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Wisdom of the Ages

Five ‘seasoned’ members of the gaming industry share their experiences and predictions

Wisdom of the Ages

With the gaming industry seemingly obsessed with millennials, the people who built the industry into what it is today can often be overlooked. And that would be very unfortunate, because within the older members of the industry resides history, experience, wisdom and integrity. As the saying goes, you can’t know where you’re going until you know where you’ve been.

The five men profiled in this piece all know where they’ve been. And most of them have a good idea where the industry is going. They’ve been gaming innovators, casino executives, enlightened regulators, casino developers, brilliant academics and much more.

But they are far from the end of the story when it comes to the seasoned observers of the industry. Most companies and organizations have these people in the ranks. It’s always a good idea to seek them out, because understanding where you’ve been will always be a good guide to where you are going.

john acresMystery Man
John Acres, President and Founder, Acres 4.0

You would think the man behind such groundbreaking innovations as player tracking, progressive jackpots and instant bonusing—technologies that now largely define the machine gaming experience as we know it—has seen it all.

But John Acres will tell you no.

“Right now, gambling is no longer growing,” he says. “For the first 40 years of my career, gambling was a growth industry. And now it’s not. If we define casinos not as resorts but as gambling spaces, casinos are dying.”

He doesn’t see a lot out there that promises to substantially change this.

From the Las Vegas headquarters of Acres 4.0, his newest and boldest venture yet, he’s surrounded by the physical evidence of the massive sums companies have invested on the Strip to create entertainment experiences whose effect has been to relegate the casino to a relatively minor place in the profit picture. Successful as this has been, and Acres readily acknowledges as much, for him it only highlights what he describes in blunt terms as a “crisis.”

“The crisis we have is one of gambling,” he says. “There are lesser amounts of money being gambled now than there was last year, and the player base is aging.”

He applauds the move toward skill-based games, but as he’s quick to point out, “Skill-based games are not new. Video poker is a skill-based game. This is not new stuff.” At best, it’s a Band-Aid. “If all we do is focus on the game content, then ultimately the consumer can simply turn to the internet and play at home, and land-based casinos die. The only edge land-based casinos have is their environment and people. Human interaction and inspiring environments, that’s what land-based casinos offer, and we don’t go a good job of featuring that.”

At its core it’s a “psychological problem,” he says, “a marketing problem that has a technological solution.”

It’s a problem he’s devoted his now-legendary career to pondering.

It began in the early 1970s, when as a 19-year-old Air Force recruit stationed in Las Vegas he decided to earn some extra money repairing slot machines on the Strip in a small arcade-style casino of a kind that have long since disappeared. What intrigued him was the personal touch that was ubiquitous in the town in those days, how his casino manager would scan the floor, spotting valuable players by sight, sometimes intervening in a losing streak by walking over and introducing himself and taking out a key to open a machine and reset it to fill a coin tray.

Inspired by Bill Harrah, who’d invented a system of “premium points” that rewarded players with paper coupons exchangeable for gifts and small appliances and the like, Acres started a company called Electronic Data Technologies. EDT refined Harrah’s invention with ticket dispensers attached directly to the slot machines at Steve Wynn’s Golden Nugget. Then, on a visit to South Africa’s Sun City, Acres was given a card punched with holes, not a key, to open the door of his hotel room. A light went off. He took the card home.

That Christmas he noticed his wife had bought a Texas Instruments Speak and Spell toy for one of the kids. What grabbed his attention was the game’s sophisticated display. What if he could combine something like this with something like that Sun City room card? Conceivably, it could do far more inserted into a slot machine than a stream of paper tickets or coupons. It could render them both obsolete. Modern player tracking was born.

He went on to co-found Mikohn Gaming, inventors of the progressive jackpot. With his third company, Acres Gaming, he wondered if it wasn’t possible to reward deserving players in real time right at the device, and from that sprung an equally novel idea: instant bonusing.

With Acres 4.0 he’s set himself what may be his greatest challenge yet, no less than “changing the systemic way in which we entertain our guests on the casino floor.” It envisions mobile technologies, cloud computing and a cutting-edge package of artificial intelligence tools called Kai, all working in tandem to learn more about players in the moment than anyone has bothered to know up to now, and using that knowledge to enrich the real-time relationship between player and device in ways never imagined. It’s about energizing employees, too, steering this revolutionary assemblage of mind power to identifying morale issues and developing solutions to resolve them.

In the end, it’s about restoring to the casino experience the all-important human factor, the thing that made it fun and emotionally rewarding in the first place. It’s what inspires Acres to believe that gaming can be a growth industry again.

But it hasn’t been an easy sell.

“Our business is about offering risk. But we ourselves won’t take that risk,” he says. “We won’t play with these multibillion-dollar investments. And we’re going to have to change that.”

Resistance is nothing new to Acres. It’s been his life’s purpose to overcome it. He remembers how it took years for player tracking to become accepted. He’s encountered it every step of the way.

“We want to do tomorrow what we did yesterday,” he says. “And that’s not going to work. It’s not working today. It’s sure not going to work tomorrow.”

dean macomberThe Egghead
Dean Macomber, President, Macomber International

In today’s parlance, he would be a geek, but in the phraseology of his time, he would have been described as an “egghead.”

Dean Macomber has one of the most analytical brains in the industry, able to drill down to the core of a problem. Along the way, he explains not only how he draws his conclusion but why, and lists all the elements he weighs to make that decision. And his conclusions will be clear and concise, and more often than not, spot on.

Macomber’s path to gaming was rather traditional for someone that looks at the industry from a unique perspective.

“I ran backwards into this industry,” he laughs. “I never intended to stay in it, but I liked to ski and bike in Lake Tahoe, so when a casino in Tahoe had an opening for a craps dealer, I took it while I was waiting to get accepted to law school. I expected to think of it as a fond memory. But I didn’t get accepted to law school; it precipitated a career in the business. I eventually got hired in Atlantic City and opened Bally’s Park Place. I worked there for five years and later was hired at the old MGM (the new Bally’s) in Las Vegas as vice president of casino operations. And the rest is history.”

Macomber bounced around between working for different projects and consulting, but then landed in the job that he considers his “Camelot.”

“I went with Larry Woolf to open Casino Niagara in Canada,” he says. “Larry’s one of the best bosses I ever worked for, and it was enjoyable coming to work each and every day. It certainly was the best business experience in my life. We went from zero employees to 3,200 and opened the casino in 137 days.”

He later worked with Indian gaming enterprises, and moved to Asia, where he helped to operate Sands China properties in Macau. He ran a casino in the Philippines and has worked with casino companies in Vietnam, Cambodia and most recently, Russia.

“I know a little about a lot of things and a lot about some very specific things,” he says. “It’s put me in a position where I can do some real interesting and very fulfilling things in executive-level consulting.”

Macomber has no intention of retiring, and looks forward to addressing some of the challenges facing the industry.

“Like most industries, gaming has to face problems that are both internally and externally influenced,” he says.

An issue that includes a little of both is the issue of saturation.

“I don’t think it is saturated,” Macomber says. “It’s only saturated in the context that gaming has always been a privilege, not a right. It’s one of the few industries where you can’t go attract investors, design a facility and open a business. But that was the only way the industry was going to grow in the beginning. To legitimize the industry, we’ve gone from gambling to gaming to entertainment to destination resorts to integrated resorts… anything that would avoid the ‘sin’ label.

“However, other ‘sin’ industries—alcohol, tobacco, etc.—exist in most states on every corner. Contextually, gaming has evolved into an industry that can only exist in a few places. It has evolved to where they prefer big casinos, which limits the number of bidders and people who can participate.

“On the other hand, you have places like Beale Street in Memphis, Bourbon Street in New Orleans, South Beach in Miami, Lan Kwai Fong in Hong Kong, which contain many multiple units in one location. There is no reason why there couldn’t be six or more casinos in one location to offer their customers a different experience in each one. And when you only have one integrated resort in a state, distance reduces the number of people who will participate. If we can loosen that knot, saturation won’t be an issue.”

Macomber believes the industry needs to deal better with problem gambling.

“It’s our problem; it’s our ‘wart,’” he says. “Every industry has one. If we can discover how to better deal with this issue, we can grow exponentially. The industry would be well served to never give up on this issue. It’s another knot we need to untie.”

He also says the attitude of governments toward the industry must change.

“They treat us as income,” he says, “they don’t treat us as businesses. When governments require billions of dollars of investment with tax rates of 40 percent, they’re only considering the revenue we produce. It’s a problem in many areas—the number of casinos you will permit; what kinds of gaming you offer; what amenities you can offer. When governments determine what casinos are going to be like rather than the businesses themselves deciding what works best for the market, the industry suffers.”

Macomber has lots of opinions on how the industry will grow and prosper in the future, and he hopes to get the chance to lend his years of expertise and analysis to all those who are shaping the future of gaming today. —Roger Gros

steve rittvoPlaying In Traffic
Steve Rittvo, President, The Innovation Group

It’s the early 1990s, and the casino industry is the farthest thing from Steve Rittvo’s mind. He’s built a successful company, Urban Systems, that does traffic surveys and studies traffic patterns for large developments—residences, retail, manufacturing, resorts and more. But when he was hired by Chris Hemmeter to do a traffic study for a casino that he planned to build in New Orleans, Rittvo was hooked.

Even though Hemmeter’s casino did not get developed, Rittvo jumped into gaming with both feet. Gaming in Louisiana was legal on rivers, and Rittvo saw an opportunity.

“I looked at a map and saw that riverboats were permitted on the Sabine River, off Lake Charles, which was very close to Texas,” he explains. “A friend had an airplane, so we jumped into it and took a ride.”

They found a location on the Sabine that would work, optioned the land, and worked the market.

“Nobody liked it,” he laughs. “We went to more than 20 companies and got turned down. Finally, Players International decided to get on board. We ended up as the second license in the state. At the end of the first year, it was the most successful riverboat in the state.”

That led to the start of his consultancy, which soon became the

Innovation Group, spun off from Urban Systems.

“Through my work in the Lake Charles project, I got to meet a lot of people,” he says. “I found I liked the people and loved the industry, and had a lot of fun.”

Soon, the Innovation Group was one of the most sought-after consulting firms in the business. Rittvo produced an annual gaming almanac for Jason Ader and Bear Stearns.

“It gave us great exposure,” he says. “We began to consult for major gaming companies that were trying to get into riverboats and Native American gaming, and later racinos. Our first Native American project was with Pechanga in Temecula, California. We started with them in a tent and today it’s grown into a massive integrated resort.”

One of the companies that employed Rittvo early on was Las Vegas Sands. After working for the company examining some U.S. casino opportunities, the Innovation Group expanded internationally.

“We’ve worked for Sheldon Adelson in Macau and Singapore,” he says. “We did the first non-PAGCOR casino in the Philippines with Caesars. Overall, we’ve worked in 70 countries and 43 states.”

With the slowdown of gaming development in the U.S., Rittvo says the Innovation Group has adjusted its focus.

“I don’t like the term ‘saturation,’ so we use ‘fully developed,’” he says. “In those fully developed areas, the game has changed. The focus is now on growing market share as opposed to growing the market. That has put more emphasis in our organization on marketing, food-and-beverage, retail, entertainment and the like.”

The focus of the Innovation Group has shifted much more to the international market, he says.

“Five years ago, 80 percent of our business was North America,” he says. “At this point, it’s probably only 40 percent to 50 percent.”

The Innovation Group was an early adopter of iGaming, as one of the four partners to launch the iGaming North America conference, the first U.S.-based conference about online gaming.

“Internet gaming and social gaming have become a very large part of our business, and we’re trying to advise companies where the industry is going in these areas,” he says.

The evolution of the industry is continuing to progress, according to Rittvo.

“Gambling/casinos had more of a cache when they were considered a ‘sin’ activity,” he says. “They’ve been accepted now as part of mainstream entertainment. In one sense, that’s good because people are comfortable going to casinos—there is no stigma. But on the other hand, it’s not as edgy.

“We also haven’t done a great job in backfilling our customers as the clientele grows older. We’ve done better than horse racing, but we need to create an environment that attracts people under 40. It has to return the excitement that was there when casinos were more edgy.”

Rittvo says slot machines don’t carry the same excitement because they are so ubiquitous.

“They’re in bars, they’re in restaurants,” he says. “I’m watching the skill-based gaming activities, which I think has some legs. Not sure if it’s really going to attract younger people, but I like where the thought process is going.”

The business model is also changing, which challenges some of the traditional gaming operators.

“The evolution of food-and-beverage and entertainment from loss leaders to profit centers is an important development,” he says. “Operators who understand this can transform their casinos into entertainment centers—multi-dimensional, multi-generational, multi-experiential.”

Rittvo says his personal opinion is that the gaming industry does not do a very good job of outreach to minorities.

“African Americans are very under-represented in the casino player base,” he says. “There is a real opportunity with the Hispanic community. The industry has done a great job with the varied Asian communities, but I think there’s still more growth to come with minorities.” —Roger Gros

jeffrey silverLegal Eagle
Jeffrey A. Silver, Partner, Dickinson Wright

Jeff Silver was in his mid-20s, not many years out of law school and an up-and-comer in the Clark County District Attorney’s Office, when he was appointed to the Nevada Gaming Control Board and was confronted one day with the contents of a wiretapped conversation among a group of mobsters discussing whether to kill him.

It was the Wild West of Las Vegas in the late ’70s, and the state would soon be engaged in an epic battle to remove mob associate Frank “Lefty” Rosenthal from the gaming industry, an event whose twists and turns, thanks to the movie Casino, would become enshrined in the popular imagination.

It was expected to be smooth sailing for Rosenthal in his application for a Nevada gaming license. That is, until a retired FBI agent sent Silver copies of the transcripts from a series of congressional hearings into organized crime that had been held more than a decade earlier. They were the hearings famous for the testimony of Mafia soldier Joe Valachi. But they also ranged into mob involvement in point shaving and bribery in college sports. And they implicated Rosenthal.

From then on, Rosenthal’s days in Las Vegas were numbered. But not before Silver got a call from the FBI about the plot on his life.

“Obviously, there were some very sinister people who were around at that time. It wasn’t just Rosenthal,” he says. “There were people at the Tropicana, at the old Aladdin, there were a lot of  influences going on in other properties.”

So the young lawyer sat in the local office of the FBI and listened as word for word the idea of his murder was considered and then discarded. “They decided at the end of the transcript that it was going to create too much heat if they did that,” he says. It was frightening, nonetheless, as he remembers all these years later how he felt at that moment.

“Pretty puckered, I’d have to say,” he chuckles grimly.

Last year, Silver joined the Las Vegas office of the national firm of Dickinson Wright, capping a distinguished career heading his own practice and highlighted by top-level executive stints at the historic Riviera and Landmark hotels and at Caesars Palace. At Dickinson Wright he specializes in gaming, liquor licensing and regulatory law, planning and zoning, contractor licensing and transportation with an A-list clientele that includes Las Vegas Sands, Gaming Laboratories International, the Mohegan Tribal Gaming Authority, Dubai World, Westgate Resorts, Sega Sammy Holdings, Bell Transportation, Ryan’s Express and TopGolf International.

His expertise has been sought by the American Bar Association, the International Association of Gaming Advisors, the U.S. Travel and Advisory Board, the Las Vegas Convention and Visitors Authority and the Greater Las Vegas Chamber of Commerce. He has testified before Congress and the Nevada Legislature on gaming law issues and has consulted on regulatory matters for a variety of jurisdictions.

Looking ahead, he sees a dynamic and ever-fluid gaming landscape in which the battle against money laundering has become more important, in which new technologies are clamoring to be embraced, new jurisdictions are emerging at home and abroad, and internet gaming, skill-based games, fantasy sports and eSports all pose unique regulatory challenges.

As he said when he joined Dickinson Wright, “It’s an exciting time to be a gaming lawyer.”

Yet it’s difficult to imagine how these brave new worlds would be possible without the foundation laid by a band of determined Nevada regulators all those years ago.

“What’s changed,” he says, “is that everyone knows and understands that the background capabilities of the investigative side are at the highest levels, and the cooperation with other law enforcement authorities is at the highest level.”

It’s difficult as well to imagine a time when this wasn’t taken for granted.

“I refer to Rosenthal as the quality control inspector for gaming regulation,” Silver says. “Every aspect of the gaming regulatory process was in some way tested by him, unsuccessfully.”

Certainly, gaming would never have evolved into the force in entertainment it is today, Wall Street could never have had the impact it’s had, if Nevada hadn’t waged and won its war on organized crime.

The importance of Silver’s role in that victory received fresh, and somewhat ironic, recognition in his recent appointment as chairman of the National Museum of Organized Crime and Law Enforcement—the “Mob Museum,” as it’s popularly known, located in a former state courthouse in Downtown Las Vegas.

“That’s a passion for me,” he says. “I’ve been involved in that pretty much from its inception.”

Does he see the job as a natural fit?

“Yeah,” he laughs, “I definitely have institutional knowledge, if nothing else.” —James Rutherford

roy studentThe Long View
Roy Student, President, Applied Management Strategies

For someone who’s spent decades in the 24/7 casino industry, Roy Student keeps surprisingly early hours. We’re talking farmer’s hours: Student is early to bed (9 p.m. nightly) so he can rise at 4 a.m. to talk to gaming clients around the world.

His company, Applied Management Strategies, has one purpose: “To build companies—startups and established companies, small, mid-sized and big companies, and companies around the world,” says Student. “Wherever they’re starting, we set them on the ‘yellow brick road’” to success in the casino industry.

He first landed in Oz—make that Las Vegas—in 1973. A native New Yorker with a degree in industrial engineering, Student was working at a racetrack equipment manufacturer when MGM tapped him to automate the casino floor at its first integrated resort, MGM Grand.

“I was a poor kid from the South Bronx tenements,” says Student. “I had never heard of Las Vegas.”

Yet, suddenly he was hobnobbing with the wizards of the industry, people like Carl Cohen, Al Benedict, Major Riddle, Bernie Rothkopf and Sidney Wyman, among others. He palled around with junket runner Big Julie Weintraub, who pulled gamblers from East Coast racetracks and imported them to “this little tinsel town” in the Nevada desert.

“These were the true gamblers: the scrap metal guys, the jewelry and garment district guys who shot craps in the foxholes of World War II and became wealthy after the war,” he says. “These guys loved to gamble, and they loved Vegas, with its glamorous resorts, fantastic shows and famous stars like Frank Sinatra, Sammy Davis Jr. and Henny Youngman.”

Before Wall Street and corporate America took over Las Vegas and the larger gaming world, “You’d do a deal in a lounge on a cocktail bar napkin and next day send it up to the controller, who wrote up a contract,” says Student. “Your bond was your word. It’s a different atmosphere now.”

Such reminiscences may make Student seem like an old-timer, but he knows today’s game. Just some of his credits include launching the first CMS system in the industry and introducing casinos to server-based gaming, and now he’s focused on building non-gaming revenues.

“We’ve developed a generation of video gamers who would rather go to a nightclub and pay $5,000 for a bottle of wine than gamble,” he says. “Today it’s all amenities; there are 1,001 things you can spend your money on. Over the last couple of years, the question has been promoting the non-gaming patron: How do you qualify him as a player and how do you rate him?”

Though the ring-a-ding casino of old has gone the way of the wooly mammoth, Student is confident gambling itself will survive. Over the course of 40 years, he’s seen the industry endure and adapt, again and again, and personally presided over some pivotal changes. As past president of Cyberview Technology, Student and company helped usher in the era of server-based gaming in the U.S. As a founder of Gaming Systems International, a world leader in the development and implementation of casino management systems, his team helped “put casinos together on four continents—we flew all over Africa, the Philippines and the Caribbean besides the United States.”

In his latest passion, he is pushing for the diversification of revenue streams in casinos and integrated resorts. The millennials of today “will be players in the next generation,” he says. “Maybe the next thing will be skilled gaming, but I think we’re going to have evolutionary, not revolutionary change. We’re going to see lots of gaming and more gaming, but it will be a side issue. People will come in for all the amenities, and it just so happens you can play craps and go to slot machines. It will part of the entertainment experience.”

The multibillion-dollar infrastructure of gaming—bricks-and-mortar casinos in dozens of states and in jurisdictions around the world—also will survive, Student says. “In Las Vegas, for one, it will be fed by the 42 million people coming in each year, and technology is going to help us enhance it. We’ve seen less slot machines on the floor, and they may take different forms, shapes and sizes and the cabinetry may change to be more appealing. But they’ll always be there, and tables will always be there.”

And if gaming revenues continue to taper off? “The overall revenue will constantly rise as people spend a little less on gaming and more on entertainment.

“We are not in the hardcore gambling business anymore,” says Student, who’s been around long enough to know. “We’re in the entertainment business.” —Marjorie Preston