EXCLUSIVE INTERVIEW: Dave Lucchese, President, Association of Gaming Equipment Manufacturers
For the Association of Gaming Equipment Manufacturers (AGEM), the pandemic hit hard.
Casinos around the world closed during the lockdown, and no operator was thinking about buying the equipment or services provided by AGEM members. While AGEM canceled dues payments for a year, it still provided members with the information they needed to prepare for reopening.
Dave Lucchese, the executive vice president of sales, marketing and digital for Everi, became president of AGEM just as the pandemic was winding down, and says the challenges remain. He spoke about the difficult times and the bright future he foresees for AGEM members and the entire gaming industry in an interview with Roger Gros, publisher of GGB.
GGB: You’ve been president of AGEM for a few months now. What has it been like, now that we’re just coming out of the pandemic?
Dave Lucchese: Yes. Aren’t I blessed to be the president during these challenging times? But it’s been really good. My fellow officers have been very supportive in the transition. Under the circumstances, I think overall we’re doing pretty good. We have a great slate of officers. We even added another officer position and welcomed Elaine Hodgson from Incredible Technologies to join the board. So we’re glad to have Elaine’s presence and talent and contribution. She’s been a nice addition to the group.
The pandemic was a real challenge for AGEM. Nobody was making any money, so AGEM dropped the requirement to pay dues in 2020. Have you reinstated that now?
We have. It certainly has been a journey and a challenge for all of us. But when the pandemic hit—and it hit the gaming industry as hard or harder than almost any other industry—we looked at our financials, felt it prudent that we could pause dues for an indefinite period of time. We did that to benefit our members. That endured through 2020 and the beginning of 2021. We have since reinstated those dues. We’ve been on a recovery path, as an industry as well as most of our members.
It doesn’t look like you’ve lost many members. It looks like you’re as strong as you ever were.
In 2021, we hit an all-time peak of membership. With the pandemic—and we were sympathetic to companies that make the decisions for whatever variety of reasons—we’ve lost a few as well.
We’re at a point right now—past halfway through 2021—where we’re better off than we were at the midpoint of 2019.
Your members are really competitive out in the industry. You fight tooth and nail for market share. But suddenly, you come to AGEM and you’re all working together for the betterment of the industry. Is that because everybody realizes that a rising tide raises all boats?
I think, to a large extent, that is part of it. And you’re right; we’re fiercely competitive in the street. But just like the United Nations, we come to the table with the betterment of the industry. We advocate for our operator partners as well. We come to it with an attitude when we meet to really have a sensibility of what’s better for the industry. So I think everybody plays well together.
But we’re a small industry, with what we could call “frenemies.” You go after it when it’s time to compete, and then it’s OK to go have a beer and talk about being friends as well.
AGEM has always had a great relationship with regulators, and even legislators to a large extent. Why is that such an important role?
We play in one of the most regulated businesses out there. We chose to do that, to be vendors in the gaming industry. But with that, over a period of time, you get accustomed to the landscape of this fun business we call “gaming.” So AGEM advocates on behalf of the industry, advocates on behalf of our members. And through that process we’ve gotten to know and have deep relationships with regulators and other influencers in the space, and time builds on that relationship.
AGEM has a variety of committees that help support our member groups. But I would say one of the most active committees is our compliance committee, comprised of our members, compliance professionals. They advocate on behalf of their own company, as well as come together and advocate on behalf of the vendor space. I think that’s what makes AGEM so strong—we have a lot of consummate professionals that have been doing this for a long time. And I think that strength in numbers helps us be effective for our members.
One of the areas that’s always a little touchy is the illegal games that are being offered in states at convenience stores, restaurants and bars. Most recently, Virginia banned those games, and before that Illinois completely cleaned up that side of the market. How do you approach that kind of thing? Because there are a lot of manufacturers that were always operating in those gray markets, and they’re not members of AGEM.
They’re not, coincidentally. In states like Missouri and Texas, it’s always a little bit of whack-a-mole where that activity is going on. Under the charter of AGEM, each of our companies has gone through a lot to be in this privileged, licensed, highly regulated business, so it’s our role to protect the overall space.
Gaming has a great reputation because of this but over the years, it hasn’t always been that way. Those gray games or illegal games out there are not regulated. There’s no jurisdiction over them. So who knows what goes on? Nobody knows. And there’s some strong speculation of illegal activity beyond just the games. So fighting that to keep the reputation of the overall gaming industry and working with individual states and constituents is important, to keep the good reputation of regulated gaming polished and pristine.
It also sometimes puts you in an uncomfortable position with your customers, with the operators. In Illinois, for example, they vigorously oppose the machines in bars and restaurants, and lost that battle. That must be a delicate dance for AGEM.
It is. Fortunately, those conflicts don’t come up that often. But we’re all looking for expansion for our ownership groups or shareholders. We try to very pragmatically and sensitively approach those when they come to be, and the cards are going to fall the way they’re going to fall. But we are sensitive to the different stakeholders and where there may be conflicts.
Another area that AGEM has really been up on recently has been responsible gaming. A few years ago, you appointed Connie Jones as the director of responsible gaming for AGEM. How has she contributed to that discussion, both for you and the industry as a whole?
I’m glad you brought that up. Certainly responsible gaming is a very, very important topic of conversation, as well as activities that our industry always stays active with.
We’re very fortunate to have Connie on AGEM as a contributor. She’s a consummate professional, with years and years of experience that she brings to the table. With AGEM, it’s certainly one of the things we hold very dearly, of being an active participant in the responsible gaming initiatives.
We’ve always known that the impact of gaming goes far beyond the physical casinos and the jobs they create. When you add AGEM and the products and services that operators buy from AGEM members and all its employees, the economic impact is substantial. Explain what that means.
Periodically, AGEM will have an economic impact study done. The last one we did was under different times. In April of 2019, we worked with Applied Analysis, and gaming was revving up pretty good in 2019. Overall, the slot companies reported nearly a $56 billion total impact. Nearly $21 billion direct impact. On the vendor side, AGEM has 61,700 direct employees—a huge employee base, and with a very healthy average wage of over $90,000, across that. So it goes without saying, AGEM members are a large contributor to the overall gaming economy.
Speaking just on behalf of Everi, with everything we’ve gone through in the pandemic in the past 18 months, things have gotten healthier. We still have more to navigate with the pandemic, but we’ve hired back all of our employees, plus some, to continue driving dramatic economic impact, as have other members of AGEM.
AGEM works with a lot of constituencies—the AGA, the European Casino Association, the Gaming Standards Association—the alphabet soup of these organizations—as well as trade show operators, of course. How do you line all that up so that everything goes smoothly with those organizations?
The foundation of that is Marcus Prater, as our longtime executive director. He’s contributed so much to AGEM over the years and serves as our point of contact for all of those different agencies and associations. He’s developed longstanding relationships with its key members. So with trade show organizations and everyone else, he is committed to working with those groups. He keeps AGEM very involved, as advocating for our members, as well as being a participant in a variety of different topics. And for the most part, AGEM is very aligned with the other agencies. Our members are also oftentimes members of those other organizations.
Marcus has informed the AGEM board that he’s stepping down next year. What kind of process have you set up to replace him?
Marcus Prater has served AGEM—and the industry—very well, with a very calm, steady hand, for years now. He’s agreed to stay on through the beginning of next year as well as a crossover, depending on AGEM needs and where we are.
We thank Marcus for his contribution over the years, and I personally appreciate all his assistance and guidance for me in stepping in as president, as well as an officer of AGEM.
So with that, we wanted to make sure we have a smooth transition. We’ve had a very open process of putting the word out that we’re looking for a replacement for the executive director position, and we’re gathering talent and going through an interviewing process. We expect to be able to finalize that and should be on track so that at G2E, or no later than the end of this year, we’ll make an announcement for a replacement of Marcus. More to come on that, but we’re in a good place to find somebody to try to step into those very large Marcus Prater shoes.
Also during this year, AGEM will have an office in the University of Nevada Las Vegas, Black Fire Center. Why is that an important milestone for the organization?
The UNLV Black Fire Center is going to be a great asset to Las Vegas and Nevada. They’re in the early stages of getting all the occupancy arranged, as well as expanding into additional buildings. It’s a nice piece of real estate.
It’s important for AGEM to be present where gaming is present. And I’ll view that as somewhat of a little hub headquarters, with UNLV calling it home, and Caesars (having) an office out there. There are other AGEM members that have offices or are considering offices out there.
We made the decision that it’s time for AGEM to grow up and have that presence among other industry professionals in the Black Fire Center. We’re working on the final paperwork right now, and by the end of the year, we should be occupying our office space there. We’ve already transitioned by hosting our past two monthly AGEM meetings at the center in one of the conference rooms. We’re happy to have the opportunity. It’s the right place to be.
What do you hope to bring to AGEM for the remainder of your term?
I’ll answer for the officer group overall. We view the path forward, our future, to be very, very bright, and really taking an opportunity as we change executive directors to reanalyze what our charter has been and refresh what we do. So we’re evaluating new initiatives, new objectives that AGEM will focus on into the future.
We have a solid foundation of contributing for our members, and member participation is very active. So we’re reviewing the criteria, and I hold very high expectations that we’ll continue pushing on to new levels, with new objectives that will be fruitful for the industry as well as our members. I think that helps us to continue to keep AGEM fresh, by growing membership and having the membership profile continue to evolve as the industry evolves and grows.