When it comes to his profession, Gavin Isaacs has paved a successful path.
Isaacs, the president and chief executive officer of end-to-end gaming supplier Scientific Games, held top executive posts at Aristocrat, Bally and SHFL entertainment, helping guide each company into new eras. Two of those companies, along with the former WMS Gaming of Chicago and Barcrest of England, now form the most diverse supplier in the history of the business.
Isaacs is now steering Scientific Games through its new era, and the executive clearly is at the top of his game. If you ask him, though, he is at the top of his game because he has surrounded himself with executives and employees who are at the top of their respective games as well.
“Great companies are made up of great people,” Isaacs says. “These (former) companies were successful because they had great people. If you’ve got the right people in place, then let them get on and build the business.”
Building the new business for Scientific Games has involved carefully arranging the multiple disciplines inherited over the past two years since Scientific Games acquired top-five slot manufacturers WMS Gaming and Bally Technologies—the latter of which, in turn, had already acquired SHFL. Isaacs was intimately familiar with two of those three former companies, having served as chief operating officer of Bally and CEO of SHFL.
Isaacs, who had left Bally to take the helm at SHFL, joined Scientific Games while the company was in the process of acquiring WMS. “When I joined Scientific Games, we were well into the integration of WMS,” he recalls, “and Bally was well into the great integration of SHFL. As our integration teams worked together, we learned from what went well and what we could have done differently in past integrations to ensure the success of the Scientific Games-Bally combination.”
Ultimately, the successful integration of former companies that led to this year’s dominant Scientific Games G2E display was achieved, as Isaacs says, thanks to the people he put in place.
The merged company would be divided into three divisions—Gaming, Lottery, and Interactive—with a veteran chief executive in charge of each division.
For the Gaming Division, that chief would be Derik Mooberry, the longtime Bally executive who had been part of the team that had successfully managed the integration of SHFL into Bally just a year earlier. For Lottery, it would be Jim Kennedy, a lottery pro with a pedigree stretching back to the earliest days of the North American state and provincial lottery industry.
The chief executive of the Interactive Division is newly appointed Barry Cottle, former executive vice president of social-gaming company Zynga and chief executive of EA Interactive, whose expertise in mobile and social disciplines will carry the company forward. He is assisted by President-Interactive Jordan Levin, who had been managing director and COO of the highly regarded Williams Interactive prior to the Scientific Games merger.
While Isaacs interacts with the heads of his divisions regularly, he also relies on Dan Savage, the former Bally marketing VP who serves as chief administrative officer, and Scott Schweinfurth, the longtime WMS executive who serves as executive vice president and chief financial officer, to keep track of day-to-day operations that are more diverse than the industry has ever seen.
“Dan is running integration, running IT, running marketing and communications, and doing a phenomenal job,” says Isaacs. “He sits to my right and Scott’s on my left, so we keep a very good finger on the pulse.”
As far as the all-important Gaming Division—which, ultimately, interacts with and influences most aspects of the other two divisions—the decision was made early on to preserve the legendary brands—Bally, Barcrest, Shuffle Master and WMS—that make up the core of Scientific Games’ product library.
“You don’t pay premiums for companies to shut down their strengths,” Isaacs says. “As we were strategizing on how we were going to operate these companies, we determined that each of those brands had particular strengths in particular markets.”
Gaming Solutions
The brands, formats and casino-floor solutions going forward are the purview of Mooberry, who, as senior vice president of games at Bally Technologies, made the most of the ubiquitous Bally brand while ushering in Shuffle Master slot and table-game brands.
The strategy going forward is two-pronged—work toward a common platform while preserving the legendary brands of the former companies. “We remain laser-focused on running the business and helping our customers find value out of all the solutions that we provide,” says Mooberry. “Our mission statement is to empower our customers by creating the world’s best gaming and lottery experiences. So, that’s a collection of obviously different products across different lines.”
“It’s interesting that all of the former companies were looking for new platforms and new operating systems,” adds Isaacs. “So, you use that as a leverage point, and say, ‘We’re going to have one operating system going forward,’ while preserving each of the brands.”
The research and development culture that was a hallmark of each of the former companies will be maintained and nurtured within the new Scientific Games with more than 700 employees focused on Game Development and over 40 percent of Scientific Games’ workforce directly involved in innovation.
The collection of more than 40 game design studios that was maintained by the legacy Bally Technologies is now augmented with the former WMS R&D center in Chicago, former SHFL facilities in Australia, and the Barcrest development center in the U.K. However, the way that system is managed has remained essentially unchanged, says Mooberry.
“The studio system hasn’t fundamentally changed,” he says. “There were some very slight differences between how WMS worked and how Bally worked and how even SHFL worked, but first and foremost, our goal is to preserve the brand identities.”
Maintaining the global strategy for game design is Allon Englman, the merged company’s vice president and design chief. “Under that structure, there are studios that work on specific branded content,” Mooberry explains. “So, the WMS teams continue to work on WMS-related content, Bally teams work on Bally-related content. And we did that for a reason—because what we’ve found in all of our market research is that different players like different styles of games, and in one part of the U.S. or world, WMS games might be wildly popular, while somewhere else, it might be Bally.”
He adds that with R&D in Las Vegas, Reno, India, China, Phoenix, San Diego, Australia and elsewhere, game design efforts can be localized to each market. “We’re literally developing machine-related content all around the world,” he says. “We often have to tweak the content to meet each market’s specific needs, and that big portfolio and large number of studios allows us to do that.”
Game design, he adds, is driven by research—player focus groups, feedback from operators, close examination of performance in the field.
Says Mooberry, “I’d like to say all our games are hits, but they’re not, so we try to look at the things that cause a game to be successful. That’s the consumer element of it, but there’s a whole customer element too—the people that make the buying decisions. We meet with different groups of operators around the world regularly. We call them customer advisory boards.
“We ask customers to come in and give us feedback on our products, our competitors’ products, what’s working, what’s not working. We take that feedback, digest it along with all the end-consumer feedback and market research we do, and the output of that really determines a plan for us.”
How does Mooberry manage this mind-boggling amount of research? “We manage it all because we’ve got great people,” he says. “And I’ve always said the secret to all of this starts with great people who make great products. And if we take care of both of those things, we ultimately will be successful in the long run. And I’m blessed to have a fantastic team.”
(In case you’re keeping score, that’s 5,000 employees in the Gaming Division, out of 8,200 total employees at Scientific Games.)
Mooberry says every member of his team is excited to bring all that content together for the first time at G2E 2015. “This is the Super Bowl for us,” he says. “It’s the biggest event of the year for us to showcase our products, so there’s no shortage of excitement around here.”
The Scientific Games booth this year is 26,000 square feet and about 60 yards long. “When you think about the enormous amount of product that we have to show, just in machines alone—the different premium machines, for-sale machines, specialty machines in Class II and lottery, electronic tables, our shuffler products, our proprietary table games, our systems area—it’s amazing.”
The display will include a full interactive area and an “Innovation Lounge” where the company will display the latest technological advances coming in the near future. That’s the annual showcase of the company’s Innovation Lab (“i-Lab”), begun under Bally Technologies to seek out emerging technologies in other industries that can be applied to gaming.
With the newly merged company, Scientific Games is taking those efforts beyond slot games. “From an innovation perspective, our i-Lab efforts have increased by a fairly large magnitude, because the company’s much bigger,” Mooberry says. “At Bally, we were only involved in gaming. Now, we focus on the online space, the interactive space… We’re working with our lottery teams as well on how to bring cutting-edge innovation to that segment.”
Lottery Futures
The Lottery Division, of course, was the earliest element built into the DNA of Scientific Games, which was a leading vendor to state and provincial lotteries back when Williams was still a pinball company and Bally Manufacturing was supplying electro-mechanical slot machines to casino operators who had yet to discover the values of the microchip in slot gaming.
Jim Kennedy, the company’s lottery chief, has been in the lottery business for three decades—he joined Scientific Games in 1985. Back then, the legacy Bally Manufacturing was in a convergence of its own—not with lotteries, but incorporating everything from health clubs to yachts to casino operations with the slot machine business. “I love the irony of it coming full-circle and seeing Scientific Games winding up purchasing Bally,” he says.
By the time that happened, Scientific Games had been one of the leaders in supplying the lottery business for decades. He says the convergence of the company’s lottery business with the casino business and its brands, Bally, Barcrest, Shuffle Master and WMS, reveals the scale of the markets and contacts the lottery side instantly afforded the gaming side, and vice versa.
“Our focus is always on the consumer,” Kennedy says, “and we follow the consumer back into the ecosystem. You lead with the consumer, and you look at how your scale can benefit your lottery customers. And the scale is really important, because most lotteries are hundreds-of-millions to billion-dollar businesses around the world. So, you have to have sophisticated, scalable solutions. What the merger gives us is a much deeper research platform, which we’ve already exploited. We did that when we bought WMS.”
He adds that Scientific Games’ Lottery Division has already benefited from the extensive R&D efforts of the Gaming Division. “We’ve already seen the benefit come out of research, and how we use research to do R&D. We’ve already seen it with our Innovation Lab group, which is our advanced R&D group. Then of course, add that core competency that we bring on the lottery side to the party, which is a deep understanding of local jurisdictional opportunities and constraints.”
As far as the creation of new lottery products, Kennedy comments that the brand emphasis of both Bally and WMS legacy efforts fits right in with what Scientific Games has always done.
“On the lottery side, Scientific Games has always been a market leader in licensing and branding,” he says. “When it comes to the muscle memory of great execution around brands, we’re there. And now, with the integration of Bally-owned and WMS-owned brands that we’re going through right now—something like Hot Shot or Gold Fish would be examples of Bally or WMS content we’re looking at—we work through our research group, and we test what consumers like, and see how to execute that on a scratch ticket or expand that using an interactive second-chance drawing platform.
“Honestly, it really is all about keeping the consumer’s experience in mind. The casino industry brings hundreds of new games to market every year. In lottery, we’re in the business of bringing thousands of new games to market every year, so we have a really deep appreciation of how having a lot of choices makes sense to the consumer.”
Moving forward, Kennedy says his division will closely examine new online areas, which he notes have been part of the lottery business with online sales worldwide for years. “We’ve been doing internet deployment in Europe for a decade,” he says. “So, it’s not just the technology; it’s the actual learning curve as well. How do you separate the myth from the facts? And the myth is, if you build it they will come. The fact is, you’ve got to have a compelling reason for the consumer to weave across multiple platforms.
“We’ve got around 600 websites for lotteries, and we have more apps out there than any other lottery company in the United States.”
As with the Gaming Division and VLTs in U.S. and European jurisdictions, online developments will be worked out in collaboration with what is perhaps the most future-focused division of Scientific Games, SG Interactive.
Interactive Channels
The former Bally Technologies and WMS Gaming spent years developing strong interactive divisions, from the Bally Mobile platform and multi-channel distribution in online and social channels to Williams Interactive’s Play4Fun white-label social application.
Moving the division forward under Scientific Games will be Cottle, the new chief executive of interactive who joined the company in the late summer. Cottle’s experience at Zynga and EA Mobile brings unique abilities in the mobile and social world into which Scientific Games forges ahead.
“Between Zynga and EA, I have been working in social/mobile games for the past eight years, and if you add in Palm Handheld and my startup company, it’s been much longer than that,” Cottle says.
“In that time, I have helped scale organizations and build mobile/social experiences with great brands in the face of a very dynamic and challenging market, including managing through several disruptive technologies and business models, from feature phones to smart phones and iPads, and from paid games on carrier decks to free-to-play games distributed across Facebook and iTunes. This space evolves very quickly.”
At Scientific Games, Cottle has something of a head start in working with Levin, who guided Williams Interactive in becoming a leader in the interactive gaming space.
“Jordan and I will work together to lead the organization,” Cottle says. “I will focus primarily on product strategy, consumer and marketing. Jordan will drive our day-to-day operations and management. We have a great relationship, and we will partner closely.”
Levin said the partnership begins with very strong products in the interactive space from both legacy companies. “The combination’s actually quite complementary,” he says. “The SG strengths were the Bally weaknesses, and the Bally strengths were the SG weaknesses, so everything coincidentally snapped into place really well across all the different groups.”
He offers social gaming as a good example. “Bally had only just gotten into social casino business through purchase of Dragonplay in mid-2014,” says Levin. “Scientific Games, through WMS, had gotten into the business as one of the earliest entrants in 2012. Dragonplay is strong on Android. Scientific Games is stronger on Facebook and iOS.
“From a content perspective, when you take a step back and look at it, I believe we now have the strongest overall interactive content offering in the world. And I would bet that if you talked to Derik (Mooberry, Gaming Division chief), he would say the same thing about land-based gaming as well.” (He does.)
Bally’s interactive business had already “done quite a bit of heavy lifting” for the new SG Interactive, through the development of a Bally Mobile Concierge business. “We were able to snap in some of our solutions on top of that platform, and then also from a VenueBet perspective, which is our in-venue mobile wagering solution. Bally had nicely invested in that, as well.
“Again, taking all the content and applications from both companies and then putting them on top of these platforms has really resulted in a very nice synergistic offering to the marketplace.”
Most of the products developed by the legacy companies will remain in place, he adds, but now with the power of all of those gaming brands. “Within social, our apps are really our brands to the consumers—Jackpot Party, Gold Fish, and more recently Quick Hit and Hot Shot,” says Levin.
It’s all wrapped up in a product package Scientific Games calls the “SG Universe,” a conglomeration of all the different products, applications and technologies of the former companies.
That includes direct consumer products like the social casino applications; real-money gaming through the remote game server product in legal, regulated jurisdictions like the U.K., Canada, and New Jersey; and the related land-based content in North America and elsewhere.
For his part, Cottle appreciates all the tools and talent at his disposal as he moves SG Interactive forward.
“This is a great group of talented and passionate individuals who are also a lot of fun,” he says. “And, they have already achieved great success—this is not a turnaround situation. There is great momentum here. With the brands that we now have through the recent acquisitions, we are set up for strong future success.
“As with any business, it comes down to understanding what the consumer wants—their core motivations—and delivering a compelling and unique experience that delivers on that. In a social casino, consumers want an authentic Las Vegas experience that they can play/share. And with Jackpot Party, Goldfish, Hot Shot, and Quick Hit, we have been able to deliver on that.”
Game Futures
In the end, Isaacs sits at the helm of a company that will both guide and benefit from what the future holds for the gaming industry. Part of that is the effort to develop new games for the emerging millennials. For example, Scientific Games is one of the vendors working with regulatory officials in New Jersey, Nevada and elsewhere to develop rules for skill-based gaming.
“We’ve got a group of resources that are focusing on skill-based games,” Mooberry says. “In fact, one of my developers has been assisting in the crafting of the regulations, in terms of the mathematics on skill-based games, and how it will work.”
Mooberry had a preliminary education in the process a few years ago when Bally delivered the Pong video slot game, and innovations like All That Jazz, which had the player using the iDeck interface to play along with music. “We certainly think skill is an element that will make the millennials a little more excited about gaming,” he says.
“I think the casino will evolve,” adds Isaacs. “I think there will always be gaming, and you’re seeing different resort experiences. If you listen to some, gaming’s finished—no one’s spending money on gaming floors anymore. But at a recent meeting at the premises of one of our Washington-based customers, we walked the floor on a Tuesday night with our head of HR, whose background is in lottery, and he was blown away—‘I can’t believe how many people are gambling; I thought people didn’t play slot machines anymore!’
“If you go to Southern California, the Midwest, Florida, Aqueduct and lots of other places, people are still playing slots. We have the biggest stadiums in the world in Singapore, Europe’s been under-invested for many years, and we have our first table WAP rolling out in the U.K.”
He adds emerging VLT markets in Italy and Greece, and booming casinos in Latin America and elsewhere, in emphasizing one thing: The supposed decline of the gaming business has been exaggerated. Gaming is strong and growing in many areas, and the new Scientific Games is uniquely positioned to take advantage of that fact.
“The lottery and gaming guys in our company seem to be getting along very well, and if customers ask, ‘Are you lottery or are you gaming?’ the answer is that is, it doesn’t really matter,” says Isaacs.
“We’re everything. Because, guess what your players are? Your players are everything.”
