amusement games and video lottery terminals.

Jean-Louis Drapeau, vice president of sales and marketing for Nanoptix Thermal Printers, says his company is also developing products for ease and functionality, even going so far as to custom-design printers for an operator’s specific needs.

In addition to the company’s top-seller, the Paycheck 3 printer, Nanoptix has created specialty printers that cater to niches within the gaming industry. For instance, one California casino needed to print promotional tickets for a mass amount of people. Using a TITO printer in the cage, the casino employee was forced to pull tickets one by one—a practice that was quite inefficient.

The casino came to Nanoptix, which in turn developed the High Speed Couponing Printer: fast tickets, no employee necessary. Developed for a single property, the product is now being shipped to casinos all over North America. The same is true of the company’s Spill-Proof printer, which protects the printer from liquid damage in a casino’s bars or restaurants.

“It has application in a gaming market for any type of receipt,” Drapeau says. “It is specialized, but it’s becoming an all-purpose printer. That’s the beauty of it.”

The Paycheck 3 printer is the company’s main all-purpose printer, with its ability to print a ticket in 1.2 seconds, as well as logo branding on both the front and back of a ticket and anti-jamming bezels.

Nanoptix also teamed up with Crane Payment Solutions to link its printers to a cash box management system. The printer will then be able to provide every statistic contained within casinos’ bill validators, from number of bills and tickets to preventive maintenance information.

“It simplifies it for casino operators,” Drapeau says. “You don’t have to buy all of this expensive hardware or software.”

Bills, Bills, Bills

Bill validation often works hand in hand with ticket printing and, like printing companies, the bill validation industry is constantly looking to technology to add ease and reliability to its products.

Unlike printers, bill validators deal with cash exchanges, and therefore must be protected with the highest levels of security.

MEI Gaming, a manufacturer of unattended payment systems, first introduced its Cashflow SC product in 2002 after four years of extensive research and engineering. The high-tech bill acceptor went above and beyond, applying the new ticket-in/ticket-out technology to cash flow transactions.

Cashflow also implemented counterfeit detection technology that enabled casino operators to prevent fraud. The product also provides cash storage within a polymer alloy cassette that will prevent breakage, as well as a lockable and removable cash box.

MEI’s Cashflow product was recently the subject of a patent lawsuit filed by JCM Global, another leading supplier of bill validators. Last month, a Las Vegas, Nevada jury ruled that MEI’s Cashflow infringed upon a patent held by JCM, and acknowledged that MEI did not willfully violate the patent. As it stands, MEI will be required to modify future Cashflow products released on the market by replacing two screws in the bill validator’s pusher assembly with two rivets.

Eric Fisher, MEI’s vice president of gaming in the Americas, says the outcome of the lawsuit will not have an effect on customers.

In the meantime, MEI’s latest product, Easitrax Soft Count, will extend the Cashflow’s high-quality bill acceptance and security into casinos’ soft count rooms. Easitrax Soft Count will further enhance existing Cashflow products by collecting information from MEI bill acceptors and categorizing it in a database. Gaming executives can then analyze the information and use it to their advantage in operating their casino floors.

Easitrax Soft Count is made to be retrofitted to Cashflow products already in place at casino properties.

JCM Global is also working on developing new, practical products in a harsh financial climate. The company released a new bill validation product, Vega, at IGE last month. Made of high-impact plastic, Vega has all of the important security features of JCM’s other, high-end bill validator, UBA, but at a lower cost. JCM Global Senior Vice President Tom Nieman says he is eager to see if Vega’s reception matches his expectations.

Vega is JCM’s first foray into value-oriented gaming solutions, and the product is unique to the marketplace. Nieman stresses that Vega will not replace UBA because it “attacks a different market, a different price point.”

And while UBA remains popular, having been incorporated into high-end resorts like the recently opened Encore, JCM is already working on the next generation of bill validators. Its Intelligent Cash Box product is a step in that direction. ICB records all transactions and displays the data when taken to the soft count room, so employees will know before opening the cash box how many notes are contained inside and what the values of those notes are.

The company also partnered with Gaming Partners International to develop Trident Table Safe. The product is placed at each table game to capture the cash and validate each bill.

“As it works today, that cash goes into a free-form box, and they don’t really know how much they have in cash until the next day,” Nieman says. “In essence, this puts a small, secure safe at every table. When the money goes through, it immediately goes into the accounting system.”

As for future plans, the fourth generation of JCM bill validators is in the works.

“There is new technology out there, just as the counterfeit activity around the world has gotten better,” Nieman says. “The sophistication by counterfeiters today is at a greater level than it’s ever been. If we’re going to continue to be the guardian and the entry point for all the revenue that comes into the slot machine, we have to improve our technology.”

By Steve Karoul   Fri, Jan 30, 2009

Foxwoods Resort Casino is the largest casino in the United States. It sits in the middle of the woods in Connecticut on a small tribal reservation owned by the Mashantucket Pequot Tribal Nation. It does not have a sister property in Macau and it does not have any other properties in Asia.

Foxwoods, however, is strategically located close to three of the largest Chinatowns in the Northeast: New York City, Boston and Toronto. Foxwoods and the Mohegan Sun Casino—the only other casino in Connecticut—both share this lucrative Asian market segment.

The two casinos control the lion’s share of domestic Asian business in the United States. Both casinos have extremely large Asian pits, numerous Asian games, multi-cultural Asian staff, headline Asian entertainment, extensive Asian bus programs and varied Asian restaurants.

Foxwoods recently introduced an Asian-style, non-negotiable chip-rolling program for baccarat. (Rolling programs pay a commission on all wagers to players making substantial buy-ins. Players wager using a bank of non-negotiable chips—which can be wagered but not cashed out.) Under the direction of its new president, Michael Speller, Foxwoods aggressively launched the new broad-based rolling program in December.

Speller has substantial hands-on experience with rolling programs. He is a highly qualified and experienced gaming executive with over 35 years experience in the industry, including substantial experience in Asia, where he worked for the Genting Casino Group in Malaysia to help set up Star Cruises in Asia. Star Cruises is owned by Genting International and very successfully specializes in high-limit casinos aboard their numerous cruise ships positioned throughout Asia, where rolling marketing programs are the game of choice among gamblers.

Foxwoods has long had Asian ties. When the Mashantucket Pequot tribe achieved federal recognition and then attempted to obtain a casino license, they went to numerous major banks in the United States to try to secure necessary funding for their new casino. They were rejected by all of the banks. They were later introduced to Tan Sri K.T. Lim, head of the Genting Corp., who flew to Connecticut to meet with the Mashantucket Pequot Tribal Council.

The Lim family understood the dynamics of casino gaming and recognized Foxwoods’ strategic location within a three-hour drive to over 60 million people in one of the more affluent regions of the United States. They agreed to loan Foxwoods the necessary money to begin, and the rest is history. Foxwoods has since developed into one of the largest, more successful casinos in the world today.

Rolling Revolution

Speller recognized the opportunity to begin a new rolling program in the United States, especially in the Northeast. Not only can Foxwoods tap into the large existing Asian communities, but they are also well-positioned to capture additional international Asian clients who may be coming to the States to visit children attending universities in the Northeast, or business conferences in New York City, Boston, Washington, D.C., or even Toronto.

Speller rapidly mobilized the new program and began an intensive internal training and education program to make sure that everyone understood the dynamics of rolling baccarat before the official program launch on December 22.

The Foxwoods rolling program is being marketed very aggressively both domestically and internationally. One additional note of interest is that Foxwoods has begun its new rolling program in a manner common to Southeast Asia but slightly different than casinos in Macau or what Caesars Tahoe or the Rio in Las Vegas tried to accomplish in the past.

The difference with the new Foxwoods rolling program is that individual players—as opposed to junket reps—are currently being targeted to participate in the new program. The actual buy-in and rolling for individual players occurs directly at the baccarat table as opposed to the casino cage, common in the more structured casino junket rolling programs.

Foxwoods presently offers the individual rolling player a 1.5 percent rolling incentive commission. In simplified terms, this means that if the player buys in at a specified “rolling” table in the casino for $10,000, they will receive $10,000 in non-negotiable chips and $150 in negotiable chips (live chips). Foxwoods states that the target market is all customers who understand the benefits of a rolling program—junket players, premium players or small players who wish to gamble at one of their specified rolling tables in the casino.

All players are informed as to how the program works, and that if they participate that they will receive the 1.5 percent rolling commission in lieu of any comps, discounts on loss or other benefits. Players who participate in rolling programs normally play long hours in an effort to earn large commissions in addition to normal wins or losses in the casino.

All of the non-negotiable chips must be played at the table. If the player loses the hand, the casino collects the non-negotiable chips. If the player wins the hand, the casino returns the non-negotiable chips plus pays the winnings in live or negotiable chips. Additional buy-ins occur directly at the table, again as opposed to the casino cage.

Future rolling junket programs at Foxwoods will, however, record all turnover at the casino cage to better protect the house and the junket rep. Once again, rolling baccarat games are not new, and in fact, are the most popular game in Asian casinos.

Speller and Foxwoods are to be commended for being creative and aggressive during this economically distressed time for casinos. They are very confident that they can achieve enough volume to offset any volatility risks. Rolling may prove to be a good source of incremental revenue for Foxwoods.

The new rolling program becomes even more attractive for the casino providing they can generate enough interest in the new program. If they can, they will be able to attract both Asian and non-Asian baccarat players locally, regionally and internationally.

However, be aware that rolling programs may not be right for every casino. Executives must do their homework first and investigate all aspects of a rolling commission program to see if it is right for their casino.

Rolling Basics

If this all sounds like Chinese to you, it’s not surprising.

The game is punto banco or baccarat. It is the game of choice of the premium Asian player market. Many casino operators around the world are not familiar with the terminology of rolling chips or this type of gambling.

Let’s break it down to the basics:  A “non-negotiable chip” is a chip which cannot be cashed out at the casino cage for currency, versus a “live chip” or negotiable chip, which may be cashed out for currency. Some casinos also utilize two completely separate sets of both non-negotiable and live chips for junkets versus their normal casino chips. This is an additional security feature which limits or controls junket play to certain tables or VIP rooms for better evaluation and control over the junket play.

One problem area that requires careful control: If the junket operator issues the credit or puts up the front money for the junket, you need to carefully control all cash-outs of “live chips.” The player will try often to cash out, claiming that he needs cash for his wife to go shopping or for tipping in the hotel, etc. This can cause a big problem for the junket operator who needs to accurately monitor each of his customers’ turnover or “rolling.”

One simple solution is to set up a junket cashout control sheet for each group. List each player’s name on the sheet. Every cash-out request from the junket players is directed to the junket operator or his representative for approval. If he approves the cashout, the junket operator records the amount of the cashout as approved next to the player’s name, and signs his signature of approval beside each transaction. This eliminates arguments or disputes at the end of the junket.

Another tip that is very helpful is to keep a photocopy of each player’s passport at the cash desk and in the pit. It makes customer identification much easier with the correct spelling of each player’s name, and it helps the staff learn the players’ names quickly to help create a friendly, more personalized atmosphere.

On a side note, it is important to understand that in Asia it is very common for most players to use the services of a junket operator. The junket operator makes all of the travel and room arrangements for his customers, and in many instances also serves as the unofficial banker who supplies credit to his customers.

In Macau, the majority of higher-end table game action comes in through junket operators who sometimes also lease VIP rooms or sometimes, on a smaller scale, may lease or sub-lease as few as only one table from the VIP room operator. This concept is also quite common on the nine casino ships that are currently operating out of Hong Kong.

Rolling the Chips

“Rolling” is a term used to describe the turnover in a rolling chip game. The player receives his buy-in in rolling or “non-negotiable chips.” He places his bet in rolling (non-negotiable) chips on the table either for player or banker. If the customer loses the bet, the dealer takes his rolling chips and puts it in his chip float. If the customer wins the bet, the dealer returns the original rolling chip wager and pays the customer his winnings in live chips.

The junket rep or his chip runner will continually monitor the stacks of chips in front of each player. As they accumulate too many live chips they will exchange them with rolling chips so that the customer will have an ample supply of rolling chips to keep betting and keep the game going without having to stop to exchange chips. The junket rep will keep a record of each of his customers’ transactions. As the junket rep accumulates too many live chips, he will take them to the casino cage and exchange them for more rolling chips.

The casino cashier will record this on the junket control sheet. For example, if the junket originally deposited $1 million, the casino will want to track and see how many times that $1 million is turned over or “rolled” through the cage, exchanging live chips for rolling chips. At the end of the junket any unused rolling chips are returned to the cash desk and deducted from the cumulative or “rolling” turnover total.

A normal two- to four-day junket will usually turn over or roll their initial deposit six to eight times. However, this figure can also increase substantially for serious players, especially if they are winning. The casino normally pays a commission of anywhere from 1.3 percent to 1.7 percent on the total turnover or total “rolling” amount.

The junket operator normally pays all of his junket’s expenses from this amount of money, and may even pay some of his better players a small percentage of his own commission. Whatever amount of money is left over after he takes care of his expenses is basically his net profit for the junket.

House Edge

The casino’s net profit comes from the total win from the group, less all expenses and commission. The idea behind the “rolling” is that it encourages longer casino play, or action. We all know that one of the critical factors in casino statistics for determining theoretical win is “time played.” The commission is based upon the loss of non-negotiable “rolling chips” during the term of the junket.

One analysis by Andrew MacDonald, formerly with Crown Casino in Melbourne, Australia, uses the term “once through the cage equals twice over the tables.” He gave a detailed analysis about why in a game like baccarat, where the house advantage is approximately 1.25 percent, casino operators can pay commissions in the range of 1.3 percent to 1.7 percent, or even slightly higher in a few areas such as Cambodia, on “rolling chip” programs.

Simply stated, the house advantage can be considered to be twice that of “normal” due to the ratio of actual versus non-negotiable turnover being 2-1. Therefore, baccarat can be considered to have a house advantage on “rolling chip” play of 2.5 percent for analytical purposes. Or conversely, the “rolling chip” commission percentages should be halved to view them realistically in terms of actual turnover. Either way the results are the same.

This is the basis of a rolling chip junket program. There are a few variations in effect around the world, but the basics are all the same. Some casinos pay a slightly higher bonus on the first turn if the total junket turnover reaches a pre-set target. This bonus is usually enough to cover the junket agent’s air ticket. This concept means “risk-reward,” so some casinos will normally use a penalty clause if they offer a bonus. Using the same principle, for example, a casino may set a target of six turns of the front money deposit as the minimum requirement for qualification. If the junket does not achieve the minimum number of turns or rolling, they penalize the agent by proportionately reducing the commission. A simple example is:

Total Net Rolling x 1.5 percent

Initial $ Deposit x 6 = Proportionate percent of commission to be paid

For example, let’s assume that the initial junket deposit is $1 million, and we require a minimum of six turns to qualify for full commission; but the junket only has $4.5 million rolling at the end of the junket. We can then see the following:

$4,500,000 x 1.5 percent

$1,000,000 x 6 = 1.125 percent commission instead of the normal 1.5 percent

This may seem like small amounts when we think of fractions of a percent, but in real dollar terms this can add up to substantial amounts of money. In the last example, the fractional percentage difference in dollar terms equals the difference between ($4,500,000 x 1.5 percent =) $67,500 in commission paid versus ($4,500,000 x 1.125 percent =) $50,625 in commission actually paid. At the end of a year, this savings to the casino goes straight to the bottom line as additional incremental net profit, since your other variable expenses remain unchanged.

Rolling Insurance

Table differential is another very interesting Asian gaming concept that originated in Macau. It can be compared to an insurance policy for the casino, since it limits the amount of risk that the house is willing to assume with each hand of baccarat. A big punto banco or baccarat table normally has 14 seats. This means that if your normal betting limits are, for example, $100 to $5,000, and all 14 players decide to bet Player at the same time, the risk factor for the house is now 14 x $5,000 or $70,000 for that hand.

However, if you had a $100 minimum bet with a table differential of $30,000, the risk factor for the house for this same hand would only be $30,000 instead of $70,000. Table differentials go as high as $200,000 to $250,000 today in Macau, but more conservative casinos will probably never offer more than a $100,000 table differential due to the volatility of the game.

(Remember, we are in the business of gambling, but we should never be gamblers when making these types of decisions. Foxwoods does not currently offer a table differential, but controls its risk through posted table limits for individual players. However, Foxwoods will most likely implement new table differentials once they start their new rolling program for junkets.)

In effect, table differential means the spread or difference allowed between the total wagers on Player and the total wagers on Banker. This means that the customers are allowed to bet higher amounts if they wish but the total difference or spread between Player and Banker can never exceed the differential—or in this case, $30,000. If the customers want to bet higher amounts you could, in fact, end up with $1,000,000 being bet on the Player and $1,030,000 being bet on the Banker, but the casino risk factor is still only going to be $30,000.

One can see this situation happening daily in the VIP rooms in the Macau casinos or in many Australian casinos. It is also quite common to have different table differentials going at the same time on different tables. For example, $30,000, $50,000, $75,000 and $100,000 differential games could all be going on simultaneously at different tables, usually with different minimum bet requirements.

One may also ask, what happens if the bets exceed the table differential? Usually, the players will work it out among themselves, giving “face” or respect to the individual with the highest bet by withdrawing some of their bet amount to reduce the total wagers back within the differential limit. In a few rare instances where you may have some players playing against players from other countries and nobody wants to lose face, the pit boss may instruct the dealers to reduce every player’s bet by a set percentage such as 10 percent, until the total wagers or spread comes under the set table differential.

Junket baccarat with Asian customers is normally a very slow game, because the customers like to “squeeze” the cards, as if this were some type of unspoken ritual. This is a cultural quirk, but their enjoyment is to slowly roll up the edge of their cards to look at their hand as the rest of the table shouts word of encouragement or luck. It makes the game much more sociable for them, but it also bends the cards to the point of ruin, which means you must change the eight decks at the end of every shoe.

Another cultural quirk associated with this type of play is “side betting,” where the players make unofficial side wagers among themselves as the cards are being “squeezed.” Some junket groups also bring along professional side bettors who book all of this unofficial wagering. Some casinos around the world do not allow this, but it is difficult to control unless you have bilingual staff capable of completely understanding the table conversation and the sometimes-secret hand signals.

Scam Prevention

Another risk with this type of gaming is for the casino operator to realize the true profit potential from this type of play. There are numerous “tricks of the trade” being used throughout Asia. One was originally called the old “Forex Scam” but continues today in Macau under the name of “Multiplier Scam,” where the junket operator works out a pre-set conversion ratio in advance with the players before arriving at the casino. For example, a 2-1 ratio may mean that every $1,000 chip is unofficially worth $2,000.

Therefore, if the player officially loses $50,000 at the casino, he may end up owing the junket operator $100,000 at settlement time back in their home country. The multiplier today sometimes goes as high as 8-1 or even 10-1 depending upon how aggressive the junket operator is and how large of a bankroll he has available in case the player wins big.

The junket operator is basically operating his own casino within your casino, but with no overhead or expense. Therefore, you need to know with whom you are doing business. The Macau government has recently tried to cap the maximum rolling commissions to 1.25 percent and to stop the multiplier. However, enforcement is not easy.

One additional tip: If you run a normal baccarat game as opposed to a rolling chip baccarat game for your junkets or premium individual players, you may want to develop a tracking sheet to record every bet. This will make it much easier to calculate an accurate average wager, which will be important for calculating the theoretical win—sometimes called “earning potential.” You can use this figure to evaluate the player for casino comps, airfare reimbursement or even partial qualification.

Casino operators should not make quick decisions about these types of programs unless they completely understand the mathematical statistics and the risk/reward ratios associated with these types of programs.

There has been some excellent explanatory analysis work on these subjects by Andrew MacDonald and by Jim Kilby, professor of gaming at the University of Nevada, Las Vegas. The rolling chip program with a table differential is a very interesting concept, which is generally misunderstood, but under the right conditions may be very beneficial to a casino with an active junket program.

Steve Karoul is a recognized authority in the areas of international casino marketing and casino junket operations. Karoul has lived in South Africa, Istanbul, Hong Kong, Bangkok and the Philippines and has also conducted casino-related business in over 90 different countries around the world. Karoul is a leading independent casino marketing consultant, with a comprehensive website, www.euroasiacasino.com. He may be reached at 1-860-536-1828 or by e-mail at: skaroul@comcast.net.

By Rich Geller   Fri, Jan 30, 2009

The differences between the various gaming machine sectors of Europe can be as great as the difference between east and west. Literally.

Throughout the former East Bloc countries, high-stakes, big-jackpot slot machines can be found in the all-electronic casinos that have proliferated there over the past 15 years. Meanwhile, back in the West, hundreds of thousands of low- and lower-stakes street machines grind away in arcades, cafés and betting shops, existing sometimes not so harmoniously alongside standard casino operations.

In Germany, for example, the 200,000-plus machines in the street-slot sector, limited to maximum payouts of €500 per hour, produced gross revenue of €2.75 billion in 2006. That was four times the amount generated by the 7,000 slots located in Germany’s 81 casinos, according to figures from German casino association DeSIA. Now, with casinos operating under restrictions on smoking and more stringent entry requirements for players in the past year, results for 2008 are expected to be even more lopsided.

In the U.K., fixed-odds betting terminals feature animated sports scenarios with a range of pre-determined, short-odds outcomes. These FOBTs accounted for 25 percent of revenue at bookmakers William Hill and Ladbrokes in 2006 and for over 50 percent of the British tote’s £2.5 billion gross revenue in 2007. The FOBTs, also known by their official designation of Category B2 gaming machines, are found in the U.K.’s 8,800 betting shops. They have a maximum stake of £100 and pay out a maximum win of £500. The machines compete easily with longer-odds casino slots, which are allowed to pay out £4,000 for a maximum stake of £2. The betting shops also are more accessible than casinos, which like their German counterparts require identification to enter and which also must abide by a smoking ban.

Another class of slot in the U.K., the Category C amusement-with-prizes machine, recently was the subject of a stake-and-jackpot increase. In fact, both the maximum stake and the maximum jackpot were doubled on the 130,000 or so AWP machines—to £1 and £70 respectively.

In Austria, the low-stakes sector has reached new heights with the Admiral Casino Prater. Admiral, one of the operator divisions of the Novomatic Group, invested €20 million in the design and construction of this huge electronic casino that features 450 gaming machines, including several electronic table games.

Outfitted with two sports betting areas and a fine restaurant, the property easily passes for a “real” casino—until you realize that the machines have a maximum stake of €0.50 and pay out a maximum jackpot of €20. Casino Prater is located in Vienna adjacent the famous amusement park for which it is named, and makes a strong statement about the importance of the small-stakes player.

Changing the Game

It is not just investment in design that is signaling a change in the low-stakes arena. Technology is beginning to blur the lines that traditionally have separated the various gaming machine sectors, allowing the operator to enrich the playing experience at even the lowest end of a market. Talk of downloadable, server-based gaming has been making its way through the casino industry of late, but its presence is already being felt in the street markets.

“The key factor is that the technology is allowing the operators to have more control over machines,” says Peter Cercone, business development director at server-based gaming specialist Videobet. “What the technology brings is the ability to optimize even very small locations, with two or four machines, to be able to offer different game content during different parts of the day, and to optimize it over time.”

Without the ability to download games directly to terminals, an operator of such a small location traditionally is dependent on the supplier’s time and manpower constraints when it comes to switching out games. The operator must first contact the supplier, and then the supplier has to arrange to deliver a new machine or physically install a new game.

Of course, such a thing as changing games repeatedly in the course of a business day is not doable without the new technology.

When slots are connected to any central server, the range of services and benefits available to the player and the operator expands greatly. Operators can track play and institute loyalty clubs, of course, but other possibilities also arise.

For example, Videobet, a wholly owned subsidiary of online gaming operator Playtech, has developed a cross-platform product that allows the player to get involved in a game at a physical location, such as an arcade or betting shop or local pub, and to continue playing that same game at a different location—even at home, online. A cashless card system allows the player to use a slot machine at an arcade and later, at home, to use the same card to go online and download the exact same game that was being played in the arcade.

Downloadable is downloadable, whether to a slot machine or a personal computer.

From a regulatory standpoint, the new technology has the potential to give those charged with overseeing the industry the highest level of insight into what is happening in a given slot system, at any given moment. However, that kind of usage requires knowledge.

“It is a double-edged sword,” says Cercone about this capability. “It gives the regulator more control over the actual gaming operation. The regulator can now log on to a terminal that is connected to all the terminals in a street market and know instantly whether there are any unauthorized games running, whether there is any potential fraud being done. This is one side of the coin.

“The other side is that the technologies that are used, and the systems, are by their very nature probably four or five orders of magnitude more complex than what a typical regulator might find usable. It really gets down to the regulator understanding the limitations and the advantages of the technologies used in server-based gaming. If you have a regulator who has been used to stand-alone machines, EPROM-based devices, it is a very big step for the regulator to understand how to use (a server-based system) to better regulate gaming.”

Aside from the ability to understand the technology, regulators can find themselves hampered by outdated gaming legislation that had been written so precisely as to prohibit the introduction of new technologies, even when those technologies would improve the regulatory task.

However, as regulators become more familiar with the new systems, it is expected that they will encourage their lawmakers to review and amend existing gaming legislation, to allow the adoption of the improved tools.

The server-based technologies are appearing in the street market faster than they are in the traditional casino market. Perhaps the street will turn out to be the proving grounds, the minor leagues, for the new systems.

Says Cercone, “The downloadable games, extended functionality from the monitoring control engine, having a richer distribution channel to the player, being able to offer new services via the technology to the player in the casino, is exactly the same as what can be and what is being applied in the street market and the route market around the world.”

In this case, that seems to show it’s not always the size of the stake that matters.

By David Ross   Fri, Jan 30, 2009

While the worst of times economically, it may be the best of times to upgrade your casino security system, and realize savings—both from buying new technology in a competitive market, and from improved overall casino operations.

Casinos are not known as technological pioneers. Most casino surveillance departments use analog cameras. Recording systems are VHS video cassette recorders.

To see how antiquated that is, look at your children’s cameras. VCR is a dying technology. You find VCRs at Goodwill stores, but not at Fry’s or Best Buy. Eventually, you won’t be able to buy VHS tapes.

You will, however, find VCRs at 90 percent of the casinos on the Las Vegas Strip. At some point, says Douglas Florence of Nice Systems, casinos will change, because they must.

Nice serves enterprise and security markets in 135 countries.

“I believe we will see an increase in security systems in 2009, because they have to,” Florence says. “Digital video recording has been around since 1994. The cost is significantly less today than in the beginning, but the problem is the number of responsible or qualified manufacturers.

“Security equipment, the CCD (charge coupled device) camera, and analog technology were driven by the camcorder. Now, what drives them are digital, megapixel and IP (internet protocol) cameras, which have more resolution than the best analog cameras in casinos. What will force us to look at the IP camera is that all of the other stuff we are using is digital. This digital convergence has been going on for eight years, but the casino industry has been slow to react.”

According to Florence, perhaps the greatest benefit of digital recording to casinos would be a reduction in costly litigation. “Litigation is the single greatest potential expense (for a casino),” he says. “If we can document that we did everything right, we can mitigate potential litigation or loss.”

Synectic Systems is a U.K.-based integration security solutions company. According to Chief Operating Officer John Katnic, now is a good time, cost-wise, to convert to digital. “You have a very competitive market,” Katnic says. “All manufacturers have numbers to hit. It’s a tough market in terms of purse supply and demand. You can get some of the best deals in a long time.”

Katnic says casinos have two reasons to buy a security system: 1) regulatory and 2) to prevent theft.

“From a regulatory point of view, the casino

doesn’t want to get shut down. You need the proper equipment. Some states have made it mandatory to go digital.”

Availability of non-digital equipment is declining. “The longer you wait, the more vulnerable you are to losing coverage and being fined,” says Katnic.

He adds that in a tough economy, desperate people will try to breach the system. “You must be on your guard,” he says. “Having the right system in place is more important than ever.”

He adds that times of business downturn are good times to switch systems. “During such times we cut the chaff and prepare for the inevitable growth that will happen after the winter of this economy,” he says. “That growth may be a year out, but these systems take a year to get people trained.”

Once installed, there are substantial savings to be had from a new digital surveillance system. Besides catching cheats, which can save a casino between $25,000 and $75,000 per incident on average, labor costs are saved from no longer changing or filing tapes, or fixing broken machines. Storage space also is liberated.

Beyond Theft Prevention

“The mindset we are trying to introduce to the market goes beyond theft aversion; we call it ‘video productivity software,’” says Katnic. “The entire operation can benefit. A classic example is the food and beverage department, where integration can generate major cost savings on shrinkage.”

Marketing can benefit too.  

“We have software that does patron counting. You can do reports on how many people go down certain aisles. If you have a new promotion or a singer on a Saturday, you can have video count patrons,” says Katnic.

Digital video also can stop valet parking losses. Many casinos pay off customers who claim their cars were scratched, because they don’t have proper surveillance coverage. With proper digital video coverage, video records can be scanned immediately. Customers can be shown whether their cars were damaged before or after they arrived.

Steve Wright of Indigo Vision adds that the new equipment achieves better performance and saves operating costs.

U.K.-based Indigo Vision designs and manufactures surveillance systems using digital high-resolution technology.

“I recently upgraded the surveillance system at the Colorado Belle in Laughlin,” Wright says. “Their operators report that reviewing a play at a table, which once took 30 minutes, now takes 30 seconds. Because it’s easier, operators will do it more often and find more instances of overpaying, or simple cheating.”

Customers also return to the tables faster. “Under the old system, the customer sat around for half an hour and wouldn’t be playing,” says Wright.

Switching from analog to digital can also be a “green” solution, by shrinking the surveillance system storage footprint, says Daryn D. Drulias, regional sales manager of Genetec, the Montreal-based provider of Omnicast, an IP video surveillance solution; Synergis, an access control solution; and Autovu, a license plate recognition solution.

Genetec’s open systems platform has no proprietary storage. Casinos can use existing hardware and leverage existing cameras without additional wiring.

Autovu’s license plate recognition software can be used in the parking structure, at valet parking or on a vehicle. Besides recognizing cheaters and frauds, it can alert the arrival of a valued customer or VIP.

Not to mention helping a frantic customer find his car now and then.

The Payoff

The top surveillance suppliers say upgrades to digital technology can pay for itself.

“A well-designed and installed surveillance system begins paying dividends immediately,” says Jim Oldstead, marketing communications director for California-based Pelco.

Pelco is a worldwide leader in security and surveillance equipment with a full line of cameras, enclosures, fiber optic components, twisted pair transmission components, and system-based products.

“Surveillance can use some of the ‘smarts’ in the system to alert them of events on unmonitored cameras,” says Oldstead. “By setting motion detection on an unused table in the casino, an alarm can be generated to pull video from that table to a user’s monitor if there is movement. This would alert surveillance of a possible theft of chips even if they were not actively monitoring that camera.”

Besides gaming protection, all gaming venues and cash-handling areas need to be secured, he adds, noting that video is a large component in that scheme—integration of surveillance with programs such as slot data systems, or point-of-sale systems in retail and restaurants, can help to quickly examine transaction data vs. video footage.

Olmstead notes that digital surveillance systems cost less than ever. The main cost is its recording media—i.e. hard drives. Prices of these systems are headed down while their storage capacity increases.

Dr. Bob Banerjee, marketing manager for Bosch Security Systems, Inc., notes that some vendors encourage casinos to rip out their analog matrix switch, but it is equally easy to argue to keep it in place.

“Adopting new surveillance technology means investing in IP, but not necessarily IP cameras,” he says. “The opportunity to save money is in selecting the right recording and storage technology for IP video streams. Normally, casinos would adopt NVRs (network video recorders). However, in addition to acquisition cost, they would have to pay for software licenses and ongoing maintenance costs. Instead, they can choose to stream video directly from the encoders to storage, which IT refers to as an iSCSI SAN, for recording. This eliminates multiple NVR PCs and reduces total cost,” he says.

There are other good reasons to keep an analog/digital mix.

“Analog cameras are super-reliable for live viewing, and PTZ (pan, tilt, zoom) cameras are important because operators can track individuals,” Banerjee  says. “The problem with an IP camera is that you hit the key but you get a lag. This is the problem with any IP camera that uses the network between you and the camera. This is why almost all casinos stick with some analog PTZ cameras. Most properties say ‘We will be out of business if they can’t see cameras live, so we will stick with analog but we want a really modern recording and playback solution.’

“They create two independent worlds that are brilliant at their own thing. IP video is fantastic for recording, playback and researching. To have the best of both worlds you install analog cameras that go into an analog matrix switch and then take a copy and go through encoders that convert it into digitized IP video.”

Doug Overstreet of JDL Digital Systems, a Washington-based company that writes OEM software, says a new surveillance system will pay for itself within two years.

“We put together our own ROI (return on investment) charts because every casino looks at this as a capital expense. VCR costs for a small casino can be $65,000 to $70,000 a year, whereas the cost of a DVR system across three years is $20,000. There is an initial outlay, but if you pencil it out by year two you are way ahead. By year three you are looking really good.

“The other thing great about tech is that processing power is great—bigger and faster hard drives. I’m getting people who are ordering less file size space, but they keep their videos longer because file sizes are smaller.”

This new technology, along with smart purchasing, can help casinos make it through the hard times.

By Darrin Hoke   Fri, Jan 30, 2009

What’s the best slot cheating scam happening today?

To answer this question, sometimes we have to look at the past to understand the future. The technology of the slot machine has been evolving at a rapid rate over the past several years. This technology has outpaced casino operations, internal controls, training and protection of these devices.

The golden age of slot cheating was the 1980s—long before online slot networks and coinless gaming. It was a time when nearly 50 percent of all Nevada’s excluded persons were slot cheats.

There weren’t any door alarms, and there wasn’t much camera coverage in the slot areas. The machines were easy to beat and easy to steal from. There was no real focus on how much money casinos were actually losing. The thinking was “just plug them in and let them do their job.”

In those days, there were numerous arrests for usage of lead slugs, kick-stands, monkey paws and a host of other scams and cheating activities. It was easy for theft to occur internally. Most casinos used signature stamps to speed up the jackpot and coin-fill process. The jackpot and fill slips were initially generated manually; only later did they progress to being generated electronically.

When a customer hit a jackpot over a certain amount in those days, the supervisor would create a jackpot slip; the slot floor person would theoretically verify the jackpot amount and various symbols and sign the slip. The supervisor would then take the slip over to an employee window and the cashier would give them the money. As long as the amounts were under the taxable rate of $1,200, there was no additional paperwork.

So what could possibly go wrong? Anyone who had access to a floor person’s stamp, or working in concert with a floor person, had a license to print money. This was one of many internal scams that went undetected in many casinos during that time.

The addition of an online slot network did not mitigate the casino’s exposure; it just made it harder for officials to catch a thief. These systems were inherently flawed. They still relied on human interaction, and assumed the humans would follow the proper internal controls.

The first of these systems was very easy to exploit. A simple reprint feature or override function key was all it took to commit fraud on a massive scale. There have been numerous documented cases involving millions of dollars stolen from casinos using this method.

Electronic Cheating

The years 1990 through 2000 were considered to be the most costly decade for slot cheating. This is the period when the slot cheats went high-tech to combat the slot manufacturers’ security responses to their earlier cheating methods.

Slot-makers were now adding optic hoppers, bill validators, online slot networks and more. Nobody would be stupid enough to try and cheat the slots now, right?

But once again, the cheats seemed to be a step or two ahead of us.

The debut of the “mini light” or “light wand” caught the casinos by surprise. This device contained a small LED light on the end, a battery pack on the other end and a magnet to hold it in place.

The thief would put his hand with the device up the payout chute. The light would trigger a payout that was not detected by the credit meter or any other electronic tracking device. Turns out hundreds of these lights were produced during the subsequent few years. It has been estimated that these devices cost Nevada casinos alone millions of dollars.

This was followed by a series of other hybrid devices that were designed to cheat the casinos out of millions more. There was the credit accelerator device, the bill validator pull-string device, the coin acceptor disabler device and a host of manual manipulation techniques. There were well-organized groups of slot cheats traveling the world implementing these techniques on a massive scale. There were individual slot cheats implementing these techniques as needed.

Many of the organized groups simply treated cheating as a business. They would purchase slot machines and reverse-engineer them to find the vulnerabilities, and then create devices to exploit those vulnerabilities. They had labs, resources and money.

Mistakes and Misbehavior

In the early 1990s, information was received that there may be corrupt EPROM (erasable programmable read-only memory) chips in some slot machines. These corrupt chips had a line of program code that allowed a player to hit a jackpot when he inserted a certain series of coins. For example, on a five-coin machine, the player would insert three coins, one coin, four coins, two coins and five coins in order. This was the combination to the jackpot code, and you would receive a winning combination, usually under the taxable amount.

Around this same time, a bored, retired rocket scientist was developing and using a device that could determine what the outcome of a video poker machine would be, usually within five to eight hands. This allowed him to hit royal flushes and other high awards at an incredible rate. This device worked on the premise that nothing is random when it comes to a machine. The exploit was fairly straightforward, and used the RNG (random number generator) in the machine to help him predict the outcome of the game based on the previous hands he played.

As these two separate investigations were unfolding, the industry discovered many things about how slot machines really worked. It was discovered that EPROM chips were not that secure, and could be easily duplicated with the right type of equipment. And who knew that randomness is really not that random?

The computer term “Easter egg” became well-known. An Easter egg is a surprise—an additional piece of code buried deep within several thousands of layers of code. Sometimes it is as innocent as a message from the developers, and sometimes it allows the user to access operating system features that could lead to fraud. The EPROM problem mentioned above was an Easter egg program designed specifically for this purpose.

The EPROM scam was linked to several individuals, including casino employees and other sources. One of the sources had a package delivered to another part of the country that was intercepted. The package contained over 100 corrupt EPROM chips. These chips were sent to the Nevada state gaming laboratory to be tested in its electronics division.

The other investigation into the RNG device had come to a conclusion, and this device made its way to the same lab for testing.

The individual responsible for testing these devices was Ronald Dale Harris, who immediately saw the possibilities of both of these devices. Harris used a gaming lab computer to have an Easter egg program uploaded to slot machines around the state that would allow his co-conspirators to hit a jackpot by inserting a series of coins. He later used an RNG program to help predict the outcome of a keno game at an Atlantic City casino to win $50,000. Is this a coincidence?

Next came the infamous “star wars” device that a very notorious slot cheat designed to piggy-back the existing EPROM in a slot machine. The device would flash the legitimate EPROM and when the machine was re-booted it would bring up the highest award paid for that machine. This well-organized cheating ring would use associates with no criminal record to collect the awards, which consisted of high-end vehicles and very large cash prizes.

Tighter Security

As we moved into the 21st century, the level of these types of cheating methods started to taper off. The industry started to move toward coinless gaming, and more reliance on the slot network to provide security for these devices was the natural course of action.

Since there wasn’t any coin to worry about, the only thing the cheats could do was attack the bill validators and other components previously mentioned. The manufacturers and regulators also stepped up their game by creating some additional internal controls and other fixes to prevent some of these crimes from occurring. Bills were now 100 percent metered so if there was a shortfall of cash it could be discovered very quickly. The TITO systems (ticket-in/ticket-out) were also metered and well-controlled. There is also more security on the internal components like the motherboard and EPROM chips.

The attention soon shifted from what the cheats were doing to what the employees were doing. Internal slot fraud is a growing problem with these new systems.

An internal control is only as good as the person who follows it. Employees are figuring out ways to breach the systems from a variety of different angles, from fraudulent player reinvestment ratings all the way to creating fraudulent tickets that a co-conspirator can later redeem for cash.

Remember, employees often get bored and start poking around, or they accidentally discover some flaw in the system that would allow them, in their minds, to get away with the crime.

As recently as 2007, a slot technician used a jumper wire to remove a machine from the casino floor for maintenance. The jumper wire was connected back to the server and then back to a slot machine in the tech shop for testing. The slot tech would print legitimate tickets for relatively small amounts and have a co-conspirator cash them in. It was estimated that the loss was over $1 million.

All program code is inherently flawed, and requires constant updates and patches to fix various bugs. Some very knowledgeable slot cheats discovered a number of program flaws in some newer multi-denomination and multi-game slot machines. By hitting different combinations of buttons, they could change the value of their credits from 5 cents to 25 cents and higher.

The manufacturers responded quickly, and a patch upgrade was issued at no cost to the casinos. But not all casinos reacted quickly. Some casinos did not, and the vulnerability existed for quite some time until they took the appropriate steps.

Electronic bonusing, different award programs and other jackpot systems undoubtedly are vulnerable. There is talk of smart card devices, debit card transactions and server-based gaming. Will these devices be more secure than their predecessors, or will they launch a new era and a new breed of slot cheat?

How will surveillance catch these new-age slot cheats? Will their crimes be invisible to the casino? Does the surveillance department need to look into some new tools and standards to help us proactively identify fraud in the cyber world?           Answer this question: “What is the best slot cheating scam happening today?” The answer is very simple: “It is the one you don’t know about!”

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

By Max Rubin   Fri, Jan 30, 2009

What’s a “smart camera?”

The term applies to an array of small, unobtrusive, hands-free cameras provided by Tangam Gaming (TGG), that gaze upon your card games to compile and report a dizzying amount of accurate data—information that can be used to make the casino more money.

The cameras are part of TGG’s “TableEye21” and “TableEyeBacc” table-game tracking systems.

In theory, exclusive and actionable data on your table games customers and operations can give you a significant competitive advantage. This elusive, accurate and actionable information can empower table games directors to execute more focused and efficient player development efforts, reduce fraud and advantage play, improve accountability, proactively manage dealer productivity, set table minimums optimally, and, consequently, increase departmental profitability.

Over the past few years, innovative casino operators around the country have been installing and testing automated table game management technologies such as RFID chips and optical tracking systems while the mainstream majority takes a “wait and see” attitude, preferring to see what works.

But one casino’s experience with TGG’s table management systems proves that smart cameras will one day take their rightful place along player-tracking systems, data warehousing and robust CRM applications as indispensable table game management tools.   

Innovation Leader

Barona Valley Ranch in San Diego has won numerous awards for customer service, player development, marketing and operational initiatives. It has a well-deserved reputation as being the leader at the forefront of casino technological innovations.

Barona was the first Native American casino to co-develop and utilize sophisticated customer relationship management software, the first casino in America to adopt a full-blown, floor-wide TITO slot system, and the first to install a server-based slot system in a Native American casino. Now, the casino’s executives are aiming to be the first to successfully benefit from a fully integrated and comprehensive automated table game management system.     

Michael Patterson, vice president of table games at Barona, has the unique luxury of being the world’s first table game manager to deploy and benefit from the industry’s first system that can track every card, every wager and every player decision to get a 360-degree view of a table’s and customer’s action.

The initiative started in 2004 when Patterson decided to partner with Tangam Systems to see if it was possible to implement an innovative table game tracking solution that was seamless and invisible to customers and dealers alike. Tangam offered a solution that unobtrusively tracked every card and player decision through overhead video cameras and video analytics software.   

After putting the technology through a brutal proving ground at Barona’s extensive on-site gaming lab and testing it out on the casino floor, Barona decided to deploy the solution to two pits that included blackjack (with both shoe and pitch games) and midi-baccarat games. After the installation, Tangam and Barona conducted an extensive case study to analyze the information and determine how the accumulated data could affect Barona’s operations.

Patterson commented, “With Tangam, our goal was to automatically track every card, bet and player decision, and we wanted to see how much actionable information and benefits we could get from those data points.”

The Tangam case study at Barona, which spanned several months, was performed with the following end goals in mind:

• Quantify the gain in player development investment efficiency that can be achieved with more accurate player ratings

• Measure dealer and operational productivity

• Determine the leakage in revenue due to dealer mistakes, cheating and advantage play

 The first step was to validate the accuracy of the data. More than 100,000 individual hands of blackjack (shoe and pitch) and midi-baccarat were manually reviewed against the tracked data to establish accuracy metrics. After exhaustive manual cross-checking, it was established that the Tangam solution had a tracking accuracy of 99.9 percent-plus among the data it labeled as “high confidence” data.

Patterson said the goal was to understand the value of each player and how to better control the outcome.

“Everyone has value,” he says. “It’s just how well you recognize that value and then how you manage that information. The last thing I want anyone to do is overreact. As soon as you discover someone isn’t profitable, you don’t go out there with a sledgehammer. You just reduce the part of the equation that is hurting you.”

The technology is very covert, according the Patterson. Therefore, players don’t get overly concerned about it, so it results in greater drop.

“For some reason, a lot of superstitious players are afraid of technology,” he says. “But this doesn’t seem to bother them.

“And the floor has less stress and they can respond to players’ needs and give them a better experience, which should translate into a greater drop. With the right tools and greater automated observations, there’s no question that we can improve our business.”

For a very good blackjack player, Patterson says you just adjust the comps to fit his skill.

“You still treat him as a valuable customer,” he says. “If he’s come in and asks for a room, you give it to him. Now if you know he’s a better player than you originally thought he was, you don’t give him a room every time he asks. But you’ve got to manage him. If he’s still profitable, he’s profitable.”

Player Development Dollars: Increasing Efficiency

Now it gets interesting. Over the past several decades, most casinos have rated their players and determined player comps and marketing reinvestment dollars using the same simple formula:  

Theoretical Win = Time Played x Game Pace x Player Disadvantage x Average Bet

Generally speaking, only the “Time Played” portion of the equation was close to pristine, while “Game Pace,” “House Edge” and “Average Bet” notations on a rating card (or even on a supposedly “high-tech” system) have been little more than vague notions notated by overworked and under-trained floor supervisors, that are rarely, if ever, accurate. 

“Game Pace” and “House Edge” have traditionally been clumped under “Average,” and this typical methodology is highly subjective and prone to error, as the house edge varies based on individual player skill, and the game pace varies significantly based on a table’s occupancy, players’ idiosyncrasies and dealers’ speed.

For the case study, the following adjusted “smart formula” was utilized get a more accurate rating for the player:

Theoretical Win = Number of Hands Played x Player Disadvantage x Average Bet   

The number of hands played and player disadvantage (skill) were accurately tracked by TGG’s smart cameras. In this updated formula, only the “Average Bet” needs to be manually estimated (Tangam does not recognize bet values), and of all of the formula’s elements, it is the one most easily predicted by floor supervisors with a tolerable degree of accuracy.

One thousand sessions were randomly chosen from the database, with each session consisting of about 120 minutes of game play. Each session had at least 100 hands of play. The theoretical win on each of these sessions was calculated using the “Traditional Formula” as well the “Smart Formula.”

For consistency of evaluation and to isolate the error factors, a constant average wager was utilized in both formulas for all 1,000 sessions. The results were compared to determine the difference in the theoretical win calculations between the two formulas.

Of the 1,000 sessions analyzed, the average difference in theoretical win was approximately 37 percent. Furthermore, the player skill across the 1,000 sessions showed an average player disadvantage of 1.4 percent.

After these base metrics were established, a secondary manual analysis was done based on 37 manually collected ratings sessions, each with more than 50 hands. This served as a “sanity check” against the results of the initial 1,000-session analysis. The comparison on these 37 ratings sessions showed an average rating difference of 28 percent, with a standard deviation of 20 percent.

In summary, Barona increased its accuracy in calculating player worth by 25 percent to 40 percent. This translates into an parallel gain of efficiency in the allocation of player reinvestment dollars.

The study proved that there is a significant gain in efficiency and focus to be realized by using accurate player skill and actual number of hands played in assessing player worth.  

Measuring and Managing Productivity

The successful adoption of shufflers has proven that minimizing downtime and enhancing game speed significantly drives more revenue on retail and mid-tier games. The importance of  managing productivity and game pace is understood by all savvy table game managers, but the ability to accurately measure the pace of individual games has been missing in the past.      

Initially, TGG measured hands per hour (HPH) metrics on the blackjack shoe games week by week over a 13-week period. In each week, more than 300,000 hands were utilized to calculate hands-per-hour statistics. The following table summarizes the results over the 13-week period:

As an additional sanity check, these numbers were compared and validated against independent case studies performed manually by other casino properties, and data presented in Jim Kilby’s Casino Operations Management.  Barona’s productivity metrics were extraordinarily close to Kilby’s book, and with two to seven players on a game, fell within two rounds per hour of precisely matching the metrics presented by Kilby.

Furthermore, comparing the HPH metrics from week to week shows a standard deviation of less than 2.5 percent over the 13-week period. This tiny variance is an indication that the HPH measurement can be used as a reliable measure of productivity and that Barona now has a tool to measure the impact of procedures and equipment changes at their tables and proactively manage game output accordingly.

Once average HPH metrics were established for the BJ shoe games, measuring and ranking dealers on HPH was done next.  Dealers at Barona place their ID cards on the table at the start of their dealing session. The system optically recognizes the ID card and logs the dealer with the table. In this manner games are associated with specific dealers.

TGG then calculated each dealer’s HPH at an occupancy level of four (for fair comparison) using sets of at least 1,000 hands. The dealers were then ranked in order of their respective HPH scores. Management was able to utilize this report to determine which dealers were performing as per their target HPH, and which were far off the mark. Barona can now apply this tool to measure and manage each dealer’s game pace on an ongoing basis.

Patterson said TGG allows him to better evaluate table staff.

“Traditionally, when you evaluate a dealer or floor person, generally, you’re guessing,” he says. “Now you know exactly how a boss or dealer is performing. In fact, if you suspect a dealer has poor guest service skills, you can tell by the number of players who are retained on the game, that the service in fact may be deficient.”

Game Protection

In addition to cards and player decisions, TGG also tracks the presence and movement of chip stacks. For instance, if a dealer erroneously pays out a push hand, the system detects the presence of the payout chip stack beside the initial bet stack and flags it as a potential payout error. (It does not, however, track overpays or underpays.)

Furthermore, it analyzes the sequence of cards and player decisions to automatically detect potential next-card knowledge, hole-card knowledge, false shuffles and baccarat third-card rule mistakes.

TGG analyzed more than 1,900 hours of action on the blackjack tables to automatically detect the leakage at tables due to dealer payout mistakes. Specifically, only erroneous payouts on push or losing bets were tracked. Surprisingly, only one uncorrected pay/take mistake happened every 24 hours of action on a blackjack game at an average occupancy of four players.  

Barona was easily able to audit the pay/take mistake incidents via the Tangam user interface, which provides search and video playback functionality. A similar study done on midi-baccarat revealed that approximately one third-card rule mistake (corrected and uncorrected) happens every 24 hours of action.

Although most of the errors were accidents, Barona now has a tool to audit pay/take mistakes and procedure mistakes, and easily catch potential collusion between dealers and players. Furthermore, TGG provides Barona constant protection against potential hole-card play, next-card knowledge play and false shuffle scams.    

Patterson says Barona only wanted an accurate rating system in the beginning but found other benefits as the test went on.

“Being able to determine third-card rule mistakes on baccarat, pay-take errors on blackjack, game pace audits, time and motion studies, advantage player alerts, down time, occupancy levels, dealer efficiency reports and many other things to come along aside from automated rating,” he explains. “All of these value-added benefits have been developed here at Barona during this beta test.”

Summarizing the Results

After the comprehensive study of the actionable data collected by the Tangam solution, the Barona team concluded the following:

The casino realizes substantially better targeting of player development dollars by utilizing Tangam generated-skill assessments and number of actual hands in determining player worth. Barona gains in the efficiency of allocation by at least 25 percent.

The solution can help catch advantage players and prevent potential collusion faster than traditional methods and with less effort, thus helping to save the casino money.

TGG-generated productivity reports are effective tools which can measure and manage the impact of procedure changes on productivity, and proactively manage both dealer and floor supervisor performance.

“Smart shoes,” the card-dispensing devices sold by several gaming vendors, will not necessarily be made obsolete by TGG, says Patterson.     

“If you look at baccarat in Macau, they’ve got a closed system and it works, but I think a combination of Tangam and smart shoes is a valid option, especially at those betting levels you see in Asia,” he says. “On smaller games, maybe not so much. The real question is whether they can price the products so that both options are available to the operator. And they both really help when it comes to card control.”

Looking Ahead

The case study has unequivocally proven the tangible benefits that “smart camera” systems bring to a casino floor. Barona is now in the process of integrating the Tangam solution with its back-end ACSC system so the player development efficiency gains can be maximized on a daily basis.

Following the integration, Barona is planning floor-wide expansion of Tangam to additional tables. Other initiatives being discussed include performing yield management on the table games using Tangam-generated data, and adding more game protection alerts. Furthermore, Patterson is now considering installing a full-blown RFID system at his tables to realize his vision of creating a comprehensive tracking system that can track every card, wager and player decision.

“TGG is a closed loop,” he says. “You get to see the entire aspect of an individuals gaming experience. With a combination of all the systems you can collect and analyze all relevant data and even make future behavioral predications. I foresee a combination of these products allowing us to predict and communicate to our players much in the same way Amazon and other organizations use behavioral data.”

Barona’s business imperative of dominating its market by successfully taking risks with emerging technological innovations has once again been validated with TGG’s smart cameras. In the not-so-distant future, Barona looks forward to having the world’s first hands-free table game data delivery system, and TGG will an integral part of that mix.  

Max Rubin is one of eight living members of the Blackjack Hall of Fame and the award-winning author of Comp City: A Guide to Free Gambling Vacations. With nearly 40 years in the gaming industry as a casino veteran, he has designed and developed several table games as well as innovative table game tournament concepts.

By Roger Gros   Tue, Feb 03, 2009

As the operator of the only casino in a country of 5 million, Heikki Rinta-Panttila should be content with his market. But he’s not. Rinta-Panttila was recently visiting Las Vegas consulting with an architecture firm about another expansion of the Grand Casino in Helsinki. Opened five years ago, the Grand Casino has been a smashing success, adding a mix of fine dining and entertainment to an already-appealing gaming experience. Rinta-Panttila explained the structure of gaming in one of Europe’s northernmost countries when he spoke with Global Gaming Business Publisher Roger Gros in Las V egas in January.

GGB: Let’s start with an overview of the gaming markets in Finland.

Rinta-Panttila: The gaming industry in Finland has been very stable for many years. For casinos, we have a company that is owned by an organization that consists of a consortium of charities. They have a monopoly to run casino games throughout the country. We have about 18,000 machines throughout the country, in what we call “mini-casinos”—about 60 of them—and one “proper” casino in Helsinki, which I run.

Explain how big your market is, in Helsinki and beyond.

In the Helsinki metropolitan area, we have about 1 million people. Remember, there are only about 5 million people in the entire country. Out of our customers, about one-third come from foreign countries and the other two thirds come from Finland.

You’re in charge of Grand Casino Helsinki. Give us some background on that property.

Compared to Las Vegas, it’s not very big. But by European standards, it’s quite a good size. We have about 25 tables, 300 slots, three restaurants, three bars and a showroom. It’s located right in the center of Helsinki. Easy to access and centrally located for all activities.

The building you currently occupy is a historic building, correct?

Yes, it’s more than 100 years old. The oldest parts of the building have been renovated to appear as they were 100 years ago. That is our showroom and fine dining restaurant. The biggest part, the casino, was designed by Paul Steelman, because we felt we needed to bring some Las Vegas excitement to the gaming area. He did a great job and we’re very pleased with the design.

What was the reaction of your clientele to the new property?

The “wow” factor really seemed to work. It’s completely different than Scandinavian architecture, and our guests were very impressed.

I was a bit concerned to put this really modern casino together with the old renovated areas, but it seems to work fine. It seems that every generation has a story to tell about this building, so we’re very pleased that we can continue that tradition.

You mentioned that you have a big international market. What are some of the nationalities that love your casino?

Surprisingly, we have a big Asian clientele. We have a rather large Asian population in Finland, and the airlines have good connections to major Asian cities. That brings a lot of people to Helsinki. They don’t necessarily come specifically for the casino. They stop there when they travel. They apply for visas to other European countries, so they wait and play.

Russians are a big group as well, but not as big as they once were.

Do you think the Russian market will grow once they close down the legal casinos in Moscow and St. Petersburg?

That’s a very good question. We don’t know exactly what will happen when the casinos go away, so it could be a very good market. Especially St. Petersburg, because it’s only about 350 kilometers from Helsinki. Even if they get the gambling zone opened in eastern Russia, we’ll still be the closest casino to St. Petersburg, which is 5 million people.

What is it like running a gaming monopoly without nearby competition?

When you don’t have a casino next door, it makes some decisions easier. But we still compete for the money that people spend on entertainment and leisure activities. This monopoly system is monitored very closely. Whatever happens gets a lot of attention and political pressure. There are points where it is actually a little more challenging than in a competitive environment.

What’s the revenue split for gaming at Grand Casino Helsinki?

Slot machines provide 68 percent of the revenue, with the remainder coming from the various table games.

The slot games are pretty much the same as you’d see anywhere—IGT is our biggest slot provider. Table games get at least half the revenue from roulette, with blackjack close behind. Poker was very big, but the boom has subsided quite a bit. It’s about 15 percent of our revenue.

Tell us about how you handle problem gambling.

That has been a big issue in Finland for a long time. We follow the research in this field very closely. We have very clear policies and procedures on how we are to handle problem gamblers. We take it very seriously. This is one of the issues that gets a lot of attention.

Where do you see the future of the Finnish gaming industry going?

There still is some room for growth, but not very much. We may consider the introduction of another casino, but then we have to consider how it would compete with our mini-casinos, so it’s not very likely.

By GGB Staff   Tue, Feb 03, 2009

Table game supplier Shuffle Master, Inc. announced the appointment of Chris Philibbosian to the company’s board of directors.

Philibbosian is president of SAAK Management, an advisory firm focused on assisting stockholders and CEOs of privately held firms in managing and growing their businesses. The firm’s primary focus is to advise clients in the areas of strategic planning, oversight of senior management, capital transactions and entity-level financial risk management.

Prior to forming SAAK Management, he served as president and chief operating officer of the Greenspun Corporation, responsible for managing the financial interests of the Greenspun family, which is focused on companies in the media, technology, communication, travel, real estate and gaming industries.

By GGB Staff   Tue, Feb 03, 2009

Former Bally Technologies and Shuffle Master executive Mark Lipparelli has been named to the Nevada Gaming Control Board.

Lipparelli, who was executive vice president of Bally Technologies for four years and vice president of Shuffle Master Inc. for two years prior to that, most recently was head of Gioco Ventures, a technology company he formed when he left Bally nearly two years ago. He was a research analyst for the gaming board during the 1980s.

“Mr. Lipparelli has the perfect background and experience to continue the effectiveness and efficiency we have on the Gaming Control Board,” said Nevada Governor Jim Gibbons in a statement. “His energetic attitude and excellent work ethic will be valuable assets for the board.”

The three-member Gaming Control Board is the investigative arm of Nevada’s regulatory system. It makes recommendations to the Nevada Gaming Commission, which has the final say in all regulatory matters.

By GGB Staff   Tue, Feb 03, 2009

The National Center for Responsible Gaming announced that Glenn C. Christenson, managing director of the investment firm Velstand Investments, LLC, has been named the new chairman of the organization’s board of directors.

Christenson, who has served on the board since 2001, replaces Phil Satre. Satre, the former chairman and CEO of Harrah’s Entertainment, Inc., has served as chairman of the board of directors for three years and will remain on the board as a director.  

“Not only has Glenn had a long tenure with the NCRG board and a history of significant involvement with the issues of problem gambling and responsible gaming, he also has a personal commitment to these issues that is truly invaluable,” Satre said. “As a former gaming industry executive, I remain quite passionate about making sure our industry continues to address these issues, and I look forward to continuing to work with Glenn and the rest of the NCRG board to do just that.”

By GGB Staff   Tue, Feb 03, 2009

Gaming Market Advisors, LLC announced that gaming veteran Kirk Saylor has joined its consulting firm.

Saylor has 25 years experience in gaming, most recently as chief operating officer at Majestic Star Casinos. Prior to that, he was CFO of Olympia Gaming and for Horseshoe Gaming Holding Corporation.

At Gaming Market Advisors, Saylor will assist clients in the valuation and acquisition of casino properties and in operations analysis. “We are very happy and very lucky to have Kirk Saylor join our consulting team,” said Steve Gallaway, a principal at Gaming Market Advisors. “Kirk brings an incredible amount of experience in casino finance, mergers, acquisitions and operations. Our clients will benefit from Kirk’s knowledge and expertise as they seek to make their properties more efficient or look to acquire distressed assets.” 

By GGB Staff   Tue, Feb 03, 2009

Ladbrokes, the world’s largest fixed-odds betting operator, has named Chris Palmer as corporate development director. He replaces Alan Ross, who is retiring.

Palmer was formerly managing director for Hesketh Family Office.

Ross, who was with Ladbrokes for 37 years, has been on the operator’s board since 2006. He will remain in an advisory capacity. “Alan has made an enormous contribution to Ladbrokes and the betting and gaming industry,” said Chris Bell, Ladbrokes CEO. “He played a major role in developing the business from the introduction of live pictures into betting shops through SiS in 1986 to the introduction of fixed-odds betting terminals in 1998, and he played a significant part in our major acquisitions and disposals across the globe.”

By GGB Staff   Tue, Feb 03, 2009

Longtime Aristocrat Technologies marketing executive Kent Young is set to become general manager of Aruze Gaming America, after completion of the acquisition by the U.S. subsidiary of Japanese slot manufacturer Aruze of True Blue Gaming Group, the company Young formed after leaving Aristocrat.

True Blue Gaming will become a wholly owned subsidiary of Aruze Gaming America, and will develop game content for all Aruze Gaming offices globally.

When Young assumes his new position at Aruze Gaming, Scot Olive, the chief development officer for True Blue Gaming, will become president of the subsidiary.

As marketing vice president and, later, global general manager of Aristocrat, Young was a central figure in that manufacturer’s rise to prominence in Nevada following approval of its Nevada license in 2000. He was responsible for launching several product groups that are now the manufacturer’s largest-selling products.

“We are extremely pleased to enter into this agreement with True Blue Gaming, and to acquire the talent and experience of Mr. Young and Mr. Olive in contributing to our global gaming business,” commented Kazuo Okada, president of Aruze Gaming America. “Mr. Young has a wealth of experience in bringing companies into new markets and developing these companies into highly successful market leaders. His experience, combined with his passion for the gaming industry, will be instrumental in the growth and success of Aruze Gaming America.”

By GGB Staff   Tue, Feb 03, 2009

The American Gaming Association’s board of directors elected TJ Matthews, chairman and CEO of International Game Technology, to serve as chairman of the AGA.

Matthews, who served as vice chairman of the AGA board for the past two years, succeeds Gary Loveman, chairman, CEO and president of Harrah’s Entertainment, Inc. Matthews began his two-year term in January.

Keith Smith, chairman and CEO of Boyd Gaming Corporation, was elected to replace Matthews as vice chairman, and Loveman will remain a member of the AGA board.

By GGB Staff   Tue, Feb 03, 2009

Class II game and system supplier Multimedia Games announced the appointment of slot industry veteran Mick Roemer as senior vice president of sales, reporting directly to President and CEO Anthony Sanfilippo.

Roemer brings more than 25 years of slot sales and marketing experience to his new post, including several years as senior sales VP at Bally Technologies, a post he left to form his own game content company, Roemer Gaming. He was also head of game development at Bally before moving to the top sales post.

Prior to Bally, Roemer worked in top sales, marketing and game development positions at International Game Technology, Powerhouse Technologies and Anchor Gaming.

In his new position at Multimedia Games, Roemer will expand and manage initiatives which he began several months ago as a company consultant, to guide Multimedia’s move into the Class III markets. He will simultaneously build a new sales organization and support Multimedia’s strategy to become licensed and operating in several new Class III gaming jurisdictions. In addition, he will oversee Multimedia’s integration of its systems business and IP (player tracking, Casino Commander, slot management and kiosks) into its overall sales strategies.    Roemer has worked in an advisory capacity with Multimedia since May 2008, in support of the  company’s efforts to expand its penetration in Class III gaming.

“Mick Roemer is an important, strategic addition to our leadership team,” said Sanfilippo. “Mick brings significant, relevant experience from several industry leaders where, in each case, he played a role in expanding market share and the prominence of their product offerings. We look forward to the benefit of his significant Class III experience and industry relationships.”

By GGB Staff   Tue, Feb 03, 2009

Leading slot manufacturer International Game Technology named Patrick Cavanaugh as the company’s new executive vice president and chief financial officer. The company has been without a CFO since Maureen Mullarkey resigned last summer.

In a separate announcement, the manufacturer named Richard Schneider its new executive vice president of product strategy.

Cavanaugh was formerly vice president of corporate finance and investor relations for IGT, a position he held since April 2004. Prior to that, he was CFO and treasurer for Oasis Technologies and Casino Data Systems.

“Pat brings to the table a unique combination of extensive gaming industry experience as a financial executive, familiarity with Wall Street, and intimate knowledge of IGT,” said TJ Matthews, IGT chairman and chief executive officer, of the promotion. “He has played an integral role in the financial management of the company since the departure of the previous CFO in 2007, and I look forward to Pat’s future contributions and leadership in his new role.”

Schneider has been IGT’s executive VP of server-based gaming since 2006, and president of IGT Systems since 2004. “In his new role, Rich will integrate IGT systems and games into one organization, a change that is reflective of our realization of the need to converge these two once-separate worlds into one unified product offering,” Matthews said. “Rich’s past experience makes him uniquely qualified to bring these two areas together to deliver exciting value-added network, game and customer service applications to our customers.”

By GGB Staff   Tue, Feb 03, 2009

Australia’s Aristocrat Leisure Ltd., the world’s second-largest slot manufacturer, has named Jamie Odell, a former top executive of the Foster’s beer company, as chief executive and managing director. Odell replaces Paul Oneile, who stepped down from the company’s top post in September.

Odell was formerly a divisional managing director of Foster’s Group in charge of its beers, wines, spirits and soft drinks businesses in the Asia-Pacific region. He resigned from Foster’s in December, after being passed over for the top job there when former chief executive Trevor O’Hoy left.

Odell joins Aristocrat as the slot-maker struggles to overcome an extended period of sluggish results, headed up by flat sales in the Americas. His annual A$1.25 million salary is subject to a 100 percent bonus depending on meeting financial and sales targets.

Oneile had been expected to stay in his post until his contract expired December 31, but left unexpectedly in September, causing the company’s board to accelerate the search for a replacement. Board Chairman David Simpson has been serving as CEO in the interim.

Aristocrat’s shares, down some 65 percent for the past 12-month period, rose 5 cents to A$3.90 on the news of the appointment.

By GGB Staff   Tue, Feb 03, 2009

Leading slot and system manufacturer International Game Technology is acquiring “certain operating assets” of rival system company Progressive Gaming International Corporation. The global operations of PGIC will be integrated with IGT’s respective offices in Europe, Asia, Australia, Latin America, Canada and the U.S. PGIC, which is the former Mikohn Corporation, is a partner of IGT in the creation of the TableID table game management system, a successful combination of system, RFID and optical reading technology. The company formerly owned a portfolio of specialty table games, including Caribbean Stud, which it sold to Shuffle Master Inc., and slot machines under the Mikohn brand, a division which was purchased by IGT. PGIC also maintains the progressive sign and meter business on which the Mikohn company was founded.

In recent years, PGIC was concentrating on marketing its slot and table game management systems, and incurred debt to IGT in connection with the TableID system. Its inability to repay that debt led to the sale of assets including PGIC’s system business, in what one analyst called a “forced liquidation.”

“Progressive Gaming was in violation of the terms of its debt agreement, with a private equity fund as well as the terms of its convertible note with IGT,” Sterne Agee & Leach analyst Nicholas Danna told Reuters last month.

IGT shares were down around 6 percent on the news of the acquisition, while PGIC shares reached an all-time low. However, IGT officials maintain that the acquisition makes sense, inasmuch as PGIC’s system technology will be merged into the IGT Advantage casino management system.

“We are very excited about the opportunity that this transaction provides to IGT,” said Rich Schneider, IGT’s executive vice president of product strategy. “The PGIC system product line is designed for somewhat different market segments as compared to our current IGT Advantage line. As such, the technology is an ideal complement to our current offering, allowing us to immediately increase our system install base, while providing us with a more complete product offering for future sales opportunities.

“Further, this gives us the ability to better service the PGIC system install base with our server-based sbX system offering.”

By GGB Staff   Tue, Feb 03, 2009

Players Network, a company dedicated to Las Vegas entertainment and the gaming lifestyle, announced a content syndication and revenue sharing agreement with Sling Media, Inc., a wholly owned subsidiary of EchoStar Corporation. Sling.com is an online video entertainment platform that provides high-quality, full-length shows, movies and clips with user customization and community features.

Players Network will have its own branded channel on Sling.com where users will have free access to Players Network’s extensive library of over 1,500 original gaming and Las Vegas lifestyle programs. Sling.com users will be able to subscribe to the Players Network Channel and choose to engage in the social community built around the content. In addition to Sling.com, Players Network broadband distribution includes Hulu.com, Blinkx.com, Google Video, Yahoo Video, YouTube, and PlayersNetwork.com. Players Network also has extensive television distribution on Comcast Cable, Direct TV, AT&T’s U-Verse, Verizon FiOS and Tivocast.

“We are so excited to have been chosen to participate in the initial launch of Sling.com,” says Mark Bradley, CEO of Players Network. “This new platform will expand Players Network’s distribution using brand new technology that poises Sling.com to be an industry leader.”

By GGB Staff   Tue, Feb 03, 2009

Elixir Gaming Technologies, Inc. has announced a contract with NagaWorld Limited to place electronic gaming machines on a participation basis at NagaWorld, a five-star hotel casino resort in Cambodia. NagaWorld is the only licensed, full-service casino in Phnom Penh.

Elixir Gaming will place electronic gaming machines in a prescribed area of NagaWorld’s 14-story hotel wing and will share in the gross revenue generated by each machine. It is expected that approximately 140 EGMs will be placed and Elixir Gaming and NagaWorld will have joint control over the operation of the machines, including floor staffs and respective audit rights.

Elixir Gaming anticipates the EGMs to be in operation in time for the upcoming Chinese New Year in late January. Subject to certain milestones and agreement between the parties, the machines placed at NagaWorld may be increased to over 200 by the second quarter.

NagaWorld has 508 rooms, 176 table games, a premium meeting, incentive travel, convention, and exhibition facility, a retail shopping area, a collection of restaurants and bars, a karaoke lounge and a spa.

By GGB Staff   Tue, Feb 03, 2009

Six new companies have joined the Association of Gaming Equipment Manufacturers, a trade group comprised of 67 companies that specialize in supplying gaming equipment.

AGEM’s newest members are AP-ID Inc., an identification validation technology firm; DynaGraphic Printing, a printing company; Incredible Technologies, a Class III gaming machine supplier; Masterpiece Advertising, a public relations and advertising agency; Regulatory Management Counselors, a law firm that specializes in gaming-related issues; and Strategy9, a marketing company.

The six companies add diversity to AGEM’s already broad-based membership.

By GGB Staff   Tue, Feb 03, 2009

Leading slot manufacturer International Game Technology has selected London-based software supplier InQuira to help improve its customer service system. InQuira Inc. is a provider of integrated software applications for web self-help, agent-assisted support and enterprise knowledge management.

IGT will leverage InQuira’s Knowledge Management software platform and customer service application expertise to provide faster, more effective support solutions for IGT’s web-based self-service customers and call center agents.

InQuira’s Knowledge Management platform includes industry-acclaimed support for capturing, authoring and refining support-oriented content through a systematic workflow and publishing cycle, as well as intelligent search technology that discerns user intents and applies full natural-language approaches for matching searches to available content.

By GGB Staff   Tue, Feb 03, 2009

Bulgarian slot manufacturer Casino Technology recently completed two new installations in Peru, through its Latin American distributor TransAtlantic Gaming.

Six slots in Casino Technology’s Gemini series are now featured at Meir Corporation’s El Polo casino, and the operator is adding four more of the manufacturer’s titles— Emperor’s Adventure, Coffee Magic, Gold of Babilon III and Silo Quest.

Meir Corporation also installed eight titles from the Gemini series along with other Casino Technology games at its soon-to-open Casino Celebrity, also in Lima.

By GGB Staff   Tue, Feb 03, 2009

Slot manufacturer Bally Technologies announced the launch of a significantly enhanced and redesigned corporate website, www.ballytech.com, to better serve the evolving needs of the global gaming industry.

“Customer feedback played a big role in developing our new website,” said Dan Savage, Bally’s vice president of marketing. “It was of paramount importance that we give our customers the online tools they need to make their job easier. That’s why we focused on creating more robust and user-friendly features such as advanced search capabilities for par sheets, SMI numbers, and other key information our customers need to access online.”

In addition to a new graphical look and feel, the revamped website also features enhanced presentation of the latest stepper and video-slot portfolio, including a “Games Showroom” with game-play videos. There also is a comprehensive systems section with information on all Bally Systems products as well as professional services and training programs.

Bally also announced the release of a new Windows-based version of its flagship SDS slot management and accounting system.

The new version of SDS supports the Microsoft Windows software platform, Microsoft SQL Server 2005, and an entirely new, streamlined and easy-to-use Windows-based graphical user interface.

The new system, called SDS Version 11.0, has been submitted to regulators in Nevada, and according to the company, it should be generally available to operators in the spring. According to a company statement, “SDS Version 11.0 will deliver flexibility, easy maintainability, internationalization, and horizontal and vertical scalability that will make systems administration easier for any size of casino operation.”

By GGB Staff   Tue, Feb 03, 2009

A Las Vegas jury has found that MEI’s CashFlow SC Series of bill acceptors infringes on a patent owned by rival JCM Global.

The subject of JCM’s infringement claim was JCM’s removable stacker mechanism. The jury found MEI infringed in four separate claims, awarding JCM in excess of $11.4 million in damages. As a result of the decision, JCM anticipates the court will impose an injunction against sales of MEI products that deploy the design found to infringe in the Nevada litigation.

In a separate case, the District Court in New Jersey has dismissed a suit filed by Mars/MEI against JCM claiming patent infringement, due to the court’s findings that Mars, Inc. did not have standing to sue at the time of the filing of the complaint. The District Court judge awarded JCM a portion of all legal fees and expenses incurred in preparation of its defense.

“JCM’s best-in-class bill validator design and engineering efforts have been vindicated,” said JCM Global President and CEO Akiyoshi Isoi. “Our patented, innovative design that gives service technicians quick service access to critical components has been a tremendous benefit to our customers, and we are thrilled that the jury has upheld our exclusivity for this design.”

By GGB Staff   Tue, Feb 03, 2009

Slot manufacturer WMS Industries Inc. announced that the Nevada Gaming Commission has given final approval to “WAGE-NET,” the company’s networked gaming system.

WAGE-NET—an acronym for Wide Area Game Enhanced Network—is the first Nevada-approved, open-architecture server-based gaming system that utilizes GSA’s G2S protocol. It is a suite of multiple system applications and platform technologies designed to increase the operational efficiency and revenue-generating capabilities of gaming floors. It also can extend a slot network across different properties.

The approval follows completion of a successful Nevada field trial at the Bellagio on the Las Vegas Strip, which installed the system in July.

“WMS’s WAGE-NET system was intuitively easy to install and performed all the capabilities that were expected,” said Justin Beltram, Bellagio’s vice president of slot operations. “The WMS team provided excellent support and service throughout the entire field trial. We look forward to participating with WMS in future trials as they enhance the system and add new features and functionality.”

Going forward, WMS expects to engage in additional field trials of the WAGE-NET system in Nevada that will include unique platform technologies and applications that focus specifically on players’ gaming experiences.

By GGB Staff   Tue, Feb 03, 2009

Unable to prevent the Seminole Indian tribe from offering table games because of a state compact approved by the federal government, Florida lawmakers suggested last week the state may target the tribe’s vendors for prosecution.

The Seminole tribe signed a Class III gaming compact more than a year ago with Governor Charlie Crist that allows Class III slot machines and banked card games including blackjack. The Class III slots became permissible under the Indian Gaming Regulatory Act when it became legal for parimutuel operators to add the games. However, the table games, added by Crist as an incentive for larger payments to the state, were held to be illegal by the courts, since such games are not legal elsewhere in the state.

Because the federal Interior Department approved the compact, state officials do not have jurisdiction to invalidate it, or to enforce the state prohibition on tables on tribal land. However, state lawmakers said last month they may begin to crack down on vendors selling table game equipment to the tribe as “co-conspirators.” Because a state court has invalidated the compact, the lawmakers included the Class III slot vendors in the targeted group, saying there is no legal standing for Class III slots without a valid compact.

Several lawmakers have raised the prospect of prosecuting vendors with the state attorney general and with state attorneys in the jurisdictions where the Seminole tribe runs its six casinos.

Jon Glogau, a tribal gaming expert who works for state Attorney General Bill McCollum, told the Tampa Tribune that the invalidation of the compact meant the Seminoles can only operate Class II games. “All Class III gaming becomes illegal in the absence of a compact,” he said.

Whether or not vendors can be prosecuted for selling equipment to the tribe is another matter. State lawmakers have legal experts studying the issue, but there is no consensus yet on whether the state Justice Department has the legal standing to prosecute vendors for selling equipment to the casinos.

By Frank Legato   Tue, Feb 03, 2009

This unique multi-level progressive video slot is designed to be offered in a bank with several base games. The progressive is triggered as a mystery bonus sequence, and higher wagers result in more frequent progressives.

What really makes the progressive sequence unique, though, is a multiplying feature. WMS is billing the game as “the industry’s first multiplying progressive.”

It is a well-designed game all around, though. Three different base games—“Summer Solstice,” Voyages of Sinbad” and “Zeus”—each have game-specific bonus features. They are all in the manufacturer’s no-frills “G-Plus” series, which offers a basic, attractive video presentation, simple game features and high volatility in the program.

Each game has a unique free-spin sequence. In Summer Solstice, the free-spin bonus features a random multiplier that increases jackpots to 10X. Voyages of Sinbad features free spins with “Magic Carpet Wild” symbols that split in two to land in a random spot on the reels on the following spin. Zeus features stacked wilds and a free-spin round that can repeat to a maximum of 100 free games.

At random after any spin, the common Money to Burn progressive bonus round can be triggered for a second-screen event that leads to one of five local-area progressives. The screen depicts a building with fire blazing in each of its windows, as the sound system blares the “Burn, baby, burn!” refrain from the song “Disco Inferno.” The player is prompted to pick one of three fire hydrants to determine which floor the animated fireman will try to extinguish. The process continues until one of the five floors—each corresponding to a progressive—is extinguished.

Once one of the five jackpots is picked, another screen appears, and the player selects an icon to reveal a reward multiplier, from 1X to 4X.

Manufacturer: WMS Gaming

Platform: CPU-NXT2

Format: Five-reel, 20-line or 30-line video slot

Denomination: .01, .02, .03, .05 in U.S.; .01 through 5.00 elsewhere

Max Bet: 600, 900

Top Award: Progressive; $1,000 reset

Hit Frequency: 33.4%—59.08%, depending on model

Theoretical Hold: 5.89%—12.92%

By Frank Legato   Tue, Feb 03, 2009

Mega Millioni$er expands the concept of Aristocrat’s Hyperlink multiple-progressive slots to include big-money multi-site progressive jackpots and a choice of base games.

This is the first multi-game unit in the Hyperlink series, in the Player’s World Deluxe video format. Progressive links will also include two individual games in the RFX five-reel stepper format.

The video version offers a choice of four base games—“Geisha,” “50 Lions,” “African Storm” or “Polynesian Pearl.” All are popular Aristocrat video titles, all 25-line games except the 50-line “50 Lions.” The RFX Stepper version is available in the base games “Sun & Moon” and “Pompeii,” five-reel steppers with a large LCD video screen for the common Hyperlink bonus. Aristocrat’s latest technology allows video and stepper games to be include in the same progressive link.

Each of the base games has a game-specific free-spin bonus event. However, the game’s controller sends the common progressive bonus event to a machine on the bank at random, regardless of the results on the individual reels.

The common bonus event results in one of three local-area progressives or the multi-site Grand jackpot, which resets at $2 million in Nevada and at $1 million in the GLI jurisdictions. The common bonus event itself is simple. Ten gold coins appear on the screen, and the player touches the screen to select gold coins, each revealing one of the jackpot amounts. Coins are selected until three jackpot amounts match for one of the four progressives.

This game also brings the Hyperlink series to Aristocrat’s latest operating system, GEN7, which features the popular Viridian cabinet.

Manufacturer: Aristocrat Technologies

Platform: GEN7; Viridian RFX

Format: Five-reel, 25-line or 50-line video slot; steppers available

Denomination: .01

Max Bet: 250

Top Award: Progressive; resets at $2 million (NV) or

$1 million (GLI)

Hit Frequency: Approximately 50%

Theoretical Hold:

10%—12%

By Frank Legato   Tue, Feb 03, 2009

Bally here applies one of its most popular classic reel-spinning themes, “24 Karat,” to its hot new “Classic Winners” triple-progressive series of video slots, available in any of the manufacturer’s four wide-screen formats.

The basic five-reel, 25-line game features a volatile program and simple, classic reel symbols. The game is available in denominations ranging from pennies through $100, although the recommended setup is pennies, with a 100-credit max bet.

The game’s marquee feature is a program offering frequent hits of three levels of progressive jackpots, each hit by a combination of red “7” symbols. (The player must bet the maximum 100 credits per spin to qualify for the progressives.)

Three red 7s on an active payline return a progressive that resets at 750 credits times the denomination; four red 7s, 10,000 times the denomination; five red 7s, 100,000 credits times the denomination.

There is another progressive combination: If the player lands five “Classic Winners” symbols on or within one position of the center, horizontal payline, the win is all three progressives.

There also is a second-screen bonus event. Three scattered bonus symbols on the middle reels, with at least 75 credits bet, trigger the “24 Karat Bonus.” The screen depicts a spinner containing seven spaces. The dial spins until stopping on a credit amount ranging from 750 credits to 100,000 credits.

Manufacturer: Bally Technologies

Platform: Alpha Elite

Format: Five-reel, 25-line video slot

Denomination: .01 through 100.00

Max Bet: 100

Top Award: Progressive; reset at 110,750 credits times denomination

Hit Frequency: 33.4%—59.08%, depending on model

Theoretical Hold: 4.05%—14.94%

By Frank Legato   Tue, Feb 03, 2009

This is the latest entry in AC Coin’s “Big Roller Series,” the group of slots that grew out of the blockbuster hit “Bankroll.”

Bankroll, of course, was the first game with the scroll-style bonus event, a mechanical scrolling top-box device resembling a sheet of banknotes that would roll and stop on a bonus amount. The Big Roller Series places the concept into a community-play bank, with six five-reel steppers arranged in a carousel under a giant version of the scrolling bonus device.

A “carousel,” in fact—the kind with horses at a carnival—is the theme of this latest entry in the series. Carousel Cash positions six five-reel steppers under a giant scroll depicting 14 different award values, including 10 amounts ranging from 40 coins to 200 coins, and four multiplier values, from 2X to 5X.

The base games are the five-reel, 20-line version of IGT’s Double Diamond, or of Triple Stars (pictured).

The math and timing are worked out so more often than not, more than one player is entering the bonus at once. When the first game triggers a bonus, there is a 15-second window in which others can join in before the bonus apparatus starts spinning. The bonus frequency is around 40 spins on average for any individual slot.

When the bonus is triggered, the carousel starts turning, and the player receives the bonus landing at his or her spot. If it is a credit amount, the player receives that amount and the bonus is over. If it is a multiplier, the device scrolls again to achieve a credit amount, and the amount is multiplied from two to five times for the award.

If the second scroll lands on a second multiplier amount, the one number is multiplied by the second number, and then multiplied by the top bonus on the scroll, which is 200 credits. For example, 5X and 2X would result in 10 times 200, or a 2,000-credit bonus.

Manufacturer: AC Coin & Slot

Platform: IGT S2000 or S AVP

Format: Five-reel, 20-line stepper slot

Denomination: .01, .02, .05

Max Bet: Configurable; 30—600

Top Award: 90,000

Hit Frequency: Approximately 50%

Theoretical Hold: 6.98%—10.98%

By Thomas Lim   Tue, Feb 03, 2009

Asian customers are becoming more and more important in casinos around the world. But to effectively cater to this market, operators must dig into the culture and make sure that your employees are treating the customers with respect.

Understanding the “High and Low Context Culture” is a fundamental subject to discuss when we talk about the things that you need to know about your Asian patrons.

Consider the following:

1. Asians are more formal than Americans.

For Asians this formality becomes very important in society, in the business world and at home.

2. Asians’ emotions are more controlled.

Perhaps Asians may hide their emotions more than Americans do.

3. Americans’ communication is generally clearly stated.

Asian communication is more subtle, more suggestive, non-verbal. It is almost like reading between the lines.

4. Motives are indirectly expressed by Asians.

The Asian way is definitely more suggestive and indirect. Sometimes rather than asking people what they want, they will make suggestions.

5. Asians establish social trust first.

Asians establish social trust first while Americans get down to business first.

6. In general Asians are more superstitious when they gamble.

It is very important to understand and accept the superstitions that are related to gaming. Our industry promotes good luck and   most of the Asian players believe in some form of superstition, which is directly related to good luck. Whether you believe in superstitions related to gaming or not, we must understand and respect what our patrons believe. It does not harm anyone. Understanding and some knowledge about the Asian player’s superstitions associated with gaming, which will definitely help your employees when they service Asian patrons.

7. Asians do not complain.

Some casino executives might have the impression that Asian players do not complain very much. Yes, they may seem too polite to complain or to argue with you. But the truth is that most Asian players don’t voice their objections because of language issues that Asian players have. If they are not satisfied with your service, they simply will not return to your property. You need to be aware of the needs of Asian players or they may choose to take their business to your competitors.

It is an essential strategic effort to train and educate your employees for gaming related aspects of Asian beliefs and behaviors. The cultural diversity, especially among different Asian nations is a multi-faceted complicated subject. Since Asian business becomes an important segment of casino revenue, it definitely makes a lot of sense to train and educate our employees with gaming related diversity training including managing language barriers. It will make a difference and it will set your property apart from your competitors.

In my humble opinion, the basics for Asian customer services are your employees’ attitudes toward Asian customers. The right attitude! It means our willingness to help assist our patrons. It means that I know my job role and I know why I am here. It means that I am ready to serve you. It means that our customer service is proactive, not reactive. Our casino employees must practice proactive attitudes with courteous manner, respect, patience and professionalism. Respect is one of the most basic customer service skills.

At the same time, our casino employees should recognize language barrier issues and they should understand the importance of their body language, the universal language. For example, many of you have visited a foreign country and their body language becomes one way of judging their friendliness and their willingness to assist you or not. Your first impression begins with their body language. We can express our happiness, anger, sorrow, and our concern without saying a word. Body language is the most powerful language, a universal language we could speak, especially when you are not able to communicate well. Not being able to speak English well or not at all does not make any patron less of a customer for us. Not being able to speak English is a “handicap,” and then we should take care of these customers with more patience and extra care and attention.

Therefore, understanding and respecting diversity is very important. Just like Americans want others to understand and respect the American way of life and what you value the most, so do Asians want their way of life valued. Proper awareness training will help your hard working employees to service your Asian customers better.

The bottom line is, regardless of the cultural background or the languages they speak, our customers all expect the best customer services from you and your commitment to satisfy customer’s needs. They will become your valuable loyal customers and new customers will find you too.

Thomas Lim is an Asian marketing specialist working with CDC Consulting. He has worked with Sun International, Harrah’s Entertainment, the Mohegan Sun and the Trump Organization in international marketing positions. He can be reached at 1-702-277-2780 or at Thomaslim@earthlink.net.

By David Ross   Tue, Feb 03, 2009

At November’s Global Gaming Expo in Las Vegas, Synectic Systems Inc. unveiled its new eSynx-16 encoder and paddleboard, a powerful 16-channel, cost-efficient internal encoder that delivers high-quality video via H.264 compression, for casinos to record more at lower cost.

The U.K.-based company, a subsidiary of Quadnetics Group Plc, is an engineering, integration and manufacturing company with expertise in IT and networked systems.

Part of Synectics’ suite of digital recording solutions for the gaming surveillance industry, the eSynx-16 is an enhancement to Synectics’ Modular Digital Recording System (MDRS), a cost-effective, yet simple-to-use, surveillance solution for casinos.

The H.264 compression technology reduces storage requirements while recording high-quality video images at higher frame rates. Last year, Synectics was among the first in the gaming surveillance industry to announce the release of H.264 encoding, and the eSynx-16 represents another technological step forward for that product.

“Our gaming customers will quickly adopt the new eSynx-16 encoder,” says John Katnic, vice president and COO of Synectics, “because it gives them motion-picture-quality H.264 video, while reducing cost, physical footprint, heat and power consumption. It’s the classic ‘more for less’ technology improvement.”

The encoder resides on a networked server, connecting via HD68 SCSI cable to an external 1U Synectics paddleboard device installed on the back of the rack behind the server.

The paddleboard supports up to 16 analog camera inputs to communicate with the eSynx-16. Up to two of the PCIe encoders can be housed per 2U server to provide 32 channels of high-quality video recording in one box.

Because it fits into a small space, it is particularly appropriate for casino boats and other places where space and budget are limited.

When used with Synergy, Synectics’ command-and-control video management system, the low-cost, hardware-agnostic eSynx-16 encoder is ideal for surveillance applications where both analog and IP cameras must be monitored and recorded together.

The eSynx-16 is fully compatible with Synectics’ Synergy software suite, a video management application with custom third-party integrations tailored to the gaming industry.

For more information about Synectics, visit the company’s website at www.synecticsusa.com.

By David Ross   Tue, Feb 03, 2009

Surveillance equipment leader Pelco has launched a camera series that features both efficiency and cost savings. The company is calling the Sarix series the next generation of video surveillance technology for casinos considering HD and H.264 solutions.

The Sarix technology, engineered exclusively by Pelco, is available in the IX Series Mega-Performance camera.

The Sarix camera systems deliver top imaging science with high-definition resolution, consistent color science, and “unmatched” processing power, according to the company. Sarix features advanced low-light capabilities and built-in analytics.

The camera technology greatly enhances low-light performance by multiplying and averaging light per pixel to provide the highest sensitivity, making it perfect for monitoring table games.

Sarix technology also produces consistent, detailed color across all products for accurate subject tracking. IX Series Mega-Performance Cameras feature H.264 compression for optimized image quality and minimized bandwidth, along with MJPEG for MPEG4 compression for the flexibility to meet various system requirements.

Sarix-based IX Series camera systems were designed to be open and adaptable. Built with open-source Linux, Sarix-based IX Series Cameras allow for seamless third-party integration with the Pelco Application Programming Interface (API). IX Series cameras ship with built-in analytics and run Pelco and third-party analytic suites.

IX Series cameras are easy to install, and feature a local service jack and “Auto Back Focus,” which provides a better focus than can be achieved with the naked eye. And because ABF can auto-focus for day and night modes, IX Series camera systems achieve optimum focus 24/7.

For more information call Pelco directly at 1-800-289-9100 or 559-292-1981, or visit the company’s website at www.pelco.com.

By Frank Legato   Tue, Feb 03, 2009

Some of you out there in the casino industry may think I have a pretty easy job. I mean, I go to press conferences, go to new casino openings, play casino games, drink in casino bars, and stay in casino hotel rooms.

OK, so I’m not shoveling pig manure. But it’s not all fun and games, I’ll tell you. As soon as I start to think of all that’s great about this job, someone reminds me that I have to write, and then edit, and then edit, and then write some more. And then edit some more.

That doesn’t even take into consideration the safety hazards I face every day in the performance of my duties. Once, I dropped my notebook on the floor at a press conference, and I had to bend all the way over to pick it up. I could have been killed!

Still, a lot of people have it harder than me in this industry. Take the main subject of this issue, security and surveillance. Just a glance at news items coming over the wire about casinos convinces me that I don’t want to do casino security. (That’s right, wise guy. I have a “news wire” right here in my office. It clicks away just like on those old-time news programs. When there’s no news, I use the wire to hang my laundry.)

Casino security jobs would be hard enough if you had to face desperate criminals all the time. But the deal-breaker for me would be having to face normal people, with alcohol mixed in.

For instance: Up at Mohegan Sun in Connecticut the other day, a security guard was called when a guy got mad and head-butted a woman to the ground. When the guard tried to detain him, he head-butted the guard. When a detective went to arrest him, he tried to head-butt the cop.

By the way, that’s always my first instinct when a cop pulls me over for speeding. “Head-butt him.” It works every time.

Either that, or hit him in the face with a bottle.

That’s what happened to a security guard at New York’s Turning Stone casino at about 2 in the morning on New Year’s Day. A guy drinking in the casino’s Lava Club lounge hauled off and slugged a guard with a bottle, and when other guards joined in to help, a fracas broke out. (Or was it a donnybrook?) Four men were arrested in a drunk-on-guard smackdown.

I wonder if they allowed wagering on the fight. Next time, they should. It would make a great promotion: “Four drunks. Four guards. This time, it’s personal!”

I’ve heard other security-guard stories that don’t make the news, from guys I know who work in casinos. There was the one story where a bunch of guards had to surround some lady who was writhing on the ground making cat noises. (Too much catnip, I suppose.) They eventually got all scratched up as they tried to de-claw her.

Then, there was the story where security guards had to restrain a frantic woman who freaked out after a dead bird dropped into her lap while she was playing. It dropped through the rafters of an older racino that had just been converted from a grandstand.

When I heard that one, I thought it was hilarious. Remarkably, she didn’t see the humor in the situation. (Repeated resuscitation attempts failed to save the bird.)

And finally, if you’re a security guard, you’re always the first one called when someone dies. Just a couple of weeks ago, a casino near where I live had a guy die on the toilet, right after he hit a jackpot. (Bummer, huh?) A couple of years earlier, a guy croaked right at his slot machine in the same casino. Who you gonna call? That’s right, casino security.

Granted, casino security can be quite an interesting profession, and it also involves sophisticated surveillance, employed to nab teams of slot cheats or internal casino thieves, or to unravel complicated scams and high-level casino crime.

But more often than not, it’s the head-butting drunk, or the rowdy cat-woman, or the dead guy. No thanks. I’ll stick to the dangerous world of casino trade journalism, and the hazards of press conferences and casino buffets and—maybe the most dangerous of all—round-table discussions.

Hey, for a good story, I’ll even risk that.

By Frank Fahrenkopf   Fri, Jan 30, 2009

As you may know, a little more than a decade ago, the American Gaming Association exposed a clever ploy used by anti-gaming academics called the “circle of disinformation.” These academics claimed to prove, through a series of “economic models,” that any economic benefits derived from gaming were exceeded by the social costs. Not surprisingly, these flawed economic models ultimately failed to stand the test of academic peer review.

Fortunately, for several years now, the research and those who developed it have been overshadowed by reality. Casinos have proven exceedingly positive for the states and communities where they operate. But, alas, the circle is making a comeback. Now, many of the same researchers involved in the disinformation campaign of the early ’90s are using the recent downturn in gaming revenues to once again trot out their old arguments.

This coterie of social critics is using the industry’s current economic problems as a window of opportunity to promote their own selfish agendas, the long-term consequences be damned. They claim that the industry’s current situation was inevitable. They suggest that casinos were bound to fall on hard times, and, now that revenues are down, it is time for gaming communities to make casinos illegal once again.

Though it may sound ridiculous, some critics even suggest that Detroit’s economy is struggling because the gaming industry hasn’t delivered on its economic promise. Forget the auto industry’s problems. Gaming companies are laying people off—critics say that proves there is no economic benefit to gaming. As if every other industry isn’t doing the same thing.

We in the industry should take this talk very seriously. After all, the claim about Detroit’s economy was published in a Wall Street Journal article. A gaming critic, under the guise of a journalist, wrote: “In locale after locale, citizens are realizing that they were snookered by politicians’ promises that casinos would provide a problem-free explosion in jobs and income from tourism. Three casinos have opened in Detroit, for example, but the city looks as desiccated as ever, and one of the operators is embroiled in bankruptcy court.”

This is a disconnect of the highest order. Detroit’s casino industry has, in fact, created employment for 7,000 people. It accounted for almost $1.36 billion in revenues in 2008, an increase of 1.84 percent over 2007 numbers.

The end game of these opportunists—to put a valuable segment of our economy out of business—would be a serious blow not only to the hundreds of thousands of Americans working in the gaming industry, and to the communities that support casinos, but to the nation’s overall economic recovery.

We cannot allow these claims to go unchallenged. It is the responsibility of all of us who work in or benefit from the gaming industry to repudiate these allegations. And they are easily repudiated.

First, we have data and testimonials from gaming communities—both large and small—across the country that enjoy the many economic advantages casinos provide. Civic leaders, businesspeople and citizens of gaming communities talk often about the positive benefits of gaming. For example, according to the mayor of Biloxi, Mississippi, A.J. Holloway, “We’ve been able to improve our quality of life (with the advent of casinos)…”

In Illinois, Robert Gilliam of the Elgin City Council reported, “The casino industry has made us a better community.”

Second, casino gaming has a sterling record of helping depressed economies recover. This record was first established in riverboat communities in the Midwest and has since proven true elsewhere.

A dramatic example of our industry’s ability to spark economic recovery surfaced in the aftermath of Hurricane Katrina. In the Gulf Coast regions of Louisiana and Mississippi, nearly 20,000 gaming industry employees were back at work less than two years after Katrina dealt a devastating blow to the area and its gaming facilities. Those employees earned a combined annual salary of nearly $500 million, which they invested in their local communities, providing a much-needed jolt to the regional economy.

States also continue to turn to gaming to address crippling budget shortfalls. There are a few recent examples from last November’s elections. In Colorado and Missouri—two gaming states that have experienced, firsthand, the economic benefits casinos can bring—citizens voted to expand gaming to support state education programs. And in Maryland, voters overwhelmingly approved a measure to legalize slots to reduce the state’s $1 billion deficit.

Finally, the circle of disinformation claims that an increase in problem gambling has led to a growing number of social ills. However, there is one major problem with that thesis—the facts are crystal clear: A multitude of highly credible studies show that the prevalence of pathological and problem gambling is no higher today than it was in 1976, when gaming was only legal in Nevada and had just been legalized in Atlantic City.

Despite incredible growth in access to casinos and other forms of legal gambling, the percentage of pathological gamblers has held steady.

Ultimately, despite the recent slump in revenues, the gaming industry remains a vital contributor to the nation’s economy. Across the country, millions of Americans still visit casinos every day. The gaming industry creates direct employment for hundreds of thousands of people—jobs that simply weren’t there before. Casinos continue to generate billions in tax revenues that allow states to pursue important public works projects. As the overall economy improves, and discretionary spending once again increases, our industry will be at the forefront of the nation’s economic revitalization.

For anyone with even a slightly open mind, these facts trump the propaganda found in the circle of disinformation. If we use them well, the circle and its creators once again will be relegated to the shadows.

By Frank Fantini   Fri, Jan 30, 2009

Pessimism is now officially the Wall Street theme for gaming stocks.

The leading gaming analysts took out their crystal balls and peered into 2009.

What they saw isn’t pretty.

Their consensus: investor sentiment is lousy, business trends are lousier, and there is no sign of improvement in the near future.

Many of them then slapped on target prices even lower than the stock prices that day.

That is very unusually bearish. It is a stance perhaps driven by having been burned so many times since 2007, as every time an analyst thought the fundamentals justified calling a stock oversold, the price fell further.

Yet, there are some causes for tentative, cautious optimism.

Prices have fallen so far that even bears see value, though many remain on the sidelines fearing the effects a deepening recession might continue to have on stocks.

Additionally, not all stocks are created equal.

In fact, many analysts appear to have come around to our long-held position that Las Vegas is fraught with great risks, and that selective regional casino stocks, like Pinnacle and Ameristar, may enjoy the best prospects in an unpredictable economy.

We also saw wisdom in the words of Joe Greff at JP Morgan.

Noting that investor sentiment on gaming stocks is as miserable as it was in the late 1990s and in 2002, Greff cautioned investors not to be totally swept into bearishness but to be prepared to be nimble. Stocks can, and did in those periods, spike when the negative sentiment dissipated.

Of course, the economy is not the only factor that can influence how investors view the prospects for gaming companies.

State legislators have a role to play, especially as states turn to gambling to help fill budget deficits.

Their decisions can cut both ways. Gaming tax increases would hurt all gamers. Legalizing new casinos or slots at racetracks would help supplier companies and open opportunities for casino operators that get to join the new markets, but hurt those in existing markets.

Here are some states considering gaming expansion:

• Delaware might legalize sports betting to offset growing regional slots competition. The impact might be limited, especially since parlay betting would probably be the only kind allowed by Delaware law, which requires betting be interpreted as a lottery.

More interesting would be the introduction of table games, which the state’s racino managers think can be done, pointing to fellow VLT state West Virginia as evidence.

Tables in Delaware could shortstop a significant number of Atlantic City gamblers.

• Florida. There’s no telling what comes out of compact negotiations with the Seminole Indians, but there appears to be no stopping them from developing a network of seven full-fledged casinos.

• Iowa could add a couple small casinos, but the impact for investor purposes would be limited.

• Kansas may re-examine its casino law, but a failure of a second round of gaming bids could sour legislators on the whole idea. Look for Cordish-Kansas Speedway to win a rebid phased-in contract for casino development in Wyandotte County near Kansas City, Kansas, casinos.

• Kentucky keeps trying, but there’s enough conflict between casino advocates and racetracks to keep this Bible Belt state from expanding gaming.

If Kentucky does succeed, it would be a negative for southern Indiana casinos such as Penn National and Pinnacle.

• Massachusetts. Another effort will be made for casinos or slots at tracks. Slots might get more sympathy this time as a pure revenue generator and to protect jobs at dog tracks when racing ends next year.

• New Hampshire likewise will be pressed to pass slots at racetracks.

• New York appears likely to extend slot parlor hours to 24/7 from 16 a day, and may approve up to 5,000 slots at Belmont Park. That would be yet another negative for Atlantic City operators.

• Ohio keeps defeating gaming referendums, but there’s been a subtle change that might make the difference. Governor Ted Strickland has softened his opposition to gambling expansion, citing the economy in this hard-hit industrial state.

And if a proposal would allow Penn National to be among the casino operators, a big source of opposition that killed the 2008 referendum will have been removed.

Ohio casinos would not be good news for those southern Indiana operators again. It could be a big plus for MTR Gaming, which, although it would lose a number of Ohio gamblers at Mountaineer Park and Presque Isle Downs, would likely get slots at Scioto Downs near Columbus. And, with the Jacobs family of Cleveland owning a big chunk of MTR, more opportunity could come the company’s way.

• South Carolina was a big video poker state before the state Supreme Court put operators out of business. Now, the legislature might get nostalgic for those days, especially if it can tax them enough.

• Texas. Like Kentucky, disagreement between casino and racetrack advocates has been an obstacle for legalizing gaming.

Racetracks have more hope this year. They point to the racing industry being united on the issue for the first time and to new House Speaker Joe Straus as having family ownership of a racetrack. But slots might not be that easy. Governor Rick Perry still opposes expanded gambling and casino advocates still want stand-alone casinos, which would require a constitutional amendment.

If Texas does expand gaming, it would diminish western Louisiana markets where Harrah’s, Isle of Capri, Boyd and Pinnacle compete, among others.

Frank Fantini is the editor and publisher of Fantini’s Gaming Report. A free 30-day trial subscription  is available by calling (toll-free) 1-866-683-4357 or online at www.gaminginvestments.com.

By GGB Staff   Fri, Jan 30, 2009

Partido Popular, the main right-leaning political party in Spain, is asking that the government draft a bill to regulate internet gambling. The party noted that there is no administrative control, no tax system and no user protection—even for underage gamblers—in place for what is becoming an increasingly popular activity. To that end, it demanded the government send a bill on internet gaming to the General Courts within three months to regulate electronic betting and gaming activities.

By GGB Staff   Fri, Jan 30, 2009

 The National Indian Gaming Commission has unveiled its five-year strategic plan, which includes the commission’s goals, objectives and mission up until 2014, as required by government statute. The plan can be accessed at www.nigc.gov.

By GGB Staff   Fri, Jan 30, 2009

The speaker of the New Hampshire House last month said it is unlikely that legislators will look to gaming to plug up the state’s budget sieve, although she also acknowledged the voters’ long-term opposition to new taxes. Speaker Terie Norelli made the remarks during an interview prior to the inauguration of Governor John Lynch. That seems to leave little hope for a proposal to put video lottery terminals at the state’s racetracks, in spite of projected a $250 million budget gap. Even so, the bill is getting more attention this year than it would normally attract.

By GGB Staff   Fri, Jan 30, 2009

Connecticut Attorney General Richard Blumenthal likes the smoking plan recently submitted by the Mohegan Tribe for the Mohegan Sun Casino Resort. The AG has been pressuring the tribe to adopt some sort of smoking control at its casinos as a way of heading off a possible collision on sovereignty if the legislature adopts a ban that applies to the casino. The legislature is under considerable pressure from the casino’s table dealers union to adopt such a ban. The plan adopted by the casino creates a smoke-free zone in most of the casino, with the exception of some slot machine areas. It will be implemented in phases, in tandem with a new ventilation system. Blumenthal would like the legislature’s bill to include Mohegan’s smoking plan.

By GGB Staff   Fri, Jan 30, 2009

Early in January, Las Vegas Sands Corp. and the Elad Group were plagued by false reports of a partnership to develop the former New Frontier site. The reports came from an Israeli website and quickly made their way to the United States, claiming that Elad Group execs were requesting assistance from Sands mogul Sheldon Adelson to build a $5 billion Plaza Hotel on the Las Vegas Strip. Both casino operators deny any such partnership.

By GGB Staff   Fri, Jan 30, 2009

The Red Garter Casino in West Wendover, Nevada, will close March 11. Holder Hospitality Group, which owns 12 properties in Nevada, including the Red Garter and the Silver Club in Sparks, has struggled during the economic slump. The Red Garter’s potential buyers have been thwarted by limited access to credit.

By GGB Staff   Fri, Jan 30, 2009

Legalized online gaming has been introduced in the Czech Republic. The Finance Ministry has granted licenses to five international companies as a start.

By GGB Staff   Fri, Jan 30, 2009

Faced with a shortfall of £1.2million in voluntary contributions to the Research in Gambling Trust—RIGT—the U.K. government is said to be ready to impose a mandatory tax on gaming operators. The Department of Media, Culture and Sport says that a voluntary agreement is still possible, but the industry must do more than just fill in the current funding gap.

By GGB Staff   Fri, Jan 30, 2009

The Lawrenceburg, Indiana, gambling ship, Argosy Casino, is changing its name to reflect the Hollywood theme and brand owned by its parent company, Penn National Gaming. The new theme comes as the riverboat undergoes a $300 million expansion. The upgraded boat will open to the public on Fourth of July weekend.

By GGB Staff   Fri, Jan 30, 2009

Wagering on parimutuel horse racing in North America declined 7.2 percent in 2008. The total amount bet on races in the U.S. and Canada was $13.67 billion last year, down from $14.72 billion the year before. It was the lowest wagering total in 10 years.

By GGB Staff   Fri, Jan 30, 2009

Two new casinos have opened for business in Chile. Osorno Casino Sol, a project of Clairvest and Latin Gaming, began operations January 13. Casino de Juegos Temuco, of Fischer, opened two days later. The properties are the ninth and 10th of a total of 18 new casinos planned for Chile.

By GGB Staff   Fri, Jan 30, 2009

The Nevada Gaming Control Board last month approved a license for the M Resort, scheduled to open in March in Las Vegas. Owner Anthony Marnell III said the proposed 1 million-square-foot retail complex has been delayed by two years. The Nevada Gaming Commission still must give approval for the property. The board also approved the purchase of Cannery Resorts by Australia’s Crown Casino. The deal still is contingent on approval by Pennsylvania regulators, where Cannery operates the Meadows racino near Pittsburgh.

By GGB Staff   Fri, Jan 30, 2009

The London Docklands may become the site of a new casino. The owners of the Excel Exhibition Centre in London’s East End have had talks with several casino operators, including Rank Group, about operating the casino for the local authority of Newham, which received one of the 16 new licenses last year. Excel was bought last year for £320 million by an exhibitions group backed by the crown prince of Abu Dhabi.

By GGB Staff   Fri, Jan 30, 2009

Wind Creek Casino and Hotel opened last month—rather, part of it did.

According to the Alabama Press-Register, the property unveiled its casino and restaurants, while the hotel’s grand opening occurred later in January. Wind Creek is owned by the Poarch Band of Creek Indians and managed by PCI Gaming.

Tribal councilman David Gehman told the Press-Register that people love the new property, though he originally voted against building the resort. Gehman’s fears have been eased due to the tribe’s ability to pay off its debt more quickly than expected.

Wind Creek is a Class II gaming establishment with 1,600 electronic bingo games. The games in question are currently the subject of a government task force commissioned by Alabama Governor Bob Riley, who alleges that the games are actually illegal slot machines. The machines in question are similar to casino-style slot machines.

“Enough is enough,” Governor Riley said. “Alabamians should never be forced to stand by and watch rogue gambling interests come in and take our state for all it’s worth. By executive order, I have established the Governor’s Task Force on Illegal Gambling, which will bring the state’s resources to bear in ending once and for all what has become a growing epidemic in Alabama.”

Slot machines and slot-like machines are illegal according to Alabama’s constitution.

The Poarch Band of Creek Indians released a statement agreeing with the governor’s stance on illegal and unregulated gambling, stressing that “our gaming enterprises are well-regulated at both a tribal and a federal level.”

By GGB Staff   Fri, Jan 30, 2009

The 14th annual Western Indian Gaming Conference, sponsored by the California Nations Indian Gaming Association, was held last month in Palm Springs with slim attendance and fewer exhibitors than in years past.

CNIGA President Anthony Miranda wasn’t bothered by the drop-off in attendance.

“The people who really cared about our issues showed up this week,” he said. “We presented a compelling conference program and produced excellent speakers.”    

One of those panels included representatives from the state legislature, which is considering several measures that may increase gambling in California. The legislators addressed the shortfall in revenue that was expected to be generated by Indian gaming. Several tribes have declined to sign gaming compacts negotiated with Governor Arnold Schwarzenegger, exacerbating the state’s looming insolvency.

Miranda said the state’s tribal casinos have fared better than their Las Vegas counterparts, with declines mostly in the single digits.

“Our customers are still coming,” he said. “They’re just spending a little less.”

Miranda acknowledges that many new projects and expansions have been delayed, if not outright canceled. But he blamed the credit markets, not the economic downturn.

“We’ve seen some tribal debt ratings lowered,” he said. “That doesn’t help.”

He also warned that the state’s budget shortfall would mean that legislators may look at other forms of gaming to make it up.

By GGB Staff   Fri, Jan 30, 2009

Texas Governor Rick Perry rebuffed a letter sent last month by the Kickapoo tribe in which the tribe tried to open discussions about reopening its casino, which has been closed for several years.

The governor’s spokesman said, “The governor is not in support of expanding the footprint of gambling in the state.”

Both the Kickapoo and the Tigua tribes want to reopen their casinos, something that Texas governors have stoutly resisted. The Tigua’s Speaking Rock casino was closed eight years ago.

Ironically, the state after which the most popular form of poker is named is also one of the most strictly anti-gambling states. Federal law allows tribes to offer whatever gaming the state offers, and the tribe’s letter tried to open a discussion based on the premise that since Texas has a lottery, that means that casino games of other types are also legal.

“The best way to resolve this dispute is to sit down with the state and negotiate a mutually beneficial Class III gaming compact,” Kickapoo Chairman Juan Garza Jr. wrote.

But Perry wasn’t buying it.

Since Perry has closed one door, the tribes are hoping that another will open during the opening session of the legislature. The Tigua tribe is gearing up to lobby Lone Star lawmakers, hoping to do just a bit better than two years ago, when a bill they supported was killed by one vote.

Since Texas, like most states, is facing budgetary woes, Chavez hopes that the possibility of generating some taxes might draw some support.

By GGB Staff   Fri, Jan 30, 2009

While Pinnacle Entertainment revenue is holding steady in the United States, its Exuma resort in the Bahamas has been bleeding cash for several years. As a result, Pinnacle wrote off some $4.3 million in the last quarter at the Casino at Emerald Bay because of the financial hardship.

The company requested and received permission to close the casino, which it did on January 2, instead of the previously announced closing date of August 31.

The financial distress in Exuma isn’t just limited to the casino. The owner of the hotel where the casino is located, the Four Seasons, is currently in receivership.

“In July 2008, the company decided to sell or otherwise discontinue operations of the Casino at Emerald Bay,” the company announced last fall. “This small casino is distant from Pinnacle's other operations and its success is heavily reliant on the neighboring Four Seasons hotel.”

By GGB Staff   Fri, Jan 30, 2009

Leading Spanish gaming concern Codere has combined five of its Mexican subsidiaries into one company.

The gaming operations of subsidiaries Complejos Turísticos Huatulco, Números de México, Femalamex and Compañía de Inversiones Mexicanas will now all be merged with the fifth subsidiary, Codere Mexico, which will keep its name.

Altogether, the five companies produced revenue close to $615 million as of October 31. Almost half of that was generated by the original Codere Mexico.

The new company operates 19,575 slots and 102 bingo halls.

Mexico is the largest market of Codere in number of machines, and supplied 22 percent of the Spain-based parent’s revenue in the first nine months of 2008.

By GGB Staff   Fri, Jan 30, 2009

The license for a second casino in Asuncion, Paraguay, is about to be awarded. There are currently two groups in the running for the right to operate the new casino.

One candidate is a venture of Casinos del Litoral of Argentina, together with Paraguayan firm Starnet. The other candidate is Hotelera Emprender, also of Argentina, working with La Gloria Hoteleria of Paraguay, which currently operates the Hotel Guarani.

The winning group will need to invest at least PYG 25 billion, about $5.2 million, to satisfy the terms of the bid.

The National Gaming Commission, Conajzar, was expected to award the license on January 21.

At the same meeting, the commission will award the license for the operation of horse racing to the Paraguayan Jockey Club and the license for Telebingo to Channel 13. Both companies were the sole bidders for the respective licenses.

By GGB Staff   Fri, Jan 30, 2009

A Jamaican Maroon colonel says the historic

St. Elizabeth community of Accompong is no place to build a casino.

“I don’t think any investor would be compelled to take a casino to a place like Accompong Town, where we are lacking in infrastructure,” said Meredie Rowe in the Jamaica Gleaner.

But the head of the Accompong Maroons, Sydney Peddie, says gaming should be considered for the area. One offer has already been made by Florida-based developer Hal Brooks and Associates, which wants to construct a casino and hotel on 50 acres in Accompong Town.

Some Maroons say the move could undermine the Maroon culture and sovereignty as well as obliterate the treaty of 1738, which gave Maroons the inherent right of ownership to Accompong Town.

“Kingston, Montego Bay, Negril and the other towns have water, adequate light and adequate infrastructure,” Rowe added. “It can cost them a whole lot less to do it elsewhere in Jamaica.”

By GGB Staff   Fri, Jan 30, 2009

Cambodian Prime Minister Hun Sen has responded to gaming businesses ignoring his December 5 directive by ordering the heads of the National Police and National Military Police to shut down 15 unlicensed slot machine operations.

The Phnom Penh Post reports that the order came during a meeting of the Council of Ministers on Friday, December 19. On the following Sunday, National Military Police Commander Sao Sokha announced that all 15 operations named had been closed down immediately following the prime minister’s order.

Extending the crackdown further, the prime minister has asked the Ministry of Economy and Finance to look for licensed slot operations where Cambodian citizens are playing machines. Cambodia does not allow its citizens to gamble.

However, the Post quoted lawmaker Son Chhay as saying, “I still see luxury cars carrying government number plates parked outside slot machine clubs. The cars clearly belong to senior officials.”

By GGB Staff   Fri, Jan 30, 2009

Although the idea of casinos on Okinawa has been discussed for the past six years, the recent economic problems have increased the urgency of discussions. A panel discussion was held recently at the Okinawa Convention Center, during which proponents and opponents of the concept were able to speak.

The usual objections were raised by the anti-casino speakers—addiction, alcoholism and detrimental effects on children—mostly by the Board of Education and parent-teacher associations. Most speakers, however, admitted that they have never visited a casino, and therefore don’t know what they are really like.

Proponents of casinos started with the idea that the government should not be telling adults what to do.

“Okinawa should believe adults more. People are adults, and they know what they are doing,” said Professor Ichiro Tanioka of Osaka Commercial University. “We don’t think it’s a good idea to make limitations on entry to the games.”

Another professor disagreed.

“We think it is important to have limitations on entry,” said Professor Kazuhito Motoyama of Okinawa Women’s College, “especially for women and children. It’s a political concern.”

The host of the session, the Okinawa Prefecture, says it will continue to hold public forums so the public is aware of the facts about casino gaming.

By GGB Staff   Fri, Jan 30, 2009

Even though the Chinese government doesn’t seem likely to relax the strict visa rules for its citizens on visits to Macau, some operators are saying that the market is leveling out and that they don’t expect the bad time to last much longer.

Despite the bad news of late, gross gaming revenues for 2008 set yet another record in Macau. The 31 casinos in the special administrative region grossed 108 billion pacatas or US$13.7 billion during the calendar year, a big increase over the US$10.6 billion posted in 2007. December ’08 revenues dipped about 7 percent.

Ciaran Carruthers, chief operating officer of Galaxy Entertainment’s Star World Hotel and Casino, says he’s optimistic about 2009.

“The worst predictions for this year still have Macau having a better year than Las Vegas ever had,” he says. “If I was a betting man, I’d say Macau is still going to be very strong for 2009.”

Although some operators expected that the federal government would ease some of the visa restrictions, a visit by a Chinese official seemed to quash that hope. During a two-day visit to the SAR, Vice President Xi Jinping suggested that Macau officials diversify the economy to avoid dependency upon the gaming industry. He recommended that new development on Hengqin Island be aimed at ventures not contingent on gaming.

“Macau’s need for diversification will be carefully considered in the development of Hengqin,” Xi said.

Analysts were disappointed with Xi’s visit, hoping that some easing of the travel restrictions would be announced.

“The immediate need is to help the labor market that’s been deteriorating because a lot of the casinos are laying off people,” said Gabriel Chan, a Hong Kong-based analyst at Credit Suisse. “There was nothing specific to help Macau.”

Xi’s lack of action sent the shares of Macau casino companies tumbling.

Meanwhile, operators continued to cut salaries to avoid staff cuts. Melco Crown Entertainment slashed wages by 8 percent, with the approval of the government. While the company avoided firing Macau residents, it did eliminate some positions occupied by “imported” staff members.

Lawrence Ho, the partner, with James Packer, in Melco Crown, said the salary cuts were necessary to preserve the team.

“I have always believed that our long-term success depends first and foremost on our employees,” he said. “We have insisted on exploring ways to avoid large-scale redundancies and our primary hope is to keep our employee teams together in the best shape possible.

“This will help us to best deal with the current turbulence in market conditions, so that when the market revives—as it most surely will—MPEL will be best poised to benefit.”

Melco Crown is scheduled to debut its City of Dreams casino resort in the second quarter of this year.

Las Vegas Sand Corp., owner of the Venetian and the Cotai Strip development, has said no more layoffs will be necessary.

“The positions that we eliminated were primarily managerial,” said LVS President and COO Bill Weidner. “We did not cut one gaming or one Macau local position.”

Weidner was also defensive about charges that LVS has taken its profits in Macau to use in developments elsewhere.

“All our earnings in Macau have stayed in Macau and were matched five times over by additional investments in Macau,” he says.

One company that will not be doing layoffs or salary reductions is Wynn Resorts, owner of Wynn Macau and the soon-to-open Encore Macau. As he has done in Las Vegas, where the economy is even worse than in Macau, Wynn says he will drop his room rates “to keep people in the building and my employees working.”

Wynn said layoffs are the “absolute last option.”

By GGB Staff   Fri, Jan 30, 2009

The two Singapore integrated resort projects are shaping up to be the world’s most expensive casino resort developments. But when completed, can they be profitable?

The two resort projects are Resorts World at Sentosa, which is a development of Genting International, and Marina Bay Sands, from troubled Las Vegas Sands. Both projects feature large casinos and high-end hotels, plus a package of family-oriented, non-gaming amenities that can include shopping malls, theme parks, museums and convention space.

Marina Bay Sands was supposed to cost $3.85 billion, but LVS now estimates the final cost to be about $4.5 billion. Resorts World was to come in at $3 billion but will now cost $4 billion, according to Genting.

However, Asian Times reports, some analysts say the revised numbers are too low and that the resorts could end up costing $6 billion each to complete as planned. If so, the properties would require $1 billion in EBITDA each year, according to the Times.

By GGB Staff   Fri, Jan 30, 2009

The Taiwan legislature has passed a bill that contains a measure to allow casino development on offshore islands, should a majority of the local population agree.

The measure was included as an amendment to the Remote Island Development Act, which seeks to encourage investment on several of Taiwan’s smaller, economically challenged islands.

Any casino would have to be a part of an international tourist resort. The amendment specifies the non-gaming amenities that would have to be included in any project, including an international tourist hotel, conference center and exhibition facility, retail shopping mall and other tourist facilities.

Taiwan’s Committee for Economic Planning and Development—CEPD—in December released a list of recommendations which could influence the yet-to-be-written casino legislation. Suggestions include requiring a minimum investment of $1 billion, minimum land area of 10 hectares and that the project is an integrated resort in the style of the two Singapore projects, Marina Bay Sands and Resorts World.

CEPD also suggested a gaming license be valid for 20-30 years, a gaming tax of 10 percent and a special allowable operation tax of 5 percent.

The outlying islands referred to in the bill include the Penghu archipelago, which is about midway between Taiwan and the Chinese mainland, and the islands of Kinmen and Matsu, near the mainland’s Fujian Province.

The three main islands of Penghu County are seen as the most likely candidates for casino resorts. The local government there recently announced vague plans for one project, but some believe that issues such as land acquisition and zoning make such a development more of a hope than a probability. The two locations named by the county government as likely sites of the project are Houliao Bay on Baisha Island and the Huhsi Port area on the main island of Makung.

The company farthest along in planning is AMZ Holdings Plc, which began the process of acquiring land on the main island of Penghu as far back as 1999. The resulting 10.8-hectare property has been rezoned from agricultural to commercial use. AMZ’s original plans include a 600-room luxury hotel and a casino of minimum 130,000 square feet. However, the company says it will adjust its plans to conform to whatever regulations are eventually laid down.

In addition to AMZ, other companies have shown an interest in the islands, including Lawrence Ho’s and Jamie Packer’s Melco Crown, MGM Mirage and Galaxy Entertainment. Sheldon Adelson’s Las Vegas Sands is holding out for a casino resort in the capital city of Taipei, when and if it is ever approved.

By GGB Staff   Fri, Jan 30, 2009

Earlier in 2008, MGM Mirage admitted that construction problems at CityCenter resulted in at least one tower being of questionable structural integrity. But at the time, the “Veer” tower was implicated.

Following an investigation by Clark County, it was revealed that there were problems with the Harmon Hotel. The rebar—metal rods that give strength and flexibility to concrete foundations—was not spaced properly, and a major retrofitting project would be necessary if construction on the tower was going to continue. At the time, MGM Mirage made all indications that it would make the proper changes and build the Harmon as it was designed.

Last month, however, the company announced it will drop the condo component of the project and top the building at its current height. Company officials said it was an economic decision that was reached because a redesign or retrofitting project would be expensive. They did not mention the fact that only 88 of the proposed 200 units are under contract to be sold, or that properties throughout Las Vegas are finding it extremely difficult to close sales on condo units in the current economy.

As it stands, the exterior of the project will be completed by the time the complex opens at the end of the year, but work on the interior will continue and it won’t open until 2010.

The move is expected to save the company as much as $600 million.

At Caesars Palace, a new hotel tower scheduled to open this summer is now on hold. The Octavius Tower, part of a $1 billion expansion project, will not be opened until, according to Harrah’s Entertainment CFO Jonathan Halkyard, “a period of stronger demand.”

While the tower is in mothballs, the rest of the expansion—110,000 additional square feet of meeting and convention space, three 10,000-square-foot villas and an expansion of the Garden of the Gods pool and garden area—will open on schedule.

By GGB Staff   Fri, Jan 30, 2009

The Illinois Gaming Board in late December chose Des Plaines and Midwest Gaming for the state’s 10th and last casino license, picking it over Rosemont and Waukegan. The vote was 3-1, ending four years of agonizing by the state board on what to do with the license. And the decision apparently came down to the only bid that was not tainted.

In doing so it passed over a much higher bid from a developer that wanted to build in Rosemont, which is still seen as having too much “mob influence.” A second bidder also suffered from problem relationships.

The winner was Chicago developer Neil Bluhm, who heads Midwest Gaming. Bluhm has recently become a true force in gaming, but has always been very well-connected in Illinois. He has directly won a license for a Philadelphia casino, SugarHouse, and indirectly controls the sole license in Pittsburgh, which was originally awarded to Majestic Gaming’s Don Barden.

Midwest Gaming won the bid despite the fact it may cannibalize the market for nearby casinos, Grand Victoria in Elgin and Hollywood Casino in Aurora.

Bluhm plans a 50,000-square-foot casino riverboat, a parking garage, four restaurants and two hotels. He plans to start construction as soon as the state process, which includes a background check on his investment group, concludes. Once building starts it will be about a year and a half before the riverboat opens for business. He will be redeveloping 20 acres of existing office buildings in the southeast corner of the city, which, ironically, is near the border of the village of Rosemont.

The runners-up were Trilliant Gaming (controlled by former MGM Grand President Alex Yemenidijian) for Rosemont, and Waukegan Gaming. Trilliant’s bid was $435 million, Waukegan Gaming’s bid was $225 million and Midwest’s $125 million. Des Plaines and Rosemont, which are both near O’Hare Airport, had argued that they would be able to tap that large reservoir of travelers.

Waukegan, the only non-Chicago area finalist, was also the only one of the three that actually qualifies as a “depressed city,” and thus in need of the economic shot in the arm that a casino would provide. Waukegan is located near the Wisconsin border.

Rosemont’s seamy past and reputation kept it from being chosen. “Rosemont is tainted by reputation,” commented a board member. “Organized crime still controls much of the life of the village of Rosemont,” said another.

Four years ago the then-mayor of Rosemont, Don Stephens, was investigated by the state attorney general for alleged organized crime ties. The city later lost out on a casino, although not for that reason. The casino license was idle during the interim.

Ironically, the board’s decision may not be popular with the citizens of Des Plaines itself, who in a 1994 referendum voted against a casino. The city will reap $25 million annually from taxes, although to get the casino it promised to give $10 million of that to the state.

By GGB Staff   Fri, Jan 30, 2009

The ambitious Gran Scala project announced in November 2007 is on track for a 2012 opening. So said Paul Stephan Allegrini, managing director of International Leisure Development, in an interview with Spanish-language business news site CincoDias.com.

Allegrini said that when it opens, Gran Scala will already be one of the biggest casino developments in Europe. The entire project, though, will not be completed until 2020.

Development is expected to be near the town of Ontiñena, a two-and-a-half hour drive from Barcelona and five hours from Madrid.

Gran Scala is a total concept development that incorporates casinos, hotels, museums and theme parks, all located in a relatively isolated desert in the Aragon region of northeastern Spain.

By GGB Staff   Fri, Jan 30, 2009

U.K. Culture Secretary Andy Burnham has authorized a plan that will see the doubling of the maximum stakes of gaming machines in pubs and arcades.

Lobbying by operators of Category C slot machines resulted in the increase of the maximum stake, which will go from 50 pence to £1. The corresponding maximum jackpot will also double, going from £35 to £70.

According to The Times, a government document indicated that the Culture Department consented to the change because of difficulties faced by many operators, due to the current economic climate.

Even Prime Minister Gordon Brown, who opposed the anticipated liberalization of gambling from the time he took office, sees economic sense in the increased stakes.

Responding to criticism by several senior bishops, The Times reports, Brown rejected “moralistic” objections in times of a stagnant economy.

The move is expected to generate an extra 20 percent in revenue for operators and £27 million in VAT.

By GGB Staff   Fri, Jan 30, 2009

Queenco Leisure International has announced an agreement between Club Hotel Loutraki and Casinos Austria for the purchase of Casinos Austria’s 51 percent stake in Casino Beograd.

Club Hotel Loutraki, with a 39 percent stake, was one of three original partners in the development of the casino in the Serbian capital, Belgrade. The Serbian national lottery is the third partner, with a 10 percent interest.

The move comes just as Casinos Austria International is announcing it will be expanding its product mix to include lottery, online gaming, sports betting and new media variants of gaming.

Club Hotel Loutraki will pay €42 million for the Casinos Austria stake. Queenco partially and indirectly owns Loutraki.

The first €8.4 million will be paid upon completion of share acquisition. The balance is due within six months of share acquisition. As security for payment of the balance, Casinos Austria will have rights to a 60 percent stake in Casino Beograd in the event of non-payment.

Completion of the closing is conditional upon receipt of approvals from Serbian regulators, among other things. All conditions to closing need to be met by June 30.

In a second deal, which is dependent upon completion of the Casino Beograd transaction, Casinos Austria International is giving Club Hotel Loutraki an option to pick up a stake in its wholly owned Grand Casino Brussels property. Loutraki may choose to acquire 50 percent of the casino for an amount equal to 50 percent of Casino Austria International’s investment in the Brussels venture, or 75 percent of the casino for 87.5 percent of the investment.

The option will expire on March 10.

By GGB Staff   Fri, Jan 30, 2009

The Irish government is reportedly giving up the idea of establishing a gambling study committee composed of members from all the various political parties. The problem is that two party leaders in particular are refusing to take part if the committee insists on looking at fixed-odds betting terminals—FOBTs—in its course of action.

Fine Gael leader Enda Kenny and Labour leader Eamon Gilmore both wrote to Minister of Justice Dermot Ahern in December, saying they would join the committee only if FOBTs were excluded from the range of subjects to be covered.

The committee was intended to examine the nation’s antiquated gaming laws and decide on changes needed to bring the sector into line with modern technological and social realities.

A detailed government report, released in 2008, was to be the basis for further work by the committee. That report in fact suggested that FOBTs should not be allowed in betting shops. The gaming machines feature sports simulations with predetermined outcomes—for example, substituting a horse race for the symbols of a video slot machine. FOBTs are considered by some to be highly addictive.

For his part, Ahern also has concerns about FOBTs, the Irish Times reports. However, he does not feel that simply refusing to acknowledge their existence is the right approach.

“We must face up to the challenges and threats, as well as the opportunities, inherent in new technologies and evolving social habits, and not bury our heads in the sand and hope they go away,” Ahern reportedly told one opposition member.

By Roger Gros   Fri, Jan 30, 2009

It’s taken a while to materialize, but the old formula seems to still be working.

In past economic downturns, states and jurisdictions looking for new ways to raise tax revenues turned to gaming by either legalization or expansion. That was the case in Pennsylvania and Florida; in Kansas and Illinois; in Maryland and Oklahoma.

And judging by news reports from several gaming and non-gaming states, it appears the industry will soon spread in the United States from sea to shining sea, and into new countries and territories internationally.

Will this expansion bring a revival of the gaming industry overall? The chances are good, because it will grease the advancement skids at the top levels and open up positions all the way down the ladder.

On the manufacturing side, it becomes something of a boon because new properties will need new equipment. And at a time when most casinos plan to tough it out with the equipment they have on hand, this is good news for vendors. And once new equipment gets into the market in greater numbers, existing properties must respond to keep their current customers happy.

States are also beginning to realize that their residents are crossing borders to gamble, leaving their entertainment budget for casinos in other states (and the attendant taxation, as well). So now we see Ohio and Kentucky get serious about considering gaming.

Ohio as recently as last November rejected a gaming referendum. However, it appears Ohio voters were smart voters by understanding that last year’s referendum would only have benefited one company and city, while bringing only marginal tax revenue to the state. A recent proposal inked by Penn National Gaming would spread the benefits around the state and give all gaming companies a chance to benefit.

In Kentucky, the long-fought battle to rescue the state’s floundering but sacrosanct racing industry is coming to a head. Racing officials are finally seeing real problems on the horizon (as if they weren’t there before!). With the Maryland racing industry now propped up via slots, following Pennsylvania, Florida, Delaware, New Jersey, New York and others, there is now a sense of urgency in Lexington to get something accomplished so all segments of the racing industry will benefit.

Massachusetts, which last year saw the legislature dismiss a clever three-casino plan put forth by Governor Deval Patrick, is back at the table after enduring another brutal fiscal year. While it’s not clear if there’s enough willpower to pass it, a closer examination of the budget may force their hands.

In Delaware, the approval of slots in neighboring Maryland and Pennsylvania has hurt the racinos. A new pro-gaming governor will likely approve pseudo-sports betting (lottery-style) and table games, transforming their racinos into something special for the East Coast.

There are problems with this “good news” scenario, however.

First, the ridiculous restrictions put on new gaming industries usually means years of growing pains.

Taxes and fees are the first hurdle. New York established taxes on its racinos of close to 80 percent initially. When no one bit, the state reduced the rate slightly, but it is still the highest in the nation. Other states have similarly onerous tax rates that make taking full advantage of gaming impossible. With such high rates, companies are limited in how much they can invest to get a decent return. High tax rates generally mean lower tax revenues, lower investment and fewer jobs and other benefits, but for some reason, legislators can’t understand this.

Also a problem is the time it takes to get the industry off the ground. In Pennsylvania, it took four years to get the first racino opened. Compare this to New Jersey 30 years ago, which took less than 18 months to open its first casino. The politics involved with setting up an industry, establishing a regulatory scheme and making all the “appropriate” appointments is staggering.

Internationally, we witnessed a major move in Asia last month with the approval of gaming in Taiwan. Again, the major reason behind this legalization was the slumping economy. But Taiwan is following the Singapore model of a reasonable tax rate and high investment: more hotels, meeting and convention space and non-gaming amenities.

If only U.S. jurisdictions could get that message.