Global Gaming Business, November 2016

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GGB Global Gaming Business Magazine

Official Publication of the American Gaming Association

Association of Gaming Equipment Manufacturers

EASTERN EUROPEAN EXPANSION SKILL VS. LUCK THOSE GIGANTIC SLOTS G2E WRAP UP

November 2016 • Vol. 15 • No. 11 • $10

Legends & Visionaries The new Ainsworth opens U.S. office and eyes global market growth

Seminole SUCCESS

Hard Rock casino brand now spans America and the world

Young &

Restless GGB’s annual

40 Under 40

highlights up-andcoming leaders

GGB_Aug.indd 1

7/11/2016 3:22:09 PM

©2016 MOTÖRHEAD. ALL RIGHTS RESERVED. LICENSED BY GLOBAL MERCHANDISING SERVICES LTD.

CONTACT US AT SALES@NETENT.COM

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CONTENTS

Vol. 15 • No. 11

november

Global Gaming Business Magazine

38 COVER STORY Ainsworth in America

COLUMNS

Founder Len Ainsworth was the guest of honor at the ribbon-cutting for the new Las Vegas headquarters of Australian slot manufacturer Ainsworth Game Technology, an event that topped off a heady two years in which the company has spread its games to most North American gaming jurisdictions.

14 AGA Playing It Safe Geoff Freeman

16 Fantini’s Finance End of the World As We Know It Frank Fantini

By Frank Legato Cover and right: Ainsworth founder Len Ainsworth and Nevada Governor Brian Sandoval joined with company and public officials and friends to cut the ribbon on the impressive Ainsworth Las Vegas office in September.

36 Table Games Waiting For Innovation Roger Snow

DEPARTMENTS FEATURES

20

40 Under 40, 2016

GGB, G2E and the Innovation Group kick off the annual “40 Under 40” program honoring 40 young emerging leaders of the gaming industry with 10 profiles of future industry leaders.

By Marjorie Preston, David Rittvo, Patrick Roberts and William Sokolic

30

Giants in the House

Giant-format slot machines from several top manufacturers prove that the “Big Bertha” style of slot is still a big earner.

By Dave Bontempo

44 Seminole Rocks An agreement to consolidate all Hard Rock franchises provides the latest good news for the burgeoning business of the Seminole Tribe of Florida.

By Dave Palermo

54 Building Eastern Europe A special report on the Eastern European casino market, and the prospects of new large-scale integrated resorts in the near future.

By Michael Vanaskie and Cameron Steinagel

58 G2E 2016:

A Wrap

A look at the 2016 edition of the Global Gaming Expo, including a recordbreaking exhibit floor and a constantly improving education program.

By Frank Legato

64 Best Tech A look at the winners of GGB’s Gaming & Technology Awards for 2016, which recognized the industry’s most innovative companies at the G2E show.

6

The Agenda

8

By the Numbers

10 5 Questions 12 Gaming Education

18 AGEM 49 Frankly Speaking

60 New Game Review

62 Goods & Services 65 People 66 Casino Communications With Russell Sanna, Executive Director, National Center for Responsible Gaming

Our monthly section highlighting and analyzing the emerging internet gaming markets.

Feature 50 Skill or Luck?

Daily fantasy sports and online gaming are leading gaming regulators to set up specific tests to establish rules based on the element of skill vs. chance in a game. By Steve Ruddock

4

Global Gaming Business NOVEMBER 2016

53 iGames News Roundup

TM

A NEW SPIN ON PIT PROFITS #PlayAGS

©2016 AGS LLC. All Rights Reserved. AGS and design is a registered trademark of AGS LLC.

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THE AGENDA

Do As I Say, Not As I Do Roger Gros, Publisher

few years ago, Jennifer Shasky Calvery, the director of the Justice Department’s Financial Crimes Enforcement Network (FinCEN), came to G2E and dressed down the casino industry for its lack of transparency when it came to cash transactions. She scolded casinos for not being more forthcoming about the sources of the funds that are deposited by players.

This address clearly shook the industry to its core. She was suggesting that virtually everything the industry was doing was wrong and needed to be improved.

Later, FinCEN proposed dropping the slot jackpot threshold from $1,200 to $600. That’s not even considering that the $1,200 threshold was established in 1978, and $1,200 in 1978 dollars isn’t even close to $1,200 in 2016 dollars.

Luckily, the industry was able to dodge that bullet, but Calvery’s message was loud and clear: Clean up your act.

Now to be sure, casinos can’t account for every penny that their customers deposit to gamble. But undoubtedly, they can do better than to simply turn their heads and deny, deny, deny.

But when Calvery stepped down from FinCEN, she made a move that would never have been accepted in any regulated gaming jurisdiction. She immediately jumped to British bank HSBC Holdings Plc., taking a leading position in that company. FinCEN has the responsibility of regulating banks, so like gaming, there should be some kind of “cooling off” period, but there is not. So Calvery can just walk out the back door of FinCEN into the front door of HSBC. But what makes this move even more egregious is the fact that the DOJ in 2012—during Calvery’s reign—fined HSBC a record $1.92 billion for laundering $850,000 for a Mexican drug cartel. Certainly, Calvery brings some credibility to HSBC, but that credibility is sullied by the haste with which she took the job.

But FinCEN has not gone away. At a Las Vegas conference in September, a representative of the Justice Department chided casinos and card clubs to uphold the Bank Secrecy Act. Some high-profile cases most likely spurred that warning. A $1 million fine for violations of anti-

A

6

money laundering regulations was levied against the former owners of the Sparks Nugget in Reno, and the longtime owners of the legendary Normandie card club in California were forced out after many financial reporting violations were uncovered. Other violations at California card clubs have also been revealed in the last year.

So casinos must do everything they can to abide by the regulations, as confusing as they are.

For example, casinos are required to file Suspicious Activity Reports for anyone who moves at least $5,000 through the cage in one day. But the caveat that the casino must have a reason to suspect illicit activity makes this particularly perplexing.

Last month, William Hill opposed a strengthening of the anti-money laundering reporting required in Nevada for sports books. A complaint was filed by tiny Mesquite Gaming, which operates two casinos in Mesquite. They compete against another casino in the market that takes advantage of a loophole in state regulations that allows them to avoid reporting $10,000 winning sports bets.

William Hill objects, saying that there have been no violations and the complaint is more about competition than regulation.

Here’s where the casino industry needs to go the extra mile to avoid the scrutiny from FinCEN. If you wait for a violation to occur, there’s going to be repercussions. If you have regulations in place to prevent violations, FinCEN will most likely be more amenable to logical explanations.

FinCEN and the DOJ can certainly overreach when it comes to transaction reporting by casinos, as evidenced by their attempt to change the jackpot threshold to $600. And those things should be opposed by the industry because they serve no purpose.

But with today’s electronic transactions, it’s getting easier to track this activity, and FinCEN is going to want to see what’s occurring with cash coming in and going out of your cage. So let’s get used to providing them with more and more information, so the casino industry will achieve the goal of a transparent business with the integrity for which we all strive.

Global Gaming Business NOVEMBER 2016

Vol. 15 • No. 11 • November 2016 Roger Gros, Publisher | rgros@ggbmagazine.com twitter: @GlobalGamingBiz Frank Legato, Editor | flegato@ggbmagazine.com twitter: @FranklySpeakn Monica Cooley, Art Director | cooley7@sunflower.com John Buyachek, Director, Sales & Marketing jbchek@ggbmagazine.com Floyd Sembler, Business Development Manager fsembler@ggbmagazine.com Becky Kingman-Gros, Chief Operating Officer bkingros@ggbmagazine.com Lisa Johnson, Communications Advisor lisa@lisajohnsoncommunications.com twitter: @LisaJohnsonPR Columnists Frank Fantini twitter: @FantiniResearch Geoff Freeman twitter: @GeoffFreemanAGA | Roger Snow Contributing Editors Dave Bontempo | Dave Palermo twitter: @DavePalermo4 Marjorie Preston | David Rittvo| Patrick Roberts Steve Ruddock twitter: @SteveRuddock | Cameron Steinagel William Sokolic| Michael Vanaskie

EDITORIAL ADVISORY BOARD Rino Armeni, President, Armeni Enterprises

• Mark A. Birtha, Senior Vice President & General Manager, Hard Rock International

• Julie Brinkerhoff-Jacobs, President, Lifescapes International

• Nicholas Casiello Jr., Shareholder, Fox Rothschild

• Jeffrey Compton, Publisher, CDC E-Reports twitter: @CDCNewswire

• Geoff Freeman, President & CEO, American Gaming Association twitter: @GeoffFreemanAGA

• Dean Macomber, President, Macomber International, Inc.

• Stephen Martino, Vice President & Chief Compliance Officer, MGM Resorts International, twitter: @stephenmartino

• Jim Rafferty, President, Rafferty & Associates

• Thomas Reilly, Vice President Systems Sales, Scientific Games

• Steven M. Rittvo, Chairman/CEO, The Innovation Group twitter: @InnovGrp

• Katherine Spilde, Executive Director, Sycuan Gaming Institute, San Diego State University

• Ernie Stevens, Jr., Chairman, National Indian Gaming Association twitter: @NIGA1985

• Roy Student, President, Applied Management Strategies

• David D. Waddell, Partner Regulatory Management Counselors PC Casino Connection International LLC. 901 American Pacific Drive, Suite 180 • Henderson, Nevada 89014 702-248-1565 • 702-248-1567 (fax) www.ggbmagazine.com The views and opinions expressed by the writers and columnists of GLOBAL GAMING BUSINESS are not necessarily the views of the publisher or editor.

Copyright 2016 Global Gaming Business LLC. Henderson, Nevada 89014 GLOBAL GAMING BUSINESS is published monthly by Casino Connection International, LLC. Printed in Nevada, USA. Postmaster: Send Change of Address forms to: 901 American Pacific Dr, Suite 180, Henderson, NV 89014 Official Publication

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BY THE

NUMBERS

Dog DayS of SuMMer a

ugust 2016 was a declining month compared to August 2015 for U.S. slot revenue. The calendar lost a Saturday and Sunday, the main factor in the decline.

For most regional properties, the net effect of the calendar change equated to a range of decline of 3 percent to 4 percent relative to last year. The drivers for the casino industry: employment, income and gas prices are in a favorable position although we see gas prices gaining. Note that with inflation tracking at +2 percent to +3 percent there is little “real� wage/income growth. We are retaining our 2016 forecast range for growth between 1 percent and 3 percent. Prior to July 2016, YTD had maintained a 2 percent growth rate. As of August, that lead drops to 1.4 percent.

Charts courtesy of Market Monitor by Manfredi Consulting To receive a monthly update on U.S. Slot revenues, visit ManfrediConsulting.com.

SportS BaSh he Nevada sports betting industry is changing, but when you look at the history of the last 20 years, the change has been slow but steady. The drop is

t

increasing but the narrow margins dictated by the win percentage is challenging for even the best sports book operator. Charts are courtesy of the Center for Gaming Research at the University of Nevada, Las Vegas.

Drop by Sport, 1995-2015

Sports Betting Win By Sport (percentage), 1995-2015 This is the percent of total amount bet that casino won in each category.

30%

$375M $250M

20%

$125M

10% 1995

2000

2005

2010

Football Basketball Baseball Parlay

8

This is the total amount bet in each sport.

Global Gaming Business NOVEMBER 2016

2015

Other

1995

2000

2005

2010

Football Basketball Baseball Parlay

2015

Other Total

®

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NUTSHELL

“They

5Questions

Said It”

“They do look like slot machines; let’s be honest.

But they are bingo machines. We operate legally and we believe we’re on sound legal footing.”

Blaine Graboyes CEO, GameCo

o

ne of the most groundbreaking products at September’s G2E was the Videogame Gambling Machines introduced by GameCo. The cutting-edge company presented several games that debuted on the casino floor for the first time in October. To hear a full podcast of this interview with CEO Blaine Graboyes, visit GGBMagazine.com.

1 2 3

GameCo’s signature product is a video gambling machine. Explain what that is, and how it works.

Our core product is called the Videogame Gambling Machine, or VGM. It’s an arcade-style cabinet that features a custom controller that we designed in partnership with Suzo-Happ. And it allows gamers to play video games on the casino floor. We build under the GLI-11 standard, which is the standard that governs most slot machines and electronic gaming machines, and we’ve built a platform that makes it very easy to adapt existing video games to play in the casino environment.

—Chuck McDonald, spokesman for the AlabamaCoushatta Tribe, on the attempt by the state of Texas to close the tribe’s Naskila Gaming Center based on the argument that its 365 Class II electronic bingo machines are really illegal slot machines

CALENDAR

What kind of games are we talking about here?

We’re really interested in appealing to all gamers. So, everything from action and adventure to sports racing, with some casual games as well. We’ll have our first game at Caesars properties in Atlantic City in October.

And we’ll have another game that we’ll release before the end of this year, and starting in 2017, we’ll release approximately one game a month.

November 7-9: Malta iGaming Seminar (MiGS) 2016, Hilton Malta. Produced by the Malta Gaming Authority. For more information, visit MaltaiGamingSeminar.com.

How do the payouts work?

Currently we support seven bet denominations: 50 cents, $1, $2, $3, $5, $10 and $20. Our machine works a lot like a slot machine or EGM; it has a bill validator and a printer. So, I fund the machine with cash or a ticket, I make my bet. I have 45 seconds in our first game, Danger Arena, to play. And I’m fighting danger bots, or robots. If I take out six or more bots, I’m in the money. Ten bots, I get the highest payout. At the core of our product is our patented math model. We were just awarded our first patent on it about a month ago. And the patented math model balances a player’s skill with the game design, so we can deliver the same return-to-player as a slot machine.

There’s obviously a little bit of volatility in there. More skilled players are going to win the highest possible payout more often, but even unskilled players have an opportunity to win. We actually shy away from the terms “easy” and “difficult,” and we talk about achievability. We build our games so that players are able to achieve the highest possible payout in each game session. And I like to describe it a lot like blackjack or poker. Our first game has 10,000 maps in it, and a player is going to play in one of those 10,000 maps. Similar to blackjack, where there’s a little bit more than 10,000 possible deals, and it’s up to my skill to use those cards, or in our game, that map, to get the highest possible payout.

November 9-11: SAGSE Buenos Aires, Costa Salguero, Buenos Aires. Produced by Mongraphie. For more information, visit Monographie.com.

4 5

Is there a random number generator involved in this as well?

Yes, we are a Class III game, and so there is an RNG, or a random number generator that lives in the game.

And really, all that it’s doing is picking the map that you’re going to play.

Was it difficult for you to explain this to regulators?

I’ve been making video games for 20 years now, but I was new to the gaming industry. It took me about a year to understand the regulations and how to communicate with regulators. Now, I would say, we feel very comfortable with it. The company has grown; we now have a compliance officer that helps us with the process as well. But yes, it is a bit of a challenge. The regulators have built their process to approve slot machines and poker and blackjack.

A year ago, we engaged with GLI to help author an opinion paper on our math model and game design, and they came back with the opinion that their GLI-11 standard accommodated our game design. Since then, we’ve been working with GLI and the New Jersey Division of Gaming Enforcement to help them understand our game design and go through the compliance and testing process. There’s been a lot of learning there, and one of the things I would say as a new company in the gaming industry, there’s no playbook.

What I appreciate, in working with the regulators, is they’ve been very supportive and collaborative in the process. They work with us on an ongoing basis.

10

Global Gaming Business NOVEMBER 2016

November 15-17: Macao Gaming Show, the Venetian Macao. Produced by the Macau Gaming Equipment Manufacturers Association (MGEMA). For more information, visit macaogamingshow.com.

November 20-22: Brazilian Gaming Congress, Sao Paulo, Brazil. Produced by Clarion Gaming. For more information, visit brasiliangamingcongress.com.

November 23-24: Balkan Entertainment & Gaming Exposition and the Eastern European Gaming Conference, Inter Expo Center, Sofia, Bulgaria. Produced by the Bulgarian Trade Association of Manufacturers and Operators in the Gaming Industry. For more information, visit BalkanGamingExpo.com.

December 5-7: University of Arizona’s Global Symposium on Racing & Gaming, Tucson, Arizona. Produced by the University of Arizona Race Track Industry Program.

For more information, visit ua-rtip.org/symposium.

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GAMING EDUCATION

The Name Game Operationalizing your brand as more than a logo or tag line

By Michael Perhaes

W

e should all know by now that a brand is much more than a logo or a tag line.

A brand is a promise we make and keep to our customers, and its successful operationalization enables our success.

But what do we mean to operationalize a brand? In its simplest guise, this is the process for how we bring a brand to life, and infuse the customer’s journey with its presence. I’ve been giving this a lot more thought lately as our flagship property, Wind Creek Casino and Hotel in Atmore Alabama, undergoes a branding facelift.

Our original company logo featured a W encased in a square (rather than a circle). The logo typeface was a slightly italicized serif font, and the name “Wind Creek” was rendered as a single word. We made small adjustments over the years to accommodate various marketing channels, but ultimately settled on a wholesale redesign when it became apparent that the old logo was difficult to read on the small screens of mobile devices.

Optimizing media for mobile consumption is a tremendous challenge, but as all marketers are now acutely aware, the mobile device and mobile messaging are driving much of marketing communication. We responded accordingly, beginning with our corporate identity program.

In its very first manifestation, the refreshed logo design was created as a branding element for WindCreekCasino.com, our free-to-play social casino where customers can play online games for free and earn real-world rewards.

The circle ‘W’ and a sans serif font treatment were deployed first as a practical solution because its elements were still legible even when rendered within just a handful of pixels on a phone.

The mobile version of the social casino would draw the most traffic, and our brand visibility on the mobile devices would now have the largest share of consumers. It only made sense at that juncture to keep going with our brand refresh, and capitalize on that brand equity we would soon earn online. This is a good example of the online brand tail wagging the analog dog. The smallscreen utility of the new logo treatment inspired us to embark on an enterprise-wide rebranding. The physical manifestation of the brand is a powerful force, but, of course, signage is only one component of its operationalization.

How are you delivering your brand promise to your customers? Have you created physical assets that support your promise? A brand voice needs to be confident with a justifiable and supportable promise to your customers, and the brand experience must be both visceral and salient. In an ideal scenario, a resort will first identify its idealized customer, its target beneficiary, then build the necessary physical assets to deliver the promised experience. The last step is creating and delivering a marketing communication program that attracts that customer.

MGM Grand is without a doubt among the best-known casino brands in the world. Prior to 2005, the resort marketed itself as the “City of Entertainment.” Its size and diversity of offerings were certainly “city-like.”

12

Global Gaming Business NOVEMBER 2016

But “Entertainment” was a not a plausible brand pillar; there is nothing unique about a Las Vegas resort offering entertainment. However, this mega-resort could support something obvious and tangentially related, the promise of “Maximum Vegas.” That is: everything and anything that you can experience in Las Vegas, you can experience at MGM Grand— but grander, bigger, better.

Las Vegas ranks among the most competitive markets in the world. Developing a breakthrough communication platform to position the property and provide a message that uniquely differentiated the resort was my mandate. Beginning in 2005 at the start of my tenure as assistant vice president of marketing, we assembled the marketing communications to deliver “Maximum Vegas.”

With our lead creative agency and our in-house advertising team, we began to build the campaign. To fully operationalize this new position and to breathe life into “Maximum Vegas,” a commitment was made by senior executives to invest in amenities that could further deliver on that promise. In order to truly deliver a “Maximum Vegas” experience, MGM Grand would have to expand its offerings, and provide more amenities appealing to a broader set of customers.

MGM Grand had become increasingly reliant on the drive-in, valueminded visitor from southern California; it was time to “fire” some of those customers, and attract the higher-spending, higher-income visitor. Management created new offerings to draw in that younger, hipper (and richer) demographic. More suites and better-appointed rooms were carved out to create a “W-like” boutique hotel known as “West Wing” within the hotel, along with the construction of Skylofts at MGM Grand. In tandem with an upgraded room product, then-property President Gamal Aziz lured the renowned chef Joel Robuchon out of retirement to open two signature restaurants at MGM Grand. His fine-dining restaurant at MGM Grand is still the only Michelin three-star restaurant in the Southwest.

With a revitalized luxury room product, supported by high-end restaurants led by an eclectic group of well-known celebrity chefs, augmented by a wide array of options appealing to our loyal mass customer, MGM Grand now delivers “Maximum Vegas.”

For Wind Creek, our tag line, “Find Your Winning Moment,” describes the customer journey. A winning moment is not just hitting a jackpot at one of our gaming machines. It could be a day in our spa with your friends, a romantic dinner at a restaurant with your spouse or a day bowling or watching movies with your family.

In myriad ways, Wind Creek’s world-class amenities allow our team members to create winning moments. Each encounter is an opportunity to deliver world-class customer service and render unforgettable winning moments for our customers. In this way, we can bring our brand to life and convincingly deliver and keep our promise to our customers.

Michael Perhaes is vice president of corporate marketing for Wind Creek Hospitality.

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AMERICAN GAMING ASSOCIATION

Playing It Safe Former law enforcement leaders agree: It’s time to repeal federal sports betting ban

B

By Geoff Freeman, President & CEO, American Gaming Association

ack in April 2015, the American Gaming Association launched its “Stop Illegal Gambling—Play it Safe” initiative to expose the massive illegal gambling market that preys on consumers and siphons vital tax revenue from communities. Shortly thereafter, we formed the Illegal Gambling Advisory Board to guide our efforts. After all, who better than the foremost law enforcement leaders to inform this initiative?

We are incredibly fortunate for their insights and expertise, and earlier this summer, members of the board led a first-ever Law Enforcement Summit in Washington to focus on the specific issue of illegal sports betting. Given the very serious competing priorities law enforcement personnel face, we hoped to have a dozen or so people in the room. Instead, nearly 35 law enforcement leaders from every level—federal, state, county, local—made a point to be part of the discussion about the $150 billion illegal market. To me, that was a clear sign that sports betting is an issue that can no longer be ignored.

Following the Summit, the board put together “Law Enforcement Summit on Illegal Sports Betting: After-Action Report,” which draws the following conclusions: 1) The Current U.S. Approach to Sports Betting Is Failing. Under the 1992 Profes-

sional and Amateur Sports Protection Act (PASPA), federal law largely prohibits sports betting outside Nevada. Instead of curbing illegal betting, the law has driven sports betting underground, creating a thriving, $150 billion$450 billion illegal market with no consumer protections, no tax benefits for communities and no safeguards for sport integrity.

2) Illegal Sports Betting Fuels Criminal Enterprises. Under PASPA, hundreds of

billions in illegal sports betting proceeds are funneled to criminal enterprises and used to finance a range of criminal activity. This illicit activity drains law enforcement resources, hindering their ability to fight crime and protect our nation’s citizens.

14

Global Gaming Business NOVEMBER 2016

3) Open, Transparent, Regulated Sports Betting System Boosts Law Enforcement Oversight. A regulated sports betting system aids law

enforcement efforts and can protect consumers.

The United Kingdom and other international markets demonstrate how legal, regulated sports betting can create a powerful partnership between the gaming industry, the leagues and law enforcement. This transparent system provides effective tools to monitor, investigate and shut down illegal activity.

4) States Must Play a Central Role. The federal ban on sports betting interferes with states’ traditional role in regulating gambling. And unfortunately, due to the current law, states lack key tools to protect consumers.

5) Time to Repeal Federal Sports Betting Ban.

Many law enforcement leaders believe it is time to reconsider the national ban on sports betting and allow states to determine if they wish to regulate this form of wagering.

As we make the case to Congress why PASPA is failing and should be repealed, no voice is stronger than law enforcement’s. Once campaign season ends and Congress digs into a slew of legislative issues, AGA will lead a broad coalition of stakeholders in mounting a full-court press with legislators.

More and more voices are joining this campaign, from mayors across the country to state legislators who want their states to have the choice to offer safe, regulated sports betting.

Broadcasters and advertisers have every reason to support legalized sports betting, as recent Nielsen Sports research shows. In September in Las Vegas, former NBA Commissioner David Stern explained why it’s a win for sports leagues and players, too.

As I said after the 3rd Circuit ruled against New Jersey, it’s Congress’ responsibility to fix the failed law that it created nearly 25 years ago. We plan to make sure that happens.

Follow Geoff Freeman on Twitter at @GeoffFreemanAGA.

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FANTINI’S FINANCE

End of the World As We Know It

How long can the casino industry grow, and where?

Q

uestion: Are we nearing the end of growth in the casino industry?

If so, what are the investment

implications?

The end of growth seems to be divided into two mass geographies: the United States and the rest of the world.

It has become common to discuss whether certain regions of the U.S. have reached saturation, always with the proviso that some veins of gold remain untapped, such as Georgia, the city of Chicago, or the motherlode of Texas.

That thesis appears likely. Certainly, nobody’s going to open half a dozen casinos in Atlantic City, and while New York state could add several casinos around the Big Apple, they’re likely to get much of their business by cannibalizing casinos in New Jersey, Pennsylvania and Connecticut.

This new environment is already playing out in many jurisdictions, with new properties often doing more cannibalizing than growing of their markets.

Even adding a new casino here or there just adds earnings in increments. It’s hard to find needle-movers in the U.S. So where is the growth, and growing returns, for casino investors? As with other mature industries, growth is coming in nibbles, from mergers, by financial engineering, and in returning capital to shareholders.

Here are some of the areas: • Modifying the business model. Casinos are evolving into entertainment centers where people increasingly can spend money on lots of forms of entertainment outside the gaming floor—shopping, dining and shows are old standbys. They long ago evolved along the Las Vegas Strip into becoming profit centers. Now that focus is moving to regional casinos.

More elaborate variations on this theme include uber-nightclubs, gaming lounges within casinos, and even virtual reality.

As an aside, it was interesting during a tour of IGT’s booth at the recent G2E that an investor asked how a person can bet on the virtual reality game being demonstrated. You can’t bet yet, but it is an amenity for the casino, was the response.

16

By Frank Fantini

Move over, Dave & Buster’s.

• Acquisitions, the classic path to growth in a mature industry.

The pace of acquisitions has accelerated in both the casino and supplier sides of the industry.

One reason is that, absent growth, companies can squeeze out higher profits by reducing costs.

• Opening new revenue streams. In addition to more stores and restaurants, casinos increasingly are going online to attract social gamers, and hope to cross-market them into brick-andmortar casinos.

Add to this new forms of betting, or spectating, such as eSports.

• Financial engineering. In gaming, this is taking the shape of companies selling or spinning off their real estate to real estate investment trusts.

The idea is to unlock the value inherent in the real estate and to give shareholders a recurring return in the form of dividends.

So far, three different models are being tried: —The spinoff of real estate into an entirely new company, such as Gaming & Leisure Properties created from Penn National.

—Selling properties to a REIT in a lease buyback, such as Pinnacle with, in its case, the added wrinkle of shareholders also getting stock in the REIT. —MGM creating a REIT for some, but not all, of its properties, at least initially.

One issue for the surviving operating companies in the REIT model is whether their new lease obligations so reduce EBITDA as calculated by lenders that future borrowing, thus growth, is dampened.

However, in the near term, REITs do unlock value.

• Dividends and share repurchases. At present, few casino companies pay dividends, but dividends are growing—including indirectly as casino shareholders also become shareholders of REITs, which are required to pay out 90 percent of their profits in dividends.

To date, buying back shares has been the preferred way to return capital to shareholders. Share repurchases are not recurring as dividends tend to be, can be made opportunistically, and do not

Global Gaming Business NOVEMBER 2016

generate income tax obligations for shareholders.

However, share repurchases can prove inefficient, as many companies dilute their effect by generously awarding stock options to management, and by the tendency of companies to buy high in a kind of perverse, upside-down cost-dollar averaging.

In short, we expect to see more dividend payers as growth options narrow.

Growth opportunities seem to be greater outside the U.S., as gaming participation is so low almost everywhere else.

This opportunity has not gone unrecognized as casino operators try to rush into emerging markets, especially those attempting to tap into China— Philippines, Korea, Australia, Cambodia, Russian Far East, even the tiny American territory of the Northern Mariana Islands in the remote South Pacific.

The problem with these markets is that they are nibbling at the corners of China. And that, as the early underperformance in the Philippines might reveal, is not going to be a needle-mover for the big international operators who have basically chosen to stay away.

What would move the needle for them are big and wealthy countries such as Japan and Brazil embracing the Singapore model of a limited number of integrated resorts. As of this writing, there is hope that Japan will do just that before this year is out, though that’s been a perennial hope, and Brazil might also act soon.

So, where does that leave investors? From our perspective, in the U.S. it means trying to find companies with credible and significant growth stories, perhaps made more attractive by dividend programs.

Internationally, it means going elephant hunting. If a handful of Singapore-like licenses come up, it will be big game to pursue for the likes of Las Vegas Sands, Genting, Wynn and MGM Resorts.

But it’s a risky bet, and as Singapore also showed, not everyone bags an elephant.

Frank Fantini is the editor and publisher of Fantini’s Gaming Report. A free 30-day trial subscription is available by calling toll free: 1-866-683-4357 or online at www.fantiniresearch.com.

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p. 18 AGEM:Layout 1 10/17/16 7:19 PM Page 18

AGEMupdate

AGEM MEMBER PROFILE Century Gaming Technologies manufactures gaming devices with special emphasis on the Nevada locals gambling market. As a premier route operator as well as a manufacturer, Century’s first objective is to build unique games for its own route customers.

Century is also now branching out and offering its product directly to Nevada non-restricted casino operators as well.

Century’s manufacturing plans include an emphasis to greatly expand the company’s keno and slot content options over the next 12 months. These new products have been developed specifically for the Nevada locals market, and company officials are excited to include them in the product mix on the gaming devices the company manufactures for Nevada. Century also is building a new promotional product to enhance its existing i3 promotional systems designed for the convenience store market. This new device, called “Cash Box Frenzy,� will make everyone in the building keenly aware of a promotional event when it is triggered by a game win event.

Cash Box Frenzy resides in a large cylinder above the machines, and its light display, music, sirens and blowing cash are sure to attract everyone’s attention.

Century’s Gamblers Bonus has been the flagship product of the company for nearly 20 years.

Gamblers Bonus is the largest and most recognized locals-oriented players club in Nevada among restricted-license gaming locations. With more than 75,000 members able to log in at nearly 300 locations statewide, being a part of the Gamblers Bonus family gives any establishment instant credibility among a huge number of local gamblers. Those gamblers are loyal to the only club in Nevada offering true “Cash for Play� and arguably the most popular video poker bonusing product, Century’s patented Four of a Kind Bingo bonus.

The new interactive Gamblers Bonus Advantage system has many options, but two of its many new features stand out. There are multiple different interactive games customers can play when they hit a qualifying hand, from pig races to balloon burst games to two different spinning prize wheels, all of which can be made scalable according to bet size.

Additionally, iGBA is the first and only automatic bonusing system that can be set to trigger independently on different games, including bonusing keno, slot and even blackjack players.

For more information, visit centurygamingtechnologies.com or contact Tim Cogswell, 702-2707500, tcogswell@cgtnv.com.

18

Global Gaming Business NOVEMBER 2016

OCTOBER 2016 KEY BOARD OF DIRECTORS ACTIONS • Victor Rocha, conference chair for the National Indian Gaming Association trade show, gave a short presentation at the October meeting. He has been brought in to review the current trade show setup to make it better for suppliers and visitors to the show. The event’s focus will be back on the exhibition floor, and he is working with tribes throughout the U.S. to bring more buyers to the show. He confirmed the show’s new home will be in San Diego from 2017 to 2021, except in 2018 when it will move to Las Vegas for one year. Phoenix will no longer be part of the rotation. • The AGA’s NextGen Policy and Regulatory Initiative was introduced prior to G2E with its first inperson meeting held at the show. AGEM is participating with this group, which will promote nextgeneration technology and regulatory reform. AGEM previously contributed funding to launch the University of Nevada, Las Vegas International Center for Gaming Regulation that has a focus to consolidate regulatory reform issues. There is a need for a collective effort between all groups to ensure success, and AGEM will continue to work alongside both groups to uphold this. • The recent G2E exhibition saw many AGEM members exhibit at the show. The new layout proved popular to everyone, providing a bigger, more visually exciting show. Attendance grew from 2015 by 7 percent, as did exhibitor space by 8,000 square feet. All the signs point to an even better show in 2017, with over 70 percent of the floor already reserved. • Prior to G2E, AGEM announced the winners of the inaugural Memorial Awards honoring Jens Halle and Peter Mead. The award ceremony took place on the show floor on September 28 with industry veterans Len Ainsworth and Howard Stutz being recognized by a notable crowd, as worthy first winners.

The success of this first event has enabled AGEM to build and promote it going forward. • AGEM welcomed two new members in October, bringing the total to 150 members. Gaming Arts, a bingo and keno technology provider with a large presence in Las Vegas, was voted in as a Bronze memAssociation of Gaming Equipment Manufacturers ber and Taft Stettinius & Hollister, a law firm based in Chicago covering every area ofSeptember law including2016 Selected positive contributors to the September 2016 Index posted a modest increase in gaming, he wasAGEM approved as an associate member.

AGEM Index included the following: September 2016 after relinquishing 8.29 points in August 2016. The composite index stood at 306.85 points at the close of the

UPCOMING EVENTS month, which represents an increase of 20.46 points, or

Aristocrat

Technologies (ASX) contributed 6.16 points due to a 4.7-percent increase in stock price to AU$15.81.

when compared to August 2016. The •7.14 Oncepercent, again, the AGEM Cup Golf Tournament and Holiday Reception will be hosted on Friday, NoAGEM Index reported a year-over-year increase for the 12th consecutive month,Ridge rising Country 123.51 points, 67.4 Nevada.

Konami Corporation (TYO: 9766) stock vember 18, at Dragon Club,orHenderson, The tournament will bereported made upa of percent, when compared to September 2015. price of ÂĽ3,895 (+6.57 percent) and contributed 10 foursomes in a two-man team competition. A holiday reception will take place after the competi5.71 points.

During the latest period, nine of the 13 global gaming tion for golfers and non-golfers to attend. equipment manufacturers reported month-to-month With a stock price of $11.27 (+36.61 percent), increases in stock price, with three up by more than 10 percent. Three manufacturers reported decreases in stock price during the month, while Galaxy Gaming reported a flat performance.

AGEMindex

Scientific Games (SGMS) contributed 4.27 points to the overall index.

Selected negative contributors included the following:

The AGEM Index posted a modest increase in September 2016 after relinquishing 8.29 points in August 2016. a stock price of $63.01 (-2.04 percent), Crane The composite broader stock mixed at results in of The indexmarkets stood atreported 306.85 points the close theWith month, which represents an increase of 20.46 Co. (CR) contributed negative 0.89 points.

September 2016. The S&P 500 reported a month-topoints, or 7.14 percent, when compared to August 2015.

The AGEM Index reported a year-over-year increase for month decrease of 0.1 percent, falling to 2,168.27.

Astro Corp.

(TW: 3064) contributed2015. negative 0.01 the 12th consecutive month, rising 123.51 points, or 67.4 percent, when compared to September During Additionally, the Dow Jones Industrial Average decreased points due to a 2.16-percent decline in stock price to 0.5 latest percent to 18,400.88, but13 theglobal NASDAQ increased 1.9 the period, nine of the gaming equipment manufacturers reported month-to-month increases in NT$34.00. percent during the period to 5,213.22. stock price, with three up by more than 10 percent. Three manufacturers reported decreases in stock price during the month, while Galaxy Gaming reported a flat performance.

Note: Daktronics, Inc. is no longer reported in the index.

AGEM

Exchange: Symbol (Currency)

Stock Price At Month End Percent Change Sep-16 Aug-16 Sep-15 Prior Period Prior Year

Index Contribution

Nasdaq: AGYS (US$)

11.12

11.05

11.12

0.63

-

0.02

Ainsworth Game Technology

ASX: AGI (AU$)

2.25

2.21

2.80

1.81

(19.64)

0.25

Aristocrat Technologies

ASX: ALL (AU$)

15.81

15.10

8.61

4.70

83.62

6.16

Taiwan: 3064 (NT$)

34.00

34.75

23.60

(2.16)

44.07

(0.01)

(2.04)

Agilysys

Astro Corp.

Crane Co. Everi Holdings Inc. Galaxy Gaming Inc. Gaming Partners International

NYSE: CR (US$)

63.01

64.32

46.61

35.19

(0.89)

NYSE: EVRI (US$)

2.39

2.11

5.13

13.27

(53.41)

0.25

OTCMKTS: GLXZ (US$)

0.46

0.46

0.24

-

91.67

Nasdaq: GPIC (US$)

10.60

9.95

10.00

6.53

6.00

0.06

-

NYSE: IGT (US$)

24.38

22.83

15.33

6.79

59.03

3.94

INTRALOT S.A.

1.04

0.88

1.70

18.18

(38.82)

0.69

Konami Corp.

TYO: 9766 (ÂĽ)

3,895

3,655

2,583

6.57

50.79

5.71

Nasdaq: SGMS (US$)

11.27

8.25

10.45

36.61

7.85

4.27

Nasdaq: TACT (US$)

7.48

7.54

9.06

(0.01)

International Game Technology PLC

Scientific Games Corporation Transact Technologies

(0.80)

(17.44)

Change in Index Value

20.46

AGEM Index Value: August 2016

286.40

AGEM Index Value: September 2016

306.85

AGEM is an international trade association representing manufacturers of electronic gaming devices, systems, lotteries and components for the gaming industry. The association works to further the interests of gaming equipment manufacturers throughout the world.

Through political action, trade show partnerships, information dissemination and good corporate citizenship, the members of AGEM work together to create benefits for every company within the organization.

Together, AGEM and its member organizations have assisted regulatory commissions and participated in the legislative process to solve problems and create a positive business environment.

The AGEM Index is published monthly by Association of Gaming Equipment Manufacturers (AGEM) and Applied Analysis | Copyright Š 2016

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The Future’s So Bright

{

Introducing GGB’s 40 Under 40, the compilation of this year’s up-and-coming industry superstars

O

K, if you’re under 40 years old you may not understand the reference in the title of this year’s 40 Under 40 list. But as one of the great one-hit wonders, Timbuk3’s song “The Future’s So Bright, I Gotta Wear Shades,” the 1986 release clearly reflects the positive prospects for the careers of the honorees.

Every year Global Gaming Business has been running the 40 Under 40 feature following the Emerging Leaders program offered at G2E and produced by the Innovation Group. The entire class of Emerging Leaders nominees is invited to a special reception at G2E. “The Emerging Leaders of Gaming program has become the most important vehicle to recognize young leaders in the gaming industry,” says Roger Gros, the publisher of GGB. “With over 100 nominations for Emerging Leaders, the 40 Under 40 list was difficult to choose. It’s a testament to the bright future of these individuals, and we’ve been very gratified by the response of the industry.”

David Rittvo, executive vice president of the Innovation Group, says the reaction to the program has been overwhelming.

}

“Now in its fifth year, the Emerging Leaders of Gaming program with G2E continues to increase in awareness, and along with GGB’s ‘40 Under 40’ feature, recognize a more diverse class of rising industry stars each year,” he says. “The Innovation Group believes that new leadership can serve to invigorate an industry, and we hope this program plays a key role in identifying those with talent and creativity to lead gaming into the future.”

In this month’s issue, GGB presents the profiles of 10 of the 40. In subsequent months, two or three profiles will be featured in every issue until the entire 40 have been profiled on these pages.

Know someone deserving under 40? The nomination process for next year’s Emerging Leaders program—which automatically makes the individual eligible for the 40 Under 40 list—begins in June. Watch the pages of this magazine and the G2E website (globalgamingexpo.com) for notification of the opening of the nomination process. The 40 Under 40 are chosen by the GGB Advisory Board listed in the masthead on page 6.

And thanks to all involved in this year’s Emerging Leaders program and the 40 Under 40 list. We couldn’t be more proud of the recipients.

40 UNDER 40 2016 CLASS 1. Matthew B. Levinson, Chairman and CEO, New Jersey Casino Control Commission 2. Walter Fales, Chief Development Officer, Warner Hospitality 3. Sara Gonso Tait, Executive Director, Indiana Gaming Commission 4. Mike McKiski, Vice President of Sales, Interblock Gaming 5. Patrick Nichols, Senior Vice President of Strategy and Business Development, The Cosmopolitan of Las Vegas 6. Cory Roberts, Associate Publisher, CDC Gaming Reports 7. Grant Eve, Partner, Joseph Eve, CPAs 8. Jeff Morris, Vice President-Public Affairs, Penn National Gaming 9. Kurt Williams, Chief Executive Officer, Casino Cash Trac, LLC 10. Patrick Harris, Senior Associate, TRM Public Affairs 20

Global Gaming Business NOVEMBER 2016

11. Erika Okerberg, Associate, Greenberg Traurig, LLP 12. Neil Erlick, Executive Vice President Business Development, Paysafe 13. Joanne Israel, General Manager, Seneca Buffalo Creek Casino 14. Darion Lowenstein, CMO, Gamblit Gaming, LLC 15. Stephen Maldonado, ITR Manager, Forest County Potawatomi Gaming Commission 16. Jada Yee, Food and Beverage Manager, SaskGaming Corporation 17. Alexander White, Game Producer, International Game Technology 18. Adam Berger, Associate, Duane Morris 19. Mike Trask, Director of Marketing, Ainsworth Game Technology 20. John Hemberger, Senior Vice President of Table Products, AGS

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The Business of Government Whit Askew • Vice President of Government Relations, American Gaming Association

W

hit Askew’s path to gaming wasn’t exactly direct. Arriving in Washington, D.C. with a desire to make a difference, Askew wound up on the staff of House Speaker John Boehner, directing his national political campaigns.

“Those years help me in my day job at the American Gaming Association running the government affairs operations,” he says. “You don’t go to college to learn how to be a casino lobbyist or a trade association advocate. So, the best way to learn is through job experience, working on campaigns, and being in situations you cannot re-create in a classroom.”

Askew joined the AGA six years ago, hired by Frank Fahrenkopf, the former president and CEO of the organization, so he’s had a ringside seat for the changes that have been undertaken since the arrival of current President and CEO Geoff Freeman.

“I’ve seen a remarkable evolution at the AGA in terms of its government affairs and advocacy efforts,” he says. “I’m really proud about the strides the industry and the association have taken, and being a part of that.”

Askew lists Fahrenkopf as one of the reasons he joined the AGA. “To be able to go from one amazing boss in John Boehner to another amazing—and legendary—boss like Frank Fahrenkopf, you couldn’t write a script about that if you tried,” he says.

At the same time, Askew says the approach of his current boss, of being inclusive and speaking to the totality of the industry, corresponds with his own philosophies.

“Geoff’s approach is leadership and his ability to gain consensus to tough issues, and it helps me do my job better each and every day,” he says. “It’s made me a more well-rounded advocate for the gaming industry.

“In the three short years that Geoff has been here, you’ve seen dramatic progress built on the solid foundation created by Frank and his team.”

As a Republican, Askew might be expected to focus directly on that side of the aisle, but he’s more pragmatic.

21. Melani Evans, Director of Corporate Marketing, Affinity Gaming 22. Vlad Dunaevsky, Casino Product Manager, Pala Interactive 23. Cheryl Hanlan, Executive Assistant GM, Sky Dancer Casino & Resort 24. Itay Fisher, Product & Gaming Development Director, Gala Coral Interactive 25. Jordan Seager, Vice President Marketing, Lucky Dragon Hotel & Casino 26. Jonathan Deutsch, Professor, Drexel University Center for Hospitality and Sport Management 27. Dan Whelan, Art Director, Incredible Technologies 28. BJ Bouschor, Vice President of IT, Firekeepers Casino Hotel 29. Angela Bae, Slot Marketing Manager, Aria Resort & Casino 30. James Siva, Tribal Council Member, Morongo Band of Mission Indians

“I’ve seen a remarkable evolution at the AGA in terms of its government affairs and advocacy efforts. I’m really proud about the strides the industry and the association have taken, and being a part of that.”

“I bleed the AGA first,” he says. “Second, I’m a Republican.

“But I’m comfortable walking into any congressional office. I’m an advocate and will work with anyone willing to participate on either side of the aisle on any issue.”

Askew says he’s helping to garner support for the AGA’s effort to legalize sports betting.

“We’ve got a 25-year-old law that has clearly failed,” he says. “And we know it has failed because there have been trillions of dollars wagered illegally on sporting events during that time. The facts speak for themselves.

There’s a thriving black market that fuels illicit activity and harmed the integrity of the games they are trying to protect. This has all happened under a prohibition. We’ve seen this all before. It didn’t work then and it isn’t working now.”

In his advice to young people trying to break into public affairs or a related field, Askew has some simple words.

“Follow your passion,” he says. “Because if you’re not enjoying it on a day-to-day basis with folks you can trust and a team you’re excited to go to work with every day, you probably won’t be as good at your job as you could be. When you follow your passion, you’ll find that you’ll be working with other passionate people and you will all be successful.”

—Patrick Roberts

31. Michael Armenta, Senior Marketing Manager, Chumash Hotel & Casino 32. Wendy Carter, Marketing Director, Choctaw Casino & Resort Durant 33. Ashlee Garnett, Hospitality Consultant, Cintas 34. Justin Quigno, Director of Slot Services, Four Winds Casinos 35. Miki Yeo, Assistant Casino Manager, Marina Bay Sands 36. Tyler Johnson, Director of Slot Operations, Osage Casinos 37. Cathryn Lai, Vice President of Product Management, Gaming Division, Scientific Games 38. Melanie Gross, Head of Online Casino, Caesars Interactive 39. Whit Askew, Vice President of Government Relations, AGA 40. Lovell Walker, Executive Director of Interactive Gaming, MGM Resorts NOVEMBER 2016 www.ggbmagazine.com

21

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40 UNDER 40 2016 Bravura Performance Cathryn Lai • Vice President of Product Management,

Follow the Money

Scientific Games

Kurt Williams • Chief Executive Officer, Casino Cash Trac

P

W

ut together a concert pianist, a rock musician, a busy mother and wife, and a rising star at one of the biggest gaming manufacturers in the world. What do they have in common?

A name: Cathryn Lai. The 38-year-old vice president of product management for Scientific Games is a woman of many interests—and enough talent and energy to excel at all of them.

Her current role encompasses not only product development but market research, financial analysis and sales. “My team talks to operators to make sure we develop viable products that operators and players want,” she says. “We work directly with the advance innovation teams, product development teams and engineering to drive new ideas, to launch and then position them correctly for the market so they’re successful.”

With seismic shifts in the industry—a changing player profile, emerging technologies and more competition than ever—her job also includes a fair amount of forecasting. “We’re not looking at two to three years out. We’re looking industry-wide at long-term trends.

“Nobody has a crystal ball, but Scientific Games has always been an innovative company,” she says. “It’s a risk to be the first to market with new concepts and ideas, but someone has to take the gamble.”

A classical pianist by training, Lai earned a degree in audio engineering and got her MBA while teaching music at DePaul University. She jumped from education to the business world as a product manager for microphone manufacturer Shure Inc. “It was a perfect fit,” she says. “I was applying my business skills and making product decisions, but with products I really love.”

It was a natural transition to WMS Gaming, where she started in 2008.

“I never looked back. Slot machines involve hardware, art, sounds and math. There are so many different, creative, smart elements, and I continually got to apply my business skills.”

She became senior director of product management for Scientific Games after it acquired WMS, and was tapped for the VP role in October.

Lai attributes her rise in part to “a strong network of women who have been great influences for me while I’ve been building my career. People talk about how there are not a lot of women in gaming, but the ones who are there are fantastic. I’ve been lucky to have so many strong advocates to help me build my brand.”

Lai continues to play classical piano, performs with no less than three rock bands, and still finds the time to make fancy lunches for her 5-year-old daughter, “cutting all her food into different shapes and faces.

“That’s 20 minutes when I could be sleeping,” Lai says, “but it’s the nature of how I do things. If I’m committed to it, I’m going to do the best.”

—Marjorie Preston

22

Global Gaming Business NOVEMBER 2016

hen Kurt Williams was working his way up through the tribal casinos of Oklahoma, he began to realize how difficult it was to keep track of all the cash transactions in a hotel casino environment. Spreadsheets filled in manually by employees in clunky Excel programs seemed to be the only answer.

“And tracking was just part of the problem,” he says. “We needed controls, too, and spreadsheets don’t offer a lot of controls for casinos.”

So Williams and his partner Drew Word (his former college roommate) created Casino Cash Trac, a company that automates cash transaction tracking throughout a casino hotel, complete with full reporting and controls.

Williams says it has gotten even more difficult to track since casinos have so many databases—tracking cage/vault transactions, the CMS system, food-and-beverage system… “Now we have kiosks, cash dispensers, promotional kiosks,” he says. “Each casino now can have 10 or 12 databases. Right now, they go to each of those databases, and bring them together through spreadsheets to try to do the audit. Our business intelligence software can bring all the information together to streamline that process.”

Williams has a background in accounting and is a CPA, while Word is a certified fraud examiner. They took a different approach—a debits and credit model.

“We didn’t take the process they already had set up and try to repair it,” he says. “We stepped back and realized that the transactions to and from the cage to the vault were simply accounting transactions. We were able to build a very smooth work-flow process around that. Some systems out there help one department or another, but our process dramatically speeds up the process and benefits every department.”

Casino Cash Trac has been so successful it was named one of the 500 fastest growing companies by Inc. magazine, and the fastest growing company in Oklahoma.

“I can’t imagine a better place for our company to start and grow, and take what we learned in Oklahoma to the world,” says Williams.

Casino Cash Trac software is scalable, says Williams.

“There has to be a return on investment for all software purchases,” he says. “We work very closely with our clients, big and small, to make sure they will get that ROI.” While Williams appreciates the honor of being named one of GGB’s 40 Under 40, he gives all credit to his partners—Word, Blake Doerr and Wanor Franca, along with the other employees in his company.

“We have an incredibly talented team,” he says, “and they deserve this recognition as much as I do. If you don’t surround yourself with the right people, you’re not going to win.”

—Patrick Roberts

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40 UNDER 40 2016 Beyond Belief Sara Gonso Tait • Executive Director, Indiana Gaming Commission

Making Headlines Mike Trask • Director of Marketing, Ainsworth Game Technology

F

ormer East Coast newspaperman Mike Trask relocated to Las Vegas during the city’s last great boom. The veteran reporter, who had worked for both ESPN and the Associated Press, joined the staff of the Las Vegas Sun in 2006, covering news, sports and entertainment.

Then the boom went bust, with the collapse of the housing market, the gaming industry and print journalism. By 2009, like many others in his field, Trask had shifted to marketing. In 2011, after working briefly as a political press secretary, he joined Bally Technologies as senior director of corporate communications. It took all his reportorial skills to learn the complicated new business.

Luckily, he had some great sources.

“It was a steep hill to climb. I remember (Bally executive) Bruce Rowe walking me through a casino, explaining how it works like you’d explain it to a 7-year-old,” Trask recalls with a laugh. “He gave me a list of magazines to read and books that explained how random number generators work. I’ve saved that book and passed it on to others.”

Trask shadowed Laura Olson-Reyes, corporate communications mainstay at Bally, now at Scientific Games. “She’s extremely passionate about this industry and expects the same from anyone on her team,” Trask says. “Laura sets the bar very high.”

In January, after five years at Bally/Sci Games, Trask migrated to Ainsworth Game Technology as director of marketing. His leadership strategy, he says, is “to surround myself with people who are more talented and smarter than I am.

I’m always looking for people I can learn from, and if they have more experience than I do on different levels, that’s great. I believe in putting the right people in the right positions and letting them succeed.”

He also looks for that intangible but essential trait known as passion. “Passion and a good attitude,” Trask says. “Honestly, I’ll take someone with a six skill level and a 10 in passion over someone who’s a three or four in passion with a 10 skill level.”

Since landing at Ainsworth, 34-year-old Trask has dedicated himself to rebuilding the company’s website, adding new video content and creating an app for sales forces on the road.

“It’s been fun, to build something almost from scratch with the full support of people like (Ainsworth North America President) Mike Dreitzer, Director of Sales John Glaser and Senior Vice President of Sales Kelcey Allison,” he says.

“At the end of the day, my reward is to be part of this amazing team.”

—Marjorie Preston

24

Global Gaming Business NOVEMBER 2016

S

ara Gonso Tait has risen meteorically through the ranks of the Indiana Gaming Commission to become the state of Indiana’s chief gaming regulator in a span of five short years. During that time, Tait has distinguished herself as a keen legal mind on issues related to the gaming field.

She strives to ensure that decisions by the commission are rooted in best industry practice and not personal preference.

Tait also has demonstrated her ability to innovate and to promote transparency, which has been welcomed by all entities in the industry.

After graduating from McKinney Law School at Indiana University in 2010, Tait faced a challengingly sparse job market until catching her break by following the advice she’d been repeatedly given: find a good mentor.

That mentor for her was then Executive Director Ernie Yelton of the Indiana Gaming Commission. Through his tutelage and her experience with the IGC, she realized that if she could regulate a casino, she could regulate anything. After starting as a staff attorney with the IGC in 2011, she received several promotions before her current appointment as executive director.

Throughout her career, Tait has navigated her way through environments where she was not just the only woman in the room, but the youngest person in the room, as well. Through these types of experiences,

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2 0 0 0 AT T O R N E Y S | 3 8 L O C AT I O N S W O R L D W I D E˚

she built skills that became invaluable to her career.

One of her most memorable career moments was when she was promoted to general counsel at nine months pregnant. Despite some of the concerns that her well-meaning advisers offered, she proved to the industry—and most importantly, to herself—that not only could she fulfill the demands of a new job role and new motherhood, but she could thrive at both. She has accomplished all of these achievements due to one simple fact: She believed in herself.

Tait is currently tasked with implementing the regulation on fantasy sports, a challenging but compelling topic. With Indiana being only the second state to authorize fantasy sports through legislation, the IGC is truly creating something brand new, a feat which will have a tremendous impact on the industry and the careers of its employees alike.

She describes the culture at the IGC as rewarding in that its employees enjoy their work and take ownership for what they do. Matt Bell, president and CEO of the Casino Association of Indiana, said, when asked about Tait, “Sara brings a unique perspective to the regulatory field. Her leadership will serve as an inspiration to men and women who aspire to the heights of the industry across the Midwest.”

Although Tait maintains a decisive style about her, she also fosters teamwork through a collaborative environment. She is not the typical regulator, given her open-door policy and interests in the ideas of others.

“It is important to promote a spirit of transparency and accountability with each member of my team and members of the industry,” Tait says.

Because she has been so fortunate in the support, mentorship and opportunities she has received, she considers it her obligation to help other young industry professionals. She encourages them to self-advocate and ask for more responsibility.

A transparent interest in learning goes a long way, and Tait now manages a $23 million agency budget while overseeing 200 employees and two police divisions.

—David Rittvo, The Innovation Group

Global Reach The Global Gaming Practice at Greenberg Traurig is not limited to North America With hands on experience in Asia, Latin America and Europe, our 40 attorneys know there is more to understanding gaming law than just operating a casino. Our attorneys have diverse backgrounds in all aspects of gaming company operations. We have experience in working with foreign governments and with regulators worldwide.

The Greenberg Traurig Global Gaming Practice can address casino operations, lotteries, pari-mutuel wagering, charitable gaming, tribal gaming, and Internet gaming. Our backgrounds include representing casino owners, operators and executives, gaming manufacturers and suppliers, private equity firms and investment banks on gaming related matters.

Global Gaming Practice Acquisitions | Financing | IP | Labor | Litigation | Operations | Real Estate | Regulatory Learn more at gtlaw.com/gaming GREENBERG TR AURIG, LLP | ATTORNEYS AT LAW | WWW.GTLAW.COM The hiring of a lawyer is an important decision and should not be based solely upon advertisements. Before you decide, ask us to send you free written information about our qualifications and our experience. Prior results do not guarantee a similar outcome. Greenberg Traurig is a service mark and trade name of Greenberg Traurig, LLP and Greenberg Traurig, P.A. ©2016 Greenberg Traurig, LLP. Attorneys at Law. All rights reserved. Contact: Martha A. Sabol in Chicago at 312.456.8400. °These numbers are subject to fluctuation.

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40 UNDER 40 2016 Extended Family

All Systems Go

James Siva • Tribal Council Member, Morongo Band of

BJ Bouschor • Vice President of Information Technology, FireKeepers Casino Hotel

Mission Indians

B

orn and raised on the Morongo Reservation in Banning, California, James Siva came from a large family with a long linage of leadership. He is descended directly from Captain John Morongo, regarded as the last chief-type leader of the tribe.

“Knowing our family’s history, I have always thought about being a leader in some fashion for Morongo,” Siva says.

The road to leadership stopped off at Columbia University, where Siva earned a bachelor of arts in ethnicity and race studies. Family is as important an element as education, he says.

“Having a strong family is the best base for being a strong leader,” he says. “I am married to a wonderful woman, Christina, who balances the political with the spiritual as a pastor.”

Prior to his election to tribal council, Siva served in leadership roles in a different setting, as a trustee on the board of Morongo Moravian Church, and as a mentor in a mentorship program at Columbia.

“Additionally, I served in the student government at Columbia. I feel that these varied roles gave me the opportunity to understand what leadership can be from very different perspectives and in very different organizations,” he says.

The Tribal Council where he serves has a dual function as a board of directors for tribal-owned enterprises, including the casino, and as a city council-like group for the governmental operations of the tribe.

“An average day has meetings at Morongo’s administration building involving governmental issues with operational oversight of our enterprises mixed in at various times,” Siva says.

Siva credits two colleagues—Morongo Tribal Chairman Robert Martin and Vice Chairwoman Maryann Andreas—as mentors.

“Both have been visionaries for Morongo and have been people who I admired for years. Now, being able to work with them on a daily basis has been a fantastic experience. I have learned so much in a short amount of time from the two of them,” he says.

The future of gaming must mirror the future of technology, Siva says.

“Our customers want the newest and greatest technology out there,” he says. “Gaming must continue to be at the cutting edge of technological advancement, be that through new modes of reaching consumers like social media or through new ways of gaming such as online-based platforms.”

His advice for young people entering the industry would be to push the envelope.

“These people are the future, and have a better feel for what is the cutting edge than anyone else,” Siva says. “The millennials will be, in a short time, the gaming industry’s biggest market. The industry should harness the innovation that continues to pour out of them.”

—William Sokolic

26

Global Gaming Business NOVEMBER 2016

“

I

T is not PCs and printers,” says BJ Bouschor, vice president of information technology for FireKeepers Casino Hotel in Battle Creek, Michigan. “IT is the best friend of every department in the company.”

The 39-year-old executive studied marketing in college, but found his true career in a management trainee program at Kewadin Casinos, owned and operated by the Chippewa Indians of Sault Ste. Marie. It was 2002.

“The program brought in col- “IT is the best lege graduates and moved them friend of every throughout the departments to see department in if they could grow into managers,” says Bouschor. “That’s where I got the company.” my start.” From accounting, he joined slot data systems, and eventually ascended to manager of information technology with responsibility for five properties. In 2014, Bouschor joined FireKeepers, owned and operated by the Nottawaseppi Huron Band of the Potawatomi. Starting as IT director, he became vice president of information technology in August 2015, overseeing a 29-person team.

An effective IT leader must keep an eye on every cog and wheel in the company and understand the daily needs of end users, Bouschor says. “For example, HR people work with that product all day long; they’re well-versed in that application, but they can’t correct issues when they come up. We have to understand a percentage of what they do to troubleshoot and fix problems on the back end.”

Bouschor credits Kewadin CFO Rick McDowell, “a numbers guy,” for teaching him about budgets and forecasting. And he’s inspired by the workplace culture created under FireKeepers President and CEO Brian Decorah.

“When I came to this property, saw the leadership style and saw how they treat their employees,” he says, “I knew I wanted to be part of it.”

On the job, Bouschor prefers “a consensus approach rather than a dictator approach. I know what I want to achieve, but if I let the team build the milestones to reach the goal, at the end of the day they’ll come up with the same thing I would have dictated. Now they have buy-in to the goal, so they drive and motivate themselves.”

The position demands strong personal accountability, and a knack for catching kinks in the system before they become catastrophes. “If you’re not constantly wondering how things work or why, you’ll get caught off-guard.

At a casino, that could take the floor down.

“Take the word ‘job’ right out of it,” says Bouschor. “You don’t get 40hour work weeks in the gaming industry. It’s got to be part of your life. And if you don’t enjoy what you’re doing, then why are you doing it?”

—Marjorie Preston

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40 UNDER 40 2016 Art for Art’s Sake Dan Whelan • Game Designer and Art Director, Incredible Technologies

F

rom the time he was a child, Dan Whelan had a gift for art, possessing a natural eye for design. But this natural-born artistic talent was not his unique quality.

The other? Drive. And playing center for the University of Nebraska at Kearney football team honed his competitive drive as well as his passion for succeeding in a team environment.

That kind of team-focused success is exactly what he continues to enjoy in his senior management position at Incredible Technologies, which started 31 years ago as a modest video game company known for its Golden Tee Golf game played in bars nationwide, and has since branched into slot games.

According to his peers, Whelan is the definition of hard work. He started at Incredible Technologies “Elaine and Richard 15 years ago under the guidance of owners Elaine Hodgson and Richard Ditton, executive vice president have created a trustof Incredible Technologies. based encouragement “Elaine and Richard have created a trust-based enthat rewards creativity, couragement that rewards creativity, personal development and measured risks,” Whelan says. His ascension personal development through the company from project manager to art diand measured risks.” rector has proven to be mutually beneficial.

Whelan has been the lead game designer on some of IT’s strongest-performing products, including Leonidas, Fired Up, The Herd, and most recently, Crazy Money Deluxe. In his current role, he leads the entire art department at IT and provides mentorship and guidance to young artists.

In one of his most notable accomplishments, Whelan designed a very successful video slot game in 2012 called The Herd with his Heavyweight Studio team (a subsidiary of Incredible Technologies), gaining IT and Heavyweight Studio their well-deserved recognition. From this success was born the Spartan-themed video slot game Leonidas in 2013, which turned into a mega-hit and went on to achieve more than 1 million YouTube uploads from enthusiastic players who continue to post positive feedback about it to this day.

Subsequently, he designed the video slot game Crazy Money Deluxe released recently. The game is IT’s first participation game, and is a runaway hit.

Whelan is motivated to build upon the growing success Incredible Technologies has created in the video slot industry for years to come.

“Dan and Incredible Technologies are a strong fit, and the company is looking forward to his continued success,” says Ditton. “In the next three to five years, he will continue to grow as a game designer, creating innovative titles. We look forward to his continued leadership by example and desire to foster the next generation of talent in the industry. He is truly an emerging leader.”

—David Rittvo, The Innovation Group

28

Global Gaming Business NOVEMBER 2016

Heart of a Lion Lovell Walker • Executive Director of Interactive Gaming, MGM Resorts International

T

here never was any question about what Lovell Walker wanted to do when he grew up. A Las Vegas native with a father who was a dealer at Bellagio, Walker was infatuated with the casino industry from an early age.

“Like most kids, I looked up to my dad, so his role in the industry had a lot to do with what I wanted to do with my life,” he says. “I was also influenced by the movie Casino.

Robert DeNiro was so cool, and it just felt right. I knew that was the path I wanted to take.”

In Las Vegas, there are many paths to a career in gaming, and Walker chose the most traditional one: attending the one college with a track record for pumping out future casino executives, the University of Nevada, Las Vegas.

During his time at UNLV, Walker was offered an internship at MGM. His first ambition may not have been his best choice.

“I wanted to be a host,” he laughs. “I thought that was where all the glamor, action and fun was.”

Glamor, however, was not what Walker got. After he graduated in 2009, Walker got a

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Blocking and Tackling Mike McKiski • Vice President of Sales, Interblock Luxury Gaming Products

job with New York-New York.

“I started as an analyst,” he says. “I studied the business of gaming, where the money was made and how you used the numbers to make decisions. It was mostly a strategic approach, and I ended up loving it.”

He credits NY-NY President Cynthia Kiser Murphey with providing him the freedom that allowed him to advance his career.

“She’s an amazing lady,” he says. “I was working 12 hours a day and loving every minute.”

Walker later moved to Mandalay Bay as director of slots, a position which really opened his eyes.

“I learned so much about operations, technology and marketing,” he says. “Mark Bennett (VP of slot operations) gave me the key to his kingdom and really let me go. It was huge for me to get that experience and do it without handcuffs. There are highs and lows to that.

Sometimes you get beat up, but it was great long-term.”

In his current job, Walker is in charge of much of the interactive gaming being introduced by MGM Resorts, most notably the new sports betting app, PlayMGM. “We believe it’s the most advanced app on the market today,” he says. “It was developed in conjunction with IGT, and it will evolve into a casino product in the future, as well.”

Walker is also involved in MyVegas, the PlayStudio social game that features MGM properties, and the “Floor of the Future,” where MGM Grand will experiment with games and casino space designed to attract the millennials.

Walker is working with another mentor, MGM Senior Vice President of Business Development Tom Mikulich, in his current capacity.

“He’s been extremely important to my career,” says Walker, who also credits MGM Resorts President Bill Hornbuckle as an important mentor.

The sky is the limit, believes Walker.

“There’s so much opportunity in gaming,” he says. “In my mind, gaming has been done the same way for decades, and when I got there, all I could see was room for improvement. I’m taking advantage of everything I see.”

—Patrick Roberts

W

hen you grow up in the Las Vegas area, chances are good you’ll end up in the casino industry. Mike McKiski proves the point.

McKiski, vice president of sales at Interblock Luxury Gaming Products, played four sports in high school in Henderson and received a football scholarship to the University of Nevada, Las Vegas, where he earned All-Conference Academic status each year. Graduating with a bachelor’s degree in journalism and media studies and creative advertising, he took a job in public relations at MGM Mirage, responsible for coordinating media activity for the company’s food and beverage outlets in Las Vegas.

“No one gets better sitting in their comfort zone. Find mentors that will challenge you to accomplish difficult milestones.”

“This job taught me the importance of meeting deadlines, and how to work quickly without rushing,” he says.

He moved on to Bally Technologies, where over eight years, he served as associate product manager, North American sales manager and director of sales and marketing.

“I would recommend that anyone who starts in the gaming industry on the supplier/manufacturing side, start in product management,” McKiski says. “This role really allows you to see how products are created and brought to market.”

At Las Vegas-based Interblock, McKiski oversees a team of account execs and directors who help educate customers on the growing appeal of electronic table games.

“It’s very exciting to be a part of Interblock as we grow our base around the world with casinos recognizing the ability of ETGs to attract new players,” he says.

Through the years, McKiski has learned that no one succeeds in a vacuum.

“No one gets better sitting in their comfort zone. Find mentors that will challenge you to accomplish difficult milestones,” he says.

McKiski did not reach the top of his game without his mentors along the way, like Gary Bernardi, the offensive line coach at UNLV at the time.

“He would constantly challenge you to push past the limits of what you thought you could achieve,” he says. “He had a quote: ‘Hard Work Beats Talent, When Talent Doesn’t Work Hard.’ That rings true for business as well.”

John Connelly, CEO of Interblock, worked with McKiski at Bally Technologies.

“John and I helped launch the Bally Interactive division, which brought mobile and online gaming solutions to over 100 casinos worldwide,” says McKiski. “He taught me how C-level executives and investors view businesses, and he has consistently challenged me to take a toplevel approach.”

McKiski says the gaming industry will be a dominant force in the global economy.

“But I believe the nature of the games will change. In the coming years, we will see a shift that will introduce new segments of the gaming floor, like electronic table games and skillbased gaming. Additionally, touch-screen, table-top and mobile-device gaming will become more prevalent with multi-tasking players.”

He advises young people to take a chance on projects they may not understand. “Success in these projects can accelerate a career trajectory. Also, be fair to people. This industry is very small; you never know who will become your next key customer, partner or manager,” he says.

—William Sokolic

NOVEMBER 2016 www.ggbmagazine.com

29

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The NexT

ThiNg Big

Why ultra-large slot machines are all the rage on today’s casino floors

M

By Dave Bontempo

eet the new casino hosts.

They have unconventional names, like Big Red, Goliath, Behemoth and Texan. They project grandiose plans for a realm in which size not only matters, but defines it.

These large-format slot machines won’t speak directly to customers, but their functions mirror goodwill ambassadors. They sell the glamor and fantasy of gaming via colossal size, sophisticated lighting, enhanced graphics and pulsating music.

Machines often standing eight feet tall or more belong in a place with no clock, two-foot drinks and a perceived paradise without limits.

They fit a super-sized world and the McMansion-esque dream of one life-altering spin. Even small victories prompt bells, music and the reinforced message of “winner.”

Large-format machines garner foot traffic and attention. They accommodate photo ops, curiosity seekers and patrons wanting something different.

Technology makes the world smaller, and more precise, but in the casino realm, large works. While marketing experts crunch numbers and Big Data predicts spending habits, big machines gain a bigger following.

There’s always a place for visual utopia. There’s always a need for “Wow.”

Big Red for Big green Las Vegas-based AGS rides on the wings of Nevada approval for its Colossal Diamonds slot machine, often called “Big Red” because of its larger-than-life cabinet size (roughly the size of three standard cabinets) and signature red color. The Big Red advance began in February after a successful field trial on the Las Vegas Strip at Paris Las Vegas and Caesars Palace.

Less than eight months later, more than 50 Big Red installations have occurred in Nevada, according to Andrew Burke, vice president of slot products for AGS. The Venetian, Planet Hollywood, Bally’s, South Point and Green Valley Ranch were among the first properties to carry it. The Horseshoe in Baltimore appears poised for installation and New Jersey will likely showcase the 30

Global Gaming Business NOVEMBER 2016

product when it’s approved, Burke believes.

Big Red means big talk. And often big money.

“It has started to re-emerge, and I am proud to say we are a big part of that reason—we are a leader in this category,” Burke says. “The concept works. One unit at Thunder Valley in California was doing about 10 times the house average. It was just jaw-dropping.

“Big Red is a social experience. When somebody is playing it, there are often people crowding around to watch this person play. It’s part of the attraction, along with people getting their pictures taken there.

“Besides the attraction, we packed it with some really great, proprietary math,” he adds.

Burke says Big Red, which comes on wheels, can easily be placed anywhere. Shrewd operators may wish to deploy it in low-utilization spaces, like an approach area to a parking garage.

Big Red has been a top performer for AGS, with nearly 250 placements across 23 states including Mohegan Sun in Connecticut, WinStar in Oklahoma, Pechanga in California and Hard Rock in Florida. With its three-reel, single pay line and large, vibrant graphics, the unit prospers from simple game play and frequent payouts.

One of its satisfied customers is the Coushatta Casino in Louisiana, which installed Big Red in 2015.

“What really made me take a good look at this machine was overhearing a couple of my peers talking about its performance at G2E in 2014,” says Warren Davidson, the director of slots for Coushatta Resort. “What I really like about the game is that it first attracts players who don’t typically wager $5 or more. After they give it a try, the low-volatility play takes away the fear factor and gives players value with time on device.

“The video simulated reel-spinning and sound effects are extremely well done and enhance the experience,” he adds. “It often draws a crowd when it is in play, and that generates even more trial. It is consistently the highest performing game on our floor.”

AGS gives Colossal Diamonds a revamp this year, placing the big game on its new Atlas operating system for better colors, more vibrant graphics and advanced features.

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“Premium, oversized cabinets have really emerged over the past four or five years and have seen a lot of success.”

—Steve Walther, Senior Director of Product Management, Konami

Great Goliath Konami Gaming graces the large-f ormat realm with Podium Goliath.

“Premium, oversized cabinets have really emerged over the past four or five years and have seen a lot of success,” says Steve Walther, senior director of product management for Konami. “They capture attention, create diversity on the floor, and infuse a certain excitement, especially for bonus feature events. Guests take notice and gather around to watch the action unfold.”

Goliath fits a theme, making the name immediately synonymous with a grand product. It includes a multi-game function unique to the industry, Walther asserts.

“Goliath offers the premium experience of a large-scale machine with an available game library running into the hundreds,” he indicates. “Any KP3-platform game you find on our standard Podium machine can be featured on Goliath’s extra-large dual 32inch HD screens, as well as standalone progressive games like our Jackpot Streams.”

Konami recently expanded Goliath to include SeleXion multi-game functionality, with up to 10 themes available instantly on this single oversized machine. Walther says its depth of game content is unmatched by any oversized cabinet in the market.

“Our customers love it because they have countless configuration options and they don’t have to worry about managing a limited pipeline of available games,” he maintains. “Additionally, the Goliath is unique because while it is oversized, to be sure, it is still flexible enough to be banked or placed on a floor in pod formations.”

The flexibility could be paramount. Walther acknowledges the revenue concern for oversized machines and their floor position. He says Goliath has achieved a sweet spot where it can be merchandised as a high-profile novelty or alongside standard core product.

“Goliath has been effective as an end cap in a high-traffic area, in pods of three or four, and banked against a wall,” he adds. “Our pricing on the Goliath has allowed our customers to earn a revenue premium by placing the cabinet without displacing more than one standard-sized product.”

Walther says customer feedback indicates that patrons recognize their favorite Konami games on Goliath’s larger-than-life dual displays, and they enjoy the immersive effect of the oversize format with the game-play mechanics.

“For operators, Goliath makes sense for their business because they know what games are popular and they’re able to expand their offering for those proven games to the oversized display with strong success,” he says. “Many of our customers are placing Goliath with bench seating to match the scale of the cabinet, and more importantly, to accommodate couples’ play.”

Texas-Sized It makes sense for Everi Holdings to showcase a large-format machine. The company has enjoyed a larger-than-life progression over the past couple years.

It was formed through the merger of Global Cash Access and Texas-based Multimedia Games, which had served the casino industry for decades.

The new company may command a tip of the 10-gallon hat for the Texan HDX. The product is more than eight feet tall, with eye-catching accent lighting and a stylish, comfortable two-person bench. A three-way sound system is part of the package.

The Texan has dual 42-inch HD integrated displays, ergonomic player controls, integrated touch screens and a three-way sound system, among other highlights. It also has dual repeat bet buttons, with classic and new content, including high-denom titles.

“Since its launch, we have placed close to 150 Texans,” says David Lucchese, executive vice president of games for Everi. “Most of our core titles are available on this cabinet, as well as unique content intended exclusively for the Texan HDX. “With its larger-than-life merchandising of our best gaming content across an oftencrowded casino floor, the Texan HDX provides significant value to our customers.”

The Sound of Science Scientific Games is a leading innovator in the global lottery and regulated gaming industries.

The company has continued to advance the games, technology, programs, marketing research and security that have been a driving force behind the success of more than 300 customers on six continents over the last 40 NOVEMBER 2016 www.ggbmagazine.com

31

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Big Houses years—and in the case of Bally slot machines, more than 80 years.

How’s this for the large-and-in-charge category? Its Super Bellringer product matches technology with psychology.

One version has three reels with 10-credit bonus lines and an 800-credit max bet. The bells, music and coins flying through the air denote the payout.

Another features nine reels and eight lines. Three or more scattered Super Bellringer symbols trigger the Tower Bonus Feature, showcasing chances to win credits or a bonus level, which awards a multiplier.

The driving theme throughout the game is Anita Ward’s monster hit, “Ring My Bell,” the top song in the United States in 1979. It propelled her career, and now it’s used to accent a winning spin. Note the musical blast from the past, connecting with baby-boomer patrons.

Once the symbols are hit, bells erupt, the song plays and a sense of celebration ensues. The first part of the process determines a bonus level ranging from 16 to 200, with the clearing of each hurdle marked by a bell. The second leg is the bonus level. A bonus level of 56, for example, combined with a multiplier of three creates 168 credits.

The music, different forms of lighting and the process of determining the bonus underscore the sense of victory, subtly working customer loyalty while paying off a winner.

A Double Play Aristocrat, based in Las Vegas, engages in the design, manufacture and marketing of gaming machines, progressive systems and casino management systems.

It places two prime products in the large-format space.

The Arc Double is hailed as the anti-box, breaking floor monotony with its graceful lines. Company officials consider it sleek and sinuous, able to draw attention and become a player destination. Arc Double is curved, with an ergonomic design, and showcases twin LCD touch screens. It also has 5.1 stereo surround sound.

The Behemoth essentially doubles the Double. Via this cabinet, the company says it produces an industry-leading 84-inch ultra-high-definition LCD portrait monitor. Its visual impact and sight lines make it a magnet, visible from many spots on the floor. Like other large devices, it becomes a de facto sales person, beckoning people to come play.

Behemoth fits attractively against a column, back to back or as an end cap, officials say. It also sports a 14-button deck with dual flash buttons, enabling a shared experience. The cabinet displays upgraded graphics and powerful 5.1 stereo surround sound. It has a dual bench surround-sound system.

This is a perfect example of go big or go home. The sound system, monitor size, graphics and bench serve as party invitations.

32

Global Gaming Business NOVEMBER 2016

The large hits keep coming for IGT, the multinational gaming powerhouse that produces slot machines and other gaming technology from offices in London, Rome, Providence and Las Vegas.

At G2E 2016, IGT introduced six new cabinets to complement its innovative slot portfolio, yet two in particular loomed large, as the MegaTower and S3000 XL underscored its commitment to the large-format cabinet space.

Fueled by the success of IGT’s S3000 cabinet, both of these large-format cabinets are designed to build on the company’s leadership in the mechanical-reel, or stepper category. The MegaTower lives up to its name, at 11 feet tall and occupying premium front and center real estate in IGT’s 25,000-square-foot booth at G2E. The cabinet’s massive 6.5-inch reels combined with a 50-inch video monitor showcased Wheel of Fortune Gold Spin Double Diamond. Atop the MegaTower stands a 27-inch Wheel of Fortune wheel, which is activated along with big winning potential when players reach a bonus round. Intelligent lighting and a dynamic player panel with dual bash buttons round out this machine, which comfortably seats two. The life of the party at IGT’s booth, the MegaTower served as the backdrop for Las Vegas Mayor Carolyn Goodman presenting a Key to the City of Las Vegas to Vanna White in celebration of 20 years of IGT Wheel of Fortune slots.

The S3000XL builds on the S3000 cabinet’s re-definition of the stepper space. By leveraging player-favorite content from the S2000 cabinet, IGT maintains the integrity of game themes while adding elements of technology to enhance them, company officials say. Within 18 months of its introduction, IGT shipped 10,000 units of the S3000. The company enhanced the proposition with the S3000-based Spin Ferno tournament solution. The S3000 XL takes that enhancement another step, offering the company’s casino partners the opportunity to utilize IGT’s comprehensive stepper portfolio in the large-format presentation.

The cabinet was also introduced with new themes, such as Texas Tea Pinball, which offers players the chance to experience continued game play on the large video screen above the massive 6.5-inch reels.

IGT also introduced the 25th anniversary of Double Diamond on the S3000 XL, a nod and salute to the company’s vast history in the mechanical reel segment.

Based upon their sheer size alone, the MegaTower and S3000 XL garnered significant attention at G2E 2016. But their appeal extends well beyond the show, company officials assert. IGT’s vast content library can be ported to the large-format product line.

Throughout the industry, operators gain new flexibility with this emerging product line. Oversized cabinets can be used as magnets for a slot bank, space-filler for an area that does not produce revenue, or a subtle sales force. Figuratively, and literally, they are on the rise.

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Big Money Fun Since the first Wheel of Fortune® Slots games hit the casino floors in 1996, we’ve been spinning big winners from coast to coast.

With over $3 Billion in jackpots paid and more than 1,000 millionaires made, it’s no wonder Wheel of Fortune® Slots are still the most celebrated games in casino history.

Now, the Wheel of Fortune® Slots sensation that set the industry bar is literally rising to astonishing new heights with the introduction of our massive MEGATOWER™ gaming machine.

Thank you for being part of this gaming legacy. We look forward to sharing many more milestones with you and life-changing jackpots with your players.

Ask your IGT Account Manager about the next generation of these legendary games.

© 2016 IGT. All rights reserved. © 2016 Califon Productions, Inc. “Wheel of Fortune” is a registered trademark of Califon Productions, Inc. All Rights Reserved.

All other trademarks used herein are owned by IGT or its affiliates, may not be used without permission, and where indicated with a ®, are registered in the U.S. Patent and Trademark Office

Still the One for

Big Money Fun Since the first Wheel of Fortune® Slots games hit the casino floors in 1996, we’ve been spinning big winners from coast to coast.

With over $3 Billion in jackpots paid and more than 1,000 millionaires made, it’s no wonder Wheel of Fortune® Slots are still the most celebrated games in casino history.

Now, the Wheel of Fortune® Slots sensation that set the industry bar is literally rising to astonishing new heights with the introduction of our massive MEGATOWER™ gaming machine.

Thank you for being part of this gaming legacy. We look forward to sharing many more milestones with you and life-changing jackpots with your players.

Ask your IGT Account Manager about the next generation of these legendary games.

© 2016 IGT. All rights reserved. © 2016 Califon Productions, Inc. “Wheel of Fortune” is a registered trademark of Califon Productions, Inc. All Rights Reserved.

All other trademarks used herein are owned by IGT or its affiliates, may not be used without permission, and where indicated with a ®, are registered in the U.S. Patent and Trademark Office

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TABLE GAMES

Waiting For Innovation Most casino games are derivative.

When can we expect something really different?

By Roger Snow

I

ndustry legend Dr. Mark Yoseloff raised a few people’s eyebrows—not to mention a few people’s blood pressure—when he claimed during last month’s Global Gaming Expo that casino suppliers haven’t done anything truly innovative in a long, long, long time.

Like, since the Jurassic Period.

Well, OK, that’s an exaggeration. It’s only been since the Cretaceous.

Paleogeographical wisecracks aside, the last instance of someone in gaming having a wizbang, non-derivative concept was in the mid2000s, according to Yoseloff, who is best known for being CEO and chairman of the board at Shuffle Master in, uh, the mid-2000s.

Yoseloff, 70, currently serves as executive director of the Center for Gaming Innovation at the University of Nevada, Las Vegas, where he teaches college students how to create product for casinos. That is, of course, when he’s not standing on stage and throwing down gauntlets—like Donkey Kong throwing down barrels—which is exactly what happened during a fiery 20-minute presentation on the floor of the Sands Expo Center in Las Vegas.

“I challenge anyone to name a casino product in the last 10 years that’s been truly innovative,” Yoseloff said to a large and attentive crowd. “Name it.”

No one did.

As you would expect, word quickly ricocheted around the convention that the past was bad-mouthing the present. And the immediate future, for that matter, as Yoseloff said none of the new products on display made him think the trend of treading water would abate anytime soon.

“I’m talking about something that addresses the unserved and underserved customers,” Yoseloff said. “This isn’t about a new slot game for slot players or a new table game for table game players. This is about coming up with something to attract a person who doesn’t currently gamble in a casino.”

That’s pretty heavy stuff, especially when

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you consider the guy up there before him was goofing around with audience members, using their suggestions to quilt together some sort of bonus bet for blackjack.

But take it from someone who was in the peanut gallery that day, Yoseloff’s message was more of a rallying call than a dressing down.

And it certainly wasn’t old-fogey, get-off-mylawn, Statler-and-Waldorf-style complaining for complaining’s sake. Yoseloff may not have come to praise casino suppliers, but he didn’t come to bury them either.

Consider the semantics. At the beginning of this TED-style talk, Yoseloff defined certain terms to mean certain things. He used “innovation” in the transformational sense, as in an idea that alters not only the way a business operates but also the customers it attracts. His historical examples for our world included the advent of dice games (3000 B.C.), card games (800 A.D.), roulette wheels (1700), slot machines (1900), proprietary table games (1988), and electronic table games (1990).

So, what you saw at G2E: the dice games, the card games, the roulette wheels, the slot machines, the proprietary table games, and the electronic table games. Are they improvements?

Yes. Are they advancements? Absolutely. Are they enhancements? Most definitely.

But are they innovations? Not even close, bud. (At least that’s what he said.)

Yoseloff implored manufacturers big and small, old and new, to shed the same-old-same product paradigms. Absent that, he said, casinos would continue their trend of being a shriveling piece of the overall resort experience.

This tough-love message was undoubtedly too tough for everyone to love, but the question remains: Is he right? Are gaming suppliers playing it too safe? Is innovation dead? Does he have a point?

Of course he has a point. Up to a point, anyway.

Yoseloff is correct in saying most new devices at G2E were more evolutionary than revolutionary. But that’s typically the case with any

mature industry. What’s an iPod if not an evolved version of the Walkman? What’s a Tesla Model S with Ludicrous Mode if not an evolved version of a 1972 AMC Pacer? (Damn, that car was fugly.) And what’s a 70-inch, curved, 4K ultra-high-definition television that streams Netflix over your home Wi-Fi if not an evolved version of a rabbit-eared, black-and-white Philco your mom kept on the kitchen counter?

One man’s derivation is another man’s innovation.

Let the etymologists argue over what word means what, but from my vantage point, there was plenty of wild and crazy stuff at the show to get excited about. Here’s a taste: 1) Gamblit and other companies staked their claims in the skillbased gold rush; 2) One table game supplier had two mechanisms to let players bet on other people’s hands; 3) Several slot manufacturers showed customers their visions of the future through innovation labs; and 4) There was an electronic baccarat game being dealt by a robot.

Tell you what: whether you agree or disagree with Yoseloff, you’ve got to give him huzzahs for his chutzpa. To stand tall in the belly of the beast and shake your first with such defiance takes a level of conviction (see: cojones, brass) that’s in scant supply these days. Particularly during trade shows, where controversy and muckraking curtsey out of the way to make room for butt-kissing and networking.

Besides, even if Yoseloff is 100 percent correct, suppliers can still chillax. At least for a bit. If you accept the evolutionary chronology referenced during his presentation, there have only been six inflection points for gambling innovation since 3000 B.C. That’s one every 833 years.

Therefore, the next great innovation isn’t due until about, oh, 2823.

My money’s on the “under.”

Roger Snow is a senior vice president with Scientific Games. The views and opinions expressed in this article are those of the author and do not necessarily reflect the views and opinions of Scientific Games Corporation or its affiliates.

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Ainsworth Rising

Ainsworth Game Technology officials join the company’s legendary founder in celebrating a North American flag-planting

By Frank Legato

T

wo years ago, a group of distinguished Nevada officials joined executives of a well-known Australian slot-machine supplier at a dusty stretch of desert just off county Highway 215 in Las Vegas, where they donned hardhats and forced shovels into the sand and rock to mark the groundbreaking of a new North American manufacturing and distribution facility.

Just after this year’s Global Gaming Expo, many of those same officials were back at that desert spot, the dust having been displaced by the gleaming new 291,000-square-foot North American headquarters of Ainsworth Game Technology. The ribbon-cutting, though, was simply the final, symbolic touch in a North American debut that has seen the company’s machines placed in casinos across the continent.

In fact, officials cutting that ribbon were were signaling the North American launch of a company that had already gained a ship share of approximately 5 percent in North America.

That share is growing steadily as the company’s market area widens in North America. “We’re more easily able to indicate where we are licensed than where we are not,” says Mike Dreitzer, president of North America for Ainsworth Game Technology, “which means there are just few places in North America where we have not yet launched.” He notes that the remaining few jurisdictions will likely be coming online within the next six to 12 months.

Dreitzer says the company’s success was all the more reason to bring those

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“

With company founder Len Ainsworth at his side, Nevada Governor Brian Sandoval cuts the ribbon on Ainsworth’s new Las Vegas facility

We believe for our part, we have created what will prove to be an iconic building of its kind for Las Vegas, and we will be supplying most of the world’s markets with our Nevada-manufactured machines. We are proud to be part of the Las Vegas community.

”

—Len Ainsworth, founder, Ainsworth Game Technology dignitaries back to that stretch of desert next to I-215 to celebrate with the company’s leaders—and most importantly, its legendary founder and executive chairman. The 93-year-old Len Ainsworth, who started building slot machines for his then-new company Aristocrat in 1953 and founded Ainsworth Game Technology in 1995, was the guest of honor at the September 30 ribbon-cutting, hosted

by Dreitzer and Ainsworth CEO Danny Gladstone and attended by representatives of local, state, federal and Native American governments.

Nevada Governor Brian Sandoval, Clark County Commissioner Steve Sisolak, National Indian Gaming Association Chairman Ernest L. Stevens and representatives of state lawmakers and U.S. senators joined Ainsworth officials to cut the ribbon on the massive new complex.

At the ceremony, Dreitzer recalled that first gathering in 2014, with speeches in a tent followed by the turning of shovels in a vacant lot. “Today, two years later, after great progress with our business and a remarkable construction effort, it is with great pride and optimism for our future that we welcome all of you to the grand opening of our state-of-the-art headquarters for the Americas,” he said.

“And we can think of no better place to call our home than the gaming capital of the world, Las Vegas, Nevada.”

The state and local officials expressed their own gratitude that Ainsworth had come to town. “When companies like Ainsworth choose Las Vegas for their global headquarters,” said Sandoval, “it sends a really big message that Las Vegas is the place to do business and Nevada is the thought leader in the gaming indus-

try. Las Vegas and Nevada are going to continue to lead the world in innovations in gaming.”

Sisolak said the area west of Interstate 15 is becoming “the high-tech hub of the valley,” and lauded Aristocrat for adding “skilled jobs with good wages and good benefits” to the county. “Those 200 permanent jobs are not just numbers; they are families,” he said. “There are faces behind each one of those jobs.”

Corporate Citizen The jobs are just the beginning—company officials used the ceremony to announce the first examples of the good corporate citizenship the company is bringing to North America, including a new scholarship program at the International Gaming Institute of the University of Nevada, Las Vegas.

Ainsworth entered an agreement to support annual scholarships for at least three years at the UNLV gaming program.

“To be a great company, you have to have a relationship with a great university,” says Dreitzer. “So, we announced a financial commitment to create the Ainsworth Scholar program. By doing this, we demonstrate the fact that we are committed to the future. We have several top-notch former students from UNLV who now work here, and we want to support UNLV and the International Gaming Institute. We stand with them in their mission of developing the the ‘big-ideas people’ of tomorrow—and hopefully, NOVEMBER 2016 www.ggbmagazine.com

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“

When companies like Ainsworth choose Las Vegas for their global headquarters, it sends a really big message that Las Vegas is the place to do business and Nevada is the thought leader in the gaming industry.

”

—Nevada Governor Brian Sandoval

Is your advertising measuring up?

Because we’ll take the Pepsi challenge with other agencies. We will. Big agencies, little agencies, agencies with really long acronyms for names, agencies that claim to specialize in gaming, agencies that claim they can help you more because they don’t specialize in gaming, agencies from up North, agencies from out West, agencies from anywhere. We view the crowded casino gaming category as an opportunity to demonstrate how creativity can separate the winners from the losers. So if you’ve thought about your advertising and wondered if it’s measuring up, we’re your next agency.

THE AD AGENCY FOR SMART CASINO BRANDS.

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Global Gaming Business NOVEMBER 2016

to employ them.”

Dreitzer adds that Ainsworth has “not only an interest, but an obligation” to support the university. “We’re going to use this as a starting point and really will continue to strengthen our relationship with UNLV in a number of areas. We want to continue to see excellent, well-rounded, well-read, well-prepared students come out and make the gaming manufacturing segment an enthusiastic choice for a career.”

Ainsworth also announced a program supporting the National Indian Gaming Association, whose member casinos provided the company its first North American game placements. NIGA Chairman Stevens was on hand at the ribbon-cutting to thank company officials for Ainsworth’s pledge of a multi-year donation to NIGA to help renovate the organization’s Washington, D.C., headquarters. Stevens pinned the Native American badge of honor on Ainsworth.

Ainsworth, in fact, was a focus of every speaker at the ceremony, who all credited the Australian’s vision as what largely led to how modern slot machines are designed.

“There are so many people to thank for the success of this company, but it goes back to where it was founded,” said Gladstone as he acknowledged Ainsworth and his wife Gretel. “It’s quite clear,” added Dreitzer, “that the history of our great industry could not be written without at least several chapters on Mr. Len Ainsworth.”

The executive chairman, after quipping characteristically that most of his speech had been “burgled by previous speakers,” reaffirmed the company’s commitment to North America, and to Nevada in particular.

“I’ve been visiting Las Vegas and Nevada since 1960, and have met with the welcome and courtesy of its citizens and officials at all times,” Ainsworth said. “During this 55-year period, I have witnessed the tremendous development of Las Vegas and its facilities, in the face of changing times and sometimes challenging economies. But

Las Vegas comes through and leads the world in terms of facilities and entertainment.

“We believe for our part, we have created what will prove to be an iconic building of its kind for Las Vegas, and we will be supplying most of the world’s markets with our Nevada-manufactured machines. We are proud to be part of the Las Vegas community.”

Ainsworth also credited Nevada regulatory officials with creating an atmosphere in which gaming has evolved as a respected industry. “Looking back to 1953, when New South Wales (Australia) and Nevada were the only world markets,” he said, “to the present, when machines and gaming are now an integral part of the economies of many countries, the Nevada Gaming Control Board has led the world in raising standards and eliminating wrongdoing, and for this we as manufacturers are truly grateful.”

Ainsworth Style It was Ainsworth’s home market in New South Wales that would dictate the style of his slot machines, designed to provide gamblers with repeat play and time-on-device. Aristocrat’s “pokies” were the forefathers of the majority of today’s slot machines. Low-denomination, multi-line games were still gaining popularity in North America when Ainsworth started his current company in 1995.

They are now the dominant game style.

Ainsworth slot games followed that same Australian recipe on their way to snatching market share in Australia from the founder’s entrenched former company, and the game style has dominated Ainsworth’s product line. With the advent of the new facility, the company’s growing R&D staff is tackling new game formats and products designed specifically for the North American market, but the basic game philosophy remains the same.

Dreitzer says they are for “gamblers who like a good gamble.”

“Now to add to our incredibly successful foundation, we are expanding our portfolio utilizing

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Ribbon-cutting ceremony speakers included, clockwise: Ainsworth CEO Danny Gladstone; Mike Dreitzer, president of North America for Ainsworth Game Technology; Geoff Freeman, president & CEO, American Gaming Association; Ernest L. Stevens, National Indian Gaming Association chairman

Ainsworth’s new U.S. game design studio,” he says. “This studio will produce 20 titles of uniquely North American origin over the next 12 months. This will be in addition to the large annual portfolio of games created in the Sydney headquarters.

“To be able to compete effectively in this market you need to be able to have a game content library broad enough to be attractive to the tastes of many different players.”

Dreitzer adds that Ainsworth customers “are very loyal to our games. Players seek these games out; they know exactly what they want, and we’re here to give them that experience. Now, we are continuing to support that while broadening the appeal of the games to more players.”

Broadening appeal also means new game styles—from branded licenses to skill games. While Ainsworth is launching new brands like King Kong (based on the 2005 film) and The Three Amigos, CEO Gladstone says the company is exploring new licenses “mindfully,” picking themes very carefully.

At G2E, the company announced an agreement that not only adds popular themes, but addresses the increasing demand for skill-based slots. The company has entered a strategic partnership with leading video game producer Bandai Namco Entertainment to produce slot games that will bring well-known arcade and online video game brands to the casino floor.

“Bandai Namco is a great company that owns many, many brands that are extremely well-known,” Gladstone says. “Our first foray in this relationship will be to create the Pac-Man slot machine. It’s coming out first in the social casino space, and then next year will be offered as an actual slot machine. It’s a great brand. It offers nostalgia and fun for players as well as opportunities to work in the skill-based space.”

He says the two companies are now studying the Bandai Namco library for new content. “Pac-Man will be the first in that line, but the partnership offers opportunities to make great, entertaining products across their whole library.”

Ainsworth will continue producing core games on all of its popular cabinet styles, including the A600 and A640 products launched this year.

Dreitzer says the A640 format is the natural evolution from the company’s popular A560 series of games. “It’s our belief that we will continue to grow a lot organically,” he says. “We do a lot of fair-share analysis, where we look to see if our products are out-earning their share of floor space. When the answer to that question is ‘yes,’ which is often the case, we can ask for more product placement.

To support this, we’ve come to market with many titles for each box. We have more than 50 titles approved for the A600, and when the A640 comes out before the end of the year, we’ll have eight titles to begin with.

“We have a lot of content to build upon our legacy of the core gambler.”

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Filling the Market Those games are being made available for a rapidly expanding market area for Ainsworth. “We expect to continue to expand our floor percentage throughout North America,” says Dreitzer. “In markets like Mississippi, Louisiana, Arizona and Wisconsin, among others, we’ve only just begun to place product, and have a long way to go before getting anywhere near saturation.

“And now that we are coming in with the horsepower of this brand-new line of products, along with a big catalog of approved games, we’re confident that we can continue to grow the floor share. We’ve got a whole new generation of product. The proof is in the pudding, and the pudding is in the cash box. We do very well with core product, and high-denomination categories.”

Pumping out new Ainsworth product is on tap not only in Las Vegas, but in South Carolina, the headquarters of the company’s recently acquired Nova Technologies subsidiary. Nova added the Class II market Ainsworth had lacked, and the companies have integrated their technologies to produce new games in both Class II and Class III. “We have completed the acquisition and the integration of Nova, so Class II presents a tremendous opportunity,” says Dreitzer. “We’re growing our Class II route in leaps and bounds, and on that side of the business, we have four cabinets, upwards of 30 titles on the Nova side, and another 15 and growing on the Ainsworth side.”

Just in time, he says, for the growth of the Class II market, which is currently in the 70,000-unit range. “We believe we can capture more and more share of that, and take Class II share away from the other companies who aren’t as focused in the space,” Dreitzer says.

Class II presence also means a stronger relationship with tribal gaming in general, he adds. “We have long had a commitment to being a reliable partner with tribal gaming throughout North America. So now, we’re able to

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offer not only Class III, but Class II, which enables us to really support the tribes in a much more meaningful way.”

The company’s commitment to tribes includes not only the multi-year donation to NIGA, but involvement with other tribal causes throughout North America. “We’re very pleased to be partners of the tribes, and it isn’t just a matter of selling them our games; it’s a matter of being committed to support what the tribes are seeking to accomplish,” Dreitzer says. “So, as we grow, so does our commitment to the tribes.”

Dreitzer says an ancillary benefit of the Nova integration is that some of the Nova product is gaining success in the Class III market. “We’re looking to port over some of those successful Nova games into the Ainsworth Class III world,” he says, “which is interesting, because it is a wholly different profile in terms of product.

“We like to be able to offer our customers different things. We’ve not yet had a customer who’s come up to us and said, ‘We have enough content; you don’t need to give us any more.’ There’s an ever-increasing need for more and more content, and so we’ve now got a center for excellence and design in South Carolina, in addition to the new studio in Las Vegas, all anchored by the mother-ship in Sydney.”

Along with third-party game designers like Lightning Box Games in Australia, with which the company recently began partnering on game design, Dreitzer says the new Ainsworth is tooled to continue to “increase and diversify our pipeline of content.”

Meanwhile, the company’s markets continue to expand, with likely next launches to include Quebec, British Columbia and Colorado within the next year, as well as bolstering of all current key markets—plus a renewed effort, thanks to Nova, in Oklahoma.

Dreitzer says the company will continue to communicate across North America the message that new Las Vegas headquarters says to the locals: “Our customers and our partners needed to understand that we’re here to say,” Dreitzer says, “and this building is a culmination of approximately 10 years of effort within the Ainsworth company to get to that point.

“On the larger scale, certainly it’s a testament to Mr. Len Ainsworth’s legacy, and to the tremendous commitment and leadership of our CEO Danny Gladstone and the leadership team, and what the company has been able to accomplish in North America. Mr. Ainsworth has been in gaming for more than 60 years, so this is a tremendous moment for both the man and the company.”

Pending regulatory approvals, the founder’s majority share of Ainsworth Game Technology will go to Austria’s Novomatic Group, but Dreitzer indicates that Ainsworth will remain very active.

“Mr. Ainsworth is extremely optimistic about this company, and about our industry,” says Dreitzer. “He rarely talks about the past. He talks of the history, certainly, but it is more about the future. He feels we’ve done a great thing here and we will continue to grow.”

Many think Ainsworth will be at it for a while yet.

He’s only 93, after all.

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’ N I K C O R in the

Free World

Seminole Hard Rock empire secure despite political, legal challenges

By Dave Palermo

P

olitical upheaval within the Seminole Tribe of Florida is not expected to have a significant impact on an ongoing legal dispute over the American Indian nation’s casino gambling regulatory agreement, or compact, with the state of Florida.

Nor is tribal politics likely to slow anticipated growth of the Seminoles’ multibillion-dollar economy, centered on its Florida casinos and Hard Rock International, which, after an agreement to consolidate all Hard Rock franchises, is expected to grow its inventory of branded hotels, cafes and casinos across the United States and abroad.

“The future looks very bright,” says Jim Allen, chairman and CEO of Hard Rock and Seminole Gaming, which manages the tribe’s seven Florida casinos and resort hotels.

The era of legendary Seminole Chairman James Billie came to an abrupt end in late September with his ouster by the tribal council, citing undefined “various issues and procedures” raised in an anti-Billie recall petition.

It was Billie’s second forced departure in the almost three decades he has served as head of the Seminole Nation. Billie’s initial 22-year reign began in 1979 and precipitated the rise of the Florida tribe from an impoverished indigenous community to a gambling industry giant. (See page 48.)

It is unclear what if any impact Billie’s departure could have on the Seminoles’ ongoing political and legal battles with the state legislature over table games allowed under the tribal-state compact.

“The ouster of James Billie could further complicate” the dispute, which has delayed $1.8 billion in planned expansion projects 44

Global Gaming Business NOVEMBER 2016

The Seminoles’ two flagship resorts are the Hard Rock Hotel Casinos in Hollywood (above) and Tampa, Florida

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at the tribe’s Hard Rock hotel casinos in Tampa and Hollywood, Florida, wrote Jerome Stockfisch in the Tampa Times.

However, most tribal insiders suspect Seminole leadership is unified in its fight with the state over the compact, which is currently before a federal judge. (See page 46.)

Nor is Billie’s departure expected to impact the tribe’s multibillion-dollar business empire, which is dominated by its Florida casinos and ownership of Hard Rock International (HRI), operators of 23 hotels and resorts and more than 160 Hard Rock cafes in 71 countries.

Since it was purchased by the tribe in 2007 for roughly $960 million, HRI annual revenues under Allen’s leadership have increased 51 percent to $663.3 million in 2015, according to public filings.

HRI’s casino and hotel inventory could grow substantially with September’s reacquisition of BREF HR LLC and affiliate Brookfield Financial LLC, which owned the Hard Rock casino brand west of the Mississippi and in certain foreign countries.

Management of Seminole tribal business enterprises, including Hard Rock operations, is largely kept separate from tribal politics. And the council is hugely pleased with Allen’s leadership of both HRI and Seminole Gaming.

“Billie helped propel Seminole to where they are now,” says South Florida gambling writer Nick Sortal, expanding a pioneering high-stakes bingo operation into seven Florida casinos, including the Tampa and Hollywood Hard Rocks.

“But the point man for their economic development has been Jim Allen,” Sortal says. “Allen is pretty much the guy. And the tribe is very supportive of him.

“Look at the results,” Sortal says of Allen’s time since taking over control of HRI and Seminole Gaming in 2001. “They understand what he does for the tribe.”

A veteran casino executive with a pile of industry awards, Allen has grown Seminole Gaming and HRI into a conglomerate that generates $5 billion a year, 90 percent of the tribe’s annual revenues. Other tribal businesses include tourism and cattle ranching.

“Allen is a very, very smart guy. A really bright guy,” says Dike Bacon, a partner in Hnedak Bobo Group architects, designers of Hard Rock cafes in New Orleans and Memphis.

Growing the Hard Rock Brand The Seminole purchase of HRI from London-based Rank Group Plc. was the largest single economic diversification in tribal history.

“This is a proud moment for the Seminole Tribe of Florida and for all Indian tribes,” Mitchell Cypress, then chairman of the tribal council, said in announcing the HRI acquisition nearly a decade ago.

“It is also an opportunity for the Seminole Tribe to diversify its business operations and help a very successful company to achieve even greater growth.”

Vice Chairman Max Osceola compared the HRI acquisition to the American Indians sale of Manhattan to the Dutch for “trinkets.”

“We’re going to buy Manhattan back one hamburger at a time,” Osceola said.

But many tribal elders were skeptical.

“Certainly it will be on my tombstone, ‘The tribe thought I was a little bit crazy.’ ” —Jim Allen, Seminole Gaming CEO, on the purchase of Hard Rock International

“Certainly it will be on my tombstone, ‘The tribe thought I was a little bit crazy,’” says Allen, a veteran of the Trump Organization and Sun International Hotel and Casino Group.

“It wasn’t that they didn’t like the idea. They were a little bit surprised we had the ability to enter into negotiations at that scale. Obviously, we were successful.

“What’s really amazing about that deal is we didn’t take one penny out of any tribal bank account,” Allen says, but instead leveraged existing tribal businesses.

The growth of Hard Rock has been impressive.

When the Seminole Tribe completed the purchase of HRI, there were 133 branded Hard Rock venues in 45 countries. Today, there are 212 Hard Rock venues in 71 countries.

Annual revenues have grown from $440 million in 2006 to $663.3 million in 2015. Hotel revenues have jumped 416 percent, cafe operations have increased 44 percent and franchise income has grown 67 percent.

Annual fees from Hard Rock casino operations have risen 115 percent, from $23.2 million to $49.9 million.

And hotel inventory has ballooned 377 percent, from 3,511 to 16,761 rooms.

The growth will likely continue, perhaps dramatically so.

The week Billie was expelled, HRI announced it was reacquiring the Hard Rock hotel and casino rights in the western United States and key international locations from BREF HR and affiliate Brookfield Asset Management. Those gambling and hotel rights were not included in the 2007 acquisition, and the separate Hard Rock companies date back to the split between Hard Rock founders Peter Morton and Isaac Tigrett in 1981.

“This is a historic day for the brand, and we could not be prouder to announce this acquisition that we believe ignites the path for further expansion around the globe,” Allen says of the deal, details of which remain secret.

“With the newly acquired rights, the Hard Rock brand has now been united for the first time in more than 35 years under one controlling ownership, the Seminole Tribe of Florida, allowing for globally consistent customer service and standards at all of our locations.”

HRI is now exclusively entitled to develop, own, license, franchise and manage Hard Rock casinos and hotels in the western United States as well as Australia, Brazil, Israel, Venezuela and Vancouver, British Columbia.

HRI also assumed agreements between BREF HR existing licensees, which include Hard Rock hotel-casinos in Lake Tahoe, Nevada; Sioux City, Iowa; Tulsa, Oklahoma; and Vancouver, British Columbia.

BREF HR affiliates will continue to own and operate the Hard Rock Hotel & Casino Las Vegas.

NOVEMBER 2016 www.ggbmagazine.com

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Judge Holds Future of Florida Gambling The vast majority of the nation’s Native American tribes are west of the Mississippi, providing Seminole with a wealth of opportunity to partner with other Indian governments seeking to adopt the Hard Rock brand in connection with a cafe, hotel or casino development.

“There are certain inquiries we are going to pursue,” Allen says. “We’re certainly very optimistic—with the Seminole being the owner of Hard Rock—sitting down with other tribal governments.

“A potential partnership has a greater opportunity to be successful when it’s two tribes, two sovereign governments, working together.”

Dolphins’ Stadium Gets A New Name While expanding its brand internationally and west of the Mississippi, Hard Rock in August also raised its profile closer to home, entering into an agreement with the Miami Dolphins professional football team to rename its facility Hard Rock Stadium.

The stadium is expected to host not only professional football games and an upcoming Super Bowl, but college events, concerts and international soccer matches, including the return of Real Madrid for the International Champions Cup in 2017.

The 18-year deal is believed to be worth about $250 million, or $14 million a year, the third-highest annual naming rights payout for a National Football League stadium.

Hard Rock had other stadium naming offers, Allen told the Miami Herald, but settled on the Dolphins facility “because of the location, the tribe being here; and Miami is a gateway to Latin America.”

The company’s gambling interests have little to do with the naming agreement.

he Seminole Tribe of Florida’s promised exclusivity to operate banked card games such as blackjack and baccarat—and perhaps games such as roulette and craps—at least temporarily rests with a Tallahassee federal court judge.

Lawsuits filed by both the Seminole Nation and state of Florida were consolidated and argued in early October before U.S. District Judge Robert Hinkle, who is expected to rule in the coming weeks.

A table game provision in a 20-year tribalstate casino regulatory agreement, or compact, signed in 2010 expired in 2015. But the tribe continues to offer the games, claiming the state acted in bad faith by allowing horse and dog tracks the right to offer electronic versions of blackjack.

The tribe also contends use of a “designated” player/banker by parimutuel tracks violates the compact and state law.

The state, meanwhile, is seeking to impose its ban on certain card games while asserting Eleventh Amendment immunity against the tribe’s lawsuit.

A proposed amended compact that would allow the tribe to operate blackjack, roulette and craps in exchange for an increased share of casino revenues was rejected last year by the Florida legislature.

Games played at the horse and dog tracks create “precisely the same kind of competition that (the Seminole was) paying not to have,” Seminole attorney Barry Richard told Hinkle. “Just because blackjack is played on a computer doesn’t mean it’s OK.” J. Carter Andersen, attorney for state gambling regulators, said tribes have no right under

T

By completing a deal to acquire rights to Hard Rock casinos west of the Mississippi and in several international locations, the Seminoles added (l. to r.) Sioux City, Iowa; Tulsa, Oklahoma; and Punta Cana, Dominican Republic

46

Global Gaming Business NOVEMBER 2016

the expired compact provision to operate table games.

“Why are we here? Because the tribe has no contractual right or other right to get what it wanted,” Andersen said.

The 2010 agreement gave the Seminole Tribe exclusive rights to operate slot machines outside of Miami-Dade and Broward counties. It also gave the tribe exclusivity to offer house-banked card games.

The tribe in exchange was to pay the state a minimum of $1 billion over five years. It actually paid the state $1.7 billion.

Governor Rick Scott and the tribe agreed in December to an amended compact under which the tribe agreed to pay the state $3 billion over seven years in exchange for being able to offer blackjack, craps and roulette.

The measure was amended in a legislative committee to allow counties to conduct referendums to legalize slot machines, a move that would violate tribal exclusivity.

Richard said Florida legislators were violating provisions of the Indian Gaming Regulatory Act (IGRA) requiring states to engage in “good-faith” negotiations with tribes on gambling compacts.

“By any standard under the IGRA, this is not good-faith negotiating by the state,” Richard told the court.

—Dave Palermo

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Billie May Not Be Through “It’s important to note that Hard Rock is a multi-faceted entertainment brand with its name on cafes, hotels and live music venues, and there is no connection between the stadium and any of the Hard Rock casinos,” Seminole spokesman Gary Bitner says.

The new name caught on quick.

“They’re already calling it ‘The Rock,’” Bitner says.

Keeping the Brand Strong Expansion plans for the Tampa Hard Rock include a 500-room hotel tower, a music venue, banquet and meeting rooms, a poker room, stores and remodeling of the entrance and Hard Rock Cafe.

Plans for the Hollywood Hard Rock include an 800-room, 34story guitar-shaped hotel, restaurants and a nightclub.

The work is conditioned on a favorable resolution to the tribe’s dispute with the state over promised exclusivity to offer housebanked table games such as blackjack, roulette and craps.

Keeping the brand fresh and relevant is a constant challenge, Allen says.

Hard Rock boasts a large and iconic collection of 81,000 pieces of music memorabilia, largely from the rock ’n’ roll era of the ’50s, ’60s and ’70s.

“Rock music is a sustainable brand; it transcends generations,” says Bacon, but in designing cafes in New Orleans and Memphis he incorporated local jazz and Elvis Presley memorabilia to give the properties a local flavor.

Allen says HRI is true to its roots.

“Certainly we haven’t forgotten about Elvis, the Stones or the Beatles,” he says.

But the company is continuing to update its music focus to meet the emerging market. Rihanna was Hard Rock’s signature artist for 2016 and Pitbull has that distinction for 2017.

“The majority of music we’re involved with, by far, is a global, international group of today’s artists versus the rock ’n’ roll artists of the ’60s and ’70s,” Allen says.

A Bright Economic Outlook Although the tribe shares its slot machine exclusivity with MiamiDade and Broward counties, Seminole officials believe it has a bright economic future with its monopoly on table games and potential expansion of its seven casinos.

The tribe’s gambling empire currently generates about $2.7 billion annually in gross gaming revenues.

Unlike gambling markets in the Northeast United States plagued by growing competition, Florida is a resort destination surrounded by water, generating roughly 80 million visitors a year.

“With the geographic location we have—being surrounded by water—there’s a great opportunity for both gambling and tourism and hospitality-related investments,” Allen says.

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Global Gaming Business NOVEMBER 2016

orn into poverty in 1944 and as an infant threatened with death by Seminole medicine men because his father was a white U.S. sailor, James Edward Billie survived to become one of the country’s most powerful American Indian leaders.

Billie, 72, successfully fought federal and state legal wars for his tribe’s right to operate high-stakes bingo on their Florida reservation, and is credited with turning the once-impoverished Seminole Tribe into an economic giant.

But his nearly 30 years as chairman of the Seminole Tribe of Florida ended September 28 when the Tribal Council voted 4-0 to honor a recall petition accusing Billie of “various issues with policies and procedures in the chairman’s office,” Seminole spokesman Gary Bitner says.

Tribal officials refused to elaborate.

It was the second time the often-controversial tribal leader was forcibly ousted as head of his tribe. A 22-year reign beginning in 1979 ended with accusations of secret financial dealings and sexual misconduct.

Billie also denied accusations he solicited the help of mob figures in running the bingo hall.

Billie, a folk singer whose album Alligator Tales was nominated for a Grammy award, took the defeat hard.

“In my heart, I’m still chief of the tribe,” he said in 2007. “They stole it from me.”

A Vietnam veteran who before entering politics supported his family by wrestling alligators and building and selling chickees—traditional Seminole houses—Billie led the tribe through legal challenges to a high-stakes tribal bingo operation launched by prior chairman Howard Tommie.

Seminole Tribe v. Butterworth, a 1981 ruling by the U.S. Court of Appeals for the Fifth Circuit, and the 1987 U.S. Supreme Court ruling in California v.

Cabazon Band of Mission Indians, are regarded as crucial court victories in tribal efforts to conduct gambling on Indian lands.

About 243 tribes in 28 states currently operate roughly 480 casinos generating $30 billion a year in gross gambling revenues.

The U.S. Supreme Court in 1996 upheld the right of the Seminole Tribe to operate casinos, despite the state’s refusal to negotiate a tribal-state compact normally required by federal law for a tribe to engage in what is known as Class III, casino-style gambling.

Billie was again elected chairman in 2011, taking 58 percent of the ballots.

He held the position until his ouster in September.

Billie, Chief Phillip Martin of the Mississippi Choctaw and Eddie Tullis, chairman of the Poarch Band of Creek Indians of Alabama, are together responsible for the success of tribal government gambling in the Southeast United States.

A stroke victim who walks with a cane, Billie may not be through with politics.

“He says he’s going to run again,” a tribal source says. “I believe he will.”

—Dave Palermo

B

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FRANKLY SPEAKING

by Frank Legato

Up In Smoke

RINALDO

Then the attorney general stuck his nose in, and snuffed out the plan like a spent roach. (Oh, come on. You don’t remember they were called that?) Well, not officially, but tribal leaders, faced with the prospect of loyal guests getting nabbed just outside of the reservation and put in the slammer, decided to suspend the whole operation until they can get a higher opinion.

OK, that was an accidental joke. By “higher,” I meant the U.S. Department of Justice. The last word on the subject from the tribe was that the suspension of operations was being viewed as a “brief sidestep” to their plans, and they were continuing to negotiate with federal and state officials to reach an accommodation that would allow opening of the Siouxby-Doobie Lounge, Casino & Spa at some point in the future.

This decision was made right after the first crop was harvested. Late last year, they burned the entire crop. A local reporter asked the tribe member who had been tasked with burning the crop what this setback meant for the tribal economy, to which he replied: “Well, it means… Well, what I’m saying is…

“What?”

Sorry. I couldn’t resist.

I hope they can work things out. The tribe had a sophisticated plan in place for the marijuana lounge. There were going to be dozens of strains from which to choose from a sort of stoner wine list, with food, beverages and, I’m guessing, 24-hour Grateful Dead music over the audio system. There was a strong security program, and they even had a plan in place to shuttle customers back to local hotels after their gaming/dope-smoking sessions.

I’m guessing the drivers were under instructions to take the easiest route past the local donut shops and ice cream parlors. Hey, that’s how I’d do it. Loyal player’s club members would get donut comps. Every 1,000 points gets you a dozen.

With sprinkles.

I’d also have a nap room on property—available, of course, for a nominal fee.

Hey, I’m always thinking.

VICT OR

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s you may know by now, I use this column to satirize and otherwise report on funny things concerning casinos. I take the reader on a humorous ride through the gaffes, the colorful characters and the unusual occurrences in the industry we all know and love.

But I’ve got a confession that may very well surprise you: Once in a while, I actually have trouble finding funny stuff. (You could tell from that first paragraph, right?) Sometimes when that happens, I will reference the issue of GGB from exactly one year back, to see what I thought was funny then. In November 2015, I wrote about a plan by South Dakota’s Flandreau Santee Sioux Tribe to open a “marijuana lounge” with slot machines in a former bowling alley on their reservation and near their current casino.

I decided to revisit South Dakota one year later to see how that plan worked out. As it turns out, it didn’t. State officials apparently put the kibosh on the plan.

According to the Indian Country Today website, South Dakota Attorney General Marty “Buzzkill” Jackley scrutinized the tribe’s marijuana-lounge plans and announced that while the sovereign tribe had legalized marijuana, the state had not, so any non-tribal member smoking the ganj at the Siouxby-Doobie Lounge (my suggested brand) would be subject to arrest for smoking pot.

What’s more, non-tribal members could be arrested even after leaving the, er, joint. According to the website, the attorney general announced that “any non-tribal member returning to state land with marijuana in their system (is) violating state law, and thus, also subject to prosecution.”

Wow. Bummer.

They had everything all set, too. It had been in December 2014 that the U.S. Department of Justice issued a memorandum stating that tribal nations may grow and sell marijuana as long as they use the same standards as legal-pot states like Colorado and Washington. In July 2015, the Santee Sioux Tribal Executive Committee officially issued an ordinance creating legal operations “on specific tribal lands for the possession, consumption, cultivation and distribution of marijuana.”

Soon after that, the tribe built a growing facility and planted seeds, in partnership with a Colorado weed-growing company. (Remember me hilariously noting that it was a “joint venture?” Har!) They started transforming the bowling alley into a lounge, complete with gaming machines, F&B facilities and even four rooms dedicated to medical marijuana treatments. The plan was to open the lounge with much fanfare last New Year’s Eve.

NOVEMBER 2016 www.ggbmagazine.com

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It can be argued that blackjack is a game of skill.

Does this place it outside the scope of gaming regulators?

It’s All

Gambling

By Steve Ruddock

The absurdity of the skill-versus-luck debate

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here is a memorable scene in the movie Pulp Fiction, where Samuel L. Jackson’s character, Jules, is trying to convey the seriousness of the situation he and Vincent, played by John Travolta, are facing. In a frantic phone call to his boss, Jules explains how the things could quickly go from bad to worse, saying, “You’ve got to appreciate what an explosive element this Bonnie situation is.”

In October 2015, the daily fantasy sports industry faced its own Bonnie Situation… sans the blood-soaked car and appearance by Harvey Keitel. The DFS industry’s travails kick-started a discussion in the gaming world: the skill-versus-luck debate.

On the heels of an unprecedented media blitz DraftKings and FanDuel had been engaging in for several weeks, the industry found itself in the legislative crosshairs after a DraftKings employee by the name of Ethan Haskell released proprietary data several hours ahead of schedule. Haskell’s faux pas was amplified by his $350,000 second-place finish in a major DFS contest on a rival DFS site that very same week.

What followed was 12 months of scrutiny by state attorneys general and lawmakers, leading to several AG opinions being proffered, and DFS bills being drafted in dozens of legislatures— to date, nine states have legalized DFS in various capacities.

At the center of these debates was how DFS fits (or doesn’t fit) into a New York Attorney General Eric Schneiderman once deemed DFS to be based on chance, but the state legislature decided otherwise 50

Global Gaming Business NOVEMBER 2016

state’s current gambling laws.

This has since morphed into the overarching question of skill versus luck in gambling, and what makes something gambling.

The Skill Test In part, the DFS industry was able to get legislation passed by steadfastly describing its contests as a game of skill. This has worked in some states, and “It’s one of the single fallen on deaf ears in others. most frustrating points “Obviously, the skill arguof gambling law.” ment has been the daily fantasy industry’s go-to talking point,” —Chris Grove of Narus Advisors, ESPN Chalk writer David Purcommenting that the skill-luck dum says. “So, if you define argument is just opinion gambling as an activity that hinges on chance more than skill, I would agree that daily fantasy is not gambling.

“However, while daily fantasy may not be slots or roulette, I certainly believe there’s some gamble to it.”

And it’s this question—how do we quantify the level of skill a game possesses?—that many states are wrestling with. The reason the answer is unclear has a lot to do with the motley and often-contradictory gambling laws states have to work with.

Some states used what’s known as dominant factor test (where skill outweighs chance) to determine if something is or isn’t gambling.

Other states use what’s known as the material element test, which says if

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chance plays a material role in the outcome, it’s gambling.

A third group of states uses what’s known as the any chance test, which says any amount of chance is enough for a game to be considered gambling.

The fourth method is as vague as the third is clear, the gambling instinct test. The gambling instinct test contends that if a game propagates gambling, it’s gambling, regardless of the amount of skill or luck it possesses. This makes it the gambling version of Supreme Court Justice John Potter’s famous opinion in regards to obscenity, “I know it when I see it.”

In a 2015 Wired.com column, Chris Grove of Narus Advisors, the publisher of legalsportsreport.com, explained how the subjective nature of most of these laws makes it difficult to come up with a consistent framework of laws governing gambling. “It’s fundamentally a matter of opinion,” Grove told Wired. “It’s one of the single most frustrating points of gambling law.”

Grove’s frustration highlights the fact that gambling laws don’t provide lawmakers and policymakers clear guidelines when it comes to what is and isn’t gambling.

“For me, I know I struggle with trying to figure out exactly when the proper point is to measure how much skill is involved in an activity,” Purdum says. “Is it when the bet culminates, which in poker would be one hand in cash games, or one game in sports betting?

“I would think most experts would take a much more long-term view. But how long? How do you know if over a lifetime of betting on sports or playing poker that my skill or lack thereof prevailed?”

With the exception of the “any chance” test, the inherent subjectivity of these laws explains why you can have two states, with similar tests for skill vis-àvis chance, reach two different conclusions when it comes to DFS.

DraftKings and FanDuel have been insisting that their games are skill, not luck

In New York, where the threshold between skill and gambling is a version of the dominant factor test, Attorney General Eric Schneiderman concluded DFS is gambling. DFS has since been deemed a game of skill by the legislature, thereby falling outside the purview of gambling laws and gaming regulators.

However, a recent lawsuit filed in the New York Supreme Court is challenging the legislature’s classification of DFS as a game of skill; Schneiderman might have to ironically defend DFS as a game of skill in court.

In Nevada, which also uses the dominant factor test, DFS was also determined to be gambling by the attorney general, and operators are required to be licensed and regulated as gambling operators by the Nevada Gaming Control Board.

The Blurred Line of Games and Gambling DFS isn’t the first game to test these boundaries, nor it will it be the last.

New products and new variations of existing games are popping up all the time. Further complicating this is the recent phenomenon of products pushing the envelope when it comes to how close you can get to gambling without becoming gambling. This can be done to avoid the high taxes and robust regulations games of chance often face, or as a means to skirt an existing prohibition on a particular type of gambling, such as sports betting.

Daily fantasy sports may be the best known of these new products that

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“What difference does it make as a matter of public policy whether you gamble on the throw of dice or the throw of a dart? Does it make any difference that one is skillful and one is pure chance? Should they be regulated any different? I just don’t get that.”

—Massachusetts Gaming Commission Chairman Stephen Crosby

have been specifically crafted to not run afoul of the country’s antiquated gambling laws, but it’s certainly not alone.

Virtual sports, eSports, skill-based slot machines and social casinos are all new products that gaming regulators and lawmakers are trying to wrap their heads around and decide how to classify.

Because many of these products were carefully designed to fall outside the classic definition of gambling (DFS was designed to comport with the fantasy sports exemption in the 2006 Unlawful Internet Gaming Enforcement Act), the efficacy of current gambling laws has been found wanting, and the overarching question of what is and isn’t gambling remains elusive.

As Purdum puts it, “Until a high court rules definitively on whether daily fantasy constitutes a game of skill or chance, you’re going to be able to argue both sides.”

And even then, this hypothetical court decision would have to play out in multiple states to cover the different variations of the skill-versus-luck test.

Let’s Go Even Deeper Into The Weeds The amount of skill and the amount of luck is where most of the debate is taking place, but it’s only one part of a bigger puzzle.

“While the skill-versus-chance debate received a lot of attention during the past year in the context of daily fantasy sports, the importance of the issue is sometimes overblown,” says Ryan Rodenberg, an associate professor of sports law analytics at Florida State University. “In some states, the relative level of skill and chance is irrelevant. Likewise, the IRS’ definition of a ‘contest’ explicitly includes skill-based competitions for purposes of the federal excise tax applicable to wagers and pools.”

Another consideration that often determines how a game is perceived is the game’s rules, and whether or not the mechanics of the game allow a player to beat the game.

For example, blackjack is skillful, but most players don’t consider it a game of skill under the standard rules used by most casinos because it’s impossible for the player to have an edge, card-counting not included. However, if a casino were to implement some player-friendly rules—paying 2-1 on all blackjacks, for example—the game becomes beatable, and depending how high a player’s edge becomes, the perception of the game might start to shift from gambling to a game of skill.

This can also work the other way. The structure of poker games or DFS contests allows the top players to beat the game in the long run. That being said, if a casino decided to increase its poker rake cap from $4 or $5 to $10 or $20, poker would no longer be beatable. Poker would in effect become blackjack, a game with no trivial amount of skillfulness, but a game that has a negative expectation.

Beyond a game’s beatability, there is another major difference between blackjack and poker that comes into play—playing against peers or the house.

If a casino offered beatable blackjack, every player would be able to beat the games simply by making the right decisions. This isn’t the case in poker, because it’s a peer-to-peer game.

In poker, skill is relative. In poker, the 10th worst player in the world can still be the best player in the game, and make profit, if he’s playing against the 52

Global Gaming Business NOVEMBER 2016

only nine people on the planet worse than he is.

DFS is in a similar situation. And this leads to yet another element that needs to be addressed when we discuss gambling. In peer-to-peer games, you’re gambling on being better than your opponents. This unknown element would even be present in chess. If I sit across a chessboard from an unknown person, we’re playing one of the purest games of skill. But, if we, or observers, place a wager on who will win, we’re now gambling on who is better at chess with some amount of incomplete information.

Is There An Easier Way? This raises yet another question. Should any of this really matter when it comes to determining what is and isn’t gambling?

In a perfect world, no.

“There have been millions of dollars spent litigating whether DFS is a game of skill or a game of chance, and if it’s some skill is it enough skill to make it avoid the regulations of games of chance,” Massachusetts Gaming Commission Chairman Stephen Crosby says. “That just makes no sense to me.

“What difference does it make as a matter of public policy whether you gamble on the throw of dice or the throw of a dart? Does it make any difference that one is skillful and one is pure chance? Should they be regulated any different? I just don’t get that.”

Crosby indicates the speed of innovation in gaming requires a certain nimbleness just to keep up, which is why the MGC chairman has advocated for a much broader definition of gambling that would eliminate the legislative and judicial morass the skill-versus-luck debate has created.

On this front, Crosby calls for defining gambling as “something along the lines of purchasing an opportunity to win an award on a future event,” adding that if a game has those three elements, it’s gambling and can be regulated as such.

Crosby isn’t the only person who feels this way. Purdum echoes his call for more nimble, streamlined laws, saying, “Things move quickly in the gaming world, so making sure the laws are adaptable and, again, broad makes the most sense to me.

“If I had a magic wand, I would take on a massive overhaul of our gambling laws, creating broad parameters that don’t rely on skill versus chance to determine which games require what level of regulation.”

This streamlining of gambling laws would put an end the never-ending cycle we see every time a new game comes on the scene: a period of where the market is unregulated that usually ends in scandal, followed by debates in legislatures, and hopefully some type of legislative action.

Instead, we would have a framework to create consistent gambling laws that don’t favor an established product over a new one, or raise legal questions about the definition of gambling or how a game fits into current laws.

Bottom line: Until gaming laws are streamlined and updated for the 21st century, with consistency and adaptability as their core components, what is and isn’t gambling will continue to be a question without a good answer.

As Purdum succinctly puts it: “I really hope, when the U.S. finally modernizes its badly outdated gambling laws, lawmakers lessen the dependence on the skill-chance element as a determining factor.”

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terms of service. Some shut down, but according to a report in the Seattle Times, others have switched to using virtual currencies, which then could be used to trade for the skins.

William Hill, Amaya Merger Off no longer being considered. Baazov no longer plays any role in the company outside of his equity ownership.

Washington State Regulators Warn Valve on Skins Betting

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here will be no merger at present of bookmaker William Hill and PokerStars owner Amaya Gaming. Talks concluded last month between the boards of directors of William Hill and Amaya with a joint decision that the companies will no longer pursue a merger.

Amaya Chairman Divyesh Gadhia said that remaining an independent, publicly traded company best positions Amaya to deliver long-term shareholder value. “Amaya is a strong and growing company with experienced management and a proven strategy to deliver profitable growth and shareholder value,” he said.

The possible deal came amid a flurry of consolidation in the iGaming sector over the past year, which saw Betfair and Paddy Power merge, Ladbrokes and Gala Coral finalizing their deal, and GVC Holdings buying Sportingbet in 2015, outbidding 888.

In fact, William Hill recently spurned a takeover bid from 888 and the Rank Group that was valued at ₤3 billion. The market cap for William Hill is today ₤2.15 billion and Amaya, whose stock is down 23 percent over the past year, is valued at ₤3.4 billion. The Amaya board also said it had received interest from GVC Holdings as well as the William Hill talks.

Both companies have had troubles recently.

William Hill has been without a chairman since James Henderson stepped down in July after questions about his digital strategy were raised. The company had previously tried to acquire both Rank and 888 but was unsuccessful in each case.

As for Amaya, it’s been downhill since the company purchased PokerStars and Full Tilt for almost $5 billion in 2014. Insider trading charges against then-CEO David Baazov were raised. Baazov stepped down from that position, and later resigned from the board, saying he was organizing a plan for a buyout that would take the company private. According to a Reuters report, that plan is

W

ashington state’s Gambling Commission has made a move involving the controversial online betting of video game “skins” by ordering Seattle-based game-maker Valve Corp. to stop supporting the betting market.

In skins betting, players involved with eSports games like Valve’s Counter Strike: Global Offensive use virtual items from the games as currency in making bets. The commission called the betting an unregulated black market.

“In Washington, and everywhere in the United States, skins betting on sports remains a large, unregulated black market for gambling,” Commission Chairman Chris Stearns said in a statement. “And that carries great risk for the players Washington State who remain wholly un- Gambling Commission protected in an unregu- Chairman Chris Stearns lated environment.”

The commission sent a cease-and-desist letter to Valve Chief Executive Officer Gabe Newel after officials said the company did not respond to requests for more information following a meeting in February. Valve is headquartered in Bellevue, Washington.

The commission said if the company doesn’t comply with the state’s gambling laws, it could seize any property related to illegal gambling activities, according to the letter.

Skins betting has been drawing attention from regulators after several controversies involving the practice, which often appeals to underage players.

Valve has been trying to distance itself, and has taken some action against sites that use its Steam platforms to exchange the virtual items.

In July, Valve sent a cease-and-desist order to 23 skins betting sites, saying they were violating its

CG Technology Agrees to Pay $22.5 million fine

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ederal prosecutors announced that CG technology, one of the largest sports book operators in the U.S., has agreed to pay $22.5 million in penalties and forfeiture to resolve criminal and civil investigations into illegal gambling and money laundering schemes.

According to Reuters, CG Technology LP had agreed to pay $16.5 million and enter into a nonprosecution agreement, three years after a former executive pleaded guilty to conspiring to participate in an illegal gambling business.

The U.S. Treasury Department’s Financial Crimes Enforcement Network separately announced a $12 million civil penalty against CG Technology, $6 million of which will be covered by the company’s criminal settlement.

The settlement is the result of an investigation that began in January 2013 and included U.S. attorneys in New York and Nevada, the U.S. Postal Service, the Internal Revenue Service and the New York City Police Department, authorities said in a press release.

Prosecutors said that the deal resolves a probe into the company’s past involvement in illegal gambling and money laundering schemes. CG Technology agreed to cooperate with the investigation and take remedial measures.

Las Vegas U.S. Attorney Daniel Bogden also said CG Technology admitted violating law by accepting messenger betting and out-of-state betting, and by laundering money.

According to the statement of facts released by the Justice Department along with the settlement, the scheme involved an illegal gambling and bookmaking operation, identified by authorities as the “Jersey Boys.” The group included an unnamed Florida bettor who owned a pick-selling service, an offshore sports book located in Costa Rica and executives at CG Technology’s Nevada sports book.

Former Cantor Gaming Vice President of Risk Management Michael Colbert previously pleaded guilty to federal conspiracy charges from the case and faces up to five years imprisonment, according to ESPN.com.

NOVEMBER 2016 www.ggbmagazine.com

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Eastern Europe emerges

By Michael Vanaskie and Cameron Steinagel

Even without visitors from outside the region, Eastern European casinos can draw from a substantial customer base.

In this special report, learn how and why integrated resorts in Eastern Europe can work for governments and investors alike.

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he development teams of the world’s leading gaming developers and operators are always searching for new brick-and-mortar opportunities. For years, the North American and Asia-Pacific markets could be counted on to provide strong returns on investments for new large-scale developments.

However, with a mature gaming market in North America experiencing single-digit revenue growth and the continuing lack of stability in many Asian-Pacific gaming markets, there is no doubt that developers and operators alike are finding fewer opportunities in these markets and searching for new geographical areas of growth.

In this article, the Innovation Group will examine the Eastern European region as a whole, as well as specific countries within the region, to determine if these markets can provide another growth channel for the brick-and-mortar segment of the industry. We will look at key characteristics of the region, consider legislative changes as well as the potential for new development in the region, and discuss how the region can benefit from the changing global landscape.

Gaming as Driver of International Tourism Encouraging Western-style gaming developments can be an attractive proposition for those jurisdictions with underdeveloped or no gaming. The introduction of large-scale gaming resorts, or integrated resorts, has been a driver of international arrivals for a number of countries over the past decade.

Consider, for example, Singapore and the Philippines. Before the introduction of large-scale gaming developments in these countries, which came in the form of Marina Bay Sands in Singapore and Resorts World Manila in the Philippines, tourism growth could be labeled as uninspiring.

In 2005, Singapore welcomed 8.9 million arrivals. This figure grew at a compound annual growth rate (CAGR) of 2 percent through 2009, when arrivals reached 9.7 million. When Marina Bay Sands opened in 2010, however, tourism arrivals jumped by more than 20 percent to over 11.6 million. Strong tourism growth continued in the years following the opening of Marina Bay Sands—from 2010 to 2012, arrivals increased at a CAGR of 11.6 percent.

Tourism in the Philippines experienced similar increases from the opening of Resorts World Manila in the second half of 2009. From 2005 to 2009, tourism arrivals grew at a CAGR of only 3.1 percent. In 2010, the first full

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year of operations for Resorts World Manila, arrivals jumped by nearly 17 percent. From 2010 to 2012, the strong growth in tourism arrivals continued in the Philippines, increasing at a CAGR of 7.3 percent.

Eastern Europe: An Economic and Demographic Overview While the introduction of Western-style gaming developments could benefit the Eastern European economy, there are several economic and demographic characteristics that make the region attractive for developers and operators as well. As shown in the table below, the 2015 average GDP per capita for the countries we focused our analysis on was nearly 40 percent higher than the global average GDP per capita of $9,996. Despite the fact that GDP per capita has been broadly declining over the past several years, there are numerous countries within the region that maintain above-average GDP per capita levels. The Eastern European countries with GDP per capita figures above the global average include Austria, Cyprus, Greece, Malta, Estonia, Czech Republic and Hungary.

The new Olympic Casino in Tallinn, Estonia, is located in the Hilton Hotel

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l

Casinos Austria operates the elegant casino in Vienna, Austria

In addition to above-average GDP per capita levels, Eastern Europe has achieved above-average tourism growth in recent years as well.

From 2009 to 2014, total international tourism increased at a CAGR of 7.6 percent. This growth rate compares favorably to the global average of 4.7 percent over the same period. In terms of total 2014 arrivals, the top five countries include Russia (32.4 million), Austria (25.3 million), Greece (22.0 million), Hungary (12.1 million) and the Czech Republic (10.6 million). In terms of tourism growth rates, the top five countries include Georgia (28.4 percent), Albania (11.1 percent), Bosnia (10.1 percent), Greece (10.1 percent) and Russia (9.8 percent).

Eastern European Countries and Markets with Emerging Gaming Opportunities We recognize that while there are positive economic and demographic trends occurring in the region as a whole, there are several countries, in particular, that are experiencing intriguing developments from a brick-and-mortar gaming perspective. Here, we’ll examine the specific countries that, in our opinion, have some of the most interesting gaming-related developments occurring.

from 2014 to €310.7 million. Additionally, visitation increased 8.6 percent year-over-year to 2.7 million total guests at the company’s domestic casinos.

Approximately 1.4 million of these guests were international visitors. This strong growth has continued in 2016, with gaming revenue increasing approximately 8 percent in the first half of 2016 to €155.8 million.

In addition to Casinos Austria’s gaming operations, the country is home to numerous VLT outlets. As for now, Casinos Austria has a monopoly on land-based casinos in the country. This monopoly was secured in a recent ruling by the Austrian Supreme Administrative Court in which it revoked three additional licenses that were awarded in 2014. Recognizing the strong growth in GGR paired with annual international arrivals of over 25 million visitors, operators and developers should keep a close watch on the potential for any legislative changes that could allow for new land-based development in the country.

Albania Albania represents a gaming market undergoing some unique changes. Currently, Albania allows gaming of almost all types, including traditional casinos with slot machines and live table games, electronic casinos (smaller, “slot hall” style casinos), online gaming, bingo, sports betting, and dog/horse track betting. However, under proposed gaming legislation, all existing casinos and electronic gaming facilities will close when a single license is granted to an operator for the casino to be located in the new Amadeus Palace resort in Tirana.

Cyprus

Austria The brick-and-mortar casino industry in Austria is small relative to other global gaming markets, but growing. According to Casinos Austria AG’s 2015 annual report, revenues for the company’s 12 domestic casinos increased 20.3 percent

There have been numerous media reports on the developments surrounding the granting of a single license for an integrated resort on the island nation located in the Mediterranean Sea. The original list of bidders for the license include some of the gaming industry’s biggest names—Bloomberry Resorts, a consortium of Hard Rock International and Melco International Development, and NagaCorp.

In late September, both Bloomberry and NagaCorp stated that they would no longer be participating in the RFP process. There have been some additional hiccups throughout the bid process, including a delay for the casino license finalists to submit their final proposals. Despite the setbacks, the government still hopes to grant the single casino license by the end of 2016, with bidders having until October 5 to submit their final proposals.

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which are located close to the Turkish border. In 2012, Turkey and Georgia relaxed travel restrictions on each other’s citizens. It remains unclear whether or not Tayyp will take any further action to mitigate Turkish gambling on Georgian soil. However, if the 2012 actions are reversed and more stringent travel policies are introduced, foreign visitation to Georgian casinos could suffer.

Estonia A single casino license in Albania will soon be offered for the Amadeus Palace resort in Tirana

The winning bidder will also be allowed to construct a satellite casino and up to three slot parlors in the country.

Once the integrated resort is finally operational in the country, it will likely lead to a boost in tourism. The country could use a tourism catalyst, as tourism grew at a CAGR of only 3 percent from 2010 to 2014.

Malta The country of Malta currently has four operating casinos. In 2015, these casinos welcomed over 781,000 visitors of which nearly 399,000 were nonMaltese. Additionally, the casinos generated approximately €36 million in GGR for the same year. One of Malta’s casinos, the Dragonara Casino, recently underwent a €10 million renovation. While the €10 million price tag for the upgrade may seem small, it included a new VIP lounge. Given the country’s picturesque scenery and mild climate, the Dragonara Casino does well in attracting high-end clientele.

On the regulatory side, Malta Gaming Authority’s chairman, Joseph Cuschieri, recently said the country’s Gaming Authority will be proposing new legislation in the coming months. This legislation will allow for complete governance of the gaming sector. Cuschieri explained in an interview that he sees Malta’s gaming industry “(being) much larger in 10 years’ time.”

Russia The gaming landscape in Russia continues to go through dynamic changes.

Recently, Tigre De Cristal, the only casino operating in the Primorye gaming zone, announced that VIP gambling turnover increased to $283 million in August after the casino signed new fixed-room deals with junket operators.

This represents a nearly nine-times increase in monthly VIP turnover from November of last year when the casino officially opened.

Elsewhere, in May 2016, Russian President Vladimir Putin extended a shutdown order to January 1, 2019 for casinos operating in AzovCity. Even though the extension allows the casinos to remain operational for several more years, it reaffirms the government’s commitment to shift gaming activity for the region to Sochi.

Georgia The country of Georgia has approximately 14 operating casinos.

Georgia has an attractive tax structure which creates an incentive for casinos in Georgia to grow by providing set annual and quarterly fees rather than taxing overall revenues. These fixed annual fees are conducive to larger facilities.

In development news, earlier this year, Melco International announced its decision to pull out of its planned casino inside the five-star Millennium Biltmore Hotel. More recently, Georgian media reported that Turkish President Recep Erdogan Tayyp has begun lobbying to close Georgian land-based casinos, many of 56

Global Gaming Business NOVEMBER 2016

The gambling industry in Estonia is regulated by several laws. The two principal laws are the Law on Gambling from 1995 and the Law on Lottery from 1996. The State Fees Act from 1997 deals with fees for the gambling industry.

Gambling Tax Law of 2004 regulates the taxation of gambling. In April 2009 the Estonian parliament, Riigikogu, adopted the new Gambling Tax which came into force on June 1. The new Gambling Law set stricter rules and higher financial and technical requirements for operators. Taxes on some forms of gambling were also increased.

In addition to the new gambling tax, the Gambling Act of 2009 was introduced to better regulate and control the Estonian gambling industry, which had grown into many small, widely dispersed gambling locations. This legislation required all slot halls and casinos to have at least 40 slot machines and five gaming tables. This act also led to the legalization of online gambling.

In development news, Olympic Entertainment Group opened its largest casino resort in Tallinn, Estonia earlier this year. The casino resort includes the 202-room Hilton Tallinn Park, which is the first Hilton hotel in the Baltic region.

Czech Republic As of 2014, the Czech Republic was home to approximately 108 casinos, containing approximately 2,155 slots and 331 tables. Nearly one-third of the country’s casinos are located in Prague, with approximately 681 slot machines and 104 tables. Since 2011, gaming revenue in the Czech Republic has declined at an average annual rate of 5.9 percent due to the increased popularity of VLT machines within the market. The Innovation Group expects this decrease to continue in the near future.

New gaming legislation was published in October 2014 and is set to be implemented in 2017, although it still requires approval from the Senate. This proposed law will raise the slot tax from 28 percent to 35 percent and require strict regulations on the registration of players. Additionally, it will open online gaming operations to foreign entities and give the Ministry of Finance the power to close any illegal facilities.

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Current and Potential Gaming Tourist Feeder Markets for Select Countries It is important to understand the current and potential tourist feeder markets that will service these highlighted countries specifically for casino visits. Tourists are most likely to be attracted to a gaming destination based on the geographic location, cultural similarities, safety of travel and casino product available, along with other factors.

The chart opposite illustrates the potential feeder markets to service these markets, taking into consideration the criteria noted earlier. For example, Albania will pull from Italy, Macedonia, Bosnia and the Middle East while at a lesser degree Northern Turkey, Bulgaria and Northern Greece. Many of these feeder markets are geographically close to Albania, while the Middle East is a good tourist fit because of Albania’s large secular Muslim population base.

As discussed throughout this article, there are many different ways that gaming in Eastern Europe can grow. We encourage operators and developers to continue to monitor the region and explore potential opportunities in this emerging gaming market.

As always, the Innovation Group will continue to keep our finger on the pulse of gaming-related developments within the region and help our clients capitalize on any current and future opportunities.

Michael Vanaskie is director of operations planning and Cameron Steinagel is vice president market and financial analysis for the Innovation Group.

Moving Forward: The Future of Gaming in Eastern Europe The changes occurring in Eastern Europe discussed above will certainly lead to a new gaming landscape over the next decade. If and when Western-style gaming proliferates throughout the market, it is likely that both tourism and gross gaming revenue will increase at above-average rates. Just as the region is likely to receive influence from the West, it is also drawing from the East.

As the Innovation Group has previously noted, Eastern Europe will undoubtedly benefit from China’s commitment through its “16+1 platform” to build an “Economic Belt” along the historical Silk Road, a trans-Eurasian project from the Pacific Ocean to the Baltic Sea. While this initiative will likely result in broad economic development, it has already led to positive gaming-specific developments. As the Belt reaches into Europe, Asia-based gaming companies are beginning to position themselves accordingly.

In July 2015, Galaxy Entertainment Group Ltd. acquired an equity position in the casino firm Société des Bains de Mer (SBM) that operates four casinos and several hotel properties in the Monaco principality, including Casino de Monte-Carlo. Hong Kong-listed Landing International Development Ltd. has recently inked a deal to acquire a company controlling the upscale Les Ambassadeurs Club and Casino in London, in consideration of expanding and diversifying its gaming operations.

NOVEMBER 2016 www.ggbmagazine.com

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G2E Highlights Future of Industry Global Gaming Expo 2016, the largest gaming trade show and conference in the world, looked to the future with a focus on new opportunities and new technologies including skill-based gaming, electronic table games and new styles of slot machines. Sports betting played a major role as NBA Commissioner Emeritus David Stern explained his journey in coming to accept the wisdom of legalizing the activity. By Frank Legato

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he gaming industry looked to the future as members of all industry sectors gathered in September for Global Gaming Expo 2016 at the Sands Expo and Convention Center in Las Vegas.

The industry’s largest trade show and conference kicked off Monday, September 26, with featured speaker Frances Townsend, a former Homeland Security adviser to President George W. Bush who called on gaming professionals to be “fearless” in pursuing career dreams. Townsend, a board member of supplier Scientific Games, urged gaming professionals— particularly women—to follow their passions.

“Courage is not the absence of fear, but our capacity for action despite fear,” she said at the Global Gaming Women-sponsored event, borrowing a quote from Arizona Senator John McCain.

Sports Betting Central On Tuesday, G2E’s main conference program and trade show kicked off with American Gaming Association President and CEO Geoff Freeman’s annual “state of the industry” press conference and welcome presentation on the main G2E keynote stage. Freeman emphasized the maturation of the gaming industry into an accepted mainstream business. “The Ameri58

Global Gaming Business NOVEMBER 2016

can attitude toward casino gaming has never been greater, and the mainstream nature of this industry has never been greater,” he said at his preshow press conference. “Las Vegas has never been more mainstream than it is today.”

Freeman cited the coming next year of a Las Vegas National Hockey League franchise and talks of moving the Oakland Raiders NFL team to Las Vegas as examples that the gaming industry has outgrown the stereotypes of the past, but he tied that fact into a theme that the AGA has pushed hard all year—the need to repeal the federal ban on sports betting.

Noting that while options for expansion of casinos to new markets are limited, sports betting is an obvious growth area the industry needs to pursue. “When it comes to growth, we’re going to have to get more creative,” he said. “One way is to give them the products they want most, and there’s no better example of that than sports betting.”

Freeman pointed out that $150 billion a year is bet on sports in the U.S., with all but around $5 billion of it wagered illegally, with no regulation to protect bettors and no tax revenue to communities. He once again called for a repeal of the Professional and Amateur Sports Protection Act of 1992 (PASPA), which banned sports betting in all but four states, three

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The Soup Nazi hosted the debut of the Seinfeld slot machine at the Scientific Games booth

(l. to r.) NIGA’s Ernie Stevens joined AGA’s Geoff Freeman to talk about commonalities with Victor Strategies President Victor Rocha

The G2E Ribbon-Cutting was conducted by a group of Global Gaming Women

of which offer limited parlay-style betting.

Sports betting would be a recurring theme in the keynotes and conference program. Keynote sessions included “The Key to Sports Integrity in the United States: Legalized Regulated Sports Betting,” in which Freeman was joined by experts from the United Kingdom; and another session on the final day of the show in which Freeman was joined by former National Basketball Association Commissioner David Stern, who, like his successor Adam Silver, advocates repealing PASPA. “The belief that gambling will lead to bad things is an outdated notion,” Stern said. “Let’s not talk about the ‘evils’ of gambling when it comes to sports.

The industry has come to accept that a properly run gaming association will be protective towards sports.”

“When it comes to who is going to lead the charge in Capitol Hill, those discussions are ongoing,” Freeman said at the beginning of the conference. “But we will succeed in getting PASPA repealed.”

AGA & NIGA: Perfect Together Other keynotes included a focus on the relationship between the AGA and the National Indian Gaming Association, in which Freeman and NIGA Chairman Ernest Stevens Jr. outlined common goals—such as fighting the attempt by the Internal Revenue Service to lower the documentation threshold on slot wins from $1,200 to $600—and stated that past differences between the two organizations are greatly outweighed by the benefits of working together toward those common industry goals.

In a Wednesday keynote address, technology “futurist” Scott Klososky urged the casino industry to take a more proactive stance to adopting new technology.

Klososky said we are in an era of “Digital Darwinism,” in which forward-thinking leaders who embrace interactive technology will thrive and others will die.

“Every industry is somewhere on the curve of hitting the inflection point when technology comes together to radically change an industry so that it’s never the same,” Klososky said.

“Where is the gaming space on this curve?” he asked. “I’d argue that you’re

Basketball legend Shaquille O’Neil gave a lift to a visitor to the Inspired Gaming booth

Country singer Tim McGraw came down from the clouds at the Aristocrat booth

Las Vegas Mayor Carolyn Goodman presented the key to the city to Wheel of Fortune’s Vanna White at the IGT booth

probably close to the inflection point but haven’t really hit it yet.”

On Thursday, the sports betting discussion was preceded by the AGA’s CEO Roundtable, moderated by University of Nevada, Las Vegas Professor Bo Bernhard, who is executive director of the school’s International Gaming Institute.

The future of the industry was discussed by Penn National Gaming President and CEO Timothy Wilmott and Pechanga Band Tribal Chairman Mark Macarro.

All About the Games Of course, while the educational program at G2E gets better every year, anticipation of the show across much of the industry inevitably turns to the “new model year” of games from the worldwide group of suppliers who use the show to launch new content for the coming year.

For manufacturers of slot machines, the innovation displayed at this year’s show, as usual, exceeded all past shows, but more importantly, blazed new trails in terms of the styles of games to be offered. Traditional slots were joined by the first batch of skill-based games, produced in response to calls from regulators in Nevada and New Jersey for new game styles that will create new players among the younger demographic. Meanwhile, the collection of licensed brands among slot-makers joined with new electronic and live table games in yet another mind-boggling G2E trade-show display.

To see Frank Legato’s favorite slot machines from G2E, read this story online at GGBMagazine.com.

NOVEMBER 2016 www.ggbmagazine.com

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NEW GAME REVIEW

by Frank Legato

Concerto SeleXion Konami Gaming

Manufacturer: Konami Gaming, Inc. Platform: KP3+; Concerto Format: Multi-game video slot Denomination: Various Max Bet: Various Top Award: Various Hit Frequency: Various Theoretical Hold: Various

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his new multi-game unit matches Konami’s top-performing Concerto video upright cabinet with the first of what will be an expanded lineup of video slot formats on the platform.

The Concerto SeleXion multi-game unit features a sleek black design, signature holographic lighting, high-definition monitors and the powerful KP3+ platform, with up to 10 different game themes in a single machine. Concerto SeleXion carries expanded memory and processing power for the industry’s fastest game change speed, according to the company.

SeleXion’s “DynamicDash” button panel combines a digital display with push buttons to allow instant modification for different denominations, line counts, languages and currencies as needed.

Concerto SeleXion has the flexibility to showcase leading new KP3+ game themes or proven KP3 titles such as China Shores, Dragon’s Law and Lotus Land, in addition to a stand-alone progressive bonus.

Available themes are displayed to guests through a menu attract animation that cycles through the different titles.

Dark & Stormy

International Game Technology

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his new game on IGT’s CrystalDual cabinet resides on the unique “King Reels” format. The reel display in this series consists of three stacked five-reel, 40-line reel sets—one displayed on the lower monitor and two on the top monitor. Each reel set has four rows of symbols.

The player can wager to activate one, two or all three sets, for a game field of 40, 80 or 120 paylines. When wagering enough to activate all 120 lines, special bonus symbols and multipliers extend through the entire 12 rows of symbols.

King Reels also features huge reel strips and giant symbol stacks— stacked symbols can extend across the entire 12 rows if the wager is enough to activate them.

Dark & Stormy places this setup in an elegant game themed around an opulent mansion, with reels symbols including various jewelry items, a woman with a crystal ball and the mansion itself.

Three or more crystal ball symbols scattered anywhere on the reels trigger a free-spin bonus. During the free spins, a random “Lightning Wild” symbol awards a multiplier that covers the entire third reel. Because it covers the center reel, the multiplier applies to all winning combinations.

If play is active on one or two of the reel sets, the Lightning Wild multiplier can be as high as 4X. However, if the entire 120-payline configuration is active when the bonus is triggered, that multiplier can be as high as 12X.

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Global Gaming Business NOVEMBER 2016

Manufacturer: International Game Technology Platform: S3000 Format: Five-reel, 125-line video slot Denomination: Multidenomination Max Bet: 1,250 Top Award: 12,000 Hit Frequency: 84% with 10 paylines active Theoretical Hold: 2%-7.5%

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Michael Jackson Icon Scientific Games

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his third game in Scientific Games’ series of Bally slots themed around late pop icon Michael Jackson uses the Alpha Pro Wave with Digital Wheel cabinet for a collection of bonus events and a wheel spin featuring video clips and audio of many of the star’s biggest hits.

The base 30-line game includes mystery events that add wild symbols and credit awards. One awards an instant Major Mystery Jackpot or Minor Mystery Jackpot. The mystery jackpots range from 100 to 800 times the bet per line.

Another mystery event is the “Wild Equalizer Feature.” This event can be randomly triggered when a wild symbol lands in the center position of reel three, known as the “Wild Zone.” When the feature is triggered, the reels expand to six rows, adding 40 paylines and five to 17 additional wild symbols.

The “Wild Bad Feature” may also occur randomly when a wild symbol lands in the Wild Zone. In this feature, the centered Wild Zone symbol expands to cover from three to eight additional symbols.

All other bonus events are triggered through a spin of the digital bonus wheel. When three scattered Michael Jackson Icon symbols land, the player is awarded one spin of the wheel. Slices on the wheel include credit awards ranging from 200 to 10,000 credits times the per-line bet, three separate free-game features—each tied to a Michael Jackson hit—and a Jackpot slice. At max bet, the Jackpot slice awards the top progressive—in the common penny version, it’s $10,000.

Randomly, when the wheel lands on a credit award, a separate picking bonus is triggered in which the player selects from three objects to reveal a multiplier from 2X to 5X.

The free-spin bonuses include “Boom Box Bonus Free Games,” in which each game title symbol triggers and additional free game, with a maximum of 25; “Black or White Free Games,” which is 10 free spins with additional wild symbols added on the fourth, seventh and 10th free spins; and “Leave Me Alone Free Games,” which is 10 free spins with locking wilds on the third reel.

Each free-spin event is accompanied by video footage of Jackson performing the song.

Manufacturer: Scientific Games Platform: Alpha 2 Format: Five-reel, 30-line video slot Denomination: All denominations Max Bet: 300 Top Award: Progressive; resets at 1 million credits times denomination Hit Frequency: 38.72% Theoretical Hold: 7.8%-14.98%

Tower Stack Lion Aruze Gaming America

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art of the new Tower Stack series, this game capitalizes on Aruze’s new Cube-X Vertical cabinet, which features a 42-inch vertical LCD monitor.

Tower Stack games use that real estate to present three stacked reel sets, each with 50 paylines. The player has the option to select his play area within those three stacked reel sets. Each reel set, or frame, as Aruze calls them, has five rows of symbols, but an extra wager known as Plus Factor activates an extra selectable play area for 16 vertical rows. The Plus Factor bet also turns all symbols on reel five of each frame into wild symbols, and causes scatter symbols for bonus triggers to be valid regardless of where on the screen they land.

The player can arrange the play area to activate up to all three of the 50line frames for 150 paylines on every spin.

The main bonus, the Big Cat Feature, includes a “mini-game” picking sequence in which the player selects an animal symbol that will appear in greater numbers during eight free games.

Another game in the series, Tower Stack Dragon, is being launched this quarter, with three more—Tower Stack Feature Panda, Tower Stack Feature Rose and Tower Stack Bison—to be launched in the coming months.

Manufacturer: Aruze Gaming America Platform: Cube-X Vertical Format: Five-reel, 50-line to 150-line video slot Denomination: .01 Max Bet: 1,000, 2,000 Hit Frequency: Approximately 50% Theoretical Hold: 3.9%-12.93%

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GOODS&SERVICES AGA PHILADELPHIA ROUNDTABLE TOUTS GAMING BENEFITS AGA CEO Geoff Freeman addresses media at Philadelphia “Get to Know Gaming” event

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he American Gaming Association’s “Get to Know Gaming” tour landed in Philadelphia last month, where state and local officials joined community groups and local casino officials for a roundtable discussion that focused on the benefits the casino industry has brought communities in the region.

The panel, moderated by Econsult Solutions President Stephen Mullin, included Geoff Freeman, president and CEO of the AGA; U.S. Rep. Pat Meehan, whose district includes Philadelphia; Wendy Hamilton, general manager of SugarHouse Casino; Marc Oppenheimer, chief marketing officer of Parx Casino in nearby Bensalem; Richard F. Levins, vice president and deputy general counsel, PA Markets, Independence Blue Cross; Julie Coker Graham, president and CEO, Philadelphia Convention & Visitors Bureau; and state Senator Larry Farnese of Philadelphia.

The roundtable discussion focused on the benefits the Philadelphia region has derived from the casino industry—the common theme of similar events in Pittsburgh, Ohio, Colorado and elsewhere under the Get To Know Gaming campaign, which spreads the word on the benefits of gaming to communities in the 40 states where commercial casinos are legal, and the estimated $75 billion the industry contributes to local communities.

Freeman noted that Pennsylvania is now the second largest commercial gaming market in the U.S., noting that the industry generates more than $6 billion in economic activity in the state, with 34,000 jobs supported—including 18,000 direct jobs in the industry. “This industry has delivered for Pennsylvania, and it’s delivered to local communities.” He added that the state’s casinos are now working with the local casinos to work out a solution to the host-community funding issue.

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IGT, ARISTOCRAT SIGN CROSS-LICENSING DEAL

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lot suppliers International Game Technology, Plc., and Aristocrat Leisure Limited have reached a comprehensive cross-licensing agreement covering intellectual property involving game features and system patents. Terms of the agreement have not been announced.

“IGT’s R&D investment and patent portfolio are the largest in the gaming industry. We are pleased to have reached this agreement with Aristocrat as we build upon our leadership in gaming innovation,” said Renato Ascoli, IGT’s chief executive officer, North America gaming & interactive. “This agreement demonstrates both companies’ shared commitment to investing in and preserving the value of intellectual property.”

“Turning ideas into value-adding innovation is core to Aristocrat’s mission to ‘create the world’s greatest gaming experience every day,’” added Toni Korsanos, Aristocrat’s chief financial officer and secretary. “Our agreement with IGT will contribute toward this, and we are pleased to have finalized these arrangements.”

INTERBLOCK ANNOUNCES MULTIPLE INSTALLATIONS

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uxury gaming manufacturer Interblock announced multiple installations of its electronic table game products, including stadium-style setups in New Zealand, upstate New York and Slovenia.

The company has partnered with SkyCity Auckland, a popular entertainment and gaming destination, to install a stadium-style ETG setup using live dealers and multiple play stations, and six additional ETG banks, bringing a total of 67 electronic table game seats to the casino floor. The landmark deal is the first of its kind for Interblock, according to the company.

SkyCity’s upcoming installation will include a product mix of Interblock’s MiniStar Roulette and Diamond products, including Automated Roulette and Sic Bo, and the all-new Video Blackjack and Baccarat.

The gaming stadium will feature two automated roulette generators, one sic bo generator and 31 Diamond play stations with multi-game capability that allows players to place wagers on up to three games simultaneously. Three games are visible to the player on the Diamond play station’s 27-inch monitor. A video wall displays each game’s progress and statistics along with a live feed of each game result.

Global Gaming Business NOVEMBER 2016

A second stadium-style installation will occur at the Seneca Niagara Resort and Casino in Niagara Falls, New York, where the company will install its new “Pulse Arena,” an immersive ETG stadium environment in a ready-made gaming lounge with DJs and pulsing lights. The gaming lounge is designed to attract new players while simultaneously providing a new gaming experience for established players, according to the company.

Seneca Niagara’s configuration will include automated generators offering five different game types: roulette, sic bo, craps, blackjack and baccarat. A total of 39 interconnected play stations and seven StarBar bar tops will reside within the Arena.

Finally, Interblock will also install its Pulse Arena setup at the Perla Casino and Hotel in Nova Gorica, Slovenia. This installation is the first and largest installation of its kind in the region.

The Pulse Arena at Perla will consist of 45 play stations and six different game types including dealer-assist blackjack, roulette and baccarat, and automated roulette, sic bo and craps. A large video wall composed of 30 LCD displays will feature statistics of the game and customized video content tailored to promote in-casino entertainment, restaurants, spa, hotel and other Perla services.

All three installations are slated to be complete by the end of the year.

ARISTOCRAT LANDS SHOOTING STAR SYSTEMS DEAL

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lot and system supplier Aristocrat Leisure Limited announced it will sign a multi-property systems deal with Shooting Star Casino, to install its Oasis 360 casino management system at its new Star Lake Casino near Dent, Minnesota, slated to open in 2018.

Aristocrat also announced that Shooting Star will install Aristocrat’s Oasis HALo loyalty platform, player portal and TrackIt table rating system

Brooks Pierce, Aristocrat managing director of the Americas, thanks Rod Lemna, Shooting Star resorts management information system director, for the order

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at all three of its Minnesota properties.

Aristocrat’s award-winning Oasis 360 casino management system features four pillars—Accounting, Marketing, Operations and Services—to help operators successfully manage and market their casinos.

ATMs A TMs • Cash Advance • TTicket icket Redemption Redem mption FABItrack/Title FABItrackk/Title 31 • Integrated Check Cashing Cashing 24/7 Customer Customer Service • and much m more!

KONAMI’S SYNKROS CHOSEN FOR NEW YORK CASINO

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ush Street Gaming has selected Konami Gaming’s Synkros gaming enterprise management system for the new $330 million Rivers Casino & Resort Schenectady, near Albany, New York.

Under the agreement, Synkros will provide systems architecture, advanced integrations and a comprehensive marketing suite, as well as a wide variety of Konami games, including its popular Concerto video slot. Konami’s Synkros Offers Management will allow customizing for multiple player loyalty offers delivered through a select variety of notification channels.

Set to open in early 2017, Rivers Casino & Resort Schenectady will offer 1,158 slots, 65 table games and 16 poker tables.

Konami’s first systems installation with Rush Street Gaming was at its first property, Rivers Casino in Pittsburgh, in 2009. It was followed up with expansions to SugarHouse Casino in Philadelphia and Rivers Casino Des Plaines in Illinois.

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MGM RESORTS SIGNS UP WITH IGT CARDLESS CONNECT

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GM Resorts will install International Game Technology’s Cardless Connect technology, which provides players with an array of loyalty card and transaction capabilities via their mobile devices, at MGM Grand Detroit by the end of the year.

With Cardless Connect, instead of inserting a card into a card reader, players simply tap their smartphones on the electronic game machine to begin play. The technology also enables cashless gaming and transfers between a player’s digital wallet and electronic gaming machines. Cardless Connect is compatible with iOS and Android platforms, providing casinos with a way to solidify relationships with established players and attract younger players.

MGM Resorts Chief Experience Officer Lili Tomovich said, “IGT Cardless Connect technology provides a breakthrough in our ability to connect with our guests. By enabling our carded players to use a smart phone to connect to a game, we’re enhancing entertainment and convenience while ensuring that players don’t have to carry or use a loyalty card to benefit from all that M life has to offer. We look forward to the test rollout of Cardless Connect technology at MGM Grand Detroit this year.”

NOVEMBER 2016 www.ggbmagazine.com

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Drum Roll Please!

Winners Announced for 16th Annual GGB Gaming & Technology Awards

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he GGB Gaming & Technology Awards are the industry’s standard in this field, recognizing excellence in innovation and practical application in all gaming disciplines. The awards were presented to the winners at last month’s Global Gaming Expo in Las Vegas.

“The submissions for the GGB Gaming & Technology Awards were incredible this year,” says Roger Gros, publisher of Global Gaming Business magazine, which administers the awards program. “The amazing products were all at the cutting edge of technology that serves all facets of

the gaming industry. An interesting trend this year was an increased emphasis on non-gaming technology to use in the integrated resorts of the future. The GGB Gaming & Technology Awards surely recognize all the trends and innovation being made in the industry today.”

Judges for the awards were Claudia Winkler, president of GHI Solutions; Rob Russell, gaming analyst, Regulatory Management Counselors, P.C.; Frank Neborsky, CEO, Power Strategies; Gerhard Burda, president and CEO, ESCAPES Advisory Services; and Cliff Paige, slot director, South Point Casino Resort, Las Vegas.

2017 GAMING & TECHNOLOGY AWARD WINNERS Best Consumer Service Technology Gold Medal: Aristocrat • AvT

Best Productivity-Enhancement Technology Gold Medal: The Rainmaker Group guestrev

Best Slot Product Gold Medal: Scientific Games Space Invaders Evolution

Silver Medal: OfferCraft Gamification Platform

Silver Medal: Everi • TournEvent 5.0

Silver Medal: GameCo

Best Table Game Product or Innovation Gold Medal: Scientific Games Prizm Game Table 64

Global Gaming Business NOVEMBER 2016

Silver Medal: Interblock • StarBar

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PEOPLE AGA INDUCTS FIVE INTO HALL OF FAME

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he American Gaming Association announced the induction of five into the Gaming Hall of Fame’s Class of 2016. They are gaming technology pioneer John Acres, casino visionary John Acres Lyle Berman, landmark architect Don Brinkerhoff, Atlantic City’s first African American casino executive Redenia Gilliam-Mosee and tribal gaming leader Richard A. “Skip” Hayward. The inductees were recognized at ceremony during the Global Gaming Expo in Las Vegas in September.

AGA President and Chief Executive Officer Geoff Freeman said, “Each inductee shaped today’s gaming industry in a distinct way, paving the way for opportunities for employees of all backgrounds, revolutionizing the player experience and pushing the boundaries of what casinos look like and where they exist. We’re proud to recognize their lifelong achievements by inducting them into the Gaming Hall of Fame.”

Acres started his gaming career in 1972 as a slot technician. His significant slot innovations include progressive jackpots, free play, the first electronic loyalty system and bonusing, and system-based rewards. Acres is currently the chief executive officer of Acres 4.0.

Berman co-founded Grand Casinos Inc. in 1990 on the Mississippi Gulf Coast, establishing a model for building resorts rather than limiting gaming to riverboats. Named the fastest-growing company in America in 1995 by Fortune Magazine, Grand Casinos under Berman’s leadership grew from a three-person startup to a $1 billion organization with 20,000 employees.

Las Vegas changed forever when Brinkerhoff designed a massive volcano for Steve Wynn that regularly erupts in front of the Mirage. Since then, he has designed numerous iconic Las Vegas Strip landmarks, including Bellagio’s conservatory and the 140-foot mountain in front of the Wynn Resort.

Gilliam-Mosee made history as the first African American, female vice president in the casino industry of Atlantic City. In her executive role, GilliamMosee created the gaming industry’s first diversity program, and served as a role model and mentor to hundreds of women in the gaming industry.

In 1983, Hayward led the effort to gain federal recognition for the Mashantucket Pequot Tribal Nation, paving the way for Indian gaming—today a

$30 billion industry. That federal legislation led to the opening of Foxwoods Resort Casino, one of the most profitable gaming operations in the world. To date, Hayward’s efforts on behalf of the Mashantucket Pequot Tribe have generated $4 billion for the state of Connecticut through the firstever slot revenue sharing agreement.

COUGHLAN NAMED TO LEAD WYNN PALACE

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he first blip in operations hit the newly opened Wynn Palace last month when Gamal Aziz resigned as president and executive director. Aziz was hired by Wynn in 2010, just months Ian Coughlan after stepping down as the leader of MGM’s hospitality for a dozen years.

“Gamal Aziz resigned his post as president of Wynn Macau Ltd. Mr. Aziz was brought in to lead the development and successful opening of Wynn Palace Cotai,” said a company press release.

“Having completed that assignment, Mr. Aziz resigned with the thanks of the board of directors, which expressed its gratitude to Mr. Aziz for his significant contributions to the company.”

Ian Coughlan has been appointed the new president of Wynn Macau. Coughlan will be responsible for all operations and development at the new $4.2 billion Wynn Palace, which opened August 22 on the Cotai Strip, as well as Wynn Macau.

Coughlan joined Wynn Macau in January 2007, bringing more than 30 years of hospitality experience with leading hotels across Asia, Europe and the United States, according to Bloomberg News. Before joining Wynn Resorts Ltd., he spent 10 years with the Peninsula Group, serving as a general manager of Peninsula Hong Kong from September 2004 to January 2007, reported the Macau Daily Times.

GLI EXECUTIVES RECOGNIZED

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aming Laboratories International announced recognitions of two of its top executives for honors at the recent Global Gaming Expo trade show.

First, Christie Eickelman, GLI’s vice president of global marketing and member of the company’s executive leadership team, was honored with the Patty Becker Pay It Forward award. The award, a set of bangle bracelets, is presented annu-

ally at the Global Gaming Women’s (GGW) fundraiser and networking event, Kick Up Your Heels.

A visual representation of courage, integrity and Christie Eickelman leadership, the bracelet signifies women who have helped other women be successful. Eickelman has been co-chair of the GGW events committee, planning GGW outreach programs, breakfasts and lunches at numerous events. Her efforts have increased GGW’s visibility and increased initial contact with GGW for many women in the workplace.

Second, while at G2E, GLI Vice President of Government Relations and General Counsel Kevin P. Mullally, who is also on the executive leadership team, was appointed by the National Council on Problem Gambling (NCPG) to chair its Standards, Policy and Regulations Committee for the 2016-2017 term. As the author of the first self-exclusion program in the U.S. in 1996, Mullally has a long history of involvement in assisting with the development of responsible gaming policies.

GGB

November 2016 Index of Advertisers

AGA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 AGEM . . . . . . . . . . . . . . . . . . . . . . . . . . . .27,37 Agilysys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 AGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Ainsworth . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Aruze . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23 Casino Cash Trac . . . . . . . . . . . . . . . . . . . . . . .19 Everi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Fabicash . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 Fantini Report . . . . . . . . . . . . . . . . . . . . . . . . .63 G2E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 Gasser Chair . . . . . . . . . . . . . . . . . . . . . . . . . .57 GLI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9,43 Greenberg Traurig . . . . . . . . . . . . . . . . . . . . .25 IGT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34,35 Innovation Group . . . . . . . . . . . . . . . . . . . . . .33 Interblock . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 JCM Global . . . . . . . . . . . . . . . . . . . . . . . . . . .13 Konami Gaming . . . . . . . . . . . . . . . .Back Cover Merkur Gaming . . . . . . . . . . . . . . . . . . . . . . . .67 NetEnt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Red Square Gaming . . . . . . . . . . . . . . . . . . . .40 RPM Advertising . . . . . . . . . . . . . . . . . . . . . . .14 Sightline Payments . . . . . . . . . . . . . . . . . . . . .15 UNLV Foundation . . . . . . . . . . . . . . . . . . . . . .51

NOVEMBER 2016 www.ggbmagazine.com

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CASINO COMMUNICATIONS

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Russell Sanna Executive Director, National Center for Responsible Gaming

ussell Sanna was appointed executive director of the National Center for Responsible Gaming, an industryfunded organization that does research into problem and compulsive gambling, in March 2016. He’s spent this year getting to know the gaming industry and introducing himself to the important executives in the industry. His goal is to increase the visibility of the NCRG and to grow the funding of the organization to be able to conduct more research and make a larger impact on the solution to problem gambling. He met with GGB Publisher Roger Gros at G2E in Las Vegas in September to talk about his first year at the NCRG. To hear a full podcast of this interview, visit GGBMagazine.com.

GGB: You’ve been executive director of the NCRG for less than one year. Explain what you understand about the early years of the organization.

Russell Sanna: The oral history tells us that

people like Bill Boyd, Phil Satre, Frank Fahrenkopf and others witnessed the demise of the tobacco industry, with executives standing up before Congress and saying, “Cigarettes do not cause cancer.” Taking that message to heart, they all concluded we have to understand what is in fact going on scientifically with gambling activity. So there was a real commitment from the industry at that point to establish in the National Center For Responsible Gaming, establishing also a firewall between the industry and the science aspect. That was pretty important to do that, so that you don’t taint the outcome of the science, to be able to investigate the important questions: Is there gambling addiction?

So, over the last 20 years, one of the most successful research projects that we’ve established is that the prevalence of gambling disorder is 1 percent of the adult population—over and over again, that’s been established. So we were able to dispel the myths and the anecdotal evidence—my uncle, my cousin, that sort of 66

thing. And so, we’ve been able to present what the peer-reviewed science says. In the last 20 years, the center has supported research, which has resulted in over 320 published articles in peer review journals, the gold standard of research.

What are some of the findings that stand out?

There continue to be a lot of new, interesting aspects that are coming out of the research. One of the major issues just now surfacing is that gambling addiction fits within a syndrome of other addictions, whether it’s other behavioral aspects, or substance addictions. That leads to a whole body of knowledge around psychopharmacology, for example. So, this summer, we gathered a group of scientists together for what we’re conceptualizing as a public health initiative, looking at the things that are associated with gambling disorder.

For example, a laboratory scientist has now trained laboratory rats to be addicted to gambling.

And that’s important, because now we have a laboratory animal that psychopharmacology experiments can be conducted on. That puts them within the realm of other contemporary and leading scientific areas.

How about the comorbidity issue, where you can’t just treat one addiction and not the other, because they all go hand-in-hand?

That’s one of the big challenges that are out there.

If you do the numbers, 1 percent of the adult population of the United States gives you 2.5 million people, approximately. The science that’s taking place through the centers, also, figured out that only 15 percent of that number is showing up in treatment modalities. So that leaves 85 percent, or roughly 2.2 million people, that we don’t know exactly where they are. And we think that upwards of 64 percent of that 85 percent have three or more comorbidities, with anxiety, trauma, depression.

And so, that’s what we’re trying to figure out.

In conjunction with scientists, we need to get the policy apparatus in contact. The scientists that we deal with are not necessarily versed in the language

Global Gaming Business NOVEMBER 2016

of the state legislatures and policymakers. So, we’re making a considered effort to reach out, to get involved with organizations like the National Council of Legislators from Gaming States and various other associations where elected officials are members. We want to get on their agenda, so we can bring everyone together.

Give us a thumbnail of how the NCRG is funded.

We are funded by the commercial casino industry.

The federal government does not spend a dime on gambling disorders. It would be a long conversation to figure out why that is; we don’t know that. We also know that the federal government’s probably not in a position to take up the cause.

But it’s not unique to the gaming industry. In a previous job, I was involved in industry-funded housing research. We got architectural research from the industry. It goes on in the automobile industry and the construction industry, as well.

Is there an formula by which the industry funds NCRG?

Well, it’s fairly arbitrary, so it is voluntary. We have people funding us at the $300,000 level, and we have people funding us at the $5,000 level. So it’s a very typical 501(c)(3) nonprofit organization. We have a very active board of directors that’s made up of industry people and academic people who help us contact potential donors.

Do you also have contributions from tribal gaming?

We do not. Historically, Mohegan Sun and Foxwoods gave minor amounts of money close to 20 years ago. I would think historically there was a time when there was a bit of competition between Indian gaming and the operators within Nevada.

Those days are over. So, in August, I was up at Seneca Casino in Niagara Falls, and I am back in touch with the chief operating officer there, who is very supportive and wants a proposal to go the board of directors. We’re hopeful this will be the first of many tribal contributions.

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