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The Bally Buzz

Bally Technologies uses games, systems and new technologies to usher its casino partners into brave new worlds

The Bally Buzz

It was a scene that has been repeated at casinos across the country—the CEO of one of the largest casinos in the world, Mohegan Sun, standing side-by-side with the head of one of the top gaming technology suppliers in the industry.

For anyone who has been following the slot sector the past few years, it’s almost unnecessary to identify that slot-maker, Bally Technologies, which Mohegan CEO Bobby Soper heralded as a “tremendous partner.” Bally President and CEO Ramesh Srinivasan returned the compliment.

The scene was repeated three times at Mohegan Sun just in the first half of this year. Bally set three world records at Mohegan with its iVIEW Display Manager (DM) networked bonusing system and its Elite Bonusing Suite (EBS) of applications. In April, the company set two Guinness World Records with a single event, setting the mark for “World’s Largest Slot Tournament” and “Most Slot Machines Running the Same Game Simultaneously,” using the “DM Tournaments” EBS application. In May, it was the “Largest Virtual Race” using the “Virtual Racing NASCAR” application.

In June, Mohegan Sun hosted Bally’s 10th annual Systems User Conference, in which casino operators from around the country learn how to best use these new technologies.

While these particular happenings were at Mohegan Sun, they could just as easily have been at Pechanga Resort or Barona Resort in California, the South Point in Las Vegas, or the Golden Nugget in Atlantic City. While most manufacturers complete their R&D efforts and demonstrate new technologies in a corporate showroom, Bally does it all on casino floors, and makes its customers an integral part of the development process.

“All through the eight and a half years I’ve been at Bally, if you think about how our products have evolved, our customers have absolutely played the primary role,” says Srinivasan, who took the reins as Bally CEO from Board Chairman Richard Haddrill last December after serving a year and a half as the company’s president and COO. “Fundamentally, we define ourselves as a customer/market-centric, engineering-driven organization. Practically everything we do is what our customers want us to do.”

This credo has led Bally, the world’s oldest slot manufacturer, to remarkable heights over the past several years—and not just in its industry-leading systems division, which was headed by Srinivasan from 2005 until he took over as president and COO in March 2011. Bally has expanded its game development operation to include multiple studios in India, California, Phoenix, Sydney, Australia, and Nice, France, in addition to the traditional R&D centers in Las Vegas and Reno.

Feeding innovation to all these system and game R&D centers is another element unique to Bally, the “Innovation Lab.” Headed by Bryan Kelly, senior vice president of technology, the lab’s main purpose is to scout new technologies in the overall business world and apply them to Bally slot games.

Meanwhile, Bally has expanded its footprint across the world, opening up new markets in Europe, Australia, Asia, Africa and Latin America.

In addition to new venues for its gaming machines, these days, Bally is devoting itself to the next big transformation in the gaming world—taking slot content to online, mobile and social venues. Following a series of technology-based acquisitions, the Bally Interactive division has created a platform that promises to seize the i-gaming moment by connecting all the technology pieces to create a seamless transition of gaming content across brick-and-mortar, online and mobile outlets.

“Taking our products across multiple channels is a big opportunity for us,” says Srinivasan. “We are making sure that all the products we are creating now integrate well across all the channels.”

Content is King

While Bally is branching out across all media, it all begins with the content being produced by the game studios. “Content is king,” says John Connelly, vice president of business development. “The ability to access that content is going to be extremely powerful, and is going to be a significant determining factor to those companies supplying technology in the future.”

The ultimate goal, Connelly says, is to provide the same content to the player, whether that player is in the casino, using a tablet or PC, or playing on a smart phone. However, while the company continues to work toward that goal, the evolution of Bally content already is being seen on the front lines of brick-and-mortar casino floors.

And that business is booming, led by gaming operations, which topped all divisions in the most recent quarter with $102 million in revenue, thanks to hits like “Pawn Stars,” based on the popular reality show; “Michael Jackson King of Pop,” with its booming sound chair immersing the player in the hits of the late entertainer; and NASCAR, which features eight top stars of the NASCAR circuit and gives players a chance to play on the “team” of their favorite driver.

The strength of Bally’s gaming operations also is reflected in the fact that for the quarter ended in March, the company’s installed base of wide-area progressive slots was up a whopping 73 percent year-on-year.

For-sale machines have been strong as well, with sales for the third quarter up 8 percent on revenues of $86 million, including nearly 4,100 new units sold in North America alone.

According to Srinivasan, the success of the company’s game division can be traced to the same factor in its system success—an emphasis on R&D.

“When you think about the vision we had eight years ago, we knew it was all R&D and engineering-driven,” he says. “So, the first thing we did was built up our R&D strength. Forty-six percent of our employees were R&D employees then; today, 56 percent of our employees are R&D employees, across all divisions. We’ve made ourselves into more and more of an engineering-driven organization.”

On the game side, that has manifested itself in an expansion of the sources of game content. As more game development studios have been created around the world, game development efforts—headed by Game Development Vice President Mike Mitchell—have benefited from a stable of new talent. Some, like former Atronic game guru Jason Stage and talented slot designer Michael Gottlieb—whose name you may recognize from his grandfather’s legendary pinball business—are now part of the Bally team, but Mitchell’s crew is always open to new ideas from third-party designers as well.

“We’ve recruited a lot more talented people, and we’re also making use of external sources,” says Srinivasan. “There are a lot of external third-party content providers who have done great work in the industry before. We are making much better use of them than we did before.

“Fundamentally, at our core we are a product company. And our success is going to depend almost entirely on how well we create, service and support great products.”

Team Approach

The game studios themselves have a lot of help from other company divisions. Kelly’s Innovation Lab, for instance, has produced a variety of game-play mechanics and physical game additions that have distinguished Bally from other slot-makers—from the “iDeck,” an LCD touch-screen button panel that has replaced mechanical buttons and doubles as a joystick-like device, to game mechanics like “U-Spin,” in which video bonus wheels are spun by touching the screen, the wheel spinning at a speed that mimics the amount of force applied to the spin.

They’re all results of trips by Kelly and a relatively small team to tech conferences across the country, during which they scope out innovations that might be applied to the slot machine. “We try to focus in on maybe 10 different types of innovation per year, covering any different touch points in the casino industry,” Kelly says, “and then we try to pass as many of those as possible on to the mainline groups and get them productized.”

Among the newest innovations coming out of Kelly’s group is the “Level 3” version of the iDeck, which will in turn fuel the development of more games; a technology that will allow players to use their gaming devices to connect with Facebook or other social sites; new improvements to the Bally Pro Sound Chair; and play mechanics such as “U-Steer.”

In all cases, says Srinivasan, the technology addresses the needs of the customer. “One of the reasons for that is that all of us know this industry still has a lot of catching up to do in terms of effective use of modern technology,” he says. “Therefore, there is a lot of pent-up customer demand. Our customer base sees technology all around them, so there are still a lot of demands and needs they have from vendors like us that need to be fulfilled. We’ve closed that gap between what our customers need and what they have considerably in the last few years, but there is still a lot to do.

“The other reason is that over the last few years, the operator side of the gaming business has become a heck of a lot more competitive than it was before, and therefore, their demands in terms of products, solutions and technology-related modules has increased.”

Network Evolution

The other side of the technology coin for Bally is systems, where the company has led the industry for years. Bally’s core systems products—ACSC and CMP casino-management systems, and SDS slot-management systems—have served as a launching point for a suite of products that is still growing.

Drawing the most attention of late, of course, has been the EBS applications using Bally iVIEW DM. The suite of networked bonuses ranges from games, bonuses, and messages sent to individual players or groups of players to instant slot tournaments covering thousands of machines of various manufacturers, to Virtual Racing, which can beam a video horse race or NASCAR race to all the machines in a casino (players qualify through minimal play to pick a horse or a NASCAR driver, and all who pick the winner split a cash prize).

It’s all done through linking the games in a casino to an Ethernet network, giving casinos extra horsepower to tailor their marketing programs.

It is the marketing side of server-based gaming, and Bally has been breaking new ground in the space for years.

Bruce Rowe, Bally’s senior vice president of customer consulting and sales support, notes that the marketing advantages of networked gaming have gained more attention than the original download-and-configuration purpose of the technology—dynamic changing of game content—because it can capitalize on player data to give the operator new ways to build customer loyalty and raise overall revenue.

“It’s interesting we’re now almost a decade since the real discussions began concerning server-based gaming,” says Rowe, “and at that time, there were really two different viewpoints that helped us craft our vision: First, we needed a practical way to deliver these solutions across all manufacturers, and also across a multitude of generations of technology provided not only by Bally but every slot manufacturer.

“Second, focusing on marketing first, as opposed to dynamic slot revenue management or access to massive game libraries, was what was most needed by the industry. What was really needed was a way to differentiate the products a customer had on the floor from the same products competitors had, by using marketing applications. You can make games more efficient to download, you can make changing games in real time more efficient, but the real effectiveness comes in marketing.”

While the huge DM Tournaments and Virtual Racing events have predictably gotten most of the press, the EBS suite of bonusing applications is full of modules that allow operators to customize bonuses, setting triggers for rewards to players while they are at the machines, instead of weeks later when they go to the mailbox.

In addition to the high-profile events, EBS has applications like U-Spin Bonusing, which sends an interactive game like Skeeball to the player’s screen, with the touch mechanic used to aim and push the ball down to one of several prizes; or Bonus Tournaments, which allows the casino to pick a group of players for a random slot tournament, which proceeds during normal game play—the player’s hitting of the spin button on the regular game racks up points in the tournament simultaneously, which means coin-in continues during the contest.

Other modules include Power Winners, a time-based mystery progressive; Dynamic Random Bonusing, which gives players a code to enter for a guaranteed prize, with many winning small but one winning big; and Flex Rewards, which allows the casino to create pools of players who are awarded various bonus games, with the prizes rising according to tier level.

Rowe calls it “individualized reinvestment” in the players while they are at the machines, which builds loyalty the same way as direct mail, but in real time.

“I think direct mail will always be an important part of our business,” Rowe says, “but what this does that is significantly different is that it allows you to use that same marketing money when you want to communicate with that customer in real time, on an individualized basis.

“Instead of knowing that 5,000 people had a bad experience 30 days ago and dropping them an offer to come back, you’re able to use that marketing money real-time, to recognize their loyalty to your casino, or to reinvest at the point of dissatisfaction. We’ve done that for years in table games, where we’re able to immediately respond to a gamer’s experience in the pit, and we’re now able to do that on the slot floor.”

As with all other areas, technology is being tweaked to improve EBS. For instance, Ted Keenan, senior director of product management for systems, said in a session at the Systems User Conference that future versions of Virtual Racing will let the operator set odds, giving bigger prizes to horses or cars that rarely win.

Additionally, one of the most notable revelations at this year’s User Conference was what Bally calls “Super Slotline,” a technology that enables EBS without the operator having to rip up carpets and replace wiring with Ethernet cables. Rowe calls it a “faux Ethernet” that allows the networked capabilities of EBS for around $100 per slot machine—as opposed to around $500 per slot for complete conversion from serial to Ethernet.

The Interactive Equation

While the Innovation Lab continues to search for ways to improve the Bally games on the floor, for the past three years, Kelly, along with Connelly, have been doing double duty putting together the technology that now forms the Bally Interactive division.

The goal of Bally Interactive is to provide customers a way to offer not only Bally content, but content from all manufacturers who supply their brick-and-mortar floors, across all distribution channels—namely, on internet casinos, on social-gaming sites, and on the player’s own mobile device, be it a smart phone or tablet.

Through a series of tuck-in acquisitions such as San Francisco-based MacroView Labs, with its market-leading, cloud-based mobile platform, and the internet gaming platform of Malta-based Chiligaming, Bally created the infrastructure for the Bally iGaming Platform, including Bally Mobile, all residing on Bally’s back-end core systems in an open-ended architecture that permits content from any manufacturer to be added to the front end.

“The iGaming Platform in the back end integrates with our core systems, and in the front it is completely open,” explains Srinivasan. “We want to give our customers the ability to choose whatever front end they want—whichever poker product they like, whichever casino gaming set of solutions they like, whichever table content, whichever bingo content. We want to leave that open to our customers. And the iGaming Platform will take care of the back end completely. We want to provide them a solid core on which they can place any content they want.”

Kelly’s Innovation Lab and Connelly’s business-development team have been working together to acquire technology and/or companies that will enable operators to complete the circle from brick-and-mortar casinos through all of the other distribution channels available now in much of the world and soon to be available in the U.S.

“I’m John’s counterpart,” Kelly says of Connelly. “He’s the business line manager for the interactive group, with a business development strategy. I’m his technical counterpart. We’re working on both the business strategy and the technological strategy to move the company forward in a multi-channel world, and researching how we use each of these channels to engage the players.

“John and I are together tag-teaming, going out hunting the companies, and later integrating them into the mainline business units.”

Connelly handles much of the merger and acquisition work for Bally, and like Kelly says he wears “multiple hats,” including a dedication to achieving that multi-channel world for Bally and its customers. Connelly says the Interactive division’s goal is to allow operators to take full advantage of i-gaming, social gaming and the mobile world in a single network, all elements—including carded play in the brick-and-mortar casino—part of the iGaming Platform.

Connelly says the network, resting on Bally core systems, will give U.S. operators a big advantage in the worldwide i-gaming market, because the owners of the U.S. internet casinos will be those same land-based casino operators.

“Sometimes you’re fortunate enough to predict things that are going to happen in the future, and if you’re correct, it gives you a strategic advantage,” Connelly says. “And in this case, Bally aggressively invested several years ago with the belief that traditional casinos in the future would be receiving online gaming licenses versus the historical model of Europe, where in many cases traditional casinos were not receiving the licenses.

“For that reason, we created a third distribution channel to our iGaming Platform, whereby we’ve integrated the core systems of the web-based casinos. So in essence, you have three channels by which to not only distribute content, but to attract players across different mediums. And we believe that is a significant strategic advantage for the traditional casinos in the United States which are being granted these licenses. By interfacing the bonusing, the player tracking, the rewards systems and applications into our iGaming Platform, we’ve now really created a differentiating factor by which they can compete online.”

Aside from the ability to award points redeemable in the casino for internet gaming and social play—and vice versa—the iGaming Platform, says Connelly, gives U.S. operators a way to exploit their other inherent advantage in the i-gaming market: their databases.

“One of the greatest costs online, versus the traditional casino, is to go out and find players online and attract them to your online casino,” he says. “This is a huge advantage to the traditional casinos if you’re able to integrate their core systems. Because their core systems, in many cases, have millions and millions of players they have acquired over the years that are in their database.

“By allowing the online platform to access that database and ensure those players have a seamless experience—meaning they’re going to be bonused and treated the same in the online world as they have been in the brick-and-mortar casino—we’ve created that bridge, which up to this point hasn’t existed. We feel that is going to be very powerful in the future.”

“To be the best content and technology provider to the gaming industry, we need to make sure we enable our customers to succeed in all the channels that they choose,” says Srinivasan of the Bally Interactive mission. “We are focusing on integrating all these channels together, so that whatever channel or combination of channels our customers choose, our products will provide them a good solution.”

Meanwhile, Bally has been busy building partnerships across the i-gaming world, the latest being agreements to place Bally content on the internet casinos of Paddy Power, iSoftbet, Interblock, William Hill, Rank and Mr. Green. More partnerships are on the way, not only with i-gaming operators but with other slot manufacturers—Kelly notes that social gaming has already proven that players want social or internet sites to mirror the floors of the brick-and-mortar casinos, and the slot titles they recognize.

“The consumer is going to get what they demand on the floor, and they’re going to demand it on those other channels,” Kelly says.

Finally, Bally will soon be the top supplier of specialty table games in the U.S. As we went to press, the company announced that it has entered into a definitive agreement to acquire SHFL entertainment, Inc. at a per-share price of $23.25 in cash for total consideration of approximately $1.3 billion.

The transaction, approved unanimously by the boards of both companies, brings SHFL’s stable of specialty table games to Bally both in casinos and online.

Srinivasan is quick to credit the abundant talent of Bally—many long-term, at a company with one of the industry’s lowest turnover rates—as the ones achieving the company’s vision. “Ultimately, a great company is just the sum of its great people,” Srinivasan says.

The CEO says he is confident those people will take Bally and its customers into the new multi-channel gaming world.

“Innovation is the key,” says Srinivasan. “It is a matter of creating more opportunities for our customers to succeed, and to make it more fun for their players. The networked floor gives us the base, and we have continuous innovation on products like iVIEW and EBS, to increase the possibility of success for our customers.

“To be a truly great company, we need to be the enabler for our customers’ success.

Frank Legato is editor of Global Gaming Business magazine. He has been writing on gaming topics since 1984, when he launched and served as editor of Casino Gaming magazine. Legato, a nationally recognized expert on slot machines, has served as editor and reporter for a variety of gaming publications, including Public Gaming, IGWB, Casino Journal, Casino Player, Strictly Slots and Atlantic City Insider. He has an B.A. in journalism and an M.A. in communications from Duquesne University in Pittsburgh, PA. He is the author of the books, How To Win Millions Playing Slot Machines... Or Lose Trying, and Atlantic City: In Living Color.