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New Force

AC Coin & Slot moves to grab market share with new games and a new business model

New Force

There’s a new manufacturer aiming at the top echelon of the industry’s slot-machine supply sector. It is a 32-year-old company.

AC Coin & Slot is known to most in the industry from bonus games like Slotto, Bankroll and many others. But if the games, custom signs and other products the company has produced over the past three decades have defined AC Coin, one development near the end of last year may define the supplier for the next three decades and beyond.

That development was the restructuring of AC Coin’s longstanding agreement with slot manufacturer International Game Technology, which accomplished two things: First, it gave AC Coin a nice chunk of investment capital, the result of IGT paying $20.6 million for the distributorship AC Coin had held since 1983, under which AC Coin had served as IGT’s exclusive distributor in Atlantic City and the Caribbean.

Secondly, and more importantly, the new agreement freed AC Coin to sell its proprietary games, where under the old deal with IGT, they had been available for lease only.

“Having the ability to go out and sell product has been the biggest change in our business,” says Jason Seelig, AC Coin’s executive vice president of sales and marketing, “because we were restricted to selling in a very small niche section of the industry. Now, we can compete on the entire casino floor, instead of 5 percent or 8 percent of the casino floor. The new business model has opened our business up to the other 95 percent of the floor.”

AC Coin is still based in Pleasantville, New Jersey, the town just outside of Atlantic City where the business was built. The company is the fourth-largest private employer within the Pleasantville Urban Enterprise Zone, and New Jersey state officials are currently working with AC Coin executives, including founder Mac Seelig, on incentives that will keep the company—a model corporate citizen and benefactor in many charities—in the state.

However, as noted by Jerry Seelig, the company’s executive vice president and general manager—and the creative force behind many of its top-selling games—the company has manufacturing capacity well beyond New Jersey. In fact, while R&D is centered there, less than half of AC Coin’s employees are in New Jersey, and its main manufacturing operation is an 80,000-square-foot facility in Reno, Nevada, with plenty of room to ramp up production. “The overwhelming amount of our revenue, over 90 percent, comes from outside New Jersey,” Jerry Seelig says, noting that the company is licensed in 180 jurisdictions across North America and Canada.

“We’re going to continue to ramp up our product offerings; we’re going to expand into VLT and Class II markets,” he says. “We’re also going to partner with companies in Europe and Australia. We’re having strategic partnering meetings in Macau. South Africa’s interesting, Italy’s interesting to us.”

The idea, he says, is to deliver more content, spreading the AC Coin product strategy to new markets. “Our main goal is to be able to manufacture the highest-earning content on the casino floor, and to be a company that can deliver that content to all gaming markets,” Jerry Seelig says.

Adds Jason Seelig, “It’s been our philosophy since we started making games and putting them in the field that if it’s not one of the highest-earning games on the floor, you can’t grow your business. And operators will tell you our games are among the highest-earning on the casino floor.”

The company is aggressively marketing its products by offering a variety of creative business models, from outright sales to lease-to-own to traditional lease structures. Jason Seelig says AC Coin is offering “far more creative business models than anyone else,” with an eye to helping casinos maximize their budgets. “We worked under such a far more considerable constraint for 15 years, because again, we played in one 5 percent section of the casino floors,” he says. “We had to get very creative then, and we were still putting out great games. Now, we’re on the other side where we can sell games, and it’s a whole different business.”

How Big?
How large will AC Coin become with its new business model? According to the Seelig brothers (along with third brother Jeff Seelig, they run the day-to-day operations in the company their father, CEO Mac Seelig, founded), much of that depends on the nature of the technology platforms going forward.

Up until now, the company has concentrated on creating unique bonus games to combine with IGT base slots. The new agreement with IGT still centers on game partnerships, but the IGT base games are used much as an OEM-supplied portion of the finished product, and the agreement enables AC Coin not only to sell directly to casinos, but to work with platforms and base games of other manufacturers based outside North America, and other U.S. manufacturers in the Class II and central-determinant VLT markets.

Another possibility is that AC Coin could develop its own proprietary slot platform and produce games start-to-finish.

“We’re evaluating other platforms for their ability to deliver our content in a more expeditious manner to the market,” Jerry Seelig says. “We’re talking to several manufacturers, but we haven’t ruled out doing our own platform,” adds Jason Seelig. “The one thing Jerry does very well is providing very unique games. It’s why AC Coin has been able to do what we’ve done. You can go into a casino and pick out our games immediately. Not very many manufacturers can say that. As we evaluate other platforms and look at our own, we’ll make sure the technology allows Jerry to be able to do what he needs to do.”

While expanding the company’s product base, the Seeligs say they will maintain a balance between volume of product and individual attention to each game. In the past, the company has used its comparatively low production volume as an advantage, concentrating on perfecting each individual game without the distraction of deadline crunches.

“We’ve had a different philosophy than other suppliers,” says Jerry Seelig. “On a casino floor, you only need 30-40 good games. I prefer to make fewer games that perform well on the casino floor. Each game needs to incubate properly, so when it goes out, it earns money.”

“The reality is that it costs a lot of money to make a slot product,” Jason Seelig adds. “To make something today, you have to make sure your story board is on target and will be relevant a few months from now. Our latest community-play game will be on test for three months in the field, before we sell it. When you sell a game and ask the customer to put it out and see how it works, it’s your customer who pays if it doesn’t work. That’s one of the reasons I don’t think we’re ever going to be a slot game mill.”

The trick, he says, is to strike a balance between creativity and production. “The trick is to become a company that can develop a lot more games, but still maintain the philosophy that assures when it reaches you, it will deliver the earnings on your floor.     

That’s why we’re looking at different methods of developing the product we have today, on a much bigger scale.”

That means taking advantage of the same management method that exists today, he adds. “We have a huge advantage in that we’re a private company, competing with a bunch of public companies,” he says. “Four Seeligs sit in a room, and the decision’s made.”

This agility that has served the company so well will now be directed to creating a big splash at this year’s Global Gaming Expo, where the company will have a much larger booth than last year, with “a lot of products people haven’t seen before,” says Jerry Seelig, “and the ability to grow off our own success.”

Spreading the Community
The games leading the charge into new markets will carry AC Coin’s new emphasis on community play. The manufacturer has concentrated on rolling out its new “Double Play” series of two-game, community-play games, headed by “Phat Cats,” and soon, “Rock & Roll Legends.”

The games feature common overhead displays for bonus events, but also the popular “Quick Hit” feature, which feeds the player a bonus event every half-dozen spins or so. “A lot of Quick Hit bonuses are working very well for us right now,” says Jason Seelig. “We’ve done that math model on multiple platforms, and it’s done well in every market. It’s an example of listening to the customers—players are coming in with less money, and they want the same entertainment value. Quick Hit does that.”

Rock & Roll Legends places a unique bonus on top of two games, in which a “rock legend” plays guitar, and notes rise on a musical staff to award bonuses when intersecting with credit amounts. “That intersecting bonus is going to be the unique part of that game, but we’ve added Quick Hit features that are very special and fun to play,” says Jason Seelig.

The two-game setups will be followed by several launches of larger community games, including a six-game “Quick Hit Super Bankroll” game that adds the frequent bonuses to the giant scrolling event that has made the community versions of Bankroll popular. Right behind that is another six-game product, the community version of the “Empire” game—the one with the miniature King Kong-like gorilla climbing the Empire State Building, collecting bonus awards along the way. (In this case, it’s a six-sided building, to accommodate the “bonus gorillas” of players at six different machines.)

It is a series that started with one of AC Coin’s biggest hits, the original Empire, and has grown into what the manufacturer calls the “Climber Series.” Jerry Seelig says this version has a different style of the Quick Hit bonus, one that has played well at three test sites—Foxwoods in Connecticut, MGM Grand in Las Vegas and Greektown in Detroit. “It’s doing the same multiple in all three of the casinos, which were chosen so we could compare it to our community Bankroll game, which currently has 600 installations across the country,” he says.

Next up will be a conversion for the community Empire game that will turn it into a community version of the legendary Slotto game. “That will be the first platform we’ve ever done where operators can do a floor conversion from a Climber game to a Slotto-series game,” Jason Seelig says. “It’s an example of listening to our customers—they love these games, but it’s also a lot of work to go from one game to another. Our engineers went back to the drawing board, and figured out how to take Empire off and put Slotto on, and do it across every jurisdiction.”

While AC Coin’s current customers are placing orders on these new products at higher-than-projected rates, initial response from new markets has been great as well, say Jerry Seelig. “We make a very interesting product they haven’t seen before, so the welcome has been very warm,” he says. “Operators recognize we are focused on helping them maximize their win per square foot, and players seem to pick up very well on the way our products are played.”

“We’re in a very interesting time right now,” says Jason Seelig. “How many times have you heard about a company with an incredibly solid core business, which is growing, but at the same time is able to sit down and engineer a change? We’re a 32-year-old company that has the ability to re-engineer itself.

“How big will we get? It depends on our ability to deliver more games using the same philosophy, but having that opportunity to sell to the other 95 percent of the casino floor is something we’re going after aggressively, so ultimately, we can become a true slot manufacturer and compete in that sector of the business.”

Adds brother Jerry, “It’s an exciting time for us and for our customers.”

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