By all accounts, it was a perfect marriage.
The industry’s M&A-watchers had long thought that slot and system supplier Bally Technologies and table game and utility supplier SHFL entertainment would mesh together seamlessly. Bally, the oldest and second-largest slot manufacturer in the business and long the leader in gaming systems, had been on a sustained roll in the slot sector, while SHFL—under the leadership of former Bally COO Gavin Isaacs—had forged new international markets for its proprietary table games, as well as moving them into new channels (not to mention owning the market for table game utilities like shufflers).
But last year’s announcement that the two companies would merge, with Bally ultimately acquiring SHFL, was still big news, particularly coming, as it did, on the heels of another mega-merger earlier in the year when the Scientific Games/WMS deal was announced.
As far as the supply sector, Bally/SHFL made 2013 the year of the merger. And if any merger made as much or more sense to each individual company than Sci Games/WMS, it was Bally/SHFL. Quite simply, the deal transformed Bally into the most complete supplier of casino games and related equipment in the history of the industry.
The impact of the combined company will only get stronger as Bally integrates the SHFL team, technology and content into a product lineup that already was the envy of the industry.
“We’re only about four or five months into the process,” comments Ramesh Srinivasan, president and CEO of Bally Technologies. “Our first task is to make sure all the products in the range are marketed and sold well to all the customers. Both SHFL and Bally had very good relationships in various areas, with various customers, and our first step is utilizing those relationships to sell all our products well.”
The next step, Srinivasan says, is to find “integration points” among the mind-boggling array of products—Bally slots, systems, bonusing modules and iGaming Platform on one side, and on the other side, SHFL’s proprietary table games—both electronic and live tables—as well as table systems, side-bet products and, of course, the automated shufflers and table utility products that were the namesake of the company originally known as Shuffle Master.
“Our systems team can bring a lot of strength to the electronic table systems business, and there are a lot of things we can do together there, which makes the electronic table systems a lot better,” Srinivasan says. “In terms of the creativity, we use a method called crowd sourcing, where we get ideas from all our employees. So, that gives you a broad base set of employees who are providing a whole lot of creative ideas.”
“There wasn’t a lot of overlap in our business units,” adds Derik Mooberry, Bally’s senior vice president of games, table game products and interactive R&D. “Where Bally was strong, SHFL didn’t necessarily have products. Where SHFL was strong or had products, those were segments Bally wasn’t in, like table games. Australia and Asia were segments obviously that were very strong for SHFL, but not for Bally. So, integration-wise, things have gone very, very well.”
“A lot of international customers had already started moving to our products,” says Srinivasan. “Especially in the systems technology area, we’ve been making great progress internationally. What the SHFL merger does is to improve us dramatically, very quickly, on the games front as well. When you look at Australia and Asia, some of the best-performing games there are SHFL games. And that’s about a $100 million business, between Australia and Asia, so this combination makes us strong internationally from the games front and from the table products front as well.
“All in all, this has made us a much greater global company.”
In addition to the combined library of products, the Bally/SHFL deal represents a merger of two growth-oriented corporate cultures, each of which was at the top of its game at the time of the merger.
“We’re really continuing the momentum of both companies,” says Mooberry. “We’ve worked hard to make sure that all of our integration efforts are taking a step forward and not a step backward. We’re trying to integrate the technologies as seamlessly as possible, so the consumer experience isn’t changed at all.”
That means the table-game portion of Bally’s business will remain with those who have developed it at SHFL over the years. “The table game engineering department continues to function with its existing roadmap that was in place at the time of acquisition; it has just grown from there,” Mooberry says.
“Both the companies’ DNA is to think about growth—how to grow revenue, how to grow profitability,” adds Srinivasan. “Each of them was operating at record levels at the time of the merger, both were very innovative companies, and both were very profitable, highly customer-centric companies.”
On the slot side, Mooberry says, the Bally development team and its successful Alpha platform are now complemented by what has been SHFL’s own slot success story, a library of games on the Equinox cabinet that has been extremely popular in Australia and Asia.
“We’re starting to combine the (slot) teams,” says Mooberry. “We are supporting both the platforms that were in the marketplace. Obviously, Bally had its Pro Series line of products in different cabinets, but there are tens of thousands of Equinox cabinets in the field as well. We continue to sell and market both of those.
“Customers like diversity. And when you look at casino floors today, there is a wider and larger assortment of hardware offerings probably than there ever has been in the past, so it’s a nice tool for our sales team to have a couple of different product lines to sell. The more you have in the catalog, certainly the better off you are.”
He adds that longtime Bally engineers and those who worked for SHFL are being cross-trained on the platforms, so each team understands the different types of technologies involved.
The mixture of hardware and technologies serves as the basis for what is now a remarkable collection of content for slots, table games and the hybrid e-tables such as SHFL’s popular Table Master and SHFL Fusion product groups.
It’s a product mix that Bally has been devoted to delivering not just to brick-and-mortar casinos, but across multiple online, mobile and social channels as well. The Bally iGaming Platform is a cross-channel solution that is growing quickly in popularity with operators of land-based casinos in social free-game applications and real-money internet gaming sites internationally and, most recently, in the nascent U.S. iGaming space.
“We continue, obviously, to bring content from both slot and table libraries into the online space,” Mooberry explains, “whether that be proprietary table game-style content or Bally slot content, and linking that to our iGaming Platform, which Bally has been marketing and selling throughout the world—with the goal of linking that iGaming Platform to our traditional core systems.”
Pooling the Talent
While much has been said about the complementary technologies brought to the table in the Bally/SHFL merger, even more can be said of the resulting pool of talent, injecting a team already swelling with talent—from Mike Gottleib, Jason Stage and other game maestros to game development veterans like Mike Mitchell, John Vallejo and Jean Venneman—with the industry’s best developers on the table side.
One need look no further than Roger Snow, who in nearly 14 years at SHFL compiled more than 30 patents, including some of that company’s most popular titles. As senior vice president of table and utility products for Bally, Snow is in charge of all former SHFL product groups, but more importantly, he is charged with continuing to do what he does best: creating new games and bringing them to market.
For his part, Snow says he has benefited from the methodical approach to game development at Bally. “When you are around people who are very smart, whether it’s a college environment or a professional environment, you just learn things every day,” he says, adding that the enormous resources at Bally’s disposal have made him more effective at his job.
“For example, within three months of the acquisition, they decided to establish a team in India of about 20 people dedicated solely to our e-table efforts,” he says. “It really opened our eyes to a lot of possibilities. Our products—our tables and shufflers, especially—have really been stand-alone products. But the way Bally approaches things philosophically, it’s all about connecting together. When you start to see the potential of stuff like that, you can’t help but get excited.”
“Bally has always had enormous development talent,” says Srinivasan. “That becomes even more so with people like Roger Snow. And when you bring together people like Roger Snow with Bryan Kelly, who heads our Innovation Lab—where we have about 50 engineers just focused on looking outward (for new technologies)—the results are very exciting.”
“The biggest surprise I’ve seen so far is the talent that we have seen from the SHFL folks,” adds Mitchell, Bally’s vice president of engineering. “These are incredibly smart, talented game designers and engineers and leadership, and it fits with us very nicely.”
“Ultimately, the success of the business is all about people, and the products those people create,” says Srinivasan. “We have a tremendously strong team, and this is just the beginning. When you have this kind of talent, as CEO, I have this arduous task of just staying out of the way!”
The augmented development team at Bally gives executives like Venneman, vice president of product management, a greatly expanded toolbox when developing the company’s product strategy going forward.
Venneman has always worked closely with Mitchell and Vallejo, vice president of game development, in moving the company’s product strategy forward. The addition of SHFL adds yet another dimension to her job.
“It’s been a really exciting time for us,” Venneman says, “because SHFL does allow a lot more content to come into our portfolio. SHFL had a great library of games, so it was very exciting to think of how we can utilize past, present and future in some of the different segments where maybe SHFL wasn’t so prominent before. The best example of that is in the U.S., where they were just really starting to enter the market when the acquisition occurred.”
At the same time, she adds, the merger has given Bally a boost in markets like Australia and Asia, where SHFL’s Equinox game group already had a sizable market share. Equinox was just beginning to secure a foothold in U.S. Native American markets, so the strategy going forward will be to continue spreading titles from the former SHFL group in North America, utilizing the Bally Pro Series cabinet wherever necessary.
The Bally Pro Series cabinet also will be utilized in other worldwide markets in which SHFL had yet to launch, but where Bally has established distribution networks, Venneman says. “We have the opportunity to put their content in Equinox and utilize our distribution channels, or take selected themes hand-picked for the jurisdictions and put them in the Pro cabinet and deploy them that way as well,” Venneman says. “We’ve got flexibility in how we offer their content, which is great.”
That content, she says, adds up to the most complete library of games in the business. “One of the real key features of the acquisition is that (SHFL products) really round out our portfolio so well, so now we have different product lines Bally didn’t have before,” Venneman says. “We weren’t in the electronic table game space or felt table game space before, and now we are. So we are now seeing what we can do on the game side to support those channels, and vice versa.”
“SHFL’s product lineup broadens our portfolio,” adds Mitchell.
In fact, the product portfolios of the merger partners were already broad, and were growing fast. Bally’s latest hit has been the Pro Wave, a cabinet with a concave LCD monitor that curves toward the player, resulting in a format with all the real estate of an upright for game features, which can be played with as much comfort from a seated position as a slant-top.
“What makes that design stand out in the casino is its initial appearance,” says Mitchell, “but once the players sit down at the gaming device, they are immersed in the best slot machine in the market, as far as the player experience. It’s comfortable; the sounds are unbelievable; the screen is accessible to the player. That’s caused our game designers to really take advantage of the full screen.”
According to Vallejo, the initial games on the Pro Wave, including a new version of the “Quick Hit” progressive video slot, have been “outstanding” in their performance, adding that the format will accommodate hit games in any of Bally’s other cabinet styles, such as the red-hot V32 portrait-style format. “The Pro Wave drives all of those right out of the gate,” he says. “We can bring all of our high-performing legacy games over to the Wave.”
The SHFL studios for Asia and Australia have joined a group of Bally game design studios that each compete for the next big hit—and each studio has its specialty. For instance, one of the newest hits for Bally, “ZZ Top Live from Texas,” comes from the Arizona studio headed by Jason Stage. Stage, a rock musician himself, poured his soul into the game, which wraps bonus events around high-definition video of a recent show by the Texas blues-rock legends in their home state.
“It couldn’t have been a better fit for a studio and a game,” Vallejo says, “and we’re very proud of the effort and attention to detail that studio employed with this game.” Mitchell adds that the hardware—namely, a state-of-the-art sound system and the booming Bally Pro Sound Chair—provided the perfect format for this and other music-related themes.
“We took great pains to develop what we believe is the best audio delivery system in the market,” Mitchell says. “So, it was a natural to take these iconic music brands and bring them into the slot space.”
Venneman adds that this audio system is one of the driving features not only of music-based themes like ZZ Top and the two Michael Jackson-themed games, but for Hollywood themes like “Titanic,” another of this year’s blockbuster games.
“Our technology really lends itself to music brands, with our Sound Chair, which we feel is a great way to give the player an immersive experience,” Venneman says. “But it’s not just about that. We’re pretty proud of the Titanic brand—an epic love story we think will resonate with players globally. It also has a very important music element, even though it’s not necessarily a music brand.”
Going forward, Venneman says Bally will continue to choose its brands wisely. “Titanic is an example of where we feel there are a lot of different elements that will appeal to the player,” she says. “It’s not just the sounds, but the sights, the story, and of course, the game play experience.
“Because when all is said and done, a brand may bring a player to a game, but it’s really up to the play mechanics to keep the player there.”
Bally in-house studios are sometimes augmented by third-party content providers, the most recent being the well-respected High 5 Games. Bally has signed a deal to transform many High 5 titles from social casinos into slots for the casino floor. “It’s been a nice addition, because they have a point of view and a style that’s very different from the traditional Bally style,” Venneman says. “So, it’s really great to be able to add those styles of games into the portfolio. High 5 also offers a different perspective, and has their own unique look and feel that has been proven to be very successful. We’re really happy to work with them.”
Along with the SHFL slot games, High 5 contributions and Bally’s own studios on the slot side, Snow’s table-game division continues to crank out innovations of its own.
Snow says the resources of Bally have enabled him to accomplish projects that would have been difficult for SHFL alone—projects like a wide-area progressive jackpot for blackjack.
“We always did local-area progressives, in which the casino funds the jackpot and pays the winners,” Snow explains. “With a wide-area progressive, which is what slot companies do, the slot company itself controls the prize and pays the prize. So there’s no reason we can’t have a wide-area progressive for blackjack with a half-million or million-dollar prize.
“When SHFL was on its own, the economics didn’t make sense, because we didn’t have the infrastructure in the casino—the jackpot team that monitors everything and races out to make a payment. There are only a handful of companies in the world that do this, and Bally is one of them.”
Other new frontiers for Snow with Bally include the ability to connect SHFL’s popular e-tables like Table Master and Fusion to back-of-house slot management systems, and to add new types of bonuses to table games. “We are now working on a community bonus round feature for our electronic table games,” Snow says. “It came about because Bally has expertise for community bonus rounds and we have e-tables, so their slot guys and I, and my mathematicians, sat down and hammered out a way to bring that type of community bonus to e-tables, where something happens to trigger an event and everybody goes into a bonus round together.”
Meanwhile, Snow continues to invent new games, and remains on the hunt for new table games and side bets. One that particularly excites him, he says, is “Free Bet Blackjack,” which Bally bought from inventor Geoff Hall last year. In this game, players can split cards or double down for free, and in exchange, if the dealer busts with a 22, all player bets push.
“This is one of the few times in my career where I consider a game’s success a fait accompli,” Snow says. “This is going to be one of the biggest things of all time, and very few people know about it. We’ve got around 55 installs right now, but it’s just a matter of time before this thing explodes. A year from now, everyone’s going to know about this game. This is going to be a monster.”
Tying it Together
Tying all of the diverse content from Bally together is what has always been one of the company’s greatest strengths, the Bally Systems division.
Bally’s casino management systems have long led the industry, but more recently, the functionality of the basic systems has been enhanced with a wealth of networked bonusing features packaged in the Elite Bonusing Suite, and delivered to players in what are often enterprise-wide tournaments, bonus games and virtual races using the Bally iVIEW Display Manager system, occupying the same space as the base game display.
Bally has sought to combine content coming from multiple studios for slots and e-tables, as well as progressives and bonusing for traditional felt tables, in a system that can deliver that content across all channels—social free-to-play games, for-money online casinos, and mobile applications for both, taking Bally content to players regardless of where they choose to play.
It’s all tied together via the Bally iGaming Platform, an open platform that not only brings content to any distribution channel, but collects data from all those channels to provide a single view of the player for marketing and customer loyalty purposes.
“Ultimately, we want to develop a single view of the player in multiple channels, and we want to be able to interconnect all three, and then deliver that experience to the player,” says Arun Rajaraman, vice president of development for systems at Bally. “Bally’s internet strategy is to connect the dots to create an ecosystem. We believe in an ecosystem of different components—a remote gaming server for content; the iGaming Platform to connect all the remote gaming servers together to create a unique player experience.”
Rajaraman says marketing functions such as networked bonusing fit into the ecosystem along with business intelligence tools such as fraud prevention, compliance functions and integration with Google Analytics.
Meanwhile, Bally’s systems team is constantly updating the ecosystem with new features for the Elite Bonusing Suite, and moving those features among the various distribution channels.
“Certain land-based casinos may develop their brand name through free play, then entice players to come in and do either real-money wagering at the casinos or online,” says Rajaraman. “There are basic things you can do with free play—promotions players can earn while they are playing online, accommodating points that can be redeemed at the land-based casino.”
According to Sethurum Shivishankar, senior vice president for systems R&D and information technology, updates are constantly being added not only on the player-facing side in the form of new bonuses, but on the operator side in a variety of features that improve efficiency.
“We have integrated our iGaming Platform into our casino management system, so that the casinos can see one view of the player,” says Shivishankar, “but at the same time, they have a drill-down of where all they have spent, so casinos can target their marketing.”
For the Elite Bonusing Suite, he says, “One of the key functions we added is a floor-wide progressive—nobody in the industry has it—which does not need any additional hardware. It is integrated in the system as part of our EBS module, which has flexible player-eligibility rules, and mystery progressives as well as pay-table progressives.”
Another new EBS module is Tournament Express, a tournament product that can be implemented with systems other than Bally. (Eventually, says Shivishankar, the networked bonusing functions may be made available to non-Bally system customers as well.)
Srinivasan says the systems division is integrating the Bally player tracking platform with the iGaming Platform. “Our iGaming platform is an open platform,” he explains. “A customer can buy whatever front-end product they want—poker, bingo, casino gaming, table products. We give the ability to protect player data, so that they don’t need to share the player data with those front-end providers.
“That iGaming Platform is integrated with the back-end core player-tracking system—the same thing with our mobile platform—so the back-end player-tracking system portion of our systems, and business intelligence, and all the other tools we provide, come together to provide a single view of the player.”
Bally’s mission in systems, slots, table games, utility products and the rest of the product library is the same as ever, says Srinivasan:
“We want to be the best provider of innovation, content and technology to the gaming industry. That is our mission. And in terms of the methodology to get there, we want to be a customer-centric, engineering-driven company.
“We are uniquely positioned to be the most broad-based supplier in the industry.”